File Nos. 33-41078
811-6325
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. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 7 [X]
(Check appropriate box or boxes.)
PEOPLES S&P MIDCAP 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)
----
X on March 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on March 1, 1996 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 S&P MIDCAP 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 4
3 Condensed Financial Information 4
4 General Description of Registrant 4, 15
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 13
7 Purchase of Securities Being Offered 8
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-20
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 S&P MIDCAP 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-19
18 Capital Stock and Other Securities B-20
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-19
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
Investment Adviser
29 Principal Underwriters C-11
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.
PROSPECTUS MARCH 1, 1997
DREYFUS MIDCAP INDEX FUND
DREYFUS MIDCAP 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 OF MEDIUM-SIZE DOMESTIC COMPANIES IN THE AGGREGATE,
AS REPRESENTED BY THE STANDARD & POOR'S MIDCAP 400
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% RED
EMPTION 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.
TABLE OF CONTENTS
Page
Fee Table......................................... 3
Condensed Financial Information................... 4
Description of the Fund........................... 4
Management of the Fund............................ 7
How to Buy Shares................................. 8
How to Redeem Shares.............................. 10
Shareholder Services.............................. 13
Shareholder Services Plan......................... 13
Dividends, Distributions and Taxes................ 14
Performance Information........................... 15
General Information............................... 16
Appendix.......................................... 17
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.
[Page 1]
[This Page Intentionally Left Blank]
[Page 2]
<TABLE>
FEE TABLE
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fees (as a 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%
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>
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
expenses noted above reflect an undertaking by The Dreyfus Corporation that
if, in the fiscal year ending October 31, 1997, Fund expenses, including the
management fee, exceed .50% of the value of the Fund's average net assets for
the fiscal year, The Dreyfus Corporation may waive its management fee or bear
certain expenses of the Fund to the extent of such excess expense. The
expenses noted above, without reimbursement, would be: Management Fees _
.40% and Total Fund Operating Expenses _ .67%. You can purchase Fund shares
without a sales charge directly from the Fund's distributor; you may be
charged a fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. 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 Ernst &
Young LLP, the Fund's independent auditors, 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>
YEAR ENDED OCTOBER 31,
______________________________________________________________
PER SHARE DATA: 1991(1) 1992 1993 1994 1995 1996
___ ___ ___ ___ ___ ___
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.............. $12.50 $13.69 $15.02 $17.63 $17.14 $19.40
___ ___ ___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income-net........................... .11 .17 .30 .26 .29 .28
Net realized and unrealized gain on investments. 1.08 1.29 2.83 .08 3.00 2.81
___ ___ ___ ___ ___ ___
TOTAL FROM INVESTMENT OPERATIONS.............. 1.19 1.46 3.13 .34 3.29 3.09
___ ___ ___ ___ ___ ___
DISTRIBUTIONS:
Dividends from investment income-net............ _ (.08) (.27) (.27) (.28) (.30)
Dividends from net realized gain on investments. _ (.05) (.25) (.56) (.75) (.87)
___ ___ ___ ___ ___ ___
TOTAL DISTRIBUTIONS........................... _ (.13) (.52) (.83) (1.03) (1.17)
___ ___ ___ ___ ___ ___
Net asset value, end of year.................... $13.69 $15.02 $17.63 $17.14 $19.40 $21.32
==== ==== ==== ==== ==== ===
TOTAL INVESTMENT RETURN............................. 9.52%(2) 10.69% 21.22% 1.89% 20.78% 16.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... _ _ .09% .40% .50% .50%
Ratio of net investment income to average net assets .87%(2) 2.22% 1.97% 1.68% 1.80% 1.49%
Decrease reflected in above expense ratios
due to undertakings 1.19%(2) 1.17% .77% .43% .35% .17%
Portfolio Turnover Rate......................... 2.18%(2) 16.31% 16.80% 19.81% 20.46% 14.66%
Average commission rate paid(3)................. _ _ _ _ _ $.0338
Net Assets, end of year (000's omitted)......... $5,436 $45,989 $65,690 $75,404 $122,982 $170,987
(1) From June 19, 1991 (commencement of operations) to October 31, 1991.
(2) Not annualized.
(3) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate 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 of medium-size domestic companies in the aggregate, as represented by
the Standard & Poor's MidCap 400 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.
*"S&P Registration Mark" and "Standard & Poor's MidCap 400 Index" 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]
MANAGEMENT POLICIES
The Fund attempts to duplicate the investment results of the Index,
which is composed of 400 selected common stocks of medium-size domestic
companies, which may include some Canadian issuers, with market
capitalizations ranging generally between $56 million and $9.6 billion. The
median market capitalization of the stocks in the Index is approximately $1.1
billion. Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"), chooses the stocks to be included in the Index on the basis of market
size, liquidity and industry group representation. 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.
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 29, 1996, 31% of the Index was composed of the 50 largest companies.
Of the companies, approximately 73% are listed on the New York Stock
Exchange, 25% are quoted on the National Association of Securities Dealers
Automated Quotation System and 2% are listed on the American Stock Exchange.
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 will be approximately the
same as the percentage it represents in the Index. Since some of the stocks
that comprise the Index may be thinly traded, comparatively small investments
could cause relatively volatile price fluctuations.
No attempt is made to manage the Fund's portfolio in the
traditional sense using economic, financial and market analysis. The Fund is
managed using a computer program to determine which securities 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.
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 dividends 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 the common stocks of
medium-size companies.
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
[Page 5]
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 Mellon Equity, 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.
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.
The securities of the smaller companies in which the Fund may
invest may be subject to more abrupt or erratic market movements than larger,
more established companies, because these securities typically are traded in
lower volume and the issuers typically are subject to a greater degree to
changes in earnings and prospects.
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 future political and economic developments, the possible
imposition of withholding taxes on income payable on the securities, the possi
ble establishment of exchange controls or the adoption of other foreign
governmental restrictions which might adversely affect an investment in these
securities and the possible seizure or nationalization of foreign deposits.
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 industry, 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
[Page 6]
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 accounts and investment companies
advised by Dreyfus or Mellon Equity. If, however, such other accounts or
investment companies 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 wholly-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 $85 billion in assets for approximately 1.7
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
$11.3 billion in assets and served as the investment adviser of 14 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 $223 billion
in assets as of December 31, 1996, including approximately $86 billion in
proprietary mutual fund assets. As of December 31, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.046 trillion in assets, including
approximately $57 billion in mutual fund assets.
Pursuant to the terms of the Management Agreement, the Fund has
agreed to pay Dreyfus a monthly fee at the annual rate of .395 of 1% of the
value of the Fund's average daily net assets. For the period from November
13, 1995 (effective date of Management Agreement) through October 31, 1996,
the Fund paid Dreyfus a monthly management fee at the effective annual rate
of .23 of 1% of the value of the Fund's average daily net assets pursuant to
an undertaking by Dreyfus. Under the Index Management Agreement, 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, and Mellon Equity has
agreed to pay for
[Page 7]
the provision of custody services to the Fund by Boston Safe
Deposit and Trust Company. For the period November 13, 1995 (effective date
of Index Management Agreement) through October 31, 1996, Dreyfus paid Mellon
Equity a monthly index management fee at the effective annual rate of .05 of
1% of the value of the Fund's average daily net assets.
Prior to November 13, 1995, World Asset Management served as the
Fund's index fund manager pursuant to an Index Management Agreement with the
Fund and Dreyfus served as the Fund's administrator pursuant to an
Administration Agreement with the Fund. Pursuant to such agreements, the Fund
agreed to pay World Asset Management and Dreyfus .10% and .30%, respectively,
of the value of the Fund's average daily net assets. For the period November
1, 1995 through November 12, 1995, no index management fee was paid to World
Asset Management.
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.
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
its 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 securities dealers, banks and other financial institutions 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. 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 which securities dealer, bank or other financial institution
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-
[Page 8]
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 vary further the initial
and subsequent investment minimum requirements at any time. The Fund's shares
are available for purchase by pension and profit-sharing plans.
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 The Dreyfus Family of Funds, 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 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 #8900052732/Dreyfus MidCap
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."
Fund shares are sold on a continuous basis at the net asset value
per share next determined after your order is received in proper form 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
[Page 9]
ability to track the Index, you are urged to transmit your purchase
order 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
outstanding. 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.
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be canceled and the institution
could be held liable for resulting fees and/or losses.
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 request so that it 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
[Page 10]
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
securities dealers or other financial institutions 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. Service Agents may charge
their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of 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 PURCHASE
D 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-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 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 proce-
[Page 11]
dures, 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 AN
D 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 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 be 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 administrative 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
[Page 12]
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. This
Privilege may be modified or terminated at any time by the Transfer Agent or
the Fund.
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. 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 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, 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 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.
[Page 13]
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares and pays dividends from net investment
income and distributes net realized securities gains, if any, once a year,
but the Fund 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. If applicable, the 1%
redemption fee, described under "How to Redeem Shares," will be charged upon
certain redemptions of Fund 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 shareholders as ordinary income whether received in cash or
reinvested in additional Fund shares. 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 corporate shareholders. Distributions from net realized long-term
securities gains of 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 additional Fund shares. The Code
provides that the net 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
will be 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 of the Fund 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.
[Page 14]
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 compounded 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 MidCap 400 Index, Standard & Poor's 500 Composite Stock Price 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. In its
advertisements, the Fund also may cite 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.
[Page 15]
GENERAL INFORMATION
The Fund was incorporated under Maryland law on June 6, 1991, and
commenced operations on June 19, l991. On November 13, 1995, the Fund, which
is incorporated under the name Peoples S&P MidCap Index Fund, Inc., began
operating under the name Dreyfus MidCap 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 auditors. 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 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 confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling 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 Fund is not sponsored, endorsed, sold or promoted by 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
MidCap 400 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 MidCap 400 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 MidCap 400 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 MIDCAP 400 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 MIDCAP 400 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 MIDCAP 400 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 OFFER
ING MAY NOT LAWFULLY BE MADE.
[Page 17]
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[Page 18]
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[Page 19]
MidCap Index
Fund
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
113p030197
[Page 20]
DREYFUS MIDCAP 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 MidCap 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-11
Purchase of Shares...........................................B-14
Shareholder Services Plan....................................B-14
Redemption of Shares.........................................B-15
Shareholder Services.........................................B-16
Determination of Net Asset Value.............................B-17
Dividends, Distributions and Taxes...........................B-18
Portfolio Transactions.......................................B-19
Performance Information......................................B-20
Information About the Fund...................................B-20
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors........................B-21
Appendix.....................................................B-22
Financial Statements.........................................B-23
Report of Independent Auditors...............................B-36
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."
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 not lower than Aa3 by Moody's or 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 the 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 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.
2. 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.
3. Invest in commodities, except that the Fund may invest in futures
contracts as described in the Fund's Prospectus and this Statement of
Additional Information.
4. Purchase, hold or deal in real estate, real estate investment trust
securities, real estate limited partnership interests, or oil, gas or other
mineral leases or exploration or development programs, 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.
5. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
Transactions in futures and options do not involve any borrowing for purposes
of this restriction.
6. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except 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.
7. 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 Board of Directors.
8. Act as an underwriter of securities of other issuers. The Fund may
not enter into repurchase agreements providing for settlement in more than
seven days after notice or purchase illiquid securities, if, in the
aggregate, more than 10% of the value of the Fund's net assets would be so
invested.
9. 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.
10. Purchase, sell or write puts, calls or combinations thereof.
11. 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 MidCap 400 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), or (iii) sell
securities short, but the Fund 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).
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 interest
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 200 Park Avenue, New York, New
York 10166.
*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, 1996, were as follows:
Aggregate Total
Compensation From Compensation
Name of Board Fund* From Fund and
Member Fund Complex
Paid to Board
Member
Joseph S. $6,250 $517,075 (94)
DiMartino
David P. Feldman $5,000 $122,257 (27)
John M. Fraser, $1,171 $ 73,563 (12)
Jr.**
Ehud Houminer** $ 671 $ 48,769 (12)
David J. Mahoney** $ 671 $ 40,312 (14)
Gloria Messinger** $1,171 $ 11,444 (4)
Jack R. Meyer $4,500 $ 18,868 (4)
John Szarkowski $5,000 $ 21,377 (4)
Anne Wexler $4,500 $ 62,034 (16)
____________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $1,026 for all Board members as a group.
** Elected to the Board by a vote of stockholders on July 26, 1996.
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. 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. He is 32 years old.
ELIZABETH A. KEELEY, 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.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by Dreyfus. From
December 1989 through November 1996, he was employed with GE Investments
where he held various financial, business development and compliance
positions. He is 35 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 outstanding on January 28, 1997.
The following persons are known by the Fund to own of record 5% or more
of the Fund's voting securities outstanding on January 28, 1997: Charles
Schwab & Company, Inc., 101 Montgomery Street, San Francisco, California
94104--20.7%; Mellon Bank, N.A., P.O. Box 3198, Pittsburgh, Pennsylvania
15230-3198--5.7%.
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
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 on
November 3, 1995, and by the Fund's Board, including a majority of the Board
members who are not "interested persons" of any party to the Management
Agreement, at a meeting held on August 9, 1995. 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 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 August 9, 1995.
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 .395 of 1% of the value of the
Fund's average daily net assets. For the period from November 13, 1995
(effective date of Management Agreement) through October 31, 1996, the
management fee payable to Dreyfus under the Management Agreement amounted to
$582,857, which amount was reduced by $252,887 pursuant to an undertaking in
effect, resulting in a net management fee paid for the period of $329,970.
As compensation for Mellon Equity's services, 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. For the period from November 13, 1995
(effective date of Index Management Agreement) through October 31, 1996, the
index management fee paid by Dreyfus to Mellon Equity under the Index
Management Agreement amounted to $70,139. All fees and expenses are accrued
daily and deducted before declaration of dividends to shareholders.
From January 3, 1995 to November 13, 1995, World Asset Management
("World") served as the Fund's index fund manager; from February 24, 1994 to
January 3, 1995, World Asset Management, Inc. ("WAM") served as the Fund's
index fund manager; and from June 18, 1992 to February 24, 1994, Woodbridge
Capital Management, Inc. ("Woodbridge" and together with World and WAM, the
"prior index fund managers") served as the Fund's index fund manager.
Pursuant to prior index management agreements with the prior index fund
managers, 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, the index management fees payable to the
prior index fund managers amounted to $72,970 and $98,063, respectively.
However, no index management fees was paid to the prior index fund managers
for the fiscal year ended October 31, 1994 pursuant to undertakings in
effect, and for the fiscal year ended October 31, 1995 the fee was reduced by
$39,687. For the period November 1, 1995 through November 12, 1995, no index
management fee was paid to the prior index fund managers.
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 .30 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 12, 1995, the administrative fees
payable to Dreyfus amounted to $218,911, $294,190 and $0, respectively. No
administrative fees were paid to Dreyfus for the fiscal years ended October
31, 1994 and 1995, pursuant to undertakings in effect.
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 each 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.
The aggregate of the fees payable to Dreyfus and Mellon Equity is not
subject to reduction as the value of the Fund's net assets increases.
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 efforts 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.
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 reimburses Dreyfus Service Corporation 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 an answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts.
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 cast in
person at a meeting called for the purpose of voting on the Plan. The Plan
was last approved by the Board at a meeting held on May 3, 1996. The Plan is
terminable at any time by vote of a majority of 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.
For the fiscal year ended October 31, 1996, $182,052 was charged to the
Fund under the Plan.
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 transmissions:
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 Fund intends to continue to so qualify as long as such
qualification is in the best interests of its shareholders. 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 transactions 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 of the
Code.
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 transaction 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 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 dividend or 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 are selected because of their ability
to handle special executions such as are involved in large block trades or
broad distributions, provided the primary consideration is met. 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
$24,979, $58,043 and $70,701, 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 5.370 year
periods ended October 31, 1996 was 16.65%, 14.01% and 14.91%, 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 June 19, 1991 (commencement of
operations) to October 31, 1996 was 110.95%. 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 (the "S&P Index"), Lipper Analytical Services,
Inc., the Dow Jones Industrial Average and other industry publications. 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 Standard & Poor's MidCap 400 Index and the S&P Index together
represent approximately 77% 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 of Common Stock 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 S&P MidCap Index Fund, Inc., began operating under the name Dreyfus
MidCap Index Fund.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02940-9671, serves as 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 fee paid to the Transfer
Agent was $15,002.
Boston Safe Deposit and Trust Company (the "Custodian"), an indirect
wholly-owned subsidiary of Mellon Bank Corporation, is located at One Boston
Place, Boston, Massachusetts 02108, and serves as the custodian of the Fund.
Under its 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 LLP, 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.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, 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 Rating :
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 MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- ------------------------------------------------------------------------------
Statement of Investments October 31, 1996
Shares Common Stocks--93.4% Value
------- ------------
Basic Industries--6.8%
14,200 Albemarle......................... $ 228,975
6,904 Betz Laboratories................. 362,460
9,410 Bowater........................... 332,878
17,900 Cabot ............................ 431,837
10,089 Calgon Carbon .................... 100,890
5,833 CalMat ........................... 108,639
5,891 Chesapeake ....................... 166,420
23,833 Clayton Homes .................... 402,181
11,221 Consolidated Papers .............. 562,452
17,976 Crompton & Knowles ............... 323,568
5,943 Dexter ........................... 184,233
29,700 Ethyl ............................ 245,025
6,653 Ferro ............................ 179,631
3,542 Fuller (H.B.) .................... 147,878
8,351 GenCorp .......................... 137,791
9,179 Georgia Gulf ..................... 247,833
10,700 Glatfelter (P.H.) ................ 203,300
4,550 Granite Construction ............. 87,587
13,102 Hanna (M.A.) ..................... 278,417
23,022 IMC Global ....................... 863,337
6,421(a) Jacobs Engineering Group ......... 142,064
11,246 Lawter International ............. 132,140
8,018 Loctite .......................... 470,055
12,936 Longview Fibre ................... 224,763
15,288 Lubrizol ......................... 454,818
20,038 Lyondell Petrochemical ........... 425,807
5,700 Minerals Technologies ............ 223,725
1,917 NCH .............................. 106,872
12,540 Olin ............................. 532,950
19,411 RPM .............................. 325,134
7,400 Rayonier ......................... 293,225
9,425 Schulman (A.) .................... 199,103
10,612(a) Sealed Air ....................... 412,541
22,830 Sonoco Products .................. 607,848
4,341 Southdown ........................ 118,834
8,700 Vulcan Materials ................. 528,525
9,213 Wausau Paper Mills ............... 177,350
8,361 Wellman .......................... 148,407
14,216 Witco ............................ 440,696
------------
11,560,189
------------
Capital Goods--24.8%
16,256 ADC Telecommunications ........... 1,111,504
8,222 AMETEK ........................... 163,412
11,182(a) AST Research ..................... 51,716
18,209 Adobe Systems .................... 630,486
3,487 Alaska Air Group ................. 76,714
7,561 Albany International, Cl. A ...... 170,122
10,952 Altera ........................... 679,024
22,700(a) America Online ................... 615,737
23,500(a) American Power Conversion ........ 502,312
Capital Goods (continued)
19,400 American Water Works ............. $ 395,275
29,120(a) Analog Devices ................... 757,120
12,731(a) Arrow Electronics ................ 606,313
24,500(a) Atmel ............................ 621,687
10,904 Avnet ............................ 549,289
12,510(a) BMC Software ..................... 1,038,330
7,711(a) Borland International............. 39,036
19,505(a) Cadence Design System ............ 711,932
11,810 Cintas ........................... 687,932
15,928(a) Cirrus Logic ..................... 302,632
12,559 Comdisco ......................... 375,200
10,600(a) Compuware ........................ 559,150
12,036 Comsat ........................... 282,846
19,918(a) Cypress Semiconductor ............ 214,118
14,602 Danaher .......................... 596,856
11,534 Diebold .......................... 663,205
6,404 Donaldson ........................ 187,317
6,115 Duriron .......................... 163,576
13,200(a) Electronic Arts .................. 495,000
38,310 Equifax .......................... 1,139,722
5,484(a) Exabyte .......................... 72,663
11,413 Federal Signal ................... 293,884
11,300(a) Fiserv ........................... 433,637
7,688 Flightsafety International ....... 379,595
10,700 GTECH Holdings ................... 315,650
5,294 Goulds Pumps ..................... 122,423
6,273 Harsco ........................... 400,687
8,730(a) HealthCare COMPARE ............... 384,120
16,480 Hubbell .......................... 673,620
10,500 Imation .......................... 287,437
6,909 Information Resources............. 87,226
36,800(a) Informix ......................... 816,500
19,400(a) Intergrated Device Technology .... 160,050
9,596 Kansas City Southern Industries .. 451,012
4,144 Kaydon ........................... 168,868
9,485 Kelly Services, Cl. A ............ 265,580
6,700 Kennametal ....................... 227,800
8,879 Keystone International ........... 159,822
2,893 Lawson Products .................. 61,476
18,740 Linear Technology ................ 627,790
11,900(a) Litton Industries ................ 534,012
6,226(a) MagneTek.......................... 69,264
20,300 Manpower ......................... 576,012
15,783 Mark IV Industries ............... 341,307
15,100(a) Maxim Integrated Products ........ 528,500
3,955 Measurex ......................... 101,841
17,800(a) Medaphis ......................... 157,975
15,509(a) Mentor Graphics .................. 131,826
7,420 Modine Manufacturing ............. 183,645
25,213 Molex ............................ 907,668
4,568 Nordson .......................... 251,240
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
------- ------------
Capital Goods (continued)
12,680(a) Octel Communications ............. $ 201,295
12,400 Ogden ............................ 224,750
19,350 Olsten ........................... 387,000
19,998 Omnicom Group .................... 994,900
8,680 PHH .............................. 258,230
31,768(a) Parametric Technology ............ 1,552,685
17,168 Paychex .......................... 978,576
9,340 Pentair .......................... 235,835
10,400 Pittston Brinks .................. 296,400
4,677(a) Policy Management Systems ........ 168,372
5,123 Precision Castparts .............. 239,500
15,353(a) Quantum .......................... 310,898
5,449(a) Rohr Industries .................. 100,806
9,005(a) Rollins .......................... 172,220
18,621 Sensormatic Electronics .......... 304,918
2,436(a) Sequa, Cl. A ..................... 101,703
8,282(a) Sequent Computer Systems ......... 122,677
13,400(a) Solectron ........................ 716,900
14,018 Sotheby's Holdings, Cl. A ........ 238,306
18,711(a) Sterling Commerce ................ 526,247
8,326 Stewart & Stevenson Services ..... 176,927
13,413(a) Storage Technology ............... 571,729
6,494(a) Stratus Computer ................. 145,303
8,166(a) Structural Dynamics Research ..... 144,946
15,426 Sundstrand ....................... 620,896
13,576(a) Symantec ......................... 147,639
6,516(a) Symbol Technologies .............. 292,405
5,500 Tecumseh Products, Cl. A ......... 309,375
4,400 Teleflex ......................... 211,750
20,944(a) Teradyne ......................... 332,486
35,092 Thermo Electron .................. 1,280,858
4,571 Thiokol .......................... 191,410
10,451 Trinity Industries ............... 361,865
21,300 U.S. Robotics .................... 1,339,237
32,500 USA Waste Service ................ 1,040,000
7,738 Varian Associates ................ 349,177
6,303(a) VeriFone ......................... 211,938
24,300 Viad ............................. 352,350
15,350(a) Vishay Intertechnology ........... 276,300
7,182 Watts Industries, Cl. A .......... 149,924
18,066(a) Xilinx ........................... 591,661
10,850 York International ............... 524,868
------------
42,315,955
------------
Consumer Cyclical--14.2%
5,800(a) Ann Taylor Stores ................ 105,125
5,568 Arvin Industries ................. 127,368
7,786 Banta ............................ 164,479
17,100(a) Bed Bath & Beyond ................ 431,775
11,232 Belo (A.H.), Cl. A ............... 438,048
10,800(a) Best Buy ......................... 176,850
Consumer Cyclical (continued)
10,544 Bob Evans Farms .................. $ 131,800
19,871(a) Brinker International ............ 337,807
7,800(a) Buffets........................... 86,775
15,700(a) Burlington Industries ............ 178,587
18,200 Callaway Golf .................... 557,375
3,816 Carlilse Companies ............... 217,035
7,559(a) Chris-Craft Industries ........... 297,635
26,073(a) Circus Circus Enterprises ........ 899,518
11,952 Claire's Stores .................. 203,184
13,400 Consolidated Stores .............. 517,575
15,325 Cracker Barrel Old Country
Store .......................... 312,246
4,100 Cross (A.T.), Cl. A .............. 46,637
18,172 Dollar General ................... 504,273
6,812 Duty Free International .......... 108,992
4,161 Ennis Business Forms.............. 45,771
14,190 Family Dollar Stores ............. 241,230
9,500 Fastenal ......................... 439,375
8,817 Federal-Mogul .................... 197,280
11,600 Fingerhut ........................ 172,550
4,024 Gibson Greetings.................. 62,875
5,297 Golden Books Family
Entertainment................... 58,929
7,561 HON Industries ................... 264,635
5,419 Hancock Fabrics .................. 46,061
10,600 Hannaford Brothers ............... 319,325
18,912 Harley-Davidson .................. 853,404
12,170 Heilig-Meyers .................... 158,210
22,740(a) Home Shopping Network ............ 230,242
3,603 Houghton Mifflin ................. 178,798
8,684 Intelligent Electronics........... 77,070
31,376 International Game Technology .... 662,818
5,583(a) International Dairy Queen, Cl. A.. 107,472
13,200(a) Jones Apparel Group .............. 412,500
18,500(a) Kohl's ........................... 666,000
8,348(a) Lands' End ....................... 179,482
11,800 Lee Enterprises .................. 269,925
22,696 Leggett & Platt .................. 678,043
10,400(a) Lone Star Steakhouse/Saloon ...... 266,500
6,345(a) MacFrugals Bargains Closeouts .... 154,659
6,600 Media General, Cl. A ............. 196,350
7,600 Meyer (Fred) ..................... 266,950
8,500(a) Micro Warehouse .................. 195,500
6,265 Miller (Herman) .................. 270,178
46,150(a) Mirage Resorts ................... 1,015,311
1,804 National Presto Industries........ 67,650
8,900(a) Nine West Group .................. 443,887
5,188 OEA .............................. 195,847
39,268 Office Depot ..................... 770,634
31,500(a) OfficeMax ........................ 425,250
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
------- ------------
Consumer Cyclical (continued)
12,000(a) Outback Steakhouse ............... $ 278,250
10,100 Payless ShoeSource ............... 342,137
12,842 Promus Hotel ..................... 407,733
20,352 Reynolds & Reynolds, Cl. A ....... 536,784
11,600 Ruddick .......................... 150,800
5,100 Sbarro ........................... 134,512
4,000(a) Scholastic ....................... 293,000
24,944(a) Service Merchandise .............. 146,546
33,932 Shaw Industreis .................. 398,701
7,207 Standard Register ................ 187,382
41,693(a) Staples .......................... 776,532
7,200 Superior Industries International. 175,500
6,248 TCA Cable TV ..................... 167,134
9,338 Tiffany & Co...................... 345,506
11,773(a) Topps............................. 44,884
16,237 Unifi ............................ 505,376
21,800(a) Viking Office Products ........... 634,925
10,915(a) Vons ............................. 604,418
8,307(a) Waban ............................ 217,020
11,414 Wallace Computer Services ........ 335,286
13,000 Warnaco Group, Cl. A ............. 323,375
2,769 Washington Post, Cl. B ........... 911,001
------------
24,350,597
------------
Consumer Staples--4.6%
3,515 CPI .............................. 66,785
4,888 Church & Dwight .................. 105,092
31,436 Coca-Cola Enterprises ............ 1,339,964
10,077 Dean Foods ....................... 292,233
23,700 Dial ............................. 325,875
15,043 Dole Food ........................ 586,677
3,314 Dreyers Grand Ice Cream .......... 85,335
11,216 First Brands ..................... 318,254
14,517 Flowers Industries ............... 339,334
23,700 IBP .............................. 592,500
4,477 International Multifoods ......... 68,274
7,433 Lancaster Colony ................. 278,737
7,545 Lance ............................ 132,037
20,336 McCormick & Co.................... 490,606
4,871 Michael Foods..................... 60,887
17,100(a) Revco D.S......................... 515,137
6,581 Savannah Food & Industries ....... 105,296
7,320 Smucker (J.M.), Cl. A ............ 120,780
4,578 Stanhome ......................... 121,317
9,191 Tambrands ........................ 391,766
36,344 Tyson Foods, Cl. A................ 1,072,148
8,766 Universal ........................ 238,873
6,464 Universal Foods .................. 228,664
------------
7,876,571
------------
Energy--7.7%
13,862 AGL Resources .................... $ 291,102
16,100 Airgas ........................... 364,262
14,781 Anadarko Petroleum ............... 940,441
22,436 Apache ........................... 796,478
9,185(a) BJ Services ...................... 412,176
12,394 Brooklyn Union Gas ............... 359,426
7,348 Diamond Shamrock ................. 215,847
17,200(a) ENSCO International .............. 743,900
8,900 El Paso Natural Gas .............. 431,650
42,000(a) Global Marine .................... 771,757
5,594 Indiana Energy ................... 137,053
14,460 MAPCO ............................ 450,067
16,780 MCN .............................. 461,450
11,282 Murphy Oil ....................... 557,048
21,400(a) Nabors Industries ................ 355,775
9,437 National Fuel Gas ................ 351,528
12,577 Noble Affiliates ................. 547,099
8,900 Parker & Parsley Petroleum ....... 255,875
16,337(a) Parker Drilling .................. 138,864
8,986 Quaker State ..................... 150,515
10,248 Questar .......................... 368,928
24,682 Ranger Oil ....................... 185,115
15,420(a) Seagull Energy ................... 333,457
10,010(a) Smith International .............. 380,380
15,605 Tidewater ........................ 682,718
10,923 Tosco ............................ 613,053
12,900 Transocean Offshore .............. 815,925
10,976 Valero Energy .................... 260,680
7,565(a) Varco International .............. 149,408
10,860 Washington Gas Light ............. 242,992
12,841(a) Weatherford International ........ 372,389
------------
13,137,358
------------
Health Care--7.9%
6,695(a) Acuson ........................... 141,431
3,534(a) Advanced Technology
Labratories .................... 107,787
12,700(a) Apria Healthcare Group ........... 242,887
7,112 Beckman Instruments .............. 261,366
10,031 Bergen Brunswig, Cl.A ............ 314,722
8,926(a) Biogen ........................... 664,987
15,928 Cardinal Health .................. 1,250,348
11,651 Carter-Wallace ................... 180,590
16,897(a) Centocor ......................... 496,349
42,380(a) Chiron ........................... 969,442
6,700 DENTSPLY International ........... 282,237
4,019(a) Datascope......................... 68,323
3,371 Diagnostic Products .............. 100,287
10,454(a) FHP International ................ 356,742
11,200(a) Forest Laboratories, Cl. A ....... 431,200
<PAGE>
Dreyfus MidCap Index Fund
- -----------------------------------------------------------------------------
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
------- ------------
Health Care (continued)
14,700(a) Foundation Health ................ $ 439,162
16,858(a) Genzyme .......................... 387,734
38,739(a) HealthSouth ...................... 1,452,720
11,600(a) HealthCare & Retirement .......... 285,650
16,400(a) Healthsource ..................... 200,900
13,015(a) Horizon/CMS Healthcare ........... 135,030
30,250 IVAX Corporation ................. 499,125
30,832(a) Laboratory Corp of America
Holdings ....................... 104,058
10,800 McKesson ......................... 537,300
30,498 Mylan Laboratories ............... 461,282
14,330(a) Nellcor .......................... 279,435
15,048(a) NovaCare ......................... 124,146
7,761(a) PacifiCare Health Systems, Cl. B.. 545,210
19,300(a) Perrigo .......................... 183,350
5,900(a) Scherer (R.P.) ................... 273,612
24,250 Stryker .......................... 721,437
13,538(a) Value Health ..................... 235,222
17,600(a) Vencor ........................... 521,400
9,200(a) Watson Pharmaceutical ............ 307,050
------------
13,562,521
------------
Interest Sensitive--13.5%
35,134 AFLAC ............................ 1,409,751
15,259 American Financial ............... 547,416
10,285 Bancorp Hawaii ................... 407,543
30,154 Bear Streans Companies ........... 712,388
14,988 Central Fidelity Banks ........... 380,320
10,957 City National .................... 191,747
10,745 Crestar Financial ................ 660,817
7,654 Dauphin Deposit .................. 250,668
15,883 Edwards (A.G.) ................... 474,504
15,410 First of America Bank ............ 837,918
18,859 First Security ................... 553,983
16,872 First Tennessee National ......... 613,719
8,406 First Virginia Banks ............. 376,168
18,400 Firstar .......................... 901,600
20,108 Franklin Resources ............... 1,417,625
5,096 Hartford Steam Boiler Inspection
& Insurance .................... 219,765
30,600 Hibernia, Cl. A .................. 340,425
23,191 Marshall & Iisley ................ 745,010
15,731 Mercantile Bancorporation ........ 780,650
11,934 Mercantile Bankshares ............ 359,511
14,224 Northern Trust ................... 985,012
8,800 PMI Group ........................ 502,700
23,500 Paine Webber Group ............... 552,250
18,087 Progressive ...................... 1,243,481
11,364 Provident ........................ 421,888
15,614 Regions Financial ................ 780,700
43,848 Schwab(Charles) .................. 1,096,200
Interest Sensitive (continued)
23,395 SouthTrust ....................... $ 774,959
20,042 State Street Boston .............. 1,270,161
23,442 Summit Bancorp ................... 958,191
29,900 SunAmerica ....................... 1,121,250
14,300 T. Rowe Price Associaties ........ 487,987
5,725 Transatlantic Holdings ........... 412,200
8,800 Wilmington Trust ................. 332,200
------------
23,120,707
------------
Mining and Metals--.5%
11,200(a) Alumax ........................... 359,800
3,929 Brush Wellman .................... 74,159
4,144 Carpenter Technology ............. 135,198
2,968 Cleveland-Cliffs ................. 121,688
3,728 Lukens............................ 51,260
2,200(a) MAXXAM............................ 92,400
6,368 Oregon Steel Mills ............... 101,092
------------
935,597
------------
Transportation--1.1%
6,412 APL, Ltd.......................... 141,064
5,269 Airborne Freight.................. 104,721
11,357 Alexander & Baldwin............... 279,666
6,700 Arnold Industries................. 106,362
7,880 Atlantic Southeast Airlines....... 165,480
5,073 GATX.............................. 242,235
15,411 Illinois Central, Ser. A.......... 498,933
9,500 Hunt (J.B.) Transport............. 138,937
9,070 Overseas Shipholding Group........ 154,190
------------
1,831,588
------------
Utilities--12.3%
18,796(a) AES............................... 824,674
9,168 Aliant Communications............. 148,980
30,322 Allegheny Power Systen............ 905,869
13,154 Atlantic Energy................... 231,839
3,595 Black Hills....................... 91,672
23,045 CMS Energy........................ 728,798
13,000(a) Calenergy......................... 377,000
5,620 Central Lousiana Electric......... 152,442
8,115 Central Maine Power............... 95,351
14,958 Century Telephone Enterprises..... 480,525
15,234 Delmarva Power & Light............ 302,775
24,216 Florida Progress.................. 808,209
40,722 Frontier.......................... 1,180,955
7,529 Hawaiian Electric Industries...... 268,220
14,251 IPALCO Enterprises................ 382,995
9,383 Idaho Power....................... 292,045
18,976 Illinova.......................... 517,096
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- -----------------------------------------------------------------------------
Statement of Investments (continued) October 31, 1996
Shares Common Stocks (continued) Value
------- ------------
Utilities (continued)
15,480 Kansas City Power & Light......... $ 425,700
16,614 LG&E Energy....................... 384,198
25,233 MidAmerican Energy................ 391,111
7,937 Minnesota Power & Light........... 224,220
13,715 Montana Power..................... 291,443
11,911 Nevada Power...................... 242,686
56,300(a) NEXTEL Communications, Cl. A...... 900,800
15,348 NIPSCO Industries................. 581,305
16,216 New England Electric System....... 547,290
17,888 New York State Electric & Gas..... 373,412
31,960 Northeast Utilities............... 343,570
10,073 Oklahoma Gas & Electric........... 394,106
21,936 Pinnacle West Capital............. 677,274
12,757 Portland General.................. 558,118
29,683 Potomac Electric Power............ 760,626
16,081 Public Service Company of
Colorado........................ 594,997
10,494 Public Service of New Mexico...... 196,762
15,990 Puget Sound Power & Light......... 353,778
26,264 SCANA............................. 702,562
16,383 Southern New England
Telecommunications.............. 610,266
10,282 Southwestern Public Service....... 349,588
29,300 360 Communications................ 662,912
29,318 TECO Energy....................... 721,960
15,200 Telephone & Data Systems.......... 532,000
11,700 UtiliCorp United.................. 317,362
10,357(a) Vanguard Cellular Systems......... 171,537
Utilities (continued)
7,679 WPL Holdings...................... $ 215,971
27,787 Wisconsin Energy.................. 753,723
------------
21,068,722
------------
TOTAL COMMON STOCKS
(cost $131,303,969)............. $159,759,805
------------
------------
Principal SHORT-TERM
Amount INVESTMENTS--6.6%
- -----------
U.S. Government Agency--6.3%
Federal Home Loan Mortgage,
$10,775,000 5.53%, 11/1/1996. $ 10,775,000
------------
U.S. Treasury Bills--.3%
151,000(b) 5.15%, 11/14/1996................. 150,736
111,000 5.06%, 12/12/1996................. 110,367
215,000(b) 5.22%, 1/2/1997................... 213,170
------------
474,273
------------
TOTAL SHORT-TERM
INVESTMENTS
(cost $11,249,304).............. $ 11,249,273
------------
------------
TOTAL INVESTMENTS
(cost $142,553,273)........................ 100.0% $171,009,078
------ ------------
------ ------------
LIABILITIES, LESS CASH AND
RECEIVABLES................................ -- $ (22,567)
------ ------------
------ ------------
NET ASSETS................................... 100.0% $170,986,511
------ ------------
------ ------------
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- ------------------------------------------------------------------------------
Notes to Statement of Investments:
(a) Non-income producing.
(b) Partially held by the custodian in a segregated account for open financial
futures positions.
Statement of Financial Futures October 31, 1996
Financial Futures Purchased:
- ----------------------------
<TABLE>
<CAPTION>
Market Value Unrealized
Number of Covered (Depreciation)
Issuer Contracts by Contracts Expiration at 10/31/96
- ------ --------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Standard & Poor's MidCap 400.................................. 93 $11,348,325 December '96 ($43,500)
---------
---------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap 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............ $142,553,273 $171,009,078
Cash............................................................... 216,843
Dividends and interest receivable.................................. 158,447
Receivable for futures variation margin--Note 4(a)................. 73,664
Prepaid expenses................................................... 16,009
------------
171,474,041
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates...................... 63,323
Payable for Common Stock redeemed.................................. 328,505
Accrued expenses................................................... 95,702
------------
487,530
------------
NET ASSETS............................................................................... $170,986,511
------------
------------
REPRESENTED BY: Paid-in capital.................................................... $133,002,901
Accumulated undistributed investment income--net................... 1,753,486
Accumulated net realized gain (loss) on investments................ 7,817,819
Accumulated net unrealized appreciation (depreciation)
on investments [including ($43,500) net unrealized
(depreciation) on financial futures]--Note 4(b).................. 28,412,305
------------
NET ASSETS............................................................................... $170,986,511
------------
------------
SHARES OUTSTANDING
(200 million shares of $.001 par value Common Stock authorized).......................... 8,018,623
NET ASSET VALUE, offering and redemption price per share................................. $21.32
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap 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 $263 foreign taxes withheld
at source).................................................... $2,245,845
Interest........................................................ 686,199
----------
Total Income............................................ $ 2,932,044
EXPENSES: Management fee--Note 3(a)....................................... 582,857
Shareholder servicing costs--Note 3(b).......................... 245,004
Audit fees...................................................... 45,835
Directors' fees and expenses--Note 3(c)......................... 32,918
Legal fees...................................................... 25,405
Prospectus and shareholders' reports............................ 24,368
Registration fees............................................... 20,552
Miscellaneous................................................... 16,138
----------
Total Expenses.......................................... 993,077
Less--reduction in management fee due to
undertaking--Note 3(a)........................................ (252,887)
----------
Net Expenses............................................ 740,190
-----------
INVESTMENT INCOME--NET............................................................. 2,191,854
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments......................... $7,470,923
Net realized gain (loss) on financial futures
Long transactions............................................. 429,818
----------
Net Realized Gain (Loss)................................ 7,900,741
Net unrealized appreciation (depreciation) on investments
(including $378,185 net unrealized appreciation on
financial futures)............................................ 11,691,375
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS............................. 19,592,116
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... $21,783,970
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap 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...................................................... $ 2,191,854 $ 1,764,765
Net realized gain (loss) on investments..................................... 7,900,741 5,648,773
Net unrealized appreciation (depreciation) on investments................... 11,691,375 11,878,944
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations........... 21,783,970 19,292,482
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net...................................................... (1,926,246) (1,274,372)
Net realized gain on investments............................................ (5,586,113) (3,413,496)
------------- -------------
Total Dividends........................................................... (7,512,359) (4,687,868)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................... 65,932,645 44,222,299
Dividends reinvested........................................................ 6,623,156 4,181,647
Cost of shares redeemed..................................................... (38,822,556) (15,431,258)
------------- -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions......... 33,733,245 32,972,688
------------- -------------
Total Increase (Decrease) in Net Assets................................. 48,004,856 47,577,302
NET ASSETS:
Beginning of Period......................................................... 122,981,655 75,404,353
------------- -------------
End of Period............................................................... $ 170,986,511 $ 122,981,655
------------- -------------
------------- -------------
Undistributed investment income--net.......................................... $ 1,753,486 $ 1,487,878
------------- -------------
CAPITAL SHARE TRANSACTIONS: Shares Shares
------------- -------------
Shares sold................................................................. 3,243,154 2,528,662
Shares issued for dividends reinvested...................................... 350,989 270,132
Shares redeemed............................................................. (1,913,500) (859,974)
------------- -------------
Net Increase (Decrease) in Shares Outstanding............................. 1,680,643 1,938,820
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- ------------------------------------------------------------------------------
Financial Highlights
Reference is made to page 4 of the Fund's Propsectus dated March 1, 1997.
See notes to financial statements.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus MidCap 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
of medium-size domestic companies in the aggregate, as represented by the
Standard & Poor's MidCap 400 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. 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. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold to the public without a sales
charge.
Effective November 13, 1995, the Fund changed its name from "Peoples S&P
MidCap Index Fund, Inc." to "Dreyfus MidCap Index Fund."
Prior to November 13, 1995, World Asset Management, Inc. ("World") served as
the Fund's index manager. In addition, Comerica Bank served as the Fund's
custodian.
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 options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Investments
denominated in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange.
(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 and 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 MidCap Index Fund
(formerly Peoples S&P MidCap 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, Administration Fee and Other Transactions With
Affiliates:
(a) Effective November 13, 1995, pursuant to the provisions of a Management
Agreement with Dreyfus, the management fee is computed at the annual rate of
.395 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 fee of .095 of 1% of the
value of the Fund's average daily net assets. The agreements provide that if in
any full fiscal year the aggregate expenses of the Fund, exclusive of taxes,
brokerage, interest on borrowings 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, 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 fee respectively. 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 2-1/2% of the first
$30 million, 2% of the next $70 million and 1-1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. However, Dreyfus has undertaken from
November 1, 1995 through October 31, 1997, to reduce the management fee paid by
the Fund (exclusive of certain expenses as described above), and to assume all
expenses in excess of an annual rate of .50 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
World and an Administration Agreement with Dreyfus whereby, World and Dreyfus
received annual fees of .10 of 1 % and .30 of 1%, respectively, of the value of
the Fund's average daily net assets.
During period ended October 31, 1996, pursuant to the undertaking, Dreyfus
waived $252,887 of its management fee. In addition, Mellon Equity has agreed to
pay Boston Safe Deposit and Trust Company for custodian services provided to
the Fund. During the period ended October 31, 1996, the Fund earned $7,076 in
redemption fees.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(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
$182,052 pursuant to the Shareholder Services Plan.
<PAGE>
Dreyfus MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
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 to the
Fund. Such compensation amounted to $15,002 during the period from December 1,
1995 through October 31, 1996.
(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.
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 $49,679,192 and $19,887,964 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 at October 31, 1996 and their related unrealized market
depreciation are set forth in the Statement of Financial Futures.
(b) At October 31, 1996, accumulated net unrealized appreciation on
investments was $28,412,305, consisting of $37,328,587 gross unrealized
appreciation and $8,916,282 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 MidCap Index Fund
(formerly Peoples S&P MidCap Index Fund, Inc.)--see Note 1
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus MidCap Index Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus MidCap Index Fund including the statements of investments and financial
futures, as of October 31, 1996, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification by examination of securities
held by the custodian as of October 31, 1996 and confirmation of securities not
held by the custodian by correspondence with 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 MidCap Index Fund at October 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated years, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
December 6, 1996
PEOPLES S&P MIDCAP INDEX FUND, INC.
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 for the period from June 19,
1991 (commencement of operations) to October 31, 1991 and for
the fiscal years ended October 31, 1992, 1993, 1994, 1995 and
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 6, 1996.
Schedule Nos. I through VII 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
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) Articles of Incorporation is incorporated by reference to Exhibit
(1)(a) of Post-Effective Amendment No. 4 to the Registration
Statement on Form N-1A, filed on January 13, 1994.
(1)(b) Articles of Amendment to the Articles of Incorporation is
incorporated by reference to Exhibit (1)(b) of Post-Effective
Amendment No. 4 to the Registration Statement on Form N-1A, filed
on January 13, 1994.
(2) By-Laws are incorporated by reference to Exhibit (2) of Post-
Effective Amendment No. 4 to the Registration Statement on Form N-
1A, filed on January 13, 1994.
(5)(a) Management Agreement is incorporated by reference to Exhibit (5)(a)
of Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A, filed on December 29, 1995.
(5)(b) Index Management Agreement is incorporated by reference to Exhibit
(5)(b) of Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on December 29, 1995.
(6) Distribution Agreement is incorporated by reference to Exhibit (6)
of Post-Effective Amendment No. 5 to the Registration Statement on
Form N-1A, filed on December 29, 1994.
(8) Custody Agreement.
(9) Shareholder Services Plan is incorporated by reference to
Exhibit (9) of Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on December 29, 1994.
(10) Opinion and consent of Stroock & Stroock & Lavan dated June 19,
1991 is incorporated by reference to Exhibit (10) of Post-Effective
Amendment No. 4 to the Registration Statement on Form N-1A, filed
on January 13, 1994.
(11) Consent of Ernst & Young LLP, Independent Auditors.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Directors and officers are
incorporated by reference to Other Exhibits (a) of Post-
Effective Amendment No. 5 to the Registration Statement
on Form N-1A, filed on December 29, 1994.
(b) Certificate of Secretary is incorporated by
reference to Other Exhibits (b) of Post-Effective
Amendment No. 5 to the Registration Statement on Form
N-1A, filed on December 29, 1994.
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 January 28, 1997
______________ _______________________________
Common Stock
(Par value $.001) 2,344
Item 27. Indemnification
_______ _______________
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 II of Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on June 19, 1991.
Reference is also made to the Distribution Agreement attached as
Exhibit (6) of Post-Effective Amendment No. 5 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. 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:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
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
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 Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
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:
Dreyfus America Fund
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 and Trust
Company****;
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
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 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) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
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 S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund,
Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) 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. Keeley++ 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. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
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 February, 1997.
PEOPLES S&P MIDCAP INDEX FUND, INC.
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 2/26/97
___________________________ Executive, Financial and Accounting
Marie E. Connolly Officer)
/s/Joseph DiMartino* Director, Chairman of the Board 2/26/97
___________________________
Joseph DiMartino
/s/David P. Feldman* Director 2/26/97
___________________________
David P. Feldman
/s/John M. Fraser, Jr.* Director 2/26/97
___________________________
John M. Fraser, Jr.
/s/Ehud Houminer* Director 2/26/97
___________________________
Ehud Houminer
/s/David J. Mahoney * Director 2/26/97
___________________________
David J. Mahoney
/s/Gloria Messinger* Director 2/26/97
___________________________
Gloria Messinger
/s/Jack R. Meyer* Director 2/26/97
____________________________
Jack R. Meyer
/s/John Szarkowski* Director 2/26/97
_____________________________
John Szarkowski
/s/Anne Wexler* Director 2/26/97
_____________________________
Anne Wexler
*BY: /s/ Elizabeth Keeley
__________________________
Elizabeth Keeley,
Attorney-in-Fact
EXHIBIT INDEX
ITEM EXHIBIT PAGE
(8) Custody Agreement
(11) Consent of Independent Auditors
CUSTODY AGREEMENT
AGREEMENT dated as of November 13, 1995, between PEOPLES S&P MIDCAP INDEX
FUND, INC., D/B/A DREYFUS MIDCAP 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 S&P MIDCAPINDEX FUND, INC.,
D/B/A DREYFUS MIDCAP 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 S&P MidCap
Index Fund, Inc., d/b/a Dreyfus MidCap 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 S&P MIDCAP INDEX FUND, INC.
D/B/A DREYFUS MIDCAP INDEX FUND
I, Elizabeth Bachman, Vice President and Assistant Secretary of Peoples
S&P MidCap Index Fund, Inc., d/b/a Dreyfus MidCap 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
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing
Agent, Custodian, Counsel and Independent Auditors" and to the use of
our report dated December 6, 1996, in this Registration Statement
(Form N-1A No. 33-41078) of Dreyfus MidCap Index Fund.
ERNST & YOUNG LLP
New York, New York
February 26, 1997
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