File Nos. 33-31809
811-5883
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 9 [X]
(Check appropriate box or boxes.)
PEOPLES INDEX FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on March 1, 1997 pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its Common
Stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the fiscal
year ended October 31, 1996 was filed on December 30, 1996.
PEOPLES INDEX FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 4, 15
5 Management of the Fund 6
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 15
7 Purchase of Securities Being Offered 7
8 Redemption or Repurchase 10
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-19
13 Investment Objectives and Policies B-2
14 Management of the Fund B-6
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-10
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PEOPLES INDEX FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-18
18 Capital Stock and Other Securities B-19
19 Purchase, Redemption and Pricing B-14
of Securities Being Offered
20 Tax Status B-17
21 Underwriters B-14
22 Calculations of Performance Data B-18
23 Financial Statements B-22
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4, C-8
Investment Adviser
29 Principal Underwriters C-9
30 Location of Accounts and Records C-12
31 Management Services C-12
32 Undertakings C-12
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS MARCH 1, 1997
DREYFUS S&P 500 INDEX FUND
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DREYFUS S&P 500 INDEX FUND (THE "FUND") IS AN OPEN-END,
NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS AN INDEX FUND. THE
FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE INVESTMENT RESULTS THAT CORRESPOND
TO THE PRICE AND YIELD PERFORMANCE OF PUBLICLY-TRADED COMMON STOCKS IN THE
AGGREGATE, AS REPRESENTED BY THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX. IN ANTICIPATION OF TAKING A MARKET POSITION, THE FUND IS PERMITTED TO
PURCHASE AND SELL STOCK INDEX FUTURES. THE FUND IS NEITHER SPONSORED BY NOR
AFFILIATED WITH STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES,
INC.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S MANAGER.
DREYFUS HAS ENGAGED ITS AFFILIATE, MELLON EQUITY ASSOCIATES ("MELLON
EQUITY"), TO SERVE AS THE FUND'S INDEX FUND MANAGER AND PROVIDE DAY-TO-DAY
MANAGEMENT OF THE FUND'S INVESTMENTS. DREYFUS AND MELLON EQUITY ARE REFERRED
TO COLLECTIVELY AS THE "ADVISERS."
IN SOME CASES, SHAREHOLDERS WHO REDEEM SHARES WITHIN SIX MONTHS OF
THE OPENING OF THEIR ACCOUNT WILL BE CHARGED A 1% REDEMPTION FEE WHICH WILL
BE DEDUCTED FROM REDEMPTION PROCEEDS.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MARCH 1, 1997, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM
TIME TO TIME.
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TABLE OF CONTENTS
PAGE
FEE TABLE......................................... 3
CONDENSED FINANCIAL INFORMATION................... 4
DESCRIPTION OF THE FUND........................... 4
MANAGEMENT OF THE FUND............................ 6
HOW TO BUY SHARES................................. 8
HOW TO REDEEM SHARES.............................. 10
SHAREHOLDER SERVICES.............................. 12
SHAREHOLDER SERVICES PLAN......................... 13
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 13
PERFORMANCE INFORMATION........................... 14
GENERAL INFORMATION............................... 15
APPENDIX.......................................... 17
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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[This Page Intentionally Left Blank]
Page 2
<TABLE>
<CAPTION>
<S> <C>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fees (as percentage of amount redeemed)........................................ 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees (after fee waiver)........................................................ .23%
Other Expenses............................................................................ .27%
Total Fund Operating Expenses (after fee waiver).......................................... .50%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $5 $16 $28 $63
</TABLE>
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The amounts listed in the example should not be considered as
representative of past or future expenses and actual expenses may be greater
or less than those indicated. Moreover, while the example assumes a 5% annual
return, the Fund's actual performance will vary and may result in an actual
return greater or less than 5%.
- ------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. The redemption fee is
charged upon certain redemptions of Fund shares occurring within six months
of the opening of an account and is retained by the Fund. Annual Fund
Operating Expenses noted above have been restated to reflect an undertaking
by Dreyfus that, until at least the fiscal year ending October 31, 1998, if
Fund expenses, including the management fee, exceed .50 of 1% of the value of
the Fund's average net assets for the fiscal year, the Fund may deduct from
the management fee payable to Dreyfus to the extent of such excess. The
expenses noted above, without reimbursement, would be: Management Fees --
.30% and Total Fund Operating Expenses -- .57%. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Fund," "How to Buy Shares," How to Redeem
Shares" and "Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Coopers
& Lybrand L.L.P., the Fund's independent accountants, whose report thereon
appears in the Statement of Additional Information. Further financial data
and related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended October 31,
----------------------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year......... $12.50 $10.86 $14.16 $15.16 $16.88 $16.41 $18.38
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net .................... .17 .34 .41 .30 .39 .36 .33
Net realized and unrealized gain (loss)
on investments (1.81) 3.18 .97 1.86 .11 3.36 3.89
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS......... (1.64) 3.52 1.38 2.16 .50 3.72 (4.22)
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income--net...... ._ (.22) (.38) (.40) (.31) (.42) (.32)
Dividends from net realized gain on investments ._ ._ ._ (.04) (.66) (1.33) (.22)
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS...................... ._ (.22) (.38) (.44) (.97) (1.75) (.54)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of year.......... $10.86 $14.16 $15.16 $16.88 $16.41 $18.38 $22.06
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN..................... (13.12%)(2) 32.85% 9.90% 14.49% 3.14% 25.68% 23.41%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... ._ ._ ._ .39% .61% .55% .57%
Ratio of net investment income to
average net assets 3.46%(2) 3.45% 3.04% 2.36% 2.26% 2.75% 1.90%
Decrease reflected in above expense ratios
due to undertakings 1.42%(2) .78% .65% .14% .03% ._ ._
Decrease reflected in above expense ratios
due to redemption fee .08%(2) .10% ._ ._ ._ ._ _
Portfolio Turnover Rate................... 1.21%(2) .69% 3.10% 3.77% 18.81% 3.66% 5.22%
Average Commission Rate Paid(3)............ _ _ _ _ _ _ $.0297
Net Assets, end of year (000's omitted).... $29,266 $69,211 $92,598 $281,403 $245,202 $336,147 $591,631
(1) From January 2, 1990 (commencement of operations) to October 31, 1990.
(2) Not annualized.
(3) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate to be paid per Share for purchases
and sales of investment securities.
</TABLE>
Further information about the Fund's performance is contained in
the Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide investment results
that correspond to the price and yield performance of publicly-traded common
stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index* (the "Index"). It cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment objective will
be achieved.
MANAGEMENT POLICIES
The Fund attempts to duplicate the investment results of the Index,
which is composed of 500 selected common stocks, most of which are listed on
the New York Stock Exchange. Standard & Poor's, a divi-
*"Standard & Poor's 500," "S&PRegistration Mark" and "S&P 500Registration
Mark" are trademarks of Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., and have been licensed for use by the Fund. The Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's.
Page 4
sion of The McGraw-Hill Companies, Inc. ("S&P"), chooses the stocks to be
included in the Index solely on a statistical basis. The Fund attempts to be
fully invested at all times in the stocks that comprise the Index and stock
index futures as described below and, in any event, at least 80% of the
Fund's net assets will be so invested. Inclusion of a stock in the Index in
no way implies an opinion by S&P as to its attractiveness as an investment.
The Fund uses the Index as the standard performance comparison because it
represents approximately 70% of the total market value of all common stocks
and is well known to investors. An investment in the Fund involves risks
similar to those of investing in common stocks.
The weightings of stocks in the Index are based on each stock's
relative total market capitalization; that is, its market price per share
times the number of shares outstanding. Because of this weighting, as of
November 30, 1996, 46.3% of the Index was composed of the 50 largest
companies. Mellon Equity will select stocks for the Fund's portfolio in the
order of their weightings in the Index beginning with the heaviest weighted
stocks. With respect to the Fund's assets invested in the stocks in the Index,
the percentage of such assets invested in each stock is approximately the
same as the percentage it represents in the Index.
No attempt is made to manage the portfolio in the traditional sense
using economic, financial and market analysis. The Fund is managed using a
computer program to determine which stocks are to be purchased or sold to
replicate the Index to the extent feasible. From time to time, administrative
adjustments may be made in the Fund's portfolio because of changes in the
composition of the Index, but such changes should be infrequent.
The Fund believes that the indexing approach described above is an
effective method of substantially duplicating percentage changes in the
Index. It is a reasonable expectation that there will be a close correlation
between the Fund's performance and that of the Index in both rising and
falling markets. The Fund will attempt to achieve a correlation between the
performance of its portfolio and that of the Index of at least 0.95, without
taking into account expenses. A correlation of 1.00 would indicate perfect
correlation, which would be achieved when the Fund's net asset value,
including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the Index. The
Fund's ability to correlate its performance with the Index, however, may be
affected by, among other things, changes in securities markets, the manner in
which the Index is calculated by S&P and the timing of purchases and
redemptions. In the future, the Fund's Board, subject to the approval of
shareholders, may select another index if such a standard of comparison is
deemed to be more representative of the performance of common stocks.
The Fund's ability to duplicate the performance of the Index also
depends to some extent on the size of the Fund's portfolio and the size of
cash flows into and out of the Fund. Investment changes to accommodate these
cash flows are made to maintain the similarity of the Fund's portfolio to the
Index to the maximum practicable extent.
From time to time to increase its income, the Fund may lend
securities from its portfolio. See "Appendix _ Investment Techniques." When
the Fund has cash reserves, the Fund may invest in money market instruments
consisting of U.S. Government securities, time deposits, certificates of
deposit, bankers' acceptances, high-grade commercial paper, and repurchase
agreements. See the Statement of Additional Information for a description of
these instruments. The Fund also may purchase stock index futures in
anticipation of taking a market position when, in the opinion of the
Advisers, available cash balances do not permit an economically efficient
trade in the cash market. The Fund also may sell stock index futures to
terminate existing positions it may have as a result of its purchases of
stock index futures. See also "Investment Considerations and Risks" and
"Appendix _ Investment Techniques" below, and "Investment Objective and
Management Policies" in the Statement of Additional Information.
Page 5
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an overall
investment program and should invest only if they are willing to undertake
the risks involved. See "Investment Objective and Management
Policies_Management Policies" in the Statement of Additional Information for
a further discussion of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
FOREIGN SECURITIES -- Since the stocks of some foreign issuers are included
in the Index, the Fund's portfolio may contain securities of such foreign
issuers which may subject the Fund to additional investment risks with
respect to those securities that are different in some respects from those
incurred by a fund which invests only in securities of domestic issuers. Such
risks include possible adverse political and economic developments, seizure
or nationalization of foreign deposits and adoption of governmental
restrictions which might adversely affect an investment in these securities.
USE OF DERIVATIVES -- The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments which derive
their performance, at least in part, from the performance of an underlying
asset, index or interest rate. The Derivatives the Fund may use include stock
index futures. While Derivatives can be used effectively in furtherance of
the Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's portfolio and make more difficult the accurate
pricing of the Fund's portfolio. See "Appendix _Investment Techniques _ Use
of Derivatives" below and "Investment Objective and Management Policies _
Management Policies _ Derivatives" in the Statement of Additional
Information.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the Fund's
assets that may be invested in the securities of a single issuer is not
limited by the 1940 Act. A "diversified" investment company is required by
the 1940 Act generally, with respect to 75% of its total assets, to invest
not more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of the Fund's assets may be invested in the
securities of a limited number of issuers, some of which may be within the
same economic sector, the Fund's portfolio may be more sensitive to changes
in the market value of a single issuer or industry. However, to meet Federal
tax requirements, at the close of each quarter the Fund may not have more
than 25% of its total assets invested in any one issuer and, with respect to
50% of total assets, not more than 5% of its total assets invested in any one
issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of the other investment companies and accounts
advised by Dreyfus or Mellon Equity. If, however, such other investment
companies or accounts desire to invest in, or dispose of, the same securities
as the Fund, available investments or opportunities for sales will be
allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by the Fund or
the price paid or received by the Fund.
MANAGEMENT OF THE FUND
ADVISERS -- Dreyfus, located at 200 Park Avenue, New York, New York 10166,
was formed in 1947 and serves as the Fund's manager. Dreyfus is a
whol-
Page 6
ly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Bank Corporation ("Mellon"). As of January 31, 1997,
Dreyfus managed or administered approximately $____ billion in assets for
more than ____ million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
authority of the Fund's Board in accordance with Maryland law.
Dreyfus has engaged Mellon Equity, located at 500 Grant Street,
Pittsburgh, Pennsylvania 15258, to serve as the Fund's index fund manager.
Mellon Equity, a registered investment adviser formed in 1957, is an indirect
wholly-owned subsidiary of Mellon and, thus, an affiliate of Dreyfus. As of
December 31, 1996, Mellon Equity and its employees managed approximately $___
billion in assets and served as the investment adviser of 13 other investment
companies.
Mellon Equity, subject to the supervision and approval of Dreyfus,
provides the day-to-day management of the Fund's investments, as well as
statistical information, under an Index Management Agreement with Dreyfus,
subject to the overall authority of the Fund's Board in accordance with
Maryland law.
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 Dreyfus, Mellon managed more than $226 billion in
assets as of September 30, 1996, including approximately $85 billion in
proprietary mutual fund assets. As of September 30, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $905 billion in assets, including
approximately $60 billion in mutual fund assets.
Pursuant to the terms of the Management Agreement, as amended January
1, 1997, the Fund has agreed to pay Dreyfus a monthly fee at the annual rate
of .25 of 1% of the value of the Fund's average daily net assets. Under the
Index Management Agreement, as amended January 1, 1997, Dreyfus has agreed to
pay Mellon Equity a monthly fee at the annual rate of .05 of 1% of the value
of the Fund's average daily net assets until such assets exceed $1 billion
and .075 of 1% of the value of such assets at any time thereafter. Mellon
Equity has agreed to pay for the provision of custody services to the Fund by
Boston Safe Deposit and Trust Company. For the period prior to January 1,
1997, including for the fiscal year ended October 31, 1996, the Fund paid
Dreyfus a monthly management fee at the annual rate of .295 of 1% of the
value of the Fund's average daily net assets, and Dreyfus paid Mellon Equity
a monthly index management fee at the annual rate of .095 of 1% of the value
of the Fund's average daily net assets.
The imposition of the Fund's management fee, as well as other
operating expenses, will have the effect of reducing investors' return and
will affect the Fund's ability to track the Index exactly. From time to time,
Dreyfus may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the expense
ratio of the Fund and increasing yield to investors. The Fund will not pay
Dreyfus at a later time for any amounts it may waive, nor will the Fund
reimburse Dreyfus for any amounts it may assume.
Dreyfus has agreed, effective November 1, 1996, that, until at least
the fiscal year ending October 31, 1998, if the Fund's aggregate expenses
(exclusive of taxes, brokerage, interest on borrowings, and extraordinary
expenses), including the management fee, exceed .50 of 1% of the value of the
Fund's
Page 7
average net assets for the fiscal year, the Fund may deduct from the
management fee payable to Dreyfus to the extent of such excess.
In allocating brokerage transactions for the Fund, the Advisers seek
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, the Advisers may consider, among other things,
the receipt of research services and/or the sale of shares of the Fund or
other funds managed, advised or administered by Dreyfus or Mellon Equity as
factors in the selection of broker-dealers to execute portfolio transactions
for the Fund. See "Portfolio Transactions" in the Statement of Additional
Information.
Dreyfus may pay the Fund's distributor for shareholder services
from Dreyfus' own assets, including past profits but not including the
management fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay Service Agents in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). Boston Safe Deposit and Trust
Company, an indirect subsidiary of Mellon, One Boston Place, Boston,
Massachusetts 02109, is the custodian of the Fund's investments.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a
fee if you effect transactions in Fund shares through a securities dealer,
bank or other financial institution (collectively, "Service Agents"). Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which maintains an omnibus account in the Fund and
has made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Account Application. For full-time or part-time employees
of Dreyfus or any of its affiliates or subsidiaries, directors of Dreyfus,
Board members of a fund advised by Dreyfus, members of the Fund's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of Dreyfus or any
of its affiliates or subsidiaries who elect to have a portion of their pay
directly deposited into their Fund account, the minimum initial investment is
$50. The Fund reserves the right to offer Fund shares without regard to
minimum purchase requirements to employees participating in certain qualified
or non-qualified employee benefit plans or other programs where contributions
or account information can be transmitted in a manner and form acceptable to
the Fund. The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be
made payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement
plan accounts, to "The Dreyfus Trust Company, Custodian." Payments which are
mailed should be sent to Dreyfus S&P 500 Index Fund, P.O. Box 6647,
Providence, Rhode Island 02940-6647. If you are opening a new account, please
enclose your Account Application. For subsequent investments, your Fund
account number should appear on the check and an investment slip should be
enclosed. For Dreyfus retirement plan accounts, payments which are mailed
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island
Page 8
02940-6427. Neither initial nor subsequent investments should be made by third
party check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900119527/Dreyfus S&P 500
Index Fund, for purchase of Fund shares in your name. The wire must include
your Fund account number (for new accounts, your Taxpayer Identification
Number ("TIN") should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase instruct
ions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents and other
institutions may charge their clients fees in connection with purchases for
the accounts of their clients. These fees would be in addition to any amounts
which might be received under the Shareholder Services Plan. Investors should
consult their Service Agents in this regard.
Fund shares are sold on a continuous basis at the net asset value
per share next determined after your order is received by the Transfer Agent
or other agent. If an order is received in proper form by the Transfer Agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on a given day, Fund shares will be
purchased at the net asset value determined as of such close of trading on
that day. Otherwise, Fund shares will be purchased at the net asset value
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day. To permit the Fund to invest your money as
promptly as possible after receipt, thereby maximizing the Fund's ability to
track the Index, you are urged to transmit your purchase order in proper form
so that it may be received by the Transfer Agent prior to 12:00 noon, New
York time, on the day you want your purchase order to be effective.Upon
request, proceeds from the redemption of shares of other funds in the Dreyfus
Family of Funds by an employee benefit plan will be applied to purchase Fund
shares on the date of redemption, if the plan's recordkeeper has entered into
an appropriate agency agreement with the Fund and such other funds.
The Fund's net asset value per share is determined as of the close
of trading on the floor of the New York Stock Exchange on each day the New
York Stock Exchange is open for business. For purposes of determining net
asset value per share, futures contracts will be valued 15 minutes after the
close of trading on the floor of the New York Stock Exchange. Net asset value
per share is computed by dividing the value of the Fund's net assets (i.e.,
the value of its assets less liabilities) by the total number of shares
outstand-
Page 9
ing. The Fund's investments are valued based on market value, or where market
quotations are not readily available, based on fair value as determined in
good faith by the Fund's Board. For further information regarding the methods
employed in valuing Fund investments, see "Determination of Net Asset Value"
in the Statement of Additional Information.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds $1,000,000 ("Eligible Benefit
Plans"). Shares of funds in the Dreyfus Family of Funds then held by Eligible
Benefit Plans will be aggregated to determine the fee payable. The
Distributor reserves the right to cease paying these fees at any time. The
Distributor will pay such fees from its own funds, other than amounts
received from the Fund, including past profits or any other source available
to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value. To maximize the Fund's ability to track the
Index, you are urged to transmit your redemption requests so that they may be
received by the Transfer Agent prior to 12:00 noon, New York time, on the day
you want your redemption request to be effective.
The Fund will deduct a redemption fee equal to 1% of the net asset
value of Fund shares redeemed where the redemption occurs within the initial
six-month period following the opening of a Fund account. The fee will be
retained by the Fund and used primarily to offset portfolio transaction
costs. It is expected that, as a result of this fee, the Fund will be able to
track the Index more closely. No redemption fee will be charged upon the
redemption of shares purchased through accounts that are reflected on the
records of the Transfer Agent as omnibus accounts approved by Dreyfus Service
Corporation or through accounts established by Service Agents approved by
Dreyfus Service Corporation that utilize the National Securities Clearing
Corporation's networking system. The redemption fee may be waived, modified
or discontinued and reintroduced at any time or from time to time. In
addition, Service Agents may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any certificates representing Fund shares being
redeemed must be submitted with the redemption request. The value of the
shares redeemed may be more or less than their original cost, depending on
the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
accordance with the procedures described below, except as provided by the
rules of the Securities and Exchange Commission. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDERRegistration Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST
TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK OR DREYFUS-
Page 10
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY
IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST.
PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS
OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent, through the Wire
Redemption Privilege or the Telephone Redemption Privilege. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated. Shares held under Keogh Plans, IRAs or
other retirement plans, and shares for which the certificates have been
issued, are not eligible for the Wire Redemption or Telephone Redemption
Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege, you authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, and reasonably
believed by the Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the
Fund nor the Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption of Fund shares. In such cases, you should consider using
the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being processed
at a later time than it would have been if telephone redemption had been
used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
6647, Providence, Rhode Island 02940-6647, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests
Page 11
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Your written redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or administered by
Dreyfus. The 1% redemption fee, described above, if applicable, may be
charged upon such redemption (depending upon how long your Fund account has
been open or the type of account from which shares are being redeemed) and
your redemption proceeds will be invested in shares of the other fund on the
next business day. Before you make such a request, you must obtain and should
review a copy of the current prospectus of the fund being purchased. Upon
request, proceeds from the redemption of shares of the Fund by an employee
benefit plan will applied to purchase shares of other funds in the Dreyfus
Family of Funds on the date of redemption, if the plan's recordkeeper has
entered into an appropriate agency agreement with the Fund and such other
funds. Prospectuses may be obtained by calling 1-800-645-6561. The prospectus
will contain information concerning minimum investment requirements and other
conditions that may apply to your purchase. No other fees currently are
charged shareholders directly in connection with this procedure, although the
Fund reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. This procedure may be modified or
terminated at any time upon not less than 60 days' notice to shareholders.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day)made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days.
Page 12
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. This Privilege may
provide you with a convenient way to invest for long-term financial goals. You
should be aware, however, that periodic investment plans do not guarantee a
profit and will not protect an investor against loss in a declining market.
To establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to Dreyfus S&P 500 Index Fund, P.O. Box 6647,
Providence, Rhode Island 02940-6647, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three business
days following receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
RETIREMENT PLANS -- The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; or for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-800
- -322-7880.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund pays the Distributor for the provision of certain services a fee at
the annual rate of .25 of 1% of the value of the Fund's average daily net
assets. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income and
distributes net realized securities gains, if any, once a year, but 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. The
Fund will automatically reinvest dividends and distributions from securities
gains, if any, in additional Fund shares at net asset value or, at your
option, pay them in cash. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest them in additional Fund shares at net asset value. If
applicable, the 1% redemption fee, described under "How to Redeem Shares,"
will be charged upon certain redemptions of shares received through the
automatic reinvestment of dividends or distributions. All expenses are
accrued daily and deducted before declaration of dividends to investors.
Dividends paid by the Fund derived from net investment income and
distributions from net realized short-term securities gains of the Fund will
be taxable to U.S. shareholders as ordinary income whether received in cash
or reinvested in Fund shares. Depending on the composition of the Fund's
income, a portion of the dividends from net investment income may qualify for
the dividends received deduction allowable to certain corporate shareholders.
Distributions from net realized long-term securities gains of
Page 13
the Fund will be taxable to U.S. shareholders as long-term capital gains for
Federal income tax purposes, regardless of how long shareholders have held
their Fund shares and whether such distributions are received in cash or
reinvested in Fund shares. The Code provides that the net long-term capital
gain of an individual generally will not be subject to Federal income tax at
a rate in excess of 28%. Dividends and distributions may be subject to state
and local taxes.
Dividends derived from net investment income and distributions from
net realized short-term securities gains paid by the Fund to a foreign
investor generally are subject to U.S. nonresident withholding taxes at the
rate of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless of t
he extent to which gain or loss may be realized, generally will not be
subject to U.S. nonresident withholding tax. However, such distributions may
be subject to backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions is
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1996 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For the purpose of advertising, performance is calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a com-
Page 14
pounded annual basis, would result in the redeemable value of the investment
at the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and ten year
periods, or for shorter time periods depending upon the length of time during
which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. Performance information, such
as that described above, may not provide a basis for comparison with other
investments or other investment companies using a different method of
calculating performance.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Standard &
Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap 400 Index,
Lipper Analytical Services, Inc., the Dow Jones Industrial Average, Money
Magazine, Morningstar, Inc. and other industry publications. The Fund may
cite in its advertisements or in reports or other communications to
shareholders, historical performance of unmanaged indices as reported in
Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS AND INFLATION
(SBBI), 1982, updated annually in the SBBI YEARBOOK, Ibbotson Associates,
Chicago. The Fund also may cite in its advertisements the aggregate amount of
assets committed to index investing by pension funds and/or other
institutional investors, and may refer to or discuss then-current or past
economic or financial conditions, developments or events.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on October 6, 1989,
and commenced operations on January 2, 1990. On November 13, 1995, the Fund,
which is incorporated under the name Peoples Index Fund, Inc., began
operating under the name Dreyfus S&P 500 Index Fund. The Fund is authorized
to issue 200 million shares of Common Stock, par value $.001 per share. Each
share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of Board
members or the appointment of accountants. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding and entitled
to vote may require the Fund to hold a special meeting of shareholders for
purposes of removing a Board member from office and the holders of at least
25% of such shares may require the Fund to hold a special meeting of
shareholders for any other purpose. Fund shareholders may remove a Board
member by the affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Fund's Board will call a meeting of shareholders for
the purpose of electing Board members if, at any time, less than a majority
of the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
you confirmation statements of account.
Shareholder inquiries may be made by writing to the Fund at l44
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free l-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S.
and Canada, call 516-794-5452.
Page 15
The Fund is not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of the Fund or
any member of the public regarding the advisability of investing in
securities generally or in the Fund particularly or the ability of the S&P
500 Index to track general stock market performance. S&P's only relationship
to the Fund is the licensing of certain trademarks and trade names of S&P and
of the S&P 500 Index which is determined, composed and calculated by S&P
without regard to the Fund. S&P has no obligation to take the needs of the
Fund or the owners of the Fund into consideration in determining, composing
or calculating the S&P 500 Index. S&P is not responsible for and has not
participated in the calculation of the Fund's net asset value, nor is S&P a
distributor of the Fund. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE FUND, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR
ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Page 16
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund is permitted to borrow money only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the value
of its total assets (including the amount borrowed) valued at the lesser of
cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the Fund's total
assets, the Fund will not make any additional investments.
USE OF DERIVATIVES -- Although the Fund will not be a commodity pool,
Derivatives subject the Fund to the rules of the Commodity Futures Trading
Commission which limit the extent to which the Fund can invest in certain
derivatives. The Fund may invest in stock index futures contracts for hedging
purposes without limit. However, the Fund may not invest in such contracts
for other purposes if the amount of initial margin deposits with respect to
such contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities which affords the Fund an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 30% of
the value of the Fund's total assets, and the Fund will receive collateral
consisting of cash, U.S. Government securities or irrevocable letters of
credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Such loans are
terminable by the Fund at any time upon specified notice. The Fund might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 17
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Page 18
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Page 19
Dreyfus
S&P 500
Index Fund
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation 078p030197
Page 20
DREYFUS S&P 500 INDEX FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 1, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus S&P 500 Index Fund (the "Fund"), dated March 1, 1997, as it may be
revised from time to time. To obtain a copy of the Fund's Prospectus, please
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's manager.
Dreyfus has engaged its affiliate, Mellon Equity Associates ("Mellon Equity"),
to serve as the Fund's index fund manager and provide day-to-day management of
the Fund's investments. Dreyfus and Mellon Equity are referred to
collectively as the "Advisers."
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . B-6
Management Arrangements. . . . . . . . . . . . . . . . . . . . . . . B-10
Shareholder Services Plan. . . . . . . . . . . . . . . . . . . . . . B-13
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . B-14
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . B-16
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . B-17
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . B-17
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . B-18
Performance Information. . . . . . . . . . . . . . . . . . . . . . . B-19
Information About the Fund . . . . . . . . . . . . . . . . . . . . . B-20
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Accountants. . . . . . . . . . . . . . . . B-20
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . B-22
Report of Independent Accountants. . . . . . . . . . . . . . . . . . B-35
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the Fund"
and "Appendix."
Other Portfolio Securities
Money Market Instruments. The Fund may invest, in the circumstances
described under "Description of the Fund - Management Policies" in the Fund's
Prospectus, in the following types of money market instruments.
U.S. Government Securities. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations from the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government provides financial
support for such U.S. Government-sponsored agencies and instrumentalities, no
assurance can be given that it will always do so since it is not so obligated
by law.
Repurchase Agreements. In a repurchase agreement, the Fund buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security.
The Fund's custodian or sub-custodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Fund. In an attempt to
reduce the risk of incurring a loss on a repurchase agreement, the Fund will
enter into repurchase agreements only with domestic banks with total assets in
excess of $1 billion, or primary government securities dealers reporting to
the Federal Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below resale price. Repurchase agreements could involve risks in the event of
a default or insolvency of the other party to the agreement, including
possible delays or restrictions upon the Fund's ability to dispose of the
underlying securities.
Bank Obligations. The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation of
a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instruments upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Commercial Paper. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct obligations which, at
the time of their purchase, are (a) rated at least Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's Ratings Group
("S&P"), (b) issued by companies having an outstanding unsecured debt issue
currently rated at least Aa by Moody's or at least AA- by S&P, or (c) if
unrated, determined by the Advisers to be of comparable quality to those rated
obligations which may be purchased by the Fund.
Management Policies
Lending Portfolio Securities. In connection with its securities lending
transactions, the Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part
of the interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower; (2)
the borrower must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the Fund must be able
to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) while voting rights on the loaned securities may pass to the
borrower, the Fund's Board must terminate the loan and regain the right to
vote the securities if a material event adversely affecting the investment
occurs.
Derivatives. The Fund may invest in Derivatives (as defined in the Fund's
Prospectus) in anticipation of taking a market position when, in the opinion
of the Advisers, available cash balances do not permit an economically
efficient trade in the cash market. Derivatives may provide a cheaper,
quicker or more specifically focused way for the Fund to invest than
"traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit the Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
In addition, Derivatives may entail investment exposures that are
greater than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return or
result in a loss. The Fund also could experience losses if its Derivatives
were poorly correlated with its other investments, or if the Fund were unable
to liquidate its position because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
Stock Index Futures. A stock index future obligates the seller to deliver
(and the purchaser to take) and amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of the underlying stocks in the index
is made. The Fund purchases and sells futures contracts on the stock index
for which it can obtain the best price with consideration also given to
liquidity.
Using futures in anticipation of market transactions involves certain
risks. Although the Fund intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any particular
time. In addition, the price of stock index futures may not correlate
perfectly with the movement in the stock index due to certain market
distortions. First, all participants in the futures market are subject to
margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions which would distort the normal relationship between
the index and futures markets. Secondly, from the point of view of
speculators, the deposit requirements in the futures market are less onerous
than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market also may cause temporary
price distortions. Because of the possibility of price distortions in the
futures market and the imperfect correlation between movements in the stock
index and movements in the price of stock index futures, a correct forecast of
general market trends still may not result in a successful hedging
transaction.
In connection with its futures transactions, the Fund may be required to
establish and maintain at its custodian bank a segregated account consisting
of permissible liquid assets in an amount equal to the market value of the
underlying commodity less any amount deposited as margin.
Investment Restrictions
The Fund has adopted the following investment restrictions as
fundamental policies, which cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. The Fund may not:
1. Purchase securities of closed-end investment companies except (a)
in the open market where no commission other than the ordinary broker's
commission is paid, which purchases are limited to a maximum of (i) 3% of the
total outstanding voting stock of any one closed-end investment company, (ii)
5% of the Fund's net assets with respect to the securities issued by any one
closed-end investment company and (iii) 10% of the Fund's net assets in the
aggregate, or (b) those received as part of a merger or consolidation. The
Fund may not purchase the securities of open-end investment companies other
than itself.
2. Invest in commodities, except that the Fund may invest in futures
contracts as described in the Prospectus and Statement of Additional
Information.
3. Purchase, hold or deal in real estate, or oil and gas interests,
but the Fund may purchase and sell securities that are secured by real estate
or issued by companies that invest or deal in real estate.
4. Borrow money, except from banks (which, if permitted by applicable
regulatory authority, may be from Mellon Bank, N.A. or Boston Safe Deposit and
Trust Company, affiliates of the Advisers) for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of the value of the Fund's total assets,
the Fund will not make any additional investments. Transactions in futures
and options do not involve any borrowing for purposes of this restriction.
5. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 15% of the value of its total assets, but only to
secure borrowings for temporary or emergency purposes. Collateral
arrangements with respect to initial or variation margin for futures contracts
will not be deemed to be pledges of the Fund's assets.
6. Lend any funds or other assets except through the purchase of debt
securities, bankers' acceptances and commercial paper of corporations and
other entities. However, the Fund may lend its portfolio securities in an
amount not to exceed 30% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Directors.
7. Act as an underwriter of securities of other issuers or purchase
securities subject to restrictions on disposition under the Securities Act of
1933 (so-called "restricted securities"). The Fund may not enter into
repurchase agreements providing for settlement in more than seven days after
notice or purchase securities which are not readily marketable, if, in the
aggregate, more than 10% of the value of the Fund's net assets would be so
invested.
8. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
9. Purchase, sell or write puts, calls or combinations thereof.
10. Invest more than 25% of its assets in investments in any
particular industry or industries (including banking), except to the extent
the Standard & Poor's 500 Composite Stock Price Index also is so concentrated,
provided that, when the Fund has adopted a temporary defensive posture, there
shall be no limitation on the purchase of obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
In addition to the investment restrictions adopted as fundamental
policies set forth above, though not fundamental policies, the Fund may not
(i) engage in arbitrage transactions, (ii) purchase warrants (excluding those
acquired by the Fund in units or attached to securities), (iii) sell
securities short, but reserves the right to sell securities short against the
box (a transaction in which the Fund enters into a short sale of a security
which the Fund owns) or (iv) purchase securities of any company having less
than three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the Fund's investments
in all such companies to exceed 5% of the value of its total assets.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best interests
of the Fund and its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below. Each Board member who is deemed to be an "interested person" of
the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Fund
* JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads, specialty yarns, home
furnishings and fabrics, Curtis Industries, Inc., a national distributor
of security products, chemicals and automotive and other hardware, and
Staffing Resources, Inc. For more than five years prior to January
1995, he was President, a director and, until August 1994, Chief
Operating Officer of Dreyfus and Executive Vice President and a director
of Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus
and, until August 24, 1994, the Fund's distributor. From August 1994
until December 31, 1994, he was a director of Mellon Bank Corporation.
He is 53 years old and his address is c/o Noel Group, Inc., 667 Madison
Avenue, 25th Floor, New York, New York 10021.
*DAVID P. FELDMAN, Board Member. Corporate Vice President-Investment
Management of AT&T. He is also a trustee of Corporate Property
Investors, a real estate investment company. He is 57 years old and his
address is One Oak Way, Berkeley Heights, New Jersey 07922.
JOHN M. FRASER, JR., Board Member. President of Fraser Associates, a service
company for planning and arranging corporate meetings and other events.
From September 1975 to June 1978, he was Executive Vice President of
Flagship Cruises, Ltd. Prior thereto, he was Senior Vice President and
Resident Director of the Swedish-American Line for the United States and
Canada. He is 74 years old and his address is 133 East 64th Street, New
York, New York 10021.
EHUD HOUMINER, Board Member. Since July 1991, Professor and
Executive-in-Residence at the Columbia Business School, Columbia
University. Since January 1996, principal of Lear, Yavitz and
Associates, a management consulting firm. He was President and Chief
Executive Officer of Philip Morris USA, manufacturers of consumer
products, from December 1988 to September 1990. He also is a Director
of Avnet Inc. He is 55 years old and his address is c/o Columbia
Business School, Columbia University, Uris Hall, Room 526, New York, New
York 10027.
DAVID J. MAHONEY, Board Member. President of David Mahoney Ventures since
1983. From 1968 to 1983, he was Chairman and Chief Executive Officer of
Norton Simon Inc., a producer of consumer products and services. Mr.
Mahoney is also a director of National Health Laboratories Inc.,
Bionaire Inc. and Good Samaritan Health Systems, Inc. He is 72 years
old and his address is 745 Fifth Avenue, Suite 700, New York, New York
10151.
GLORIA MESSINGER, Board Member. From 1981 to 1993, Managing Director and
Chief Executive Officer of ASCAP (American Society of Composers, Authors
and Publishers). She is a member of the Board of Directors of the Yale
Law School Fund and Theater for a New Audience, Inc., and was secretary
of the ASCAP Foundation and served as a Trustee of the Copyright Society
of the United States. She is also a member of numerous professional and
civic organizations. She is 66 years old and her address is 747 Third
Avenue, 11th Floor, New York, New York 10017.
JACK R. MEYER, Board Member. President and Chief Executive Officer of Harvard
Management Company, an investment management company, since September
1990. For more than five years prior thereto, he was Treasurer and
Chief Investment Officer of The Rockefeller Foundation. He is 51 years
old and his address is 600 Atlantic Avenue, Boston, Massachusetts 02210.
JOHN SZARKOWSKI, Board Member. Director Emeritus of Photography at The Museum
of Modern Art. Consultant in Photography. He is 71 years old and his
address is Bristol Road, Box 221, East Chatham, New York 12060.
ANNE WEXLER, Board Member. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs. She is also a
director of Alumax, Comcast Corporation, The New England Electric
System, and Nova Corporation, and a member of the Board of the Carter
Center of Emory University, the Council of Foreign Relations, the
National Park Foundation, Visiting Committee of the John F. Kennedy
School of Government at Harvard University and the Board of Visitors of
the University of Maryland School of Public Affairs. She is 66 years
old and her address is c/o The Wexler Group, 1317 F Street, N.W., Suite
600, Washington, D.C. 20004.
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of the Fund
who are not "interested persons" of the Fund, as defined in the 1940 Act, will
be selected and nominated by the Board members who are not "interested
persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the Board
receives an additional 25% of such compensation. Emeritus Board members are
entitled to receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of compensation
paid to each Board members by the Fund for the fiscal year ended October 31,
1996, and by all other funds in the Dreyfus Family of Funds for which such
person is a Board member (the number of which is set forth in parenthesis next
to each Board member's total compensation) for the year ended December 31,
1995, were as follows:
Total Compensation
Aggregate From Fund and
Name of Board Compensation From Fund Complex
Member Fund* Paid to Board Member
Joseph S. DiMartino $6,250 $445,000 (94)
David P. Feldman $5,000 $113,783 (27)
John M. Fraser, Jr. $1,171 $ 58,606 (12)
Ehud Houminer $ 671 $ 55,405 (12)
David J. Mahoney $ 671 $ 47,250 (14)
Gloria Messinger $1,171 $ 5,511 (1)
Jack R. Meyer $4,500 $ 21,125 (4)
John Szarkowski $5,000 $ 21,625 (4)
Anne Wexler $4,500 $ 62,201 (16)
____________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $1,339 for all Board members as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by Dreyfus. From December
1991 to July 1994, she was President and Chief Compliance Officer of
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President,
General Counsel, Secretary and Clerk of the Distributor and an officer
of other investment companies advised or administered by Dreyfus. From
February 1992 to July 1994, he served as Counsel for The Boston Company
Advisors, Inc. From August 1990 to February 1992, he was employed as an
associate at Ropes & Gray. He is 32 years old.
ELIZABETH A. BACHMAN, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by Dreyfus. She is 27 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by
Dreyfus. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank and Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
RICHARD W. INGRAM, Vice President and Assistant Secretary. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by Dreyfus. From March 1994 to November 1995,
he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company, Inc.
He is 40 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by Dreyfus. Prior to August 1993, he was employed as an
Associate Examiner at the National Association of Securities Dealers,
Inc. He is 27 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by Dreyfus. From September 1989 to July 1994, she was an
Assistant Vice President and Client Manager for The Boston Company, Inc.
She is 32 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by
Dreyfus. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares of Common Stock outstanding on December 22, 1996.
The following persons are known by the Fund to own of record 5% or more
of the Fund's voting securities outstanding on December 22, 1996: The Dreyfus
Trust Company, as Trustee for FDC Incentive Savings Plan, 1 Cabot Road #028-
0031, Medford, Massachusetts 02155-5141--11.8%; Charles Schwab & Company,
Inc., 101 Montgomery Street, Los Angeles, California 94104--15.4%; Nationwide
Qualified Plans, P.O. Box 182029, Columbus, Ohio 43218-2029--17.7%.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. Dreyfus provides management services pursuant to
the Management Agreement (the "Management Agreement") dated November 13, 1995,
amended as of January 1, 1997, with the Fund, which is subject (after May 14,
1997) to annual approval by (i) the Fund's Board or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of the Fund,
provided that in either event the continuance also is approved by a majority
of the Board members who are not "interested persons" (as defined in the 1940
Act) of the Fund or Dreyfus by vote cast in person at a meeting called for the
purpose of voting on such approval. The Management Agreement was approved by
shareholders at a meeting held on November 3, 1995 and was last approved by
the Fund's Board, including a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of any party to the
Management Agreement, at a meeting held on November 6, 1996. The Management
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of the holders of a majority of the Fund's shares, or, upon
not less than 90 days' notice, by Dreyfus. The Management Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act).
The following persons are officers and/or directors of Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash, Vice
Chairman-Distribution and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; William F. Glavin, Jr., Vice President-
Corporate Development; Mark N. Jacobs, Vice President, General Counsel and
Secretary; Patrice M. Kozlowski, Vice President-Corporate Communications; Mary
Beth Leibig, Vice President-Human Resources; Jeffrey N. Nachman, Vice
President-Mutual Fund Accounting; Andrew S. Wasser, Vice President-Information
Systems; Elvira Oslapas, Assistant Secretary; and Mandell L. Berman, Burton C.
Borgelt and Frank V. Cahouet, directors.
Dreyfus maintains office facilities on behalf of the Fund, and furnishes
the Fund statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. Dreyfus also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
Index Management Agreement. Mellon Equity provides investment advisory
assistance and day-to-day management of the Fund's investments pursuant to the
Index Management Agreement (the "Index Management Agreement") dated November
13, 1995, amended as of January 1, 1997 between Mellon Equity and Dreyfus.
The Index Management Agreement is subject (after May 14, 1997) to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in the
1940 Act) of the Fund's outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the Fund's Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Fund or Mellon Equity, by vote cast in person at a meeting called for the
purpose of voting on such approval. The Index Management Agreement was
approved by shareholders on November 3, 1995, and was approved by the Fund's
Board, including a majority of Board members who are not "interested persons"
of any party to the Index Management Agreement, at a meeting held on November
6, 1996. The Index Management Agreement is terminable without penalty (i) by
Dreyfus on 60 days' notice, (ii) by the Fund's Board or by vote of the holders
of a majority of the Fund's shares on 60 days' notice, or (iii) by Mellon
Equity on not less than 90 days' notice. The Index Management Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act) or upon the termination of the Management Agreement for any reason.
The following persons are executive officers and/or directors of Mellon
Equity: Phillip R. Roberts, Chairman of the Board; William P. Rydell,
President and Chief Executive Officer; and W. Keith Smith, Director.
Mellon Equity provides day-to-day management of the Fund's investments
in accordance with the stated policies of the Fund, subject to the supervision
of Dreyfus and approval of the Fund's Board. All purchases and sales are
reported for the Board's review at the meeting subsequent to such
transactions. Mellon Equity has agreed to pay for the custody services
provided to the Fund by Boston Safe Deposit and Trust Company.
Expenses. All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by Dreyfus and/or
Mellon Equity. The expenses borne by the Fund include: organizational costs,
taxes, interest, loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of 5% or more of
the outstanding voting securities of Dreyfus or Mellon Equity or any of their
affiliates, Securities and Exchange Commission fees, 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 shareholders, costs
of shareholder's reports and meetings, and any extraordinary expenses.
As compensation for Dreyfus' services, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of .25 of 1% of the value of the
Fund's average daily net assets. As compensation for Mellon Equity's
services, Dreyfus has agreed to pay Mellon Equity a monthly fee at the annual
rate of .05 of 1% of the value of the Fund's average daily net assets until
such assets exceed $1 billion and .075 of 1% of the value of such assets at
any time thereafter. Prior to January 1, 1997, the Fund had agreed to pay
Dreyfus a monthly management fee at the annual rate of .295 of 1% of the value
of the Fund's average daily net assets, and Dreyfus had agreed to pay Mellon
Equity a monthly index management fee at the annual rate of .095 of 1% of the
value of the Fund's average daily net assets. All fees and expenses are
accrued daily and deducted before declaration of dividends to shareholders.
For the period from November 13, 1995 (effective date of Management Agreement)
through October 31, 1996, the management fee paid to Dreyfus amounted to
$1,329,105 for such period. For the period from November 13, 1995 (effective
date of Index Management Agreement) through October 31, 1996, the index
management fee paid to Mellon Equity by Dreyfus amounted to $______ for such
period.
From April 4, 1990 to November 13, 1995, Wells Fargo Nikko Investment
Advisers ("WFNIA") served as the Fund's index fund manager. Pursuant to prior
index management agreements with WFNIA, the Fund agreed to pay a monthly fee
at the annual rate of .10 of 1% of the value of the Fund's average daily net
assets. For the fiscal years ended October 31, 1994 and 1995 and for the
period November 1, 1995 through November 13, 1995 (termination date of the
prior index management agreement), the index management fees payable to WFNIA
amounted to $274,298, $280,472 and $11,274, respectively. The index
management fee was reduced by $30,232 in the fiscal year ended October 31,
1994, pursuant to an undertaking by WFNIA resulting in a net fee paid to WNFIA
of $244,066 for the 1994 fiscal year.
Prior to November 13, 1995, Dreyfus served as the Fund's administrator
pursuant to an administration agreement with the Fund. As compensation for
its administrative services, the Fund agreed to pay Dreyfus a monthly fee at
the annual rate of .20 of 1% of the value of the Fund's average daily net
assets. For the fiscal years ended October 31, 1994 and 1995 and for the
period November 1, 1995 through November 13, 1995 (termination date of the
administration agreement), the administrative fees payable to Dreyfus amounted
to $548,596, $560,944 and $22,547, respectively. The administration fee was
reduced by $60,463 in the fiscal year ended October 31, 1994, pursuant to an
undertaking by Dreyfus, resulting in a net administrative fee paid to Dreyfus
of $488,133 for the 1994 fiscal year.
Dreyfus (and to a limited extent, Mellon Equity) have agreed that if in
any fiscal year the aggregate expenses of the Fund (including fees pursuant to
the 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, and Dreyfus may deduct from the fees paid to
Mellon Equity or Dreyfus and Mellon Equity will bear, such excess expense in
proportion to their management fee and index management fee, 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.
In addition, Dreyfus has agreed, effective November 1, 1996, that, until
at least the fiscal year ending October 31, 1998, if the Fund's aggregate
expenses (exclusive of taxes, brokerage, interest on borrowings, and
extraordinary expenses), including the management fee, exceed .50 of 1% of the
value of the Fund's average daily net assets for the fiscal year, the Fund may
deduct from the management fee payable to Dreyfus to the extent of such
excess.
The aggregate of the fees payable to Dreyfus is not subject to reduction
as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services
Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund pays the Distributor for the provision of certain services
to Fund shareholders. 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 such shareholder accounts. Under the
Shareholder Services Plan, the Distributor may make payments to certain
securities dealers, financial institutions and other financial industry
professionals (collectively, "Service Agents"), in respect of these services.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the Fund's
Board for its review. In addition, the Plan provides that material amendments
of the Plan must be approved by the Board, and by Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund and have no
direct or indirect financial interest in the operation of the Plan, by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Plan is subject to annual approval by such vote of the Board
members cast in person at a meeting called for the purpose of voting on the
Plan. The Plan was last so approved at a meeting held on November 6, 1996.
The Plan is terminable at any time by vote of a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund, and
have no direct or indirect financial interest in the operation of the Plan or
in any agreements entered into in connection with the Plan.
For the fiscal year ended October 31, 1996, $851,214 was charged to the
Fund under the prior Shareholder Services Plan (the "Prior Plan") which was
terminated as of December 31, 1996. Pursuant to the Prior Plan, the Fund
reimbursed Dreyfus Service Corporation for certain allocated expenses of
providing personal services relating to shareholder accounts.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor on a
best effort basis pursuant to an agreement which is renewable annually. The
Distributor also acts as distributor for the other funds in the Dreyfus Family
of Funds and for certain other investment companies. In some states, certain
financial institutions effecting transactions in Fund shares may be required
to register as dealers pursuant to state law.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes Dreyfus Transfer, Inc. (the "Transfer Agent"), the Fund's transfer
and dividend disbursing agent, to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt if the Transfer Agent
receives the redemption request in proper form. Redemption proceeds ($1,000
minimum) will be transferred by Federal Reserve wire only to the commercial
bank account specified by the investor on the Account Application or
Shareholder Services Form, or to a correspondent bank if the investor's bank
is not a member of the Federal Reserve System. Fees ordinarily are imposed by
such bank and borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each
signature must be guaranteed. Signatures on endorsed certificates submitted
for redemption also must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net
assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In the
case of requests for redemption in excess of such amount, the Board reserves
the right to make payments in whole or part in securities or other assets of
the Fund in case of an emergency or any time a cash distribution would impair
the liquidity of the Fund to the detriment of the existing shareholders. In
such event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage charges
would be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Corporate Pension, Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including IRAs set up under a
Simplified Employee Pension Plan ("SEP-IRAs") and IRA "Rollover Accounts," and
403(b)(7) Plans. Plan support services also are available. Investors can
obtain details on the various plans by calling the following numbers toll
free: for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA "Rollover
Accounts," please call 1-800-645-6561; or for SEP-IRAs, 401(k) Salary
Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
A fee may be charged by the entity acting as custodian for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a non-working
spousal IRA with a minimum investment of $250.
The investor should read the prototype retirement plan and the
appropriate form of custodial agreement for further details as to eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. The Fund's portfolio securities are
valued at the last sale price on the securities exchange or national
securities market on which such securities are primarily traded. Securities
not listed on an exchange or national securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
Any securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith by the
Fund's Board. Expenses and fees, including the management fee (reduced by the
expense limitation, if any), are accrued daily and taken into account for the
purpose of determining the net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Taxation of the Fund. Management of the Fund believes that the Fund
qualified for the fiscal year ended October 31, 1996 as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. In addition, all or a portion of the gain
realized from engaging in "conversion transactions" may be treated as ordinary
income under Section 1258. "Conversion transactions" are defined to include
certain forward, futures, option and "straddle" transactions, transactions
marketed or sold to produce capital gains, or transactions described in
Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by the Fund from
certain financial futures will be treated as 60% long-term capital gain or
loss and 40% short-term capital gain or loss. Gain or loss will arise upon
the exercise of such futures as well as from closing transactions. In
addition, any such futures remaining unexercised at the end of the Fund's
taxable year will be treated as sold for their then fair market value,
resulting in additional gain or loss to the Fund characterized in the manner
described above.
Offsetting positions held by the Fund involving futures may constitute
"straddles." Straddles are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of straddles is governed
by Sections 1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256.
As such, all or a portion of any short or long-term capital gain from
certain "straddle" and conversion transactions may be recharacterized to
ordinary income. If the Fund were treated as entering into straddles by
reason of its futures transactions, such straddles could be characterized as
"mixed straddles" if the futures transactions comprising such straddles were
governed by Section 1256 of the Code. The Fund may make one or more elections
with respect to "mixed straddles." Depending upon which election is made, if
any, the results to the Fund may differ. If no election is made, to the
extent the straddle and conversion transactions rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to the
extent of unrealized gain in any offsetting positions. Moreover, as a result
of the straddle rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gain on
straddle positions may be recharacterized as short-term capital gain or
ordinary income.
Shareholder Taxation. Depending on the composition of the Fund's
income, all or a portion of the dividends paid by the Fund from net investment
income may qualify for the dividends received deduction allowable to certain
U.S. corporate shareholders ("dividends received deduction"). In general,
dividend income of the Fund distributed to qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent that
(i) the Fund's income consists of dividends paid by U.S. corporations and
(ii) the Fund would have been entitled to the dividends received deduction
with respect to such dividend income if the Fund were not a regulated
investment company. The dividends received deduction for qualifying corporate
shareholders may be further reduced if the shares of the Fund held by them
with respect to which dividends are received are treated as debt-financed or
deemed to have been held for less than 46 days. In addition, the Code
provides other limitations with respect to the ability of a qualifying
corporate shareholder to claim the dividends received deduction in connection
with holding Fund shares.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of his shares below the
cost of his investment. Such a distribution would be a return on the
investment in an economic sense although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund for
six months or less and has received a capital gain distribution with respect
to such shares, any loss incurred on the sale of such shares will be treated
as a long-term capital loss to the extent of the capital gain distribution
received.
PORTFOLIO TRANSACTIONS
The Advisers assume general supervision over placing orders on behalf of
the Fund for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best
judgment of the Advisers and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of orders at the
most favorable net price. Brokers also will be selected because of their
ability to handle special executions such as are involved in large block
trades or broad distributions, provided the primary consideration is met.
Portfolio turnover may vary from year to year, as well as within a year. High
turnover rates are likely to result in comparatively greater brokerage
expenses. The overall reasonableness of brokerage commissions paid is
evaluated by the Advisers based upon their knowledge of available information
as to the general level of commissions paid by other institutional investors
for comparable services.
For its portfolio securities transactions for the fiscal years ended
October 31, 1994, 1995 and 1996, the Fund paid total brokerage commissions of
$111,012, $22,591 and $67,672, respectively, none of which was paid to the
Distributor. There were no spreads or concessions on principal transactions
in fiscal 1994, 1995 and 1996.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
The Fund's average annual total return for the 1, 5 and 6.83 year
periods ended October 31, 1996 was 23.41%, 15.02% and 13.13%, respectively.
Average annual total return is calculated by determining the ending redeemable
value of an investment purchased with a hypothetical $1,000 payment made at
the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period)
and subtracting 1 from the result.
The Fund's total return for the period January 2, 1990 (commencement of
operations) to October 31, 1996 was 132.29%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end of
the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"), Lipper Analytical Services,
Inc., the Dow Jones Industrial Average and other industry publications. Past
performance of the S&P 500 Index is no guarantee of future success of the
Fund. The Fund's share price and yield fluctuate, and its investment return
will reflect applicable expenses. The Fund may cite in its advertisements or
reports or other communications to shareholders, historical performance of
unmanaged indexes as reported in Ibbotson, Roger G. and Rex A. Sinquefield,
Stocks, Bonds, Bills and Inflation (SBBI), 1982 updated annually in the SBBI
Yearbook, Ibbotson Associates, Chicago. The Fund also may cite in its
advertisements to the aggregate amount of assets committed to index investing
by pension funds and/or other institutional investors.
The S&P 500 Index and the Standard & Poor's MidCap 400 Index together
represent approximately __% of the total market capitalization of stocks
traded in the United States. From time to time, advertising materials for the
Fund may refer to Morningstar ratings and related analysis supporting such
ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund shares
are of one class and have equal rights as to dividends and in liquidation.
Shares have no preemptive, subscription or conversion rights and are freely
transferable.
On November 13, 1995, the Fund, which is incorporated under the name
Peoples Index Fund, Inc., began operating under the name Dreyfus S&P 500 Index
Fund.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT ACCOUNTANTS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and dividend
disbursing agent. Under a transfer agency agreement with the Fund, the
Transfer Agent arranges for the maintenance of shareholder account records for
the Fund, the handling of certain communications between shareholders and the
Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee computed on the
basis of the number of shareholder accounts it maintains for the Fund during
the month, and is reimbursed for certain out-of-pocket expenses. For the
period December 1, 1995 (effective date of transfer agency agreement) through
October 31, 1996, the Fund paid the Transfer Agent $70,303.
Boston Safe Deposit and Trust Company (the "Custodian"), an indirect
wholly-owned subsidiary of Mellon Bank Corporation, One Boston Place, Boston,
Massachusetts 02108, acts as the custodian of the Fund's investments. Under a
custody agreement with the Fund, the Custodian holds the Fund's portfolio
securities and keeps all necessary accounts and records. The Custodian's fees
for its services to the Fund are paid by Mellon Equity.
Neither the Transfer Agent nor the Custodian has any part in determining
the investment policies of the Fund or which securities are to be purchased or
sold by the Fund.
Stroock & Stroock & Lavan, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Fund's Prospectus.
Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New York, New
York 10019-6013, independent accountants, have been selected as auditors of
the Fund.
APPENDIX
Description of S&P A-1 Commercial Paper Ratings:
The rating A is the highest rating and is assigned by S&P to issues that
are regarded as having the greatest capacity for timely payment. Issues in
this category are delineated with the number 1, 2 or 3 to indicate the
relative degree of safety. Paper rated A-1 indicates that the degree of
safety regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus (+) sign designation.
Description of Moody's Prime-1 Commercial Paper Ratings:
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment
of short-term promissory obligations, and ordinarily will be evidenced by
leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate
reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well established access to a range of financial markets and assured sources of
alternate liquidity.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ------------------------------------------------------------------------------
Statement of Investments October 31, 1996
Shares Common Stocks--93.6% Value
-------- ------------
Basic Industries--5.5%
11,500 Air Products & Chemicals............. $ 690,000
13,500 Alco Standard ....................... 626,062
3,800 Armstrong World Industries........... 253,650
5,400 Avery Dennison....................... 355,725
3,100 Ball................................. 74,787
5,400 Bemis................................ 189,000
5,000 Boise Cascade........................ 155,000
2,900 Centex............................... 87,365
9,900 Champion International............... 430,650
13,300 Crown Cork & Seal.................... 638,400
25,400 Dow Chemical......................... 1,974,850
58,100 duPont (E.I.) de Nemours............. 5,388,775
8,100 Eastman Chemical..................... 427,275
3,800(a) FMC.................................. 279,775
8,700 Fluor................................ 569,850
9,500 Georgia Pacific...................... 712,500
5,600 Goodrich (B.F.)...................... 237,300
9,300 Grace (W.R.)......................... 492,900
6,600 Great Lakes Chemical................. 344,025
11,100 Hercules............................. 528,637
31,000 International Paper.................. 1,325,250
8,800 James River ......................... 277,200
29,200 Kimberly-Clark....................... 2,722,900
11,200 Louisiana Pacific ................... 233,800
5,400 Mead................................. 306,450
43,400 Minnesota Mining &
Manufacturing...................... 3,325,525
60,700 Monsanto............................. 2,405,237
14,700 Morton International................. 578,812
7,000 Nalco Chemical....................... 254,625
33,400 Occidental Petroleum................. 818,300
19,300 PPG Industries....................... 1,100,100
3,000 Potlach ............................. 128,250
16,100 Praxair.............................. 712,425
6,700 Rohm & Haas ......................... 478,210
8,900 Sherwin-Williams .................... 446,112
5,200 Sigma-Aldrich........................ 305,500
10,300 Stone Container...................... 157,075
5,700 Temple-Inland........................ 292,125
7,100 Union Camp .......................... 346,125
13,400 Union Carbide........................ 571,175
10,500 Westvaco ............................ 299,250
20,500 Weyerhaeuser......................... 940,440
5,700 Willamette Industries ............... 384,750
------------
32,866,162
------------
Capital Goods--21.0%
22,700 AMP.................................. 768,962
14,000(a) Advanced Micro Devices............... 248,500
4,700 Alexander & Alexander Services....... 71,675
17,954 Allegheny Teledyne................... 383,766
29,300 AlliedSignal......................... $ 1,919,150
12,500(a) Amdahl............................... 128,125
17,700 American Brands...................... 845,175
6,200(a) Andrew............................... 302,250
12,900 Apple Computer....................... 296,700
18,600(a) Applied Materials.................... 491,737
4,700 Autodesk............................. 107,512
30,000 Automatic Data Processing............ 1,248,750
19,500 Bay Networks......................... 394,875
36,100 Boeing............................... 3,443,037
3,000 Briggs & Stratton.................... 120,000
22,000 Browning-Ferris Industries........... 577,500
27,900 COMPAQ Computer...................... 1,942,537
7,800(a) Cabletron Systems.................... 486,525
7,500 Case................................. 348,750
20,000 Caterpillar.......................... 1,372,500
7,100(a) Ceridian............................. 352,337
4,100 Cincinnati Milacron.................. 78,412
67,000(a) Cisco Systems........................ 4,145,625
37,700 Computer Associates..................
International...................... 2,229,012
7,800(a) Computer Sciences.................... 579,150
11,200 Cooper Industries.................... 450,800
3,100 Crane................................ 144,150
38,200(a) CUC International.................... 935,900
4,100 Cummins Engine....................... 170,662
12,100 DSC Communications................... 167,887
4,100(a) Data General......................... 60,987
26,700 Deere & Co........................... 1,114,725
9,300 Dell Computer........................ 756,787
8,500 Deluxe Corp.......................... 277,312
16,100(a) Digital Equipment.................... 474,950
11,800 Dover................................ 606,225
10,000 Dow Jones & Co....................... 330,000
18,500 Dresser Industries................... 608,187
17,600 Dun & Bradstreet..................... 1,018,600
4,900 EG&G................................. 86,362
24,000(a) EMC.................................. 630,000
8,000 Eaton................................ 478,000
23,200 Emerson Electric..................... 2,064,800
23,200 First Data........................... 1,850,200
4,200 Foster Wheeler....................... 172,200
6,500 General Dynamics..................... 446,062
170,900 General Electric..................... 16,534,579
5,200 General Signal....................... 211,900
12,500 Genuine Parts........................ 546,875
3,600 Giddings & Lewis..................... 42,300
5,300 Grainger (W.W.)...................... 392,862
10,700 H&R Block............................ 264,825
4,900 Harnischfeger Industries............. 196,000
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ---------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
-------- ------------
Capital Goods (continued)
4,000 Harris............................... $ 250,500
105,800 Hewlett-Packard...................... 4,668,425
13,100 Honeywell............................ 813,837
12,700 Illinois Tool Works.................. 892,175
11,300 Ingersoll-Rand....................... 470,362
54,600 International Business Machines...... 7,043,400
85,100 Intel................................ 9,350,362
4,900(a) Intergraph........................... 45,937
8,400 Interpublic Group Cos................ 407,400
4,300 Johnson Controls..................... 313,900
13,400(a) LSI Logic............................ 355,100
32,400 Laidlaw, Cl. B....................... 380,700
20,700 Lockheed Martin...................... 1,855,237
65,925 Lucent Technologies.................. 3,098,480
7,700 Mallinckrodt Group................... 334,950
7,500 Marsh & McLennan..................... 780,937
5,700 McDermott International.............. 101,175
22,300 McDonnell Douglas.................... 1,215,350
21,600 Micron Technology.................... 548,100
61,900(a) Microsoft............................ 8,495,780
61,300 Motorola............................. 2,819,800
14,300(a) National Semiconductor............... 275,275
4,900 National Service Industries.......... 169,050
26,700 Northern Telecommunications.......... 1,738,837
6,000 Northrop Grumman..................... 484,500
36,500(a) Novell............................... 337,625
67,700(a) Oracle............................... 2,864,560
5,300(a) Owens-Corning........................ 205,375
11,900 Pall................................. 304,937
7,700 Parker-Hannifin...................... 291,637
4,500 Perkin-Elmer......................... 241,312
15,400 Pitney Bowes......................... 860,475
4,600 Raychem.............................. 359,375
24,500 Raytheon............................. 1,206,625
22,600 Rockwell International............... 1,243,000
8,400 Ryder System......................... 249,900
6,000 Safety-Kleen......................... 93,750
7,900 Scientific-Atlanta................... 114,550
10,900 Seagate Technology................... 727,575
24,400 Service Corp. International.......... 695,400
2,400 Shared Medical Systems............... 115,800
17,800(a) Silicon Graphics..................... 329,300
6,300 Snap-On.............................. 202,387
9,213 Stanley Works........................ 260,267
19,100(a) Sun Microsystems..................... 1,165,100
12,200(a) Tandem Computers..................... 154,025
3,400 Tektronix............................ 133,025
9,200(a) Tellabs.............................. 783,150
19,600 Texas Instruments.................... 943,250
8,400 Textron.............................. 745,500
4,200 Thomas & Betts....................... $ 177,975
3,300 Timken............................... 147,262
17,500(a) 3COM................................. 1,183,437
2,906 TRINOVA.............................. 95,534
6,700 TRW.................................. 606,350
15,800 Tyco International................... 784,075
17,900(a) Unisys............................... 111,875
12,600 United Technologies.................. 1,622,250
50,800 WMX Technologies..................... 1,746,250
43,600 Westinghouse Electric................ 746,650
33,600 Xerox................................ 1,558,200
------------
124,234,026
------------
Consumer Cyclical--11.5%
26,100 Albertson's.......................... 897,187
7,700 American Greetings, Cl. A............ 225,706
15,100 American Stores...................... 624,762
5,300(a) Bally Entertainment.................. 159,662
9,100 Black & Decker....................... 340,112
10,200 Brunswick............................ 239,700
10,700(a) Charming Shoppes..................... 49,487
75,400 Chrysler............................. 2,535,330
10,100 Circuit City Stores.................. 330,775
24,200 Comcast, Cl. A....................... 356,950
8,700 Cooper Tire and Rubber............... 170,737
10,500 Dana Corp............................ 311,062
16,300 Darden Restaurants................... 136,512
22,400 Dayton Hudson........................ 775,600
11,700 Dillard Department Stores, Cl. A..... 371,475
70,200 Disney (Walt)........................ 4,624,425
15,900 Donnelley (R.R.) & Sons.............. 482,962
6,400 Echlin............................... 208,800
21,500(a) Federated Department Stores.......... 709,500
3,700 Fleetwood Enterprises................ 124,875
3,900 Fleming Cos.......................... 67,762
122,400 Ford Motor........................... 3,825,000
7,900(a) Fruit of the Loom, Cl. A............. 287,362
14,600 Gannett.............................. 1,107,775
29,700 Gap.................................. 861,300
14,200(a) General Instrument................... 285,775
78,200 General Motors....................... 4,213,025
6,200 Giant Food, Cl. A.................... 209,250
16,100 Goodyear Tire & Rubber............... 738,587
4,000 Great Atlantic & Pacific............. 120,000
12,800 HFS.................................. 937,600
7,600 Harcourt General..................... 378,100
3,200 Harland (John H.).................... 99,600
10,700(a) Harrah's Entertainment............... 179,225
8,900 Hasbro............................... 345,987
20,200 Hilton Hotel......................... 613,575
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- -----------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
-------- ------------
Consumer Cyclical (continued)
49,601 Home Depot........................... $ 2,715,654
12,100 ITT.................................. 508,200
12,200 ITT Industries....................... 283,650
4,000 Jostens.............................. 86,000
50,300 K mart............................... 490,425
3,900(a) King World Productions............... 140,400
9,900 Knight-Ridder........................ 370,012
13,000(a) Kroger............................... 580,125
28,000 Limited.............................. 514,500
7,600 Liz Claiborne........................ 321,100
2,100 Longs Drug Stores.................... 94,237
17,800 Lowes................................ 718,675
2,506 Luby's Cafeterias.................... 52,626
13,200 Marriott International............... 750,750
16,600 Masco................................ 520,825
28,300 Mattel............................... 817,162
25,900 May Department Stores................ 1,227,012
10,500 Maytag............................... 208,687
72,400 McDonald's........................... 3,212,750
10,300 McGraw-Hill Cos...................... 482,812
10,900 Melville............................. 406,025
3,800 Mercantile Stores.................... 188,575
2,800 Meredith............................. 140,700
10,300 Moore................................ 208,575
900 NACCO Industries, Cl. A.............. 41,625
29,600 NIKE, Cl. B.......................... 1,742,700
7,800(a) Navistar International............... 72,150
10,100 New York Times, Cl. A................ 364,862
8,400 Nordstrom............................ 302,925
4,000 PACCAR............................... 223,000
23,300 Penney (J.C.)........................ 1,223,250
6,400 Pep Boys-Manny, Moe & Jack........... 224,000
20,300(a) Price/Costco......................... 403,462
5,800 Reebok International................. 207,350
8,700 Rite Aid............................. 295,800
4,000 Russell.............................. 113,500
5,300(a) Ryan's Family Steak House............ 39,087
40,500 Sears, Roebuck & Co.................. 1,959,187
5,000(a) Shoney's............................. 36,875
2,100 Springs Industries................... 94,762
5,100 Stride Rite.......................... 42,075
7,000 Supervalu............................ 208,250
18,800 Sysco................................ 639,200
7,500 TJX Cos.............................. 300,000
6,200 Tandy................................ 233,275
67,600(a) Tele-Communications, Cl. A........... 840,775
58,900 Time Warner.......................... 2,194,030
10,700 Times Mirror, Cl. A.................. 494,875
28,300(a) Toys R Us............................ 958,662
6,300 Tribune.............................. 515,025
49,000 US West Media Group.................. $ 765,625
6,600 V.F.................................. 431,475
36,900(a) Viacom, Cl. B........................ 1,203,862
237,400 Wal-Mart Stores...................... 6,320,780
25,500 Walgreen............................. 962,625
13,300 Wendy's International................ 274,312
7,700 Whirlpool............................ 363,825
15,700 Winn-Dixie Stores.................... 523,987
13,800(a) Woolworth............................ 289,800
------------
67,892,012
------------
Consumer Staples--12.2%
2,900 Alberto-Culver, Cl. B................ 132,675
51,300 Anheuser-Busch Cos................... 1,975,050
56,470 Archer Daniels Midland............... 1,228,222
13,768 Avon Products........................ 746,914
7,100 Brown-Forman, Cl. B.................. 307,075
15,000 CPC International.................... 1,183,125
24,300 Campbell Soup........................ 1,944,000
5,300 Clorox............................... 578,362
258,000 Coca-Cola............................ 13,029,000
15,200 Colgate-Palmolive.................... 1,398,400
25,200 ConAgra.............................. 1,256,850
3,900 Coors (Adolph), Cl. B................ 76,050
34,900 Eastman Kodak........................ 2,783,275
6,700 Ecolab............................... 244,550
16,500 General Mills........................ 942,562
46,100 Gillette............................. 3,445,975
38,300 Heinz (H.J.)......................... 1,359,650
15,900 Hershey Foods........................ 769,162
11,500 International Flavors &
Fragrances......................... 475,812
137,900 Johnson & Johnson.................... 6,791,575
21,900 Kellogg.............................. 1,390,650
16,400 Newell............................... 465,350
162,100 PepsiCo.............................. 4,802,212
84,700 Philip Morris Cos.................... 7,845,337
8,500 Pioneer Hi-Bred International........ 570,562
4,700 Polaroid............................. 190,937
71,000 Procter & Gamble..................... 7,029,000
14,000 Quaker Oats.......................... 497,000
11,000 Ralston-Ralston Purina Group......... 727,375
15,500 Rubbermaid........................... 360,375
50,200 Sara Lee............................. 1,782,100
38,800 Seagram.............................. 1,469,550
6,400 Tupperware........................... 328,800
19,500 UST.................................. 563,062
16,600 Unilever, N.V........................ 2,537,730
10,900 Whitman.............................. 264,325
12,000 Wrigley, (Wm) Jr..................... 723,000
------------
72,215,649
------------
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
-------- ------------
Energy--9.4%
9,600 Amerada Hess......................... $ 531,600
51,500 Amoco................................ 3,901,125
6,700 Ashland.............................. 284,750
16,600 Atlantic Richfield................... 2,199,500
15,000 Baker Hughes......................... 534,375
13,000 Burlington Resources................. 654,875
67,600 Chevron.............................. 4,444,700
10,900 Coastal.............................. 468,700
5,700 Columbia Gas System.................. 346,275
9,800 Consolidated Natural Gas............. 520,625
2,100 Eastern Enterprises.................. 80,850
26,300 Enron................................ 1,222,950
7,100 Enserch.............................. 152,650
128,500 Exxon................................ 11,388,312
12,900 Halliburton.......................... 730,462
2,600 Helmerich & Payne.................... 140,725
5,100 Kerr-McGee........................... 320,025
3,500 Louisiana Land & Exploration......... 199,062
40,800 Mobil................................ 4,763,400
5,200 Nicor................................ 181,350
14,200 Noram Energy......................... 218,325
2,800 Oneok................................ 75,250
10,800(a) Oryx Energy.......................... 207,900
8,800 Pacific Enterprises.................. 270,600
15,600 Panenergy............................ 600,600
4,800 Pennzoil............................. 244,800
3,600 Peoples Energy....................... 126,900
27,200 Phillips Petroleum................... 1,115,200
8,800(a) Rowan Cos............................ 196,900
55,500 Royal Dutch Petroleum................ 9,178,312
9,400(a) Santa Fe Energy Resources............ 133,950
25,400 Schlumberger......................... 2,517,775
8,900 Sonat................................ 438,325
7,700 Sun Company.......................... 172,287
17,700 Tenneco.............................. 876,150
27,400 Texaco............................... 2,784,525
29,800 USX-Marathon Group................... 651,875
25,810 Union Pacific Resources Group........ 709,775
25,700 Unocal............................... 941,265
5,500(a) Western Atlas........................ 381,562
10,900 Williams Cos......................... 569,525
------------
55,478,112
------------
Health Care--8.7%
8,700(a) ALZA................................. 225,112
80,800 Abbott Laboratories.................. 4,090,500
6,800 Allergan............................. 207,400
65,800 American Home Products............... 4,030,250
27,400(a) Amgen................................ 1,679,962
5,900 Bard (C.R.).......................... 166,675
5,900 Bausch & Lomb........................ 199,125
28,200 Baxter International................. $ 1,173,825
12,900 Becton, Dickinson & Co............... 561,150
10,300(a) Beverly Enterprises.................. 127,462
12,000(a) Biomet............................... 193,500
18,300(a) Boston Scientific.................... 995,062
51,900 Bristol-Myers Squibb................. 5,488,425
69,450 Columbia/HCA Healthcare.............. 2,482,837
23,800 Corning.............................. 922,250
16,800(a) Humana............................... 306,600
56,600 Lilly (Eli).......................... 3,990,300
6,500 Manor Care........................... 255,125
24,800 Medtronic............................ 1,596,500
125,900 Merck & Co........................... 9,332,337
4,500 Millipore............................ 157,500
66,500 Pfizer............................... 5,502,875
52,600 Pharmacia & Upjohn................... 1,893,600
38,300 Schering-Plough...................... 2,451,200
8,500(a) St. Jude Medical..................... 335,750
22,400(a) Tenet Healthcare..................... 467,600
6,500 U.S. Surgical........................ 272,187
19,000 United Healthcare.................... 719,625
28,100 Warner-Lambert....................... 1,787,866
------------
51,612,600
------------
Interest Sensitive--13.8%
15,579 Aetna................................ 1,041,845
11,100 Ahmanson (H.F.) & Co................. 348,262
46,000 Allstate............................. 2,581,750
49,100 American Express..................... 2,307,700
21,200 American General..................... 789,700
48,600 American International Group......... 5,279,175
11,200 Aon.................................. 646,800
45,100 Banc One............................. 1,911,112
39,900 Bank of New York..................... 1,321,687
37,300 BankAmerica.......................... 3,412,950
15,800 Bank of Boston....................... 1,011,200
8,300 Bankers Trust New York............... 701,350
20,000 Barnett Banks........................ 762,500
5,600 Beneficial........................... 327,600
16,200 Boatmens Bancshares.................. 984,150
7,900 CIGNA................................ 1,030,950
45,200 Chase Manhattan...................... 3,875,900
18,000 Chubb................................ 900,000
49,800 Citicorp............................. 4,930,200
11,900 Comerica............................. 632,187
23,000 CoreStates Financial................. 1,118,375
17,000 Dean Witter, Discover & Co........... 1,000,875
113,000 Federal National Mortgage
Association........................ 4,421,125
18,500 Federal Home Loan Mortgage........... 1,868,500
10,900 Fifth Third Bancorp.................. 682,612
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
-------- ------------
Interest Sensitive (continued)
14,600 First Bank Systems................... $ 963,600
32,800 First Chicago NBD.................... 1,672,800
28,500 First Union.......................... 2,073,375
27,200 Fleet Financial Group................ 1,356,600
8,500 General Re........................... 1,251,625
6,000 Golden West Financial................ 389,250
14,200 Great Western Financial.............. 397,600
14,200 Green Tree Financial................. 562,675
10,000 Household International.............. 885,000
12,100 ITT Hartford......................... 762,300
7,400 Jefferson Pilot...................... 420,875
4,000 Kaufman & Broad Home................. 48,000
23,800 Keycorp.............................. 1,109,675
10,800 Lincoln National..................... 523,800
11,900 Loews................................ 983,237
23,100 MBNA................................. 872,025
6,100 MGIC Investment...................... 418,612
13,500 Mellon Bank.......................... 879,187
17,500 Merrill Lynch & Co................... 1,229,375
19,300 Morgan (J.P.) & Co................... 1,667,037
15,700 Morgan Stanley Group................. 788,925
23,000 National City........................ 997,625
30,100 NationsBank.......................... 2,836,925
38,400 Norwest.............................. 1,684,800
35,300 PNC Bank............................. 1,279,625
9,700 Providian............................ 455,900
2,600 Pulte................................ 68,900
5,700 Republic New York.................... 434,625
13,000 Safeco............................... 490,750
10,900 Salomon.............................. 491,862
8,700 St. Paul Cos......................... 473,062
23,100 SunTrust Banks....................... 1,077,037
7,400 Torchmark............................ 357,975
6,800 Transamerica......................... 515,950
49,700 Travelers Group...................... 2,696,225
7,600 UNUM................................. 477,850
12,200 USF&G................................ 231,800
3,600 USLife............................... 112,500
16,000 U.S. Bancorp......................... 640,000
17,300 Wachovia............................. 929,875
9,700 Wells Fargo.......................... 2,591,119
------------
81,988,483
------------
Mining and Metals--1.4%
11,000(a) ARMCO................................ 41,250
4,400 ASARCO............................... 115,500
23,400 Alcan Aluminium...................... 769,275
18,000 Aluminum Co. of America.............. 1,055,250
37,000 Barrick Gold......................... 966,625
23,300 Battle Mountain Gold................. 177,662
11,500(a) Bethlehem Steel...................... 93,437
9,600 Cyprus Amax Minerals................. $ 217,200
14,400 Echo Bay Mines....................... 112,500
14,900 Engelhard............................ 271,925
20,200 Freeport-McMoRan Copper,
Cl. B.............................. 613,575
15,200 Homestake Mining..................... 216,600
17,400 Inco................................. 552,450
5,000 Inland Steel Industries.............. 80,625
10,300 Newmont Mining....................... 476,375
9,100 Nucor................................ 431,113
6,800 Phelps Dodge......................... 427,550
24,800 Placer Dome.......................... 595,200
6,600 Reynolds Metals...................... 371,250
13,600 Santa Fe Pacific Gold................ 161,500
8,700 USX-U.S. Steel....................... 237,075
9,400 Worthington Industries............... 195,050
------------
8,178,987
------------
Transportation--1.4%
9,400(a) AMR.................................. 789,600
15,800 Burlington Northern Santa Fe......... 1,301,525
21,900 CSX.................................. 944,437
4,100 Caliber System....................... 69,187
8,400 Conrail.............................. 799,050
4,600 Consolidated Freightways............. 110,400
8,200 Delta Air Lines...................... 581,175
5,900(a) Federal Express...................... 474,950
13,000 Norfolk Southern..................... 1,158,625
15,000 Southwest Airlines................... 337,500
6,600(a) USAir Group.......................... 114,675
25,200 Union Pacific........................ 1,414,350
2,900(a) Yellow............................... 37,882
------------
8,133,356
------------
Utilities--8.7%
19,600 ALLTEL............................... 597,800
166,900 AT&T................................. 5,820,637
51,600(a) Airtouch Communications.............. 1,348,050
19,400 American Electric Power.............. 805,100
56,900 Ameritech............................ 3,115,275
15,300 Baltimore Gas & Electric............. 416,925
45,300 Bell Allantic........................ 2,729,325
102,900 BellSouth............................ 4,193,175
15,700 Carolina Power & Light............... 567,166
21,700 Central & Southwest.................. 575,050
16,300 CINergy.............................. 539,937
24,300 Consolidated Edison.................. 710,775
15,000 DTE Energy........................... 451,875
18,400 Dominion Resources................... 694,600
21,000 Duke Power........................... 1,026,375
45,400 Edison International................. 896,650
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- -----------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
-------- ------------
Utilities (continued)
23,600 Entergy.............................. $ 660,800
19,000 FPL Group............................ 874,000
12,500 GPU.................................. 410,937
100,200 GTE.................................. 4,220,925
26,000 Houston Industries................... 594,750
71,200 MCI Communications................... 1,788,900
45,400 NYNEX................................ 2,020,300
14,900 Niagara Mohawk Power................. 126,650
7,100 Northern States Power................ 333,700
15,800 Ohio Edison.......................... 329,825
23,000 PECO Energy.......................... 580,750
16,700 PP&L Resources....................... 390,362
43,000 Pacific Gas & Electric............... 1,010,500
44,300 Pacific Telesis Group................ 1,506,200
30,400 PacifiCorp........................... 642,200
25,300 Public Service Enterprise Group...... 679,937
63,100 SBC Communications................... 3,068,237
69,700 Southern............................. 1,542,112
44,600 Sprint............................... 1,750,550
23,200 Texas Utilities...................... 939,600
49,400 US West.............................. 1,500,525
22,300 UniCom............................... 579,800
10,600 Union Electric....................... 409,425
40,200(a) WorldCom............................. 979,875
------------
51,429,575
------------
TOTAL COMMON STOCKS
(cost $409,363,085)................ $554,028,962
------------
------------
Principal SHORT-TERM
Amount INVESTMENTS--6.4% Value
---------- ------------
U.S.Treasury Bills:
$11,809,000(b) 5.15%, 11/14/1996.................... $ 11,788,334
4,340,000 5.11%, 11/21/1996.................... 4,328,325
5,379,000 5.06%, 12/12/1996.................... 5,348,340
3,010,000 5.22%, 1/2/1997...................... 2,984,385
5,254,000 4.89%, 1/9/1997...................... 5,203,930
6,211,000 5.36%, 1/16/1997..................... 6,145,412
1,123,000 5.30%, 1/23/1997..................... 1,110,052
933,000 5.34%, 1/30/1997..................... 921,300
------------
TOTAL SHORT-TERM
INVESTMENTS
(cost $37,830,467)................. $ 37,830,078
------------
------------
TOTAL INVESTMENTS
(cost $447,193,552).................................100.0% $591,859,040
------ ------------
------ ------------
LIABILITIES LESS CASH AND
RECEIVABLES...........................................0.0% $ (228,354)
------ ------------
------ ------------
NET ASSETS............................................100.0% $591,630,686
------ ------------
------ ------------
Notes to Statement of Investments:
- ----------------------------------------------------------
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account as collateral for
open financial future positions.
<PAGE>
Statement of Financial Futures October 31, 1996
Financial Futures Purchased;
- ----------------------------
Market Value Unrealized
Number of Covered Appreciation
Issuer Contracts by Contracts Expiration at 10/31/96
- ------ --------- ------------ ---------- ------------
Standard & Poor's 500 110 $39,030,750 December '96 $683,475
--------
--------
See notes to financial statements.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ----------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1996
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments........... $447,193,552 $591,859,040
Cash.............................................................. 1,008,677
Dividends receivable.............................................. 756,794
Receivable for futures variation margin--Note 4(a)................ 374,050
Receivable for investment securities sold......................... 27,863
Prepaid expenses.................................................. 34,179
------------
594,060,603
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates..................... 224,874
Payable for Common Stock redeemed................................. 2,057,520
Accrued expenses.................................................. 147,523
------------
2,429,917
------------
NET ASSETS.......................................................................... $591,630,686
------------
------------
REPRESENTED BY: Paid-in capital................................................... $423,335,774
Accumulated undistributed investment income--net.................. 7,475,536
Accumulated net realized gain (loss) on investments............... 15,470,413
Accumulated gross unrealized appreciation (depreciation)
on investments (including $683,475 net unrealized
appreciation on financial futures)--Note 4(b)................... 145,348,963
------------
NET ASSETS.......................................................................... $591,630,686
------------
------------
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized)..................... 26,817,475
NET ASSET VALUE, offering and redemption price per share............................ $22.06
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ------------------------------------------------------------------------------
Statement of Operations Year Ended October 31, 1996
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $60,905 foreign taxes withheld
at source)......................................................... $ 9,780,073
Interest............................................................. 1,626,652
-----------
Total Income................................................... $11,406,725
EXPENSES: Management fee--Note 3(a)............................................ 1,362,926
Shareholder servicing costs--Note 3(b)............................... 1,022,106
Registration fees.................................................... 90,412
Professional fees.................................................... 67,612
Prospectus and shareholders' reports................................. 53,506
Directors' fees and expenses--Note 3(c).............................. 33,735
Custodian fees....................................................... 4,161
Miscellaneous........................................................ 4,520
-----------
Total Expenses................................................. 2,638,978
-----------
INVESTMENT INCOME--NET............................................................... 8,767,747
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4
Net realized gain (loss) on investments.............................. $11,890,436
Net realized gain (loss) on financial futures........................ 6,172,657
-----------
Net Realized Gain (Loss)....................................... 18,063,093
Net unrealized appreciation (depreciation) on investments
(including $710,875 net unrealized appreciation on
financial futures)--Note 4(b)...................................... 67,183,468
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS............................... 85,246,561
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................. $94,014,308
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ----------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1996 October 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 8,767,747 $ 6,157,690
Net realized gain (loss) on investments................................ 18,063,093 4,310,640
Net unrealized appreciation (depreciation) on investments.............. 67,183,468 54,324,576
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations...... 94,014,308 64,792,906
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:................................................ (6,205,887) (6,077,935)
Net realized gain on investments....................................... (4,169,581) (19,477,910)
------------- -------------
Total Dividends...................................................... (10,375,468) (25,555,845)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from shares sold:......................................... 307,525,173 142,531,859
Dividends reinvested................................................... 9,406,794 22,101,817
Cost of shares redeemed................................................ (145,087,307) (112,925,618)
------------- -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions.... 171,844,660 51,708,058
------------- -------------
Total Increase (Decrease) in Net Assets............................ 255,483,500 90,945,119
NET ASSETS:
Beginning of Period.................................................... 336,147,186 245,202,067
------------- -------------
End of Period.......................................................... $591,630,686 $336,147,186
------------- -------------
------------- -------------
Undistributed investment income--net..................................... $ 7,475,536 $ 4,913,676
------------- -------------
CAPITAL SHARE TRANSACTIONS: Shares Shares
------------- -------------
Shares sold:........................................................... 15,194,675 8,633,225
Shares issued for dividends reinvested................................. 496,663 1,546,663
Shares redeemed........................................................ (7,162,184) (6,829,736)
------------- -------------
Net Increase (Decrease) in Shares Outstanding........................ 8,529,154 3,350,152
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.--See Note 1
- -------------------------------------------------------------------------------
Financial Highlights
Reference is made to page 4 of the Fund's Prospectus dated March 1, 1997.
See notes to financial statements.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--See Note 1
- ---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus S&P 500 Index Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. The Fund's investment objective is to provide investment
results that correspond to the price and yield performance of publicly-traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index. Effective November 13, 1995, The Dreyfus
Corporation ("Dreyfus") serves as the Fund's manager and Mellon Equity
Associates ("Mellon Equity"), an affiliate of Dreyfus, serves as the Fund's
index manager. Effective November 13, 1995, Boston Safe Deposit and Trust
Company, an affiliate of Dreyfus, became the Fund's custodian. Dreyfus is a
direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. acts
as the distributor of the Fund's shares, which are sold to the public without a
sales charge.
Prior to November 13, 1995, Wells Fargo Nikko Investment Advisors
("WFNIA") served as the Fund's index manager. In addition, Wells Fargo
Institutional Trust Company, N.A. ("WFITC"), an affiliate of WFNIA, was the
custodian of the Fund's investments. Dreyfus served as the Fund's
administrator.
Effective November 13, 1995, the Fund changed its name from "Peoples
Index Fund, Inc." to "Dreyfus S&P 500 Index Fund".
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including 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. Bid price is
used when no asked price is available.
(b) 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.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid annually.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
if any, it is the policy of the Fund not to distribute such gain.
(d) 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.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--see Note 1
- --------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. For the period ended October 31, 1996, the Fund did not borrow
under the line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Effective November 13, 1995, pursuant to a Management Agreement with
Dreyfus, the management fee is computed at the annual rate of .295 of 1% of the
value of the Fund's average daily net assets, and is payable monthly. Dreyfus
has agreed to pay Mellon Equity a monthly fee at the annual rate of .095 of 1%
of the value of the Fund's average daily net assets. Prior to November 13,
1995, the Fund had an Index Management Agreement with WFNIA and an
Administration Agreement with Dreyfus, whereby WFNIA and Dreyfus received
annual fees of .10 of 1% and .20 of 1%, respectively, of the value of the
Fund's average daily net assets. The Management Agreement further provides that
if in any full fiscal year the aggregate expenses of the Fund, exclusive of
interest, taxes, brokerage and 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 may deduct from the fees paid
to Mellon Equity or Dreyfus and Mellon Equity will bear, in the same proportion
as in the agreement, the amount of such excess to the extent required by state
law. The most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full fiscal year that such
expenses (exclusive of certain expenses as described above) exceed 21/2% of the
first $30 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. There was no expense reimbursement for the
year ended October 31, 1996.
However, Dreyfus has undertaken from November 6, 1996, that if the Fund's
aggregate expenses (exclusive of certain expenses as described above) exceed
.50 of 1% of the Fund's average daily net assets, the Fund may deduct from the
management fee payable to Dreyfus to the extent of such excess.
In addition, for the period from November 1, 1995 through November 13,
1995 WFITC earned $4,161 for custodian services provided to the Fund.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus, an amount
not to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts. 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.
During the period ended October 31, 1996, the Fund was charged an aggregate of
$851,214 pursuant to the Shareholder Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $70,303 during the period ended October
31, 1996.
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--see Note 1
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged on certain redemptions of Fund shares
where the redemption occurs within the initial six-month period following the
opening of the account. During the period ended October 31, 1996, redemption
fees amounted to $12,975.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1996
amounted to $173,674,512 and $22,427,505, respectively.
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 contract at the close of each day's
trading. Accordingly, variation margin payments are received or made 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 as of October 31, 1996 and their
related unrealized market appreciation are set forth in the Statement of
Financial Futures.
(b) At October 31, 1996, accumulated net unrealized appreciation on
investments and financial futures was $145,348,963, consisting of $152,453,934
gross unrealized appreciation and $7,104,971 gross unrealized depreciation.
At October 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Dreyfus S&P 500 Index Fund
(formerly Peoples Index Fund, Inc.)--see Note 1
- --------------------------------------------------------------------
To the Shareholders and Board of Directors of
Dreyfus S&P 500 Index Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus S&P 500 Index Fund (the "Fund"), including the statements of
investments and financial futures, as of October 31, 1996, and the related
statements of operations for the year then ended, the changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 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 S&P 500 Index Fund at October 31, 1996, the results of its
operations, the changes in its net assets and the financial highlights for the
periods referred to above, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
New York, New York
December 13, 1996
PEOPLES INDEX FUND, INC.
d/b/a DREYFUS S&P 500 INDEX FUND
PART C. OTHER INFORMATION
__________________________
Item 24. Financial Statements and Exhibits. - List
_______ __________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information from January 2, 1990
(commencement of operations) to October 31, 1990 and for the
six fiscal years ended October 31, 1996.
Included in Part B of the Registration Statement:
Statement of Investments--October 31, 1996.
Statement of Financial Futures--October 31, 1996.
Statement of Assets and Liabilities--October 31, 1996.
Statement of Operations--year ended October 31, 1996.
Statement of Changes in Net Assets--For the fiscal years
ended October 31, 1995 and 1996.
Notes to Financial Statements.
Report of Independent Auditors dated December 13, 1996.
All schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes which are included in Part
B to the Registration Statement.
Item 24. Financial Statements and Exhibits (continued)
_______ _____________________________________________
(b) Exhibits:
(1)(a) Articles of Incorporation is incorporated by reference to Exhibit
(1)(a) of Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on February 8, 1994.
(1)(b) Articles of Amendment is incorporated by reference to Exhibit (1)(b)
of Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A, filed on February 8, 1994.
(2) By-Laws is incorporated by reference to Exhibit (2) of Post-
Effective Amendment No. 6 to the Registration Statement on Form
N-1A, filed on February 8, 1994.
(5)(a) Management Agreement, as amended.
(5)(b) Index Management Agreement, as amended.
(6) Distribution Agreement is incorporated by reference to Exhibit (6)
of Post-Effective Amendment No. 7 to the Registration Statement on
From N-1A, filed on December 29, 1994.
(8) Custody Agreement.
(9) Shareholder Services Plan.
(10) Opinion and consent of Stroock & Stroock & Lavan dated January 2,
1990 is incorporated by reference to Exhibit (10) of Post-Effective
Amendment No. 6 to the Registration Statement on Form N-1A, filed on
Februry 8, 1994.
(11) Consent of Coopers & Lybrand L.L.P., Independent Accountants.
Item 25. Persons Controlled by or Under Common Control with Registrant
_______ _____________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of December 19, 1996
_______________ _______________________________
Shares of Common Stock,
par value $0.001 per share 8,054
Item 27. Indemnification
______ _______________
Reference is made to Article SEVENTH of the Registrant's Articles of
Incorporation filed as Exhibit 1 and to Section 2-418 of the Maryland
General Corporation Law. The application of these provisions is limited
by Article VIII of the Registrant's By-Laws filed as Exhibit 2 and by the
following undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any such action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final
adjudication of such issue.
The statement as to the general effect of any contract, arrangements or
statute under which a director, officer, underwriter or affiliated person
of the Registrant is insured or indemnified is incorporated by reference
to Item 27 of Part C of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on January 5, 1990.
Reference is also made to the Distribution Agreement attached as Exhibit
(6) of Post-Effective Amendment No. 7 to the Registration Statement on
Form N-1A, filed on December 29, 1994. Item 28(a). Business and Other
Connections of Investment Adviser.
___________________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management
services as the investment adviser, manager and distributor
for sponsored investment companies registered under the
Investment Company Act of 1940 and as an investment adviser
to institutional and individual accounts. Dreyfus also
serves as sub-investment adviser to and/or administrator of
other investment companies. Dreyfus Service Corporation, a
wholly-owned subsidiary of Dreyfus, serves primarily as a
registered broker-dealer of shares of investment companies
sponsored by Dreyfus and of other investment companies for
which Dreyfus acts as investment adviser, sub-investment
adviser or administrator. Dreyfus Management, Inc., another
wholly-owned subsidiary, provides investment management
services to various pension plans, institutions and
individuals.
Item 28(a). Business and Other Connections of Investment Adviser
(continued)
________ ___________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
BURTON C. BORGELT Chairman and Chief Executive Officer:
Director Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
Director:
DeVlieg Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
JULIAN M. SMERLING None
Honorary Director
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company*****
Vice Chairman of the Board:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Executive Mellon Bank Corporation****
Officer, Chief Operating The Boston Company*****
Officer and Director Deputy Director:
Mellon Trust****
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****
President:
Boston Safe Deposit and Trust
Company*****
STEPHEN E. CANTER Former Chairman and Chief Executive Officer:
Vice Chairman and Kleinwort Benson Investment Management
Chief Investment Officer, Americas Inc.*
and a Director Director:
The Dreyfus Trust Company++
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.***;
Director:
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company*****
Laurel Capital Advisors****
Boston Group Holdings, Inc.
Executive Vice President:
Mellon Bank, N.A.****
Boston Safe Deposit & Trust
Company*****
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
MARK N. JACOBS, Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation****
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation,
Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
Item 28(b). Business and Other Connections of Sub-Investment Adviser
________ ___________________________________________________________
Registrant is fulfilling the requirement of this Item 28(b) to
provide a list of the officers and directors of Mellon Equity Associates, the
Registrant's sub-investment adviser (the "Sub-Adviser"), together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by the Sub-Adviser or those of its officers and
directors during the past two years, by incorporating by reference the
information contained in the Form ADV filed with the SEC pursuant to the
Investment Advisers Act of 1940 by the Sub-Adviser (SEC File No. 801-28692).
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) The Dreyfus/Laurel Funds, Inc.
34) The Dreyfus/Laurel Funds Trust
35) The Dreyfus/Laurel Tax-Free Municipal Funds
36) Dreyfus Stock Index Fund, Inc.
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) Dreyfus Investment Grade Bond Funds, Inc.
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Tax Exempt Cash Management
67) The Dreyfus Third Century Fund, Inc.
68) Dreyfus Treasury Cash Management
69) Dreyfus Treasury Prime Cash Management
70) Dreyfus Variable Investment Fund
71) Dreyfus Worldwide Dollar Money Market Fund, Inc.
72) General California Municipal Bond Fund, Inc.
73) General California Municipal Money Market Fund
74) General Government Securities Money Market Fund, Inc.
75) General Money Market Fund, Inc.
76) General Municipal Bond Fund, Inc.
77) General Municipal Money Market Fund, Inc.
78) General New York Municipal Bond Fund, Inc.
79) General New York Municipal Money Market Fund
80) Premier Insured Municipal Bond Fund
81) Premier California Municipal Bond Fund
82) Premier Equity Funds, Inc.
83) Premier Global Investing, Inc.
84) Premier GNMA Fund
85) Premier Growth Fund, Inc.
86) Premier Municipal Bond Fund
87) Premier New York Municipal Bond Fund
88) Premier State Municipal Bond Fund
89) Premier Strategic Growth Fund
90) Premier Value Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Bachman++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02903-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares and in connection with such meeting
to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York on
the 26th day of December, 1996.
PEOPLES INDEX FUND, INC.
d/b/a/ DREYFUS S&P 500 INDEX FUND
BY:/s/ Marie E. Connolly*
Marie, E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signatures Title Date
__________________________ ______________________________ __________
/s/Marie E. Connolly* President and Treasurer (Principal 12/26/96
___________________________ Executive, Financial and Accounting
Marie E. Connolly Officer)
/s/David P. Feldman* Director 12/26/96
___________________________
David P. Feldman
/s/John M Fraser, Jr.* Director 12/26/96
___________________________
John M Fraser, Jr.
/s/Joseph S. DiMartino* Director, Chairman of the Board 12/26/96
___________________________
Joseph S. DiMartino
/s/Ehud Houminer* Director 12/26/96
___________________________
Ehud Houminer
/s/David J. Mahoney* Director 12/26/96
___________________________
David J. Mahoney
/s/Gloria Messinger* Director 12/26/96
___________________________
Gloria Messinger
/s/Jack R. Meyer* Director 12/26/96
_____________________________
Jack R. Meyer
/s/John Szarkowski* Director 12/26/96
_____________________________
John Szarkowski
/s/Anne Wexler* Director 12/26/96
_____________________________
Anne Wexler
*BY: /s/ Elizabeth Bachman
__________________________
Elizabeth Bachman,
Attorney-in-Fact
EXHIBIT INDEX
ITEM EXHIBIT PAGE
(5)(a) Management Agreement, as amended
(5)(b) Index Management Agreement, as amended
(8) Custody Agreement
(9) Shareholder Services Plan
(11) Consent of Coopers and Lybrand L.L.P., Independent Accountants
MANAGEMENT AGREEMENT
PEOPLES INDEX FUND, INC.
(d/b/a Dreyfus S&P 500 Index Fund)
200 Park Avenue
New York, New York 10166
November 13, 1995
Amended, November 6, 1996
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 Pros-
pectus 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 and the Index Manager are
authorized to invest the Fund's assets in securities issued by Mellon Bank
Corporation, to the extent required or permitted by the Fund's investment
objective and policies, and to the extent permitted by the U.S. Securities
and Exchange Commission or other applicable authority. You will furnish to
the Fund such statistical information, with respect to the investments which
the Fund may hold or contemplate purchasing, as the Fund may reasonably
request. The Fund wishes to be informed of important developments
materially affecting its portfolio and shall expect you, on your own
initiative, to furnish to the Fund from time to time such information as you
may believe appropriate for this purpose.
In addition, you will supply office facilities (which may be in
your own offices), data processing services, clerical, accounting and
bookkeeping services, internal auditing and legal services, internal
executive and administrative services, and stationery and office supplies;
prepare reports to the Fund's stockholders, tax returns, reports to and
filings with the Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of the Fund's shares; and
generally assist in all aspects of the Fund's operations. You shall have
the right, at your expense, to engage other entities to assist you in
performing some or all of the obligations set forth in this paragraph,
provided each such entity enters into an agreement with you in form and
substance reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as if you had
acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the services
to be provided to the Fund hereunder and the Fund agrees as an inducement to
your undertaking the same that neither you nor the Index Manager shall be
liable hereunder for any error of judgment or mistake of law or for any loss
suffered by the Fund, provided that nothing herein shall be deemed to
protect or purport to protect you 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 Agree-
ment, the Fund will pay you on the first business day of each month a fee at
the annual rate of .25 of 1% of the value of the Fund's average daily net
assets. Net asset value shall be computed on such days and at such time or
times as described in the Fund's then-current Prospectus and Statement of
Additional Information. 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 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.
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 Agree-
ment, 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 Agree-
ment also will terminate automatically in the event of its assignment (as
defined in said Act).
The Fund recognizes that from time to time your directors,
officers and employees may serve as directors, trustees, partners, officers
and employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities
may include the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory or other
agreements with such other entities. If you cease to act as the Fund's
investment adviser, the Fund agrees that, at your request, the Fund will
take all necessary action to change the name of the Fund to a name not
including "Dreyfus" in any form or combination of words.
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,
PEOPLES INDEX FUND, INC.
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
INDEX MANAGEMENT AGREEMENT
THE DREYFUS CORPORATION
200 Park Avenue
New York, New York 10166
November 13, 1995
Amended, November 6, 1996
Mellon Equity Associates
500 Grant Street
Pittsburgh, Pennsylvania 15258
Dear Sirs:
As you are aware, Peoples Index Fund, Inc. (d/b/a Dreyfus S&P 500
Index 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 Pros
pectus 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
are authorized to invest the Fund's assets in securities issued by Mellon
Bank Corporation, to the extent required or permitted by the Fund's
investment objective and policies, and to the extent permitted by the U.S.
Securities and Exchange Commission or other applicable authority. 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 and only to the extent thereof, a fee
calculated daily and paid monthly at the annual rate of .05 of 1% of the
value of the Fund's average daily net assets until Fund assets equal or
exceed $1 billion and .075 of 1% of the value of the Fund's average daily
net assets thereafter, irrespective of the level of the value of the Fund's
average daily net assets.
Net asset value shall be computed on such days and at such time
or times as described in the Fund's then-current Prospectus and Statement
of Additional Information. 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 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.
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:__________________________
CUSTODY AGREEMENT
AGREEMENT dated as of November 13, 1995, between PEOPLES INDEX FUND,
INC., D/B/A DREYFUS S&P 500 INDEX FUND, a corporation organized under the
laws of the State of Maryland (the "Fund"), having its principal office and
place of business at 200 Park Avenue, New York, New York 10166, and BOSTON
SAFE DEPOSIT AND TRUST COMPANY (the "Custodian"), a Massachusetts trust
company with its principal place of business at One Boston Place, Boston,
Massachusetts 02108.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires,
shall have the following meanings:
(a) "Affiliated Person" shall have the meaning of the term within
Section 2(a)3 of the 1940 Act.
(b) "Authorized Person" shall mean those persons duly authorized by
the Board of Directors of the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund and listed in the
certification annexed hereto as Appendix A or such other certification
as may be received by the Custodian from time to time.
(c) "Book-Entry System" shall mean the Federal Reserve/Treasury book-
entry system for United States and federal agency Securities, its
successor or successors and its nominee or nominees, in which the
Custodian is hereby specifically authorized and instructed on a
continuous and on-going basis to deposit all Securities eligible for
deposit therein, and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder.
(d) "Business Day" shall mean each day on which the Fund is required
to determine its net asset value, and any other day on which the
Securities and Exchange Commission may require the Fund to be open for
business.
(e) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Custodian, which is actually received by the Custodian and
signed on behalf of the Fund by any two Authorized Persons or any two
officers thereof.
(f) "Articles of Incorporation" shall mean the Articles of
Incorporation of the Fund dated January 23, 1989 as the same may be
amended from time to time.
(g) "Depository" shall mean The Depository Trust Company ("DTC"),
a clearing agency registered with the Securities and Exchange
Commission under Section 17(a) of the Securities Exchange Act of 1934,
as amended, its successor or successors and its nominee or nominees, in
which the Custodian is hereby specifically authorized and instructed on
a continuous and on-going basis to deposit all Securities eligible for
deposit therein, and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder. The term
"Depository" shall further mean and include any other person to be
named in a Certificate authorized to act as a depository under the 1940
Act, its successor or successors and its nominee or nominees.
(h) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the government of the United States or agencies or
instrumentalities thereof ("U.S. government securities"), commercial
paper, bank certificates of deposit, bankers' acceptances and short-
term corporate obligations, where the purchase or sale of such
securities normally requires settlement in federal funds on the same
day as such purchase or sale, and repurchase and reverse repurchase
agreements with respect to any of the foregoing types of securities and
bank time deposits.
(i) "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person.
(j) "Prospectus" shall mean the Fund's current prospectus and
statement of additional information relating to the registration of the
Fund's Shares under the Securities Act of 1933, as amended.
(k) "Shares" shall mean all or any part of each class of Common Stock
of the Fund listed in the Certificate annexed hereto as Appendix B, as
it may be amended from time to time, which from time to time are
authorized and/or issued by the Fund.
(l) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodities interests and investments from time to time
owned by the Fund.
(m) "Transfer Agent" shall mean the person which performs the
transfer agent, dividend disbursing agent and shareholder servicing
agent functions for the Fund.
(n) "Written Instructions" shall mean a written communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person by any system, including, without
limitation, electronic transmissions, facsimile and telex, whereby the
receiver of such communication is able to verify by codes or otherwise
with a reasonable degree of certainty the authenticity of the sender of
such communication.
(o) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time.
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies at the time owned by or in
the possession of the Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
3. Compensation.
(a) The Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule A and incorporated herein. Such
Fee Schedule does not include out-of-pocket disbursements of the
Custodian for which the Custodian shall be entitled to bill separately.
Out-of-pocket disbursements shall consist of the items specified in the
Schedule of Out-of-pocket charges annexed hereto as Schedule B and
incorporated herein, which schedule may be modified by the Custodian
upon not less than thirty days prior written notice to the Fund.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule A of this Agreement a revised Fee
Schedule, dated and signed by an Authorized Officer or authorized
representative of each party hereto.
(c) The Custodian will bill the Fund as soon as practicable after the
end of each calendar month, and said billings will be detailed in
accordance with Schedule A, as amended from time to time. The Fund
will promptly pay to the Custodian the amount of such billing. The
Custodian may charge against any monies held on behalf of the Fund
pursuant to this Agreement such compensation and disbursements incurred
by the Custodian in the performance of its duties pursuant to this
Agreement. The Custodian shall also be entitled to charge against any
money held on behalf of the Fund pursuant to this Agreement the amount
of any loss, damage, liability or expense incurred with respect to the
Fund, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets.
The Fund will deliver or cause to be delivered to the Custodian or its
permitted Sub-Custodians all Securities and monies owned by it at any
time during the period of this Agreement. The Custodian will not be
responsible for such Securities and monies until actually received by
it. The Fund shall instruct the Custodian from time to time in its
sole discretion, by means of Written Instructions, or, in connection
with the purchase or sale of Money Market Securities, by means of Oral
Instructions confirmed in writing in accordance with Section 11(h)
hereof or Written Instructions, as to the manner in which and in what
amounts Securities and monies are to be deposited on behalf of the Fund
in the Book-Entry System or the Depository. Securities and monies of
the Fund deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian
for customers, including but not limited to accounts for which the
Custodian acts in a fiduciary or representative capacity.
(b) Accounts and Disbursements. The Custodian shall establish and
maintain a separate account for the Fund and shall credit to the
separate account all monies received by it for the account of such Fund
and shall disburse the same only:
1. In payment for Securities purchased for the Fund, as
provided in Section 5 hereof;
2. In payment of dividends or distributions with respect to
the Shares, as provided in Section 7 hereof;
3. In payment of original issue or other taxes with respect
to the Shares, as provided in Section 8 hereof;
4. In payment for Shares which have been redeemed by the
Fund, as provided in Section 8 hereof;
5. Pursuant to a Certificate setting forth the name and
address of the person to whom the payment is to be made, the
amount to be paid and the purpose for which payment is to be made,
provided that in the event of disbursements pursuant to this Sub-
section 4(b)(5), the Fund shall indemnify and hold the Custodian
harmless from any claims or losses arising out of such
disbursements in reliance on such Certificate; or
6. In payment of fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to the Fund, as
provided in Sections 3 and 11(i).
(c) Confirmation and Statements. Promptly after the close of business
on each day, the Custodian shall furnish the Fund with confirmations
and a summary of all transfers to or from the account of the Fund
during said day. Where securities purchased by the Fund are in a
fungible bulk of securities registered in the name of the Custodian (or
its nominee) or shown on the Custodian's account on the books of the
Depository or the Book-Entry System, the Custodian shall by book entry
or otherwise identify the quantity of those securities belonging to the
Fund. At least monthly, the Custodian shall furnish the Fund with a
detailed statement of the Securities and monies held for the Fund under
this Agreement.
(d) Registration of Securities and Physical Separation. All
Securities held for the Fund which are issued or issuable only in
bearer form, except such Securities as are held in the Book-Entry
System, shall be held by the Custodian in that form; all other
Securities held for the Fund may be registered in the name of the Fund,
in the name of the Custodian, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to
time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or
nominees. The Fund reserves the right to instruct the Custodian as to
the method of registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee or in the name of the
Book-Entry System or the Depository, any Securities which it may hold
for the account of the Fund and which may from time to time be
registered in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to the Fund which are not held in the
Book-Entry System or the Depository in a separate account for the Fund
in the name of the Fund physically segregated at all times from those
of any other person or persons.
(e) Segregated Accounts. Upon receipt of a Certificate the Custodian
will establish segregated accounts on behalf of the Fund to hold liquid
or other assets as it shall be directed by a Certificate and shall
increase or decrease the assets in such segregated accounts only as it
shall be directed by subsequent Certificate.
(f) Collection of Income and Other Matters Affecting Securities.
Unless otherwise instructed to the contrary by a Certificate, the
Custodian by itself, or through the use of the Book-Entry System or the
Depository with respect to Securities therein deposited, shall with
respect to all Securities held for the Fund in accordance with this
Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon
all Securities which may mature or be called, redeemed, retired or
otherwise become payable. Notwithstanding the foregoing, the
Custodian only shall have such responsibility to the Fund for
Securities which are called if either (i) the Custodian received a
written notice of such call; or (ii) notice of such call appears
in one or more of the publications listed in Appendix C annexed
hereto, which may be amended at any time by the Custodian upon
five (5) Business Days prior notification to the Fund;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect; and
5. Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the
account of the Fund all rights and similar Securities issued with
respect to any Securities held by the Custodian hereunder for the
Fund.
(g) Delivery of Securities and Evidence of Authority. Upon receipt of
a Certificate, the Custodian, directly or through the use of the Book-
Entry System or the Depository, shall:
1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated in such
Certificate, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any
Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for
the Fund in exchange for other Securities or cash issued or paid
in connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for
the Fund to any protective committee, reorganization committee or
other person in connection with the reorganization, refinancing,
merger, consolidation or recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement in the separate account for the Fund such certificates
of deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of
the assets specifically allocated to the separate account of the
Fund and take such other steps as shall be stated in a Certificate
to be for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;
5. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by the Fund;
6. Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called or otherwise
become payable. Notwithstanding the foregoing, the Custodian
shall have no responsibility for monitoring or ascertaining any
call, redemption or retirement dates with respect to put bonds
which are owned by the Fund and held by the Custodian or its
nominees. Nor shall the Custodian have any responsibility or
liability to the Fund for any loss by the Fund for any missed
payments or other defaults resulting therefrom; unless the
Custodian received timely notification from the Fund specifying
the time, place and manner for the presentment of any such put
bond owned by the Fund and held by the Custodian or its nominee.
The Custodian shall not be responsible and assumes no liability to
the Fund for the accuracy or completeness of any notification the
Custodian may furnish to the Fund with respect to put bonds
7. Deliver Securities for delivery in connection with any
loans of Securities made by the Fund but only against receipt of
adequate collateral as agreed upon from time to time by the
Custodian and the Fund which may be in the form of cash or U.S.
government securities or a letter of credit;
8. Deliver Securities for delivery as security in
connection with any borrowings by the Fund requiring a pledge of
Fund assets, but only against receipt of amounts borrowed;
9. Deliver Securities upon receipt of a Certificate from
the Fund for delivery to the Transfer Agent or to the holders of
Shares in connection with distributions in kind, as may be
described from time to time in the Fund's Prospectus, in
satisfaction of requests by holders of Shares for repurchase or
redemption;
10. Deliver Securities as collateral in connection with
short sales by the Fund of common stock for which the Fund owns
the stock or owns preferred stocks or debt securities convertible
or exchangeable, without payment or further consideration, into
shares of the common stock sold short;
11. Deliver Securities for any purpose expressly permitted
by and in accordance with procedures described in the Fund's
Prospectus; and
12. Deliver Securities for any other proper business
purpose, but only upon receipt of, in addition to Written
Instructions, a certified copy of a resolution of the Board of
Directors signed by an Authorized Person and certified by the
Secretary of the Fund, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper business purpose, and naming
the person or persons to whom delivery of such Securities shall be
made.
(h) Endorsement and Collection of Checks, Etc. The Custodian is
hereby authorized to endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the
account of the Fund.
5. Purchase and Sale of Investments of the Fund.
(a) Promptly after each purchase of Securities for the Fund, the Fund
shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate; and
(ii) with respect to each purchase of Money Market Securities, either a
Written Instruction or Oral Instruction, in either case specifying with
respect to each purchase: (1) the name of the issuer and the title of
the Securities; (2) the number of shares or the principal amount
purchased and accrued interest, if any; (3) the date of purchase and
settlement; (4) the purchase price per unit; (5) the total amount
payable upon such purchase; (6) the name of the person from whom or the
broker through whom the purchase was made, if any; and (7) whether or
not such purchase is to be settled through the Book-Entry System or the
Depository. The Custodian shall receive the Securities purchased by or
for the Fund and upon receipt of Securities shall pay out of the monies
held for the account of the Fund the total amount payable upon such
purchase, provided that the same conforms to the total amount payable
as set forth in such Certificate, Written or Oral Instruction.
(b) Promptly after each sale of Securities of the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities
which are not Money Market Securities, a Certificate, and (ii) with
respect to each sale of Money Market Securities, either Written
Instruction or Oral Instructions, in either case specifying with
respect to such sale: (1) the name of the issuer and the title of the
Securities; (2) the number of shares or principal amount sold, and
accrued interest, if any; (3) the date of sale; (4) the sale price per
unit; (5) the total amount payable to the Fund upon such sale; (6) the
name of the broker through whom or the person to whom the sale was
made; and (7) whether or not such sale is to be settled through the
Book-Entry System or the Depository. The Custodian shall deliver or
cause to be delivered the Securities to the broker or other person
designated by the Fund upon receipt of the total amount payable to the
Fund upon such sale, provided that the same conforms to the total
amount payable to the Fund as set forth in such Certificate, Written or
Oral Instruction. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
6. Lending of Securities.
If the Fund is permitted by the terms of the Articles of
Incorporation and as disclosed in its Prospectus to lend securities,
within 24 hours after each loan of Securities, the Fund shall deliver
to the Custodian a Certificate specifying with respect to each such
loan: (a) the name of the issuer and the title of the Securities; (b)
the number of shares or the principal amount loaned; (c) the date of
loan and delivery; (d) the total amount to be delivered to the
Custodian, and specifically allocated against the loan of the
Securities, including the amount of cash collateral and the premium, if
any, separately identified; and (e) the name of the broker, dealer or
financial institution to which the loan was made.
Promptly after each termination of a loan of Securities, the Fund
shall deliver to the Custodian a Certificate specifying with respect to
each such loan termination and return of Securities: (a) the name of
the issuer and the title of the Securities to be returned; (b) the
number of shares or the principal amount to be returned; (c) the date
of termination; (d) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting
credits as described in said Certificate); and (e) the name of the
broker, dealer or financial institution from which the Securities will
be returned. The Custodian shall receive all Securities returned from
the broker, dealer or financial institution to which such Securities
were loaned and upon receipt thereof shall pay the total amount payable
upon such return of Securities as set forth in the Certificate.
Securities returned to the Custodian shall be held as they were prior
to such loan.
7. Payment of Dividends or Distributions.
(a) The Fund shall furnish to the Custodian a Certificate specifying
the date of payment of any dividend or distribution, and the total
amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such Certificate, the Custodian
shall pay out the total amount payable to the Transfer Agent of the
Fund.
8. Sale and Redemption of Shares of the Fund.
(a) Whenever the Fund shall sell any Shares, or whenever any shares
are redeemed, the Fund shall deliver or cause to be delivered to the
Custodian a Written Instruction from the Transfer Agent duly
specifying:
1. The net amount of money to be received by the Custodian,
where the sale of such Shares exceeds redemption; and
2. The net amount of money to be paid for such Shares, where
redemptions exceed purchases.
The Custodian understands and agrees that Written Instructions may
be furnished subsequent to the purchase of Shares and that the
information contained therein will be derived from the sales of Shares
as reported to the Fund by the Transfer Agent.
(b) Upon receipt of money from the Transfer Agent, the Custodian shall
credit such money to the separate account of the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 8, the Custodian shall pay all original
issue or other taxes required to be paid in connection with such
issuance upon the receipt of a Written Instruction specifying the
amount to be paid.
(d) Upon receipt from the Transfer Agent of Written Instructions
setting forth the net amount of money to be paid for Shares received by
the Transfer Agent for redemption, the Custodian shall make payment to
the Transfer Agent of such net amount.
9. Indebtedness.
(a) The Fund will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Fund borrows money for
investment or for temporary administrative or emergency purposes using
Securities as collateral for such borrowings, a notice or undertaking
in the form currently employed by any such bank setting forth the
amount which such bank will loan to the Fund against delivery of a
stated amount of collateral. The Fund shall promptly deliver to the
Custodian a Certificate stating with respect to each such borrowing:
(1) the name of the bank; (2) the amount and terms of the borrowing,
which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Fund, or other loan agreement;
(3) the time and date, if known, on which the loan is to be entered
into (the "borrowing date"); (4) the date on which the loan becomes due
and payable; (5) the total amount payable to the Fund on the borrowing
date; (6) the market value of Securities to be delivered as collateral
for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities;
and (7) a statement that such loan is in conformance with the 1940 Act
and the Fund's Prospectus.
(b) Upon receipt of the Certificate referred to in subparagraph (a)
above, the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery
by the lending bank of the total amount of the loan payable, provided
that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank,
keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the Fund from time to
time such Securities as may be specified in the Certificate to
collateralize further any transaction described in this Section 9. The
Fund shall cause all Securities released from collateral status to be
returned directly to the Custodian, and the Custodian shall receive
from time to time such return of collateral as may be tendered to it.
In the event that the Fund fails to specify in the Certificate all of
the information required by this Section 9, the Custodian shall not be
under any obligation to deliver any Securities. Collateral returned to
the Custodian shall be held hereunder as it was prior to being used as
collateral.
10. Persons Having Access to Assets of the Fund.
(a) No trustee or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any sub-
investment adviser of the Fund, or of the Fund's administrator, shall
have physical access to the assets of the Fund held by the Custodian or
be authorized or permitted to withdraw any investments of the Fund, nor
shall the Custodian deliver any assets of the Fund to any such person.
No officer, director, employee or agent of the Custodian who holds any
similar position with the Fund's investment adviser, with any sub-
investment adviser of the Fund or with the Fund's administrator shall
have access to the assets of the Fund.
(b) Nothing in this Section 10 shall prohibit any duly authorized
officer, employee or agent of the Fund, or any duly authorized officer,
director, employee or agent of the investment adviser, of any sub-
investment adviser of the Fund or of the Fund's administrator, from
giving Oral Instructions or Written Instructions to the Custodian or
executing a Certificate so long as it does not result in delivery of or
access to assets of the Fund prohibited by paragraph (a) of this
Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. Notwithstanding any other provision of this
Agreement, neither the Custodian nor its nominee shall be liable for
any loss or damage, including counsel fees, resulting from its action
or omission to act or otherwise, except for any such loss or damage
arising out of the negligence, misfeasance or willful misconduct of the
Custodian or any of its employees, Sub-Custodians or agents. The
Custodian may, with respect to questions of law, apply for and obtain
the advice and opinion of counsel to the Fund or of its own counsel, at
the expense of the Fund, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such
advice or opinion. The Custodian shall not be liable to the Fund for
any loss or damage resulting from the use of the Book-Entry System or
the Depository, except to the extent such loss or damage arises by
reason of any negligence, misfeasance or willful misconduct on the part
of the Custodian or any of its employees or agents.
(b) Limit of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation to
inquire into, and shall not be liable for:
1. The validity of the issue of any Securities purchased by
the Fund, the legality of the purchase thereof, or the propriety
of the amount paid therefor;
2. The legality of the sale of any Securities by the Fund
or the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Fund;
6. The legality of any borrowing for temporary or emergency
administrative purposes.
(c) No Liability Until Receipt. The Custodian shall not be liable
for, or considered to be the Custodian of, any money, whether or not
represented by any check, draft, or other instrument for the payment of
money, received by it on behalf of the Fund until the Custodian
actually receives and collects such money directly or by the final
crediting of the account representing the Fund's interest in the Book-
Entry System or the Depository.
(d) Amounts Due from Transfer Agent. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount due to the Fund from the Transfer Agent nor to take any action
to effect payment or distribution by the Transfer Agent of any amount
paid by the Custodian to the Transfer Agent in accordance with this
Agreement.
(e) Collection Where Payment Refused. The Custodian shall not be
under any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in
default, or if payment is refused after due demand or presentation,
unless and until (a) it shall be directed to take such action by a
Certificate and (b) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such
action.
(f) Appointment of Agents and Sub-Custodians. The Custodian may
appoint one or more banking institutions, including but not limited to
banking institutions located in foreign countries, to act as Depository
or Depositories or as Sub-Custodian or as Sub-Custodians of Securities
and monies at any time owned by the Fund. The Custodian shall use
reasonable care in selecting a Depository and/or Sub-Custodian located
in a country other than the United States ("Foreign Sub-Custodian"),
which selection shall be in accordance with the requirements of Rule
17f-5 under the 1940 Act, and shall oversee the maintenance of any
Securities or monies of the Fund by any Foreign Sub-Custodian. In
addition, the Custodian shall hold the Fund harmless from, and
indemnify the Fund against, any loss, action, claim, demand, expense
and proceeding, including counsel fees, that occurs as a result of the
failure of any Foreign Sub-Custodian or Depository to exercise
reasonable care with respect to the safekeeping of Securities and
monies of the Fund. Notwithstanding the generality of the foregoing,
however, the Custodian shall not be liable for any losses resulting
from the general risk of investing or holding Securities and monies in
a particular country, including, but not limited to, losses resulting
from nationalization, expropriation, devaluation, revaluation,
confiscation, seizure, cancellation, destruction or similar action by
any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental
authority of currency restrictions, exchange controls, taxes, levies or
other charges affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution; or any other similar act or event beyond
the Custodian's control.
(g) No Duty to Ascertain Authority. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be
held by the Fund under the provisions of the Articles of Incorporation
and the Prospectus.
(h) Reliance on Certificates and Instructions. The Custodian shall be
entitled to rely upon any Certificate, notice or other instrument in
writing received by the Custodian and reasonably believed by the
Custodian to be genuine and to be signed by an officer or Authorized
Person of the Fund. The Custodian shall be entitled to rely upon any
Written Instructions or Oral Instructions actually received by the
Custodian pursuant to the applicable Sections of this Agreement and
reasonably believed by the Custodian to be genuine and to be given by
an Authorized Person. The Fund agrees to forward to the Custodian
Written Instructions from an Authorized Person confirming such Oral
Instructions in such manner so that such Written Instructions are
received by the Custodian, whether by hand delivery, telex or
otherwise, by the close of business on the same day that such Oral
Instructions are given to the Custodian. The Fund agrees that the fact
that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund. The
Fund agrees that the Custodian shall incur no liability to the Fund in
acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably
appear to have been received from a duly Authorized Person.
(i) Overdraft Facility and Security for Payment. In the event that the
Custodian is directed by Written Instruction (or Oral Instructions
confirmed in writing in accordance with Section 11(h) hereof) to make
any payment or transfer of monies on behalf of the Fund for which there
would be, at the close of business on the date of such payment or
transfer, insufficient monies held by the Custodian on behalf of the
Fund, the Custodian may, in its sole discretion, provide an overdraft
(an "Overdraft") to the Fund in an amount sufficient to allow the
completion of such payment or transfer. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the Fund and the Custodian; and (b) shall accrue
interest from the date of the Overdraft to the date of payment in full
by the Fund at a rate agreed upon in writing, from time to time, by the
Custodian and the Fund. The Custodian and the Fund acknowledge that
the purpose of such Overdraft is to temporarily finance the purchase of
Securities for prompt delivery in accordance with the terms hereof, to
meet unanticipated or unusual redemption, to allow the settlement of
foreign exchange contracts or to meet other emergency expenses not
reasonably foreseeable by the Fund. The Custodian shall promptly
notify the Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing. To secure payment of any Overdraft,
the Fund hereby grants to the Custodian a continuing security interest
in and right of setoff against the Securities and cash in the Fund's
account from time to time in the full amount of such Overdraft. Should
the Fund fail to pay promptly any amounts owed hereunder, the Custodian
shall be entitled to use available cash in the Fund's account and to
liquidate Securities in the account as is necessary to meet the Fund's
obligations under the Overdraft. In any such case, and without
limiting the foregoing, the Custodian shall be entitled to take such
other actions(s) or exercise such other options, powers and rights as
the Custodian now or hereafter has as a secured creditor under the
Massachusetts Uniform Commercial Code or any other applicable law.
(j) Inspection of Books and Records. The books and records of the
Custodian shall be open to inspection and audit at reasonable times by
officers and auditors employed by the Fund and by the appropriate
employees of the Securities and Exchange Commission.
The Custodian shall provide the Fund with any report obtained by
the Custodian on the system of internal accounting control of the Book-
Entry System or the Depository and with such reports on its own systems
of internal accounting control as the Fund may reasonably request from
time to time.
12. Term and Termination.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter
until such time as this Agreement may be terminated in accordance with
the provisions hereof.
(b) Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than 60 days after the date
of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a certified vote of the Board of
Directors of the Fund, electing to terminate this Agreement and
designating a successor custodian or custodians, which shall be a
person qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the Custodian a
certified vote of the Board of Directors of the Fund, designating a
successor custodian or custodians. In the absence of such designation
by the Fund, the Custodian may designate a successor custodian, which
shall be a person qualified to so act under the 1940 Act. If the Fund
fails to designate a successor custodian, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than Securities held
in the Book-Entry System which cannot be delivered to the Fund) and
monies then owned by the Fund, be deemed to be its own custodian and
the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and monies then held by the
Custodian on behalf of the Fund, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall then
be entitled.
13. Limitation of Liability.
The Fund and the Custodian agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the Directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund, individually, but are binding only upon
the assets and property of the Fund, as provided in the Articles of
Incorporation. The execution and delivery of this Agreement have been
authorized by the Directors of the Fund, and signed by an authorized
officer of the Fund, acting as such, and neither such authorization by
such Directors nor such execution and delivery by such officer shall be
deemed to have been made by any of them or any shareholder of the Fund
individually or to impose any liability on any of them or any
shareholder of the Fund personally, but shall bind only the assets and
property of the Fund as provided in the Articles of Incorporation.
14. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by the
Secretary of the Fund setting forth the names and the signatures of the
present Authorized Persons. The Fund agrees to furnish to the
Custodian a new certification in similar form in the event that any
such present Authorized Person ceases to be such an Authorized Person
or in the event that other or additional Authorized Persons are elected
or appointed. Until such new certification shall be received, the
Custodian shall be fully protected in acting under the provisions of
this Agreement upon Oral Instructions or signatures of the present
Authorized Persons as set forth in the last delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the
Secretary of the Fund setting forth the names and the signatures of the
present officers of the Fund. The Fund agrees to furnish to the
Custodian a new certification in similar form in the event any such
present officer ceases to be an officer of the Fund or in the event
that other or additional officers are elected or appointed. Until such
new certification shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement upon the
signature of an officer as set forth in the last delivered
certification.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at One Boston Place, Boston, Massachusetts 02108 or at such
other place as the Custodian may from time to time designate in
writing.
(d) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund, shall be sufficiently given
if addressed to the Fund and mailed or delivered to it at its offices
at 200 Park Avenue, New York, New York 10166 or at such other place as
the Fund may from time to time designate in writing.
(e) This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality
as this Agreement, (i) authorized, or ratified and approved by a vote
of the Board of Directors of the Fund, including a majority of the
members of the Board of Directors of the Fund who are not "interested
persons" of the Fund (as defined in the 1940 Act), or (ii) authorized,
or ratified and approved by such other procedures as may be permitted
or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of the Fund authorized or approved by a
vote of the Board of Directors of the Fund. Nothing in this Agreement
shall give or be construed to give or confer upon any third party any
rights hereunder.
(g) The Fund represents that a copy of the Articles of Incorporation
is on file with the Secretary of the State of Maryland.
(h) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts.
(i) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(j) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective representatives duly authorized as of
the day and year first above written.
PEOPLES INDEX FUND, INC.,
D/B/A DREYFUS S&P 500 INDEX FUND
By:
Name: Elizabeth Bachman
Title: Vice President
BOSTON SAFE DEPOSIT ANDTRUST COMPANY
By:
Name:
Title:
APPENDIX A
I, Elizabeth Bachman, the Assistant Secretary, of Peoples Index Fund,
Inc., d/b/a Dreyfus S&P 500 Index Fund, a corporation organized under the
laws of the State of Maryland (the "Fund"), do hereby certify that:
The following individuals have been duly authorized as Authorized
Persons to give Oral Instructions and Written Instructions on behalf of the
Fund and the specimen signatures set forth opposite their respective names
are their true and correct signatures:
Name Signature
Thomas Durante ___________________________
James Windels ___________________________
Anna Mancini ___________________________
Michael Stalzer ___________________________
Jennifer Romano ___________________________
Assistant Secretary
Dated:
APPENDIX B
PEOPLES INDEX FUND, INC.
D/B/A DREYFUS S&P 500 INDEX FUND
I, Elizabeth Bachman, Vice President and Assistant Secretary of
Peoples Index Fund, Inc., d/b/a Dreyfus S&P 500 Index Fund, a corporation
organized and existing under the laws of the State of Maryland (the
"Fund"), do hereby certify that the only series of shares of the Fund
issued and/or authorized by the Fund as of the date of this Custody
Agreement are shares of Common Stock, $.001 par value.
SCHEDULE A
BOSTON SAFE DEPOSIT AND TRUST COMPANY
CUSTODY FEE SCHEDULE
Please refer to correspondence from the Fund to Mellon Equity
Associates, Inc., dated November 13, 1995 regarding fees.
SCHEDULE B
The Fund will pay to the Custodian as soon as possible after the
end of each month all out-of-pocket expenses reasonably incurred in
connection with the assets of the Fund.
APPENDIX C
The following are designated publications for purposes of Section 4(f)2:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
PEOPLES INDEX FUND, INC.
(d/b/a Dreyfus S&P 500 Index Fund)
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-captioned
investment company (the "Fund") adopt a Shareholder Services Plan under
which the Fund would pay the Fund's distributor (the "Distributor") for
providing services to (a) shareholders of each series of the Fund or class
of Fund shares set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time, or (b) if no series or classes are set forth on
such Exhibit, shareholders of the Fund. The Distributor would be permitted
to pay certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") in respect of these
services. The Plan is not to be adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"), and the fee under
the Plan is intended to be a "service fee" as defined in Article III,
Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such information as
it deemed necessary to an informed determination as to whether a written
plan should be implemented and has considered such pertinent factors as it
deemed necessary to form the basis for a decision to use Fund assets for
such purposes.
In voting to approve the implementation of such a plan, the Board
has concluded, in the exercise of its reasonable business judgment and in
light of applicable fiduciary duties, that there is a reasonable likelihood
that the plan set forth below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as follows:
1. The Fund shall pay to the Distributor a fee at the annual
rate set forth on Exhibit A in respect of the provision of personal
services to shareholders and/or the maintenance of shareholder accounts.
The Distributor shall determine the amounts to be paid to Service Agents
and the basis on which such payments will be made. Payments to a Service
Agent are subject to compliance by the Service Agent with the terms of any
related Plan agreement between the Service Agent and the Distributor.
2. For the purpose of determining the fees payable under this
Plan, the value of the net assets of the Fund or the net assets
attributable to each series or class of Fund shares identified on Exhibit
A, as applicable, shall be computed in the manner specified in the Fund's
charter documents for the computation of net asset value.
3. The Board shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to this Plan. The report
shall state the purpose for which the amounts were expended.
4. This Plan will become effective immediately upon approval by
a majority of the Board members, including a majority of the Board members
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, pursuant to
a vote cast in person at a meeting called for the purpose of voting on the
approval of this Plan.
5. This Plan shall continue for a period of one year from its
effective date, unless earlier terminated in accordance with its terms, and
thereafter shall continue automatically for successive annual periods,
provided such continuance is approved at least annually in the manner
provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board, provided
that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph 4 hereof.
7. This Plan is terminable without penalty at any time by vote
of a majority of the Board members who are not "interested persons" (as
defined in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into in
connection with this Plan.
Dated: August 11, 1993
Amended: November 6, 1996
EXHIBIT A
Fee as a Percentage of
Average Daily Net Assets
.25
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Dreyfus S&P 500 Index Fund:
We consent to the inclusion in Post-Effective Amendment No. 9 to
the Registration Statement of Peoples Index Fund, Inc. on Form
N-1A (File No. 33-31809) of our report dated December 13, 1996,
on our audit of the financial statements and financial
highlights of Dreyfus S&P 500 Index Fund.
We also consent to the reference to our Firm under the heading
"Transfer and Dividend Disbursing Agent, Custodian, Counsel and
Independent Accountants".
New York, New York
December 26, 1996
