Securities Act File No. 33-48926
Investment Company Act File No. 811-6718
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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. 6 /_x_/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ____
ACT OF 1940 /_x_/
___
Amendment No. 6 /_x_/
(Check appropriate box or boxes)
DREYFUS SHORT-TERM INCOME 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
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
It is proposed that this filing will become effective
(check appropriate box)
____ immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(i)
____ on (date) pursuant to paragraph (a)(i)
____ 75 days after filing pursuant to paragraph
(a)(ii)
_X_ on September 30, 1995 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.
<PAGE>
Registrant has registered an indefinite number of its 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 its fiscal year
ended July 31, 1995 will be filed on September 29, 1995.
DREYFUS FOCUS FUNDS, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Dreyfus Dreyfus
Intermediate Short-Term
Term Fund Income Fund
Items in
Part A of
Form N-A Caption Page Page
<S> <C> <C> <C>
1 Cover Cover Cover
Page Page
2 Synopsis 2 2
3 Condensed Financial Information 3 3
4 General Description of Registrant 3, 23 3, 26
5 Management of the Fund 6 8
5(a) Management's Discussion of
Fund's Performance * *
6 Capital Stock and Other Securities 23 26
7 Purchase of Securities Being Offered 8 11
8 Redemption or Repurchase 16 19
9 Pending Legal Proceedings * *
Items in
Part B of
Form N-1A Both Funds
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and Policies B-2
14 Management of the Fund B-13
15 Control Persons and Principal Holders
of Securities B-17
16 Investment Advisory and Other Services B-18
17 Brokerage Allocation B-32
18 Capital Stock and Other Securities B-35
19 Purchase, Redemption and Pricing of
Securities Being Offered B-20, B-23, B-29
20 Tax Status *
21 Underwriters B-1, B-20
22 Calculations of Performance Data B-33
23 Financial Statements B-44
Items in
Part C of
Form N-1A Both Funds
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common
Control with Registrant C-2
26 Number of Holders of Securities C-2
27 Indemnification C-2
28 Business and Other Connections of
Investment Adviser C-2
29 Principal Underwriters C-8
30 Location of Accounts and Records C-11
31 Management Services C-11
32 Undertakings C-12
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* Omitted since answer is negative or inapplicable.
<PAGE>
PROSPECTUS SEPTEMBER __, 1995
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DREYFUS INTERMEDIATE TERM FUND
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Dreyfus Intermediate Term Fund (the "Fund") is a
separate diversified portfolio of Dreyfus Investment Grade
Bond Funds, Inc., an open-end, management investment company
(the "Company"), known as a mutual fund. The Fund's
investment objective is to maximize total return to the
extent consistent with the preservation of capital. The
Fund will invest principally in a broad range of investment
grade debt securities of domestic and foreign issuers and
expects to maintain a duration of five years or less and a
dollar-weighted average portfolio maturity ranging between
three and ten years.
You can invest, reinvest or redeem shares at any
time without charge or penalty.
The Fund provides free redemption checks, which
you can use in amounts of $500 or more for cash or to pay
bills. You continue to earn income on the amount of the
check until it clears. You can purchase or redeem shares by
telephone using Dreyfus TeleTransfer.
The Dreyfus Corporation will professionally manage
the Fund's portfolio.
---------------------
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
September __, 1995, 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.
For a free copy, write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call 1-800-
645-6561. When telephoning, ask for Operator 144.
---------------------
Mutual fund shares are not deposits or obligations
of, or guaranteed or endorsed by, any bank, and are not
federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency.
The net asset value of funds of this type will fluctuate
from time to time.
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<PAGE>
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses . . . . . . . . . . .
Description of the Fund. . . . . . . . . . . . . . .
Management of the Fund . . . . . . . . . . . . . . .
How to Buy Shares. . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . . . .
Shareholder Services Plan. . . . . . . . . . . . . .
Dividends, Distributions and Taxes . . . . . . . . .
Performance Information. . . . . . . . . . . . . . .
General Information. . . . . . . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . .
- --------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees . . . . . . . . . . . . . . .60%
Other Expenses. . . . . . . . . . . . . . . __%
Total Fund Operating
Expenses. . . . . . . . . . . . . . . . . __%
EXAMPLE:
You would pay the following
expenses on a $1,000
investment, assuming (1) 5% 1 Year 3 Years
annual return and (2) redemption
at the end of each time period: $ $
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF 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%.
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The purpose of the foregoing table is to assist
you in understanding the costs and expenses borne by the
Fund, the payment of which will reduce investors' annual
return. Other Expenses are based on estimated amounts for
the current fiscal year. The information in the foregoing
table does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. You can
purchase Fund shares without charge directly from the Fund's
distributor; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer,
bank or other financial institution. For a further
description of the various costs and expenses incurred in
the operation of the Fund, as well as expense reimbursement
or waiver arrangements, see "Management of the Fund," "How
to Buy Shares" and "Shareholder Services Plan."
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to maximize
total return to the extent consistent with the preservation
of capital. It cannot be changed without approval by the
holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding voting shares. There can be no assurance that
the Fund's investment objective will be achieved.
MANAGEMENT POLICIES
The Fund anticipates that substantially all of its
assets will be invested in investment grade debt securities
and securities with debt-like characteristics, of domestic
and foreign issuers. These securities include bonds,
debentures, notes, money market instruments, mortgage-
related securities, asset-backed securities, convertible
debt obligations and convertible preferred stock. See
"Appendix--Certain Portfolio Securities." The issuers may
include domestic and foreign corporations, partnerships or
trusts, and governments or their political subdivisions,
agencies or instrumentalities. The Fund may invest up to
15% of the value of its total assets in securities of
foreign issuers. Under normal market conditions, the Fund
will invest in a portfolio of securities with a duration of
five years or less and a dollar-weighted average maturity
ranging between three and ten years.
Under normal market conditions, the Fund will seek
to provide performance results that equal or exceed the
Lehman Brothers Aggregate Bond Index (the "Index"), which is
a broad investment grade bond index that measures the total
investment return (capital change plus income) provided by a
universe of over 6,000 fixed-income securities, weighted by
the market value outstanding of each security. As of
____________, 1995, the effective duration of the securities
comprising the Index was approximately ____ years and their
weighted average maturity was approximately ____ years.
Duration is a means of assessing the price
volatility associated with changes in interest rates.
Generally, the longer the duration, the more volatility an
investor should expect. For example, the market price of a
bond with a duration of five years would be expected to
decline 5% if interest rates rose 1%. Conversely, the
market price of the same bond would be expected to increase
5% if interest rates fell 1%. The market price of a bond
with a duration of ten years would be expected to increase
or decline twice as much as the market price of a bond with
a five-year duration.
The Fund currently intends, to a limited extent,
to engage in options and futures transactions. See
"Investment Considerations and Risks" below and "Investment
Objective and Management Policies--Management Policies" in
the Statement of Additional Information. The Fund's annual
portfolio turnover rate is not expected to exceed 100%.
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.
FIXED-INCOME SECURITIES--Even though interest-bearing
securities are investments which promise a stable stream of
income, the prices of such securities generally are
inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price
fluctuations. The values of fixed-income securities also
may be affected by changes in the credit rating or financial
condition of the issuer. See "Appendix--Certain Portfolio
Securities--Ratings" below and Appendix in the Statement of
Additional Information.
FOREIGN SECURITIES--Foreign securities markets generally are
not as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities
markets are less than in the United States and, at times,
volatility of price can be greater than in the United
States.
Because evidences of ownership of such securities
usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse
political and economic developments, possible seizure or
nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities
or might restrict the payment of principal and interest to
investors located outside the country of the issuer, whether
from currency blockage or otherwise.
Since foreign securities often are purchased with
and payable in currencies of foreign countries, the value of
these assets as measured in U.S. dollars may be affected
favorably or unfavorably by changes in currency rates and
exchange control regulations.
FOREIGN CURRENCY EXCHANGE--Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand
in the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen
from an international perspective. Currency exchange rates
also can be affected unpredictably by intervention by U.S.
or foreign governments or central banks, or the failure to
intervene, or by currency controls or political developments
in the United States or abroad. See "Appendix--Investment
Techniques--Foreign Currency Transactions."
USE OF DERIVATIVES--The Fund may invest 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 options and
futures, mortgage-related securities and asset-backed
securities. 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 investments 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.
SIMULTANEOUS INVESTMENTS--Investment decisions for the Fund
are made independently from those of the other investment
companies advised by The Dreyfus Corporation. If, however,
such other 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 investment company. 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
INVESTMENT ADVISER--The Dreyfus Corporation, located at 200
Park Avenue, New York, New York 10166, was formed in 1947
and serves as the Fund's investment adviser. The Dreyfus
Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of ________, 1995, The Dreyfus
Corporation managed or administered approximately $____
billion in assets for more than ___ million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in
the overall management of the Fund's affairs under a
Management Agreement with the Company, subject to the
authority of the Company's Board in accordance with Maryland
law. The Fund's primary portfolio manager is [Description
to Come]. The Fund's other portfolio managers are
identified in the Statement of Additional Information. The
Dreyfus Corporation also provides research services for the
Fund and for other funds advised by The Dreyfus Corporation
through a professional staff of portfolio managers and
securities analysts.
Mellon is a publicly owned multibank holding
company incorporated under Pennsylvania law in 1971 and
registered under the Federal Bank Holding Company Act of
1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected
international markets. Mellon is among the twenty-five
largest bank holding companies in the United States based on
total assets. Mellon's principal wholly-owned subsidiaries
are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc.,
AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its
subsidiaries, including The Dreyfus Corporation, Mellon
managed more than $___ billion in assets as of _________,
1995, including approximately $ billion in mutual fund
assets. As of ________, 1995, Mellon, through various
subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $
billion in assets, including approximately $ billion in
mutual fund assets.
Under the terms of the Management Agreement, the
Fund has agreed to pay The Dreyfus Corporation a monthly fee
at the annual rate of .60 of 1% of the value of the Fund's
average daily net assets. From time to time, The Dreyfus
Corporation 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 The
Dreyfus Corporation at a later time for any amounts it may
waive, nor will the Fund reimburse The Dreyfus Corporation
for any amounts it may assume.
EXPENSES--All expenses incurred in the operation of the
Company will be borne by the Company, except to the extent
specifically assumed by The Dreyfus Corporation. The
expenses to be borne by the Company will 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 The Dreyfus Corporation, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, 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 Company'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 shareholders' reports and meetings,
and any extraordinary expenses. Expenses attributable to
the Fund are charged against the assets of the Fund; other
expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Board, including,
but not limited to, proportionately in relation to the net
assets of each portfolio.
The Dreyfus Corporation may pay the Fund's
distributor for shareholder services from The Dreyfus
Corporation's own assets, including past profits but not
including the management fee paid by the Fund. The Fund's
distributor may use part or all of such payments to pay
Service Agents (as defined below) in respect of these
services.
DISTRIBUTOR--The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's
ultimate parent is Boston Institutional Group, Inc.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT--The
Bank of New York, 90 Washington Street, New York, New York
10286, is the Fund's Custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer
Agent").
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You
may be charged a nominal fee if you effect transactions in
Fund shares through a securities dealer, bank or other
financial institution (collectively, "Service Agents").
Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares.
The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or
$1,000 if you are a client of a Service Agent which has made
an aggregate minimum initial purchase for its customers of
$2,500. Subsequent investments must be at least $100.
However, the minimum initial investment for Dreyfus-
sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans
with only one participant is $750, with no minimum for
subsequent purchases. Individuals who open an IRA also may
open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA
must be at least $250. The initial investment must be
accompanied by the Account Application. For full-time or
part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Company'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 The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of
their pay directly deposited into their Fund account, the
minimum initial investment is $50. The Fund reserves the
right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other
programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund.
The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
Fund shares also are offered without regard to the minimum
initial investment requirements through Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step
Program described under "Shareholder Services." These
services enable you to make regularly scheduled investments
and 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.
You may purchase Fund shares by check or wire, or
through the Dreyfus TeleTransfer Privilege described below.
Checks should be made payable to "The Dreyfus Family of
Funds," or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian" and should specify that
you are investing in the Fund. Payments to open new
accounts which are mailed should be sent to The Dreyfus
Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should
appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box
105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments
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# 89000_____/Dreyfus
Investment Grade Bond Funds, Inc./Dreyfus Intermediate Term
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, you should call 1-800-645-6561 after completing
your wire payment to obtain your Fund account number. You
should 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
instructions 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 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 an order in
proper form is received by the Transfer Agent or other
agent. Net asset value per share is determined as of the
close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time), on each day the New
York Stock Exchange is open for business. For purposes of
determining net asset value, options and 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 Fund shares outstanding. The Fund's
investments are valued generally by using available market
quotations or at fair value which may be determined by one
or more pricing services approved by the Company's Board.
Each pricing services, procedures are reviewed under the
general supervision of the Board. For further information
regarding the methods employed in valuing the Fund's
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 one million
dollars ("Eligible Benefit Plans"). All present holdings of
shares of funds in the Dreyfus Family of Funds by Eligible
Benefit Plans will be aggregated to determine the fee
payable with respect to each purchase of Fund shares. 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").
DREYFUS TELETRANSFER PRIVILEGE--You may purchase shares
(minimum $500, maximum $150,000 per day) by telephone 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. The
proceeds will be transferred between the bank account
designated in one of these documents and your Fund account.
Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may
be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer purchase
of shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the
Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds
have different investment objectives which may be of
interest to you. If you desire to use this service, you
should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are
imposed on its use.
To request an exchange, you must give exchange
instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should
review a copy of the current prospectus of the portfolio or
fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the
case of personal retirement plans, the shares being
exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange,
the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which
the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on
the Account Application, indicating that you specifically
refuse this Privilege. The Telephone Exchange Privilege may
be established for an existing account by written request,
signed by all shareholders on the account, or by a separate
signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions
by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Shares--
Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable
and where available, will be automatically carried over to
the fund into which the exchange is made: Telephone
Exchange Privilege, Check Redemption Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege,
Dreyfus TeleTransfer Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined
net asset value; however, a sales load may be charged with
respect to exchanges into funds sold with a sales load. If
you are exchanging into a fund that charges a sales load,
you may qualify for share prices which do not include the
sales load or which reflect a reduced sales load, if the
shares of the fund from which you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions
paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although
the Fund reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject
any exchange request in whole or in part. The availability
of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable
gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to
invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares
of certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. The amount you
designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of
the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be
modified or canceled by the Fund or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any
time by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-
9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The
exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or
loss. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-
Exchange Authorization Form, please call toll free 1-800-
645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERR
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. 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 9671,
Providence, Rhode Island 02940-9671, 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.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege
enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal
salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically
deposited into your Fund account. You may deposit as much
of such payments as you elect. To enroll in Dreyfus
Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type
of payment that you desire to include in this Privilege.
The appropriate form may be obtained by calling
1-800-645-6561. Death or legal incapacity will terminate
your participation in this Privilege. You may elect at any
time to terminate your participation by notifying in writing
the appropriate Federal agency. The Fund may terminate your
participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your
employer's direct deposit program, you may have part or all
of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House
system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must
complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization
only by written notification to your employer. It is the
sole responsibility of your employer, not the Distributor,
The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus
Payroll Savings Plan. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables a shareholder to
purchase Fund shares without regard to the Fund's minimum
initial investment requirements through Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan. To establish a Dreyfus
Step Program account, a shareholder must supply the
necessary information on the Account Application and file
the required authorization form(s) with the Transfer Agent.
For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free
1-800-782-6620. A shareholder may terminate participation
in this Program at any time by discontinuing participation
in Dreyfus-Automatic Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as
the case may be, as provided under the terms of such
Privilege(s). The Fund may modify or terminate this Program
at any time. Investors who wish to purchase Fund shares
through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs,
SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another
fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund
sold with a sales load. If you are investing in a fund that
charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced
sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will
be subject on redemption to the contingent deferred sales
charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional
Information. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends
and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a
domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges
or to request a Dividend Options Form, please call toll free
1-800-645-6561. You may cancel these privileges by mailing
written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. To select a
new fund after cancellation, you must submit a new Dividend
Options Form. Enrollment in or cancellation of these
privileges is effective three business days following
receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dreyfus Dividend
Sweep. The Fund may modify or terminate these privileges at
any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for these privileges.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of
$50) on either a monthly or quarterly basis if you have a
$5,000 minimum account. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561.
There is a service charge of 50 cents for each withdrawal check.
The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
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; for SEP-IRAs, 401(k) Salary Reduction
Plans and 403(b)(7) Plans, please call
1-800-322-7880.
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.
The Fund imposes no charges when shares are
redeemed. Service Agents may charge their clients a nominal
fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the
shares redeemed may be more or less than their original
cost, depending upon 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 proper form,
except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND
SHARES BY CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER 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, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER
ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER
THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO
REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE
DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE 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 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 Check Redemption Privilege, the Wire Redemption
Privilege, the Telephone Redemption Privilege or the Dreyfus
TeleTransfer Privilege. Other redemption procedures may be
in effect for clients of certain Service Agents. 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.
You may redeem 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 or
telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions from any person representing
himself or herself to be you, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for
any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market
conditions, you may experience difficulty in contacting the
Transfer Agent by telephone to request a redemption or
exchange 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 9671, Providence, Rhode
Island 02940-9671. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. THESE REQUESTS
WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone
numbers listed under "General Information." Redemption
requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guar-
anteed. 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.
CHECK REDEMPTION PRIVILEGE--You may write Redemption Checks
drawn on your Fund account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or
more. Potential fluctuations in the net asset value of the
Fund's shares should be considered in determining the amount
of the check. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer
Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot
honor a Redemption Check due to insufficient funds or other
valid reason. You should date your Redemption Checks with
the current date when you write them. Please do not
postdate your Redemption Checks. If you do, the Transfer
Agent will honor upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if
they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by
Redemption Check. Shares held under Keogh Plans, IRAs or
other Dreyfus retirement plans are not eligible for this
Privilege.
WIRE REDEMPTION PRIVILEGE--You may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired
to your account at a bank which is a member of the Federal
Reserve System, or a correspondent bank if your bank is not
a member. You also may direct that redemption proceeds be
paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption
proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired
within any 30-day period. You may telephone redemption
requests by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Statement of
Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for
which certificates have been issued, are not eligible for
this Privilege.
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 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and
shares for which certificates have been issued, are not
eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE--You may request by telephone
that redemption proceeds (minimum $500 per day) be
transferred between your Fund account and your bank account.
Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may
be so designated. Redemption proceeds will be on deposit in
your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request
or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the
Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer redemption
of shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and
shares issued in certificate form, are not eligible for this
Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan,
pursuant to which it pays the Distributor for the provision
of certain services to Fund shareholders a fee at the annual
rate of .25 of 1% of the value of the Fund's average daily
net assets. The services provided may include personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may
make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid
to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Internal Revenue Code of 1986, as
amended (the "Code"), the Fund is treated as a separate
corporation for purposes of qualification and taxation as a
regulated investment company. The Fund ordinarily declares
dividends from its net investment income on each day the New
York Stock Exchange is open for business. Dividends usually
are paid on the last business day of each month. The Fund's
earnings for Saturdays, Sundays and holidays are declared as
dividends on the next business day. If you redeem all
shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you
along with the proceeds of the redemption. Distributions
from net realized securities gains, if any, generally are
declared and paid once a year, but the Fund may make
distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a
manner consistent with the provisions of the 1940 Act. The
Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether
to receive dividends and distributions in cash or to
reinvest in additional shares at net asset value. All
expenses are accrued daily and deducted before declaration
of dividends to investors.
Dividends derived from net investment income,
together with distributions from net realized short-term
securities gains and all or a portion of any gains realized
from the sale or other disposition of certain market
discount bonds, paid by the Fund will be taxable to U.S.
shareholders as ordinary income whether received in cash or
reinvested in additional shares. No dividend paid by the
Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations. 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 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,
together with distributions from net realized short-term
securities gains and all or a portion of any gains realized
from the sale or other disposition of certain market
discount bonds, 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 the 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 and the proceeds of any redemption,
regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with
opening an account is correct or that such shareholder has
not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax
return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has
failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number or
employer identification number of the record owner of the
account. Any tax withheld as a result of backup withholding
does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
It is expected that the Fund will qualify as a
"regulated investment company" under the Code so long as
such qualification is in the best interests 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 purposes of advertising, performance may be
calculated on several bases, including current yield,
average annual total return and/or total return.
Current yield refers to the Fund's annualized net
investment income per share over a 30-day period, expressed
as a percentage of the net asset value per share at the end
of the period. For purposes of calculating current yield,
the amount of net investment income per share during that
30-day period, computed in accordance with regulatory
requirements, is compounded by assuming that it is
reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a
second six-month period which, when added to the result for
the first six months, provides an "annualized" yield for an
entire one-year period. Calculations of current yield may
reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Average annual total return is calculated pursuant
to a standardized formula which assumes that an investment
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 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. You should remember that performance is a function
of portfolio management in selecting the type and quality of
portfolio securities and is affected by operating expenses.
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 Lipper Analytical Services,
Inc., the Lehman Brothers Aggregate Bond Index, Moody's Bond
Survey Bond Index, Bond Buyer's 20-Bond Index, Morningstar,
Inc. and other industry publications.
GENERAL INFORMATION
The Company was incorporated under Maryland law on
June 26, 1992, and commenced operations on August 18, 1992.
Before
, 1995, the Company's name was Dreyfus Short-Term
Income Funds, Inc. The Company is authorized to issue one
billion shares of Common Stock (with 500 million allocated
to the Fund), 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 Company's By-Laws, the holders of at least
10% of the shares outstanding and entitled to vote may
require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from
office or for any other purpose. Shareholders may remove a
Board member by the affirmative vote of a majority of the
Company's outstanding voting shares. In addition, the 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 Company is a "series fund," which is a mutual
fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the
1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other
portfolio. For certain matters Company shareholders vote
together as a group; as to others they vote separately by
portfolio. By this Prospectus, shares of the Fund are being
offered. Other portfolios are sold pursuant to other
offering documents.
To date, the Board has authorized the creation of
two series of shares. All consideration received by the
Company for shares of one of the series and all assets in
which such consideration is invested will belong to that
series (subject only to the rights of creditors of the
Company) and will be subject to the liabilities related
thereto. The income attributable to, and the expenses of,
one series are treated separately from those of the other
series. The Company has the ability to create, from time to
time, new series without shareholder approval.
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.
<PAGE>
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS--Foreign currency transactions
may be entered into for a variety of purposes, including:
to fix in U.S. dollars, between trade and settlement date,
the value of a security the Fund has agreed to buy or sell;
or to hedge the U.S. dollar value of securities the Fund
already owns, particularly if it expects a decrease in the
value of the currency in which the foreign security is
denominated; or to gain exposure to the foreign currency in
an attempt to realize gains.
Foreign currency transactions may involve, for
example, the Fund's purchase of foreign currencies for U.S.
dollars or the maintenance of short positions in foreign
currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own
for another currency at a future date in anticipation of a
decline in the value of the currency sold relative to the
currency the Fund contracted to receive in the exchange.
The Fund's success in these transactions will depend
principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign
currencies and the U.S. dollar.
LEVERAGE--The Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment
company to borrow in an amount up to 33-1/3% of the value of
such company's total assets. The Fund currently intends 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--The Fund may invest in the following
types of Derivatives: options and futures, mortgage-related
securities and asset-backed securities. These instruments
and certain related risks are described more specifically
under "Investment Objective and Management Policies--
Management Policies--Derivatives" in the Statement of
Additional Information.
The Fund may invest in Derivatives for a variety
of reasons, including to hedge certain market risks, to
manage the interest rate sensitivity (sometimes called
duration) of fixed-income securities, to provide a
substitute for purchasing or selling particular securities
or to enhance income or potential gain. 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, decrease or change the level of risk to which its
portfolio is exposed in much the same way as the Fund can
increase, decrease or change 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 it 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.
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 futures contracts and options with respect thereto
for hedging purposes without limit. However, the Fund may
not invest in such contracts and options for other purposes
if the sum of the amount of initial margin deposits and
premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceed
5% of the liquidation value of the Fund's assets, after
taking into account unrealized profits and unrealized losses
on such contracts and options; provided, however, that in
the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.
The Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and
put options. The Fund may write (i.e., sell) covered call
and put option contracts to the extent of 20% of the value
of its net assets at the time such option contracts are
written. When required by the Securities and Exchange
Commission, the Fund will set aside permissible liquid
assets in a segregated account to cover its obligations
relating to its purchase of Derivatives. To maintain this
required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may
not be possible to liquidate a Derivative position at a
reasonable price.
FORWARD COMMITMENTS. The Fund may purchase securities on a
forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the
date of the commitment to purchase. The payment obligation
and the interest rate that will be received on a forward
commitment or when-issued security are fixed at the time the
Fund enters into the commitment. However, the Fund does not
make a payment until it receives delivery from the other
party to the transaction. The Fund will make commitments to
purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed
advisable. A segregated account of the Fund consisting of
cash, cash equivalents or U.S. Government securities or
other high quality liquid debt securities at least equal at
all times maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
MORTGAGE-RELATED SECURITIES--Mortgage-related securities are
a form of Derivative collateralized by pools of mortgages
assembled for sale to investors by various governmental
agencies, such as the Government National Mortgage
Association and government-related organizations such as the
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation, as well as by private issuers
such as commercial banks, savings and loan institutions,
mortgage banks and private mortgage insurance companies, and
similar foreign entities. The mortgage-related securities
which may be purchased include those with fixed, floating
and variable interest rates, those with interest rates that
change based on multiples of changes in interest rates and
those with interest rates that change inversely to changes
in interest rates, as well as stripped mortgage-backed
securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different
proportions of interest and principal distributions on a
pool of mortgage-backed securities or whole loans. A common
type of stripped mortgage-backed security will have one
class receiving some of the interest and most of the
principal from the mortgage collateral, while the other
class will receive most of the interest and the remainder of
the principal. Although certain mortgage-related securities
are guaranteed by a third party or otherwise similarly
secured, the market value of the security, which may
fluctuate, is not secured. If a mortgage-related security
is purchased at a premium, all or part of the premium may be
lost if there is a decline in the market value of the
security, whether resulting from changes in interest rates
or prepayments on the underlying mortgage collateral. As
with other interest-bearing securities, the prices of
certain of these securities are inversely affected by
changes in interest rates. However, although the value of a
mortgage-related security may decline when interest rates
rise, the converse is not necessarily true, since in periods
of declining interest rates the mortgages underlying the
security are more likely to be prepaid. For this and other
reasons, a mortgage-related security's stated maturity may
be shortened by unscheduled prepayments on the underlying
mortgages, and, therefore, it is not possible to predict
accurately the security's return to the Fund. Moreover,
with respect to stripped mortgage-backed securities, if the
underlying mortgage securities experience greater than
anticipated prepayments of principal, the Fund may fail to
fully recoup its initial investment even if the securities
are rated in the highest rating category by a nationally
recognized statistical rating organization. For further
discussion concerning the investment considerations
involved, see "Description of the Fund--Investment
Considerations and Risks--Fixed-Income Securities" and
"Illiquid Securities" below.
ASSET-BACKED SECURITIES--Asset-backed securities are a form
of Derivative. The securitization techniques used for
asset-backed securities are similar to those used for
mortgage-related securities. The collateral for these
securities has included home equity loans, automobile and
credit card receivables, boat loans, computer leases,
airplane leases, mobile home loans, recreational vehicle
loans and hospital account receivables. The Fund may invest
in these and other types of asset-backed securities that may
be developed in the future.
Asset-backed securities present certain risks that
are not presented by mortgage-backed securities. Primarily,
these securities may provide the Fund with a less effective
security interest in the related collateral than do
mortgage-backed securities. Therefore, there is the
possibility that recoveries on the underlying collateral may
not, in some cases, be available to support payments on
these securities.
CONVERTIBLE SECURITIES--Convertible securities are fixed-
income securities that may be converted at either a stated
price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities
generally are subordinated to other similar but non-
convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of
the same issuer. Because of the subordination feature,
however, convertible securities typically have lower ratings
than similar non-convertible securities.
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS--The
Fund may invest in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs") and European
Depositary Receipts ("EDRs"). These securities may not
necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities
issued by a foreign corporation. EDRs, which are sometimes
referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe typically by non-United States
banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs in
registered form are designed for use in the United States
securities markets and EDRs and CDRs in bearer form are
designed for use in Europe.
ZERO COUPON SECURITIES--The Fund may invest in zero coupon
U.S. Treasury securities, which are Treasury Notes and Bonds
that have been stripped of their unmatured interest coupons,
the coupons themselves and receipts or certificates
representing interests in such stripped debt obligations and
coupons. Zero coupon securities also are issued by
corporations and financial institutions which constitute a
proportionate ownership of the issuer's pool of underlying
U.S. Treasury securities. A zero coupon security pays no
interest to its holder during its life and is sold at a
discount to its face value at maturity. The amount of the
discount fluctuates with the market price of the security.
The market prices of zero coupon securities generally are
more volatile than the market prices of securities that pay
interest periodically and are likely to respond to a greater
degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.
MONEY MARKET INSTRUMENTS--The Fund may invest, in the
circumstances described under "Description of the Fund--
Management Policies," 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 of 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 to 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. 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. The Fund may enter into
repurchase agreements with certain banks or non-bank
dealers.
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 instrument 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 not lower than
Prime-1 by Moody's Investors Service, Inc. ("Moody's") or A-
1 by Standard & Poor's Corporation ("S&P"), (b) issued by
companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, or (c)
if unrated, determined by The Dreyfus Corporation to be of
comparable quality to those rated obligations which may be
purchased by the Fund.
ILLIQUID SECURITIES--The Fund may invest up to 15% of the
value of its net assets in securities as to which a liquid
trading market does not exist, provided such investments are
consistent with the Fund's investment objective. Such
securities may include securities that are not readily
marketable, such as certain securities that are subject to
legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days
after notice, and certain privately negotiated, non-exchange
traded options and securities used to cover such options.
As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is
not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be
adversely affected.
RATINGS--The fixed-income securities in which the Fund may
invest will be rated, at the time of purchase, investment
grade, which is at least Baa by Moody's or at least BBB by
S&P, Fitch Investors Service, Inc. ("Fitch") or Duff &
Phelps Credit Rating Co. ("Duff"), or, if unrated, deemed to
be of comparable quality by The Dreyfus Corporation. Fixed-
income securities rated Baa by Moody's or BBB by S&P, Fitch
and Duff are considered investment grade obligations which
lack outstanding investment characteristics and have
speculative characteristics as well. See Appendix in the
Statement of Additional Information for a general
description of securities ratings.
The ratings of Moody's, S&P, Fitch and Duff
represent their opinions as to the quality of the
obligations which they undertake to rate. Ratings are
relative and subjective and, although ratings may be useful
in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of such
obligations.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S OFFICIAL
SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>
- -----------------------------------------------------------
PROSPECTUS SEPTEMBER __, 1995
- -----------------------------------------------------------
DREYFUS SHORT TERM INCOME FUND
- -----------------------------------------------------------
Dreyfus Short Term Income Fund (the "Fund") is a
separate non-diversified portfolio of Dreyfus Investment
Grade Bond Funds, Inc., an open-end, management investment
company (the "Company"), known as a mutual fund. The Fund's
investment objective is to provide you with as high a level
of current income as is consistent with the preservation of
capital. The Fund invests principally in a broad range of
debt securities of domestic and foreign issuers and
maintains a dollar-weighted average portfolio maturity of
three years or less.
You can invest, reinvest or redeem shares at any
time without charge or penalty.
The Fund provides free redemption checks, which
you can use in amounts of $500 or more for cash or to pay
bills. You continue to earn income on the amount of the
check until it clears. You can purchase or redeem shares by
telephone using Dreyfus TeleTransfer.
The Dreyfus Corporation professionally manages the
Fund's portfolio.
-----------------
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
_________ __, 1995, 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.
For a free copy, 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.
<PAGE>
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses . . . . . . . . . . .
Condensed Financial Information. . . . . . . . . . .
Description of the Fund. . . . . . . . . . . . . . .
Management of the Fund . . . . . . . . . . . . . . .
How to Buy Shares. . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . . . .
Shareholder Services Plan. . . . . . . . . . . . . .
Dividends, Distributions and Taxes . . . . . . . . .
Performance Information. . . . . . . . . . . . . . .
General Information. . . . . . . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . .
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>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees. . . . . . . . . . . . . . . . . . . . . .50%
Other Expenses . . . . . . . . . . . . . . . . . . . . . .__%
Total Fund Operating Expenses . . . . . . . . . . . . . ___%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the following
expenses on a $1,000 invest-
ment, assuming (1) 5% annual
return and (2) redemption at
the end of each time period: $__ $__ $__ $__
</TABLE>
____________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF PAST AND 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, the payment of which will reduce investors' annual
return. The information in the foregoing table has been
restated to reflect current fees, but does not reflect any
fee waivers or expense reimbursement arrangements that may
be in effect. You can purchase Fund shares without charge
directly from the Fund's distributor; you may be charged a
nominal 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" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been
audited (except where indicated) 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>
<CAPTION>
1993<F1> 1994 1995
PER SHARE DATA:
<S> <C> <C> <C>
Net asset value, beginning of year. $12.50 $12.47
INVESTMENT OPERATIONS:
Investment income-net . . . . . . . . . . . . . .89 .84
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . (.01) (.54)
TOTAL DISTRIBUTIONS . . . . . . . . . . . . . . (.91) (.83)
Net asset value, end of year . . . . . . . . . $12.47 $11.94
TOTAL FROM INVESTMENT OPERATIONS .88 .30
Net asset value, end of period . . . . . . . .
DISTRIBUTIONS:
Dividends from investment income-net . . . . . (.89) (.83)
Dividends from net realized gain on investments (.02) ---
TOTAL INVESTMENT RETURN . . . . . . . . . . . . . 7.68% 2.47%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . --- .24%
Ratio of net investment income to average net
assets . . . . . . . . . . . . . . . . . . . . 7.58%<F2> 6.79%
Decrease reflected in above expense ratios due
to undertakings by The Dreyfus Corporation . . 1.12%<F2> .71%
Portfolio Turnover Rate . . . . . . . . . . . . 54.59%<F3> 74.90%
Net Assets, end of period (000's Omitted) . . . $205,736 $277,028
- -----------------------
<FN>1 From August 18, 1992 (commencement of operations) to July 31, 1993.
<FN>2 Annualized.
<FN>3 Not annualized.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you
with as high a level of current income as is consistent with
the preservation of capital. It cannot be changed without
approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"))
of the Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be
achieved.
MANAGEMENT POLICIES
Under normal market conditions, the Fund invests at
least 80% of its net assets in debt securities and
securities with debt-like characteristics, such as bonds,
debentures, notes, mortgage-related securities and asset-
backed securities of domestic and foreign issuers and
municipal obligations. The Fund may invest up to 30% of the
value of its total assets in securities of foreign issuers.
See "Appendix--Certain Portfolio Securities."
At least 80% of the value of the Fund's net assets
must be invested in debt securities rated at least Baa by
Moody's Investors Service, Inc. ("Moody's") or at least BBB
by Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps Credit Rating Co.
("Duff") or, if unrated, deemed to be of comparable quality
by The Dreyfus Corporation. Debt securities rated Baa by
Moody's and BBB by S&P, Fitch and Duff are considered
investment grade obligations which lack outstanding
investment characteristics and may have speculative
characteristics as well. The Fund may invest up to 35% of
the value of its net assets in debt securities rated lower
than Baa by Moody's and BBB by S&P, Fitch and Duff and as
low as Caa by Moody's and CCC by S&P, Fitch and Duff, or, if
unrated, deemed to be of comparable quality by The Dreyfus
Corporation. Securities rated Caa by Moody's and CCC by
S&P, Fitch and Duff are considered to have predominantly
speculative characteristics with respect to capacity to pay
interest and repay principal and to be of poor standing.
See "Investment Considerations and Risks--Lower Rated
Securities" below for a discussion of certain risks, and
"Appendix" in the Statement of Additional Information.
Under normal market conditions, the dollar-weighted average
maturity of the Fund's portfolio is three years or less.
The Fund may invest in money market instruments
consisting of U.S. Government securities, certificates of
deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt
instruments, and repurchase agreements, as set forth under
"Appendix--Certain Portfolio Securities--Money Market
Instruments." Under normal market conditions, the Fund does
not expect to have a substantial portion of its assets
invested in money market instruments. However, when The
Dreyfus Corporation determines that adverse market
conditions exist, the Fund may adopt a temporary defensive
posture and invest all of its assets in money market
instruments.
The Fund is permitted to engage in leveraging and
lending portfolio securities. See also "Investment
Considerations and Risks" below and "Appendix--Investment
Techniques."
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.
FIXED-INCOME SECURITIES--Even though interest-bearing
securities are investments which promise a stable stream of
income, the prices of such securities generally are
inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price
fluctuations. The values of fixed-income securities also
may be affected by changes in the credit rating or financial
condition of the issuer. See "Appendix--Certain Portfolio
Securities--Ratings" below and Appendix in the Statement of
Additional Information.
LOWER RATED SECURITIES--The Fund may invest up to 35% of its
net assets in higher yielding (and, therefore, higher risk)
debt securities. These are securities such as those rated
Ba by Moody's or BB by S&P, Fitch or Duff or as low as Caa
by Moody's or CCC by S&P, Fitch or Duff (commonly known as
junk bonds). They generally are not meant for short-term
investing and may be subject to certain risks with respect
to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated fixed-income
securities. The retail secondary market for these
securities may be less liquid than that of higher rated
securities; adverse conditions could make it difficult at
times for the Fund to sell certain securities or could
result in lower prices than those used in calculating the
Fund's net asset value. See "Certain Portfolio Securities--
Ratings" below.
FOREIGN SECURITIES--Foreign securities markets generally are
not as developed or efficient as those in the United States.
Securities of some foreign issuers are less liquid and more
volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities
markets are less than in the United States and, at times,
volatility of price can be greater than in the United
States.
Because evidences of ownership of such securities
usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse
political and economic developments, possible seizure or
nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities
or might restrict the payment of principal and interest to
investors located outside the country of the issuer, whether
from currency blockage or otherwise.
Since foreign securities often are purchased with
and payable in currencies of foreign countries, the value of
these assets as measured in U.S. dollars may be affected
favorably or unfavorably by changes in currency rates and
exchange control regulations.
FOREIGN CURRENCY EXCHANGE--Currency exchange rates may
fluctuate significantly over short periods of time. They
generally are determined by the forces of supply and demand
in the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen
from an international perspective. Currency exchange rates
also can be affected unpredictably by intervention by U.S.
or foreign governments or central banks, or the failure to
intervene, or by currency controls or political developments
in the United States or abroad. See "Appendix--Investment
Techniques--Foreign Currency Transactions."
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 to invest, with respect to 75% of its
total assets, not more than 5% of such assets in the
securities of a single issuer and to hold not more than 10%
of the outstanding voting securities of a single issuer.
However, the Fund intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of
the Internal Revenue Code of 1986, as amended (the "Code"),
which requires that, at the end of each quarter of its
taxable year, (i) at least 50% of the market value of its
total assets be invested in cash, U.S. Government
securities, the securities of other regulated investment
companies and other securities, with such other securities
of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of
the Fund's total assets, and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the
value of its total assets be invested in the securities of
any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies). 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 or economic
sector, its portfolio securities may be more susceptible to
any single economic, political or regulatory occurrence than
the portfolio securities of a diversified investment
company.
USE OF DERIVATIVES--The Fund may invest 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 mortgage-related
securities and asset-backed securities. 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 investments 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.
SIMULTANEOUS INVESTMENTS--Investment decisions for the Fund
are made independently from those of the other investment
companies advised by The Dreyfus Corporation. If, however,
such other 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 investment company. 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
INVESTMENT ADVISER--The Dreyfus Corporation, located at 200
Park Avenue, New York, New York 10166, was formed in 1947
and serves as the Fund's investment adviser. The Dreyfus
Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of ________, 1995, The Dreyfus
Corporation managed or administered approximately $___
billion in assets for more than ___ million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in
the overall management of the Fund's affairs under a
Management Agreement with the Company, subject to the
authority of the Company's Board in accordance with Maryland
law. The Fund's primary portfolio manager is Gerald E.
Thunelius. He has held that position since June 1994, and
has been an employee of The Dreyfus Corporation since May
1989. The Fund's other portfolio managers are identified in
the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and
for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities
analysts.
Mellon is a publicly owned multibank holding
company incorporated under Pennsylvania law in 1971 and
registered under the Federal Bank Holding Company Act of
1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected
international markets. Mellon is among the twenty-five
largest bank holding companies in the United States based on
total assets. Mellon's principal wholly-owned subsidiaries
are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc.,
AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its
subsidiaries, including The Dreyfus Corporation, Mellon
managed more than $ billion in assets as of ,
1995, including approximately $ billion in mutual fund
assets. As of , 1995, Mellon, through various
subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $
billion in assets, including approximately $ billion in
mutual fund assets.
Under the terms of the Management Agreement, the
Fund has agreed to pay The Dreyfus Corporation a monthly fee
at the annual rate of .50 of 1% of the value of the Fund's
average daily net assets. From time to time, The Dreyfus
Corporation 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 The
Dreyfus Corporation at a later time for any amounts it may
waive, nor will the Fund reimburse The Dreyfus Corporation
for any amounts it may assume. For the fiscal year ended
July 31, 1995, the Fund paid The Dreyfus Corporation a
monthly management fee at the effective annual rate of .
of 1% of the value of the Fund's average daily net assets
pursuant to undertakings by The Dreyfus Corporation.
EXPENSES--All expenses incurred in the operation of the
Company will be borne by the Company, except to the extent
specifically assumed by The Dreyfus Corporation. The
expenses to be borne by the Company will 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 The Dreyfus Corporation, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, 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 Company'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 shareholders' reports and meetings,
and any extraordinary expenses. Expenses attributable to
the Fund are charged against the assets of the Fund; other
expenses of the Company are allocated among the Company's
portfolios on the basis determined by the Board, including,
but not limited to, proportionately in relation to the net
assets of each portfolio.
The Dreyfus Corporation may pay the Fund's
distributor for shareholder services from The Dreyfus
Corporation's own assets, including past profits but not
including the management fee paid by the Fund. The Fund's
distributor may use part or all of such payments to pay
Service Agents (as defined below) in respect of these
services.
DISTRIBUTOR--The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at One Exchange
Place, Boston, Massachusetts 02109. The Distributor's
ultimate parent is Boston Institutional Group, Inc.
The Dreyfus Corporation may pay the Fund's
distributor for shareholder services from The Dreyfus
Corporation's own assets, including past profits but not
including the management fee paid by the Fund. The Fund's
distributor may use part or all of such payments to pay
Service Agents (as defined below) in respect of these
services.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT--The
Bank of New York, 90 Washington Street, New York, New York
10286, is the Fund's Custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer
Agent").
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You
may be charged a nominal fee if you effect transactions in
Fund shares through a securities dealer, bank or other
financial institution (collectively, "Service Agents").
Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares.
The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000
if you are a client of a Service Agent which has made an
aggregate minimum initial purchase for its customers of
$2,500. Subsequent investments must be at least $100.
However, the minimum initial investment for Dreyfus-
sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans
with only one participant is $750, with no minimum for
subsequent purchases. Individuals who open an IRA also may
open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA
must be at least $250. The initial investment must be
accompanied by the Account Application. For full-time or
part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Company'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 The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of
their pay directly deposited into their Fund account, the
minimum initial investment is $50. The Fund reserves the
right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other
programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund.
The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
Fund shares also are offered without regard to the minimum
initial investment requirements through Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step
Program described under "Shareholder Services." These
services enable you to make regularly scheduled investments
and 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.
You may purchase Fund shares by check or wire, or
through the Dreyfus TeleTransfer Privilege described below.
Checks should be made payable to "The Dreyfus Family of
Funds," or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian" and should specify that
you are investing in the Fund. Payments to open new
accounts which are mailed should be sent to The Dreyfus
Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should
appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box
105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments
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# 8900117028/Dreyfus
Investment Grade Bond Funds, Inc./Dreyfus Short Term Income
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, you should call 1-800-645-6561 after completing
your wire payment to obtain your Fund account number. You
should 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
instructions 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 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 an order in
proper form is received by the Transfer Agent or other
agent. Net asset value per share is determined as of the
close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time), on each day the New
York Stock Exchange is open for business. For purposes of
determining net asset value, options and 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 Fund shares outstanding. The Fund's
investments are valued generally by using available market
quotations or at fair value which may be determined by one
or more pricing services approved by the Company's Board.
Each pricing services, procedures are reviewed under the
general supervision of the Board. For further information
regarding the methods employed in valuing the Fund's
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 one million
dollars ("Eligible Benefit Plans"). All present holdings of
shares of funds in the Dreyfus Family of Funds by Eligible
Benefit Plans will be aggregated to determine the fee
payable with respect to each purchase of Fund shares. 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").
DREYFUS TELETRANSFER PRIVILEGE--You may purchase shares
(minimum $500, maximum $150,000 per day) by telephone 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. The
proceeds will be transferred between the bank account
designated in one of these documents and your Fund account.
Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may
be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer purchase
of shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the
Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds
have different investment objectives which may be of
interest to you. If you desire to use this service, you
should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are
imposed on its use.
To request an exchange, you must give exchange
instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should
review a copy of the current prospectus of the portfolio or
fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the
case of personal retirement plans, the shares being
exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange,
the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which
the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on
the Account Application, indicating that you specifically
refuse this Privilege. The Telephone Exchange Privilege may
be established for an existing account by written request,
signed by all shareholders on the account, or by a separate
signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions
by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Shares--
Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable
and where available, will be automatically carried over to
the fund into which the exchange is made: Telephone
Exchange Privilege, Check Redemption Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege,
Dreyfus TeleTransfer Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net
asset value; however, a sales load may be charged with
respect to exchanges into funds sold with a sales load. If
you are exchanging into a fund that charges a sales load,
you may qualify for share prices which do not include the
sales load or which reflect a reduced sales load, if the
shares of the fund from which you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions
paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although
the Fund reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject
any exchange request in whole or in part. The availability
of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable
gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to
invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares
of certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. The amount you
designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and/or fifteenth day of
the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset
value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be
modified or canceled by the Fund or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any
time by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-
9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The
exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or
loss. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-
Exchange Authorization Form, please call toll free 1-800-
645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER(R)
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. 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 9671,
Providence, Rhode Island 02940-9671, 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.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables
you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments
from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments
as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed
Direct Deposit Sign-Up Form for each type of payment that
you desire to include in this Privilege. The appropriate
form may be obtained by calling 1-800-645-6561. Death or
legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate
Federal agency. The Fund may terminate your participation
upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your
employer's direct deposit program, you may have part or all
of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House
system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must
complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization
only by written notification to your employer. It is the
sole responsibility of your employer, not the Distributor,
The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus
Payroll Savings Plan. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables a shareholder to
purchase Fund shares without regard to the Fund's minimum
initial investment requirements through Dreyfus-Automatic
Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan. To establish a Dreyfus
Step Program account, a shareholder must supply the
necessary information on the Account Application and file
the required authorization form(s) with the Transfer Agent.
For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free
1-800-782-6620. A shareholder may terminate participation
in this Program at any time by discontinuing participation
in Dreyfus-Automatic Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as
the case may be, as provided under the terms of such
Privilege(s). The Fund may modify or terminate this Program
at any time. Investors who wish to purchase Fund shares
through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs,
SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another
fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund
sold with a sales load. If you are investing in a fund that
charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced
sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will
be subject on redemption to the contingent deferred sales
charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional
Information. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends
and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a
domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges or
to request a Dividend Options Form, please call toll free 1-
800-645-6561. You may cancel these privileges by mailing
written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. To select a
new fund after cancellation, you must submit a new Dividend
Options Form. Enrollment in or cancellation of these
privileges is effective three business days following
receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dreyfus Dividend
Sweep. The Fund may modify or terminate these privileges at
any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for these privileges.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of
$50) on either a monthly or quarterly basis if you have a
$5,000 minimum account. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561.
There is a service charge of 50 cents for each withdrawal check.
The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
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; for SEP-IRAs, 401(k) Salary Reduction
Plans and 403(b)(7) Plans, please call
1-800-322-7880.
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.
The Fund imposes no charges when shares are
redeemed. Service Agents may charge their clients a nominal
fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the
shares redeemed may be more or less than their original
cost, depending upon 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 proper form,
except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND
SHARES BY CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER 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, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER
ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER
THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO
REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE
DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE 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 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 Check Redemption Privilege, the Wire Redemption
Privilege, the Telephone Redemption Privilege or the Dreyfus
TeleTransfer Privilege. Other redemption procedures may be
in effect for clients of certain Service Agents. 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.
You may redeem 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 or
telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions from any person representing
himself or herself to be you, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for
any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market
conditions, you may experience difficulty in contacting the
Transfer Agent by telephone to request a redemption or
exchange 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 9671, Providence, Rhode
Island 02940-9671. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. THESE REQUESTS
WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone
numbers listed under "General Information." Redemption
requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guar-
anteed. 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.
CHECK REDEMPTION PRIVILEGE--You may write Redemption Checks
drawn on your Fund account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or
more. Potential fluctuations in the net asset value of the
Fund's shares should be considered in determining the amount
of the check. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer
Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot
honor a Redemption Check due to insufficient funds or other
valid reason. You should date your Redemption Checks with
the current date when you write them. Please do not
postdate your Redemption Checks. If you do, the Transfer
Agent will honor upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if
they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by
Redemption Check. Shares held under Keogh Plans, IRAs or
other Dreyfus retirement plans are not eligible for this
Privilege.
WIRE REDEMPTION PRIVILEGE--You may request by wire or
telephone that redemption proceeds (minimum $1,000) be wired
to your account at a bank which is a member of the Federal
Reserve System, or a correspondent bank if your bank is not
a member. You also may direct that redemption proceeds be
paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption
proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired
within any 30-day period. You may telephone redemption
requests by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Statement of
Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for
which certificates have been issued, are not eligible for
this Privilege.
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 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and
shares for which certificates have been issued, are not
eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE--You may request by telephone
that redemption proceeds (minimum $500 per day) be
transferred between your Fund account and your bank account.
Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may
be so designated. Redemption proceeds will be on deposit in
your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request
or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the
Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer redemption
of shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. Shares held
under Keogh Plans, IRAs or other retirement plans, and
shares issued in certificate form, are not eligible for this
Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan,
pursuant to which it pays the Distributor for the provision
of certain services to Fund shareholders a fee at the annual
rate of .20 of 1% of the value of the Fund's average daily
net assets. The services provided may include personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may
make payments to Service Agents in respect of these
services. The Distributor determines the amounts to be paid
to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Code, the Fund is treated as a separate
corporation for purposes of qualification and taxation as a
regulated investment company. The Fund ordinarily declares
dividends from its net investment income on each day the New
York Stock Exchange is open for business. Dividends usually
are paid on the last business day of each month. The Fund's
earnings for Saturdays, Sundays and holidays are declared as
dividends on the next business day. If you redeem all
shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you
along with the proceeds of the redemption. Distributions
from net realized securities gains, if any, generally are
declared and paid once a year, but the Fund may make
distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a
manner consistent with the provisions of the 1940 Act. The
Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether
to receive dividends and distributions in cash or to
reinvest in additional shares at net asset value. All
expenses are accrued daily and deducted before declaration
of dividends to investors.
Dividends derived from net investment income,
together with distributions from net realized short-term
securities gains and all or a portion of any gains realized
from the sale or other disposition of certain market
discount bonds, paid by the Fund will be taxable to U.S.
shareholders as ordinary income whether received in cash or
reinvested in additional shares. No dividend paid by the
Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations. 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 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,
together with distributions from net realized short-term
securities gains and all or a portion of any gains realized
from the sale or other disposition of certain market
discount bonds, 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 the 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 and the proceeds of any redemption,
regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with
opening an account is correct or that such shareholder has
not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax
return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has
failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number or
employer identification number of the record owner of the
account. Any tax withheld as a result of backup withholding
does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has
qualified for the fiscal year ended July 31, 1995 as a
"regulated investment company" under the Code. The Fund
intends to continue to so qualify so long as such
qualification is in the best interests 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 purposes of advertising, performance may be
calculated on several bases, including current yield,
average annual total return and/or total return.
Current yield refers to the Fund's annualized net
investment income per share over a 30-day period, expressed
as a percentage of the net asset value per share at the end
of the period. For purposes of calculating current yield,
the amount of net investment income per share during that
30-day period, computed in accordance with regulatory
requirements, is compounded by assuming that it is
reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a
second six-month period which, when added to the result for
the first six months, provides an "annualized" yield for an
entire one-year period. Calculations of current yield may
reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Average annual total return is calculated pursuant
to a standardized formula which assumes that an investment
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 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. You should remember that performance is a function
of portfolio management in selecting the type and quality of
portfolio securities and is affected by operating expenses.
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 Lipper Analytical Services,
Inc., Moody's Bond Survey Bond Index, Bond Buyer's 20-Bond
Index, Morningstar, Inc. and other industry publications.
The Fund's yield should generally be higher than money
market funds (the Fund, however, does not seek to maintain a
stabilized price per share and may not be able to return an
investors' principal), and its price per share should
fluctuate less than long term bond funds (which generally
have somewhat higher yields).
GENERAL INFORMATION
The Company was incorporated under Maryland law on
June 26, 1992, and commenced operations on August 18, 1992.
Before ____________, 1995, the Company's name was Dreyfus
Short-Term Income Funds, Inc. The Company is authorized
to issue one billion shares of Common Stock (with 500 million
allocated to the Fund), 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 Company's By-Laws, the holders of at least
10% of the shares outstanding and entitled to vote may
require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from
office or for any other purpose. Shareholders may remove a
Board member by the affirmative vote of a majority of the
Company's outstanding voting shares. In addition, the 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 Company is a "series fund," which is a mutual
fund divided into separate portfolios, each of which is
treated as a separate entity for certain matters under the
1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other
portfolio. For certain matters Company shareholders vote
together as a group; as to others they vote separately by
portfolio. By this Prospectus, shares of the Fund are being
offered. Other portfolios are sold pursuant to other
offering documents.
To date, the Board has authorized the creation of
two series of shares. All consideration received by the
Company for shares of one of the series and all assets in
which such consideration is invested will belong to that
series (subject only to the rights of creditors of the
Company) and will be subject to the liabilities related
thereto. The income attributable to, and the expenses of,
one series are treated separately from those of the other
series. The Company has the ability to create, from time to
time, new series without shareholder approval.
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.
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS--Foreign currency transactions
may be entered into for a variety of purposes, including:
to fix in U.S. dollars, between trade and settlement date,
the value of a security the Fund has agreed to buy or sell;
or to hedge the U.S. dollar value of securities the Fund
already owns, particularly if it expects a decrease in the
value of the currency in which the foreign security is
denominated; or to gain exposure to the foreign currency in
an attempt to realize gains.
Foreign currency transactions may involve, for
example, the Fund's purchase of foreign currencies for U.S.
dollars or the maintenance of short positions in foreign
currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own
for another currency at a future date in anticipation of a
decline in the value of the currency sold relative to the
currency the Fund contracted to receive in the exchange.
The Fund's success in these transactions will depend
principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign
currencies and the U.S. dollar.
LEVERAGE--Leveraging will exaggerate the effect on net asset
value of any increase or decrease in the market value of the
Fund's portfolio. Money borrowed for leveraging will be
limited to 33-1/3% of the value of the Fund's total assets.
These borrowings will be subject to interest costs which may
or may not be recovered by appreciation of the securities
purchased; in certain cases, interest costs may exceed the
return received on the securities purchased.
The Fund may enter into reverse repurchase
agreements with banks, brokers or dealers. This form of
borrowing involves the transfer by the Fund of an underlying
debt instrument in return for cash proceeds based on a
percentage of the value of the security. The Fund retains
the right to receive interest and principal payments on the
security. At an agreed upon future date, the Fund
repurchases the security at principal plus accrued interest.
Except for these transactions, the Fund's borrowings
generally will be unsecured.
USE OF DERIVATIVES--The Fund may invest in the following
types of Derivatives: mortgage-related securities and
asset-backed securities. These instruments and certain
related risks are described more specifically under
"Investment Objective and Management Policies--Management
Policies--Derivatives" in the Statement of Additional
Information.
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, decrease or change the level of risk to which its
portfolio is exposed in much the same way as the Fund can
increase, decrease or change 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 it 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.
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. In connection with such loans, the
Fund continues to be entitled to payments in amounts equal
to the interest, dividends or other distributions payable on
the loaned securities. Loans of portfolio securities afford
the Fund an opportunity to earn interest on the amount of
the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities may
not exceed 33-1/3% of the value of the Fund's total assets.
In connection with such loans, 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.
FORWARD COMMITMENTS--The Fund may purchase securities on a
forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the
date of the commitment to purchase. The payment obligation
and the interest rate that will be received on a forward
commitment or when-issued security are fixed at the time the
Fund enters into the commitment. However, the Fund does not
make a payment until it receives delivery from the other
party to the transaction. The Fund will make commitments to
purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these
securities before the settlement date if it is deemed
advisable. A segregated account of the Fund consisting of
cash, cash equivalents or U.S. Government securities or
other high quality liquid debt securities at least equal at
all times to the amount of the commitments will be
established and maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
MORTGAGE-RELATED SECURITIES--Mortgage-related securities are
a form of Derivative collateralized by pools of mortgages
assembled for sale to investors by various governmental
agencies, such as the Government National Mortgage
Association and government-related organizations such as the
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation, as well as by private issuers
such as commercial banks, savings and loan institutions,
mortgage banks and private mortgage insurance companies, and
similar foreign entities. The mortgage-related securities
which may be purchased include those with fixed, floating
and variable interest rates, those with interest rates that
change based on multiples of changes in interest rates and
those with interest rates that change inversely to changes
in interest rates, as well as stripped mortgage-backed
securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different
proportions of interest and principal distributions on a
pool of mortgage-backed securities or whole loans. A common
type of stripped mortgage-backed security will have one
class receiving some of the interest and most of the
principal from the mortgage collateral, while the other
class will receive most of the interest and the remainder of
the principal. Although certain mortgage-related securities
are guaranteed by a third party or otherwise similarly
secured, the market value of the security, which may
fluctuate, is not secured. If a mortgage-related security
is purchased at a premium, all or part of the premium may be
lost if there is a decline in the market value of the
security, whether resulting from changes in interest rates
or prepayments on the underlying mortgage collateral. As
with other interest-bearing securities, the prices of
certain of these securities are inversely affected by
changes in interest rates. However, although the value of a
mortgage-related security may decline when interest rates
rise, the converse is not necessarily true, since in periods
of declining interest rates the mortgages underlying the
security are more likely to be prepaid. For this and other
reasons, a mortgage-related security's stated maturity may
be shortened by unscheduled prepayments on the underlying
mortgages, and, therefore, it is not possible to predict
accurately the security's return to the Fund. Moreover,
with respect to stripped mortgage-backed securities, if the
underlying mortgage securities experience greater than
anticipated prepayments of principal, the Fund may fail to
fully recoup its initial investment even if the securities
are rated in the highest rating category by a nationally
recognized statistical rating organization. For further
discussion concerning the investment considerations
involved, see "Description of the Fund--Investment
Considerations and Risks--Fixed-Income Securities" and
"Illiquid Securities" below.
ASSET-BACKED SECURITIES--Asset-backed securities are a form
of Derivative. The securitization techniques used for
asset-backed securities are similar to those used for
mortgage-related securities. The collateral for these
securities has included home equity loans, automobile and
credit card receivables, boat loans, computer leases,
airplane leases, mobile home loans, recreational vehicle
loans and hospital account receivables. The Fund may invest
in these and other types of asset-backed securities that may
be developed in the future.
Asset-backed securities present certain risks that
are not presented by mortgage-backed securities. Primarily,
these securities may provide the Fund with a less effective
security interest in the related collateral than do
mortgage-backed securities. Therefore, there is the
possibility that recoveries on the underlying collateral may
not, in some cases, be available to support payments on
these securities.
MUNICIPAL OBLIGATIONS--Municipal obligations are debt
obligations issued by states, territories and possessions of
the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities. Municipal obligations
bear fixed, floating or variable rates of interest. While,
in general, municipal obligations are tax exempt securities
having relatively low yields as compared to taxable, non-
municipal obligations of similar quality, certain municipal
obligations are taxable obligations, offering yields
comparable to, and in some cases greater than, the yields
available on other permissible Fund investments.
Certain municipal obligations are subject to
redemption at a date earlier than their stated maturity
pursuant to call options, which may be separated from the
related municipal obligations and purchased and sold
separately. The Fund also may acquire call options on
specific municipal obligations. The Fund generally would
purchase these call options to protect the Fund from the
issuer of the related municipal obligation redeeming, or
other holder of the call option from calling away, the
municipal obligation before maturity. The Fund will invest
in municipal obligations, the ratings of which correspond
with the ratings of other permissible Fund investments.
Dividends received by shareholders on Fund shares which are
attributable to interest income received by the Fund from
municipal obligations generally will be subject to Federal
income tax. The Fund currently intends to invest no more
than 25% of its assets in municipal obligations. However,
this percentage may be varied from time to time without
shareholder approval.
ZERO COUPON SECURITIES--The Fund may invest in zero coupon
U.S. Treasury securities, which are Treasury Notes and Bonds
that have been stripped of their unmatured interest coupons,
the coupons themselves and receipts or certificates
representing interests in such stripped debt obligations and
coupons. Zero coupon securities also are issued by
corporations and financial institutions which constitute a
proportionate ownership of the issuer's pool of underlying
U.S. Treasury securities. A zero coupon security pays no
interest to its holder during its life and is sold at a
discount to its face value at maturity. The amount of the
discount fluctuates with the market price of the security.
The market prices of zero coupon securities generally are
more volatile than the market prices of securities that pay
interest periodically and are likely to respond to a greater
degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.
MONEY MARKET INSTRUMENTS--The Fund may invest, in the
circumstances described under "Description of the Fund--
Management Policies," 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 of 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 to 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. 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. The Fund may enter into
repurchase agreements with certain banks or non-bank
dealers.
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 instrument 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 not lower than
Prime-1 by Moody's or A-1 by S&P, (b) issued by companies
having an outstanding unsecured debt issue currently rated
at least A3 by Moody's or A- by S&P, or (c) if unrated,
determined by The Dreyfus Corporation to be of comparable
quality to those rated obligations which may be purchased by
the Fund.
ILLIQUID SECURITIES--The Fund may invest up to 15% of the
value of its net assets in securities as to which a liquid
trading market does not exist, provided such investments are
consistent with the Fund's investment objective. Such
securities may include securities that are not readily
marketable, such as certain securities that are subject to
legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days
after notice, and certain privately negotiated, non-exchange
traded options and securities used to cover such options.
As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is
not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be
adversely affected.
RATINGS--Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as
well assured and often the protection of interest and
principal payments may be very moderate. Securities rated
BB by S&P, Fitch or Duff are regarded as having
predominantly speculative characteristics and, while such
obligations have less near-term vulnerability to default
than other speculative grade debt, they face major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity
to meet timely interest and principal payments. Securities
rated C by Moody's are regarded as having extremely poor
prospects of ever attaining any real investment standing.
Securities rated D by S&P, Fitch and Duff are in default and
the payment of interest and/or repayment of principal is in
arrears. Such securities, though high yielding, are
characterized by great risk. See Appendix in the Statement
of Additional Information for a general description of
securities ratings.
The ratings of Moody's, S&P, Fitch and Duff
represent their opinions as to the quality of the
obligations which they undertake to rate. Ratings are
relative and subjective and, although ratings may be useful
in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of such
obligations. Although these ratings may be an initial
criterion for selection of portfolio investments, The
Dreyfus Corporation also will evaluate these securities and
the ability of the issuers of such securities to pay
interest and principal. The Fund's ability to achieve its
investment objective may be more dependent on The Dreyfus
Corporation's credit analysis than might be the case for a
fund that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S OFFICIAL
SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
SCHEDULE I
The average distribution of investments in
corporate bonds by ratings for the fiscal year ended July
31, 1995, calculated monthly on a dollar weighted basis, was
as follows:
Moody's Investors Standard & Poor's
Service, Inc. or Corporation Percentage
Aaa AAA %
Aa AA
A A
Baa BBB
Ba BB
B B
NR NR 100.0%
The actual distribution of the Fund's corporate
bond investments by ratings on any given date will vary. In
addition, the distribution of the Fund's investments by
ratings as set forth above should not be considered as
representative of the Fund's future portfolio composition.
<PAGE>
- -----------------------------------------------------------
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
DREYFUS SHORT-TERM INCOME FUND
DREYFUS INTERMEDIATE TERM FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
SEPTEMBER __, 1995
- -----------------------------------------------------------
This Statement of Additional Information, which is
not a prospectus, supplements and should be read in
conjunction with the current Prospectus of the series named
above (each, a "Fund") of Dreyfus Investment Grade Bond
Funds, Inc. (the "Company"), dated ________________, 1995,
as each may be revised from time to time. To obtain a copy
of the relevant 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 (the "Manager") serves as
each Fund's investment adviser.
Premier Mutual Fund Services, Inc. (the
"Distributor") is the distributor of each Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . B-2
Management of the Company . . . . . . . . . . . . . . B-13
Management Agreement. . . . . . . . . . . . . . . . . B-18
Purchase of Shares . . . . . . . . . . . . . . . . . B-20
Shareholder Services Plan . . . . . . . . . . . . . . B-21
Redemption of Shares. . . . . . . . . . . . . . . . . B-23
Shareholder Services. . . . . . . . . . . . . . . . . B-25
Determination of Net Asset Value. . . . . . . . . . . B-29
Dividends, Distributions and Taxes. . . . . . . . . . B-30
Portfolio Transactions. . . . . . . . . . . . . . . . B-32
Performance Information . . . . . . . . . . . . . . . B-33
Information About the Funds . . . . . . . . . . . . . B-35
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . B-35
Appendix. . . . . . . . . . . . . . . . . . . . . . . B-36
Financial Statements. . . . . . . . . . . . . . . . . B-44
Report of Independent Auditors. . . . . . . . . . . . B-
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be
read in conjunction with the sections in each Fund's
Prospectus entitled "Description of the Fund" and
"Appendix."
Portfolio Securities
Municipal Obligations. (Dreyfus Short Term Income
Fund Only) Municipal obligations generally include debt
obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds
issued by or on behalf of public authorities. Municipal
obligations are classified as general obligation bonds,
revenue bonds and notes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest.
Revenue bonds are payable from the revenue derived from a
particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing
power. Industrial development bonds, in most cases, are
revenue bonds and generally do not carry the pledge of the
credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and
are sold in anticipation of a bond sale, collection of taxes
or receipt of other revenues. Municipal obligations include
municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment
issued by municipalities.
Mortgage Related Securities. (All Funds)
Government-Agency Securities--Mortgage-related securities
issued by the Government National Mortgage Association
("GNMA") include GNMA Mortgage Pass-Through Certificates
(also known as "Ginnie Maes") which are guaranteed as to the
timely payment of principal and interest by GNMA and such
guarantee is backed by the full faith and credit of the
United States. GNMA is a wholly-owned U.S. Government
corporation within the Department of Housing and Urban
Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee.
Government-Related Securities--Mortgage-related securities
issued by the Federal National Mortgage Association ("FNMA")
include FNMA Guaranteed Mortgage Pass-Through Certificates
(also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to
the full faith and credit of the United States. The FNMA is
a government-sponsored organization owned entirely by
private stockholders. Fannie Maes are guaranteed as to
timely payment of principal and interest by FNMA.
Mortgage-related securities issued by the Federal
Home Loan Mortgage Corporation ("FHLMC") include FHLMC
Mortgage Participation Certificates (also known as "Freddie
Macs" or "PCs"). The FHLMC is a corporate instrumentality
of the United States created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie
Macs are not guaranteed by the United States or by any
Federal Home Loan Bank and do not constitute a debt or
obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of
interest, which is guaranteed by the FHLMC. The FHLMC
guarantees either ultimate collection or timely payment of
all principal payments on the underlying mortgage loans.
When the FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its
guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later
than one year after it becomes payable.
American, European and Continental Depositary
Receipts. (Dreyfus Intermediate Term Fund only) The Fund
may invest in American Depositary Receipts, European
Depositary Receipts and Continental Depositary Receipts
through "sponsored" or "unsponsored" facilities. A
sponsored facility is established jointly by the issuer of
the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without
participation by the issuer of the deposited security.
Holders of unsponsored depositary receipts generally bear
all the costs of such facilities and the depositary of an
unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the
issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the
deposited securities.
Foreign Government Obligations; Securities of
Supranational Entities. (All Funds) A Fund may invest in
obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies
or instrumentalities that are determined by the Manager to
be of comparable quality to the other obligations in which
the Fund may invest. Such securities also include debt
obligations of supranational entities. Supranational
entities include international organizations designated or
supported by governmental entities to promote economic
reconstruction or development and international banking
institutions and related government agencies. Examples
include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican
Development Bank.
Repurchase Agreements. (All Funds) The Funds'
custodian or sub-custodian will have custody of, and will
hold in a segregated account, securities acquired by a 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, each
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 the resale
price.
Commercial Paper and Other Short-Term Corporate
Obligations. (All Funds) These instruments include
variable amount master demand notes, which are obligations
that permit a Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between
the Fund, as lender, and the borrower. These notes permit
daily changes in the amounts borrowed. Because these
obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such
instruments generally will be traded, and there generally is
no established secondary market for these obligations,
although they are redeemable at face value, plus accrued
interest, at any time. Accordingly, where these obligations
are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on
demand. Such obligations frequently are not rated by credit
rating agencies, and a Fund may invest in them only if at
the time of an investment the borrower meets the criteria
set forth in the Fund's Prospectus for other commercial
paper issuers.
Illiquid Securities. (All Funds) Where a
substantial market of qualified institutional buyers has
developed for certain unregistered securities purchased by a
Fund pursuant to Rule 144A under the Securities Act of 1933,
as amended, the Fund intends to treat such securities as
liquid securities in accordance with procedures approved by
the Company's Board. Because it is not possible to predict
with assurance how the market for specific restricted
securities sold pursuant to Rule 144A will develop, the
Company's Board has directed the Manager to monitor
carefully the relevant Fund's investments in such securities
with particular regard to trading activity, availability of
reliable price information and other relevant information.
To the extent that, for a period of time, qualified
institutional buyers cease purchasing restricted securities
pursuant to Rule 144A, a Fund's investing in such securities
may have the effect of increasing the level of illiquidity
in its investment portfolio during such period.
Management Policies
Leverage. (All Funds) For borrowings for
investment purposes, the Investment Company Act of 1940, as
amended (the "1940 Act"), requires the Fund to maintain
continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If the required coverage
should decline as a result of market fluctuations or other
reasons, the Fund may be required to sell some of its
portfolio securities within three days to reduce the amount
of its borrowings and restore the 300% asset coverage, even
though it may be disadvantageous from an investment
standpoint to sell securities at that time. Each Fund also
may be required to maintain minimum average balances in
connection with such borrowing or pay a commitment or other
fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the
stated interest rate. Dreyfus Short-Term Income Fund may
enter into reverse repurchase agreements. To the extent the
Fund enters into a reverse repurchase agreement, the Fund
will maintain in a segregated custodial account cash or U.S.
Government securities or other high quality liquid debt
securities at least equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in
certain cases, in accordance with releases promulgated by
the Securities and Exchange Commission. The Securities and
Exchange Commission views reverse repurchase transactions as
collateralized borrowings by the Fund.
Lending Portfolio Securities. (Dreyfus Short-Term
Income Fund only) The Fund may lend securities from its
portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete
certain transactions. In connection with such loans, the
Fund continues to be entitled to payments in amounts equal
to the interest, dividends or other distributions payable on
the loaned securities. Loans of portfolio securities afford
the Fund an opportunity to earn interest on the amount of
the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities may
not exceed 33-1/3% of the value of the Fund's total assets.
In connection with such loans, 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. 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; and (5) the Fund may pay only
reasonable custodian fees in connection with the loan.
Derivatives. (All Funds) Each Fund may invest in
Derivatives (as defined in the Fund's Prospectus) for a
variety of reasons, including to hedge certain market risks,
to provide a substitute for purchasing or selling particular
securities or to increase potential income gain.
Derivatives may provide a cheaper, quicker or more
specifically focused way for a Fund to invest than
"traditional" securities would.
Dreyfus Intermediate Term Fund may invest up to 5%
of its assets, represented by the premium paid, in the
purchase of call and put options. The Fund may write (i.e.,
sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option
contracts are written. When required by the Securities and
Exchange Commission, the Fund will set aside permissible
liquid assets in a segregated account to cover its
obligations relating to its purchase of Derivatives. To
maintain this required cover, the Fund may have to sell
portfolio securities at disadvantageous prices or times
since it may not be possible to liquidate a Derivative
position at a reasonable price. Derivatives may be
purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are
guaranteed by the clearing agency which is the issuer or
counterparty to such Derivatives. This guarantee usually is
supported by a daily payment system (i.e., margin
requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the
clearing agency defaults, there is relatively little
counterparty credit risk associated with Derivatives
purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each
party to an over-the-counter Derivative bears the risk that
the counterparty will default. Accordingly, the Manager
will consider the creditworthiness of counterparties to
over-the-counter Derivatives in the same manner as it would
review the credit quality of a security to be purchased by
the Fund. Over-the-counter Derivatives are less liquid than
exchange-traded Derivatives since the other party to the
transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding
for it.
Futures Transactions--In General. (Dreyfus
Intermediate Term Fund only) The Fund may enter into
futures contracts in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market
of the Chicago Mercantile Exchange.
Engaging in these transactions involves risk of
loss to the Fund which could adversely affect the value of
the Fund's net assets. 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. Many futures exchanges and boards
of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once
the daily limit has been reached in a particular contract,
no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the
limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial
losses.
Successful use of futures by the Fund also is
subject to the ability of the Manager to predict correctly
movements in the direction of the relevant market and, to
the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between
the transaction being hedged and the price movements of the
futures contract. For example, if the Fund uses futures to
hedge against the possibility of a decline in the market
value of securities held in its portfolio and the prices of
such securities instead increase, the Fund will lose part or
all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses
in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to
sell securities to meet daily variation margin requirements.
The Fund may have to sell such securities at a time when it
may be disadvantageous to do so.
Pursuant to regulations and/or published positions
of the Securities and Exchange Commission, the Fund may be
required to segregate cash or high quality money market
instruments in connection with its commodities transactions
in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the
effect of limiting the Fund's ability otherwise to invest
those assets.
Specific Futures Transactions. The Fund may purchase and
sell interest rate futures contracts. An interest rate
future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.
Options--In General. (Dreyfus Intermediate Term
Fund only) The Fund may purchase and write (i.e., sell)
call or put options with respect to specific securities. A
call option gives the purchaser of the option the right to
buy, and obligates the writer to sell, the underlying
security or securities at the exercise price at any time
during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option
the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at
any time during the option period.
A covered call option written by the Fund is a call
option with respect to which the Fund owns the underlying
security or otherwise covers the transaction by segregating
cash or other securities. A put option written by the Fund
is covered when, among other things, cash or liquid
securities having a value equal to or greater than the
exercise price of the option are placed in a segregated
account with the Fund's custodian to fulfill the obligation
undertaken. The principal reason for writing covered call
and put options is to realize, through the receipt of
premiums, a greater return than would be realized on the
underlying securities alone. The Fund receives a premium
from writing covered call or put options which it retains
whether or not the option is exercised.
There is no assurance that sufficient trading
interest to create a liquid secondary market on a securities
exchange will exist for any particular option or at any
particular time, and for some options no such secondary
market may exist. A liquid secondary market in an option
may cease to exist for a variety of reasons. In the past,
for example, higher than anticipated trading activity or
order flow, or other unforeseen events, at times have
rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options.
There can be no assurance that similar events, or events
that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular
options. If, as a covered call option writer, the Fund is
unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the
underlying security upon exercise or it otherwise covers its
position.
Future Developments. A Fund may take advantage of
opportunities in the area of options and futures contracts
and options on futures contracts and any other Derivatives
which are not presently contemplated for use by the Fund or
which are not currently available but which may be
developed, to the extent such opportunities are both
consistent with the Fund's investment objective and legally
permissible for the Fund. Before entering into such
transactions or making any such investment, the Fund will
provide appropriate disclosure in its Prospectus or
Statement of Additional Information.
Forward Commitments. (All Funds) A Fund may
purchase securities on a forward commitment or when-issued
basis, which means that delivery and payment take place a
number of days after the date of the commitment to purchase.
The payment obligation and the interest rate that will be
received on a forward commitment or when-issued security are
fixed at the time the Fund enters into the commitment.
However, a Fund does not make a payment until it receives
delivery from the other party to the transaction. A Fund
will make commitments to purchase such securities only with
the intention of actually acquiring the securities, but the
Fund may sell these securities before the settlement date if
it is deemed advisable. A segregated account of the Fund
consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at
least equal at all times to the amount of the commitments
will be established and maintained at the Fund's custodian
bank.
Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally
changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise)
based upon the public's perception of the creditworthiness
of the issuer and changes, real or anticipated, in the level
of interest rates. Securities purchased on a forward
commitment or when-issued basis may expose a Fund to risks
because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield
available in the market when the delivery takes place
actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or
when-issued basis when a Fund is fully or almost fully
invested may result in greater potential fluctuation in the
value of the Fund's net assets and its net asset value per
share.
Risk Factors
Lower Rated Securities. (Dreyfus Short-Term Income
Fund only) Dreyfus Short-Term Income Fund is permitted to
invest in debt securities rated Ba and below by Moody's
Investors Service, Inc. ("Moody's") or BB and below by
Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps Credit Ratings Co.
("Duff" and with Moody's, S&P and Fitch, the "Rating
Agencies") or as low as Caa by Moody's or CCC by S&P, Fitch
or Duff. Such securities, though higher yielding, are
characterized by risk. See in the Fund's Prospectus
"Description of the Fund--Investment Considerations and
Risks--Lower Rated Securities" for a discussion of certain
risks and the Appendix for a general description of the
Rating Agencies' ratings. Although ratings may be useful in
evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these
securities. The Fund will rely on the Manager's judgment,
analysis and experience in evaluating the creditworthiness
of an issuer. In this evaluation, the Manager will take
into consideration, among other things, the issuer's
financial resources, its sensitivity to economic conditions
and trends, the quality of the issuer's management and
regulatory matters. It also is possible that a Rating
Agency might not in a timely fashion change the rating on a
particular issue to reflect subsequent events. Once the
rating of a debt security in the Fund's portfolio has been
changed, the Manager will consider all circumstances deemed
relevant in determining whether the Fund should continue to
hold the security.
Investors should be aware that the market values of
many of these securities tend to be more sensitive to
economic conditions than are higher rated securities. These
securities generally are considered by the Rating Agencies
to be, on balance, predominantly speculative with respect to
capacity to pay interest and repay principal in accordance
with the terms of the obligation and generally will involve
more credit risk than securities in the higher rating
categories.
Companies that issue certain of these securities
often are highly leveraged and may not have available to
them more traditional methods of financing. Therefore, the
risk associated with acquiring the securities of such
issuers generally is greater than is the case with the
higher rated securities. For example, during an economic
downturn or a sustained period of rising interest rates,
highly leveraged issuers of these securities may not have
sufficient revenues to meet their interest payment
obligations. The issuer's ability to service its debt
obligations also may be affected adversely by specific
corporate developments, forecasts, or the unavailability of
additional financing. The risk of loss because of default
by the issuer is significantly greater for the holders of
these securities because such securities generally are
unsecured and often are subordinated to other creditors of
the issuer.
Because there is no established retail secondary
market for many of these securities, the Fund anticipates
that such securities could be sold only to a limited number
of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for
higher rated securities. The lack of a liquid secondary
market may have an adverse impact on market price and yield
and the Fund's ability to dispose of particular issues when
necessary to meet the Fund's liquidity needs or in response
to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it
more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and
calculating its net asset value. Adverse publicity and
investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of these
securities. In such cases, judgment may play a greater role
in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to
economic downturns. It is likely that an economic recession
could disrupt severely the market for such securities and
may have an adverse impact on the value of such securities.
In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and
increase the incidence of default for such securities.
The Fund may acquire these securities during an
initial offering. Such securities may involve special risks
because they are new issues. The Fund has no arrangement
with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit
and other characteristics pertinent to such new issues.
Investment Restrictions
Each Fund has adopted investment restrictions
numbered 1 through 7 as fundamental policies. Dreyfus
Intermediate Term Fund also has adopted investment
restrictions numbered 14 and 15 as fundamental policies.
These restrictions cannot be changed, as to a Fund, without
approval by the holders of a majority (as defined in the
1940 Act) of such Fund's outstanding voting shares.
Investment restrictions numbered 8 through 13 are not
fundamental policies and may be changed by vote of a
majority of the Company's Board members at any time.
Neither Fund may:
1. Invest in commodities, except that the Fund
may purchase and sell futures contracts, including those
relating to indices, and options on futures contracts or
indices.
2. Purchase, hold or deal in real estate, 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. In
particular, the Fund may purchase mortgage-backed securities
and real estate investment trust securities.
3. Borrow money, except to the extent permitted
under the 1940 Act (which currently limits borrowing to no
more than 33-1/3% of the value of the Fund's total assets).
For purposes of this Investment Restriction, the entry into
options, futures contracts, including those relating to
indices, and options on futures contracts or indices shall
not constitute borrowing.
4. Make loans to others, except through the
purchase of debt obligations and the entry into repurchase
agreements. However, the Fund may lend its portfolio
securities in an amount not to exceed 33-1/3% 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 Company's Board.
5. Act as an underwriter of securities of other
issuers, except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
6. Invest more than 25% of the value of its
total assets in the securities of issuers in any single
industry, provided that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
7. Issue any senior security (as such term is
defined in Section 18(f) of the 1940 Act), except to the
extent the activities permitted in Investment Restriction
Nos. 1, 3, and 9 may be deemed to give rise to a senior
security.
8. Invest in the securities of a company for the
purpose of exercising management or control, but the Fund
will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.
9. Pledge, mortgage or hypothecate its assets,
except to the extent necessary to secure permitted
borrowings and to the extent related to the purchase of
securities on a when-issued or forward commitment basis and
the deposit of assets in escrow in connection with writing
covered put and call options and collateral and initial or
variation margin arrangements with respect to options,
futures contracts, including those relating to indices, and
options on futures contracts or indices.
10. Purchase, sell or write puts, calls or
combinations thereof.
11. Enter into repurchase agreements providing
for settlement in more than seven days after notice or
purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Fund's net
assets would be so invested.
12. Purchase securities of other investment
companies, except to the extent permitted under the 1940 Act
or as they may be acquired as part of a merger,
consolidation or acquisition of assets.
13. Sell securities short or purchase securities
on margin, but the Fund may make margin deposits in
connection with transactions in futures, including those
relating to indices, and options on futures or indices.
Dreyfus Intermediate Term Fund may not:
14. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25% of
the value of the Fund's total assets may be invested, and
securities issued or guaranteed by the U.S. Government, or
its agencies or instrumentalities may be purchased, without
regard to any such limitation.
15. Hold more than 10% of the outstanding voting
securities of any single issuer. This Investment
Restriction applies only with respect to 75% of the Fund's
total assets.
If a percentage restriction is adhered to at the
time of investment, a later change in percentage resulting
from a change in values or assets will not constitute a
violation of
such restriction.
The Company may make commitments more restrictive
than the restrictions listed above so as to permit the sale
of Fund shares in certain states. Should the Company
determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Company
reserves the right to revoke the commitment by terminating
the sale of such Fund's shares in the state involved.
MANAGEMENT OF THE COMPANY
Directors and officers of the Company, together
with information as to their principal business occupations
during at least the last five years, are shown below. Each
Director who is deemed to be an "interested person" of the
Company, as defined in the 1940 Act, is indicated by an
asterisk.
Directors of the Company
LUCY WILSON BENSON, Director. President of Benson and
Associates, consultants to business and government.
Mrs. Benson is a director of Communications Satellite
Corporation, General Re Corporation and Logistics
Management Institute. She is also a trustee of the
Alfred P. Sloan Foundation, Vice Chairman of the Board
of Trustees of Lafayette College, Vice Chairman of the
Citizens Network for Foreign Affairs and a member of the
Council on Foreign Relations. Mrs. Benson served as a
consultant to the U.S. Department of State and to
SRI International from 1980 to 1981. From 1977 to 1980,
she was Under Secretary of State for Security
Assistance, Science and Technology. Her address is 46
Sunset Avenue, Amherst, Massachusetts 01002.
*DAVID W. BURKE, Director. Consultant to the Manager since
August 1994. From October 1990 to August 1994, he was
Vice President and Chief Administrative Officer of the
Manager. From 1977 to 1990, Mr. Burke was involved in
the management of national television news, as Vice
President and Executive Vice President of ABC News, and
subsequently as President of CBS News. His address is
200 Park Avenue, New York, New York 10166.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January
1995, Chairman of the Board of various funds in the
Dreyfus Family of Funds. For more than five years prior
thereto, he was President, a director and, until August
1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus
Service Corporation, a wholly-owned subsidiary of the
Manager and, until August 24, 1994, the Company's
distributor. From August 1994 until December 31, 1994,
he was a director of Mellon Bank Corporation. He is
also Chairman of the Board of Directors of Noel Group,
Inc., a venture capital company; a trustee of Bucknell
University; 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, Simmons Outdoor
Corporation and Staffing Resources, Inc. He is 51 years
old and his address is 200 Park Avenue, New York, New
York 10166.
MARTIN D. FIFE, Director. President of Fife Associates,
Inc. and other companies engaged in the chemical and plastics
industries. His address is 30 Rockefeller Plaza, New
York, New York 10112.
WHITNEY I. GERARD, Director. Partner of the New York City
law firm of Chadbourne & Parke. His address is 30
Rockefeller Plaza, New York, New York 10112.
ROBERT R. GLAUBER, Director. Research Fellow, Center for
Business and Government at the John F. Kennedy School of
Government, Harvard University since January 1992.
Mr. Glauber was Under Secretary of the Treasury for
Finance at the U.S. Treasury Department from May 1989 to
January 1992. For more than five years prior thereto,
he was a Professor of Finance at the Graduate School of
Business Administration of Harvard University and, from
1985 to 1989, Chairman of its Advanced Management
Program. He is also a director of Mid Ocean Reinsurance
Co. Ltd. and Cooke & Bieler, Inc., investment
counselors. His address is 79 John F. Kennedy Street,
Cambridge, Massachusetts 02138.
ARTHUR A. HARTMAN, Director. Senior consultant with APCO
Associates Inc. From 1981 to 1987, he was United States
Ambassador to the former Soviet Union. He is a director
of the Hartford Insurance Group and a member of the
advisory councils of several other companies, research
institutes and foundations. He is President of the
Harvard Board of Overseers. His address is 2738
McKinley Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Director. An economist and Senior Fellow
at the Brookings Institution since 1969. He is co-director of
the Brookings Panel on Economic Activity and editor of
its journal, The Brookings Papers. He is also a
director of the State Farm Mutual Automobile Association
and State Farm Life Insurance Company. His address is
1775 Massachusetts Avenue, N.W., Washington, D.C. 20036.
PAUL D. WOLFOWITZ, Director. Dean of The Paul H. Nitze School
of Advanced International Studies at Johns Hopkins
University. From 1989 to 1993, he was Under Secretary
of Defense for Policy. From 1986 to 1989, he was the
U.S. Ambassador to the Republic of Indonesia. From 1982
to 1986, he was Assistant Secretary of State of East
Asian and Pacific Affairs of the Department of State.
His address is 1740 Massachusetts Avenue, N.W.,
Washington, D.C. 20036.
For so long as the Company's plan described in the
section captioned "Shareholder Services Plan" remains in
effect, the Board members who are not "interested persons"
of the Company, as defined in the 1940 Act, will be selected
and nominated by the Board members who are not "interested
persons" of the Company.
The Company 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
member by the Company for the fiscal year ended July 31,
1995, 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 fiscal year ended July 31, 1995,
were as follows:
<TABLE>
<CAPTION> (5)
(3) Total Compensation
(2) Pension or (4) From Company and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation Accrued as Part of Benefits Upon Paid to Board
Member From Company* Company's Expenses Retirement Member
<S> <C> <C> <C> <C>
Lucy Wilson Benson $_____ none none $_______(15)
David W. Burke $_____ none none $_______(53)
Joseph S. DiMartino $_____ none none $445,000**(93)
Martin D. Fife $_____ none none $_______(12)
Whitney I. Gerard $_____ none none $_______(12)
Robert R. Glauber $_____ none none $_______(21)
Arthur A. Hartman $_____ none none $_______(12)
George L. Perry $_____ none none $_______(12)
Paul D. Wolfowitz $_____ none none $_______(11)
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $ for all Board members
as a group.
** Estimated amount for the year ending December 31, 1995.
</TABLE>
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President and
Chief Operating Officer of the Distributor and an
officer of other investment companies advised or
administered by the Manager. From December 1991 to
July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent
of which is Boston Institutional Group, Inc. Prior to
December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior
Vice President and General Counsel of the Distributor
and an officer of other investment companies advised or
administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company
Advisors, Inc. From August 1990 to February 1992, he
was employed as an Associate at Ropes & Gray. He is 31
years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer.
Senior Vice President of the Distributor and an officer
of other investment companies advised or administered
by the Manager. From 1988 to August 1994, he was
manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an
officer of other investment companies advised or
administered by the Manager. From September 1992 to
August 1994, he was an attorney with the Board of
Governors of the Federal Reserve System. He is 30
years old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the
Distributor and an officer of other investment
companies advised or administered by the Manager. 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 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer
of the Distributor and an officer of other investment
companies advised or administered by the Manager. From
1984 to July 1994, he was Assistant Vice President in
the Mutual Fund Accounting Department of the Manager.
He is 59 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other
investment companies advised or administered by the
Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered
investment company. From March 1990 until September
1991, she was Development Director of The Rockland
Center for the Arts. She is 50 years old.
The address of each officer of the Company is 200 Park
Avenue, New York, New York 10166.
The Company's Board members and officers, as a group,
owned less than 1% of each Fund's shares of common stock
outstanding on ___________, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "Management of the Company."
Management Agreement. The Manager provides management
services pursuant to the Management Agreement (the
"Agreement") dated August 24, 1994, as amended August __,
1995, with the Company. As to each Fund, the Agreement is
subject to annual approval by (i) the Company's Board or
(ii) vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such 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 Company or the Manager, by
vote cast in person at a meeting called for the purpose of
voting on such approval. The Agreement was approved by
shareholders on August 5, 1994 in respect of Dreyfus Short-
Term Income Fund, and on __________, 1995 in respect of
Dreyfus Intermediate Term Fund, and was last approved by the
Company's Board, including a majority of the Board members
who are not "interested persons" of any party to the
Agreement, at a meeting held on August __, 1995. As to each
Fund, the Agreement is terminable without penalty, on 60
days' notice, by the Company's Board or by vote of the
holders of a majority of such Fund's shares, or, on not less
than 90 days' notice, by the Manager. The Agreement will
terminate automatically, as to the relevant Fund, in the
event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of
the Manager: Howard Stein, Chairman of the Board and Chief
Executive Officer; W. Keith Smith, Vice Chairman of the
Board; Robert E. Riley, President, 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; Philip L. Toia, Vice
Chairman--Operations and Administration; Daniel C. Maclean,
Vice President and General Counsel; Barbara E. Casey, Vice
President--Dreyfus Retirement Services; Diane M. Coffey,
Vice President--Corporate Communications; Elie M. Genadry,
Vice President--Institutional Sales; William F. Glavin, Jr.,
Vice President--Corporate Development; Henry D. Gottmann,
Vice President--Retail Sales and Services; Mark N. Jacobs,
Vice President--Fund Legal and Compliance and Secretary;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting;
Andrew S. Wasser, Vice President--Information Services;
Katherine C. Wickham, Vice President--Human Resources;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant
Secretary; and Mandell L. Berman, Frank V. Cahouet, Alvin E.
Friedman, Lawrence M. Greene, Julian M. Smerling and David
B. Truman, directors.
The Manager manages each Fund's investments in
accordance with the stated policies of such Fund, subject to
the approval of the Company's Board. The Manager is
responsible for investment decisions, and provides the Funds
with portfolio managers who are authorized by the Board to
execute purchases and sales of securities. The Funds'
portfolio managers are Garitt Kono and Gerald Thunelius
(with respect to Dreyfus Short Term Income Fund) and [To Be
Provided] (with respect to Dreyfus Intermediate Term Fund).
The Manager also maintains research departments with a
professional staff of portfolio managers and securities
analysts who provide research services for the Fund as well
as for other funds advised by the Manager. All purchases
and sales are reported for the Board's review at the meeting
subsequent to such transactions.
The Manager maintains office facilities on behalf of
the Funds, and furnishes statistical and research data,
clerical help, accounting, data processing, bookkeeping and
internal auditing and certain other required services to the
Funds. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it
from time to time deems appropriate.
Expenses. All expenses incurred in the operation of
the Company are borne by the Company, except to the extent
specifically assumed by the Manager. The expenses borne by
the Company 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 the Manager, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal
expenses, costs of maintaining the Company's existence,
costs of independent pricing services, 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 shareholders' reports and meetings,
and any extraordinary expenses. In addition, the Company is
subject to an annual service fee for ongoing personal
services relating to shareholder accounts and services
related to the maintenance of shareholder accounts. See
"Shareholder Services Plan." Expenses attributable to a
particular Fund are charged against the assets of that Fund;
other expenses of the Company are allocated among the Funds
on the basis determined by the Board, including, but not
limited to, proportionately in relation to the net assets of
each Fund.
As compensation for the Manager's services to the
Company, the Company has agreed to pay the Manager a monthly
management fee at the annual rate of .50 of 1% of the value
of Dreyfus Short-Term Income Fund's average daily net assets
and .60 of 1% of the value of Dreyfus Intermediate Term
Fund's average daily net assets. For the period August 18,
1992 (commencement of operations) through July 31, 1993 and
for the fiscal years ended July 31, 1994 and 1995, the
management fees payable with respect to Dreyfus Short-Term
Income Fund amounted to $_____, $1,431,860 and $_____,
respectively; however, pursuant to an undertaking in effect,
the Manager waived receipt of $_____, $1,431,860 and $_____
for fiscal 1993, 1994 and 1995, respectively, resulting in
no management fee being paid in fiscal 1993 and 1994 and
$______ being paid in fiscal 1995 with respect to Dreyfus
Short-Term Income Fund.
As to each Fund, the Manager has agreed that if in any
fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings and (with the prior
written consent of the necessary state securities
commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state
having jurisdiction over the Fund, the Fund may deduct from
the payment to be made to the Manager under the Agreement,
or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any,
will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is
not subject to reduction as the value of a Fund's net assets
increases.
PURCHASE OF SHARES
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as each
Fund's distributor 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.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders may be made between the hours of 8:00 a.m.
and 4:00 p.m., New York time, on any business day that The
Shareholder Services Group, Inc., each Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), and the
New York Stock Exchange are open. Such purchases will be
credited to the shareholder's Fund account on the next bank
business day. To qualify to use the Dreyfus TeleTransfer
Privilege, the initial payment for purchase of shares must
be drawn on, and redemption proceeds paid to, the same bank
and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any
other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Shares--Dreyfus
TeleTransfer Privilege."
Reopening an Account. An investor may reopen an
account with a minimum investment of $100 without filing a
new Account Application during the calendar year the account
is closed or during the following calendar year, provided
the information on the old Account Application is still
applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "Shareholder Services Plan."
The Company has adopted a Shareholder Services Plan,
pursuant to which the Company pays the Distributor for the
provision of certain services to each Fund's shareholders.
The services provided may include personal services relating
to shareholder accounts, such as answering shareholder
inquiries regarding the Company and providing reports and
other information, and services related to the maintenance
of such shareholder accounts. Under the Shareholder
Services Plan, the Distributor may make payments to certain
securities dealers, financial institutions and other
financial industry professionals (collectively, "Service
Agents") in respect of these services.
A quarterly report of the amounts expended under the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made to the Board
members for their review. In addition, the Shareholder
Services Plan provides that it may be amended only with the
approval of the Board members, and by the Board members who
are neither "interested persons" (as defined in the 1940
Act) of the Company nor have any direct or indirect
financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan, by vote cast
in person at a meeting called for the purpose of considering
such amendments. As to each Fund, the Shareholder Services
Plan is subject to annual approval by such vote of the Board
members cast in person at a meeting called for the purpose
of voting on the Shareholder Services Plan. The Shareholder
Services Plan was so approved on ___________, 1995. The
Shareholder Services Plan is terminable with respect to each
Fund at any time by vote of a majority of the Board members
who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the
Shareholder Services Plan or in any agreements entered into
in connection with the Shareholder Services Plan.
Prior Service Plan. As of August __, 1995, the
Company terminated its then-existing Service Plan that had
been in effect from August 24, 1994 with respect to Dreyfus
Short-Term Income Fund only. The Service Plan, adopted
pursuant to Rule 12b-1 under the 1940 Act, provided that the
Company (i) reimburse the Distributor for payments to
certain financial institutions (which may include banks),
securities dealers and other financial industry
professionals (collectively, "Service Agents") for
distributing shares and servicing shareholder accounts
("Servicing") and (ii) pay the Manager, Dreyfus Service
Corporation and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing
relating to the Company and for Servicing, at an aggregate
annual rate of .20 of 1% of the value of Dreyfus Short-Term
Income Fund's average daily net assets. Under such plan,
for the period August 24, 1994 through July 31, 1995, the
total amount payable by the Company was $______, of which
$______ was payable to Dreyfus for advertising and marketing
Dreyfus Short-Term Income Fund's shares and Servicing, and
$______ was reimbursed to the Distributor for payments made
to Service Agents. In addition, the Company paid $______
for preparing, printing and distributing prospectuses and
statements of additional information and for costs
associated with implementing and operating such plan.
As of August 24, 1994, the Company terminated its
then-existing Service Plan, which provided for payments to
be made to Dreyfus Service Corporation, the Company's
distributor prior to such date, for advertising, marketing
and distributing Dreyfus Short-Term Income Fund's shares and
for Servicing at an annual rate of .20 of 1% of the value of
such Fund's total assets. For the period from August 1,
1994 through August 23, 1994, the total amount charged to
the Company under such plan was $______, of which $______
was charged for advertising, marketing and distributing Fund
shares and Servicing and $______ was payable by the Company
for preparing, printing and distributing prospectuses and
statements of additional information and operating such
plan. Dreyfus Service Corporation paid $_____ of this
amount to Service Agents.
REDEMPTION OF SHARES
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "How to Redeem Shares."
Check Redemption Privilege. An investor may indicate
on the Account Application or by later written request that
the Company provide Redemption Checks ("Checks") drawn on
the Company's account. Checks will be sent only to the
registered owner(s) of the account and only to the address
of record. The Account Application or later written request
must be manually signed by the registered owner(s). Checks
may be made payable to the order of any person in an amount
of $500 or more. When a Check is presented to the Transfer
Agent for payment, the Transfer Agent, as the investor's
agent, will cause the Company to redeem a sufficient number
of shares in the investor's account to cover the amount of
the Check. Dividends are earned until the Check clears.
After clearance, a copy of the Check will be returned to the
investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts,
although election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer
Agent.
If the amount of the Check is greater than the value
of the shares in an investor's account, the Check will be
returned marked insufficient funds. Checks should not be
used to close an account.
Wire Redemption Privilege. By using this Privilege,
the investor authorizes the Transfer 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 Company will initiate payment for shares
redeemed pursuant to this Privilege on the next business day
after receipt by the Transfer Agent of 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 usually are 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 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."
Dreyfus TeleTransfer Privilege. Investors should be
aware that if they have selected the Dreyfus TeleTransfer
Privilege, any request for a wire redemption will be
effected as a Dreyfus TeleTransfer transaction through the
Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds
will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of
the redemption request. See "Purchase of Shares--Dreyfus
TeleTransfer Privilege."
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 Company has committed
itself to pay in cash all redemption requests by any
shareholder of record of a Fund, limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the
value of such 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 in
part in securities or other assets 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 securities are 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 relevant 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 each Fund's
Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of funds purchased by exchange
will be purchased on the basis of relative net asset value
per share as follows:
A. Exchanges for shares of funds that are offered without
a sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other
funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of
funds acquired by a previous exchange from shares
purchased with a sales load and additional shares
acquired through reinvestment of dividends or
distributions of any such funds (collectively referred
to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred
to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds
the maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above,
shareholders must notify the Transfer Agent of their prior
ownership of fund shares and their account number.
To request an exchange, shareholders must give
exchange instructions to the Transfer Agent in writing or by
telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the
Account Application, indicating that the investor
specifically refuses this Privilege. By using the Telephone
Exchange Privilege, the investor authorizes the Transfer
Agent to act on telephonic instructions from any person
representing himself or herself to be the investor, and
reasonably believed by the Transfer Agent to be genuine.
Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not
eligible for telephone exchange.
To establish a personal retirement plan by exchange,
shares of the fund being exchanged must have a value of at
least the minimum initial investment required for the fund
into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a
Simplified Employee Pension Plan ("SEP-IRAs") with only one
participant, the minimum initial investment is $750. To
exchange shares held in corporate plans, 403(b)(7) Plans and
SEP-IRAs with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested
among the funds in the Dreyfus Family of Funds. To exchange
shares held in a personal retirement plan account, the
shares exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus
Auto-Exchange Privilege permits an investor to purchase, in
exchange for shares of a Fund, shares of another fund in the
Dreyfus Family of Funds. This Privilege is available only
for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or
cancellation of this Privilege is effective three business
days following notification by the investor. An investor
will be notified if the investor's account falls below the
amount designated to be exchanged under this Privilege. In
this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated
amount prior to the next Auto-Exchange transaction. Shares
held under IRA and other retirement plans are eligible for
this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but
not from IRA accounts to regular accounts. With respect to
all other retirement accounts, exchanges may be made only
among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege
are available to shareholders resident in any state in which
shares of the fund being acquired may legally be sold.
Shares may be exchanged only between accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the
other funds may be obtained by calling 1-800-645-6561. The
Company reserves the right to reject any exchange request in
whole or in part. The Fund Exchanges service or the Dreyfus
Auto-Exchange Privilege may be modified or terminated at any
time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal
Plan permits an investor with a $5,000 minimum account to
request withdrawal of a specified dollar amount (minimum of
$50) on either a monthly or quarterly basis. Withdrawal
payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed
reinvested dividends and distributions, the investor's
shares will be reduced and eventually may be depleted.
There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the
investor, the Company or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from a
Fund in shares of another fund in the Dreyfus Family of
Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be
purchased on the basis of relative net asset value per share
as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of
other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect
to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon
redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans.
The Company makes available to corporations a variety of
prototype pension and profit-sharing plans including a
401(k) Salary Reduction Plan. In addition, the Company
makes available Keogh Plans, IRAs, including SEP-IRAs and
IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support
services also are available.
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.
The entity acting as custodian for Keogh Plans,
403(b)(7) Plans or IRAs may charge a fee, 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 acting 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 for
subsequent purchases. The minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is ordinarily $750, with no
minimum for subsequent purchases. Individuals who open an
IRA also may open a non-working spousal IRA with a minimum
investment of $250.
Each investor should read the prototype retirement
plan and the appropriate form of custodial agreement for
further details on 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 each Fund's
Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. Substantially all
of each Fund's investments (including short-term
investments) are valued each business day by one or more
independent pricing services (the "Service") approved by the
Board. Securities valued by the Service for which quoted
bid prices in the judgment of the Service are readily
available and are representative of the bid side of the
market are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities)
and asked prices (as calculated by the Service based upon
its evaluation of the market for such securities). Other
investments valued by the Service are carried at fair value
as determined by the Service, based on methods which include
consideration of: yields or prices of securities of
comparable quality, coupon, maturity and type; indications
as to values from dealers; and general market conditions.
Short-term investments are not valued by the Service and are
valued at the mean price or yield equivalent for such
securities or for securities of comparable maturity, quality
and type as obtained from market makers. Other investments
that are not valued by the Service are valued at the average
of the most recent bid and asked prices in the market in
which such investments are primarily traded, or at the last
sales price for securities traded primarily on an exchange
or the national securities market. In the absence of
reported sales of investments traded primarily on an
exchange or the national securities market, the average of
the most recent bid and asked prices is used. Bid price is
used when no asked price is available. Any assets or
liabilities initially expressed in terms of foreign currency
will be translated into U.S. dollars at the midpoint of the
New York interbank market spot exchange rate as quoted on
the day of such translation by the Federal Reserve Bank of
New York or, if no such rate is quoted on such date, at the
exchange rate previously quoted by the Federal Reserve Bank
of New York or at such other quoted market exchange rate as
may be determined to be appropriate by the Manager.
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 a Fund's shares.
Restricted securities, as well as securities or other
assets for which recent market quotations are not readily
available, or are not valued by the Service, are valued at
fair value as determined in good faith by the Board. The
Board will review the method of valuation on a current
basis. In making their good faith valuation of restricted
securities, the Board members generally will take the
following factors into consideration: restricted securities
which are, or are convertible into, securities of the same
class of securities for which a public market exists usually
will be valued at market value less the same percentage
discount at which purchased. This discount will be revised
periodically by the Board if the Board members believe that
it no longer reflects the value of the restricted
securities. Restricted securities not of the same class as
securities for which a public market exists usually will be
valued initially at cost. Any subsequent adjustment from
cost will be based upon considerations deemed relevant by
the Board.
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 each Fund's
Prospectus entitled "Dividends, Distributions and Taxes."
Management of the Company believes that Dreyfus Short-
Term Income Fund has qualified for the fiscal year ended
July 31, 1995 as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). It
is expected that Dreyfus Intermediate Term Fund will qualify
as a regulated investment company under the Code. Each Fund
intends to continue to so qualify if such qualification is
in the best interests of its shareholders. As a regulated
investment company, each Fund will pay no Federal income tax
on net investment income and net realized securities gains
to the extent that such income and gains are distributed to
shareholders in accordance with applicable provisions of the
Code. The term "regulated investment company" does not
imply the supervision of management or investment practices
or policies by any government agency.
Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the net
asset value of the shares below the cost of the investment.
Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated
above. In addition, the Code provides that if a shareholder
holds shares of a 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 long-term capital loss to the extent of the
capital gain distribution received.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gains and losses.
However, a portion of the gain or loss realized from the
disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-U.S. dollar
denominated securities (including debt instruments and
certain forward contracts and options) may be treated as
ordinary income or loss under Section 988 of the Code. In
addition, all or a portion of any gains realized from the
sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276.
Finally, 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, any gain or loss
realized by a Fund from certain forward contracts and
options 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 exercise or lapse of
such contracts and options as well as from closing
transactions. In addition, any such contracts or options
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 such Fund
characterized in the manner described above.
Offsetting positions held by a Fund involving certain
foreign currency forward contracts or options 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 Sections 1256 and 988 of the
Code. As such, all or a portion of any short or long-term
capital gain from certain "straddle" transactions may be
recharacterized to ordinary income.
If a Fund were treated as entering into "straddles" by
reason of its engaging in certain forward contracts or
options transactions, such "straddles" would be
characterized as "mixed straddles" if the forward contracts
or options transactions comprising a part of such
"straddles" were governed by Section 1256 of the Code. A
Fund may make one or more elections with respect to "mixed
straddles." Depending on 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 the offsetting position. Moreover, as a
result of the "straddle" and conversion transaction rules,
short-term capital loss on "straddle" positions may be
recharacterized as long-term capital loss, and long-term
capital gains may be treated as short-term capital gains or
ordinary income.
Investment by a Fund in securities issued or acquired
at a discount, or providing for deferred interest or for
payment of interest in the form of additional obligations
could under special tax rules affect the amount, timing and
character of distributions to shareholders by causing the
Fund to recognize income prior to the receipt of cash
payments. For example, the Fund could be required to accrue
a portion of the discount (or deemed discount) at which the
securities were issued each year and to distribute such
income in order to maintain its qualification as a regulated
investment company. In such case, the Fund may have to
dispose of securities which it might otherwise have
continued to hold in order to generate cash to satisfy these
distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing
orders on behalf of the Company for the purchase or sale of
portfolio securities. Allocation of brokerage transactions,
including their frequency, is made in the best judgment of
the Manager and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution
of orders at the most favorable net price. Subject to this
consideration, the brokers selected will include those that
supplement the Manager's research facilities with
statistical data, investment information, economic facts and
opinions. Information so received is in addition to and not
in lieu of services required to be performed by the Manager
and the Manager's fees are not reduced as a consequence of
the receipt of such supplemental information. Such
information may be useful to the Manager in serving both the
Company and other funds which it advises and, conversely,
supplemental information obtained by the placement of
business of other clients may be useful to the Manager in
carrying out its obligations to the Company.
Sales of Fund shares by a broker may be taken into
consideration, and brokers also will be selected because of
their ability to handle special executions such as are
involved in large block trades or broad distributions,
provided the primary consideration is met. Large block
trades may, in certain cases, result from two or more funds
advised or administered by the Manager being engaged
simultaneously in the purchase or sale of the same security.
Certain of the Funds' transactions in securities of foreign
issuers may not benefit from the negotiated commission rates
available to the Funds for transactions in securities of
domestic issuers. When transactions are executed in the
over-the-counter market, each Fund will deal with the
primary market makers unless a more favorable price or
execution otherwise is obtainable. Foreign exchange
transactions are made with banks or institutions in the
interbank market at prices reflecting a mark-up or mark-down
and/or commission.
Portfolio turnover may vary from year to year as well
as within a year. High turnover rates are likely to result
in greater brokerage expenses. The overall reasonableness
of brokerage commissions paid is evaluated by the Manager
based upon its knowledge of available information as to the
general level of commissions paid by other institutional
investors for comparable services.
For the period August 18, 1992 (commencement of
operations) through July 31, 1993 and for the fiscal years
ended July 31, 1994 and 1995, no brokerage commissions, were
paid by Dreyfus Short-Term Income Fund. Gross spreads and
concessions on principal transactions which were
determinable amounted to $72,750, $31,500 and $______ for
the same periods, none of which were paid to the
Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "Performance Information."
Dreyfus Intermediate Term Fund had not commenced
operations as of the date hereof. Accordingly, no
performance information is available for such Fund.
Dreyfus Short-Term Income Fund's current yield for the
30-day period ended July 31, 1995 was ___%, which reflects
the absorption of certain expenses pursuant to expense
limitations in effect. See "Management of the Company" in
such Fund's Prospectus. Had certain expenses not been
absorbed, current yield for the same period would have been
____%. Current yield is computed pursuant to a formula
which operates as follows: the amount of the Fund's
expenses accrued for the 30-day period (net of
reimbursements) is subtracted from the amount of the
dividends and interest earned (computed in accordance with
regulatory requirements) by the Fund during the period.
That result is then divided by the product of: (a) the
average daily number of shares outstanding during the period
that were entitled to receive dividends, and (b) the net
asset value per share on the last day of the period less any
undistributed earned income per share reasonably expected to
be declared as a dividend shortly thereafter. The quotient
is then added to 1, and that sum is raised to the 6th power,
after which 1 is subtracted. The current yield is then
arrived at by multiplying the result by 2.
Dreyfus Short-Term Income Fund's average annual return
for the 1 and 2.953 year periods ended July 31, 1995 was
___% and ___%, 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.
Dreyfus Short-Term Income Fund's total return for the
period August 18, 1992 (commencement of operations) through
July 31, 1995 was ___%. 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.
From time to time, the Company may compare a Fund's
performance with the performance of other instruments, such
as certificates of deposit and FDIC-insured bank money
market accounts.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be
read in conjunction with the section in each Fund's
Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid
for in accordance with the terms of the offering, is fully
paid and non-assessable. Fund shares are of one class and
have equal rights as to dividends and in liquidation.
Shares have no preemptive, subscription or conversion rights
and are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted under the provisions of the 1940
Act or applicable state law or otherwise to the holders of
the outstanding voting securities of an investment company,
such as the Company, will not be deemed to have been
effectively acted upon unless approved by the holders of a
majority of the outstanding shares of each series affected
by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is
clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of
such series. However, the Rule exempts the selection of
independent accountants and the election of Board members
from the separate voting requirements of the Rule.
Each Fund will send annual and semi-annual financial
statements to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York,
New York 10286, is the Company's custodian. The Shareholder
Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671, is the Company's transfer and dividend
disbursing agent. Neither The Bank of New York nor The
Shareholder Services Group, Inc. has any part in determining
the investment policies of either Fund or which securities
are to be purchased or sold by a Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York,
New York 10004-2696, as counsel for the Company, has
rendered its opinion as to certain legal matters regarding
the due authorization and valid issuance of the shares of
Common Stock being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York,
New York 10019, independent auditors, have been selected as
auditors of the Company.
<PAGE>
APPENDIX
Description of certain ratings assigned by S&P,
Moody's, Fitch and Duff:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is
extremely strong.
AA
Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest
rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest
and repay principal although they are somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in
higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas they
normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
repay principal for bonds in this category than for bonds in
higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to
default than other speculative grade debt. However, they
face major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal
payments.
B
Bonds rated B have a greater vulnerability to default
but presently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or
economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable
vulnerability to default, and is dependent upon favorable
business, financial and economic conditions to meet timely
payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions,
they are not likely to have the capacity to pay interest and
repay principal.
S&P's letter ratings may be modified by the addition
of a plus (+) or minus (-) sign designation, which is used
to show relative standing within the major rating
categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P 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.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what generally are known as high grade bonds. They
are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa
securities.
A
Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium
grade obligations, i.e., they are neither highly protected
nor poorly secured. Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered as
well assured. Often the protection of interest and
principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this
class.
B
Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to
show relative standing within the major rating categories,
except in the Aaa category [and in the categories below B].
The modifier 1 indicates a ranking for the security in the
higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating category.
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.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the
issuer's ability to meet the obligations of a specific debt
issue or class of debt. The ratings take into consideration
special features of the issue, its relationship to other
obligations of the issuer, the current financial condition
and operative performance of the issuer and of any
guarantor, as well as the political and economic environment
that might affect the issuer's future financial strength and
credit quality.
AAA
Bonds rated AAA are considered to be investment grade
and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade
and of very high credit quality. The obligor's ability to
pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated
in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term
debt of these issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade
and of high credit quality. The obligor's ability to pay
interest and repay principal is considered to be strong, but
may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade
and of satisfactory credit quality. The obligor's ability
to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment.
The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher
ratings.
BB
Bonds rated BB are considered speculative. The
obligor's ability to pay interest and repay principal may be
affected over time by adverse economic changes. However,
business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative.
While bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable
characteristics, which, if not remedied, may lead to
default. The ability to meet obligations requires an
advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating
symbol to indicate the relative position of a credit within
the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations
that are payable on demand or have original maturities of up
to three years, including commercial paper, certificates of
deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's
bond rating analysis, the short-term rating places greater
emphasis than bond ratings on the existence of liquidity
necessary to meet the issuer's obligations in a timely
manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned
this rating are regarded as having the strongest degree of
assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this
rating reflect an assurance of timely payment only slightly
less in degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality.
The risk factors are negligible, being only slightly more
than for risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.
A
Bonds rated A have protection factors which are
average but adequate. However, risk factors are more
variable and greater in periods of economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for
prudent investment. Considerable variability in risk during
economic cycles.
BB
Bonds rated BB are below investment grade but are
deemed by Duff as likely to meet obligations when due.
Present or prospective financial protection factors
fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently
within the category.
B
Bonds rated B are below investment grade and possess
the risk that obligations will not be met when due.
Financial protection factors will fluctuate widely according
to economic cycles, industry conditions and/or company
fortunes. Potential exists for frequent changes in quality
rating within this category or into a higher or lower
quality rating grade.
CCC
Bond rated CCC are well below investment grade
securities. Such bonds may be in default or have
considerable uncertainty as to timely payment of interest,
preferred dividends and/or principal. Protection factors
are narrow and risk can be substantial with unfavorable
economic or industry conditions and/or with unfavorable
company developments.
Plus (+) and minus (-) signs are used with a rating
symbol (except AAA) to indicate the relative position of a
credit within the rating category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper
rating assigned by Duff. Paper rated Duff-1 is regarded as
having very high certainty of timely payment with excellent
liquidity factors which are supported by ample asset
protection. Risk factors are minor.
<PAGE>
DREYFUS SHORT-TERM INCOME FUND, INC.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A of the Registration
Statement with respect to Dreyfus Short-Term
Income Fund only:
Financial Highlights from August 18, 1992
(commencement of operations) to July 31,
1995.
Included in Part B of the Registration
Statement:
To be filed by Amendment.
(b) Exhibits:
(1)(a) Articles of Incorporation are
incorporated by reference to Exhibit (1)
of the Registration Statement on Form N-
1A, filed on June 29, 1992.
(b) Form of Articles of Amendment.
(c) Form of Articles Supplementary.
(2) By-Laws are incorporated by reference to
Exhibit (2) of the Registration
Statement on Form N-1A, filed on June
29, 1992.
(4) Specimen certificate for the
Registrant's securities is incorporated
by reference to Exhibit (4) of the
Registration Statement on Form N-1A,
filed on June 29, 1992.
(5) Form of Management Agreement.
(6) Form of Distribution Agreement.
(8)(a) Form of Amended and Restated Custody
Agreement.
(8)(b) Sub-Custodian Agreements are
incorporated by reference to Exhibit
(8)(b) of Post-Effective Amendment No. 1
to the Registration Statement on Form N-
1A, filed on January 9, 1993.
(9) Form of Shareholder Services Plan.
(10) Opinion and consent of Registrant's
counsel is incorporated by reference to
Exhibit (10) of Pre-Effective Amendment
No. 2 to the Registration Statement on
Form N-1A, filed on August 11, 1992.
(16) Schedules of Computation of Performance
Data are incorporated by reference to
Exhibit (16) of Post-Effective Amendment
No. 3 to the Registration Statement on
Form N-1A, filed on October 19, 1993.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not applicable.
Item 26. Number of Holders of Securities
(2)
Number of Record
(1) Holders as of
Title of Class August 10, 1995
---------------------- -----------------
Common Stock, par value
$.001 per share
Dreyfus Short-Term Income Fund, Inc. 11,879
Item 27. Indemnification
The Statement as to the general effect of any
contract, arrangements or statute under which a director,
officer, underwriter of affiliated person of the Registrant
is insured or indemnified in any manner against any
liability which may be incurred in such capacity, other than
insurance provided by any director, officer, underwriter or
affiliated person for its own protection, 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
December 22, 1993.
Reference also is made to the Distribution
Agreement filed as Exhibit 6 hereto.
Item 28(a). Business and Other Connections of Investment
Adviser
The Dreyfus Corporation ("Dreyfus") and its
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 distributor 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.
Officers and Directors of Dreyfus
Name and Position with
Dreyfus Other Businesses
MANDELL L. BERMAN Real estate consultant and private
Director investor
29100 Northwestern Highway--Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation;
Member of the Board of Vintners
International
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
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
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage
Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board Dreyfus Acquisition Corporation*;
and Chief Executive The Dreyfus Consumer Credit
Officer Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
World Balanced Fund+++;
Trustee:
Corporate Property Investors
New York, New York
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of The Boston Company
the Board One Boston Place
Boston, Massachusetts 02108;
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation*;
Operating Officer Former Executive Vice President:
and a Director Prudential Investment Corporation
751 Board Street
Newark, New Jersey 07102
STEPHEN E. CANTER Former Chairman and Chief Executive
Vice Chairman, Chief Officer:
Investment Officer and Kleinwort Benson Investment Management
a Director Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-- Executive Officer:
Distribution The Boston Company Advisors, Inc.
and a Director 53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Director:
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund++++
JULIAN M. SMERLING None
Director
PHILIP L. TOIA Chairman of the Board and Trust
Vice Chairman-- Investment Officer:
Operations and The Dreyfus Trust Company++;
Administration Chairman of the Board and Chief
Executive Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank,
F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization*;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
BARBARA E. CASEY President:
Vice President-- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108
DIANE M. COFFEY None
Vice President--
Corporate Communications
ELIE M. GENADRY President:
Vice President-- Institutional Services Division of
Institutional Sales Dreyfus Service Corporation*;
Broker-Dealer Division of Dreyfus
Service Corporation*;
Group Retirement Plans Division of
Dreyfus Service Corporation*;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++
HENRY D. GOTTMANN Executive Vice President:
Vice President--Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals*
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and Dreyfus Precious Metals, Inc.*;
General Counsel Director and Vice President:
The Dreyfus Consumer Credit
Corporation*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President--Mutual
Fund Accounting
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President-- Department of Parks and Recreation of
Human Resources the City of New York
830 Fifth Avenue
New York, New York 10022
WILLIAM F. GLAVIN, JR. Senior Vice President:
Vice President-- The Boston Company Advisors, Inc.
Corporate Development 53 State Street
Exchange Place
Boston, Massachusetts 02109
ANDREW S. WASSER Vice President:
Vice President-- Mellon Bank Corporation
Information Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit
Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*;
Formerly, Vice President-Financial
Planning, Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-- Lion Management, Inc.*;
Legal and Secretary The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation,
Inc.*;
The Truepenny Corporation*
* The address of the business so indicated is 200 Park
Avenue,
New York, New York 10166.
** The address of the business so indicated is 80 Cutter
Mill
Road, Great Neck, New York 11021.
+ The address of the business so indicated is 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.
+++ The address of the business so indicated is One
Rockefeller Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard
Royal, Luxembourg.
+++++ The address of the business so indicated is Nassau,
Bahama Islands.
Item 29. Principal Underwriters
(a)
Other investment companies for which Registrant's princi-
pal underwriter (exclusive distributor) acts as principal
underwriter or exclusive distributor:
1. Comstock Partners Strategy Fund, 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 Money Market Fund, Inc.
7. Dreyfus BASIC Municipal Fund, Inc.
8. Dreyfus BASIC U.S. Government Money Market Fund
9. Dreyfus California Intermediate Municipal Bond
Fund
10. Dreyfus California Tax Exempt Bond Fund, Inc.
11. Dreyfus California Tax Exempt Money Market Fund
12. Dreyfus Capital Value Fund (A Premier 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 Edison Electric Index Fund, Inc.
18. Dreyfus Florida Intermediate Municipal Bond Fund
19. Dreyfus Florida Municipal Money Market Fund
20. Dreyfus Focus Funds, Inc.
21. The Dreyfus Fund Incorporated
22. Dreyfus Global Bond Fund, Inc.
23. Dreyfus Global Growth, L.P. (A Strategic Fund)
24. Dreyfus GNMA Fund, Inc.
25. Dreyfus Government Cash Management
26. Dreyfus Growth and Income Fund, Inc.
27. Dreyfus Growth Opportunity Fund, Inc.
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 Equity Fund, Inc.
33. Dreyfus International Recovery Fund, Inc.
34. Dreyfus Investors GNMA Fund
35. The Dreyfus/Laurel Funds, Inc.
36. The Dreyfus/Laurel Funds Trust
37. The Dreyfus/Laurel Tax-Free Municipal Funds
38. The Dreyfus/Laurel Investment Series
39. Dreyfus Life and Annuity Index Fund, Inc.
40. Dreyfus Lifetime Portfolios, Inc.
41. Dreyfus Liquid Assets, Inc.
42. Dreyfus Massachusetts Intermediate Municipal Bond
Fund
43. Dreyfus Massachusetts Municipal Money Market Fund
44. Dreyfus Massachusetts Tax Exempt Bond Fund
45. Dreyfus Michigan Municipal Money Market Fund,
Inc.
46. Dreyfus Money Market Instruments, Inc.
47. Dreyfus Municipal Bond Fund, Inc.
48. Dreyfus Municipal Cash Management Plus
49. Dreyfus Municipal Money Market Fund, Inc.
50. Dreyfus New Jersey Intermediate Municipal Bond
Fund
51. Dreyfus New Jersey Municipal Bond Fund, Inc.
52. Dreyfus New Jersey Municipal Money Market Fund,
Inc.
53. Dreyfus New Leaders Fund, Inc.
54. Dreyfus New York Insured Tax Exempt Bond Fund
55. Dreyfus New York Municipal Cash Management
56. Dreyfus New York Tax Exempt Bond Fund, Inc.
57. Dreyfus New York Tax Exempt Intermediate Bond
Fund
58. Dreyfus New York Tax Exempt Money Market Fund
59. Dreyfus Ohio Municipal Money Market Fund, Inc.
60. Dreyfus 100% U.S. Treasury Intermediate Term Fund
61. Dreyfus 100% U.S. Treasury Long Term Fund
62. Dreyfus 100% U.S. Treasury Money Market Fund
63. Dreyfus 100% U.S. Treasury Short Term Fund
64. Dreyfus Pennsylvania Intermediate Municipal
Bond Fund
65. Dreyfus Pennsylvania Municipal Money Market Fund
66. Dreyfus Short-Intermediate Government Fund
67. Dreyfus Short-Intermediate Municipal Bond Fund
68. Dreyfus Short-Term Income Fund, Inc.
69. The Dreyfus Socially Responsible Growth Fund,
Inc.
70. Dreyfus Strategic Growth, L.P.
71. Dreyfus Strategic Income
72. Dreyfus Strategic Investing
73. Dreyfus Tax Exempt Cash Management
74. The Dreyfus Third Century Fund, Inc.
75. Dreyfus Treasury Cash Management
76. Dreyfus Treasury Prime Cash Management
77. Dreyfus Variable Investment Fund
78. Dreyfus-Wilshire Target Funds, Inc.
79. Dreyfus Worldwide Dollar Money Market Fund, Inc.
80. General California Municipal Bond Fund, Inc.
81. General California Municipal Money Market Fund
82. General Government Securities Money Market
Fund, Inc.
83. General Money Market Fund, Inc.
84. General Municipal Bond Fund, Inc.
85. General Municipal Money Market Fund, Inc.
86. General New York Municipal Bond Fund, Inc.
87. General New York Municipal Money Market Fund
88. Pacifica Funds Trust--Pacific American Money
Market Portfolio, Pacific American U.S. Treasury
Portfolio
89. Peoples Index Fund, Inc.
90. Peoples S&P MidCap Index Fund, Inc.
91. Premier California Municipal Bond Fund
92. Premier Capital Growth Fund, Inc.
93. Premier Global Investing, Inc.
94. Premier GNMA Fund
95. Premier Growth Fund, Inc.
96. Premier Insured Municipal Bond Fund
97. Premier Municipal Bond Fund
98. Premier New York Municipal Bond Fund
99. Premier State Municipal Bond Fund
(b)
<TABLE>
<CAPTION>
Positions and offices with Positions and
Name and principal Premier Mutual offices with
business address Fund Services, Inc. Registrant
<S> <C> <C>
Marie E. Connolly+ Director, President, Chief President and
Operating Officer and Treasurer
Compliance Officer
Joseph F. Tower, III+ Senior Vice President, Assistant
Treasurer and Chief Treasurer
Financial Officer
John E. Pelletier+ Senior Vice President, Vice President
General Counsel, Secretary and Secretary
and Clerk
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Vice President
Associate General Counsel and Assistant
Secretary
Lynn H. Johnson+ Vice President None
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
Ruth D. Leibert++ Assistant Vice President Assistant
Secretary
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.
</TABLE>
Item 30. Location of Accounts and Records
1. The Shareholder 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. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Registrant hereby undertakes
(1) to file a post-effective amendment, using
financial statements which need not be certified,
within four to six months from the effective date
of Registrant's 1933 Act Registration Statement.
(2) to call a meeting of shareholders for the purpose
of voting upon the question of removal of a
director or directors when requested in writing
to do so by the holders of at least 10% of the
Registrant's outstanding shares of common stock
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.
(3) 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 10th day of August, 1995.
DREYFUS FOCUS FUNDS, INC.
(Registrant)
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 dates indicated.
/s/Marie E. Connolly* President (Principal August 11,
1995
Marie E. Connolly Executive, Financial and
Accounting Officer and
Treasurer)
/s/Joseph S. DiMartino* Director August 11,
1995
Joseph S. DiMartino
/s/Lucy Wilson Benson* Director August 11,
1995
Lucy Wilson Benson
/s/David W. Burke* Director August 11,
1995
David W. Burke
/s/Martin D. Fife* Director August 11,
1995
Martin D. Fife
/s/Whitney I. Gerard* Director August 11,
1995
Whitney I. Gerard
/s/Robert G. Glauber* Director August 11,
1995
Robert G. Glauber
/s/Arthur A. Hartman* Director August 11,
1995
Arthur A. Hartman
/s/Goerge L. Perry* Director August 11,
1995
George L. Perry
/s/Paul D. Wolfowitz* Director August 11,
1995
Paul D. Wolfowitz
/s/Eric B. Fischman
* By: Eric B. Fischman,
Attorney-in-Fact
DREYFUS SHORT-TERM INCOME FUND, INC.
Post-Effective Amendment No. 6 to
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
EXHIBITS
INDEX TO EXHIBITS
Page
(1)(b) Form of Articles of Amendment . . . . . . . . .
(1)(c) Form of Articles Supplementary. . . . . . . . .
(5) Form of Management Agreement. . . . . . . . . .
(6) Form of Distribution Agreement. . . . . . . . .
(8) Form of Amended and Restated Custody
Agreement. . . . . . . . . . . . . . . . . . .
(9) Form of Shareholder Services Plan . . . . . . .
<PAGE>
Exhibit (1)(b)
FORM OF
ARTICLES OF AMENDMENT
DREYFUS SHORT-TERM INCOME FUND, INC., a Maryland
corporation having its principal office in the State of
Maryland at 32 South Street, Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland
that:
FIRST: The charter of the Corporation is hereby
amended by striking Article SECOND of the Articles of
Incorporation and inserting in lieu thereof the following:
"SECOND: The name of the corporation
(hereinafter called the 'corporation')
is Dreyfus Investment Grade Bond Funds,
Inc.
SECOND: The charter of the Corporation is hereby
amended further to redesignate the issued and unissued
shares of stock of the Corporation as shares of stock of
Dreyfus Short-Term Income Fund by striking paragraph (1) of
Article FIFTH of the Articles of Incorporation in its
entirety and inserting in lieu thereof the following:
"FIFTH: (1) The total number of shares
of stock which the corporation has
authority to issue is five hundred
million (500,000,000) shares of Common
Stock, all of which are of a par value
of one tenth of one cent ($.001) each,
all of which are classified as shares of
the Dreyfus Short-Term Income Fund."
THIRD: The Corporation is registered as an open-
end investment company under the Investment Company Act of
1940.
FOURTH: These Articles of Amendment were approved
by at least a majority of the entire Board of Directors of
the Corporation and are limited to changes expressly
permitted by Section 2-605 of subtitle 6 of Title 2 of the
Maryland General Corporation Law to be made without action
by the stockholders of the Corporation.
The Vice President acknowledges these Articles of
Amendment to be the corporate act of the Corporation and
states that to the best of his knowledge, information and
belief the matters and facts set forth in these Articles
with respect to the authorization and approval of the
amendment of the Corporation's charter are true in all
material respects, and that this statement is made under the
penalties of perjury.
IN WITNESS WHEREOF, Dreyfus Short-Term Income
Fund, Inc. has caused this instrument to be signed in its
name and on its behalf by its Vice President, and witnessed
by its Assistant Secretary, on the ____ day of August, 1995.
DREYFUS SHORT-TERM INCOME
FUND, INC.
BY:________________________
Eric B. Fischman,
Vice President
WITNESS:
________________________
Ruth D. Leibert,
Assistant Secretary
<PAGE>
Exhibit (1)(c)
FORM OF
ARTICLES SUPPLEMENTARY
DREYFUS INVESTMENT GRADE BOND FUNDS, INC., a
Maryland corporation having its principal office in the
State of Maryland at 32 South Street, Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation that:
FIRST: The aggregate number of shares of Common
Stock that the Corporation has authority to issue is
increased by five hundred million (500,000,000) shares, all
of which shall be classified as shares of Dreyfus
Intermediate Term Fund.
SECOND: The shares of Common Stock of Dreyfus
Intermediate Term Fund classified hereby shall have the
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption as set forth in
Article FIFTH, Section (5) of the Corporation's Charter, and
shall be subject to all provisions of the Corporation's
Charter relating to stock of Corporation generally.
THIRD: Immediately before the increase in the
aggregate number of shares as set forth in Article FIRST
hereof, the Corporation was authorized to issue five hundred
million (500,000,000) shares of stock, all of which were
shares of Dreyfus Short-Term Income Fund, having a par value
of one tenth of one cent ($.001) each, and an aggregate par
value of five hundred thousand dollars ($500,000).
FOURTH: As hereby increased and classified, the
total number of shares of stock which the Corporation has
authority to issue is one billion (1,000,000,000) shares,
all of which are shares of Common Stock, with a par value of
one-tenth of one cent ($.001) per share, having an aggregate
par value of one million dollars ($1,000,000), of which five
hundred million (500,000,000) shares are classified as
shares of Dreyfus Short-Term Income Fund and five hundred
million (500,000,000) shares are classified as shares of
Dreyfus Intermediate Term Fund.
FIFTH: The Corporation is registered as an open-
end investment company under the Investment Company Act of
1940, as amended.
SIXTH: The Board of Directors of the Corporation
increased the total number of shares of capital stock that
the Corporation has authority to issue pursuant to Section
2-105(c) of the Maryland General Corporation Law and
classified the increased shares pursuant to authority
provided in the Corporation's Charter.
The undersigned Vice President acknowledges these
Articles Supplementary to be the corporate act of the
Corporation and states that to the best of his knowledge,
information and belief, the matters and facts with respect
to authorization and approval set forth in these Articles
are true in all material respects and that this statement is
made under penalties of perjury.
IN WITNESS WHEREOF, Dreyfus Investment Grade Bond
Funds, Inc. has caused these Articles Supplementary to be
signed in its name and on its behalf by its Vice President
and witnessed by its Assistant Secretary on August __, 1995.
DREYFUS INVESTMENT GRADE
BOND FUNDS, INC.
By:________________________________
Eric B. Fischman, Vice
President
Witness:
__________________________
Ruth D. Leibert,
Assistant Secretary
<PAGE>
Exhibit (5)
FORM OF
MANAGEMENT AGREEMENT
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, August 24,
1995
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as
follows:
The Fund desires to employ its capital by in-
vesting and reinvesting the same in investments of the type
and in accordance with the limitations specified in its
charter documents and in its Prospectus and Statement of
Additional Information as from time to time in effect,
copies of which have been or will be submitted to you, and
in such manner and to such extent as from time to time may
be approved by the Fund's Board. The Fund desires to employ
you to act as its investment adviser.
In this connection it is understood that from time
to time you will employ or associate with yourself such
person or persons as you may believe to be particularly
fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are
employed by both you and the Fund. The compensation of such
person or persons shall be paid by you and no obligation may
be incurred on the Fund's behalf in any such respect.
Subject to the supervision and approval of the
Fund's Board, you will provide investment management of each
Series' portfolio in accordance with such Series' investment
objectives and policies as stated in the Fund's Prospectus
and Statement of Additional Information as from time to time
in effect. In connection therewith, you will obtain and
provide investment research and will supervise each Series'
investments and conduct a continuous program of investment,
evaluation and, if appropriate, sale and reinvestment of
such Series' assets. You will furnish to the Fund such
statistical information, with respect to the investments
which a Series may hold or contemplate purchasing, as the
Fund may reasonably request. The Fund wishes to be informed
of important developments materially affecting any Series'
portfolio and shall expect you, on your own initiative, to
furnish to the Fund from time to time such information as
you may believe appropriate for this purpose.
In addition, you will supply office facilities
(which may be in your own offices), data processing
services, clerical, accounting and bookkeeping services,
internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies;
prepare reports to each Series' stockholders, tax returns,
reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities; calculate the net
asset value of each Series' shares; and generally assist in
all aspects of the Fund's operations. You shall have the
right, at your expense, to engage other entities to assist
you in performing some or all of the obligations set forth
in this paragraph, provided each such entity enters into an
agreement with you in form and substance reasonably
satisfactory to the Fund. You agree to be liable for the
acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering
the services to be provided to the Fund hereunder and the
Fund agrees as an inducement to your undertaking the same
that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by one
or more Series, provided that nothing herein shall be deemed
to protect or purport to protect you against any liability
to the Fund or a Series or to its security holders to which
you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to
this Agreement, the Fund will pay you on the first business
day of each month a fee at the rate set forth opposite each
Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described
in the Fund's then-current Prospectus and Statement of
Additional Information. The fee for the period from the
date of the commencement of the public sale of a Series'
shares to the end of the month during which such sale shall
have been commenced shall be pro-rated according to the
proportion which such period bears to the full monthly
period, and upon any termination of this Agreement before
the end of any month, the fee for such part of a month shall
be pro-rated according to the proportion which such period
bears to the full monthly period and shall be payable upon
the date of termination of this Agreement.
For the purpose of determining fees payable to
you, the value of each Series' net assets shall be computed
in the manner specified in the Fund's charter documents for
the computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All
other expenses to be incurred in the operation of the Fund
will be borne by the Fund, except to the extent specifically
assumed by you. The expenses to be borne by the Fund
include, without limitation, the following: organizational
costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees
and commissions, if any, fees of Board members who are not
your officers, directors or employees or holders of 5% or
more of your outstanding voting securities, Securities and
Exchange Commission fees and state Blue Sky qualification
fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and
legal expenses, costs of independent pricing services, costs
of maintaining the Fund's existence, costs attributable to
investor services (including, without limitation, telephone
and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings,
and any extraordinary expenses.
As to each Series, if in any fiscal year the
aggregate expenses of the Fund (including fees pursuant to
this Agreement, but excluding interest, taxes, brokerage
and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over the
Series, the Fund may deduct from the fees to be paid
hereunder, or you will bear, such excess expense to the
extent required by state law. Your obligation pursuant
hereto will be limited to the amount of your fees hereunder.
Such deduction or payment, if any, will be estimated daily,
and reconciled and effected or paid, as the case may be, on
a monthly basis.
The Fund understands that you now act, and that
from time to time hereafter you may act, as investment
adviser to one or more other investment companies and
fiduciary or other managed accounts, and the Fund has no
objection to your so acting, provided that when the purchase
or sale of securities of the same issuer is suitable for the
investment objectives of two or more companies or accounts
managed by you which have available funds for investment,
the available securities will be allocated in a manner
believed by you to be equitable to each company or account.
It is recognized that in some cases this procedure may ad-
versely affect the price paid or received by one or more
Series or the size of the position obtainable for or
disposed of by one or more Series.
In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service
and nothing contained herein shall be deemed to limit or
restrict your right or the right of any of your affiliates
to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
You shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad
faith or gross negligence on your part in the performance of
your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person,
even though also your officer, director, partner, employee
or agent, who may be or become an officer, Board member,
employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of
the Fund, to be rendering such services to or acting solely
for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction
even though paid by you.
As to each Series, this Agreement shall continue
until the date set forth opposite such Series' name on
Schedule 1 hereto (the "Reapproval Date") and thereafter
shall continue automatically for successive annual periods
ending on the day of each year set forth opposite the
Series' name on Schedule 1 hereto (the "Reapproval Day"),
provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority
(as defined in the Investment Company Act of 1940) of such
Series' outstanding voting securities, provided that in
either event its continuance also is approved by a majority
of the Fund's Board members who are not "interested persons"
(as defined in said Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of
voting on such approval. As to each Series, this Agreement
is terminable without penalty, on 60 days' notice, by the
Fund's Board or by vote of holders of a majority of such
Series' shares or, upon not less than 90 days' notice, by
you. This Agreement also will terminate automatically, as
to the relevant Series, in the event of its assignment (as
defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other
entities (including other investment companies) and that
such other entities may include the name "Dreyfus" as part
of their name, and that your corporation or its affiliates
may enter into investment advisory or other agreements with
such other entities. If you cease to act as the Fund's
investment adviser, the Fund agrees that, at your request,
the Fund will take all necessary action to change the name
of the Fund to a name not including "Dreyfus" in any form or
combination of words.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS INVESTMENT GRADE
BOND FUNDS, INC.
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date Reapproval Day
<S> <C> <C> <C>
Dreyfus Intermediate
Term Fund .60% July 29, 1997 July 29th
Dreyfus Short-Term
Income Fund .50% July 29, 1995 July 29th
</TABLE>
<PAGE>
Exhibit (6)
FORM OF
DISTRIBUTION AGREEMENT
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, August 24, 1995
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named investment
company (the "Fund") has agreed that you shall be, for the
period of this agreement, the distributor of (a) shares of
each Series of the Fund set forth on Exhibit A hereto, as
such Exhibit may be revised from time to time (each, a
"Series") or (b) if no Series are set forth on such Exhibit,
shares of the Fund. For purposes of this agreement the term
"Shares" shall mean the authorized shares of the relevant
Series, if any, and otherwise shall mean the Fund's
authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities
Act of 1933, as amended, and will transmit promptly any
orders received by you for purchase or redemption of Shares
to the Transfer and Dividend Disbursing Agent for the Fund
of which the Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you
will enter into sales or servicing agreements with
securities dealers, financial institutions and other
industry professionals, such as investment advisers,
accountants and estate planning firms, and in so doing you
will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations
made or adopted pursuant to the Investment Company Act of
1940, as amended, by the Securities and Exchange Commission
or any securities association registered under the Securi-
ties Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept
such orders and to make such sales and the Fund shall advise
you promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses
in connection with the registration of Shares under the
Securities Act of 1933, as amended, and all expenses in
connection with maintaining facilities for the issue and
transfer of Shares and for supplying information, prices and
other data to be furnished by the Fund hereunder, and all
expenses in connection with the preparation and printing of
the Fund's prospectuses and statements of additional
information for regulatory purposes and for distribution to
shareholders; provided, however, that nothing contained
herein shall be deemed to require the Fund to pay any of the
costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all
documents and to furnish any and all information and
otherwise to take all actions which may be reasonably
necessary in the discretion of the Fund's officers in con-
nection with the qualification of Shares for sale in such
states as you may designate to the Fund and the Fund may
approve, and the Fund agrees to pay all expenses which may
be incurred in connection with such qualification. You
shall pay all expenses connected with your own qualification
as a dealer under state or Federal laws and, except as
otherwise specifically provided in this agreement, all other
expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time,
for use in connection with the sale of Shares, such
information with respect to the Fund or any relevant Series
and the Shares as you may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized
officers; and the Fund warrants that the statements
contained in any such information, when so signed by the
Fund's officers, shall be true and correct. The Fund also
shall furnish you upon request with: (a) semi-annual
reports and annual audited reports of the Fund's books and
accounts made by independent public accountants regularly
retained by the Fund, (b) quarterly earnings statements
prepared by the Fund, (c) a monthly itemized list of the
securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial
condition as you may reasonably request.
1.8 The Fund represents to you that all registra-
tion statements and prospectuses filed by the Fund with the
Securities and Exchange Commission under the Securities Act
of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been
carefully prepared in conformity with the requirements of
said Acts and rules and regulations of the Securities and
Exchange Commission thereunder. As used in this agreement
the terms "registration statement" and "prospectus" shall
mean any registration statement and prospectus, including
the statement of additional information incorporated by
reference therein, filed with the Securities and Exchange
Commission and any amendments and supplements thereto which
at any time shall have been filed with said Commission. The
Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to
be stated therein in conformity with said Acts and the rules
and regulations of said Commission; that all statements of
fact contained in any such registration statement and pro-
spectus will be true and correct when such registration
statement becomes effective; and that neither any registra-
tion statement nor any prospectus when such registration
statement becomes effective will include an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading. The Fund may but shall not be
obligated to propose from time to time such amendment or
amendments to any registration statement and such supplement
or supplements to any prospectus as, in the light of future
developments, may, in the opinion of the Fund's counsel, be
necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Fund of a written
request from you to do so, you may, at your option,
terminate this agreement or decline to make offers of the
Fund's securities until such amendments are made. The Fund
shall not file any amendment to any registration statement
or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however,
that nothing contained in this agreement shall in any way
limit the Fund's right to file at any time such amendments
to any registration statement and/or supplements to any pro-
spectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus
in the form furnished to you from time to time, in con-
nection with the sale of Shares. The Fund agrees to
indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the
meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection
therewith) which you, your officers and directors, or any
such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise,
arising out of or based upon any untrue statement, or
alleged untrue statement, of a material fact contained in
any registration statement or any prospectus or arising out
of or based upon any omission, or alleged omission, to state
a material fact required to be stated in either any regis-
tration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided,
however, that the Fund's agreement to indemnify you, your
officers or directors, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or
expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission made in any
registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by
you specifically for use in the preparation thereof. The
Fund's agreement to indemnify you, your officers and
directors, and any such controlling person, as aforesaid, is
expressly conditioned upon the Fund's being notified of any
action brought against you, your officers or directors, or
any such controlling person, such notification to be given
by letter or by telegram addressed to the Fund at its
address set forth above within ten days after the summons or
other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have
to the person against whom such action is brought by reason
of any such untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of
the Fund's indemnity agreement contained in this para-
graph 1.9. The Fund will be entitled to assume the defense
of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be con-
ducted by counsel of good standing chosen by the Fund and
approved by you. In the event the Fund elects to assume the
defense of any such suit and retain counsel of good standing
approved by you, the defendant or defendants in such suit
shall bear the fees and expenses of any additional counsel
retained by any of them; but in case the Fund does not elect
to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the control-
ling person or persons named as defendant or defendants in
such suit, for the fees and expenses of any counsel retained
by you or them. The Fund's indemnification agreement
contained in this paragraph 1.9 and the Fund's
representations and warranties in this agreement shall
remain operative and in full force and effect regardless of
any investigation made by or on behalf of you, your officers
and directors, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity
will inure exclusively to your benefit, to the benefit of
your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and
their successors. The Fund agrees promptly to notify you of
the commencement of any litigation or proceedings against
the Fund or any of its officers or Board members in connec-
tion with the issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the
Fund, its several officers and Board members, and any person
who controls the Fund within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities
and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the
Fund, its officers or Board members, or any such controlling
person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund,
its officers or Board members, or such controlling person
resulting from such claims or demands, shall arise out of or
be based upon any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing
by you to the Fund specifically for use in the Fund's
registration statement and used in the answers to any of the
items of the registration statement or in the corresponding
statements made in the prospectus, or shall arise out of or
be based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished
in writing by you to the Fund and required to be stated in
such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its
officers and Board members, and any such controlling person,
as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its
officers or Board members, or any such controlling person,
such notification to be given by letter or telegram
addressed to you at your address set forth above within ten
days after the summons or other first legal process shall
have been served. You shall have the right to control the
defense of such action, with counsel of your own choosing,
satisfactory to the Fund, if such action is based solely
upon such alleged misstatement or omission on your part, and
in any other event the Fund, its officers or Board members,
or such controlling person shall each have the right to par-
ticipate in the defense or preparation of the defense of any
such action. The failure so to notify you of any such
action shall not relieve you from any liability which you
may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or
alleged untrue, statement or omission, or alleged omission,
otherwise than on account of your indemnity agreement
contained in this paragraph 1.10. This agreement of
indemnity will inure exclusively to the Fund's benefit, to
the benefit of the Fund's officers and Board members, and
their respective estates, and to the benefit of any
controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of
any litigation or proceedings against you or any of your
officers or directors in connection with the issue and sale
of Shares.
1.11 No Shares shall be offered by either you or
the Fund under any of the provisions of this agreement and
no orders for the purchase or sale of such Shares hereunder
shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect
or any necessary amendments thereto shall be suspended under
any of the provisions of the Securities Act of 1933, as
amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on
file with the Securities and Exchange Commission; provided,
however, that nothing contained in this paragraph 1.11 shall
in any way restrict or have an application to or bearing
upon the Fund's obligation to repurchase any Shares from any
shareholder in accordance with the provisions of the Fund's
prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the reg-
istration statement or prospectus then in effect
or for additional information;
(b) in the event of the issuance by the
Securities and Exchange Commission of any stop
order suspending the effectiveness of the regis-
tration statement or prospectus then in effect or
the initiation of any proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in
the registration statement or prospectus then in
effect or which requires the making of a change in
such registration statement or prospectus in order
to make the statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments
to any registration statement or prospectus which
may from time to time be filed with the Securities
and Exchange Commission.
2. Offering Price
Shares of any class of the Fund offered for sale
by you shall be offered for sale at a price per share (the
"offering price") approximately equal to (a) their net asset
value (determined in the manner set forth in the Fund's
charter documents) plus (b) a sales charge, if any and
except to those persons set forth in the then-current
prospectus, which shall be the percentage of the offering
price of such Shares as set forth in the Fund's then-current
prospectus. The offering price, if not an exact multiple of
one cent, shall be adjusted to the nearest cent. In
addition, Shares of any class of the Fund offered for sale
by you may be subject to a contingent deferred sales charge
as set forth in the Fund's then-current prospectus. You
shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any
payments to dealers shall be governed by a separate
agreement between you and such dealer and the Fund's then-
current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if
the Fund has Series, a separate Reapproval Date shall be
specified on Exhibit A for each Series), and thereafter
shall continue automatically for successive annual periods
ending on the day (the "Reapproval Day") of each year set
forth on Exhibit A hereto, provided such continuance is
specifically approved at least annually by (i) the Fund's
Board or (ii) vote of a majority (as defined in the Invest-
ment Company Act of 1940) of the Shares of the Fund or the
relevant Series, as the case may be, provided that in either
event its continuance also is approved by a majority of the
Board members who are not "interested persons" (as defined
in said Act) of any party to this agreement, by vote cast in
person at a meeting called for the purpose of voting on such
approval. This agreement is terminable without penalty, on
60 days' notice, by vote of holders of a majority of the
Fund's or, as to any relevant Series, such Series'
outstanding voting securities or by the Fund's Board as to
the Fund or the relevant Series, as the case may be. This
agreement is terminable by you, upon 270 days' notice,
effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically,
as to the Fund or relevant Series, as the case may be, in
the event of its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares,
you shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons
employed by you to assist in the performance of your duties
under this agreement may not devote their full time to such
service and nothing contained in this agreement shall be
deemed to limit or restrict your or any of your affiliates
right to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
Please confirm that the foregoing is in accordance
with your understanding and indicate your acceptance hereof
by signing below, whereupon it shall become a binding agree-
ment between us.
Very truly yours,
DREYFUS INVESTMENT GRADE BOND
FUNDS, INC.
By: _________________________
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
<PAGE>
EXHIBIT A
Name of Series Reapproval Date Reapproval
Day
Dreyfus Intermediate
Term Fund July 29, 1997 July 29th
Dreyfus Short-Term
Income Fund July 29, 1995 July 29th
<PAGE>
Exhibit (8)(a)
CUSTODY AGREEMENT
Custody Agreement made as of July 29, 1992, as
amended and restated August 24, 1995 between DREYFUS
INVESTMENT GRADE BOND FUNDS, INC., a corporation organized
and existing under the laws of the State of Maryland, having
its principal office and place of business at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a
New York corporation authorized to do a banking business,
having its principal office and place of business at 90
Washington Street, New York, New York 10286 (hereinafter
called the "Custodian").
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:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires,
shall have the following meanings:
1. "Authorized Person" shall be deemed to include
the Treasurer, the Controller or any other person, whether
or not any such person is an Officer or employee of the
Fund, duly authorized by the Fund's Board to give Oral
Instructions and Written Instructions on behalf of the Fund
and listed in the Certificate annexed hereto as Appendix A
or such other Certificate as may be received by the
Custodian from time to time.
2. "Available Balance" shall mean for any given
day during a calendar year the aggregate amount of Federal
Funds held in the Fund's custody account(s) at The Bank of
New York, or its successors, as of the close of such day or,
if such day is not a business day, the close of the
preceding business day.
3. "Bankruptcy" shall mean with respect to a
party such party's making a general assignment, arrangement
or composition with or for the benefit of its creditors, or
instituting or having instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or the entry
of an order for relief under the Federal bankruptcy law or
any other relief under any bankruptcy or insolvency law or
other similar law affecting creditors' rights, or if a
petition is presented for the winding up or liquidation of
the party or a resolution is passed for its winding up or
liquidation, or it seeks, or becomes subject to, the
appointment of an administrator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all of its assets or its taking any action in
furtherance of, or indicating its consent to approval of, or
acquiescence in, any of the foregoing.
4. "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.
5. "Call Option" shall mean an exchange traded
option with respect to Securities other than Stock Index
Options, Futures Contracts and Futures Contract Options
entitling the holder, upon timely exercise and payment of
the exercise price, as specified therein, to purchase from
the writer thereof the specified underlying Securities.
6. "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 Officers of the Fund.
7. "Clearing Member" shall mean a registered
broker-dealer which is a clearing member under the rules of
O.C.C. and a member of a national securities exchange
qualified to act as a custodian for an investment company,
or any broker-dealer reasonably believed by the Custodian to
be such a clearing member.
8. "Collateral Account" shall mean a segregated
account so denominated and pledged to the Custodian as
security for, and in consideration of, the Custodian's
issuance of (a) any Put Option guarantee letter or similar
document described in paragraph 8 of Article V herein, or
(b) any receipt described in Article V or VIII herein.
9. "Consumer Price Index" shall mean the U.S.
Consumer Price Index, all items and all urban consumers,
U.S. city average 1982-84 equals 100, as first published
without seasonal adjustment by the Bureau of Labor
Statistics, the Department of Labor, without regard to
subsequent revisions or corrections by such Bureau.
10. "Covered Call Option" shall mean an exchange
traded option entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to
purchase from the writer thereof the specified Securities
(excluding Futures Contracts) which are owned by the writer
thereof and subject to appropriate restrictions.
11. "Depository" shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the
Securities and Exchange Commission, its successor or
successors and its nominee or nominees, provided the
Custodian has received a certified copy of a resolution of
the Fund's Board specifically approving deposits in DTC.
The term "Depository" shall further mean and include any
other person authorized to act as a depository under the
Investment Company Act of 1940, as amended, its successor or
successors and its nominee or nominees, specifically
identified in a certified copy of a resolution of the Fund's
Board specifically approving deposits therein by the
Custodian.
12. "Earnings Credit" shall mean for any given
day during a calendar year the product of (a) the Federal
Funds Rate for such date minus .25%, and (b) 82% of the
Available Balance.
13. "Federal Funds" shall mean immediately
available same day funds.
14. "Federal Funds Rate" shall mean, for any day,
the Federal Funds (Effective) interest rate so denominated
as published in Federal Reserve Statistical Release H.15
(519) and applicable to such day and each succeeding day
which is not a business day.
15. "Financial Futures Contract" shall mean the
firm commitment to buy or sell fixed income securities,
including, without limitation, U.S. Treasury Bills, U.S.
Treasury Notes, U.S. Treasury Bonds, domestic bank
certificates of deposit, and Eurodollar certificates of
deposit, during a specified month at an agreed upon price.
16. "Futures Contract" shall mean a Financial
Futures Contract and/or Stock Index Futures Contracts.
17. "Futures Contract Option" shall mean an
option with respect to a Futures Contract.
18. "Margin Account" shall mean a segregated
account in the name of a broker, dealer, futures commission
merchant or Clearing Member, or in the name of the Fund for
the benefit of a broker, dealer, futures commission merchant
or Clearing Member, or otherwise, in accordance with an
agreement between the Fund, the Custodian and a broker,
dealer, futures commission merchant or Clearing Member (a
"Margin Account Agreement"), separate and distinct from the
custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time
in connection with such transactions as the Fund may from
time to time determine. Securities held in the Book-Entry
System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and
records.
19. "Merger" shall mean with respect to a party,
the consolidation or amalgamation with, merger into, or
transfer of all or substantially all of such party's assets
to, another entity, where such party is not the surviving
entity.
20. "Money Market Security" shall be deemed to
include, without limitation, debt obligations issued or
guaranteed as to principal and interest by the government of
the United States or agencies or instrumentalities thereof,
commercial paper, certificates of deposit and bankers'
acceptances, repurchase and reverse repurchase agreements
with respect to the same and bank time deposits, where the
purchase and sale of such securities ordinarily requires
settlement in Federal funds on the same date as such
purchase or sale.
21. "O.C.C." shall mean Options Clearing
Corporation, a clearing agency registered under Section 17A
of the Securities Exchange Act of 1934, its successor or
successors, and its nominee or nominees.
22. "Officers" shall be deemed to include the
President, any Vice President, the Secretary, the Treasurer,
the Controller, any Assistant Secretary, any Assistant
Treasurer or any other person or persons duly authorized by
the Fund's Board to execute any Certificate, instruction,
notice or other instrument on behalf of the Fund and listed
in the Certificate annexed hereto as Appendix B or such
other Certificate as may be received by the Custodian from
time to time.
23. "Option" shall mean a Call Option, Covered
Call Option, Stock Index Option and/or a Put Option.
24. "Oral Instructions" shall mean verbal
instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by
the Custodian to be an Authorized Person.
25. "Put Option" shall mean an exchange traded
option with respect to Securities other than Stock Index
Options, Futures Contracts, and Futures Contract Options
entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to
the writer thereof for the exercise price.
26. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Fund sells Securities and
agrees to repurchase such Securities at a described or
specified date and price.
27. "Security" shall be deemed to include,
without limitation, Money Market Securities, Call Options,
Put Options, Stock Index Options, Stock Index Futures
Contracts, Stock Index Futures Contract Options, Financial
Futures Contracts, Financial Futures Contract Options,
Reverse Repurchase Agreements, common stock and other
instruments or rights having characteristics similar to
common stocks, preferred stocks, debt obligations issued by
state or municipal governments and by public authorities
(including, without limitation, general obligation bonds,
revenue bonds and industrial bonds and industrial
development bonds), bonds, debentures, notes, mortgages or
other obligations, and any certificates, receipts, warrants
or other instruments representing rights to receive,
purchase, sell or subscribe for the same, or evidencing or
representing any other rights or interest therein, or any
property or assets.
28. "Segregated Security Account" shall mean an
account maintained under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the
custody account in which certain Securities and/or other
assets of the Fund shall be deposited and withdrawn from
time to time in accordance with Certificates received by the
Custodian in connection with such transactions as the Fund
may from time to time determine.
29. "Series" shall mean (i) the Series of the
Fund specified on Appendix D hereto, or, where the context
requires each such Series, or (ii) if no Series are set
forth on such Appendix, the Fund.
30. "Shares" shall mean the shares of Common
Stock of the Fund, each of which, in the case of a Fund
having Series, is allocated to a particular Series.
31. "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties agree to
take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the
value of a particular stock index at the close of the last
business day of the contract and the price at which the
futures contract is originally struck.
32. "Stock Index Option" shall mean an exchange
traded option entitling the holder, upon timely exercise, to
receive an amount of cash determined by reference to the
difference between the exercise price and the value of the
index on the date of exercise.
33. "Written Instructions" shall mean written
communications actually received by the Custodian from an
Authorized Person or from a person reasonably believed by
the Custodian to be an Authorized Person by telex or any
other such system whereby the receiver of such
communications is able to verify by codes or otherwise with
a reasonable degree of certainty the authenticity of the
sender of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of all the Securities and moneys at
any time owned by the Fund during the period of this
Agreement, except that (a) if the Custodian fails to provide
for the custody of any of the Fund's Securities and moneys
located or to be located outside the United States in a
manner satisfactory to the Fund, the Fund shall be permitted
to arrange for the custody of such Securities and moneys
located or to be located outside the United States other
than through the Custodian at rates to be negotiated and
borne by the Fund and (b) if the Custodian fails to continue
any existing sub-custodial or similar arrangements on
substantially the same terms as exist on the date of this
Agreement, the Fund shall be permitted to arrange for such
or similar services other than through the Custodian at
rates to be negotiated and borne by the Fund. The Custodian
shall not charge the Fund for any such terminated services
after the date of such termination.
2. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as
hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, the Fund will deliver or
cause to be delivered to the Custodian all Securities and
all moneys owned by any Series, including cash received for
the issuance of such Series' shares, at any time during the
period of this Agreement and shall specify the Series, if
any, to which the same are to be specifically allocated.
The Custodian will not be responsible for such Securities
and such moneys until actually received by it. The
Custodian will be entitled to reverse any credits made on a
Series' behalf where such credits have been previously made
and moneys are not finally collected. The Fund shall
deliver to the Custodian a certified resolution of the
Fund's Board approving, authorizing and instructing the
Custodian on a continuous and on-going basis to deposit in
the Book-Entry System all Securities eligible for deposit
therein and to utilize the Book-Entry System to the extent
possible in connection with its performance hereunder,
including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities
collateral. Prior to a deposit of Securities of a Series in
the Depository, the Fund shall deliver to the Custodian a
certified resolution of the Fund's Board approving,
authorizing and instructing the Custodian on a continuous
and on-going basis until instructed to the contrary by a
Certificate actually received by the Custodian to deposit in
the Depository all Securities eligible for deposit therein
and to utilize the Depository to the extent possible in
connection with its performance hereunder, including,
without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities
and moneys of such Series deposited in either 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 in which
the Custodian acts in a fiduciary or representative
capacity. Prior to the Custodian's accepting, utilizing and
acting with respect to Clearing Member confirmations for
Options and transactions in Options as provided in this
Agreement, the Custodian shall have received a certified
resolution of the Fund's Board approving, authorizing and
instructing the Custodian on a continuous and on-going
basis, until instructed to the contrary by a Certificate
actually received by the Custodian, to accept, utilize and
act in accordance with such confirmations as provided in
this Agreement.
2. The Custodian shall credit to a separate
account in the name of the Fund for each Series all moneys
received by it for the account of the Fund, with respect to
such Series. Money credited to the separate account for a
Series shall be disbursed by the Custodian only:
(a) In payment for Securities purchased, as
provided in Article IV hereof;
(b) In payment of dividends or distributions, as
provided in Article XI hereof;
(c) In payment of original issue or other taxes,
as provided in Article XII hereof;
(d) In payment for Shares redeemed by it, as
provided in Article XII hereof;
(e) Pursuant to Certificates setting forth the
name and address of the person to whom the payment is to be
made, the Series account from which payment is to be made
and the purpose for which payment is to be made; or
(f) In payment of the fees and in reimbursement
of the expenses and liabilities of the Custodian, as
provided in Article XV hereof.
3. 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
each Series during said day. Where Securities are
transferred to the account of a Series, the Custodian shall
also by book-entry or otherwise identify as belonging to
such Series a quantity of Securities 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 Book-Entry System or the Depository. At least monthly
and from time to time, the Custodian shall furnish the Fund
with a detailed statement of the Securities and moneys held
for each Series under this Agreement.
4. Except as otherwise provided in paragraph 7 of
this Article and in Article VIII, all Securities held for a
Series, 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 a Series may be registered in the name
of such Series, 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 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 a Series and which may from time
to time be registered in the name of such Series. The
Custodian shall hold all such Securities which are not held
in the Book-Entry System or in the Depository in a separate
account in the name of such Series physically segregated at
all times from those of any other person or persons.
5. Except as otherwise provided in this Agreement
and 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 each Series in accordance with this
Agreement:
(a) Collect all income due or payable and, in any
event, if the Custodian receives a written notice from the
Fund specifying that an amount of income should have been
received by the Custodian within the last 90 days, the
Custodian will provide a conditional payment of income
within 60 days from the date the Custodian received such
notice, unless the Custodian reasonably concludes that such
income was not due or payable to the Fund, provided that the
Custodian may reverse any such conditional payment upon its
reasonably concluding that all or any portion of such income
was not due or payable, and provided further that the
Custodian shall not be liable for failing to collect on a
timely basis the full amount of income due or payable in
respect of a "floating rate instrument" or "variable rate
instrument" (as such terms are defined under Rule 2a-7 under
the Investment Company Act of l940, as amended) if it has
acted in good faith, without negligence or willful
misconduct.
(b) Present for payment and collect the amount
payable upon such Securities which are called, but only if
either (i) the Custodian receives 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
business days' prior notification to the Fund;
(c) Present for payment and collect the amount
payable upon all Securities which may mature;
(d) Surrender Securities in temporary form for
definitive Securities;
(e) Execute, as Custodian, 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
(f) Hold directly, or through the Book-Entry
System or the Depository with respect to Securities therein
deposited, for the account of each Series all rights and
similar securities issued with respect to any Securities
held by the Custodian hereunder.
6. Upon receipt of a Certificate and not
otherwise, the Custodian, directly or through the use of the
Book-Entry System or the Depository, shall:
(a) Execute and deliver 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;
(b) Deliver any Securities held for the Series 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;
(c) Deliver any Securities held for the Series to
any protective committee, reorganization committee or other
person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of
any corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued
to it to evidence such delivery;
(d) Make such transfers or exchanges of the
assets of the Series and take such other steps as shall be
stated in said order to be for the purpose of effectuating
any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund; and
(e) Present for payment and collect the amount
payable upon Securities not described in preceding
paragraph 5(b) of this Article which may be called as
specified in the Certificate.
7. Notwithstanding any provision elsewhere
contained herein, the Custodian shall not be required to
obtain possession of any instrument or certificate
representing any Futures Contract, Option or Futures
Contract Option until after it shall have determined, or
shall have received a Certificate from the Fund stating,
that any such instruments or certificates are available.
The Fund shall deliver to the Custodian such a Certificate
no later than the business day preceding the availability of
any such instrument or certificate. Prior to such
availability, the Custodian shall comply with Section 17(f)
of the Investment Company Act of 1940, as amended, in
connection with the purchase, sale, settlement, closing out
or writing of Futures Contracts, Options or Futures Contract
Options by making payments or deliveries specified in
Certificates received by the Custodian in connection with
any such purchase, sale, writing, settlement or closing out
upon its receipt from a broker, dealer or futures commission
merchant of a statement or confirmation reasonably believed
by the Custodian to be in the form customarily used by
brokers, dealers, or futures commission merchants with
respect to such Futures Contracts, Options or Futures
Contract Options, as the case may be, confirming that such
Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the
name of the Custodian (or any nominee of the Custodian) as
custodian for the Fund, provided, however, that payments to
or deliveries from the Margin Account shall be made in
accordance with the terms and conditions of the Margin
Account Agreement. Whenever any such instruments or
certificates are available, the Custodian shall,
notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option or
Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the
Custodian of such instrument or such certificate, and
deliver any Futures Contract, Option or Futures Contract
Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment
therefor. Any such instrument or certificate delivered to
the Custodian shall be held by the Custodian hereunder in
accordance with, and subject to, the provisions of this
Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN
OPTIONS,
FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS
1. Promptly after each purchase of Securities by
the Fund, other than a purchase of any Option, Futures
Contract, Futures Contract Option or Reverse Repurchase
Agreement, 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, a Certificate,
Oral Instructions or Written Instructions, specifying with
respect to each such purchase: (a) the Series to which the
Securities purchased are to be specifically allocated; (b)
the name of the issuer and the title of the Securities; (c)
the number of shares or the principal amount purchased and
accrued interest, if any; (d) the date of purchase and
settlement; (e) the purchase price per unit; (f) the total
amount payable upon such purchase; (g) the name of the
person from whom or the broker through whom the purchase was
made, and the name of the clearing broker, if any; and
(h) the name of the broker to which payment is to be made.
The Custodian shall, upon receipt of Securities purchased by
or for such Series, pay out of the moneys held for the
account of such Series the total amount payable to the
person from whom, or the broker through whom, the purchase
was made, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral
Instructions or Written Instructions.
2. Promptly after each sale of Securities by the
Fund, other than a sale of any Option, Futures Contract,
Futures Contract Option or Reverse Repurchase Agreement, 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, a Certificate, Oral Instructions or
Written Instructions, specifying with respect to each such
sale: (a) the Series to which such Securities sold were
specifically allocated; (b) the name of the issuer and the
title of the Security; (c) the number of shares or principal
amount sold, and accrued interest, if any; (d) the date of
sale; (e) the sale price per unit; (f) the total amount
payable to such Series upon such sale; (g) the name of the
broker through whom or the person to whom the sale was made,
and the name of the clearing broker, if any; and (h) the
name of the broker to whom the Securities are to be
delivered. The Custodian shall deliver the Securities upon
receipt of the total amount payable to the Fund for the
account of such Series upon such sale, provided that the
same conforms to the total amount payable as set forth in
such Certificate, Oral Instructions or Written Instructions.
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.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by
the Fund, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each Option
purchased: (a) the Series to which the Option purchased is
to be specifically allocated; (b) the type of Option (put or
call); (c) the name of the issuer and the title and number
of shares subject to such Option or, in the case of a Stock
Index Option, the stock index to which such Option relates
and the number of Stock Index Options purchased; (d) the
expiration date; (e) the exercise price; (f) the dates of
purchase and settlement; (g) the total amount payable by the
Fund for the account of such Series in connection with such
purchase; (h) the name of the Clearing Member through which
such Option was purchased; and (i) the name of the broker to
whom payment is to be made. The Custodian shall pay, upon
receipt of a Clearing Member's statement confirming the
purchase of such Option held by such Clearing Member for the
account of the Custodian (or any duly appointed and
registered nominee of the Custodian) as custodian for the
Fund, out of moneys held for the account of such Series, the
total amount payable upon such purchase to the Clearing
Member through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in
such Certificate.
2. Promptly after the sale of any Option
purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with
respect to each such sale: (a) the Series to which the
Option sold was specifically allocated; (b) the type of
Option (put or call); (c) the name of the issuer and the
title and number of shares subject to such Option or, in the
case of a Stock Index Option, the stock index to which such
Option relates and the number of Stock Index Options sold;
(d) the date of sale; (e) the sale price; (f) the date of
settlement; (g) the total amount payable to the Fund for the
account of such Series upon such sale; and (h) the name of
the Clearing Member through which the sale was made. The
Custodian shall consent to the delivery of the Option sold
by the Clearing Member which previously supplied the
confirmation described in preceding paragraph 1 of this
Article with respect to such Option against payment to the
Custodian of the total amount payable to the Fund for the
account of such Series, provided that the same conforms to
the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any
Call Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Call Option:
(a) the Series to which the Call Option exercised was
specifically allocated; (b) the name of the issuer and the
title and number of shares subject to the Call Option;
(c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total
amount to be paid by the Fund for the account of such Series
upon such exercise; and (g) the name of the Clearing Member
through which such Call Option was exercised. The Custodian
shall, upon receipt of the Securities underlying the Call
Option which was exercised, pay out of the moneys held for
the account of such Series the total amount payable to the
Clearing Member through whom the Call Option was exercised,
provided that the same conforms to the total amount payable
as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any
Put Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Put Option: (a)
the Series to which the Put Option exercised was
specifically allocated; (b) the name of the issuer and the
title and number of shares subject to the Put Option;
(c) the expiration date; (d) the date of exercise and
settlement; (e) the exercise price per share; (f) the total
amount to be paid to the Fund for the account of such Series
upon such exercise; and (g) the name of the Clearing Member
through which such Put Option was exercised. The Custodian
shall, upon receipt of the amount payable upon the exercise
of the Put Option, deliver or direct the Depository to
deliver the Securities, provided the same conforms to the
amount payable to the Fund for the account of such Series as
set forth in such Certificate.
5. Promptly after the exercise by the Fund of any
Stock Index Option purchased by the Fund pursuant to para-
graph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Stock Index
Option: (a) the Series to which the Stock Index Option
exercised was specifically allocated; (b) the type of Stock
Index Option (put or call); (c) the number of Options being
exercised; (d) the stock index to which such Option relates;
(e) the expiration date; (f) the exercise price; (g) the
total amount to be received by the Fund for the account of
such Series in connection with such exercise; and (h) the
Clearing Member from which such payment is to be received.
6. Whenever the Fund writes a Covered Call
Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Covered Call
Option: (a) the Series to which the Covered Call Option
written is to be specifically allocated; (b) the name of the
issuer and the title and number of shares for which the
Covered Call Option was written and which underlie the same;
(c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund for the account of such
Series; (f) the date such Covered Call Option was written;
and (g) the name of the Clearing Member through which the
premium is to be received. The Custodian shall deliver or
cause to be delivered, in exchange for receipt of the
premium specified in the Certificate with respect to such
Covered Call Option, such receipts as are required in
accordance with the customs prevailing among Clearing
Members dealing in Covered Call Options and shall impose, or
direct the Depository to impose, upon the underlying
Securities specified in the Certificate such restrictions as
may be required by such receipts. Notwithstanding the
foregoing, the Custodian has the right, upon prior written
notification to the Fund, at any time to refuse to issue any
receipts for Securities in the possession of the Custodian
and not deposited with the Depository underlying a Covered
Call Option.
7. Whenever a Covered Call Option written by the
Fund and described in the preceding paragraph of this
Article is exercised, the Fund shall promptly deliver to the
Custodian a Certificate instructing the Custodian to
deliver, or to direct the Depository to deliver, the
Securities subject to such Covered Call Option and
specifying: (a) the Series to which the Covered Call Option
exercised was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the
Covered Call Option; (c) the Clearing Member to whom the
underlying Securities are to be delivered; and (d) the total
amount payable to the Fund for the account of such Series
upon such delivery. Upon the return and/or cancellation of
any receipts delivered pursuant to paragraph 6 of this
Article, the Custodian shall deliver, or direct the
Depository to deliver, the underlying Securities as
specified in the Certificate for the amount to be received
as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Put Option: (a) the Series
to which the Put Option written is to be specifically
allocated; (b) the name of the issuer and the title and
number of shares for which the Put Option is written and
which underlie the same; (c) the expiration date; (d) the
exercise price; (e) the premium to be received by the Fund
for the account of such Series; (f) the date such Put Option
is written; (g) the name of the Clearing Member through
which the premium is to be received and to whom a Put Option
guarantee letter is to be delivered; (h) the amount of cash,
and/or the amount and kind of Securities, if any, to be
deposited in the Segregated Security Account; and (i) the
amount of cash and/or the amount and kind of Securities to
be deposited into the Collateral Account. The Custodian
shall, after making the deposits into the Collateral Account
specified in the Certificate, issue a Put Option guarantee
letter substantially in the form utilized by the Custodian
on the date hereof, and deliver the same to the Clearing
Member specified in the Certificate against receipt of the
premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to
issue any Put Option guarantee letter or similar document if
it is unable to make any of the representations contained
therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund
shall promptly deliver to the Custodian a Certificate
specifying: (a) the Series to which the Put Option
exercised was specifically allocated; (b) the name of the
issuer and title and number of shares subject to the Put
Option; (c) the Clearing Member from which the underlying
Securities are to be received; (d) the total amount payable
by the Fund upon such delivery; (e) the amount of cash
and/or the amount and kind of Securities to be withdrawn
from the Collateral Account; and (f) the amount of cash
and/or the amount and kind of Securities, if any, to be
withdrawn from the Segregated Security Account. Upon the
return and/or cancellation of any Put Option guarantee
letter or similar document issued by the Custodian in
connection with such Put Option, the Custodian shall pay out
of the moneys held for the account of such Series the total
amount payable to the Clearing Member specified in the
Certificate as set forth in such Certificate, and shall make
the withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index
Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Stock Index
Option: (a) the Series to which the Stock Index Option
written is to be specifically allocated; (b) whether such
Stock Index Option is a put or a call; (c) the number of
Options written; (d) the stock index to which such Option
relates; (e) the expiration date; (f) the exercise price;
(g) the Clearing Member through which such Option was
written; (h) the premium to be received by the Fund for the
account of such Series; (i) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in
the Segregated Security Account; (j) the amount of cash
and/or the amount and kind of Securities, if any, to be
deposited in the Collateral Account; and (k) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in a Margin Account, and the name in which such
account is to be or has been established. The Custodian
shall, upon receipt of the premium specified in the
Certificate, make the deposits, if any, into the Segregated
Security Account specified in the Certificate, and either
(1) deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with
the customs prevailing among Clearing Members in Stock Index
Options and make the deposits into the Collateral Account
specified in the Certificate, or (2) make the deposits into
the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the
Fund and described in the preceding paragraph of this
Article is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to such
Stock Index Option: (a) the Series to which the Stock Index
Option exercised was specifically allocated; (b) such
information as may be necessary to identify the Stock Index
Option being exercised; (c) the Clearing Member through
which such Stock Index Option is being exercised; (d) the
total amount payable upon such exercise, and whether such
amount is to be paid by or to the Fund for the account of
such Series; (e) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Margin
Account; and (f) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Segregated
Security Account and the amount of cash and/or the amount
and kind of Securities, if any, to be withdrawn from the
Collateral Account.
Upon the return and/or cancellation of the receipt, if any,
delivered pursuant to the preceding paragraph of this
Article, the Custodian shall pay to the Clearing Member
specified in the Certificate the total amount payable, if
any, as specified therein.
12. Whenever the Fund purchases any Option
identical to a previously written Option described in para-
graphs 6, 8 or 10 of this Article in a transaction expressly
designated as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Fund
shall promptly deliver to the Custodian a Certificate
specifying with respect to the Option being purchased: (a)
the Series to which the Option purchased is to be
specifically allocated; (b) that the transaction is a
Closing Purchase Transaction; (c) the name of the issuer and
the title and number of shares subject to the Option, or, in
the case of a Stock Index Option, the stock index to which
such Option relates and the number of Options held; (d) the
exercise price; (e) the premium to be paid by the Fund for
the account of such Series; (f) the expiration date; (g) the
type of Option (put or call); (h) the date of such purchase;
(i) the name of the Clearing Member to which the premium is
to be paid; and (j) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the
Collateral Account, a specified Margin Account or the
Segregated Security Account. Upon the Custodian's payment
of the premium and the return and/or cancellation of any
receipt issued pursuant to paragraphs 6, 8 or 10 of this
Article with respect to the Option being liquidated through
the Closing Purchase Transaction, the Custodian shall
remove, or direct the Depository to remove, the previously
imposed restrictions on the Securities underlying the Call
Option.
13. Upon the expiration or exercise of, or
consummation of a Closing Purchase Transaction with respect
to, any Option purchased or written by the Fund and
described in this Article, the Custodian shall delete such
Option from the statements delivered to the Fund for the
account of a Series pursuant to paragraph 3 of Article III
herein, and upon the return and/or cancellation of any
receipts issued by the Custodian, shall make such
withdrawals from the Collateral Account, the Margin Account
and/or the Segregated Security Account as may be specified
in a Certificate received in connection with such
expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Futures Contract
(or with respect to any number of identical Futures
Contract(s)): (a) the Series to which the Futures Contract
entered into is to be specifically allocated; (b) the
category of Futures Contract (the name of the underlying
stock index or financial instrument); (c) the number of
identical Futures Contracts entered into; (d) the delivery
or settlement date of the Futures Contract(s); (e) the date
the Futures Contract(s) was (were) entered into and the
maturity date; (f) whether the Fund is buying (going long)
or selling (going short) on such Futures Contract(s); (g)
the amount of cash and/or the amount and kind of Securities,
if any, to be deposited in the Segregated Security Account;
(h) the name of the broker, dealer or futures commission
merchant through which the Futures Contract was entered
into; and (i) the amount of fee or commission, if any, to be
paid and the name of the broker, dealer or futures
commission merchant to whom such amount is to be paid. The
Custodian shall make the deposits, if any, to the Margin
Account in accordance with the terms and conditions of the
Margin Account Agreement. The Custodian shall make payment
of the fee or commission, if any, specified in the
Certificate and deposit in the Segregated Security Account
the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar
payment required to be made by the Fund for the account of a
Series to a broker, dealer or futures commission merchant
with respect to an outstanding Futures Contract shall be
made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar
payment from a broker, dealer or futures commission merchant
to the Fund with respect to an outstanding Futures Contract
shall be received and dealt with by the Custodian in
accordance with the terms and conditions of the Margin
Account Agreement.
3. Whenever a Futures Contract held by the
Custodian hereunder is retained by the Fund until delivery
or settlement is made on such Futures Contract, the Fund
shall deliver to the Custodian a Certificate specifying:
(a) the Series to which the Futures Contract retained is to
be specifically allocated; (b) the Futures Contract; (c)
with respect to a Stock Index Futures Contract, the total
cash settlement amount to be paid or received, and with
respect to a Financial Futures Contract, the Securities
and/or amount of cash to be delivered or received; (d) the
broker, dealer or futures commission merchant to or from
which payment or delivery is to be made or received; and (e)
the amount of cash and/or Securities to be withdrawn from
the Segregated Security Account. The Custodian shall make
the payment or delivery specified in the Certificate and
delete such Futures Contract from the statements delivered
to the Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a
Certificate specifying: (a) the Series to which the
offsetting Futures Contract is to be specifically allocated;
(b) the items of information required in a Certificate
described in paragraph 1 of this Article, and (c) the
Futures Contract being offset. The Custodian shall make
payment of the fee or commission, if any, specified in the
Certificate and delete the Futures Contract being offset
from the statements delivered to the Fund for the account of
such Series pursuant to paragraph 3 of Article III herein,
and make such withdrawals from the Segregated Security
Account as may be specified in such Certificate. The
withdrawals, if any, to be made from the Margin Account
shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures
Contract Option by the Fund, the Fund shall deliver to the
Custodian a Certificate specifying with respect to such
Futures Contract Option: (a) the Series to which the
Futures Contract Option purchased is to be specifically
allocated; (b) the type of Futures Contract Option (put or
call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures
Contract underlying the Futures Contract Option purchased;
(d) the expiration date; (e) the exercise price; (f) the
dates of purchase and settlement; (g) the amount of premium
to be paid by the Fund for the account of such Series upon
such purchase; (h) the name of the broker or futures
commission merchant through which such option was purchased;
and (i) the name of the broker or futures commission
merchant to whom payment is to be made. The Custodian shall
pay the total amount to be paid upon such purchase to the
broker or futures commission merchant through whom the
purchase was made, provided that the same conforms to the
amount set forth in such Certificate.
2. Promptly after the sale of any Futures
Contract Option purchased by the Fund pursuant to para-
graph 1 hereof, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such
sale: (a) the Series to which the Futures Contract Option
sold was specifically allocated; (b) the type of Futures
Contract Option (put or call); (c) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures
Contract Option; (d) the date of sale; (e) the sale price;
(f) the date of settlement; (g) the total amount payable to
the Fund for the account of such Series upon such sale; and
(h) the name of the broker or futures commission merchant
through which the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option
being closed against payment to the Custodian of the total
amount payable to the Fund for the account of such Series,
provided the same conforms to the total amount payable as
set forth in such Certificate.
3. Whenever a Futures Contract Option purchased
by the Fund pursuant to paragraph 1 is exercised by the
Fund, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which the Futures
Contract Option exercised was specifically allocated; (b)
the particular Futures Contract Option (put or call) being
exercised; (c) the type of Futures Contract underlying the
Futures Contract Option; (d) the date of exercise; (e) the
name of the broker or futures commission merchant through
which the Futures Contract Option is exercised; (f) the net
total amount, if any, payable by the Fund; (g) the amount,
if any, to be received by the Fund for the account of such
Series; and (h) the amount of cash and/or the amount and
kind of Securities to be deposited in the Segregated
Security Account. The Custodian shall make the payments, if
any, and the deposits, if any, into the Segregated Security
Account as specified in the Certificate. The deposits, if
any, to be made to the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract
Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Futures Contract
Option: (a) the Series to which the Futures Contract Option
written is to be specifically allocated; (b) the type of
Futures Contract Option (put or call); (c) the type of
Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the
Futures Contract Option; (d) the expiration date; (e) the
exercise price; (f) the premium to be received by the Fund
for the account of such Series; (g) the name of the broker
or futures commission merchant through which the premium is
to be received; and (h) the amount of cash and/or the amount
and kind of Securities, if any, to be deposited in the
Segregated Security Account. The Custodian shall, upon
receipt of the premium specified in the Certificate, make
the deposits into the Segregated Security Account, if any,
as specified in the Certificate. The deposits, if any, to
be made to the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin
Account Agreement.
5. Whenever a Futures Contract Option written by
the Fund which is a call is exercised, the Fund shall
promptly deliver to the Custodian a Certificate specifying:
(a) the Series to which the Futures Contract Option
exercised was specifically allocated; (b) the particular
Futures Contract Option exercised; (c) the type of Futures
Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant through
which such Futures Contract Option was exercised; (e) the
net total amount, if any, payable to the Fund for the
account of such Series upon such exercise; (f) the net total
amount, if any, payable by the Fund for the account of such
Series upon such exercise; and (g) the amount of cash and/or
the amount and kind of Securities to be deposited in the
Segregated Security Account. The Custodian shall, upon its
receipt of the net total amount payable to the Fund for the
account of such Series, if any, specified in such
Certificate make the payments, if any, and the deposits, if
any, into the Segregated Security Account as specified in
the Certificate. The deposits, if any, to be made to the
Margin Account shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account
Agreement.
6. Whenever a Futures Contract Option which is
written by the Fund and which is a Put Option is exercised,
the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series to which the Futures
Contract Option exercised was specifically allocated; (b)
the particular Futures Contract Option exercised; (c) the
type of Futures Contract underlying such Futures Contract
Option; (d) the name of the broker or futures commission
merchant through which such Futures Contract Option is
exercised; (e) the net total amount, if any, payable to the
Fund for the account of such Series upon such exercise; (f)
the net total amount, if any, payable by the Fund for the
account of such Series upon such exercise; and (g) the
amount and kind of Securities and/or cash to be withdrawn
from or deposited in the Segregated Security Account, if
any. The Custodian shall, upon its receipt of the net total
amount payable to the Fund for the account of such Series,
if any, specified in the Certificate, make the payments, if
any, and the deposits, if any, into the Segregated Security
Account as specified in the Certificate. The deposits to
and/or withdrawals from the Margin Account, if any, shall be
made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
7. Whenever the Fund purchases any Futures
Contract Option identical to a previously written Futures
Contract Option described in this Article in order to
liquidate its position as a writer of such Futures Contract
Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to the Futures Contract
Option being purchased: (a) the Series to which the Futures
Contract Option purchased is to be specifically allocated;
(b) that the transaction is a closing transaction; (c) the
type of Futures Contract and such other information as may
be necessary to identify the Futures Contract underlying the
Futures Contract Option; (d) the exercise price; (e) the
premium to be paid by the Fund for the account of such
Series; (f) the expiration date; (g) the name of the broker
or futures commission merchant to which the premium is to be
paid; and (h) the amount of cash and/or the amount and kind
of Securities, if any, to be withdrawn from the Segregated
Security Account. The Custodian shall effect the
withdrawals from the Segregated Security Account specified
in the Certificate. The withdrawals, if any, to be made
from the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin
Account Agreement.
8. Upon the expiration or exercise of, or
consummation of a closing transaction with respect to, any
Futures Contract Option written or purchased by the Fund and
described in this Article, the Custodian shall (a) delete
such Futures Contract Option from the statements delivered
to the Fund pursuant to paragraph 3 of Article III herein,
and (b) make such withdrawals from, and/or, in the case of
an exercise, such deposits into, the Segregated Security
Account as may be specified in a Certificate. The deposits
to and/or withdrawals from the Margin Account, if any, shall
be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through
the exercise of a Futures Contract Option described in this
Article shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sale, the Fund shall
deliver to the Custodian a Certificate specifying: (a) the
Series to which the short sale is to be specifically
allocated; (b) the name of the issuer and the title of the
Security; (c) the number of shares or principal amount sold,
and accrued interest or dividends, if any; (d) the dates of
the sale and settlement; (e) the sale price per unit; (f)
the total amount credited to the Fund for the account of
such Series upon such sales, if any; (g) the amount of cash
and/or the amount and kind of Securities, if any, which are
to be deposited in a Margin Account and the name in which
such Margin Account has been or is to be established; (h)
the amount of cash and/or the amount and kind of Securities,
if any, to be deposited in a Segregated Security Account;
and (i) the name of the broker through which such short sale
was made. The Custodian shall upon its receipt of a
statement from such broker confirming such sale and that the
total amount credited to the Fund upon such sale, if any, as
specified in the Certificate is held by such broker for the
account of the Custodian (or any nominee of the Custodian)
as custodian of the Fund, issue a receipt or make the
deposits into the Margin Account and the Segregated Security
Account specified in the Certificate.
2. In connection with the closing-out of any
short sale, the Fund shall promptly deliver to the Custodian
a Certificate specifying with respect to each such closing-
out: (a) the Series to which the short sale being closed-
out was specifically allocated; (b) the name of the issuer
and the title of the Security; (c) the number of shares or
the principal amount, and accrued interest or dividends, if
any, required to effect such closing-out to be delivered to
the broker; (d) the dates of the closing-out and settlement;
(e) the purchase price per unit; (f) the net total amount
payable to the Fund for the account of such Series upon such
closing-out; (g) the net total amount payable to the broker
upon such closing-out; (h) the amount of cash and the amount
and kind of Securities to be withdrawn, if any, from the
Margin Account; (i) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the
Segregated Security Account; and (j) the name of the broker
through which the Fund is effecting such closing-out. The
Custodian shall, upon receipt of the net total amount
payable to the Fund for the account of such Series upon such
closing-out and the return and/or cancellation of the
receipts, if any, issued by the custodian with respect to
the short sale being closed-out, pay out of the moneys held
for the account of the Series to the broker the net total
amount payable to the broker, and make the withdrawals from
the Margin Account and the Segregated Security Account, as
the same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund, on behalf of a
Series, enters into a Reverse Repurchase Agreement with
respect to Securities and money held by the Custodian
hereunder, the Fund shall deliver to the Custodian a
Certificate or in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate, Oral
Instructions or Written Instructions specifying: (a) the
Series to which the Reverse Repurchase Agreement is to be
specifically allocated; (b) the total amount payable to the
Fund for the account of such Series in connection with such
Reverse Repurchase Agreement; (c) the broker or dealer
through or with which the Reverse Repurchase Agreement is
entered; (d) the amount and kind of Securities to be
delivered by the Fund to such broker or dealer; (e) the date
of such Reverse Repurchase Agreement; and (f) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in a Segregated Security Account in connection
with such Reverse Repurchase Agreement. The Custodian
shall, upon receipt of the total amount payable to the Fund
specified in the Certificate, Oral Instructions or Written
Instructions make the delivery to the broker or dealer, and
the deposits, if any, to the Segregated Security Account,
specified in such Certificate, Oral Instructions or Written
Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in paragraph 1 of this Article, the Fund
shall promptly deliver a Certificate or, in the event such
Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions or Written Instructions to
the Custodian specifying: (a) the Series to which the
Reverse Repurchase Agreement terminated was specifically
allocated; (b) the Reverse Repurchase Agreement being
terminated; (c) the total amount payable by the Fund for the
account of such Series in connection with such termination;
(d) the amount and kind of Securities to be received by the
Fund for the account of such Series in connection with such
termination; (e) the date of termination; (f) the name of
the broker or dealer with or through which the Reverse
Repurchase Agreement is to be terminated; and (g) the amount
of cash and/or the amount and kind of Securities to be
withdrawn from the Segregated Security Account. The
Custodian shall, upon receipt of the amount and kind of
Securities to be received by the Fund specified in the
Certificate, Oral Instructions or Written Instructions, make
the payment to the broker or dealer, and the withdrawals, if
any, from the Segregated Security Account, specified in such
Certificate, Oral Instructions or Written Instructions.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make
such deposits to, or withdrawals from, a Segregated Security
Account as specified in a Certificate received by the
Custodian. Such Certificate shall specify the amount of
cash and/or the amount and kind of Securities to be
deposited in, or withdrawn from, the Segregated Security
Account. In the event that the Fund fails to specify in a
Certificate the designated Series, the name of the issuer,
the title and the number of shares or the principal amount
of any particular Securities to be deposited by the
Custodian into, or withdrawn from, a Segregated Securities
Account, the Custodian shall be under no obligation to make
any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or
payments from a Margin Account to the broker, dealer,
futures commission merchant or Clearing Member in whose
name, or for whose benefit, the account was established as
specified in the Margin Account Agreement.
Amounts received by the Custodian as payments
or distributions with respect to Securities deposited in any
Margin Account shall be dealt with in accordance with the
terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by
the Custodian in any Collateral Account described herein.
In accordance with applicable law, the Custodian may enforce
its lien and realize on any such property whenever the
Custodian has made payment or delivery pursuant to any Put
Option guarantee letter or similar document or any receipt
issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds
which are less than the Custodian's obligations under any
Put Option guarantee letter or similar document or any
receipt, such deficiency shall be a debt owed the Custodian
by the Fund within the scope of Article XIII herein.
5. On each business day, the Custodian shall
furnish the Fund with respect to each Series a statement
with respect to each Margin Account in which money or
Securities are held specifying as of the close of business
on the previous business day: (a) the name of the Margin
Account; (b) the amount and kind of Securities held therein;
and (c) the amount of money held therein. The Custodian
shall make available upon request to any broker, dealer or
futures commission merchant specified in the name of a
Margin Account a copy of the statement furnished the Fund
with respect to such Margin Account.
6. Promptly after the close of business on each
business day in which cash and/or Securities are maintained
in a Collateral Account, the Custodian shall furnish the
Fund with a Statement with respect to such Collateral
Account specifying the amount of cash and/or the amount and
kind of Securities held therein. No later than the close of
business next succeeding the delivery to the Fund of such
statement, the Fund shall furnish to the Custodian a
Certificate or Written Instructions specifying the then
market value of the securities described in such statement.
In the event such then market value is indicated to be less
than the Custodian's obligation with respect to any
outstanding Put Option, guarantee letter or similar
document, the Fund shall promptly specify in a Certificate
the additional cash and/or Securities to be deposited in
such Collateral Account to eliminate such deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. For each Series, the Fund shall furnish to the
Custodian a copy of the resolution of the Fund's Board,
certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of a
dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment
shall be determined, the amount payable per share to the
shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment
date, or (ii) authorizing the declaration of dividends and
distributions on a daily basis and authorizing the Custodian
to rely on Oral Instructions, Written Instructions or a
Certificate setting forth the date of the declaration of
such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment
shall be determined, the amount payable per share to the
shareholders of record as of that date and the total amount
payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such
resolution, Oral Instructions, Written Instructions or
Certificate, as the case may be, the Custodian shall pay out
of the moneys held for the account of the Series the total
amount payable to the Dividend Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Series'
Shares, the Fund shall deliver to the Custodian a
Certificate duly specifying:
(a) The number of Shares sold, trade date, and
price; and
(b) The amount of money to be received by the
Custodian for the sale of such Shares.
2. Upon receipt of such money from the Transfer
Agent, the Custodian shall credit such money to the account
of such Series.
3. Upon issuance of any Series' Shares in
accordance with the foregoing provisions of this Article,
the Custodian shall pay, out of the money held for the
account of such Series, all original issue or other taxes
required to be paid by the Fund for the account of such
Series in connection with such issuance upon the receipt of
a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the
Fund shall hereafter redeem any Series' Shares, the Fund
shall furnish to the Custodian a Certificate specifying:
(a) The number of Shares redeemed; and
(b) The amount to be paid for the Shares
redeemed.
5. Upon receipt from the Transfer Agent of an
advice setting forth the number of a Series' Shares received
by the Transfer Agent for redemption and that such Shares
are valid and in good form for redemption, the Custodian
shall make payment to the Transfer Agent out of the moneys
held for the account of such Series of the total amount
specified in the Certificate issued pursuant to the
foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding
the redemption of any of Series' Shares, whenever a Series'
Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the
Fund, the Custodian, unless otherwise instructed by a
Certificate, shall, upon receipt of an advice from the Fund
or its agent setting forth that the redemption is in good
form for redemption in accordance with the check redemption
procedure, honor the check presented as part of such check
redemption privilege out of the money held in the account of
the Fund for such purposes.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion
advance funds on behalf of a Series which results in an
overdraft because the moneys held by the Custodian for the
account of such Series shall be insufficient to pay the
total amount payable upon a purchase of Securities as set
forth in a Certificate or Oral Instructions issued pursuant
to Article IV, or which results in an overdraft in the
account for such Series for some other reason, or if a
Series is for any other reason indebted to the Custodian
(except a borrowing for investment or for temporary or
emergency purposes using Securities as collateral pursuant
to a separate agreement and subject to the provisions of
paragraph 2 of this Article XIII), such overdraft or
indebtedness shall be deemed to be a loan made by the
Custodian to such Series payable on demand and shall bear
interest from the date incurred at a rate per annum (based
on a 360-day year for the actual number of days involved)
equal to the Federal Funds Rate plus l/2%, such rate to be
adjusted on the effective date of any change in such Federal
Funds Rate but in no event to be less than 6% per annum,
except that any overdraft resulting from an error by the
Custodian shall bear no interest. Any such overdraft or
indebtedness shall be reduced by an amount equal to the
total of all amounts due such Series which have not been
collected by the Custodian on behalf of such Series when due
because of the failure of the Custodian to make timely
demand or presentment for payment. In addition, the Fund
hereby agrees that the Custodian shall have a continuing
lien and security interest in and to any property at any
time held by it for the benefit of such Series or in which
such Series may have an interest which is then in the
Custodian's possession or control or in possession or
control of any third party acting in the Custodian's behalf.
The Fund authorizes the Custodian, in its sole discretion,
at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of
account standing to such Series' credit on the Custodian's
books. For purposes of this Section 1 of Article XIII,
"overdraft" shall mean a negative Available Balance.
2. The Fund will cause to be delivered to the
Custodian by any bank (including, if the borrowing is
pursuant to a separate agreement, the Custodian) from which
it borrows money for investment or for temporary or
emergency purposes using Securities in a Series' portfolio
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
specifying with respect to each such borrowing: (a) the
Series to which the borrowing relates; (b) the name of the
bank; (c) 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; (d) the time and date, if known, on which the
loan is to be entered into; (e) the date on which the loan
becomes due and payable; (f) the total amount payable to the
Fund for the account of such Series on the borrowing date;
(g) 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 (h) a statement specifying
whether such loan is for investment purposes or for
temporary or emergency purposes and that such loan is in
conformance with the Investment Company Act of 1940, as
amended, and the Fund's prospectus. The Custodian shall
deliver on the borrowing date specified in a Certificate 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 such Securities as additional
collateral as may be specified in a Certificate to
collateralize further any transaction described in this
paragraph. 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 a Certificate the
Series, the name of the issuer, the title and number of
shares or the principal amount of any particular Securities
to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any
Securities.
ARTICLE XIV
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its
organization documents and as disclosed in its most recent
and currently effective prospectus to lend the portfolio
Securities of a Series, within 24 hours after each loan of
portfolio Securities the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with
respect to each such loan: (a) the Series to which the
Securities to be loaned are specifically allocated; (b) the
name of the issuer and the title of the Securities; (c) the
number of shares or the principal amount loaned; (d) the
date of loan and delivery; (e) the total amount to be
delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the
premium, if any, separately identified; and (f) the name of
the broker, dealer or financial institution to which the
loan was made. The Custodian shall deliver the Securities
thus designated to the broker, dealer or financial
institution to which the loan was made upon receipt of the
total amount designated as to be delivered against the loan
of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-
Entry System or Depository only in the form of a certified
or bank cashier's check payable to the order of the Fund or
the Custodian drawn on New York Clearing House funds and may
deliver Securities in accordance with the customs prevailing
among dealers in securities.
2. Promptly after each termination of the loan of
Securities by the Fund, the Fund shall deliver or cause to
be delivered to the Custodian a Certificate specifying with
respect to each such loan termination and return of
Securities: (a) the Series to which the Securities to be
returned are specifically allocated; (b) the name of the
issuer and the title of the Securities to be returned; (c)
the number of shares or the principal amount to be returned;
(d) the date of termination; (e) 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 (f) 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, out of the moneys held
for the account of the Series specified in the Certificate,
the total amount payable upon such return of Securities as
set forth in the Certificate.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, 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, either hereunder or under any
Margin Account Agreement, except for any such loss or damage
arising out of its own negligence or willful misconduct.
The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, 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 be liable to the Fund for any loss or
damage resulting from the use of the Book-Entry System or
any Depository arising by reason of any negligence,
misfeasance or willful misconduct on the part of the
Custodian or any of its employees or agents.
2. Without limiting the generality of the
foregoing, the Custodian shall be under no obligation to
inquire into, and shall not be liable for:
The validity of the issue of any Securities
purchased, sold or written by or for the Fund, the legality
of the purchase, sale or writing thereof, or the propriety
of the amount paid or received therefor;
(b) The legality of the issue or sale of any of
the Fund's Shares, or the sufficiency of the amount to be
received therefor;
(c) The legality of the redemption of any of the
Fund's Shares, or the propriety of the amount to be paid
therefor;
(d) The legality of the declaration or payment of
any dividend by the Fund;
(e) The legality of any borrowing by the Fund
using Securities as collateral;
(f) The legality of any loan of portfolio
Securities pursuant to Article XIV of this Agreement, nor
shall the Custodian be under any duty or obligation to see
to it that any cash collateral delivered to it by a broker,
dealer or financial institution or held by it at any time as
a result of such loan of portfolio Securities of the Fund is
adequate collateral for the Fund against any loss it might
sustain as a result of such loan. The Custodian
specifically, but not by way of limitation, shall not be
under any duty or obligation periodically to check or notify
the Fund that the amount of such cash collateral held by it
for the Fund is sufficient collateral for the Fund, but such
duty or obligation shall be the sole responsibility of the
Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer or financial
institution to which portfolio Securities of the Fund are
lent pursuant to Article XIV of this Agreement makes payment
to it of any dividends or interest which are payable to or
for the account of the applicable Series of the Fund during
the period of such loan or at the termination of such loan,
provided, however, that the Custodian shall promptly notify
the Fund in the event that such dividends or interest are
not paid and received when due; or
(g) The sufficiency or value of any amounts of
money and/or Securities held in any Margin Account,
Segregated Security Account or Collateral Account in
connection with transactions by the Fund. In addition, the
Custodian shall be under no duty or obligation to see that
any broker, dealer, futures commission merchant or Clearing
Member makes payment to the Fund of any variation margin
payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission
merchant or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, futures
commission merchant or Clearing Member is the amount the
Fund is entitled to receive, or to notify the Fund of the
Custodian's receipt or non-receipt of any such payment;
provided however that the Custodian, upon the Fund's written
request, shall, as Custodian, demand from any broker,
dealer, futures commission merchant or Clearing Member
identified by the Fund the payment of any variation margin
payment or similar payment that the Fund asserts it is
entitled to receive pursuant to the terms of a Margin
Account Agreement or otherwise from such broker, dealer,
futures commission merchant or Clearing Member.
3. 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 at the Book-Entry System or
the Depository.
4. The Custodian shall have no responsibility and
shall not be liable for ascertaining or acting upon any
calls, conversions, exchange, offers, tenders, interest rate
changes or similar matters relating to Securities held in
the Depository, unless the Custodian shall have actually
received timely notice from the Depository. In no event
shall the Custodian have any responsibility or liability for
the failure of the Depository to collect, or for the late
collection or late crediting by the Depository of any amount
payable upon Securities deposited in the Depository which
may mature or be redeemed, retired, called or otherwise
become payable. However, upon receipt of a Certificate from
the Fund of an overdue amount on Securities held in the
Depository, the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian
shall not be under any obligation to appear in, prosecute or
defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may
involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be
furnished as often as may be required.
5. 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 of the Fund nor to
take any action to effect payment or distribution by the
Transfer Agent of the Fund of any amount paid by the
Custodian to the Transfer Agent of the Fund in accordance
with this Agreement.
6. 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 (i) it shall be directed to
take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs
and expenses in connection with any such action.
7. The Custodian may appoint one or more banking
institutions as Depository or Depositories or as Sub-
Custodian or Sub-Custodians, including, but not limited to,
banking institutions located in foreign countries, of
Securities and moneys at any time owned by the Fund, upon
terms and conditions approved in the Certificate, which
shall, if requested by the Custodian, be accompanied by an
approving resolution of the Fund's Board adopted in
accordance with Rule 17f-5 under the Investment Company Act
of 1940, as amended. Notwithstanding anything to the
contrary contained in this Agreement, the Custodian shall
hold harmless and indemnify the Fund from and against any
losses, actions, claims, demands, expenses and proceedings,
including counsel fees, that occur as a result of any act or
omission of any Foreign Sub-Custodian or Depository with
respect to the safekeeping of moneys and securities of the
Fund.
8. 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 account of the Fund are
such as properly may be held by the Fund under the
provisions of its organization documents.
9. (a) The Custodian shall be entitled to
receive and the Fund agrees to pay to the Custodian all
reasonable out-of-pocket expenses and such compensation and
fees as are specified on Schedule A hereto. The Custodian
shall not deem amounts payable in respect of foreign
custodial services to be out-of-pocket expenses, it being
the parties' intention that all fees for such services shall
be as set forth on Schedule B hereto and shall be provided
for the term of this Agreement without any automatic or
unilateral increase. The Custodian shall have the right to
unilaterally increase the figures on Schedule A on or after
March 1, 1996 and on or after each succeeding March 1
thereafter by an amount equal to 50% of the increase in the
Consumer Price Index for the calendar year ending on the
December 31 immediately preceding the calendar year in which
such March 1 occurs, provided, however, that during each
such annual period commencing on a March 1, the aggregate
increase during such period shall not be in excess of 10%.
Any increase by the Custodian shall be specified in a
written notice delivered to the Fund at least thirty days
prior to the effective date of the increase. The Custodian
may charge such compensation and any expenses incurred by
the Custodian in the performance of its duties pursuant to
such agreement against any money held by it for the account
of the Fund. The Custodian shall also be entitled to charge
against any money held by it for the account of the Fund the
amount of any loss, damage, liability or expense, including
counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. The
expenses which the Custodian may charge against the account
of the Fund include, but are not limited to, the expenses of
Sub-Custodians and foreign branches of the Custodian
incurred in settling outside of New York City transactions
involving the purchase and sale of Securities of the Fund.
(b) The Fund shall receive a credit for each
calendar month against such compensation and fees of the
Custodian as may be payable by the Fund with respect to such
calendar month in an amount equal to the aggregate of its
Earnings Credit for such calendar month. In no event may
any Earnings Credits be carried forward to any fiscal year
other than the fiscal year in which it was earned, or,
unless permitted by applicable law, transferred to, or
utilized by, any other person or entity, provided that any
such transferred Earnings Credit can be used only to offset
compensation and fees of the Custodian for services rendered
to such transferee and cannot be used to pay the Custodian's
out-of-pocket expenses. For purposes of this sub-section
(b), the Fund is permitted to transfer Earnings Credits only
to The Dreyfus Corporation, its affiliates and/or any
investment company now or in the future for which The
Dreyfus Corporation or any of its affiliates acts as the
sole investment adviser. For purposes of this sub-
section (b), a fiscal year shall mean the twelve-month
period commencing on the effective date of this Agreement
and on each anniversary thereof.
10. 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 a Certificate. The Custodian shall be
entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to
Article IV or XI hereof. The Fund agrees to forward to the
Custodian a Certificate or facsimile thereof, confirming
such Oral Instructions or Written Instructions in such
manner so that such Certificate or facsimile thereof is
received by the Custodian, whether by hand delivery, telex
or otherwise, by the close of business of the same day that
such Oral Instructions or Written 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 an Authorized Person.
11. The Custodian shall be entitled to rely upon
any instrument, instruction or notice received by the
Custodian and reasonably believed by the Custodian to be
given in accordance with the terms and conditions of any
Margin Account Agreement. Without limiting the generality of
the foregoing, the Custodian shall be under no duty to
inquire into, and shall not be liable for, the accuracy of
any statements or representations contained in any such
instrument or other notice including, without limitation,
any specification of any amount to be paid to a broker,
dealer, futures commission merchant or Clearing Member.
12. The books and records pertaining to the Fund
which are in the possession of the Custodian shall be the
property of the Fund. Such books and records shall be
prepared and maintained as required by the Investment
Company Act of 1940, as amended, and other applicable
securities laws and rules and regulations. The Fund, or the
Fund's authorized representatives, shall have access to such
books and records during the Custodian's normal business
hours. Upon the reasonable request of the Fund, copies of
any such books and records shall be provided by the
Custodian to the Fund or the Fund's authorized
representative at the Fund's expense.
13. 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, or O.C.C., and with such reports on its own
systems of internal accounting control as the Fund may
reasonably request from time to time.
14. The Fund agrees to indemnify the Custodian
against and save the Custodian harmless from all liability,
claims, losses and demands whatsoever, including attorney's
fees, howsoever arising or incurred because of or in
connection with the Custodian's payment or non-payment of
checks pursuant to paragraph 6 of Article XII as part of any
check redemption privilege program of the Fund, except for
any such liability, claim, loss and demand arising out of
the Custodian's own negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, the Custodian may deliver and receive Securities,
and receipts with respect to such Securities, and arrange
for payments to be made and received by the Custodian in
accordance with the customs prevailing from time to time
among brokers or dealers in such Securities.
16. The Custodian shall have no duties or
responsibilities whatsoever except such duties and responsi-
bilities as are specifically set forth in this Agreement,
and no covenant or obligation shall be implied in this
Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. (a) Any termination may be effected only by
the terminating party giving to the other party a notice in
writing specifying the date of such termination, which shall
be not less than two hundred seventy (270) days after the
date of giving of such notice.
(b) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under this Agreement and such breach has
remained uncured for a period of thirty days after the
Custodian's receipt from the Fund of written notice
specifying such breach.
(c) Either party, immediately upon written
notice to the other party, may terminate this Agreement upon
the Merger or Bankruptcy of the other party.
(d) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under the "Amendment to Transfer Agency
Agreements" dated August 18, 1989 and has not cured such
breach as promptly as practicable and in any event within
seven days of its receipt of written notice of such breach,
provided that the Custodian shall not be permitted to cure
any such material breach arising from the willful misconduct
of the Custodian.
In the event notice of termination is given by the
Fund, it shall be accompanied by a copy of a resolution of
the Fund's Board, certified by the Secretary or any
Assistant Secretary, electing to terminate this Agreement
and designating a successor custodian or custodians, each of
which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits.
In the event notice of termination is given by the
Custodian, the Fund shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of its
Board, certified by the Secretary or any Assistant
Secretary, 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 bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the
date set forth in such notice, this Agreement shall
terminate 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 moneys then owned by the Fund and held by it as
Custodian, after deducting all fees, expenses and other
amounts for the payment or reimbursement of which it shall
then be entitled.
2. If a successor custodian is not designated by
the Fund or the Custodian in accordance with the preceding
paragraph, 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 moneys 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, in any
Depository or by a Clearing Member which cannot be delivered
to the Fund, to hold such Securities hereunder in accordance
with this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate
setting forth the names of the present Authorized Persons.
The Fund agrees to furnish to the Custodian a new
Certificate in similar form in the event that any such
present Authorized Person ceases to be an Authorized Person
or in the event that other or additional Authorized Persons
are elected or appointed. Until such new Certificate 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 Certificate.
2. Annexed hereto as Appendix B is a Certificate
signed by two of the present Officers of the Fund setting
forth the names of the present Officers of the Fund. The
Fund agrees to furnish to the Custodian a new Certificate 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 Certificate shall be received, the Custodian shall be
fully protected in acting under the provisions of this
Agreement upon the signatures of the Officers as set forth
in the last delivered Certificate.
3. 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 90
Washington Street, 13th Floor, New York, New York 10286, or
at such other place as the Custodian may from time to time
designate in writing.
4. 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 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or at
such other place as the Fund may from time to time designate
in writing.
5. 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 and
approved by a resolution of the Fund's Board.
6. 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 resolution of its Board.
7. This Agreement shall be construed in
accordance with the laws of the State of New York.
8. 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 officers,
thereunto duly authorized, as of the day and year first
above written.
DREYFUS INVESTMENT GRADE BOND
FUNDS, INC.
By:
Attest:
THE BANK OF NEW YORK
By:
Attest:
<PAGE>
Appendix A
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN ACCOUNT
FOR PORTFOLIO SECURITIES TRANSACTIONS
Group I Group II
- --------------------------
- --------------------------------------
Frank Greene, Phyllis Paul R. Casti, Jr.
Meiner, Paul R. Casti, Jr., Jeffrey N. Nachman Thomas J.
Durante
Thomas J. Durante, Jean Philip Toia James M.
Windels
Farley, Gregory S. Gruber, Lawrence Kash Paul T. Molloy
Paul T. Molloy, Jeffrey N. Joseph I. Connolly Jean Farley
Nachman, James M. Windels, Gregory S. Gruber
Anna Mancini and Mary
Kate Macchia
Cash Account
1. Fees payable to The Bank of New York pursuant to
written agreement with the Fund for services rendered
in its capacity as Custodian or agent of the Fund, or
to The Shareholder Services Group, Inc. in its capacity
as Transfer Agent or agent of the Fund:
Two (2) signatures required, one of which must be
from Group II, except that no individual shall be
authorized to sign more than once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either
Group I or Group II, or both such Groups, except
that no individual shall be authorized to sign
more than once.
Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be
from Group II, except that no individual shall be
authorized to sign more than once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or
Group II, including any one of the following:
Paul R. Casti, Jr., James M. Windels, Jeffrey N.
Nachman, Joseph I. Connolly or Philip Toia, except
that no individual shall be authorized to sign
more than once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the
following:
Joseph I. Connolly, Philip Toia, Paul R.
Casti, Jr., Thomas J. Durante, Jean Farley,
Gregory S. Gruber, Paul T. Molloy, Jeffrey N.
Nachman, James M. Windels, Mary Kate Macchia,
Robert Salviolo, Katya Jiminez, Paul Goerke,
Christine O'Hara and Anna Mancini.
<PAGE>
Appendix B
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
The undersigned Officers of the Fund do hereby
certify that the following individuals, whose specimen
signatures are on file with The Bank of New York, have been
duly elected or appointed by the Fund's Board to the
position set forth opposite their names and have qualified
therefor:
Name Position
Marie E. Connolly President and Treasurer
John E. Pelletier Vice President and Secretary
Frederick C. Dey Vice President and
Assistant Treasurer
Eric B. Fischman Vice President and
Assistant Secretary
John F. Tower, III Assistant Treasurer
John J. Pyburn Assistant Treasurer
Ruth D. Leibert Assistant Secretary
Garitt Kono Portfolio Manager
Gerald E. Thunelius Portfolio Manager
Eric B. Fischman, Ruth D. Leibert,
Vice President Assistant Secretary
<PAGE>
Appendix C
The following are designated publications for
purposes of paragraph 5(b) of Article III:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
The New York Times
Standard & Poor's Called Bond Record
The Wall Street Journal
Appendix D
Name of Series
Dreyfus Intermediate Term Fund
Dreyfus Short-Term Income Fund
<PAGE>
Schedule A
The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.
<PAGE>
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
Domestic Custody Fees
Basic Fee: 1/100 of 1% per annum of
the first $500,000,000,
and 1/200 of 1% of the
excess over $500,000,000
per annum of the total
market value of domestic
securities held.
Custodial Transactions:
$8.00 per transaction for each receipt and
delivery of book entry securities through DTC/FRB.
$20.00 per transaction for physical settlements,
municipal sub-custodian settlements, writing
options (preparation of depository or escrow
receipts) and initial futures transactions.
$5.00 for futures variation margin maintenance.
$7.00 for P&I paydowns.
$10.00 for GNMA PTC settlements.
$200.00 for the collection of interest on
securities held in "street name".
<PAGE>
Schedule B
The fees payable to the Custodian with respect to
securities held in foreign custody are as set forth in a
letter dated January 13, 1995 from Jerome P. Isoldi of The
Bank of New York to Frederick C. Dey, a copy of which is
attached hereto.
<PAGE>
THE BANK OF NEW YORK
90 Washington Street
New York, New York 10286
January 13, 1995
Mr. Frederick C. Dey
Assistant Treasurer
200 Park Avenue
New York, New York 10166
Re: Global Custody Fees
Dear Fred:
This letter is an update of my September 21, 1993
global custody fee schedule letter addressed to Mr. Jeffrey
Nachman for the Dreyfus Family of Funds.
Safekeeping charges and transaction fees will be
applied per country, as indicated in the attached schedule.
Warmest regards.
Sincerely,
Jerome P. Isoldi
Senior Vice President
JPI/nd
Enclosure
<PAGE>
GLOBAL CUSTODY FEE PROPOSAL
THE DREYFUS FAMILY OF FUNDS
AUSTRALIA MEXICO (BONDS)
CANADA NETHERLANDS
FRANCE NEW ZEALAND
GERMANY SWEDEN
IRELAND SWITZERLAND
JAPAN
SAFEKEEPING FEE
12 b.p. PER ANNUM ON FIRST 250MM MARKET VALUE OF ASSETS
10 b.p. PER ANNUM ON NEXT 500MM
8 b.p. PER ANNUM ON EXCESS
TRANSACTION FEE
$50 FOR EACH TRANSACTION
CEDEL
SAFEKEEPING FEE
5 b.p. PER ANNUM ON MARKET VALUE OF ASSETS HELD
TRANSACTION FEE
$25 FOR EACH TRANSACTION
<PAGE>
GLOBAL CUSTODY FEE PROPOSAL
THE DREYFUS FAMILY OF FUNDS
SAFEKEEPING TRANSACTIONS
ARGENTINA 30 b.p. $ 75
AUSTRIA 8 b.p. 60
BANGLADESH 40 b.p. 170
BELGIUM 8 b.p. 75
BRAZIL * 45 b.p. 75
CHILE 35 b.p. 90
CHINA 25 b.p. 50
COLUMBIA 45 b.p. 125
CZECH REPUBLIC 50 b.p. 55
DENMARK 15 b.p. 75
FINLAND 10 b.p. 75
GREECE
Bond 25 b.p. 30
Equity 50 b.p. 450
HONG KONG 15 b.p. 100
HUNGARY 5 b.p. 75
INDIA 45 b.p. 125
INDONESIA 15 b.p. 75
ISRAEL 65 b.p. 45
ITALY 18 b.p. 75
KOREA 12.5 b.p. 25
LUXEMBOURG 6.5 b.p. 75
MALAYSIA 15 b.p. 100
MEXICO (EQUITIES) 25 b.p. 60
NORWAY 25 b.p. 125
PAKISTAN 40 b.p. 150
PERU 65 b.p. 175
PHILIPPINES 12.5 b.p. 150
POLAND 50 b.p. 150
PORTUGAL 25 b.p. 220
SINGAPORE 15 b.p. 150
SOUTH AFRICA 12.5 b.p. 150
SPAIN 8 b.p. 50
SRI LANKA 20 b.p. 60
TAIWAN 15 b.p. 150
THAILAND 18 b.p. 95
TURKEY 25 b.p. 60
UNITED KINGDOM 8 b.p. 50
URUGUAY ** 55 b.p. 75
VENEZUELA 45 b.p. 75
* Includes Local Administrator.
** $4,000 Per Year, Per Account.
OUT-OF-POCKET EXPENSES
TELEX, TELEPHONE, SECURITIES REGISTRATION, ETC., ARE IN
ADDITION TO THE ABOVE.
<PAGE>
Exhibit (9)
FORM OF
DREYFUS INVESTMENT GRADE BOND FUNDS, INC.
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the
above-captioned investment company (the "Fund") adopt a
Shareholder Services Plan under which the Fund would pay the
Fund's distributor (the "Distributor") for providing
services to (a) shareholders of each series of the Fund or
class of Fund shares set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time, or (b) if no
series or classes are set forth on such Exhibit,
shareholders of the Fund. The Distributor would be
permitted to pay certain financial institutions, securities
dealers and other industry professionals (collectively,
"Service Agents") in respect of these services. The Plan is
not to be adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"), and
the fee under the Plan is intended to be a "service fee" as
defined in Article III, Section 26, of the NASD Rules of
Fair Practice.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be
implemented and has considered such pertinent factors as it
deemed necessary to form the basis for a decision to use
Fund assets for such purposes.
In voting to approve the implementation of such a
plan, the Board has concluded, in the exercise of its
reasonable business judgment and in light of applicable
fiduciary duties, that there is a reasonable likelihood that
the plan set forth below will benefit the Fund and its
shareholders.
The Plan: The material aspects of this Plan are
as follows:
1. The Fund shall pay to the Distributor a fee
at the annual rate set forth on Exhibit A in respect of the
provision of personal services to shareholders and/or the
maintenance of shareholder accounts. The Distributor shall
determine the amounts to be paid to Service Agents and the
basis on which such payments will be made. Payments to a
Service Agent are subject to compliance by the Service Agent
with the terms of any related Plan agreement between the
Service Agent and the Distributor.
2. For the purpose of determining the fees
payable under this Plan, the value of the net assets of the
Fund or the net assets attributable to each series or class
of Fund shares identified on Exhibit A, as applicable, shall
be computed in the manner specified in the Fund's charter
documents for the computation of net asset value.
3. The Board shall be provided, at least
quarterly, with a written report of all amounts expended
pursuant to this Plan. The report shall state the purpose
for which the amounts were expended.
4. This Plan will become effective immediately
upon approval by a majority of the Board members, including
a majority of the Board members who are not "interested
persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in the operation of
this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of
this Plan.
5. This Plan shall continue for a period of one
year from its effective date, unless earlier terminated in
accordance with its terms, and thereafter shall continue
automatically for successive annual periods, provided such
continuance is approved at least annually in the manner
provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the
Board, provided that any material amendments of the terms of
this Plan shall become effective only upon approval as
provided in paragraph 4 hereof.
7. This Plan is terminable without penalty at
any time by vote of a majority of the Board members who are
not "interested persons" (as defined in the Act) of the Fund
and have no direct or indirect financial interest in the
operation of this Plan or in any agreements entered into in
connection with this Plan.
Dated: August 24, 1995
<PAGE>
EXHIBIT A
Name of Series or Class Fee
Dreyfus Intermediate Term Fund .25%
Dreyfus Short-Term Income Fund .20%
