File Nos. 33-50390
811-7076
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. 8 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940[ X]
Amendment No. 8 [ X ]
(Check appropriate box or boxes.)
DREYFUS-WILSHIRE TARGET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
c/o First Data Investor Services Group, Inc.
One Exchange Place, Boston, MA 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617)
263-3100
Julie A. Tedesco, Esq.
One Exchange Place
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
____ immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
X 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)
____ on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
____ this post-effective amendment designates a new effective
date for a
previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of
its common stock under the Securities Act of 1933 pursuant to
Section 24(f)
of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice
for the fiscal year ended August 31, 1995 was filed on October 25,
1995.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis
3
3 Condensed Financial Information 4
4 General Description of Registrant 5, 16
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 16
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 12
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-25
13 Investment Objectives and Policies B-2
14 Management of the Fund B-8
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-11
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
(continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation B-24
18 Capital Stock and Other Securities B-24
19 Purchase, Redemption and Pricing B-16, B-17
of Securities Being Offered B-19
20 Tax Status *
21 Underwriters B-16
22 Calculations of Performance Data B-23
23 Financial Statements B-27
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-5
30 Location of Accounts and Records C-8
31 Management Services C-8
32 Undertakings C-8
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PROSPECTUS MAY 31, 1996.
WILSHIRE TARGET FUNDS, INC.
(Investment Class Shares)
Wilshire Target Funds, Inc. (the "Fund") is an open-end
investment company, known as a mutual fund. This prospectus offers
Investment Class Shares ("Shares") in each of four separate
diversified portfolios (each, a "Portfolio"): Large Company Growth
Portfolio, Large Company Value Portfolio, Small Company Growth
Portfolio and Small Company Value Portfolio. The goal of each
Portfolio is to provide the investment results of a portfolio of
publicly-traded common stocks in one of four sub-categories of
companies from the Wilshire 5000 Index which meet certain criteria
established by the Fund's Investment Adviser. See "Description of
the Fund-Investment Approach." No portfolio is an index fund.
Wilshire Associates Incorporated ("Wilshire") serves as the
Fund's investment adviser. First Data Investor Services Group,
Inc. ("First Data") serves as the Fund's administrator. 440
Financial Distributors, Inc. ("440 Financial") serves as the
Fund's distributor.
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 May 31,
1996, which may be further 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 MAILING ADDRESS, or call TELEPHONE NO.
Shares of the Fund are not deposits or obligations of, or
guaranteed or endorsed by, any financial institution, are not
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency, and involve risk, including
the possible loss of principal amount invested.
TABLE OF CONTENTS Page
Fee Table 3
Condensed Financial Information 4
Description of the Fund 5
Management of the Fund 8
How to Buy Fund Shares 9
Shareholder Services 11
How to Redeem Fund Shares 12
Shareholder Services Plan 14
Dividends, Distributions and Taxes 14
Performance Information 15
General Information 16
Appendix 18
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
[This Page Intentionally Left Blank]
Fee Table
Large Large Small Small
Company Company Company Company
Growth Value Growth Value
Portfolio Portfolio Portfolio Portfolio
Annual Fund Operating Expenses:
(as a percentage of average daily net assets)
Management Fees 0.25% 0.25% 0.25% 0.25%
12b-1 (Shareholder Services
Plan) Fee 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.67% 0.62% 0.76% 0.51%
Total Fund Operating Expenses 1.17% 1.12% 1.26% 1.01%
Example:
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period:
1 Year $ 12 $ 11 $ 13 $ 10
3 Years $ 37 $ 36 $ 40 $ 32
5 Years $ 64 $ 62 $ 69 $ 56
10 Years $142 $136 $152 $124
The amounts listed in the example should not be considered
as representative of past or future expenses and actual expenses
may be greater or less than those indicated. Moreover, while the
example assumes a 5% annual return, each portfolio's 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 that the Fund and investors
will bear, the payment of which will reduce investors' annual
return. The information in the foregoing table has been restated
to reflect the current fees payable under the Funds new advisory
and administration contracts, dated May 31, 1996, and the
conversion of its shareholder services plan to a Rule 12b-1
shareholder services plan, effective May 31, 1996; however, the
information does not reflect any fee waivers or expense
limitations that may be in effect. You can purchase Shares
without charge directly from 440 Financial; 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" and "Shareholder Services Plan." </R
Condensed Financial Information
The information
for the fiscal years ended August 31,
1993, 1994 and 1995 in the following table has been audited by
Coopers & Lybrand L.L.P., the Fund's independent accountants,
whose report thereon appears in the Statement of Additional
Information. The financial data in the following table for the
six months ended February 29, 1996 is unaudited. Further
financial data and related notes are included in the Statement of
Additional Information, which is available upon request.
Financial Highlights
Contained below is per share operating performance data for
a Share outstanding throughout the period, total investment
return, ratios to average net assets and other supplemental data
for each Portfolio for each period indicated. This information has
been derived from each Portfolio's financial statements.
<TABLE>
<CAPTION>
Large Company Large
Company
Growth Portfolio Value
Portfolio
Year Ended (unaudited) Year Ended
(unaudited)
August 31, Six Months August 31, Six
Months
Ended Ended Feb.
29, Feb. 29,
<S> <C> <C>
<C> <C> <C> <C>
<C> <C>
PER SHARE DATA: 1993(1) 1994 1995 1996
1993(1) 1994 1995 1996
Net asset value, beginning
of period $12.50 $12.74 $13.31
$12.50 $15.18 $13.99
Investment Operations:
Investment income-net .21 .15 .10
.54 .36 .34
Net realized and unrealized
gain (loss) on investments .10 .65 3.03
2.30 (.90) 2.19
Total from Investment
Operations .31 .80 3.13
2.84 (.54) 2.53
Distributions:
Dividends from investment
income-net (.07) (.23) (.10)
(.16) (.36) (.40)
Dividends from net realized
gain on investments -- -- --
- -- (.29) (.10)
Total Distributions (.07) (.23) (.10)
(.16) (.65) (.50)
Net asset value,
. end of period $12.74 $13.31 $16.34
$15.18 $13.99 $16.02
======= ====== ======
======= ====== ======
TOTAL INVESTMENT
RETURN 2.46%(2) 6.34% 23.67%
22.93%(2) (3.61%) 18.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets -- .68% .84%
- -- .58% .81%
Ratio of net investment
income to average net assets 1.66%(2) 1.18% .94%
4.27%(2) 4.02% 3.77%
Decrease reflected in above
expense ratios due to undertakings
by Wilshire and Dreyfus 1.14%(2) .71% .21%
1.32%(2) .60% .21%
Portfolio Turnover Rate 11.92%(2) 21.53% 30.09%
21.75%(2) 47.16% 58.04%
Net Assets, end of year
(000's omitted) $8,061 $8,424 $21,348
$8,116 $12,158 $22,926
- -----------------
</TABLE>
(1)From September 30, 1992 (commencement of operations) to August
31, 1993.
<TABLE>
<CAPTION>
Small Company Small Company
Growth Portfolio Value Portfolio
Year Ended (unaudited) Year Ended
(unaudited)
August 31, Six Months August 31, Six
Months
<S> Ended Ended Feb. 29,
Feb. 29,
PER SHARE DATA: 1993(1) 1994 1995 1996
1993(2) 1994 1995 1996
Net asset value, beginning
of period $12.50 $16.03 $15.39 $12.50
$14.81 $14.32
Investment Operations:
Investment income-net .08 (.04) (.07)
.35 .45 .55
Net realized and unrealized
gain (loss) on investments 3.48 .90 3.54
2.10 (.45) 1.06
Total from Investment
Operations 3.56 .86 3.47
2.45 -- 1.61
Distributions:
Dividends from investment
income-net (.03) -- --
(.14) (.33) (.45)
Dividends in excess of
investment income-net -- (.07) --
- -- -- --
Dividends from net realized
gain on investments -- (1.43) (.31)
- -- (.16) (.07)
Total Distributions (.03) (1.50) (.31)
(.14) (.49) (.52)
Net asset value, end of
period $16.03 $15.39 $18.55
$14.81 $14.32 $15.41
======= ====== ======
======= ====== ======
TOTAL INVESTMENT
RETURN 28.50%(3) 5.20% 23.04%
19.72%(3) (0.01%) 11.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets -- .74% .95%
- -- .50% .69%
Ratio of net investment
income (loss)to average
net assets .53%(3) (.40%) (.54%)
3.65%(3) 3.64% 4.12%
Decrease reflected in above expense ratios due to undertakings
by Wilshire and Dreyfus 1.40%(3) .73% .21%
1.32%(3) .56% .22%
Portfolio Turnover Rate 55.26%(3) 46.41% 110.98%
26.87%(3)48.59% 86.17%
Net Assets, end of year
(000's omitted) $7,527 $11,188 $21,882
$15,155 $23,438 $25,978
- -----------------
(1)From October 1, 1992 (commencement of operations) to August 31,
1993.
(2)From September 30, 1992 (commencement of operations) to August
31, 1993.
(3)Not annualized.
Further information about each Portfolio's performance is
contained in the Fund's annual and semi-annual reports, which may
be obtained without charge by writing to the address or calling
the number set forth on the cover page of this Prospectus.
Description of the Fund
Investment Objective - The goal of each Portfolio is to provide
the investment results of a portfolio of publicly-traded common
stocks in one of four sub-categories of companies from the
Wilshire 5000 Index which meet certain criteria established by
Wilshire as described herein. Each Portfolio's investment
objective 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 such Portfolio's outstanding voting
shares. There can be no assurance that a Portfolio's investment
objective will be achieved.
Investment Approach - Wilshire identifies from the Wilshire 5000
Index, an index consisting of all publicly-traded common stocks in
the United States, the stocks of the 2,500 companies with the
largest market capitalizations (ranging between $95 billion and
$155 million). It then divides that universe of stocks, first,
into those of the 750 companies with the largest capitalizations
(ranging between $95 billion and $1.2 billion), which constitute
approximately 90% of the total market value of the stocks included
in the Wilshire 5000 Index, and, second, into those of the 1,750
next largest companies based on capitalization (ranging currently
between $1.2 billion and $155 million), which constitute
approximately 10% of the total market value of the stocks included
in the Wilshire 5000 Index (the stocks of the remaining 2,500
companies constitute less than 2% of the total market value of the
stocks included in the Wilshire 5000 Index). From these large and
small capitalization universes, Wilshire selects the stocks of
those companies it believes to possess the characteristics of
growth stocks and of value stocks, based on criteria discussed
below. In this manner, Wilshire identifies the four potential
universes of companies, the stocks of which it may purchase for
the Portfolios. Wilshire reviews periodically these selections and
updates each potential universe of companies. The number of
securities eligible for investment by a Portfolio at any time will
vary, but is expected to range between 150 to 550 stocks.
To determine whether a company's stock falls within the
growth or value classification, Wilshire analyzes each company
based on fundamental factors such as price to book value ratios,
price to earnings ratios, earnings growth, dividend payout ratios,
return on equity, and the company's beta (a measure of stock price
volatility relative to the market generally). In general, Wilshire
believes that companies with relatively low price to book ratios,
low price to earnings ratios and higher than average dividend
payments in relation to price should be classified as value
companies. Alternatively, companies which have above average
earnings or sales growth and retention of earnings and command
higher price to earnings ratios fit the more classic growth
description.
By dividing companies into these four sub-categories,
Wilshire attempts to offer potential investors market exposure to
these types of companies. As described under "Investment
Considerations and Risks" below, you should purchase a Portfolio's
Shares only as a supplement to an overall investment program. To
provide varying degrees of market exposure to these types of
securities, various combinations of each Portfolio's Shares might
be purchased.
Management Policies - The Large Company Growth Portfolio invests
substantially all of its assets in equity securities of issuers
within the universe of companies identified by Wilshire as large
capitalization, growth companies.
The Large Company Value Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as large capitalization, value
companies.
The Small Company Growth Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as small capitalization,
growth companies.
The Small Company Value Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as small capitalization, value
companies.
Each Portfolio attempts to remain fully invested in equity
securities of companies which comprise its relative universe. When
a Portfolio has cash pending investment or needs to meet potential
redemptions, it 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. Under normal circumstances, the Fund
anticipates that not more than 5% of the value of a Portfolio's
total assets will be invested in any one category of such
instruments, and that not more than 20% of the value of a
Portfolio's total assets will be invested in all money market
instruments. No Portfolio intends to invest in money market
instruments or any other securities for defensive purposes. See
the Statement of Additional Information for a description of these
instruments. Each Portfolio may purchase stock index futures in
anticipation of taking a market position when, in Wilshire's
opinion, available cash balances do not permit an economically
efficient trade in the cash market. Each Portfolio may sell stock
index futures to terminate existing positions it may have as a
result of its purchase of stock index futures. To the extent the
Fund, on behalf of a Portfolio, purchases or sells futures
contracts, the Fund currently intends to use the New York Stock
Exchange Composite Index, Value Line Composite Index or Standard &
Poor's 500 Composite Stock Price Index. The performance of the
futures should not be expected to correlate identically with that
of the particular index. In addition, each Portfolio may lend its
portfolio securities. See also "Investment Consideration
and Risks" below and "Investment Objective and Management
Policies" in the Statement of Additional Information.
Investment Considerations and Risks
General - Each Portfolio's net asset value is not fixed and should
be expected to fluctuate. You should consider a Portfolio as a
supplement to an overall investment program and should invest only
if you are willing to undertake the risks involved. See
"Investment Objective and Policies - Management Policies" in the
Statement of Additional Information for a further discussion of
certain risks.
Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of a
Portfolio's investment securities will result in changes in the
value of such Portfolio's Shares and thus the Portfolio's total
return to investors. Moreover, because no Portfolio will adopt a
temporary defensive position in response to market factors, and
thus will remain almost fully invested at all times, the net asset
value of one or more Portfolios could be adversely affected by
adverse changes, real or anticipated, in companies that are
generally characterized in the same manner as the companies the
securities of which are held by the relevant Portfolio. So that,
for example, if large capitalization growth stocks fall out of
favor with investors widely, irrespective of fundamentals, the net
asset value of the Large Company Growth Portfolio should be
expected to be adversely affected. Similar risks exist for the
other Portfolios.
Foreign Securities - Since the stocks of some foreign issuers are
included in the Wilshire 5000 Index, each Portfolio's investments
may include securities of such foreign issuers which may subject
such Portfolio to additional investment risks with respect to
those securities that are different in some respects from those
incurred by a fund which invests only in securities of domestic
issuers. Such risks include future political and economic
developments, the possible imposition of withholding taxes on
income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect an investment in these
securities, and the possible seizure or nationalization of foreign
deposits.
Use of Derivatives - Each Portfolio may invest, to a limited
extent, in derivatives ("Derivatives"). These are financial
instruments which derive their performance, at least in part, from
the performance of an underlying asset, index or interest rate.
The Derivatives the Portfolios may use include stock index
futures. While Derivatives can be used effectively in furtherance
of a Portfolio's investment objective, under certain market
conditions, they can increase the volatility of the Portfolio's
net asset value, can decrease the liquidity of the Portfolio's
investments and make more difficult the accurate pricing of the
Portfolio's investments. See "Appendix - Investment Techniques -
Use of Derivatives" below and "Investment Objectives and
Management Policies - Management Policies - Derivatives" in the
Statement of Additional Information.
Simultaneous Investments - Investment decisions for each Portfolio
are made independently from those of other investment companies
and accounts advised by Wilshire. However, if such other
investment companies or accounts are prepared to invest in, or
desire to dispose of, securities of the type in which a Portfolio
invests at the same time as such Portfolio, available investments
or opportunities for sales will be allocated equitably to each. In
some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Portfolio or the price
paid or received by the Portfolio
Management of the Fund
Investment Adviser - Wilshire, located at 1299 Ocean Avenue,
Santa Monica, California 90401-1085, was formed in 1972 and serves
as the Fund's investment adviser. As of February 29, 1996,
Wilshire managed approximately $7 billion in assets. Under the
terms of an Investment Advisory Agreement with the Fund, Wilshire,
subject to the overall authority of the Fund's Board of Directors
in accordance with Maryland law, manages the investment of the
assets of each Portfolio. The Fund's primary portfolio manager is
Thomas D. Stevens, the President and Chairman of the Board of
Directors of the Fund and a Senior Vice President of Wilshire. He
has held the position of portfolio manager of the Fund since the
Fund's inception and has been employed by Wilshire since October
6, 1980. The Fund's other portfolio manager is identified in the
Statement of Additional Information. Wilshire also provides
research services for the Fund through a professional staff of
portfolio managers and securities analysts. Wilshire is
controlled by its President, Mr. Dennis Tito, who owned 70% of its
outstanding voting stock as of February 29, 1996.
Pursuant to the terms of the Investment Advisory Agreement,
dated May 31, 1996 (the "Advisory Agreement"), the Fund has agreed
to pay Wilshire a monthly fee at the annual rate of .25 of 1% of
the value of each Portfolio's average daily net assets. However,
the Advisory Agreement also includes a fifteen month expense
limitation provision. For the three month period June 1, 1996
through August 31, 1996 and the fiscal year September 1, 1996
through August 31, 1997, Wilshire has agreed that, if the
aggregate operating expenses of any Portfolio (exclusive of
interest, taxes, brokerage, 12b-1 plan fees and extraordinary
expenses) for such period exceed the annual rate specified in the
following table for such Portfolio, the investment advisory fee
otherwise payable for that period by the Portfolio under the
Advisory Agreement will be reduced by the amount of the excess,
but not below an annual fee rate of .10 of 1% of such Portfolio's
average daily net assets.
Fund Annual Rate (%)
Large Company Growth Portfolio .80
Large Company Value Portfolio .77
Small Company Growth Portfolio .91
Small Company Value Portfolio .66
For the fiscal year ended August 31, 1995, the Fund paid Wilshire
an investment advisory fee at the effective annual rate of .09 of
1% of the value of the average daily net assets of the Large
Company Growth, Large Company Value and Small Company Growth
Portfolios, and .08 of 1% for the Small Company Value Portfolio,
in each case after giving effect to a voluntary fee waiver
which was in effect through November 7, 1994.
Administrator - First Data, a subsidiary of First Data
Corporation, P. O. Box [ ], Providence, Rhode Island 02940-[
] serves as the Fund's administrator pursuant to an Administration
Agreement with the Fund. Under the terms of the Administration
Agreement, First Data generally assists in all aspects of the
Fund's operations, other than providing investment advice, subject
to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. Pursuant to the terms of the
Administration Agreement, dated May 31, 1996, the Fund has agreed
to pay First Data a monthly fee at the annual rate of .15 of 1% of
the value of the Fund's monthly average net assets up to aggregate
net assets of $1 billion, .10 of 1% of such value on the next $4
billion, and .08 of 1% on excess net assets. For the fiscal year
ended August 31, 1995, no administration fee was paid to The
Dreyfus Corporation (the former administrator of the Fund)
pursuant to an undertaking by Dreyfus.
Custodian and Transfer and Dividend Disbursing Agent -
Northern Trust Company, an Illinois trust company located at 50
South LaSalle Street, Chicago, Illinois 60675, is the custodian of
the Fund's investments. First Data is also the Fund's Transfer
and Dividend Disbursing Agent (the "Transfer Agent").
Distributor - 440 Financial serves as the distributor of the
Shares. 440 Financial is also a subsidiary of First Data
Corporation. 440 Financial is not compensated by the Fund or its
shareholders for its services as distributor, except to the extent
that it receives payments from the Fund under the Funds
shareholder services plan. See "Shareholder Services Plan" below.
Expenses - From time to time, Wilshire or First Data may waive
receipt of its fees and/or voluntarily assume certain expenses of
the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The
Fund will not pay Wilshire or First Data for any amounts which may
be waived, nor will the Fund reimburse Wilshire or First Data for
any amounts which may be assumed. In addition to shareholder
services fees which may be paid by 440 Financial out of amounts
which it receives under the Funds shareholder services plan, 440
Financial, Wilshire or First Data may bear other expenses of
distribution of the shares of the Fund or of the provision of
shareholder services to the Funds shareholders, including
payments to securities dealers or other financial intermediaries
or service providers, out of its profits and available resources
other than the advisory and administration fees paid by the Fund.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by 440
Financial, Wilshire or First Data. The expenses borne by the Fund
include: organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of 440 Financial, Wilshire or First Data or any
of their affiliates, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory and administration
fees, shareholder services plan 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 Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses. Expenses
attributable to a particular class of shares or Portfolio are
charged against the assets of that class or Portfolio;
accordingly, shareholder services plan fees payable with respect
to a particular class of shares are charged only to that class of
shares. Other expenses of the Fund are allocated between the
Portfolios on the basis determined by the Board of Directors,
including, but not limited to, proportionately in relation to the
net assets of each Portfolio.
How to Buy Fund Shares
Portfolio Shares are sold without a sales charge. You may be
charged a nominal fee if you effect transactions in Portfolio
Shares through a securities dealer, bank or other financial
institution. Share 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 in a Portfolio is $2,500, or
$1,000 if you are a client of a securities dealer, bank or other
financial institution which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must
be at least $100. The initial investment must be accompanied by
the Fund's Account Application. The Fund reserves the
right to offer a Portfolio's Shares without regard to minimum
purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other
programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund. The Fund
reserves the right to vary further the initial and subsequent
investment minimum requirements at any time.
You may purchase a Portfolio's Shares by check or wire.
Checks should be made payable to "Wilshire Target Funds, Inc."
For subsequent investments, your Fund account number should appear
on the check. Payments which are mailed should be sent to Wilshire
Target Funds, Inc., P.O. Box [ ], Providence, Rhode Island
02940-[ ], together with your investment slip or, when opening
a new account, your Account Application, indicating the name of
the Portfolio being purchased. Neither initial nor subsequent
investments should be made by third party check.
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
Boston Safe Deposit and Trust Company, together with the name of
the Fund and the applicable Portfolio's DDA number as follows, for
purchase of Shares in your name: DDA [Acct. No.]/Large Company
Growth Portfolio; DDA[Acct. No.]/Large Company Value Portfolio;
DDA[Acct. No.]/Small Company Growth Portfolio; DDA[Acct.
No.]/Small Company Value Portfolio. The wire must include your
Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial
purchase of Fund Shares is by wire, please call [TELEPHONE NO.]
after completing your wire payment to obtain your Fund account
number. Please include your Fund account number on the Fund's
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.
Portfolio Shares also may be purchased through the
Wilshire Target Funds Accumulation Plan, described under
"Shareholder Services." This service enables 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.
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 Boston
Safe and Trust Deposit Company with instructions to credit your
Fund account. The instructions must specify your Fund account
registration and your Fund account number preceded by the digits
"[No.]."
Shares of each Portfolio 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. Net asset value per
share of each class of shares 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,
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 of a class of shares of a Portfolio is computed
by dividing the value of the net assets attributable to that class
of shares (i.e., the value of the assets attributable to that
class less liabilities attributable to that class) by the total
number of shares of that class outstanding. Each Portfolio's
investments are valued based on market value or, where market
quotations are not readily available, based on fair value as
determined in good faith by the Board of Directors. For further
information regarding the methods employed in valuing Fund
investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the Fund's 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").
Shareholder Services
Portfolio Exchanges - You may purchase, in exchange for shares
of a Portfolio, shares of the same class of one of the other
Portfolios offered by the Fund, to the extent such shares are
offered for sale in your state of residence. If you desire to use
this service, please call [TELEPHONE NO.] 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. 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
Portfolio 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
[TELEPHONE NO.]. If you have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling
[TELEPHONE NO.] or, if you are calling from overseas, call
[TELEPHONE NO.]. See "How to Redeem Fund 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 Portfolio or
fund into which the exchange is made: Telephone Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, and the dividend and capital gain distribution option
selected by the investor.
Shares will be exchanged at their next determined net
asset value. No fees currently are charged to
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 Exchanges may be modified or
terminated at any time upon notice to shareholders.
The exchange of Shares of one Portfolio 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.
Wilshire Target Funds Accumulation Plan - Wilshire Target
Funds Accumulation Plan permits you to purchase Portfolio Shares
(minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Portfolio Shares are purchased
by transferring funds from the bank account designated by you. At
your option, the bank account designated by you will be debited in
the specified amount, and Portfolio 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 Wilshire Target Funds Accumulation Plan
account, you must file an authorization form with the Transfer
Agent. You may obtain the necessary authorization form by calling
[TELEPHONE NO.]. You may cancel your participation in this
Privilege or change the amount of purchase at any time by mailing
written notification to Wilshire Target Funds, Inc., P.O. Box [
], Providence, Rhode Island 02940-[ ], and the notification
will be effective three business days following receipt. The Fund
may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
Retirement Plans - The Fund offers a variety of pension and
profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs and
IRA "Rollover Accounts," 401(k) Salary Reduction Plans and
403(b)(7) Plans. Plan support services also are available. To
obtain details on Keogh Plans, IRAs and IRA "Rollover Accounts,"
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans,
please call the following toll-free number: [ TELEPHONE NO.].
How to Redeem Fund Shares
General - You may request redemption of your Shares at any time.
Redemption requests should be transmitted in accordance with the
procedures described below. When a request is received in proper
form, the Fund will redeem the Shares at the next determined net
asset value.
Securities dealers, banks and other financial institutions
may charge a nominal fee for effecting redemptions of a
Portfolio's Shares. Any certificates representing a Portfolio's
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 Portfolio'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 a Portfolio's shares by check or through Wilshire
Target Funds Accumulation Plan and subsequently submit a written
redemption request to the transfer agent, the redemption proceeds
will be transmitted to you promptly upon bank clearance of your
purchase check or Wilshire Target Funds Accumulation Plan order,
which may take up to eight business days or more. In addition, the
fund will reject requests to redeem shares by wire or telephone
for a period of eight business days after receipt by the transfer
agent of the purchase check or the Wilshire Target Funds
Accumulation Plan 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 Wire Redemption Privilege or the
Telephone Redemption Privilege. 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 Fund's 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 a Portfolio's
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, such Portfolio's net
asset value may fluctuate.
Regular Redemption - Under the regular redemption procedure, you
may redeem your Shares by written request mailed to Wilshire
Target Funds, Inc., P.O. Box [ ], Providence, Rhode Island
02940-[ ]. Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in
proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers
listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.
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 only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling [TELEPHONE NO.] or, if you are calling from overseas,
call [TELEPHONE NO.]. 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 [TELEPHONE NO. ] or, if you are
calling from overseas, call [TELEPHONE NO.] Shares held under
Keogh Plans, IRAs or other retirement plans, and Shares for which
certificates have been issued, are not eligible for this
Privilege.
Shareholder Services Plan
The Directors of the Fund have adopted a separate
shareholder services plan (the "Shareholder Services Plan") with
respect to the Shares pursuant to Section 12(b) of the 1940 Act
and Rule 12b-1 thereunder. Under the Shareholder Services Plan,
the Fund reimburses 440 Financial at an annual rate of up to .25
of 1% of the value of the average daily net assets attributable to
the Shares of each Portfolio for certain shareholder services
provided by securities dealers or other financial intermediaries.
The shareholder services provided may include personal services to
holders of the Shares and/or for the maintenance of the accounts
of the holders of the Shares. The amount payable under the
Shareholder Services Plan is charged to, and therefore reduces,
income allocated to the Shares.
Dividends, Distributions and Taxes
Each Portfolio ordinarily declares and pays dividends from
its net investment income and distributes net realized securities
gains, if any, once a year, but it may make distributions on a
more frequent basis to comply with the distribution requirements
of the Internal Revenue Code of 1986, as amended (the "Code"), in
all events in a manner consistent with the provisions of the 1940
Act. The Fund will 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.
The Fund intends to distribute substantially all of its net
investment income and net realized securities gains on a current
basis. Dividends paid by a Portfolio derived from net
investment income and distributions from net realized short-term
securities gains of the Portfolio will be taxable to U.S.
shareholders as ordinary income for federal income tax purposes
whether received in cash or reinvested in additional Shares.
Depending upon the composition of a Portfolio's income, all or a
portion of the dividends derived from net investment income may
qualify for the dividends received deduction allowable to certain
U.S. corporations. Distributions from net realized long-term
securities gains of a Portfolio 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
Portfolio Shares and whether such distributions are received in
cash or reinvested in Shares. The Code currently 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 will generally be subject to state and
local taxes.
Dividends from net investment income and distributions from
net realized short-term securities gains paid by a Portfolio 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
a Portfolio 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 any U.S. withholding tax. However, such
distributions and redemption proceeds may be subject to backup
withholding, as described below, unless the foreign investor
certifies his non-U.S. residency status. The tax consequences
to foreign investors engaged in a trade or business that is
effectively connected with the United States may differ from the
foregoing.
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 each Portfolio has
qualified for the fiscal year ended August 31, 1995 as a
"regulated investment company" under the Code. Each Portfolio
intends to continue to so qualify. /R> Such qualification
relieves a Portfolio of any liability for Federal income tax to
the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, each Portfolio is
subject to a non-deductible 4% excise tax, measured with respect
to certain undistributed amounts, if any, of taxable investment
income and capital gains.
The foregoing is a general summary of the U.S. federal
income tax consequences of investing in the Fund. You should
consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
Performance Information
For purposes of advertising, performance is calculated on
the bases of average annual total return and/or total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the
Portfolio 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 each Portfolio's performance will
include such Portfolio'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 Portfolio 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 the Wilshire 5000 Index, Lipper Analytical Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones
Industrial Average, Morningstar, Inc. and other industry
publications.
General Information
The Fund was incorporated under Maryland law on July 30,
1992, and commenced operations on September 30, 1992. The Fund is
authorized to issue 400 million shares of Common Stock (with 100
million allocated to each Portfolio and 50 million
allocated to each of two classes of each Portfolio), par value
$.001 per share.
The Fund is a "series fund," which is a mutual fund divided
into separate portfolios. Each Portfolio of the Fund is treated as
a separate entity for certain matters under the 1940 Act and for
other purposes, and a shareholder of one Portfolio is not deemed
to be a shareholder of any other Portfolio. As described below,
for certain matters Fund shareholders vote together as a group; as
to others they vote separately by Portfolio or by class.
To date, the Board of Directors has authorized the creation
of four series of shares ("Portfolios") and an "Investment
Class" and "Institutional Class" of shares for each Portfolio.
All consideration received by the Fund for shares of one of
the Portfolios and all assets in which such consideration is
invested will belong to that Portfolio (subject only to the rights
of creditors of the Fund) and will be subject to the liabilities
related thereto. Each share of a class of a Portfolio
represents an equal proportionate interest in the Portfolio with
each other class share, subject to the liabilities of the
particular class. Each class of shares of a Portfolio
participates equally in the earnings, dividends and assets
attributable to that class. The income attributable to, and the
expenses of, one class are treated separately from those of the
other classes. Shares are fully paid and non-assessable. Should a
Portfolio be liquidated, the holders of each class are entitled to
share pro rata in the net assets attributable to that class
available for distribution to shareholders. The Board of Directors
has the ability to create, from time to time, new portfolios and
additional classes without shareholder approval. Shares have no
pre-emptive or conversion rights.
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 Directors or the appointment of auditors.
However, pursuant to the Fund's By-Laws, the holders of at least
10% of the shares outstanding and entitled to vote may require the
Fund to hold a special meeting of shareholders for the purpose of
considering the removal of a Director from office or for any other
purpose. Fund shareholders may remove a Director by the
affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any
time, less than a majority of the Directors then holding office
have been elected by shareholders. Each share has one vote and
shares of each Portfolio would be entitled to vote separately to
approve investment advisory agreements or changes in investment
restrictions, but shares of all Portfolios would vote together in
the election of Directors or selection of accountants. Each class
of a Portfolio is also entitled to vote separately on any material
increases in the fees under its Shareholder Services Plan or on
any other matter that affects solely that class of shares, but
will otherwise vote together with all other classes of shares of
the Portfolio on all other matters on which stockholders are
entitled to vote.
The Transfer Agent maintains a record of your ownership and
sends confirmations and statements of account. Certificates
for shares will not be issued unless specifically requested.
Shareholder inquiries may be made by writing to the Fund at
[FUND ADDRESS], or by calling toll free [TELEPHONE NO.]. In New
York City, call [ TELEPHONE NO.]; outside of the U.S. and Canada,
call [TELEPHONE NO.]. </R
Appendix
Investment Techniques
Borrowing Money - Each Portfolio is permitted to borrow money only
for temporary or emergency (not leveraging) purposes, in an amount
up to 15% of the value of its total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of a Portfolio's total assets,
the Portfolio will not make any additional investments.
Use of Derivatives - Although no Portfolio will be a commodity
pool, Derivatives subject a Portfolio to the rules of the
Commodity Futures Trading Commission which limit the extent to
which a Portfolio can invest in certain Derivatives. Each
Portfolio may invest in stock index futures contracts for hedging
purposes without limit. However, no Portfolio may invest in such
contracts for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging purposes, exceed 5% of the
liquidation value of the Portfolio's assets, after taking into
account unrealized profits and unrealized losses on such contracts
it has entered into; 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.
Lending Portfolio Securities - Each Portfolio 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 Portfolio
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 Portfolio 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 % of the value of
the Portfolio's total assets. In connection with such loans, the
Portfolio 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. A
Portfolio might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches its
agreement with the Portfolio.
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 Portfolios' 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
[This Page Intentionally Left Blank]
"ART"
"LOGO"
Wilshire Target Funds, Inc.
"Prospectus"
[ 1996, Wilshire Associates Incorporated]
[WILSp511595]
WILSHIRE TARGET FUNDS, INC.
(INVESTMENT CLASS SHARES)
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
May 31, 1996
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with the
current Prospectus of Wilshire Target Funds, Inc. (Investment
Class Shares), dated May 31, 1996, as it may be revised from time
to time. To obtain a copy of the Prospectus, please write to
Wilshire Target Funds, Inc. (the "Fund") at or call the
following numbers:
Call Toll Free
Outside the U.S. and Canada--Call
Wilshire Associates Incorporated ("Wilshire") serves as the
Fund's investment adviser.
First Data Investor Services Group, Inc. ("First Data")
serves as the Fund's administrator.
440 Financial Distributors, Inc. ("440 Financial") serves as
the Fund's distributor.
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY 1
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 2
MANAGEMENT OF THE FUND 8
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS 11
SHAREHOLDER SERVICES PLAN 16
PURCHASE OF FUND SHARES 17
REDEMPTION OF FUND SHARES 18
SHAREHOLDER SERVICES 19
DETERMINATION OF NET ASSET VALUE 21
DIVIDENDS, DISTRIBUTION AND TAXES 21
PERFORMANCE INFORMATION 23
PORTFOLIO TRANSACTIONS 24
INFORMATION ABOUT THE FUND 25
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,COUNSEL AND
INDEPENDENT ACCOUNTANTS 25
APPENDIX 26
STATEMENT OF ASSETS AND LIABILITIES 54
NOTES TO FINANCIAL STATEMENTS 61
GENERAL INFORMATION AND HISTORY
On August 28, 1992, Dreyfus-Wilshire Series Fund, Inc.
changed its name to Dreyfus-Wilshire Target Funds, Inc.
On May 31, 1996 Dreyfus-Wilshire Target Funds, Inc. changed
its name to Wilshire Target Funds, Inc.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description
of the Fund."
Other Portfolio Securities
U.S. Government Securities--Each Portfolio may purchase
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, which 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, for example, Government
National Mortgage Association pass-through certificates, are
supported by the full faith and credit of the U.S. Treasury;
others, such as those of the Federal Home Loan Banks, by the right
of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as
those issued by the Student Loan Marketing Association, 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 or instrumentalities, no assurance
can be given that it will always do so, since it is not so
obligated by law.
Zero Coupon Securities--Each Portfolio 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. Each
Portfolio also may invest in zero coupon securities 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.
Bank Obligations--Each Portfolio may purchase certificates
of deposit, time deposits, bankers' acceptances and other
short-term obligations issued by domestic banks, foreign
subsidiaries of domestic banks, foreign branches of domestic
banks, and domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign
branches of domestic banks, foreign subsidiaries of domestic
banks, and domestic and foreign branches of foreign banks, the
Portfolio 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. Such
risks include possible future political and economic developments,
the possible imposition of foreign withholding taxes on interest
income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal
and interest on these securities and the possible seizure or
nationalization of foreign deposits.
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 at a stated
interest rate. Each Portfolio will invest in time deposits of
domestic banks that have total assets in excess of one billion
dollars. Time deposits which may be held by the Portfolios will
not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal
Deposit Insurance Corporation.
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 of 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.
Repurchase Agreements--In a repurchase agreement, the
Portfolio 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 Portfolio's
ability to dispose of the underlying securities. The Fund's
custodian or sub-custodian will have custody of, and will hold in
a segregated account, securities acquired by a Portfolio under a
repurchase agreement. Repurchase agreements are considered by the
staff of the Securities and Exchange Commission to be loans by the
Portfolio entering into them. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Portfolios will
enter into repurchase agreements only with domestic banks with
total assets in excess of one billion dollars, or primary
government securities dealers reporting to the Federal Reserve
Bank of New York, with respect to securities of the type in which
such Portfolio may invest, and will require that additional
securities be deposited with it if the value of the securities
purchased should decrease below resale price.
Commercial Paper and Other Short-Term Corporate
Obligations--Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Portfolios 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.,
A-1 by Standard & Poor's Ratings Group, F-1 by Fitch Investors
Service, L.P. or D-1 by Duff & Phelps Credit Rating Co., (b)
issued by companies having an outstanding unsecured debt issue
currently rated not lower than Aa3 by Moody's Investors Service,
Inc. or AA- by Standard & Poor's Ratings Group, Fitch Investors
Service, L.P. or Duff & Phelps Credit Rating Co., or (c)
if unrated, determined by Wilshire to be of comparable quality to
those rated obligations which may be purchased by such Portfolio.
These instruments include variable amount master demand notes,
which are obligations that permit the Portfolio to invest
fluctuating amounts at varying rates of interest pursuant to
direct arrangements between the Portfolio, 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 Portfolio's right to redeem is dependent
on the ability of the borrower to pay principal and interest on
demand. In connection with floating and variable rate demand
obligations, Wilshire will consider, on an ongoing basis, earning
power, cash flow and other liquidity ratios of the borrower, and
the borrower's ability to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating
agencies, and a Portfolio may invest in them only if at the time
of an investment the borrower meets the criteria set forth above
for other commercial paper issuers.
Management Policies
Derivatives. A Portfolio 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 the Portfolio 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 a Fund to increase, decrease or change the level of risk to
which its portfolio is exposed in much the same way as the
Portfolio 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 a Portfolio's performance.
If a Portfolio invests in Derivatives at inappropriate times
or judges market conditions incorrectly, such investments may
lower the Portfolio's return or result in a loss. A Portfolio
also could experience losses if its Derivatives were poorly
correlated with its other investments, or if the Portfolio was
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.
When required by the Securities and Exchange Commission, the
Portfolio 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, a Portfolio 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, Wilshire 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 a Portfolio. 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. A Portfolio 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 a
Portfolio which could adversely affect the value of such
Portfolio's net assets. Although each Portfolio 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 Portfolio to substantial
losses.
Successful use of futures by a Portfolio also is subject to
the ability of Wilshire 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 a
Portfolio 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 Portfolio
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 Portfolio has insufficient cash, it may have to
sell securities to meet daily variation margin requirements. A
Portfolio 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, a Portfolio 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 a
Portfolio's ability otherwise to invest those assets.
Specific Futures Transactions. A Portfolio may purchase and
sell stock index futures contracts. A stock index future
obligates a Portfolio to pay or receive an amount of cash equal to
a fixed dollar amount specified in the futures contract multiplied
by the difference between the settlement price of the contract on
the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the
opening of trading in such securities on the next business day.
Future Developments. A Portfolio may take advantage of
opportunities in the area of futures contracts and any other
Derivatives which are not presently contemplated for use by the
Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent
with the Portfolio's investment objective and legally permissible
for the portfolio. Before entering into such transactions or
making any such investment, the Portfolio will provide appropriate
disclosure in its Prospectus or Statement of Additional
Information.
Lending Portfolio Securities. In connection with its
securities lending transactions, a Portfolio 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 Portfolio 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
Portfolio must be able to terminate the loan at any time; (4) the
Portfolio must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions payable on the
loaned securities, and any increase in market value; (5) the
Portfolio may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Directors
must terminate the loan and regain the right to vote the
securities if a material event adversely affecting the investment
occurs. These conditions may be subject to future modification.
Investment Restrictions. Each Portfolio has adopted
investment restrictions numbered 1 through 9 as fundamental
policies, which cannot be changed, as to a Portfolio, without
approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of
such Portfolio's outstanding voting shares. Investment
restrictions numbered 10 through 15 are not fundamental policies
and may be changed by vote of a majority of the Directors at any
time. No Portfolio may:
1. Invest in commodities, except that the Portfolio may
purchase and sell options, forward contracts, 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 Portfolio may purchase and sell securities that are secured by
real estate or issued by companies that invest or deal in real
estate.
3. Borrow money, except for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the
Portfolio's total assets (including the amount borrowed) based on
the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Portfolio's total assets,
the Portfolio will not make any additional investments. For
purposes of this investment restriction, the entry into options,
forward contracts, 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 Portfolio 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 Fund's Board of Directors.
5. Act as an underwriter of securities of other issuers,
except to the extent the Portfolio 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 its assets in the securities
of issuers in any single industry, provided there shall be no
limitation on the purchase of obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
7. Invest more than 5% of its assets in the obligations
of any single issuer, except that up to 25% of the value of the
Portfolio'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.
8. Hold more than 10% of the outstanding voting
securities of any single issuer. This Investment Restriction
applies only with respect to 75% of the Portfolio's total assets.
9. 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, 11 and
12 may be deemed to give rise to a senior security.
10. Invest in the securities of a company for the purpose
of exercising management or control, but the Portfolio will vote
the securities it owns in its portfolio as a shareholder in
accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to
the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection
with writing covered put and call options and the purchase of
securities on a when-issued or forward commitment basis and
collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating to indices, and options on futures
contracts or indices.
12. Purchase, sell or write puts, calls or combinations
thereof, except as may be described in the Fund's Prospectus and
this Statement of Additional Information.
13. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the
Portfolio's investments in all such companies to exceed 5% of the
value of its total assets.
14. 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 Portfolio's net assets would be so invested.
15. Purchase securities of other investment companies,
except to the extent permitted under the 1940 Act or those
received as part of a merger or consolidation.
If a percentage restriction is adhered to at the time of
investment, a later change in percentage resulting from a change
in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of a
Portfolio's shares in certain states. In this regard, and while
not a fundamental policy, the Fund has undertaken that no
Portfolio may invest in real estate limited partnerships. Should
the Fund determine that a commitment is no longer in the best
interest of the Portfolio and its shareholders, the Fund reserves
the right to revoke the commitment by terminating the sale of such
Portfolio's shares in the state involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with
information as to their principal business occupations during at
least the last five years, are shown below. Each Director who is
deemed to be an "interested person" of the Fund, as defined in the
1940 Act, is indicated by an asterisk.
Directors of the Fund
*THOMAS D. STEVENS, Chairman of the Board, President and Director.
Senior Vice President and Principal of Wilshire Associates
Incorporated for more than the past five years. He is the Chief
Investment Officer of the Wilshire Asset Management division.
Wilshire Asset Management is a provider of index and structured
equity and fixed income applications. He is 46 years old and his
address is c/o Wilshire Associates Incorporated, 1299 Ocean
Avenue, Santa Monica, California 90401-1085.
DEWITT F. BOWMAN, Director. Since January 1994, Pension
Investment Consultant providing advice on large pension fund
investment strategy, new product evaluation and integration, and
large plan investment analysis and management. For more than four
years prior thereto, he was Chief Investment Officer of the
California Public Employees Retirement System. He currently
serves as a director of the RREEF America REIT, RCM Equity Funds,
Inc., Brandes Investment Trust, and as a trustee of the Pacific
Gas and Electric Nuclear Decommissioning Trust. He is 65 years
old and his address is 79 Eucalyptus Knoll, Mill Valley,
California 94941.
*ROBERT J. RAAB, JR., Director. Senior Vice President and
Principal of Wilshire Associates Incorporated for more than the
past five years. He is head of Wilshire's Institutional Services
Division and is responsible for Wilshire Equity, Fixed Income,
Index Fund and Portfolio Accounting products. He is 46 years old
and his address is c/o Wilshire Associates Incorporated, 1299
Ocean Avenue, Santa Monica, California 90401-1085.
PETER J. CARRE, Director. Attorney, Peter Carre and
Associates, Law Offices, since 1982. He practices law in the
areas of ERISA and Investment Law. He is 48 years old and his
address is c/o Peter Carre and Associates, Law Offices, 815
Connecticut Avenue, N.W., Washington, D.C. 20006.
ANNE WEXLER, Director. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs for
more than fifteen years. She is also a director of Alumax,
The Dreyfus Corporation, Comcast Corporation and The New
England Electric System, Nova Corporation, and a member of the
Board of the Carter Center of Emory University, the Council of
Foreign Relations, the National Park Foundation, Visiting
Committee of the John F. Kennedy School of Government at Harvard
University and the Board of Visitors of the University of Maryland
School of Public Affairs. She is 65 years old and her address is
c/o The Wexler Group, 1317 F Street, N.W., Suite 600, Washington,
D.C. 20004.
For so long as the Fund's plan described in the section
captioned "Shareholder Services Plan" remains in effect, the
Directors of the Fund who are not "interested persons" of the
Fund, as defined in the 1940 Act, will be selected and nominated
by the Directors who are not "interested persons" of the Fund.
The Fund typically pays its Directors an annual retainer and
a per meeting fee and reimburses them for their expenses. The
aggregate amount of compensation paid to each current Director by
the Fund for the fiscal year ended August 31, 1995, was as
follows:
(1) (2) (3) (4) (5)
Name of Board Member Aggregate Pension or Estimated
Total
Compensation Retirement
Annual Compensation
from Fund* Benefits Benefits
From
Accrued as Part Upon
Registrant
of Fund's Retirement and
Fund
Expenses
Complex
Thomas D. Stevens none none none none
DeWitt F. Bowman none none none none
Robert J. Raab, Jr. none none none none
Peter J. Carre none none none none
Anne Wexler $4,500* none none $4,500*
* Amount does not include reimbursed expenses for attending
Board meetings, which amounted to $598 for all Directors as a
group.
Officers of the Fund
THOMAS D. STEVENS, (see "Directors of the Fund" above).
DAVID R. BORGER, Vice President and Treasurer. Vice President and
Principal of Wilshire Associates Incorporated and Director of
Research for its Wilshire Asset Management division for more than
five years. He is 47 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401-1085.
ALAN L. MANNING, Secretary. Since 1990, Vice President, Secretary
and General Counsel of Wilshire Associates Incorporated. He is 46
years old and his address is c/o Wilshire Associates Incorporated,
1299 Ocean Avenue, Santa Monica, California 90401-1085.
MICHAEL J. NAPOLI, JR., Vice President. Vice President and
Principal of Wilshire Associates Incorporated for more than five
years. He is Director of Marketing for its Wilshire Asset
Management division. He is 44 years old and his address is c/o
Wilshire Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401-1085.
JULIE A. TEDESCO, Vice President and Assistant Secretary. Since
May 1994, Counsel to First Data Investor Services Group, Inc.
From July 1992 to May 1994, Assistant Vice President and Counsel
of The Boston Company. From 1988 to 1992, Ms. Tedesco was an
associate in the Boston law firm of Hutchins, Wheeler & Dittmar.
She is 38 years old and her address is c/o First Data Investor
Services Group, Inc., 53 State Street, Boston, Massachusetts
02109.
THERESE M. HOGAN, Vice President and Assistant Secretary. Since
June 1994, Manager (State Regulation) of First Data Investor
Services Group, Inc. From October 1993 to June 1994, Senior Legal
Assistant at Palmer & Dodge, Boston, Massachusetts. For more than
eight years prior thereto, a paralegal at Robinson & Cole in
Hartford, Connecticut. She is 34 years old and her address is c/o
First Data Investor Services Group, Inc., 53 State Street, Boston,
Massachusetts 02109.
MICHEL C. KARDOK, Assistant Treasurer. Since May, 1994, Vice
President, First Data Investor Services Group, Inc. For more than
four years prior thereto, he was Vice President of The Boston
Company Advisors, Inc. He is 36 years old and his address is c/o
First Data Investor Services Group, Inc., 53 State Street, Boston,
Massachusetts 02109.
Directors and officers of the Fund, as a group, owned less
than 1% of the Fund's shares of Common Stock outstanding on
March 20, 1996.
The following persons are known by the Fund to own of record
5% or more of a Portfolio's voting securities outstanding on
March 20, 1996:
Large Company Growth Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104-- 42%;
Cincinnati Bell Collectively Bargained Retirees Health Care
Trust, 201 East 4th Street, Cincinnati, Ohio 45202-- 26%; and
Hartwell Davis Jr., 4109 Kennesaw Drive, Birmingham, Alabama
35213-3225--5%.
Large Company Value Portfolio: Cincinnati Bell Collectively
Bargained Retirees Health Care Trust, 201 East 4th Street,
Cincinnati, Ohio 45202-- 42%; and Charles Schwab & Company, 101
Montgomery Street, San Francisco, California 94104--37%.
Small Company Growth Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104-- 32%;
Cincinnati Bell Collectively Bargained Retirees Health Care Trust,
201 East 4th Street, Cincinnati, Ohio 45202--14%; and Hartwell
Davis Jr., 4109 Kennesaw Drive, Birmingham, Alabama 35213-3225--
7%.
Small Company Value Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104-- 32%;
Dreyfus Trust Company, as trustee for FDC Incentive Savings Plan,
144 Glenn Curtiss Boulevard, Uniondale, New York 11556--19%;
Cincinnati Bell Collectively Bargained Retirees Health Care Trust,
201 East 4th Street, Cincinnati, Ohio 45202--18%; and Dreyfus
Trust Company, as trustee for Medline Industries, Inc. 401(k)
Profit Sharing Plan, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556--7%.
A shareholder that owns, directly or indirectly, 25% or more
of a Portfolio's voting securities may be deemed to be a "control
person" (as defined in the 1940 Act) of such Portfolio.
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."
Investment Advisory Agreement. Wilshire provides investment
advisory services to each Portfolio pursuant to the Investment
Advisory Agreement (the "Advisory Agreement") dated May 31,
1996, with the Fund. As to each Portfolio, the Advisory Agreement
has an initial term of two years and thereafter is subject to
annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of such Portfolio, provided that in either event
the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of
the Fund or Wilshire, by vote cast in person at a meeting called
for the purpose of voting on such approval. As to each Portfolio,
the Advisory Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board of Directors or by vote of the holders
of a majority of such Portfolio's shares, or, on not less than 90
days' notice, by Wilshire. The Advisory Agreement will terminate
automatically, as to the relevant Portfolio, in the event of its
assignment (as defined in the 1940 Act).
The following persons are officers and directors of
Wilshire: Dennis A. Tito, Chairman of the Board of Directors,
President and Chief Executive Officer; Gilbert Hammer, Director
and Senior Vice President; Robert J. Raab, Jr., Director and
Senior Vice President; Thomas D. Stevens, Director and Senior Vice
President; Stephen L. Nesbitt, Director and Senior Vice President;
Rosalind M. Hewsenian, Director and Vice President; Robert C.
Kuberek, Director and Vice President; Howard M. Yata, Director and
Vice President; Cecilia I. Loo, Director and Vice President; Alan
L. Manning, Vice President, General Counsel and Secretary; and San
Slawson, Vice President and Treasurer.
Wilshire is controlled by Mr. Dennis Tito, who owned 70%
of its outstanding stock as of February 29, 1996.
Wilshire provides day-to-day management of each Portfolio's
investments in accordance with the stated policies of the
Portfolio, subject to the approval of the Fund's Board of
Directors. Wilshire provides the Fund with portfolio managers
who are authorized by the Board of Directors to execute purchases
and sales of securities. The Fund's primary Portfolio Manager is
Thomas D. Stevens and he is assisted by David R. Borger. Wilshire
maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research
services for the Fund. All purchases and sales are reported for
the Board's review at the meeting subsequent to such transactions.
As compensation for Wilshire's services, the Fund has agreed
to pay Wilshire a monthly advisory fee at the annual rate of
.25 of 1% of the value of each Portfolio's average daily net
assets. The aggregate of the fees payable to Wilshire is not
subject to reduction as the value of a Portfolios net assets
increases. However, the advisory agreement also includes a
fifteen-month expense limitation provision. For the three-month
period June 1, 1996 through August 31, 1996 and the fiscal year
September 1, 1996 through August 31, 1997, Wilshire has agreed
that, if the aggregate operating expenses of any Portfolio
(exclusive of interest, taxes, brokerage, 12b-1 plan fees and
extraordinary expenses) for such period exceed the annual rate
specified in the following table for such Portfolio, the
investment advisory fee otherwise payable for that period by the
Portfolio under the agreement will be reduced by the amount of the
excess, but not below an annual fee rate of .10 of 1% of such
Portfolio's average daily net assets.
Fund Annual Rate (%)
Large Company Growth Portfolio .80
Large Company Value Portfolio .77
Small Company Growth Portfolio .91
Small Company Value Portfolio .66
All fees and expenses are accrued daily and deducted before
declaration of dividends to investors. For the period September
30, 1992 (commencement of operations for all Portfolios except
Small Company Growth Portfolio which commenced operations on
October 1, 1992) through August 31, 1993, and for the fiscal years
ended August 31, 1994 and 1995, the advisory fees for each
Portfolio payable to Wilshire,
the reductions attributable to a
voluntary fee waiver which was in effect until November 7, 1994,
and the net fees paid were as follows:
* Fee Paid For Period Ended August 31, 1993
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $7,486 $7,486
-0-
Large Company Value Portfolio $5,979 $5,979 -
0-
Small Company Growth Portfolio $6,308 $6,308
-0-
Small Company Value Portfolio $6,886 $6,886 -
0-
* Fee Paid For Fiscal Year Ended August 31, 1994
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $ 8,137 $ 8,137
-0-
Large Company Value Portfolio $11,133 $11,133 -
0-
Small Company Growth Portfolio $ 8,397 $ 8,397
-0-
Small Company Value Portfolio $20,919 $20,919 -
0-
* Fee Paid For Fiscal Year Ended August 31, 1995
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $14,834 $ 1,672
$13,162
Large Company Value Portfolio $15,835 $ 2,071
$13,764
Small Company Growth Portfolio $15,630 $ 2,195
$13,435
Small Company Value Portfolio $25,210 $ 4,145
$21,065
*The monthly fee paid to Wilshire during the above time periods
was calculated at the annual rate of .10 of 1% of the value of
each Portfolio's average daily net assets under the contract in
effect prior to May 31, 1996.
Administration Agreement. Pursuant to the Administration
Agreement (the "Administration Agreement") dated May 31, 1996
with the Fund, First Data, a subsidiary of First Data Corporation,
53 State Street, Boston, Massachusetts 02109, furnishes the Fund
clerical help and accounting, data processing, internal auditing
and legal services and certain other services required by the
Fund, prepares reports to each Portfolio's shareholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, and generally assists
in all aspects of the Fund's operations, other than providing
investment advice.
As to each Portfolio, the Administration Agreement has an
initial term of two years and will be extended for a third year
automatically unless the Fund elects to terminate it on the second
anniversary by six months written notice of termination.
Thereafter, the Agreement would continue in effect from year to
year subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the 1940 Act)
of such Portfolio's outstanding voting securities, provided that
in either event the continuance also is approved by a majority of
the Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund or First Data, by vote cast in person
at a meeting called for the purpose of voting on such approval.
As to each Portfolio, the Administration Agreement is terminable
without penalty, on six months notice prior to its second
anniversary, and 60 days' notice at any time after its third
anniversary, by the Fund's Board of Directors or by vote of
the holders of a majority of such Portfolio's shares, or, on not
less than 90 days' notice at any time after its third
anniversary by First Data. The Administration Agreement will
terminate automatically, as to the relevant Portfolio, in the
event of its assignment (as defined in the 1940 Act).
As compensation for First Data's services under the
Administration Agreement, the Fund has agreed to pay First Data a
monthly administration fee at the annual rate of .15 of 1% of the
Fund's monthly average net assets up to aggregate net assets of $1
billion, .10 of 1% of such value on the next $4 billion, and .08
of 1% on excess net assets. For the period September 30, 1992
(commencement of operations for all Portfolios except Small
Company Growth Portfolio which commenced operations on October 1,
1992) through August 31, 1993, and for the fiscal years ended
August 31, 1994 and 1995, the administration fees payable to the
former administrator, The Dreyfus Corporation, for each Portfolio,
the reductions attributable to a voluntary fee waiver which was in
effect until August 31, 1995, and the net fees paid were as
follows:
Fee Paid For Period Ended August 31, 1993
Administration Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $14,972 $14,972
-0-
Large Company Value Portfolio $11,958 $11,958 -
0-
Small Company Growth Portfolio $12,617 $12,617
-0-
Small Company Value Portfolio $13,772 $13,772 -
0-
Fee Paid For Fiscal Year Ended August 31, 1994
Administration Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $16,275 $16,275
-0-
Large Company Value Portfolio $22,267 $22,267 -
0-
Small Company Growth Portfolio $16,793 $16,793
-0-
Small Company Value Portfolio $41,838 $41,838 -
0-
Fee Paid For Fiscal Year Ended August 31, 1995
Administration Reduction Net
Portfolio Fee Payable in Fee Fee
Paid
Large Company Growth Portfolio $29,667 $29,667
-0-
Large Company Value Portfolio $31,669 $31,669 -
0-
Small Company Growth Portfolio $31,260 $31,260
-0-
Small Company Value Portfolio $50,421 $50,421 -
0-
Expenses and Expense Information. From time to time,
Wilshire or First Data may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have
the effect of lowering the overall expense ratio of the Fund and
increasing yield to investors at the time such amounts are waived
or assumed, as the case may be. The Fund will not pay Wilshire or
First Data for any amounts which may be waived, nor will the Fund
reimburse Wilshire or First Data for any amounts which may be
assumed. In addition to shareholder services fees which may be
paid by 440 Financial out of amounts which it receives under the
Fund's shareholder services plan, 440 Financial, Wilshire or First
Data may bear other expenses of distribution of the shares of the
Fund or of the provision of shareholder services to the Fund's
shareholders, including payments to securities dealers or other
financial intermediaries or service providers, out of its profits
and available resources other than the advisory and administration
fees paid by the Fund.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by 440
Financial, Wilshire or First Data. The expenses borne by the
Fund include: organizational costs, taxes, interest, brokerage
fees and commissions, if any, fees of Directors who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of 440 Financial, Wilshire or
First Data or any of their affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees,
advisory and administration fees, shareholder services plan
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 Fund's existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports
and meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and
for distribution to existing shareholders, and any extraordinary
expenses. Expenses attributable to a particular class of
shares or Portfolio are charged against the assets of that class
or Portfolio; accordingly, shareholder services plan fees payable
with respect to a particular class of shares are charged only to
that class of shares. Other expenses of the Fund are allocated
between the Portfolios on the basis determined by the Board
of Directors, including, but not limited to, proportionately in
relation to the net assets of each Portfolio.
As to each Portfolio, Wilshire and First Data have
agreed that if in any fiscal year the aggregate annual
expenses of the Portfolio, exclusive of taxes, brokerage,
interest on borrowings, Rule 12b-1 plan expenses and
extraordinary expenses, but including the advisory and
administration fees, exceed the expense limitation of any state in
which shares of the Portfolio are qualified for offer and sale,
the Fund may deduct from the payments to be made to each of
Wilshire and First Data, or Wilshire and First Data will bear such
excess expense in proportion to their investment advisory fee and
administration fee otherwise payable, 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.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the
"Plan") with respect to the Investment Class Shares of each
Portfolio pursuant to Section 12b of the 1940 Act and Rule 12b-1
thereunder. The Fund reimburses 440 Financial, which acts as the
distributor of the Investment Class Shares of each Portfolio, at
an annual rate of up to 0.25 of 1% of the value of the average
daily net assets attributable to the Shares of each Portfolio for
certain shareholder services provided by securities dealers or
other financial intermediaries. The shareholder services provided
may include personal services to holders of Investment Class
Shares and/or the maintenance of shareholder accounts. The amount
payable under the Shareholder Services Plan is charged to, and
therefore reduces, income allocated to the Investment Class
Shares.
The Plan has been, and any material amendments to the Plan
must be, approved (i) by votes of the majority of both (a) the
Directors of the Fund, and (b) those Directors of the Fund who are
not interested persons of the Fund, and have no direct or indirect
financial interest in the operation of the Plan or any agreements
related to it (the "Independent Directors"), in each case cast in
person at a meeting called for the purpose of voting on the Plan,
and (ii) and by vote of a majority of the outstanding Investment
Class shares. The Plan shall continue in effect for a period of
more than one year after May 31, 1996 only so long as such
continuance is specifically approved at least annually by votes of
the majority (or whatever other percentage may, from time to time,
be required by Section 12(b) of the Investment Company Act of 1940
or the rules and regulations thereunder) of both (a) the Directors
of the Fund, and (b) the Independent Directors of the Fund, cast
in person at a meeting called for the purpose of voting on the
Plan or such agreement.
Under the Plan, 440 Financial is required to provide to the
Directors of the Fund for their review, at least quarterly, a
written report of the amounts so expended and the purposes for
which such expenditures were made. The Plan may be terminated at
any time by vote of a majority of the Independent Directors, or by
vote of a majority of the outstanding Investment Class shares.
The Plan may not be amended to increase materially the amount of
expenses permitted without approval by a vote of at least a
majority of the outstanding Investment Class shares.
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.
For the fiscal year ended August 31, 1995, the following
amounts
were charged to each Portfolio under the Fund's former
Shareholder Services Plan:
Large Company Growth Portfolio $34,200
Large Company Value Portfolio $39,503
Small Company Growth Portfolio $38,741
Small Company Value Portfolio $62,831
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."
The Distributor. 440 Financial, a subsidiary of First
Data Corporation, c/o First Data Corporation, 53 State Street,
Boston, Massachusetts 02109, serves as the Fund's distributor
pursuant to an agreement which is renewable annually.
Transactions Through Securities Dealers. Fund shares may be
purchased and redeemed through securities dealers which may charge
a nominal transaction fee for such services. Some dealers will
place the Fund's shares in an account with their firm. Dealers
also may require that the customer invest more than the $1,000
minimum investment; the customer not take physical delivery of
share certificates; the customer not request redemption checks to
be issued in the customer's name; fractional shares not be
purchased; or other conditions.
There is no sales or service charge to individual investors
by the Fund or by 440 Financial, although investment dealers,
banks and other institutions may make reasonable charges to
investors for their services. The services provided and the
applicable fees are established by each dealer or other
institution acting independently of the Fund. The Fund has been
given to understand that these fees may be charged for customer
services including, but not limited to, same-day investment of
client funds; same-day access to client funds; advice to customers
about the status of their accounts, yield currently being paid or
income earned to date; provision of periodic account statements
showing security and money market positions; other services
available from the dealer, bank or other institution; and
assistance with inquiries related to their investment. Any such
fees will be deducted from the investor's account monthly and on
smaller accounts could constitute a substantial portion of the
distribution. Small, inactive, long-term accounts involving
monthly service charges may not be in the best interest of
investors. Investors should be aware that they may purchase
shares of the Fund directly from the Fund through 440
Financial without imposition of any maintenance or service
charges, other than those already described herein. In some
states, banks or other financial institutions effecting
transactions in Fund shares may be required to register as dealers
pursuant to state law.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Fund Shares."
Wire Redemption Privilege. By using this Privilege, the
investor authorizes First Data (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
Fund will initiate payment for shares redeemed pursuant to this
Privilege on the next business day after receipt if the Transfer
Agent receives the redemption request in proper form. Redemption
proceeds ($1,000 minimum) will be transferred by Federal Reserve
wire only to the commercial bank account specified by the investor
on the Account Application or Shareholder Services Form, or to a
correspondent bank if the investor's bank is not a member of the
Federal Reserve System. Fees ordinarily are imposed by such bank
and 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
______ _______________
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT Cables
operator at toll free. Investors should advise the
operator that the above transmittal code must be used and should
also inform the operator of the Transfer Agent's answer back sign.
To change the commercial bank or account designated to
receive wire redemption proceeds, a written request must be sent
to the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described below
under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with the
redemption request. Written redemption requests must be signed by
each shareholder, including each holder of a joint account, and
each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed.
The Transfer Agent has adopted standards and procedures pursuant
to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees
must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians,
and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more
information with respect to signature-guarantees, please call one
of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay
in cash all redemption requests by any shareholder of record,
limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of the Portfolio'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 of Directors 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 readily marketable, to the extent
available, and would be valued in the same manner as the
Portfolio's investment 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
Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Portfolio Exchanges. You may purchase, in exchange for
shares of a Portfolio, shares of the same class of one of the
other Portfolios offered by the Fund, to the extent such shares
are offered for sale in your state of residence. Shares of
other Portfolios purchased by exchange will be purchased on the
basis of relative net asset value per share as follows:
To request an exchange, the investor 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 Portfolio being exchanged must have a value of at least
the minimum initial investment required for the Portfolio into
which the exchange is being made. For 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 portfolios in Wilshire Target Funds, Inc. To exchange
shares held in personal retirement plans, the shares exchanged
must have a current value of at least $100.
The Portfolio Exchanges service is available to shareholders
resident in any state in which shares of the Portfolio being
acquired may legally be sold. Shares may be exchanged only
between accounts having identical names and other identifying
designations.
The Fund reserves the right to reject any exchange request
in whole or in part. The Portfolio Exchanges service may
be modified or terminated at any time upon notice to shareholders.
Corporate Pension/Profit-Sharing and Personal Retirement
Plans. The Fund makes available to corporations a variety of
prototype pension and profit-sharing plans including a 401(k)
Salary Reduction Plan. In addition, the Fund makes available
Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts,"
and 403(b)(7) Plans. Plan support services also are available.
Investors can obtain details on the various plans by calling the
following toll-free number:
Investors who wish to purchase a Portfolio's shares in
conjunction with a Keogh Plan, a 403(b)(7) Plan or an IRA,
including an SEP-IRA, may request from the Transfer Agent
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 or subsequent purchases.
The minimum initial investment for Keogh Plans, IRAs,
SEP-IRAs and 403(b)(7) Plans with only one participant, is
normally $750, with no minimum on subsequent purchases.
Individuals who open an IRA may also open a non-working spousal
IRA with a minimum investment of $250.
The investor should read the prototype retirement plan and
the appropriate form of custodial agreement for further details 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 the Fund's Prospectus entitled
"How to Buy Fund Shares."
Valuation of Portfolio Securities. Each Portfolio's
investment securities are valued at the last sale price on the
securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an
exchange or national securities market, or securities in which
there were no transactions, are valued at the average of the most
recent bid and asked prices. Bid price is used when no asked
price is available. Short-term investments are carried at
amortized cost, which approximates value. Any securities or other
assets for which recent market quotations are not readily
available are valued at fair value as determined in good faith by
the Board of Directors. Expenses and fees, including the advisory
and administration fees, are accrued daily and taken into account
for the purpose of determining the net asset value of each
Portfolio's shares.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed currently
are: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTION AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
Management of the Fund believes that each Portfolio
qualified for the fiscal year ended August 31, 1995 as a
"regulated investment company" under the Internal Revenue Code of
1986, as amended (the "Code"). Each Portfolio intends to continue
to so qualify. Qualification as a regulated investment
company relieves the Portfolio from any liability for Federal
income taxes to the extent its earnings are distributed in
accordance with the 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.
Depending on the composition of a Portfolio's income, all or
a portion of the dividends paid by such Portfolio from net
investment income may qualify for the dividends received deduction
allowable to certain U.S. corporate shareholders ("dividends
received deduction"). In general, dividend income of a Portfolio
distributed to qualifying corporate shareholders will be eligible
for the dividends received deduction only to the extent that (i)
such Portfolio's income consists of dividends paid by U.S.
corporations and (ii) the Portfolio would have been entitled to
the dividends received deduction with respect to such dividend
income if the Portfolio were not a regulated investment company.
The dividends received deduction for qualifying corporate
shareholders may be reduced if the shares of the
Portfolio held by them with respect to which dividends are
received are treated as debt-financed or deemed to have been held
for less than 46 days. In addition, the Code provides other
limitations with respect to the ability of a qualifying corporate
shareholder to claim the dividends received deduction in
connection with holding a Portfolio's shares.
Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the aggregate
net asset value of his shares below the cost of his investment.
Such a dividend or distribution would be a return on investment in
an economic sense, although taxable as stated in the Fund's
Prospectus. In addition, the Code provides that if a shareholder
holds shares of the Fund for six months or less and has received a
capital gain distribution with respect to such shares, any loss
incurred on the sale of such shares will be treated as a long-term
capital loss to the extent of the capital gain distribution
received.
If a shareholder holds shares of a Portfolio while holding a
short position in a regulated futures contract or an option in
such regulated futures contract that substantially diminishes
the shareholders risk of loss in its Portfolio shares (an
"offsetting position"), recently proposed Internal Revenue Service
regulations clarify that (i) any losses on the disposition of
Portfolio shares will be required to be deferred to the extent of
any unrealized appreciation in the short position and (ii) such
holding will limit the shareholder's ability to claim the
corporate dividends received deduction in respect of Portfolio
dividends.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. All or a
portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section
1258. "Conversion transactions" are defined to include certain
forward, futures, option and "straddle" transactions, transactions
marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by a
Portfolio from certain financial futures transactions will be
treated as 60% long- term capital gain or loss and 40% short-term
capital gain or loss. Gain or loss will arise upon the exercise
or lapse of such futures as well as from closing transactions. In
addition, any such futures remaining unexercised at the end of the
Portfolio's taxable year will be treated as sold for their then
fair market value, resulting in additional gain or loss to such
Portfolio characterized in the manner described above.
Offsetting positions held by a Portfolio involving financial
futures may constitute "straddles." Straddles are defined to
include "offsetting positions" in actively traded personal
property. The tax treatment of straddles is governed by Sections
1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256. As such,
all or a portion of any short or long-term capital gain from
certain "straddle" and/or conversion transactions may be
recharacterized to ordinary income.
If a Portfolio were treated as entering into straddles by
reason of its futures transactions, such straddles could be
characterized as "mixed straddles" if the futures transactions
comprising such straddles were governed by Section 1256 of the
Code. The Portfolio may make one or more elections with respect
to "mixed straddles." Depending upon which election is made, if
any, the results to the Portfolio may differ. If no election is
made, to the extent the straddle rules apply to positions
established by the Portfolio, losses realized by such Portfolio
will be deferred to the extent of unrealized gain in any
offsetting positions. Moreover, as a result of the straddle
rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital
gain on straddle positions may be recharacterized as
short-term capital gain, and as a result of the conversion
transaction rules, long-term capital gain may be recharacterized
as ordinary income.
Investment by a Portfolio 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 such Portfolio to
recognize income prior to the receipt of cash payments. For
example, the Portfolio 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, such Portfolio may have to dispose of securities which
it might otherwise have continued to hold in order to generate
cash to satisfy these distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Large Company Growth Portfolio's average annual total
return for the 1 and 2.921 year periods ended August 31, 1995 was
23.67% and 10.75%, respectively. The Large Company Value
Portfolio's average annual total return for the 1 and 2.921 year
periods ended August 31, 1995 was 18.97% and 12.48%, respectively.
The Small Company Growth Portfolio's average annual total return
for the 1 and 2.918 year periods ended August 31, 1995 was 23.04%
and 19.03%, respectively. The Small Company Value Portfolio's
average annual total return for the 1 and 2.921 year periods ended
August 31, 1995 was 11.84% and 10.51%, respectively. Average
annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value per
share 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 "nth" root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.
The total return for the period September 30, 1992(1)
(commencement of operations) to August 31, 1995 for each Portfolio
was as follows:
Large Company Growth Portfolio 34.74%
Large Company Value Portfolio 40.98%
Small Company Growth Portfolio 66.33%
Small Company Value Portfolio 33.88%
Total return is calculated by subtracting the amount of the
Portfolio'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.
_____________________
(1) Small Company Growth Portfolio commenced operations on October
1, 1992.
From time to time advertising materials for the Fund may
refer to Morningstar ratings and related analysis supporting such
ratings.
PORTFOLIO TRANSACTIONS
Wilshire supervises the placement of orders on behalf of
each Portfolio for the purchase or sale of portfolio securities.
Allocation of brokerage transactions, including their frequency,
is made in the best judgment of Wilshire 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 may include
those that supplement Wilshire'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 Wilshire and its
fees are not reduced as a consequence of the receipt of such
supplemental information. Such information may be useful to
Wilshire in serving both the Fund and other clients which it
advises and, conversely, supplemental information obtained by the
placement of business of other clients may be useful to Wilshire
in carrying out its obligations to the Fund. Brokers also are
selected because of their ability to handle special executions
such as are involved in large block trades or broad distributions,
provided the primary consideration is met. Large block trades, in
certain cases, may result from two or more clients Wilshire might
advise being engaged simultaneously in the purchase or sale of the
same security. When transactions are executed in the
over-the-counter market, the Fund will deal with the primary
market makers unless a more favorable price or execution otherwise
is obtainable.
Portfolio turnover may vary from year to year, as well as
within a year. Under normal market conditions, each Portfolio's
turnover rate generally will not exceed 60%. High turnover rates
are likely to result in comparatively greater brokerage expenses.
The overall reasonableness of brokerage commissions paid is
evaluated by the Adviser based upon its knowledge of available
information as to the general level of commissions paid by other
institutional investors for comparable services.
For its portfolio securities transactions for the period
September 30, 1992 (commencement of operations for all Portfolios
except Small Company Growth Portfolio which commenced operations
on October 1, 1992) through August 31, 1993 and for the fiscal
years ended August 31, 1994 and 1995, the Fund paid total
brokerage commissions as follows:
Period Ended Year Ended Year Ended
Portfolio August 31, 1993 August 31, 1994 August
31, 1995
Large Company Growth Portfolio $ 8,191 $ 2,199
$13,487
Large Company Value Portfolio $ 9,779 $10,349 $23,243
Small Company Growth Portfolio $21,107 $12,919
$42,766
Small Company Value Portfolio $17,687 $37,422 $61,819
No brokerage commissions were paid to the former distributor,
The Dreyfus Corporation. There were no spreads or concessions
on principal transactions for any such period.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."
Each share of a Portfolio has one vote and, when issued and
paid for in accordance with the terms of the offering, is fully
paid and non-assessable. Shares of each class of a Portfolio
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 Fund, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding
shares of each Portfolio affected by such matter. Rule
18f-2 further provides that a Portfolio shall be deemed to be
affected by a matter unless it is clear that the interests of each
Portfolio in the matter are identical or that the matter does not
affect any interest of such Portfolio. However, the Rule exempts
the selection of independent accountants and the election of
Directors from the separate voting requirements of the Rule.
Rule 18f-3 under the 1940 Act makes further provision for the
voting rights of each class of Shares, such as the Investment
Class shares, of an investment company which issues more than one
class of voting shares. In particular, Rule 18f-3 provides that
each class shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to the class'
arrangement for services and expenses, and shall have separate
voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other
class.
The Fund will send annual and semi-annual financial
statements to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT ACCOUNTANTS
Northern Trust Company, an Illinois trust company located at
50 South LaSalle Street, Chicago, Illinois 60675, acts as
custodian of the Fund's investments. First Data Investor 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. Neither Northern Trust Company nor
First Data has any part in determining the investment policies of
the Fund or which securities are to be purchased or sold by the
Fund.
Ropes & Gray, One International Place, Boston, Massachusetts
02110-2624, is counsel for the Fund.
Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New
York, New York 10019, independent accountants, have been selected
as auditors of the Fund.
APPENDIX
Description of the highest commercial paper rating assigned
by Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc. ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, L.P. ("Fitch") and Duff &
Phelps Credit Rating Co. ("Duff").
The rating A is the highest rating and is assigned by S&P to
issues that are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with the
number 1, 2 or 3 to indicate the relative degree of safety. Paper
rated A-1 indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess
overwhelming safety characteristics are denoted with a plus (+)
sign designation.
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.
The rating F-1 is among the highest commercial paper ratings
assigned by Fitch. Very strong credit quality. Issues assigned
this rating reflect an assurance for timely payment only slightly
less than those issues rated F-1+.
The rating D-1 is the highest commercial paper rating
assigned by Duff. Paper rated D-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.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO
SHARES COMMON STOCKS-99.5% VALUE
_______ _______
ADVERTISING-.3%
900 Interpublic Group Cos. $ 34,988
500 Omnicom Group 31,375
______
66,363
______
AEROSPACE & DEFENSE-2.1%
4,300 Boeing
274,125
600 Northrop Grumman 36,525
1,600 Raytheon
129,400
______
440,050
______
AUTO PARTS-.6%
1,800 (a) AutoZone 48,375
1,600 Genuine Parts 63,000
900 Pep Boys-Manny, Moe & Jack 24,750
______
136,125
______
BANKING-.9%
1,800 MBNA 63,900
4,100 Norwest
123,512
______
187,412
______
BASIC INDUSTRIES-.9%
7,215 Archer-Daniels-Midland
119,949
1,100 Fluor 64,350
______
184,299
______
BEVERAGES-7.9%
3,300 Anheuser-Busch
188,513
16,200 Coca-Cola
1,040,850
10,100 PepsiCo
457,025
______
1,686,388
______
BUILDING MATERIALS-.4%
1,100 Nucor 53,900
1,100 Sherwin-Williams 39,463
______
93,363
______
CHEMICALS-.7%
800 Great Lakes Chemical 52,900
500 Loctite 24,000
800 Lubrizol 24,800
600 Millipore 20,925
600 Sigma-Aldrich 28,800
______
151,425
______
COMMERCIAL SERVICES-.7%
2,250 (a) CUC International 76,781
SHARES COMMON STOCKS (CONTINUED)
VALUE
____
_______
COMMERCIAL SERVICES (CONTINUED)
800 Ecolab
$21,900
1,200 Service Corp International 42,000
______
140,681
______
COMPUTER SOFTWARE & SERVICES-9.4%
800 (a) ADC Telecommunications 31,000
800 Adobe Systems 40,800
600 Autodesk 27,675
1,800 Automatic Data Processing
117,000
600 (a) BMC Software 25,575
900 (a) Cabletron Systems 47,587
2,000 Computer Associates International
139,000
800 (a) Computer Sciences 48,200
500 (a) Dell Computer 38,500
600 (a) Electronic Arts 22,800
400 HBO & Co. 22,000
500 Linear Technology 40,500
400 (a) Maxim Integrated Products 30,500
2,600 Micron Technology
199,875
7,400 (a) Microsoft
684,500
4,900 (a) Novell 88,200
5,600 (a) Oracle
224,700
700 (a) Parametric Technology 38,675
500 Paychex 20,500
900 (a) Seagate Technology 39,825
1,200 (a) Sun Microsystems 69,450
______
1,996,862
______
COSMETICS & TOILETRIES-1.9%
900 Avon Products 63,563
1,800 Colgate-Palmolive
122,400
5,500 Gillette
229,625
______
415,588
______
DRUGS & PHARMACEUTICALS-11.5%
10,100 Abbott Laboratories........
391,375
800 Allergan 24,300
3,400 (a). Amgen
162,775
600 Cardinal Health 32,100
600 (a) Forest Labs 26,850
1,400 IVAX 35,875
8,300 Johnson & Johnson
572,700
15,800 Merck & Co.................
788,025
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____ ______-
DRUGS & PHARMACEUTICALS (CONTINUED)
1,500 Mylan Laboratories
$34,312
1,700 Rhone-Poulenc Rorer 75,225
4,600 Schering-Plough
214,475
2,200 . Upjohn 93,225
______
2,451,237
______
ELECTRONICS-16.8%
500 (a). Altera 31,313
1,600 Duracell 71,400
3,000 Emerson Electric
214,125
21,700 General Electric.
1,277,588
600 Grainger (W.W.) 35,700
6,500 Hewlett-Packard
520,000
415 Hubbell, Cl. B 24,329
10,600 Intel
650,575
1,200 . Loral 65,700
7,500 Motorola
560,625
500 . Perkin-Elmer 17,062
900 Premier Industrial 21,600
1,200 Sensormatic Electronics 25,200
600 (a) Vishay Intertechnology 24,300
894 (a). Xilinx 38,330
______
3,577,847
______
ENTERTAINMENT-.8%
3,700 Carnival Cruise Lines, Cl. A 80,475
1,300 (a) Circus Circus Enterprises 42,575
1,300 (a) Harrah's Entertainment 41,438
400 (a) King World Productions 15,200
______
179,688
______
ENVIRONMENTAL-.3%
975 (a) Thermo Instrument Systems 24,984
2,300 Wheelabrator Technologies 35,938
______
60,922
______
FINANCE & FINANCIAL SERVICES-2.3%
550 ADVANTA, Cl. A 22,756
1,300 Block (H & R) 50,700
1,100 Equifax 42,762
800 ... Fifth Third Bancorp 45,000
1,000 . Franklin Resources 55,000
900 ... Green Tree Financial 52,425
600 Kansas City Southern Industries 26,400
1,366 Mercury Finance 31,247
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FINANCE & FINANCIAL SERVICES (CONTINUED)
700 Northern Trust $31,500
1,200 . Schwab (Chas) 55,800
1,100 State Street Boston 40,563
1,100 Synovus Financial 28,050
______
482,203
______
FOOD DISTRIBUTORS-.3%
2,400 Sysco 69,000
______
FOODS-4.4%
3,100 .. Campbell Soup
141,825
3,100 . ConAgra
117,413
2,000 .. General Mills
103,250
3,300 Heinz (H.J.) 139,837
1,100 Hershey Foods
65,863
900 Hormel (Geo A) 21,600
2,800 Kellogg
189,000
1,050 Pioneer Hi-Bred International
45,150
1,600 Quaker Oats
55,600
1,400 Wrigley, (WM) Jr. 63,175
______
942,713
______
HEALTH CARE-1.5%
5,700 Columbia/HCA Healthcare
267,900
700 (a)... Foundation Health 24,238
700 Manor Care 22,663
______
314,801
______
HOUSEHOLD APPLIANCES-.2%
900 Whirlpool
49,050
______
HOUSEHOLD PRODUCTS-3.7%
800 Clayton Homes 18,900
2,000 Newell 50,000
800 .. Premark International 41,900
8,800 Procter & Gamble
610,500
2,000 Rubbermaid 59,500
______
780,800
______
INSURANCE-4.6%
1,325 .. AFLAC 54,159
6,075 American International Group
489,797
800 .. GEICO 54,600
1,100 . General Re
163,487
800 MGIC Investment 44,800
800 . Progressive Corp, Ohio 35,500
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
INSURANCE (CONTINUED)
400 . SunAmerica
$23,900
900 .. Torchmark 36,000
300 . Transatlantic Holdings 21,000
2,000 U.S. HealthCare 64,000
______
987,243
______
LEISURE TIME-.1%
2,100 International Game Technology 29,925
______
MACHINERY-.2%
1,125 Thermo Electron 48,516
______
MANUFACTURING-1.1%
1,100 (a) American Power Conversion 18,425
900 . Hillenbrand Industries
26,662
1,400 Illinois Tool Works
85,750
600 . Leggett & Platt
29,025
1,500 Pall 32,813
600 (a) Solectron 21,300
1,200 . Worthington Industries 24,000
______
237,975
______
MEDICAL SUPPLIES-1.3%
800 Becton, Dickinson
45,100
1,300 (a).. Biomet
20,963
1,500 Medtronic
141,562
600 (a). St. Jude Medical 35,775
700 Stryker
29,225
______
272,625
______
OFFICE & BUSINESS EQUIPMENT-.4%
1,900 Pitney Bowes 77,187
______
OIL & GAS-.2%
2,000 . Enron Oil & Gas 46,500
______
PACKAGING-.5%
900 Bemis 26,100
1,100 (a).. Crown Cork & Seal 49,500
1,100 . Sonoco Products 29,562
______
105,162
______
PRINTING & PUBLISHING-1.0%
1,000 American Greetings, Cl. A 30,750
1,700 Gannett 90,950
1,600 (a) Marvel Entertainment Group 23,000
1,400 Readers Digest Association, Cl. A
64,750
______
209,450
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RADIO & TV BROADCASTING-1.3%
2,000 Capital Cities/ABC
$230,000
1,100 Scripps (E.W.), Cl. A 36,987
______
266,987
______
RESTAURANTS-1.6%
725 (a) Brinker International 12,144
600 Cracker Barrel Old Country 12,225
8,800 McDonald's
321,200
______
345,569
______
RETAIL-8.4%
3,100 Albertson's 98,813
1,200 Circuit City Stores 41,400
900 Dayton Hudson 65,812
725 Dollar General 19,031
1,800 Gap 57,825
5,766 Home Depot
229,919
4,600 Limited 85,100
3,100 .. May Department Stores 131,363
1,000 . Nordstrom 41,250
2,000 (a) Office Depot 62,250
3,600 (a). Toys `R' Us 93,600
500 (a) Viking Office Products 18,000
29,400 Wal-Mart Stores
723,975
3,200 Walgreen 78,400
900 Winn-Dixie Stores 53,550
______
1,800,288
______
TECHNOLOGY-7.1%
20,200 AT&T...
1,141,300
1,100 (a). Applied Materials
114,400
1,200 (a). Atmel 37,950
3,400 (a).. cisco Systems
223,125
______
1,516,775
______
TELECOMMUNICATIONS-.5%
500 (a).. Andrew 29,125
1,100 (a). Tellabs 51,425
249 (a)... U.S. Robotics 34,922
______
115,472
______
TEXTILES-1.1%
800 . Cintas 30,200
900 NIKE, Cl. B 83,363
1,100 ... Reebok International 39,050
1,500 Shaw Industries 22,500
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
LARGE COMPANY VALUE PORTFOLIO
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TEXTILES (CONTINUED)
800 .. Unifi
$20,200
800 ... V.F. 43,800
______
239,113
______
TIRE & RUBBER GOODS-.1%
1,100 Cooper Tire & Rubber 28,600
______
TOBACCO-.3%
2,500 UST 68,125
______
TOYS-.6%
1,000 . Hasbro 32,375
2,900 . Mattel 84,100
______
116,475
______
TRANSPORTATION-.1%
500 ... Illinois Central 19,188
______
UTILITIES-TELEPHONE-1.4%
700 Century Telephone Enterprises 19,512
2,818 (a) Citizens Utility, Cl. A 30,998
1,100 ... Frontier 30,663
9,000 . MCI Communications
216,562
______
297,735
______
TOTAL COMMON STOCKS
(cost $17,491,165).
$21,235,727
============
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-.6%
____
U.S. TREASURY BILLS:
65,000 5.84%, 11/2/1995...
$64,407
65,000 6.15%, 11/16/1995.. 64,272
______
TOTAL SHORT-TERM INVESTMENTS
(cost $128,662)
$128,679
========
TOTAL INVESTMENTS
(cost $17,619,827).. 100.1%
$21,364,406
======
===========
LIABILITIES, LESS CASH
AND RECEIVABLES. (.1%)
$(15,959)
=======
==========
NET ASSETS 100.0%
$21,348,447
=======
===========
SHARES COMMON STOCKS-99.2% VALUE
____
_______
AEROSPACE & DEFENSE-1.0%
1,700 ... General Dynamics
$89,463
2,200 Textron
150,700
______
240,163
______
AUTOMOTIVE-6.0%
9,500 ... Chrysler
511,812
26,500 Ford Motor.
811,562
900 . PACCAR 44,550
______
1,367,924
______
BANKING-24.6%
3,200 Ahmanson (HF) & Co. 76,000
5,200 ... American General
183,300
1,600 AmSouth Bancorp 59,800
10,300 Banc One...
346,338
1,350 . Bancorp Hawaii 45,225
2,907 . Bank of Boston
127,908
5,000 ... Bank of New York
217,500
9,800 BankAmerica
553,700
2,100 ... Bankers Trust NY
144,637
2,600 .. Barnett Banks
148,525
3,400 ... Boatmen's Bancshares
125,800
4,700 Chase Manhattan
270,250
6,300 ... Chemical Banking
366,975
3,100 ... Comerica
110,438
3,600 .. First Bank System
164,250
2,400 .. First Chicago
152,100
2,300 . First Fidelity Bancorp
150,362
1,800 .. First of America Bank 79,650
1,400 . First Security 44,100
1,000 First Tennessee National 53,000
4,500 First Union
225,562
900 ... First Virginia Banks 37,012
2,000 Firstar 74,250
1,000 .. Integra Financial 56,125
6,228 KeyCorp
193,068
1,600 . Mercantile Bancorp 72,400
1,800 ... Meridian Bancorp 72,225
400 .. Michigan National 43,025
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
LARGE COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
BANKING (CONTINUED)
1,400 .. Midlantic $
72,100
4,900 .. Morgan (J.P.)
357,087
4,200 NBD Bancorp
150,150
3,900 .. National City 116,025
1,250 . Old Kent Financial 47,656
6,000 PNC Bank
157,500
1,600 .. Regions Financial 64,400
1,400 .. Republic New York 78,750
1,900 . Signet Banking 49,637
2,400 . SouthTrust 62,100
900 .. Star Banc 47,700
1,600 .. UJB Financial 55,400
4,500 Wachovia
178,875
______
5,630,905
______
BEVERAGES-.3%
1,900 Brown-Forman, Cl. B
70,300
______
BROKERAGE-1.6%
3,025 .. Bear Stearns Cos.
62,390
1,400 Edwards (AG) 34,125
4,500 .. Merrill Lynch
259,313
______
355,828
______
CHEMICALS-.4%
2,700 .. Ethyl 29,363
1,600 .. Witco 53,200
______
82,563
______
ELECTRONICS-.1%
1,100 National Service Industries 31,900
______
ENERGY-12.9%
1,600 Ashland Oil
52,400
32,400 Exxon..
2,227,500
200 FINA, Cl. A 9,250
1,200 .. Pennzoil 52,800
6,700 . Texaco
433,825
8,513 . USX-Marathon Group
175,581
______
2,951,356
______
FINANCE-4.5%
1,100 .. Crestar Financial
62,012
2,000 First Interstate Bancorp
191,000
3,600 .. Fleet Financial Group
133,200
3,500 Great Western Financial
81,813
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FINANCE (CONTINUED)
7,100 NationsBank
$435,763
1,800 Transamerica
122,400
______
1,026,188
______
FOREST & PAPER PRODUCTS-1.3%
1,000 Federal Paper Board 39,625
5,400 Weyerhaeuser
248,400
______
288,025
______
HOLDING COMPANIES-1.4%
600 Harsco 33,600
7,140 RJR Nabisco
203,490
1,500 Temple-Inland 77,625
______
314,715
______
INSURANCE-3.9%
2,900 . Aetna Life & Casualty
197,925
2,700 Aon
105,300
1,900 CIGNA
183,825
1,200 Jefferson-Pilot 75,450
2,600 Lincoln National
111,800
1,600 . SAFECO
103,400
2,100 . St. Paul Cos.
113,925
______
891,625
______
MACHINE TOOLS-.2%
1,200 Snap-On 49,200
______
MANUFACTURING-.4%
1,100 . Johnson Controls 66,962
700 .. Timken 31,588
______
98,550
______
MINING & MINERALS-.3%
2,400 Cyprus Amax Minerals 67,200
______
OFFICE & BUSINESS EQUIPMENT-.3%
1,000 Harris 57,625
______
PUBLISHING-.6%
2,500 .. New York Times, Cl. A 62,188
2,800 Times Mirror, Cl. A 85,750
______
147,938
______
RAILROADS-1.5%
5,300 Union Pacific
347,150
______
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RETAIL-3.0%
2,700 Melville
$90,113
6,100 Penney (J.C.)
276,025
10,000 Sears, Roebuck.
323,750
______
689,888
______
TELECOMMUNICATIONS-11.6%
13,000 BellSouth..
893,750
25,000 GTE
915,625
10,900 Pacific Telesis Group..
309,288
12,200 U S West
530,700
______
2,649,363
______
TOBACCO-.9%
5,100 American Brands
214,200
______
TRANSPORTATION-.2%
2,200 Ryder System 53,350
______
UTILITIES-21.6%
3,400 . Allegheny Power System 82,875
4,800 American Electric Power
163,800
3,700 Baltimore Gas & Electric 97,125
2,400 CMS Energy 59,100
4,000 . Carolina Power & Light
122,500
3,400 Centerior Energy 36,550
6,100 Consolidated Edison
172,325
2,900 DPL 64,525
1,800 DQE 42,975
1,800 . Delmarva Power & Light 39,150
3,900 .. Detroit Edison
119,437
4,400 Dominion Resources
158,950
5,300 . Duke Power
215,312
5,900 . Entergy
141,600
4,800 FPL Group
186,600
2,600 Florida Progress 78,975
3,400 Houston Industries
144,075
900 IPALCO Enterprises 31,162
2,100 Illinova 52,762
1,400 Kansas City Power & Light 31,325
3,100 Long Island Lighting 52,700
1,200 Montana Power 26,400
1,500 NIPSCO Industries 49,125
1,800 New England Electric System 63,000
1,800 New York State Electric & Gas 43,425
3,700 Niagara Mohawk Power 44,400
3,100 Northeast Utilities 70,912
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
UTILITIES (CONTINUED)
1,700 .. Northern States Power
$72,462
4,000 Ohio Edison 86,500
1,200 Oklahoma Gas & Electric 42,450
5,800 . PECO Energy
154,425
4,000 PP & L Resources
87,500
11,100 Pacific Gas & Electric.
319,125
7,800 . PacifiCorp
141,375
2,400 .. Pinnacle West Capital 59,700
3,100 . Potomac Electric Power 66,263
1,700 Public Service Co. of Colorado 55,038
6,400 Public Service Enterprise Group
176,000
1,900 Puget Sound P&L 41,088
2,700 .. SCANA 62,775
11,900 SCEcorp.
197,838
2,900 San Diego Gas & Electric 63,075
17,200 Southern.
363,350
5,900 .. Texas Utilities
205,025
5,500 . Unincom
154,688
2,600 Union Electric 92,625
1,800 Western Resources 54,450
2,700 . Wisconsin Energy 72,563
______
4,959,400
______
UTILITIES-NATURAL GAS DISTRIBUTORS-.6%
2,100 . Pacific Enterprises 50,400
3,700 Panhandle Eastern 92,500
______
142,900
______
TOTAL COMMON STOCKS
(cost $20,522,037)
$22,728,256
===========
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-1.3%
____
U.S. TREASURY BILLS:
$104,000 5.84%, 11/2/1995.
$103,052
100,000 . 6.15%, 11/16/1995 98,880
101,000 . 5.72%, 11/24/1995 99,749
______
TOTAL SHORT-TERM INVESTMENTS
(cost $301,641)
$301,681
=========
TOTAL INVESTMENTS
(cost $20,823,678). 100.5%
$23,029,937
======
===========
LIABILITIES, LESS CASH
AND RECEIVABLES.. (.5%)
$(103,682)
=====
===========
NET ASSETS 100.0%.
$22,926,255
=====
===========
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY GROWTH PORTFOLIO
SHARES COMMON STOCKS-99.4% VALUE
____
_______
AIR TRANSPORTATION-.4%
2,500 Air Express International
$56,875
1,400 . Skywest
31,675
______
88,550
______
AUTO PARTS-.8%
2,550 (a) Jason 25,341
5,100 Superior Industries International
151,088
______
176,429
______
BANKING-.7%
2,600 Astoria Financial
111,800
1,200 (a).. CSF Holdings 46,650
______
158,450
______
BIOTECHNOLOGY-1.3%
1,200 Collagen 21,600
4,900 (a). Nellcor
254,800
______
276,400
______
BROKERAGE-.2%
1,000 . Pioneer Group 28,500
600.. SEI 13,275
______
41,775
______
BUILDING MATERIALS-.2%
1,500 (a). Fibreboard 35,625
______
CHEMICALS-1.5%
3,900 (a).. Airgas
107,250
1,200 (a).. IDEXX Laboratories 40,650
7,600 (a) Scotts Company (The), Cl. A
171,000
______
318,900
______
COMMERCIAL SERVICES-2.4%
2,200 (a) DeVRY 48,675
4,100 (a) Franklin Quest 94,812
1,400 (a) Insurance Auto Auctions 17,850
2,200 (a). Interim Services 57,200
10,800(a) Robert Half International
306,450
______
524,987
______
COMPUTER SOFTWARE & SERVICES-15.7%
2,700 (a).. Acxiom 72,562
5,600 (a) American Management Systems
142,800
1,200 (a). BancTec 20,700
3,100 (a). Broderbund Software
228,238
3,400 (a).. Cerner
116,450
1,900 (a) Computer Network Technology 16,150
SHARES COMMON STOCKS (CONTINUED) VALUE
COMPUTER SOFTWARE & SERVICES (CONTINUED)
2,540 (a). Comverse Technology
$50,800
2,000 (a) Electronics For Imaging
113,000
2,900 (a). Exabyte 43,862
6,600 (a).. FIserv
188,100
1,400 . Fair Issac & Co. 36,400
1,900 (a) Franklin Electronic Publishers 57,237
100 (a) Hutchinson Technology 7,825
900 (a) Hyperion Software 41,850
3,600 (a) Information Resources 46,350
3,450 (a) Keane 90,563
3,900 (a) Komag
242,775
2,900 (a) MICROS Systems
98,963
1,000 (a).. Network General 35,187
1,300 (a) Progress Software 75,725
5,500 (a) Pyxis
124,438
7,600 (a). Quantum
182,400
6,300 Reynolds & Reynolds, Cl. A
202,387
3,900 (a) Safeguard Scientifics
195,488
9,600 (a). Stratus Computer
268,800
3,600 (a) Structural Dynamics Research 65,250
8,700 (a) SunGard Data Systems
241,425
1,000 .. System Software 31,564
4,600 (a) Systems & Computer Technology
122,475
4,800 (a).. Tech Data 57,000
4,973 (a) Zilog
221,298
______
3,438,062
______
COSMETICS & TOILETRIES-.2%
1,572 Nature's Sunshine Products 36,942
______
DISTRIBUTION-.1%
3,500 (a). Merisel 22,313
______
ELECTRONICS-12.0%
8,700 Allen Group
283,837
3,000 Dallas Semiconductor 71,250
2,100 (a).. Gentex 51,450
2,500 (a). ITEL 94,375
19 (a).. Input/Output 708
5,600 (a) Lattice Semiconductor
184,100
7,800 (a). Marshall Industries
247,650
3,000 (a). Novellus Systems
221,062
6,400 (a) Oak Industries
189,600
200 .. Pacific Scientific
5,025
1,850 Pioneer Standard Electronics 47,638
2,200 (a) Presstek
113,850
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
ELECTRONICS (CONTINUED)
400 (a).. Rogers
$11,400
2,200 (a) SCI Systems 68,200
3,800 (a) Silicone Valley Group
163,400
1,200 (a).. Special Devices 21,300
6,600 (a). Symbol Technologies
229,350
3,500 (a) Tech-Sym
101,937
2,400 (a).. Three-Five Systems 71,700
3,300 (a) Unitrode 99,000
6,100 (a).. VLSI Technology
201,300
5,250 . Wireless Telecom Group 92,531
2,700 .. X-Rite 53,325
______
2,623,988
______
ENTERTAINMENT-.7%
700 (a). Grand Casinos 25,638
4,000 (a).. Primadonna Resorts 81,000
3,400 (a).. Rio Hotel & Casino 44,200
______
150,838
______
ENVIRONMENTAL-1.8%
4,400 (a) Allwaste 23,650
500 IMCO Recycling 10,125
4,600 (a) Sanifill
146,625
3,500 (a).. USA Waste Services 68,250
6,700 (a) U.S. Filter
147,400
______
396,050
______
FINANCE-1.8%
2,100 (a) Autofinance Group 34,650
3,500 (a) Concord EFS 99,750
3,600 Money Store
236,250
1,100 (a). Primark 27,775
______
398,425
______
FOODS-1.3%
2,700 (a) Canandaigua Wine, Cl. A
127,575
5,000 Richfood Holdings
121,250
2,000 (a). Smithfield Foods 44,500
______
293,325
______
HOMEBUILDING-1.2%
6,600 .. Centex 193,050
4,200 (a). Toll Brothers 75,075
______
268,125
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
HOSPITAL MANAGEMENT-10.8%
5,300 (a) Genesis Health Ventures $
167,612
5,800 (a).. HealthCare COMPARE
218,225
11,700(a) Health Care & Retirement
368,550
4,300 (a).. Healthsource
172,000
9,300 (a).. Horizon Healthcare
203,438
7,700 Integrated Health Services
230,037
2,400 (a) Living Centers of America 73,200
1,400 (a) Pacific Physician Services 24,500
1,900 (a) Quantum Health Resources 24,225
7,300 (a) Sierra Health Services
195,275
2,500 (a) Universal Health Services, Cl. B 85,938
10,400 (a) Vencor
308,100
8,900 (a) Vivra
294,812
______
2,365,912
______
INSURANCE-2.8%
5,800 (a). Capsure Holdings 79,750
7,632 (a) FHP International
188,892
1,300 (a) Fund American Enterprise 94,250
600 (a). Markel 40,800
4,800 (a). United Insurance 70,800
3,700 Vesta Insurance Group
138,750
______
613,242
______
LEISURE TIME-3.1%
6,900 (a) Acclaim Entertainment
174,225
3,650 Arctco 49,731
10,300 Callaway Golf..
159,650
4,500 (a) Chris-Craft Industries
202,500
1,200 (a). Coleman 45,300
1,100 (a). GC Companies 36,850
______
668,256
______
MACHINERY-3.3%
3,700 AGCO
179,912
2,200 (a). Cognex
109,725
800 (a). Electroglas 60,400
100 (a). Ionics 3,938
2,600 (a) Kulicke & Soffa Industries
101,075
1,900 Roper Industries 64,600
5,600 (a) Thermo Power 89,600
1,900 (a) Zebra Technologies, Cl. A
110,675
______
719,925
______
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
MANUFACTURING-6.2%
9,200 Breed Technologies
$175,950
7,900 (a) Champion Enterprises
134,300
700.. IDEX 28,175
1,700 (a). InterVoice 37,612
1,300 (a). Lydall 31,038
2,100 Medusa 57,750
3,000 NACCO Industries, Cl. A
172,500
7,400 Oakwood Homes
236,800
3,400 (a). Paxar
62,475
5,400 (a). Shorewood Packaging 97,200
2,200 (a) Thermo Process Systems 25,850
6,800 (a). VeriFone
192,950
3,000 Wabash National
109,500
600 Winnebago Industries 5,025
______
1,367,125
______
MEDICAL SUPPLIES & SERVICES-4.7%
2,800 . Arrow International
114,800
2,800 (a) Coastal Physician Group 42,350
2,100 (a) Cordis
162,225
4,500 . DENTSPLY International
167,625
2,000 (a). Datascope 42,000
1,800 Invacare 77,850
2,400 (a). Respironics 42,600
1,400 (a). Rotech Medical 36,050
3,600 (a) STERIS
105,750
7,700 (a). Sunrise Medical
199,237
2,300 (a) Tecnol Medical Products 41,688
______
1,032,175
______
METALS-1.7%
3,800 (a).. Magma Copper Cl. B 69,350
950 (a) Material Sciences 18,287
2,000 (a).. Mueller Industries
110,500
2,300 (a). WHX 29,038
5,300 (a) Whittaker
103,350
1,200 (a). Wolverine Tube 46,800
______
377,325
______
OIL & GAS-3.2%
1,100 (a) BJ Services 27,500
4,900 (a). Ensco International 88,200
12,800(a) Nabors Industries.
118,400
2,517 (a). Nuevo Energy 62,296
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
OIL & GAS (CONTINUED)
3,000 (a) Oceaneering International
$35,250
4,300 (a).. Offshore Logistics 59,125
3,000 .. Phoenix Resource Cos.
109,875
200 Pogo Producing 4,750
3,100 (a). Seitel 80,988
600 (a). Southern Union 10,500
1,100 (a). Tejas Gas 54,725
2,700 . Vintage Petroleum 54,000
______
705,609
______
PRINTING & PUBLISHING-2.3%
6,600 . Belo (A.H.), Cl. A
231,825
3,300 (a).. Catalina Marketing
178,200
1,100 (a). Devon Group 44,137
1,875 Thomas Nelson 47,812
______
501,974
______
RADIO & TV BROADCASTING-2.3%
10,400 (a) BET Holdings, Cl. A..
191,100
2,955 (a) Clear Channel Communication
220,517
3,300 (a) Heritage Media, Cl. A 93,225
300 (a) Westcott Communications 4,463
______
509,305
______
RESTAURANTS-1.9%
3,150 Apple South 77,175
900 Applebee's International 27,000
3,900 (a). Buffets 51,188
1,300 (a). IHOP 33,313
5,500 (a) Lone Star Steakhouse & Saloon
220,687
______
409,363
______
RETAIL-6.3%
6,700 (a) Best Buy
182,575
4,150 (a).. Bombay 34,756
5,150 (a) Burlington Coat Factory 61,800
2,400 .. Claire's Stores 51,900
8,000 (a). Consolidated Stores
176,000
1,200 (a). Dress Barn 11,400
1,000 (a) Fabri-Centers America, Cl. A 13,625
1,000 (a) Fabri-Centers America, Cl. B 11,375
5,000 Fastenal
165,000
4,400 (a). Lands' End 76,450
6,200 .. Lennar
120,125
3,300 (a) MacFrugals Bargains Closeouts 55,275
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RETAIL (CONTINUED)
8,600 (a).. Michaels Stores
$139,750
1,500 (a) MicroAge 17,625
1,400 (a). Proffitt's 36,925
5,300 (a).. Starbucks
212,000
600 (a) Timberland, Cl. A 17,475
______
1,384,056
______
TELECOMMUNICATIONS-2.0%
3,300 (a) Aspect Telecommunications
157,575
2,900 (a) Boston Technology 40,600
1,500 (a) California Microwave 39,375
700 (a). CommNet Cellular 19,775
400 (a).. Dial Page 7,500
1,800 (a).. Digi International 50,850
1,200 (a) Nationwide Cellular Service 33,000
1,900 (a) Octel Communications 64,837
1,600 (a) United States Long Distance 23,600
______
437,112
______
TEXTILES-1.9%
3,900 (a) Fieldcrest Cannon 93,112
3,600 (a). Jones Apparel Group
125,100
4,600 St. John Knits
203,550
______
421,762
______
TRANSPORTATION-2.0%
1,500 Expeditors International,
Washington.. 34,875
2,600 (a).. Fritz Companies
185,250
3,600 (a) National Auto Credit
52,200
2,800 (a). Wisconsin Central
Transportation.
166,600
______
438,925
______
TRUCKING-1.6%
7,000 (a) American Freightways
135,625
1,591 (a) Heartland Express 46,935
1,700 (a). M.S. Carriers 31,875
3,100 (a) Swift Transportation
61,225
3,200 .. Werner Enterprises 64,800
______
340,460
______
UTILITIES-1.0%
10,400(a) California Energy.
217,100
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TOTAL COMMON STOCKS
(cost $19,717,062)
$21,758,810
===========
CONVERTIBLE PREFERRED STOCKS-.2%
1,440 FHP International, Series A
(cost $33,817).
$35,100
========
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-1.6%
____
U.S. TREASURY BILLS:
$131,000 5.84%, 11/2/1995..
$129,805
49,000 .. 6.15%, 11/16/1995
48,451
182,000 .. 5.72%, 11/24/1995
179,747
______
TOTAL SHORT-TERM INVESTMENTS
(cost $357,990)
$358,003
=========
TOTAL INVESTMENTS
(cost $20,108,869). 101.2%
$22,151,913
=======
============
LIABILITIES, LESS CASH
AND RECEIVABLES. (1.2%)
$(269,735)
____
____________
NET ASSETS 100.0%.
$21,882,178
=======
=============
SMALL COMPANY VALUE PORTFOLIO
SHARES COMMON STOCKS-99.0%
____
ADVERTISING-.2%
3,000 True North Communications
$64,500
______
AEROSPACE & DEFENSE-1.0%
1,300 . Curtiss-Wright
57,200
5,500 .. Thiokol
191,812
______
249,012
______
AUTO PARTS-2.5%
4,600 .. Excel Industries 60,950
8,283 .. Federal-Mogul
184,296
14,100 . Safety - Kleen
190,350
9,000 Smith (A.O.)
223,875
______
659,471
- -------
BANKING-19.6%
3,575 . Associated Banc-Corp
127,136
2,925 .. Bancorp South
117,000
14,300 .. Bank South
326,218
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
BANKING (CONTINUED)
2,400 . Bankers
$42,600
3,342 CNB Bancshares
96,082
9,700 . Central Fidelity Banks
317,675
1,675 . Chittenden 45,643
3,400 Citizens Bancorp Maryland
104,125
4,900 . Citizens Banking
149,450
2,394 . Commerce Bancorp 53,566
700 . Commerce Bancshares 25,112
9,300 .. Compass Bancshares
279,000
2,500 Cullen Frost Bankers
115,000
6,900 .. Dauphin Deposit 189,750
4,400 . Deposit Guaranty 173,800
3,702 .. F&M National 64,785
6,300 First American (Tennessee)
269,325
2,200 .. Firstbank of Illinois 62,150
8,200 . FirstMerit
219,350
3,920 . First Michigan Bank 98,490
2,600 . Fort Wayne National 82,550
3,400 Jefferson Bankshares 76,500
5,300 .. Keystone Financial 169,600
5,400 .. Liberty Bancorp
198,450
3,600 .. Mark Twain Bancshares
126,000
11,700 Mercantile Bankshares
311,513
3,889 .. Mid Am 60,523
1,100 .. North Fork Bancorp 21,313
2,900 Old National Bancorp (Ind) 99,325
3,960 One Valley Bancorp of
West Virginia..
121,770
3,700 . Republic Bancorp 49,488
7,460 .. Summit Bancorporation
186,500
2,400 . Susquehanna Bancshares 67,800
4,600 United Carolina Bancshares
161,000
600 United Counties Bancorp
116,400
1,500 . U.S. Trust
119,625
5,900 Westcorp
122,425
3,600 .. Whitney Holding
119,700
______
5,086,739
______
BEVERAGES-.5%
8,200 .. Coors (Adolph), Cl. B
139,400
______
CAPITAL MAINTENANCE SERVICES-.2%
2,100 ABM Industries 54,075
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
CHEMICALS-1.1%
2,200 .. Chemed $77,550
4,600 .. Dexter 113,850
2,000 LeaRonal
45,500
3,400 .. Stepan 57,375
______
294,275
______
COMMERCIAL & PERSONAL SERVICES-2.0%
12,000 Ogden. 279,000
2,700 Omega Healthcare Investors 69,525
3,800 .. PHH
165,775
______
514,300
______
FINANCE-10.7%
4,100 . Albank Financial
125,050
3,700 . Alex Brown
222,000
1,750 . Amcore Financial 35,875
3,400 . CCB Financial
164,050
5,100 . Centura Banks
158,738
6,600 First Commerce
212,850
5,000 First Commonwealth Financial
75,625
6,700 First Financial-Wisconsin
132,325
7,200 First Hawaiian
200,700
6,100 . Fourth Financial
216,550
6,250 . Fulton Financial
120,313
3,400 . JSB Financial
105,400
6,200 Magna Group
142,600
3,200 .. ONBANCorp 91,600
6,000 Piper Jaffray Cos 87,000
3,700 Provident Bancorp
154,937
1,400 . TCF Financial 77,875
4,300 . UMB Financial
165,550
4,900 .. USLIFE
211,312
2,700 United Bancshares
80,325
______
2,780,675
______
FOOD DISTRIBUTORS-2.1%
200 American Maize - Products, Cl. A 7,775
9,200 .. Flowers Industries
189,750
4,000 .. Ingles Markets, Cl. A 41,500
1,500 Lance
27,000
3,300 . Michael Foods 42,900
3,700 . Midwest Grain Products 64,750
2,500 . Nash Finch 50,625
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FOOD DISTRIBUTORS (CONTINUED)
1,300 . Smith's Food &
Drug Centers, Cl. B..
$24,537
2,900 .. Smucker (J.M.), Cl. A 60,900
730 .. Universal Foods 23,177
______
532,914
______
FOREST PRODUCTS-1.1%
1,100 . Chesapeake 40,013
12,200 Longview Fibre. 196,725
3,000 . Pope & Talbot 46,875
______
283,613
______
HOME FURNISHINGS-1.2%
4,800 Kimball International, Cl. B
123,600
1,500 La-Z Boy Chair
42,563
4,400 Stanhome
136,400
______
302,563
______
HOUSEHOLD APPLIANCES-.3%
1,700 National Presto Industries
72,250
______
HOUSING-.3%
6,100 Kaufman & Broad Home
81,587
______
INSURANCE-5.6%
2,400 Foremost Corp., America
96,600
3,815 Fremont General
103,958
1,600 .. Hartford Steam Boiler 74,200
3,600 . Home Beneficial, Cl. B 83,700
8,900 .. Ohio Casualty
295,925
1,400 Protective Life
39,900
27,900 Reliance Group Holdings.
223,200
4,600 Security-Connecticut
122,475
3,200 Selective Insurance Group
109,600
1,200 . Trenwick Group
56,700
5,300 United Wisconsin Services
113,950
6,000 Zenith National Insurance
137,250
______
1,457,458
______
LEISURE TIME-2.3%
3,518 .. Anthony Industries 70,800
14,500 Fleetwood Enterprises
284,562
7,500 Handleman 71,250
500 National Golf Properties 10,937
200 Outboard Marine 4,275
2,500 Skyline 44,062
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
LEISURE TIME (CONTINUED)
3,000 . Sturm Ruger
$101,250
______
587,136
______
MACHINERY-.2%
3,400 Thomas Industries 58,225
______
MANUFACTURING-2.8%
5,200 . Arvin Industries 113,750
3,200 Bassett Furniture 79,200
4,000 . Brown Group
73,000
2,500 . Cross (A.T.), Cl. A
39,687
200 Jostens 4,800
1,800 Manitowoc 49,275
3,700 O'Sullivan 40,700
2,500 Sealright 32,500
3,300 Standard Products 64,350
6,300 Winnebago Industries 52,763
11,100 Zero.
174,825
______
724,850
______
MEDICAL SUPPLIES-.9%
3,600 ADAC Laboratories 41,400
700 . Beckman Instruments 20,037
4,400 . Block Drug Cl. A
172,700
______
234,137
______
METALS-2.1%
4,600 Amcast Industrial 87,400
3,200 Ball
108,800
900 Barnes Group 37,125
3,800 .. Cleveland - Cliffs
171,950
4,100 .. Simpson Industries 48,175
11,600 UNR Industries.. 91,350
______
544,800
______
OFFICE & BUSINESS EQUIPMENT-3.3%
3,650 American Business Products 68,893
3,500 General Binding 71,750
9,600 .. Hunt Manufacturing
130,800
6,100 Miller (Herman)
160,125
6,400 Standard Register
136,000
5,100 Wallace Computer Services
294,525
______
862,093
______
OIL & GAS-1.2%
3,500 National Fuel Gas 98,438
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
OIL & GAS (CONTINUED)
6,100 .. ONEOK $
133,437
3,000 Questar 91,500
______
323,375
______
RAILROADS-.9%
4,400 GATX
227,150
______
RESTAURANTS-1.0%
7,500 Luby's Cafeterias
149,063
4,800 . Sbarro
109,800
______
258,863
______
RETAIL-4.8%
5,800 .. Blair 193,575
12,700 Family Dollar Stores.
231,775
4,600 .. Fay's 36,800
2,400 Hancock Fabrics
25,200
4,600 Longs Drug Stores
170,200
1,300 . Ross Stores 20,800
5,600 Ruddick
149,800
7,200 .. Shopko Stores 90,900
2,424 Strawbridge-Clothier, Cl. A 44,237
21,500 TJX Companies
268,750
3,900 . Venture Stores 22,913
______
1,254,950
______
STEEL-1.0%
500 . Birmingham Steel 10,125
2,000 Carpenter Technology
152,500
6,700 Chaparral Steel 77,050
100 Oregon Steel Mills 1,675
______
241,350
______
TELECOMMUNICATIONS-1.0%
11,600 Comsat..
269,700
______
TEXTILES-2.2%
8,400 Guilford Mills
210,000
4,800 Kellwood
100,800
3,000 Oxford Industries 54,000
5,000 Springs Industries, Cl. A
215,625
______
580,425
______
TOBACCO-.7%
8,200 Universal
184,500
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TRANSPORTATION-1.0%
10,500 Alexander & Baldwin
$238,875
______
UTILITIES-ELECTRIC POWER-17.4%
13,320 Atlantic Energy.
253,080
3,300 Black Hills 80,025
3,000 CILCORP
107,250
8,400 CIPSCO
276,150
3,900 Central Hudson Gas & Electric
108,225
7,300 Central Maine Power 83,950
2,600 Central Vermont Public Service 35,750
4,500 Eastern Utilities Association
105,188
4,800 Empire District Electric 85,200
5,300 Hawaiian Electric Industries
191,463
7,200 IES Industries
181,800
6,300 Interstate Power
154,350
4,300 MDU Resources Group
130,075
2,400 . Madison Gas & Electric 79,200
30,870 MidAmerican Energy.
439,898
7,700 Minnesota Power & Light
206,938
11,300 Nevada Power.
230,238
1,800 Northwestern Public Service 45,225
3,100 Orange/Rockland Utilities
101,913
12,416 Portland General
297,984
9,400 Rochester Gas & Electric
209,150
6,600 Sierra Pacific Resources
141,900
3,600 Southern Indiana Gas & Electric
113,850
3,900 Southwestern Public Service
117,000
5,800 United Illuminating
194,300
6,900 WPL Holdings
196,650
5,400 WPS Resources
155,925
13,300 Washington Water Power..
206,150
______
4,528,827
______
UTILITIES-NATURAL GAS DISTRIBUTORS-6.1%
3,000 Bay State Gas
70,500
2,000 Colonial Gas
39,000
2,000 Connecticut Energy
38,750
2,300 Connecticut Natural Gas
50,600
4,700 Eastern Enterprises
143,938
8,000 El Paso Natural Gas
225,000
2,500 Energen 54,688
3,900 Laclede Gas 77,513
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
UTILITIES-NATURAL GAS DISTRIBUTORS (CONTINUED)
3,000 NUI
$45,375
4,000 New Jersey Resources 96,000
3,300 .. Northwest Natural Gas
102,300
2,400 Pennsylvania Enterprises 76,200
7,800 Peoples Energy
212,550
6,400 Piedmont Natural Gas
130,400
4,500 Public Service Company of
North Carolina. 68,625
2,414 South Jersey Industries
47,978
2,800 United Cities Gas 43,400
2,900 Washington Energy 48,213
______
1,571,030
______
UTILITIES-WATER-1.7%
6,100 American Water Works
182,238
2,600 California Water Service
80,600
1,700 E'town 45,688
2,700 .. Philadelphia Suburban 48,600
7,136 United Water Resources 92,768
______
449,894
______
TOTAL COMMON STOCKS
(cost $24,192,376)
$25,713,012
===========
TOTAL INVESTMENTS
(cost $24,192,376). 99.0%
$25,713,012
=====
===========
CASH AND RECEIVABLES (NET). 1.0%
$265,200
=====
===========
NET ASSETS 100.0%.
$25,978,212
=======
===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995
LARGE LARGE SMALL SMALL
COMPANY COMPANY COMPANY COMPANY
GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
________ ___________ __________ __________
ASSETS:
Investments in securities, at value
[cost-Note 4(b)]-see statement.
$21,364,406 $23,029,937 $22,151,913 $25,713,012
Cash..
22,166 12,991 42,237 49,544
Receivable for investment securities sold
_ _ _ 179,966
Dividends receivable.
21,983 110,924 4,173 99,935
Prepaid expenses and other assets
10,317 11,164 10,386 9,177
Due from The Dreyfus Corporation.
_ 20,304 _ 7,427
_______ ______ _______ _______
21,418,872 23,185,320 22,208,709 26,059,061
____________ ____________ ____________ ____________
LIABILITIES:
Due to Wilshire
$ 1,784 $ 1,833 $ 1,831 $ 2,083
Payable for investment securities purchased
_ 198,163 256,560 __
Payable for Common Stock redeemed
40 7,228 40 18,463
Accrued expenses and other liabilities.
68,601 51,841 68,100 60,303
______ _______ _______ _______
70,425 259,065 326,531 80,849
_____ ________ _______ _______
NET ASSETS
$21,348,447 $22,926,255 $21,882,178 $25,978,212
============ ============ ========== ===========
REPRESENTED BY:
Paid-in capital
$17,284,473 $19,679,928 $16,955,970 $23,045,250
Accumulated undistributed investment
income-net
89,061 470,916 _ 733,991
Accumulated investment (loss).
_ _ (87,165) _
Accumulated undistributed net realized gain
on investments..
230,334 569,152 2,970,329 678,335
Accumulated net unrealized appreciation on
investments-Note 4(b).
3,744,579 2,206,259 2,043,044 1,520,636
__________ __________ __________ _________
NET ASSETS at value
$21,348,447 $22,926,255 $21,882,178 $25,978,212
=========== ============ =========== ============
SHARES OF COMMON STOCK OUTSTANDING
[400 million shares (with 100 million allocated
to each series) of $.001 par value
Common Stock authorized]
1,306,134 1,430,928 1,179,532 1,685,300
=========== ============ =========== ============
NET ASSET VALUE per share
(Net Assets Shares Outstanding)
$16.34 $16.02 $18.55 $15.41
======= ======= ======= =======
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1995
LARGE LARGE SMALL SMALL
COMPANY COMPANY COMPANY COMPANY
GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
______ ______ ______ ______
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $34 and $72
foreign taxes withheld at source for the
Small Company Growth Portfolio and
Small Company Value Portfolio) $
244,485 $710,822 $40,037 $1,176,442
Interest..
20,211 15,590 22,934 36,416
______ ______ ______ ______
TOTAL INCOME.
264,696 726,412 62,971 1,212,858
______ ______ ______ ______
EXPENSES-Note 2(c):
Investment advisory fee-Note 3(a). $
14,834 $15,835 $15,630 $ 25,210
Administration fee-Note 3(a)
29,667 31,669 31,260 50,421
Shareholder servicing costs-Note 3(b)
45,596 50,022 61,059 83,095
Auditing fees
22,531 22,533 25,534 25,549
Registration fees..
18,057 15,907 18,172 13,752
Prospectus and shareholders' reports.
9,807 8,527 10,369 11,207
Custodian fees..
4,976 5,084 5,343 5,442
Directors' fees and expenses-Note 3(c)
4,375 4,584 5,199 7,491
Legal fees
1,476 1,932 2,207 2,922
Miscellaneous
4,801 6,474 6,668 3,833
______ ______ ______ ______
156,120 162,567 181,441 228,922
Less-fees waived by Wilshire and Dreyfus
due to undertakings-Note 3(a).
31,339 33,740 33,455 54,566
______ ______ ______ ______
TOTAL EXPENSES..
124,781 128,827 147,986 174,356
________ ________ ________ _______
INVESTMENT INCOME
(LOSS)-NET..
139,915 597,585 (85,015) 1,038,502
________ ________ ________ _______
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments-Note 4(a) $
381,982 $ 680,162 $3,009,406 $ 793,177
Net unrealized appreciation on investments
3,125,221 2,162,794 775,482 1,360,207
________ ________ ________ _______
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS..
3,507,203 2,842,956 3,784,888 2,153,384
________ ________ ________ _______
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
$3,647,118 $3,440,541 $3,699,873 $3,191,886
========== =========== =========== ==========
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
LARGE COMPANY LARGE COMPANY
GROWTH PORTFOLIO VALUE PORTFOLIO
_______________________ _______________________
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31,
___________________________ ___________________________
1994 1995 1994 1995
________ ________ ________ ________
OPERATIONS:
Investment income-net
$ 96,341 $139,915 $ 447,331 $597,585
Net realized gain (loss) on investments
(119,770) 381,982 135,129 680,162
Net unrealized appreciation (depreciation) on
investments for the year.
526,588 3,125,221 (920,730) 2,162,794
________ ________ ________ ________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
503,159 3,647,118 (338,270) 3,440,541
________ ________ ________ ________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net
(146,578) (91,631) (314,400) (461,355)
Net realized gain on investments.
_ _ (259,490) (117,646)
________ ________ ________ ________
TOTAL DIVIDENDS
(146,578) (91,631) (573,890) (579,001)
________ ________ ________ ________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.
6,136,117 15,277,226 11,201,295 11,530,692
Dividends reinvested.
145,901 86,969 551,033 568,732
Cost of shares redeemed.
(6,274,916) (5,995,631) (6,799,014) (4,192,263)
________ ________ ________ ________
INCREASE IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS.
7,102 9,368,564 4,953,314 7,907,161
________ ________ ________ ________
TOTAL INCREASE IN NET ASSETS
363,683 12,924,051 4,041,154 10,768,701
NET ASSETS:
Beginning of year.
8,060,713 8,424,396 8,116,400 12,157,554
________ ________ ________ ________
End of year. $
8,424,396(1) $21,348,447(1) $12,157,554(2) $22,926,255(2)
================ =============== ==============
=============
SHARES SHARES SHARES SHARES
________ ________ ________ ________
CAPITAL SHARE TRANSACTIONS:
Shares sold.
478,006 1,070,812 780,559 815,733
Shares issued for dividends reinvested.
11,258 6,609 39,052 44,156
Shares redeemed
(488,901) (404,353) (485,042) (298,264)
________ ________ ________ ________
NET INCREASE IN SHARES OUTSTANDING
363 673,068 334,569 561,625
======== ========= ========= ==========
(1) Includes undistributed investment income-net: $40,777 in
1994 and $89,061 in 1995.
(2) Includes undistributed investment income-net: $334,686 in
1994 and $470,916 in 1995.
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SMALL COMPANY SMALL COMPANY
GROWTH PORTFOLIO VALUE PORTFOLIO
_______________________ ___________________________
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31,
___________________________ ___________________________
1994 1995 1994 1995
________ ________ ________ ________
OPERATIONS:
OPERATIONS:
Investment income (loss)-net.. $
(33,247) $ (85,015) $ 761,845 $ 1,038,502
Net realized gain on investments.
284,483 3,009,406 64,244 793,177
Net unrealized appreciation (depreciation)
on investments for the year.
253,279 775,482 (755,152) 1,360,207
________ ________ ________ ________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.
504,515 3,699,873 70,937 3,191,886
________ ________ ________ ________
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.
_ _ (441,748) (842,828)
In excess of investment income-net..
(32,220) _ _ _
From net realized gain on investments..
(677,557) (274,014) (212,842) (131,692)
________ ________ ________ ________
TOTAL DIVIDENDS
(709,777) (274,014) (654,590) (974,520)
________ ________ ________ ________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.
12,327,171 12,371,344 26,817,975 18,676,103
Dividends reinvested.
674,755 259,640 630,047 852,961
Cost of shares redeemed.
(9,135,407) (5,363,057) (18,580,966) (19,206,167)
________ ________ ________ ________
INCREASE IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS.
3,866,519 7,267,927 8,867,056 322,897
________ ________ ________ ________
TOTAL INCREASE IN NET ASSETS
3,661,257 10,693,786 8,283,403 2,540,263
NET ASSETS:
Beginning of year.
7,527,135 11,188,392 15,154,546 23,437,949
________ ________ ________ ________
End of year.
$11,188,392(1) $21,882,178(1) $23,437,949(2) $25,978,212(2)
============== ============== ==============
==============
SHARES SHARES SHARES SHARES
________ ________ ________ ________
CAPITAL SHARE TRANSACTIONS:
Shares sold.
799,229 761,531 1,879,823 1,332,739
Shares issued for dividends reinvested.
43,146 17,183 43,906 64,716
Shares redeemed
(584,999) (326,229) (1,310,912) (1,348,397)
________ ________ ________ ________
NET INCREASE IN SHARES OUTSTANDING
257,376 452,485 612,817 49,058
========== ========== ========= ________
(1) Includes distributions in excess of investment income-net:
($2,150) in 1994 and accumulated investment (loss)-net;
($87,165) in 1995.
(2) Includes undistributed investment income-net: $538,317 in
1994 and
$733,991 in 1995.
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated
November 15, 1995.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Reference is made to page 5 of the Fund's Prospectus dated
November 15, 1995.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company and operates as a series company issuing four classes of
shares of Common Stock: the Large Company Growth Portfolio, the
Large Company Value Portfolio, the Small Company Growth Portfolio
and the Small Company Value Portfolio. The Fund accounts
separately for the assets, liabilities and operations of each
series. Wilshire Associates Incorporated ("Wilshire") serves as
the Fund's investment adviser. The Dreyfus Corporation ("Dreyfus")
serves as the Fund's administrator. Dreyfus is a direct subsidiary
of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the
"Distributor") acts as the distributor of the Fund's shares. The
Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned subsidiary of FDI Holdings, Inc., the
parent company of which is Boston Institutional Group, Inc.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Each series' investments in
securities (including financial futures) are valued at the last
sales price on the securities exchange on which such securities
are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the
national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Dividend income is recognized on the
ex-dividend date and interest income, including, where applicable,
amortization of discount on investments, is recognized on the
accrual basis.
(C) EXPENSES: Expenses directly attributable to each
series are charged to that series' operations; expenses which are
applicable to all series are allocated among them.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends payable to
shareholders are recorded by each series on the ex-dividend date.
Dividends from investment income-net and dividends from net
realized capital gain, with respect to each series, are normally
declared and paid annually, but each series may make distributions
on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that a
net realized capital gain of a series can be offset by a capital
loss carryover of that series, if any, such gain will not be
distributed.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes.
For Federal income tax purposes, each series is treated as a
single entity for the purpose of determining such qualifications.
NOTE 3--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Fees paid by the Fund pursuant to the provisions of an
Investment Advisory Agreement with Wilshire and an Administration
Agreement with Dreyfus are payable monthly based on annual rates
of .10 of 1% and .20 of 1%, respectively, of the average daily
value of each series' net assets. The agreements further provide
that if in any full fiscal year the aggregate expenses of any
series, exclusive of interest on borrowings, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any state
having jurisdiction over the Fund, that series may deduct from
payments to be made to Wilshire and Dreyfus, or Wilshire and
Dreyfus will bear, the amount of such excess to the extent
required by state law in proportion to their respective fees. The
most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full fiscal
year that such expenses of a series exceed 2-1\2% of the first $30
million, 2% of the next $70 million and 1-1\2% of the excess over
$100 million of the average value of that series' net assets in
accordance with California "blue sky" regulations. However,
Wilshire and Dreyfus had undertaken from September 1, 1994 through
November 7, 1994, to waive receipt of the advisory fee and
administration fee payable to it by each series, and thereafter,
Dreyfus had undertaken through August 31, 1995, to waive the
administration fee paid by each Series.
The expenses waived, pursuant to the undertakings
amounted to the following for the year ended August 31, 1995:
ADVISORY FEE
ADMINISTRATION FEE
WAIVED BY
WAIVED BY
WILSHIRE
DREYFUS TOTAL
____________
__________________ _______
<S> <C>
<C> <C>
Large Company Growth Portfolio $1,672
$29,667 $31,339
Large Company Value Portfolio. 2,071
31,669 33,740
Small Company Growth Portfolio 2,195
31,260 33,455
Small Company Value Portfolio. 4,145
50,421 54,566
(B) Pursuant to the Fund's Shareholder Services Plan, each
series reimburses Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, an amount not to exceed an annual rate of
.25 of 1% of the value of a series' average daily net assets for
servicing shareholder accounts. The services provided may include
personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder accounts. The following summarizes the
aggregate amount charged by Dreyfus Service Corporation pursuant
to the Shareholder Services Plan during the year ended August 31,
1995:
Large Company Growth Portfolio $34,200
Small Company Growth Portfolio $38,741
Large Company Value Portfolio 39,503
Small Company Value Portfolio 62,831
(C) Each director who is not an "affiliated person" as
defined in the Act receives from the Fund an annual fee of $2,500
and an attendance fee of $500 per meeting. The Chairman of the
Board receives an additional 25% of such compensation.
(D) A 1% redemption fee is charged on certain redemptions
of Series' shares (including redemptions through use of the
Exchange Privilege) where the redemption or exchange occurs within
a six-month period following the date of issuance. During the
year ended August 31, 1995, redemption fees for each series were
as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
<S> <C>
Large Company Growth Portfolio $ 568
Small Company Growth Portfolio $1,783
Small Company Value Portfolio 2,214
</TABLE>
NOTE 4-SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of
purchases and sales of investment securities, other than
short-term securities, for the year ended August 31, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
_____________ _________
<S>
<C> <C> <C>
Large Company Growth Portfolio..
$13,681,190 $ 4,368,078
Large Company Value Portfolio
16,565,048 9,119,354
Small Company Growth Portfolio..
24,340,972 16,876,853
Small Company Value Portfolio
21,374,619 22,164,749
(B) The following summarizes the accumulated net
unrealized appreciation (depreciation) on investments for each
series at August 31, 1995:
GROSS GROSS
APPRECIATION (DEPRECIATION) NET
_______ ________ _______
Large Company Growth Portfolio..
$3,942,237 $ (197,658) $3,744,579
Large Company Value Portfolio
2,449,022 (242,763) 2,206,259
Small Company Growth Portfolio..
2,906,473 (863,429) 2,043,044
Small Company Value Portfolio
2,256,076 (735,440) 1,520,636
At August 31, 1995, the cost of investments of each series for
Federal
income tax purposes was substantially the same as the
cost for financial reporting purposes. The cost of investments for
each
series for financial reporting purposes as of August 31, 1995 was
as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <S>
<C>
Large Company Growth Portfolio $17,619,827 Small
Company Growth Portfolio $20,108,869
Large Company Value Portfolio 20,823,678 Small
Company Value Portfolio 24,192,376
</TABLE>
DREYFUS-WILSHIRE TARGET FUNDS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF THE
DREYFUS-WILSHIRE TARGET FUNDS, INC.
We have audited the accompanying statements of assets and
liabilities, including the statements of investments, of
Dreyfus-Wilshire Target Funds, Inc. (comprised of the Large
Company Growth Portfolio, the Large Company Value Portfolio, the
Small Company Growth Portfolio and the Small Company Value
Portfolio) as of August 31, 1995, the related statements of
operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and
the financial highlights for each of the two years in the period
then ended and for the period from September 30,1992 (when
operations commenced for all Series except Small Company Growth
Portfolio, which commenced operations on October 1, 1992) to
August 31, 1993. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of August 31, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of each of the respective
portfolios constituting the Dreyfus-Wilshire Target Funds, Inc. as
of August 31, 1995, the results of their operations for the year
then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights for
the periods referred to above, in conformity with generally
accepted accou nting principles.
[Coopers & Lybrand signature logo]
COOPERS & LYBRAND L.L.P.
New York, New York
October 6, 1995
DREYFUS-WILSHIRE TARGET FUNDS, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Dreyfus-Wilshire
Target Funds, Inc. (Large Company Value Portfolio, Small Company
Value Portfolio and Small Company Growth Portfolio) hereby make
the following designations of long-term capital gain distributions
regarding the fiscal year ended August 31, 1995.
<TABLE>
<CAPTION>
LONG-TERM
CAPITAL GAIN
DISTRIBUTION TOTAL PAID PAYABLE
PER SHARE PER SHARE DATE
_________ __________ _________
<S>
<C> <C> <C>
Large Company Value Portfolio.
$ .0900 $ .502 12/30/94
Small Company Value Portfolio.
$ .065 $ .518 12/30/94
Small Company Growth Portfolio
$ .314 $ .314 12/30/94
</TABLE>
PROSPECTUS MAY 31, 1996
WILSHIRE TARGET FUNDS, INC.
(Institutional Class Shares)
Wilshire Target Funds, Inc. (the "Fund") is an open-end
investment company, known as a mutual fund. This prospectus offers
Institutional Class Shares ("Shares") in each of four separate
diversified portfolios (each, a "Portfolio"): Large Company Growth
Portfolio, Large Company Value Portfolio, Small Company Growth
Portfolio and Small Company Value Portfolio. The goal of each
Portfolio is to provide the investment results of a portfolio of
publicly-traded common stocks in one of four sub-categories of
companies from the Wilshire 5000 Index which meet certain criteria
established by the Fund's Investment Adviser. See "Description of
the Fund-Investment Approach." No portfolio is an index fund.
Wilshire Associates Incorporated ("Wilshire") serves as the
Fund's investment adviser. First Data Investor Services Group,
Inc. ("First Data") serves as the Fund's administrator. 440
Financial Distributors, Inc. ("440 Financial") serves as the
Fund's distributor.
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 May 31, 1996,
which may be further 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 MAILING
ADDRESS, or call TELEPHONE NO.
Shares of the Fund are not deposits or obligations of, or
guaranteed or endorsed by, any financial institution, are not
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency, and involve risk, including
the possible loss of principal amount invested.
TABLE OF CONTENTS Page
Fee Table 3
Condensed Financial Information 4
Description of the Fund 5
Management of the Fund 8
How to Buy Fund Shares 9
Shareholder Services 11
How to Redeem Fund Shares 11
Shareholder Services Plan 13
Dividends, Distributions and Taxes 13
Performance Information 15
General Information 15
Appendix 17
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE
[This Page Intentionally Left Blank]
Fee Table
Large Large Small
Small
Company Company Company Company
Growth Value Growth
Value
Portfolio Portfolio Portfolio Portfolio
Annual Fund Operating Expenses:
(as a percentage of average daily net assets)
Management Fees 0.25% 0.25% 0.25% 0.25%
12b-1 (Shareholder
Services Plan) Fee 0.15% 0.15% 0.15% 0.15%
Other Expenses 0.67% 0.62% 0.76% 0.51%
Total Fund Operating
Expenses 1.07% 1.02% 1.16% 0.91%
Example:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of each
time period:
1 Year $ 11 $ 10 $ 12 $ 9
3 Years $ 34 $ 32 $ 37 $ 29
5 Years $ 59 $ 56 $ 64 $ 50
10 Years $131 $125 $141 $112
The amounts listed in the example should not be considered
as representative of past or future expenses and actual expenses
may be greater or less than those indicated. Moreover, while the
example assumes a 5% annual return, each portfolio's 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 that the Fund and investors
will bear, the payment of which will reduce investors' annual
return. The information in the foregoing table reflects the
current fees payable under the Funds new advisory and
administration contracts, dated May 31, 1996, and the Rule 12b-1
shareholder services plan adopted with respect to the Shares,
effective May 31, 1996; however, the information does not reflect
any fee waivers or expense limitations that may be in effect. You
can purchase Shares without charge directly from 440 Financial;
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" and "Shareholder
Services Plan.
Condensed Financial Information
The information for the fiscal years ended August 31, 1993,
1994 and 1995 in the following table has been audited by Coopers &
Lybrand L.L.P., the Fund's independent accountants, whose report
thereon appears in the Statement of Additional Information. The
financial data in the following table for the six months ended
February 29, 1996 is unaudited. Further financial data and
related notes are included in the Statement of Additional
Information, which is available upon request.
Financial Highlights
Contained below is per share operating performance data for
an Investment Class share outstanding throughout the period, total
investment return, ratios to average net assets and other
supplemental data for each Portfolio for each period indicated.
(No Institutional Class shares were outstanding prior to May 31,
1996.) This information has been derived from each Portfolio's
financial statements.
<TABLE>
<CAPTION>
Large Company
Large Company
Growth Portfolio
Value Portfolio
Year Ended (unaudited)
Year Ended (unaudited)
August 31, Six Months
August 31, Six Months
Ended
Ended
Feb 29,
Feb 29,
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA: 1993(1) 1994
1995 1996 1993(1) 1994 1995 1996
Net asset value, beginning of period $12.50 $12.74
$13.31 $12.50 $15.18 $13.99
Investment Operations:
Investment income-net .21 .15 .10
.54 .36 .34
Net realized and unrealized gain (loss) on investments
.10 .65 3.03 2.30
(.90) 2.19
Total from Investment Operations .31 .80
3.13 2.84 (.54) 2.53
Distributions:
Dividends from investment income-net (.07) (.23)
(.10) (.16) (.36) (.40)
Dividends from net realized gain on investments --
- -- -- --
(.29) (.10)
Total Distributions (.07) (.23) (.10)
(.16) (.65) (.50)
Net asset value, end of period $12.74 $13.31 $16.34
$15.18 $13.99 $16.02
======= ====== ====== ======= ======
======
TOTAL INVESTMENT RETURN 2.46%(2) 6.34% 23.67%
22.93%(2) (3.61%) 18.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets --
.68% .84% -- .58%
.81%
Ratio of net investment income to average net assets
1.66%(2) 1.18% .94% 4.27%(2)
4.02% 3.77%
Decrease reflected in above expense ratios due to undertakings
by Wilshire and Dreyfus 1.14%(2) .71% .21%
1.32%(2) .60% .21%
Portfolio Turnover Rate 11.92%(2) 21.53% 30.09%
21.75%(2) 47.16% 58.04%
Net Assets, end of year (000's omitted) $8,061 $8,424
$21,348 $8,116 $12,158 $22,926
- -----------------
</TABLE>
(1)From September 30, 1992 (commencement of operations) to August
31, 1993.
(2)Not annualized
<TABLE>
<CAPTION>
Small Company
Small Company
Growth Portfolio
Value Portfolio
Year Ended Six Months Year
Ended Six Months
August 31, Ended
August 31, Ended
Feb 29,
Feb 29,
<S>
<C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA: 1993(1) 1994 1995 1996
1993(2) 1994 1995 1996
Net asset value, beginning of period $12.50 $16.03
$15.39 $12.50 $14.81 $14.32
Investment Operations:
Investment income-net .08 (.04) (.07)
.35 .45 .55
Net realized and unrealized gain (loss) on investments
3.48 .90 3.54 2.10
(.45) 1.06
Total from Investment Operations 3.56 .86
3.47 2.45 -- 1.61
Distributions:
Dividends from investment income-net (.03) --
- -- (.14) (.33) (.45)
Dividends in excess of investment income-net --
(.07) -- --
- -- --
Dividends from net realized gain on investments --
(1.43) (.31) --
(.16) (.07)
Total Distributions (.03) (1.50) (.31)
(.14) (.49) (.52)
Net asset value, end of period $16.03 $15.39 $18.55
$14.81 $14.32 $15.41
======= ====== ====== ======= ======
======
TOTAL INVESTMENT RETURN 28.50%(3) 5.20% 23.04%
19.72%(3) (0.01%) 11.84%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- .74%
.95% -- .50% .69%
Ratio of net investment income (loss)to average net assets
.53%(3) (.40%) (.54%) 3.65%(3) 3.64%
4.12%
Decrease reflected in above expense ratios due to undertakings
by Wilshire and Dreyfus 1.40%(3) .73% .21%
1.32%(3) .56% .22%
Portfolio Turnover Rate 55.26%(3)46.41%110.98%
26.87%(3)48.59% 86.17%
Net Assets, end of year (000's omitted) $7,527 $11,188 $21,882
$15,155 $23,438 $25,978
- -----------------
</TABLE>
(1)From October 1, 1992 (commencement of operations) to August 31,
1993.
(2)From September 30, 1992 (commencement of operations) to August
31, 1993.
(3)Not annualized.
Further information about the prior performance of each
Portfolio's Investment Class shares is contained in the Fund's
annual and semi-annual reports, which may be obtained without
charge by writing to the address or calling the number set forth
on the cover page of this Prospectus.
Description of the Fund
Investment Objective - The goal of each Portfolio is to provide
the investment results of a portfolio of publicly-traded common
stocks in one of four sub-categories of companies from the
Wilshire 5000 Index which meet certain criteria established by
Wilshire as described herein. Each Portfolio's investment
objective 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 such Portfolio's outstanding voting
shares. There can be no assurance that a Portfolio's investment
objective will be achieved.
Investment Approach - Wilshire identifies from the Wilshire 5000
Index, an index consisting of all publicly-traded common stocks in
the United States, the stocks of the 2,500 companies with the
largest market capitalizations (ranging between $95 billion and
$155 million). It then divides that universe of stocks, first,
into those of the 750 companies with the largest capitalizations
(ranging between $95 billion and $1.2 billion), which constitute
approximately 90% of the total market value of the stocks included
in the Wilshire 5000 Index, and, second, into those of the 1,750
next largest companies based on capitalization (ranging currently
between $1.2 billion and $155 million), which constitute
approximately 10% of the total market value of the stocks included
in the Wilshire 5000 Index (the stocks of the remaining 2,500
companies constitute less than 2% of the total market value of the
stocks included in the Wilshire 5000 Index). From these large and
small capitalization universes, Wilshire selects the stocks of
those companies it believes to possess the characteristics of
growth stocks and of value stocks, based on criteria discussed
below. In this manner, Wilshire identifies the four potential
universes of companies, the stocks of which it may purchase for
the Portfolios. Wilshire reviews periodically these selections and
updates each potential universe of companies. The number of
securities eligible for investment by a Portfolio at any time will
vary, but is expected to range between 150 to 550 stocks.
To determine whether a company's stock falls within the
growth or value classification, Wilshire analyzes each company
based on fundamental factors such as price to book value ratios,
price to earnings ratios, earnings growth, dividend payout ratios,
return on equity, and the company's beta (a measure of stock price
volatility relative to the market generally). In general, Wilshire
believes that companies with relatively low price to book ratios,
low price to earnings ratios and higher than average dividend
payments in relation to price should be classified as value
companies. Alternatively, companies which have above average
earnings or sales growth and retention of earnings and command
higher price to earnings ratios fit the more classic growth
description.
By dividing companies into these four sub-categories,
Wilshire attempts to offer potential investors market exposure to
these types of companies. As described under "Investment
Considerations and Risks" below, you should purchase a Portfolio's
Shares only as a supplement to an overall investment program. To
provide varying degrees of market exposure to these types of
securities, various combinations of each Portfolio's Shares might
be purchased.
Management Policies - The Large Company Growth Portfolio invests
substantially all of its assets in equity securities of issuers
within the universe of companies identified by Wilshire as large
capitalization, growth companies.
The Large Company Value Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as large capitalization, value
companies.
The Small Company Growth Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as small capitalization,
growth companies.
The Small Company Value Portfolio invests substantially all
of its assets in equity securities of issuers within the universe
of companies identified by Wilshire as small capitalization, value
companies.
Each Portfolio attempts to remain fully invested in equity
securities of companies which comprise its relative universe. When
a Portfolio has cash pending investment or needs to meet potential
redemptions, it 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. Under normal circumstances, the Fund
anticipates that not more than 5% of the value of a Portfolio's
total assets will be invested in any one category of such
instruments, and that not more than 20% of the value of a
Portfolio's total assets will be invested in all money market
instruments. No Portfolio intends to invest in money market
instruments or any other securities for defensive purposes. See
the Statement of Additional Information for a description of these
instruments. Each Portfolio may purchase stock index futures in
anticipation of taking a market position when, in Wilshire's
opinion, available cash balances do not permit an economically
efficient trade in the cash market. Each Portfolio may sell stock
index futures to terminate existing positions it may have as a
result of its purchase of stock index futures. To the extent the
Fund, on behalf of a Portfolio, purchases or sells futures
contracts, the Fund currently intends to use the New York Stock
Exchange Composite Index, Value Line Composite Index or Standard &
Poor's 500 Composite Stock Price Index. The performance of the
futures should not be expected to correlate identically with that
of the particular index. In addition, each Portfolio may lend its
portfolio securities. See also "Investment Considerations and
Risks" below and "Investment Objective and Management Policies" in
the Statement of Additional Information.
Investment Considerations and Risks
General - Each Portfolio's net asset value is not fixed and should
be expected to fluctuate. You should consider a Portfolio as a
supplement to an overall investment program and should invest only
if you are willing to undertake the risks involved. See
"Investment Objective and Policies - Management Policies" in the
Statement of Additional Information for a further discussion of
certain risks.
Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of a
Portfolio's investment securities will result in changes in the
value of such Portfolio's Shares and thus the Portfolio's total
return to investors. Moreover, because no Portfolio will adopt a
temporary defensive position in response to market factors, and
thus will remain almost fully invested at all times, the net asset
value of one or more Portfolios could be adversely affected by
adverse changes, real or anticipated, in companies that are
generally characterized in the same manner as the companies the
securities of which are held by the relevant Portfolio. So that,
for example, if large capitalization growth stocks fall out of
favor with investors widely, irrespective of fundamentals, the net
asset value of the Large Company Growth Portfolio should be
expected to be adversely affected. Similar risks exist for the
other Portfolios.
Foreign Securities - Since the stocks of some foreign issuers are
included in the Wilshire 5000 Index, each Portfolio's investments
may include securities of such foreign issuers which may subject
such Portfolio to additional investment risks with respect to
those securities that are different in some respects from those
incurred by a fund which invests only in securities of domestic
issuers. Such risks include future political and economic
developments, the possible imposition of withholding taxes on
income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect an investment in these
securities, and the possible seizure or nationalization of foreign
deposits.
Use of Derivatives - Each Portfolio may invest, to a limited
extent, in derivatives ("Derivatives"). These are financial
instruments which derive their performance, at least in part, from
the performance of an underlying asset, index or interest rate.
The Derivatives the Portfolios may use include stock index
futures. While Derivatives can be used effectively in furtherance
of a Portfolio's investment objective, under certain market
conditions, they can increase the volatility of the Portfolio's
net asset value, can decrease the liquidity of the Portfolio's
investments and make more difficult the accurate pricing of the
Portfolio's investments. See "Appendix - Investment Techniques -
Use of Derivatives" below and "Investment Objectives and
Management Policies - Management Policies - Derivatives" in the
Statement of Additional Information.
Simultaneous Investments - Investment decisions for each Portfolio
are made independently from those of other investment companies
and accounts advised by Wilshire. However, if such other
investment companies or accounts are prepared to invest in, or
desire to dispose of, securities of the type in which a Portfolio
invests at the same time as such Portfolio, available investments
or opportunities for sales will be allocated equitably to each. In
some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Portfolio or the price
paid or received by the Portfolio.
Management of the Fund
Investment Adviser - Wilshire, located at 1299 Ocean Avenue, Santa
Monica, California 90401-1085, was formed in 1972 and serves as
the Fund's investment adviser. As of February 29, 1996, Wilshire
managed approximately $7 billion in assets. Under the terms of an
Investment Advisory Agreement with the Fund, Wilshire, subject to
the overall authority of the Fund's Board of Directors in
accordance with Maryland law, manages the investment of the assets
of each Portfolio. The Fund's primary portfolio manager is Thomas
D. Stevens, the President and Chairman of the Board of Directors
of the Fund and a Senior Vice President of Wilshire. He has held
the position of portfolio manager of the Fund since the Fund's
inception and has been employed by Wilshire since October 6, 1980.
The Fund's other portfolio manager is identified in the Statement
of Additional Information. Wilshire also provides research
services for the Fund through a professional staff of portfolio
managers and securities analysts. Wilshire is controlled by its
President, Mr. Dennis Tito, who owned 70% of its outstanding
voting stock as of February 29, 1996.
Pursuant to the terms of the Investment Advisory Agreement,
dated May 31, 1996 (the "Advisory Agreement"), the Fund has agreed
to pay Wilshire a monthly fee at the annual rate of .25 of 1% of
the value of each Portfolio's average daily net assets. However,
the Advisory Agreement also includes a fifteen month expense
limitation provision. For the three month period June 1, 1996
through August 31, 1996 and the fiscal year September 1, 1996
through August 31, 1997, Wilshire has agreed that, if the
aggregate operating expenses of any Portfolio (exclusive of
interest, taxes, brokerage, 12b-1 plan fees and extraordinary
expenses) for such period exceed the annual rate specified in the
following table for such Portfolio, the investment advisory fee
otherwise payable for that period by the Portfolio under the
Advisory Agreement will be reduced by the amount of the excess,
but not below an annual fee rate of .10 of 1% of such Portfolio's
average daily net assets.
Fund Annual Rate (%)
Large Company Growth Portfolio .80
Large Company Value Portfolio .77
Small Company Growth Portfolio .91
Small Company Value Portfolio .66
For the fiscal year ended August 31, 1995, the Fund paid Wilshire
an investment advisory fee at the effective annual rate of .09 of
1% of the value of the average daily net assets of the Large
Company Growth, Large Company Value and Small Company Growth
Portfolios, and .08 of 1% for the Small Company Value Portfolio,
in each case after giving effect to a voluntary fee waiver which
was in effect through November 7, 1994.
Administrator - First Data, a subsidiary of First Data
Corporation, P. O. Box [ ], Providence, Rhode Island 02940-[
] serves as the Fund's administrator pursuant to an Administration
Agreement with the Fund. Under the terms of the Administration
Agreement, First Data generally assists in all aspects of the
Fund's operations, other than providing investment advice, subject
to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. Pursuant to the terms of the
Administration Agreement, dated May 31, 1996, the Fund has agreed
to pay First Data a monthly fee at the annual rate of .15 of 1% of
the value of the Fund's monthly average net assets up to aggregate
net assets of $1 billion, .10 of 1% of such value on the next $4
billion, and .08 of 1% on excess net assets. For the fiscal year
ended August 31, 1995, no administration fee was paid to The
Dreyfus Corporation (the former administrator of the Fund)
pursuant to an undertaking by Dreyfus.
Custodian and Transfer and Dividend Disbursing Agent - Northern
Trust Company, an Illinois trust company located at 50 South
LaSalle Street, Chicago, Illinois 60675, is the custodian of the
Fund's investments. First Data is also the Fund's Transfer and
Dividend Disbursing Agent (the "Transfer Agent").
Distributor - 440 Financial serves as the distributor of the
Shares. 440 Financial is also a subsidiary of First Data
Corporation. 440 Financial is not compensated by the Fund or its
shareholders for its services as distributor, except to the extent
that it receives payments from the Fund under the Funds
shareholder services plan. See "Shareholder Services Plan" below.
Expenses - From time to time, Wilshire or First Data may waive
receipt of its fees and/or voluntarily assume certain expenses of
the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The
Fund will not pay Wilshire or First Data for any amounts which may
be waived, nor will the Fund reimburse Wilshire or First Data for
any amounts which may be assumed. In addition to shareholder
services fees which may be paid by 440 Financial out of amounts
which it receives under the Funds shareholder services plan, 440
Financial, Wilshire or First Data may bear other expenses of
distribution of the shares of the Fund or of the provision of
shareholder services to the Funds shareholders, including
payments to securities dealers or other financial intermediaries
or service providers, out of its profits and available resources
other than the advisory and administration fees paid by the Fund.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by 440
Financial, Wilshire or First Data. The expenses borne by the Fund
include: organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of 440 Financial, Wilshire or First Data or any
of their affiliates, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory and administration
fees, shareholder services plan 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 Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses. Expenses
attributable to a particular class of shares or Portfolio are
charged against the assets of that class or Portfolio;
accordingly, shareholder services plan fees payable with respect
to a particular class of shares are charged only to that class of
shares. Other expenses of the Fund are allocated between the
Portfolios on the basis determined by the Board of Directors,
including, but not limited to, proportionately in relation to the
net assets of each Portfolio.
How to Buy Fund Shares
Shares are offered exclusively to institutional investors,
such as employee benefit plans, other tax-exempt institutions,
corporations and other institutional buyers. Shares are sold
without a sales charge. You may be charged a nominal fee if you
effect transactions in Portfolio Shares through a securities
dealer, bank or other financial institution. Share 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 in the Shares of a Portfolio
is $5,000,000. Subsequent investments must be at least $100,000.
The initial investment must be accompanied or preceded by the
Fund's Account Application. The Fund reserves the right to vary
the initial and subsequent investment minimum requirements at any
time.
You may purchase a Portfolio's Shares by check or wire.
Checks should be made payable to "Wilshire Target Funds, Inc."
For subsequent investments, your Fund account number should appear
on the check. Payments which are mailed should be sent to Wilshire
Target Funds, Inc., P.O. Box [ ], Providence, Rhode Island
02940-[ ], together with your investment slip or, when opening
a new account, your Institutional Class Shares Account
Application, indicating the name of the Portfolio being purchased.
Neither initial nor subsequent investments should be made by third
party check.
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 Boston
Safe Deposit and Trust Company, together with the name of the Fund
and the applicable Portfolio's DDA number as follows, for purchase
of Shares in your name: DDA [Acct. No.]/Large Company Growth
Portfolio; DDA[Acct. No.]/Large Company Value Portfolio; DDA[Acct.
No.]/Small Company Growth Portfolio; DDA[Acct. No.]/Small Company
Value Portfolio. The wire must include your Fund account number
(for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund Shares is
by wire, please call [TELEPHONE NO.] after completing your wire
payment to obtain your Fund account number. Please include your
Fund account number on the Fund's 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 Boston
Safe and Trust Deposit Company with instructions to credit your
Fund account. The instructions must specify your Fund account
registration and your Fund account number preceded by the digits
"[No.]."
Shares of each Portfolio 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. Net asset value per
share of each class of shares 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,
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 of a class of shares of a Portfolio is computed by
dividing the value of the net assets attributable to that class of
shares (i.e., the value of the assets attributable to that class
less liabilities attributable to that class) by the total number
of shares of that class outstanding. Each Portfolio's investments
are valued based on market value or, where market quotations are
not readily available, based on fair value as determined in good
faith by the Board of Directors. For further information regarding
the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Statement of Additional
Information.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the Fund's 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").
Shareholder Services
Portfolio Exchanges - You may purchase, in exchange for shares of
a Portfolio, shares of the same class of one of the other
Portfolios offered by the Fund, to the extent such shares are
offered for sale in your state of residence. If you desire to use
this service, please call [TELEPHONE NO.] 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. Except in the case of personal
retirement plans, the shares being exchanged must have a current
value of at least $100,000; 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
Portfolio into which the exchange is being made (currently,
$5,000,000). 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 [TELEPHONE NO.]. If you have established the
Telephone Exchange Privilege, you may telephone exchange
instructions by calling [TELEPHONE NO.] or, if you are calling
from overseas, call [TELEPHONE NO.]. See "How to Redeem Fund
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
Portfolio or fund into which the exchange is made: Telephone
Exchange Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, and the dividend and capital gain
distribution option selected by the investor.
Shares will be exchanged at their next determined net asset
value. No fees currently are charged to 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 Exchanges may be modified or terminated at any time upon notice
to shareholders.
The exchange of Shares of one Portfolio 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.
Retirement Plans - The Fund offers a variety of pension and
profit-sharing plans. Plan support services also are available.
To obtain details on available plans, please call the following
toll-free number: [ TELEPHONE NO.].
How to Redeem Fund Shares
General - You may request redemption of your Shares at any time.
Redemption requests should be transmitted in accordance with the
procedures described below. When a request is received in proper
form, the Fund will redeem the Shares at the next determined net
asset value.
Securities dealers, banks and other financial institutions
may charge a nominal fee for effecting redemptions of a
Portfolio's Shares. Any certificates representing a Portfolio's
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 Portfolio'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 a Portfolio's shares by check 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, which may take up to eight
business days or more. In addition, the fund will reject requests
to redeem shares by wire or telephone for a period of eight
business days after receipt by the transfer agent of the purchase
check 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(s) at its
option upon not less than 45 days' written notice if the aggregate
net asset value of all of your accounts in the Portfolios is
$2,000,000 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 Wire Redemption Privilege or the
Telephone Redemption Privilege. 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 Fund's 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 a Portfolio's
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, such Portfolio's net
asset value may fluctuate.
Regular Redemption - Under the regular redemption procedure, you
may redeem your Shares by written request mailed to Wilshire
Target Funds, Inc., P.O. Box [ ], Providence, Rhode Island
02940-[ ]. Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in
proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers
listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.
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 only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling [TELEPHONE NO.] or, if you are calling from overseas, call
[TELEPHONE NO.]. 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 [TELEPHONE NO. ] or, if you are calling
from overseas, call [TELEPHONE NO.] Shares held under Keogh Plans,
IRAs or other retirement plans, and Shares for which certificates
have been issued, are not eligible for this Privilege.
Shareholder Services Plan
The Directors of the Fund have adopted a separate
shareholder services plan (the "Shareholder Services Plan") with
respect to the Shares pursuant to Section 12(b) of the 1940 Act
and Rule 12b-1 thereunder. Under the Shareholder Services Plan,
the Fund reimburses 440 Financial at an annual rate of up to .15
of 1% of the value of the average daily net assets attributable to
the Shares of each Portfolio for certain shareholder services
provided by securities dealers or other financial intermediaries.
The shareholder services provided may include personal services to
holders of the Shares and/or for the maintenance of the accounts
of the holders of the Shares. The amount payable under the
Shareholder Services Plan is charged to, and therefore reduces,
income allocated to the Shares.
Dividends, Distributions and Taxes
Each Portfolio ordinarily declares and pays dividends from
its net investment income and distributes net realized securities
gains, if any, once a year, but it may make distributions on a
more frequent basis to comply with the distribution requirements
of the Internal Revenue Code of 1986, as amended (the "Code"), in
all events in a manner consistent with the provisions of the 1940
Act. The Fund will 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.
The Fund intends to distribute substantially all of its net
investment income and net realized securities gains on a current
basis. Dividends paid by a Portfolio derived from net investment
income and distributions from net realized short-term securities
gains of the Portfolio will be taxable to U.S. shareholders as
ordinary income for federal income tax purposes whether received
in cash or reinvested in additional Shares. Depending upon the
composition of a Portfolio's income, all or a portion of the
dividends derived from net investment income may qualify for the
dividends received deduction allowable to certain U.S.
corporations. Distributions from net realized long-term securities
gains of a Portfolio 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 Portfolio
Shares and whether such distributions are received in cash or
reinvested in Shares. The Code currently 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 will generally be subject to state and local taxes.
Dividends from net investment income and distributions from
net realized short-term securities gains paid by a Portfolio 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
a Portfolio 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 any U.S. withholding tax. However, such
distributions and redemption proceeds may be subject to backup
withholding, as described below, unless the foreign investor
certifies his non-U.S. residency status. The tax consequences to
foreign investors engaged in a trade or business that is
effectively connected with the United States may differ from the
foregoing.
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 each Portfolio has
qualified for the fiscal year ended August 31, 1995 as a
"regulated investment company" under the Code. Each Portfolio
intends to continue to so qualify. Such qualification relieves a
Portfolio of any liability for Federal income tax to the extent
its earnings are distributed in accordance with applicable
provisions of the Code. In addition, each Portfolio is subject to
a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts, if any, of taxable investment income and
capital gains.
The foregoing is a general summary of the U.S. federal
income tax consequences of investing in the Fund. You should
consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
Performance Information
For purposes of advertising, performance is calculated on
the bases of average annual total return and/or total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the
Portfolio 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 each Portfolio's performance will
include such Portfolio'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 Portfolio 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 the Wilshire 5000 Index, Lipper Analytical Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones
Industrial Average, Morningstar, Inc. and other industry
publications.
General Information
The Fund was incorporated under Maryland law on July 30,
1992, and commenced operations on September 30, 1992. The Fund is
authorized to issue 400 million shares of Common Stock (with 100
million allocated to each Portfolio and 50 million allocated to
each of two classes of each Portfolio), par value $.001 per share.
The Fund is a "series fund," which is a mutual fund divided
into separate portfolios. Each Portfolio of the Fund is treated as
a separate entity for certain matters under the 1940 Act and for
other purposes, and a shareholder of one Portfolio is not deemed
to be a shareholder of any other Portfolio. As described below,
for certain matters Fund shareholders vote together as a group; as
to others they vote separately by Portfolio or by class.
To date, the Board of Directors has authorized the creation
of four series of shares ("Portfolios") and an "Investment Class"
and "Institutional Class" of shares for each Portfolio. All
consideration received by the Fund for shares of one of the
Portfolios and all assets in which such consideration is invested
will belong to that Portfolio (subject only to the rights of
creditors of the Fund) and will be subject to the liabilities
related thereto. Each share of a class of a Portfolio represents
an equal proportionate interest in the Portfolio with each other
class share, subject to the liabilities of the particular class.
Each class of shares of a Portfolio participates equally in the
earnings, dividends and assets attributable to that class. The
income attributable to, and the expenses of, one class are treated
separately from those of the other classes. Shares are fully paid
and non-assessable. Should a Portfolio be liquidated, the holders
of each class are entitled to share pro rata in the net assets
attributable to that class available for distribution to
shareholders. The Board of Directors has the ability to create,
from time to time, new portfolios and additional classes without
shareholder approval. Shares have no pre-emptive or conversion
rights.
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 Directors or the appointment of auditors.
However, pursuant to the Fund's By-Laws, the holders of at least
10% of the shares outstanding and entitled to vote may require the
Fund to hold a special meeting of shareholders for the purpose of
considering the removal of a Director from office or for any other
purpose. Fund shareholders may remove a Director by the
affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any
time, less than a majority of the Directors then holding office
have been elected by shareholders. Each share has one vote and
shares of each Portfolio would be entitled to vote separately to
approve investment advisory agreements or changes in investment
restrictions, but shares of all Portfolios would vote together in
the election of Directors or selection of accountants. Each class
of a Portfolio is also entitled to vote separately on any material
increases in the fees under its Shareholder Services Plan or on
any other matter that affects solely that class of shares, but
will otherwise vote together with all other classes of shares of
the Portfolio on all other matters on which stockholders are
entitled to vote.
The Transfer Agent maintains a record of your ownership and
sends confirmations and statements of account. Certificates for
shares will not be issued unless specifically requested.
Shareholder inquiries may be made by writing to the Fund at
[FUND ADDRESS], or by calling toll free [TELEPHONE NO.]. In New
York City, call [ TELEPHONE NO.]; outside of the U.S. and Canada,
call [TELEPHONE NO.]
Appendix
Investment Techniques
Borrowing Money - Each Portfolio is permitted to borrow money only
for temporary or emergency (not leveraging) purposes, in an amount
up to 15% of the value of its total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of a Portfolio's total assets,
the Portfolio will not make any additional investments.
Use of Derivatives - Although no Portfolio will be a commodity
pool, Derivatives subject a Portfolio to the rules of the
Commodity Futures Trading Commission which limit the extent to
which a Portfolio can invest in certain Derivatives. Each
Portfolio may invest in stock index futures contracts for hedging
purposes without limit. However, no Portfolio may invest in such
contracts for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging purposes, exceed 5% of the
liquidation value of the Portfolio's assets, after taking into
account unrealized profits and unrealized losses on such contracts
it has entered into; 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.
Lending Portfolio Securities - Each Portfolio 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 Portfolio
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 Portfolio 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 % of the value of
the Portfolio's total assets. In connection with such loans, the
Portfolio 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. A
Portfolio might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches its
agreement with the Portfolio.
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 Portfolios' 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
[This Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
"ART"
"LOGO"
Wilshire Target Funds, Inc.
"Prospectus"
[ 1996, Wilshire Associates Incorporated]
[WILSp511595]
WILSHIRE TARGET FUNDS, INC.
(INSTITUTIONAL CLASS SHARES)
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
May 31, 1996
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with the
current Prospectus of Wilshire Target Funds, Inc. (Institutional
Class Shares), dated May 31, 1996, as it may be revised from time
to time. To obtain a copy of the Prospectus, please write to
Wilshire Target Funds, Inc. (the "Fund") at or call the
following numbers:
Call Toll Free
Outside the U.S. and Canada--Call
Wilshire Associates Incorporated ("Wilshire") serves as the
Fund's investment adviser.
First Data Investor Services Group, Inc. ("First Data")
serves as the Fund's administrator.
440 Financial Distributors, Inc. ("440 Financial") serves as
the Fund's distributor.
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY 1
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES 2
MANAGEMENT OF THE FUND 8
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS 11
SHAREHOLDER SERVICES PLAN 16
PURCHASE OF FUND SHARES 17
REDEMPTION OF FUND SHARES 18
SHAREHOLDER SERVICES 19
DETERMINATION OF NET ASSET VALUE 21
DIVIDENDS, DISTRIBUTION AND TAXES 21
PERFORMANCE INFORMATION 23
PORTFOLIO TRANSACTIONS 24
INFORMATION ABOUT THE FUND 25
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,COUNSEL AND
INDEPENDENT ACCOUNTANTS 25
APPENDIX 26
STATEMENT OF ASSETS AND LIABILITIES 54
NOTES TO FINANCIAL STATEMENTS 61
GENERAL INFORMATION AND HISTORY
On August 28, 1992, Dreyfus-Wilshire Series Fund, Inc.
changed its name to Dreyfus-Wilshire Target Funds, Inc.
On May 31, 1996 Dreyfus-Wilshire Target Funds, Inc. changed
its name to Wilshire Target Funds, Inc.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description
of the Fund."
Other Portfolio Securities
U.S. Government Securities-Each Portfolio may purchase
securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, which 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, for example, Government
National Mortgage Association pass-through certificates, are
supported by the full faith and credit of the U.S. Treasury;
others, such as those of the Federal Home Loan Banks, by the right
of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as
those issued by the Student Loan Marketing Association, 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 or instrumentalities, no assurance
can be given that it will always do so, since it is not so
obligated by law.
Zero Coupon Securities-Each Portfolio 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. Each
Portfolio also may invest in zero coupon securities 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.
Bank Obligations-Each Portfolio may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries of
domestic banks, foreign branches of domestic banks, and domestic
and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such
securities issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign branches
of foreign banks, the Portfolio 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. Such risks include possible future political and
economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption of
other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
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 at a stated
interest rate. Each Portfolio will invest in time deposits of
domestic banks that have total assets in excess of one billion
dollars. Time deposits which may be held by the Portfolios will
not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal
Deposit Insurance Corporation.
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 of 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.
Repurchase Agreements-In a repurchase agreement, the
Portfolio 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 Portfolio's
ability to dispose of the underlying securities. The Fund's
custodian or sub-custodian will have custody of, and will hold in
a segregated account, securities acquired by a Portfolio under a
repurchase agreement. Repurchase agreements are considered by the
staff of the Securities and Exchange Commission to be loans by the
Portfolio entering into them. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Portfolios will
enter into repurchase agreements only with domestic banks with
total assets in excess of one billion dollars, or primary
government securities dealers reporting to the Federal Reserve
Bank of New York, with respect to securities of the type in which
such Portfolio may invest, and will require that additional
securities be deposited with it if the value of the securities
purchased should decrease below resale price.
Commercial Paper and Other Short-Term Corporate Obligations-
Commercial paper consists of short-term, unsecured promissory
notes issued to finance short-term credit needs. The commercial
paper purchased by the Portfolios 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., A-1 by
Standard & Poor's Ratings Group, F-1 by Fitch Investors Service,
L.P. or D-1 by Duff & Phelps Credit Rating Co., (b) issued by
companies having an outstanding unsecured debt issue currently
rated not lower than Aa3 by Moody's Investors Service, Inc. or AA-
by Standard & Poor's Ratings Group, Fitch Investors Service, L.P.
or Duff & Phelps Credit Rating Co., or (c) if unrated, determined
by Wilshire to be of comparable quality to those rated obligations
which may be purchased by such Portfolio. These instruments
include variable amount master demand notes, which are obligations
that permit the Portfolio to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the
Portfolio, 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 Portfolio's right to redeem is dependent
on the ability of the borrower to pay principal and interest on
demand. In connection with floating and variable rate demand
obligations, Wilshire will consider, on an ongoing basis, earning
power, cash flow and other liquidity ratios of the borrower, and
the borrower's ability to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating
agencies, and a Portfolio may invest in them only if at the time
of an investment the borrower meets the criteria set forth above
for other commercial paper issuers.
Management Policies
Derivatives. A Portfolio 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 the Portfolio 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 a Fund to increase, decrease or change the level of risk to
which its portfolio is exposed in much the same way as the
Portfolio 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 a Portfolio's performance.
If a Portfolio invests in Derivatives at inappropriate times
or judges market conditions incorrectly, such investments may
lower the Portfolio's return or result in a loss. A Portfolio
also could experience losses if its Derivatives were poorly
correlated with its other investments, or if the Portfolio was
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.
When required by the Securities and Exchange Commission, the
Portfolio 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, a Portfolio 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, Wilshire 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 a Portfolio. 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. A Portfolio 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 a
Portfolio which could adversely affect the value of such
Portfolio's net assets. Although each Portfolio 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 Portfolio to substantial
losses.
Successful use of futures by a Portfolio also is subject to
the ability of Wilshire 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 a
Portfolio 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 Portfolio
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 Portfolio has insufficient cash, it may have to
sell securities to meet daily variation margin requirements. A
Portfolio 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, a Portfolio 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 a
Portfolio's ability otherwise to invest those assets.
Specific Futures Transactions. A Portfolio may purchase and
sell stock index futures contracts. A stock index future
obligates a Portfolio to pay or receive an amount of cash equal to
a fixed dollar amount specified in the futures contract multiplied
by the difference between the settlement price of the contract on
the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the
opening of trading in such securities on the next business day.
Future Developments. A Portfolio may take advantage of
opportunities in the area of futures contracts and any other
Derivatives which are not presently contemplated for use by the
Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent
with the Portfolio's investment objective and legally permissible
for the portfolio. Before entering into such transactions or
making any such investment, the Portfolio will provide appropriate
disclosure in its Prospectus or Statement of Additional
Information.
Lending Portfolio Securities. In connection with its
securities lending transactions, a Portfolio 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 Portfolio 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
Portfolio must be able to terminate the loan at any time; (4) the
Portfolio must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions payable on the
loaned securities, and any increase in market value; (5) the
Portfolio may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Directors
must terminate the loan and regain the right to vote the
securities if a material event adversely affecting the investment
occurs. These conditions may be subject to future modification.
Investment Restrictions. Each Portfolio has adopted
investment restrictions numbered 1 through 9 as fundamental
policies, which cannot be changed, as to a Portfolio, without
approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of
such Portfolio's outstanding voting shares. Investment
restrictions numbered 10 through 15 are not fundamental policies
and may be changed by vote of a majority of the Directors at any
time. No Portfolio may:
1. Invest in commodities, except that the Portfolio may
purchase and sell options, forward contracts, 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 Portfolio may purchase and sell securities that are secured by
real estate or issued by companies that invest or deal in real
estate.
3. Borrow money, except for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the
Portfolio's total assets (including the amount borrowed) based on
the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Portfolio's total assets,
the Portfolio will not make any additional investments. For
purposes of this investment restriction, the entry into options,
forward contracts, 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 Portfolio 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 Fund's Board of Directors.
5. Act as an underwriter of securities of other issuers,
except to the extent the Portfolio 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 its assets in the securities
of issuers in any single industry, provided there shall be no
limitation on the purchase of obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
7. Invest more than 5% of its assets in the obligations
of any single issuer, except that up to 25% of the value of the
Portfolio'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.
8. Hold more than 10% of the outstanding voting
securities of any single issuer. This Investment Restriction
applies only with respect to 75% of the Portfolio's total assets.
9. 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, 11 and
12 may be deemed to give rise to a senior security.
10. Invest in the securities of a company for the purpose
of exercising management or control, but the Portfolio will vote
the securities it owns in its portfolio as a shareholder in
accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to
the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection
with writing covered put and call options and the purchase of
securities on a when-issued or forward commitment basis and
collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating to indices, and options on futures
contracts or indices.
12. Purchase, sell or write puts, calls or combinations
thereof, except as may be described in the Fund's Prospectus and
this Statement of Additional Information.
13. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the
Portfolio's investments in all such companies to exceed 5% of the
value of its total assets.
14. 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 Portfolio's net assets would be so invested.
15. Purchase securities of other investment companies,
except to the extent permitted under the 1940 Act or those
received as part of a merger or consolidation.
If a percentage restriction is adhered to at the time of
investment, a later change in percentage resulting from a change
in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of a
Portfolio's shares in certain states. In this regard, and while
not a fundamental policy, the Fund has undertaken that no
Portfolio may invest in real estate limited partnerships. Should
the Fund determine that a commitment is no longer in the best
interest of the Portfolio and its shareholders, the Fund reserves
the right to revoke the commitment by terminating the sale of such
Portfolio's shares in the state involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with
information as to their principal business occupations during at
least the last five years, are shown below. Each Director who is
deemed to be an "interested person" of the Fund, as defined in the
1940 Act, is indicated by an asterisk.
Directors of the Fund
*THOMAS D. STEVENS, Chairman of the Board, President and Director.
Senior Vice President and Principal of Wilshire Associates
Incorporated for more than the past five years. He is the Chief
Investment Officer of the Wilshire Asset Management division.
Wilshire Asset Management is a provider of index and structured
equity and fixed income applications. He is 46 years old and his
address is c/o Wilshire Associates Incorporated, 1299 Ocean
Avenue, Santa Monica, California 90401-1085.
DEWITT F. BOWMAN, Director. Since January 1994, Pension
Investment Consultant providing advice on large pension fund
investment strategy, new product evaluation and integration, and
large plan investment analysis and management. For more than four
years prior thereto, he was Chief Investment Officer of the
California Public Employees Retirement System. He currently
serves as a director of the RREEF America REIT, RCM Equity Funds,
Inc., Brandes Investment Trust, and as a trustee of the Pacific
Gas and Electric Nuclear Decommissioning Trust. He is 65 years
old and his address is 79 Eucalyptus Knoll, Mill Valley,
California 94941.
*ROBERT J. RAAB, JR., Director. Senior Vice President and
Principal of Wilshire Associates Incorporated for more than the
past five years. He is head of Wilshire's Institutional Services
Division and is responsible for Wilshire Equity, Fixed Income,
Index Fund and Portfolio Accounting products. He is 46 years old
and his address is c/o Wilshire Associates Incorporated, 1299
Ocean Avenue, Santa Monica, California 90401-1085.
PETER J. CARRE, Director. Attorney, Peter Carre and Associates,
Law Offices, since 1982. He practices law in the areas of ERISA
and Investment Law. He is 48 years old and his address is c/o
Peter Carre and Associates, Law Offices, 815 Connecticut Avenue,
N.W., Washington, D.C. 20006.
ANNE WEXLER, Director. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs for more
than fifteen years. She is also a director of Alumax, The Dreyfus
Corporation, Comcast Corporation and The New England Electric
System, Nova Corporation, and a member of the Board of the Carter
Center of Emory University, the Council of Foreign Relations, the
National Park Foundation, Visiting Committee of the John F.
Kennedy School of Government at Harvard University and the Board
of Visitors of the University of Maryland School of Public
Affairs. She is 65 years old and her address is c/o The Wexler
Group, 1317 F Street, N.W., Suite 600, Washington, D.C. 20004.
For so long as the Fund's plan described in the section
captioned "Shareholder Services Plan" remains in effect, the
Directors of the Fund who are not "interested persons" of the
Fund, as defined in the 1940 Act, will be selected and nominated
by the Directors who are not "interested persons" of the Fund.
The Fund typically pays its Directors an annual retainer and
a per meeting fee and reimburses them for their expenses. The
aggregate amount of compensation paid to each current Director by
the Fund for the fiscal year ended August 31, 1995, was as
follows:
(1) (2) (3) (4)
(5)
Name of Board Member Aggregate Pension or Estimated Annual
Total
Compensation Retirement Benefits Upon
Compensation
from Fund* Benefits Retirement
From
Accrued as Part
Registrant
of Fund's and
Fund
Expenses Complex
Thomas D. Stevens none none none none
DeWitt F. Bowman none none none none
Robert J. Raab, Jr. none none none
none
Peter J. Carre none none none
none
Anne Wexler $4,500* none none
$4,500*
* Amount does not include reimbursed expenses for attending
Board meetings, which amounted to $598 for all Directors as a
group.
Officers of the Fund
THOMAS D. STEVENS, (see "Directors of the Fund" above).
DAVID R. BORGER, Vice President and Treasurer. Vice President and
Principal of Wilshire Associates Incorporated and Director of
Research for its Wilshire Asset Management division for more than
five years. He is 47 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401-1085.
ALAN L. MANNING, Secretary. Since 1990, Vice President, Secretary
and General Counsel of Wilshire Associates Incorporated. He is 46
years old and his address is c/o Wilshire Associates Incorporated,
1299 Ocean Avenue, Santa Monica, California 90401-1085.
MICHAEL J. NAPOLI, JR., Vice President. Vice President and
Principal of Wilshire Associates Incorporated for more than five
years. He is Director of Marketing for its Wilshire Asset
Management division. He is 44 years old and his address is c/o
Wilshire Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401-1085.
JULIE A. TEDESCO, Vice President and Assistant Secretary. Since
May 1994, Counsel to First Data Investor Services Group, Inc.
From July 1992 to May 1994, Assistant Vice President and Counsel
of The Boston Company. From 1988 to 1992, Ms. Tedesco was an
associate in the Boston law firm of Hutchins, Wheeler & Dittmar.
She is 38 years old and her address is c/o First Data Investor
Services Group, Inc., 53 State Street, Boston, Massachusetts
02109.
THERESE M. HOGAN, Vice President and Assistant Secretary. Since
June 1994, Manager (State Regulation) of First Data Investor
Services Group, Inc. From October 1993 to June 1994, Senior Legal
Assistant at Palmer & Dodge, Boston, Massachusetts. For more than
eight years prior thereto, a paralegal at Robinson & Cole in
Hartford, Connecticut. She is 34 years old and her address is c/o
First Data Investor Services Group, Inc., 53 State Street, Boston,
Massachusetts 02109.
MICHEL C. KARDOK, Assistant Treasurer. Since May, 1994, Vice
President, First Data Investor Services Group, Inc. For more than
four years prior thereto, he was Vice President of The Boston
Company Advisors, Inc. He is 36 years old and his address is c/o
First Data Investor Services Group, Inc., 53 State Street, Boston,
Massachusetts 02109.
Directors and officers of the Fund, as a group, owned less
than 1% of the Fund's shares of Common Stock outstanding on March
20, 1996.
The following persons are known by the Fund to own of record
5% or more of a Portfolio's voting securities outstanding on March
20, 1996:
Large Company Growth Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104--42%;
Cincinnati Bell Collectively Bargained Retirees Health Care Trust,
201 East 4th Street, Cincinnati, Ohio 45202--26%; and Hartwell
Davis Jr., 4109 Kennesaw Drive, Birmingham, Alabama 35213-3225--
5%.
Large Company Value Portfolio: Cincinnati Bell Collectively
Bargained Retirees Health Care Trust, 201 East 4th Street,
Cincinnati, Ohio 45202--42%; and Charles Schwab & Company, 101
Montgomery Street, San Francisco, California 94104--37%.
Small Company Growth Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104--32%;
Cincinnati Bell Collectively Bargained Retirees Health Care Trust,
201 East 4th Street, Cincinnati, Ohio 45202--14%; and Hartwell
Davis Jr., 4109 Kennesaw Drive, Birmingham, Alabama 35213-3225--
7%.
Small Company Value Portfolio: Charles Schwab & Company,
101 Montgomery Street, San Francisco, California 94104--32%;
Dreyfus Trust Company, as trustee for FDC Incentive Savings Plan,
144 Glenn Curtiss Boulevard, Uniondale, New York 11556--19%;
Cincinnati Bell Collectively Bargained Retirees Health Care Trust,
201 East 4th Street, Cincinnati, Ohio 45202--18%; and Dreyfus
Trust Company, as trustee for Medline Industries, Inc. 401(k)
Profit Sharing Plan, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556--7%.
A shareholder that owns, directly or indirectly, 25% or more
of a Portfolio's voting securities may be deemed to be a "control
person" (as defined in the 1940 Act) of such Portfolio.
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."
Investment Advisory Agreement. Wilshire provides investment
advisory services to each Portfolio pursuant to the Investment
Advisory Agreement (the "Advisory Agreement") dated May 31, 1996,
with the Fund. As to each Portfolio, the Advisory Agreement has
an initial term of two years and thereafter is subject to annual
approval by (i) the Fund's Board of Directors or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting
securities of such Portfolio, provided that in either event the
continuance also is approved by a majority of the Directors who
are not "interested persons" (as defined in the 1940 Act) of the
Fund or Wilshire, by vote cast in person at a meeting called for
the purpose of voting on such approval. As to each Portfolio, the
Advisory Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board of Directors or by vote of the holders
of a majority of such Portfolio's shares, or, on not less than 90
days' notice, by Wilshire. The Advisory Agreement will terminate
automatically, as to the relevant Portfolio, in the event of its
assignment (as defined in the 1940 Act).
The following persons are officers and directors of
Wilshire: Dennis A. Tito, Chairman of the Board of Directors,
President and Chief Executive Officer; Gilbert Hammer, Director
and Senior Vice President; Robert J. Raab, Jr., Director and
Senior Vice President; Thomas D. Stevens, Director and Senior Vice
President; Stephen L. Nesbitt, Director and Senior Vice President;
Rosalind M. Hewsenian, Director and Vice President; Robert C.
Kuberek, Director and Vice President; Howard M. Yata, Director and
Vice President; Cecilia I. Loo, Director and Vice President; Alan
L. Manning, Vice President, General Counsel and Secretary; and San
Slawson, Vice President and Treasurer.
Wilshire is controlled by Mr. Dennis Tito, who owned 70% of
its outstanding stock as of February 29, 1996.
Wilshire provides day-to-day management of each Portfolio's
investments in accordance with the stated policies of the
Portfolio, subject to the approval of the Fund's Board of
Directors. Wilshire provides the Fund with portfolio managers who
are authorized by the Board of Directors to execute purchases and
sales of securities. The Fund's primary Portfolio Manager is
Thomas D. Stevens and he is assisted by David R. Borger. Wilshire
maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research
services for the Fund. All purchases and sales are reported for
the Board's review at the meeting subsequent to such transactions.
As compensation for Wilshire's services, the Fund has agreed
to pay Wilshire a monthly advisory fee at the annual rate of .25
of 1% of the value of each Portfolio's average daily net assets.
The aggregate of the fees payable to Wilshire is not subject to
reduction as the value of a Portfolios net assets increases.
However, the advisory agreement also includes a fifteen-month
expense limitation provision. For the three-month period June 1,
1996 through August 31, 1996 and the fiscal year September 1, 1996
through August 31, 1997, Wilshire has agreed that, if the
aggregate operating expenses of any Portfolio (exclusive of
interest, taxes, brokerage, 12b-1 plan fees and extraordinary
expenses) for such period exceed the annual rate specified in the
following table for such Portfolio, the investment advisory fee
otherwise payable for that period by the Portfolio under the
agreement will be reduced by the amount of the excess, but not
below an annual fee rate of .10 of 1% of such Portfolio's average
daily net assets.
Fund Annual Rate (%)
Large Company Growth Portfolio .80
Large Company Value Portfolio .77
Small Company Growth Portfolio .91
Small Company Value Portfolio .66
All fees and expenses are accrued daily and deducted before
declaration of dividends to investors. For the period September
30, 1992 (commencement of operations for all Portfolios except
Small Company Growth Portfolio which commenced operations on
October 1, 1992) through August 31, 1993, and for the fiscal years
ended August 31, 1994 and 1995, the advisory fees for each
Portfolio payable to Wilshire, the reductions attributable to a
voluntary fee waiver which was in effect until November 7, 1994,
and the net fees paid were as follows:
*Fee Paid For Period Ended August 31, 1993
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $7,486 $7,486 -0-
Large Company Value Portfolio $5,979 $5,979 -0-
Small Company Growth Portfolio $6,308 $6,308 -0-
Small Company Value Portfolio $6,886 $6,886 -0-
*Fee Paid For Fiscal Year Ended August 31, 1994
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $ 8,137 $ 8,137 -0-
Large Company Value Portfolio $11,133 $11,133 -0-
Small Company Growth Portfolio $ 8,397 $ 8,397 -0-
Small Company Value Portfolio $20,919 $20,919 -0-
*Fee Paid For Fiscal Year Ended August 31, 1995
Advisory Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $14,834 $ 1,672 $13,162
Large Company Value Portfolio $15,835 $ 2,071 $13,764
Small Company Growth Portfolio $15,630 $ 2,195 $13,435
Small Company Value Portfolio $25,210 $ 4,145 $21,065
*The monthly fee paid to Wilshire during the above time periods
was calculated at the annual rate of .10 of 1% of the value of
each Portfolio's average daily net assets under the contract in
effect prior to May 31, 1996.
Administration Agreement. Pursuant to the Administration
Agreement (the "Administration Agreement") dated May 31, 1996 with
the Fund, First Data, a subsidiary of First Data Corporation, 53
State Street, Boston, Massachusetts 02109, furnishes the Fund
clerical help and accounting, data processing, internal auditing
and legal services and certain other services required by the
Fund, prepares reports to each Portfolio's shareholders, tax
returns, reports to and filings with the Securities and Exchange
Commission and state Blue Sky authorities, and generally assists
in all aspects of the Fund's operations, other than providing
investment advice.
As to each Portfolio, the Administration Agreement has an
initial term of two years and will be extended for a third year
automatically unless the Fund elects to terminate it on the second
anniversary by six months written notice of termination.
Thereafter, the Agreement would continue in effect from year to
year subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the 1940 Act)
of such Portfolio's outstanding voting securities, provided that
in either event the continuance also is approved by a majority of
the Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund or First Data, by vote cast in person at a
meeting called for the purpose of voting on such approval. As to
each Portfolio, the Administration Agreement is terminable without
penalty, on six months notice prior to its second anniversary, and
60 days' notice at any time after its third anniversary, by the
Fund's Board of Directors or by vote of the holders of a majority
of such Portfolio's shares, or, on not less than 90 days' notice
at any time after its third anniversary by First Data. The
Administration Agreement will terminate automatically, as to the
relevant Portfolio, in the event of its assignment (as defined in
the 1940 Act).
As compensation for First Data's services under the
Administration Agreement, the Fund has agreed to pay First Data a
monthly administration fee at the annual rate of .15 of 1% of the
Fund's monthly average net assets up to aggregate net assets of $1
billion, .10 of 1% of such value on the next $4 billion, and .08
of 1% on excess net assets. For the period September 30, 1992
(commencement of operations for all Portfolios except Small
Company Growth Portfolio which commenced operations on October 1,
1992) through August 31, 1993, and for the fiscal years ended
August 31, 1994 and 1995, the administration fees payable to the
former administrator, The Dreyfus Corporation, for each Portfolio,
the reductions attributable to a voluntary fee waiver which was in
effect until August 31, 1995, and the net fees paid were as
follows:
Fee Paid For Period Ended August 31, 1993
Administration Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $14,972 $14,972 -0-
Large Company Value Portfolio $11,958 $11,958 -0-
Small Company Growth Portfolio $12,617 $12,617 -0-
Small Company Value Portfolio $13,772 $13,772 -0-
Fee Paid For Fiscal Year Ended August 31, 1994
Administration Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $16,275 $16,275 -0-
Large Company Value Portfolio $22,267 $22,267 -0-
Small Company Growth Portfolio $16,793 $16,793 -0-
Small Company Value Portfolio $41,838 $41,838 -0-
Fee Paid For Fiscal Year Ended August 31, 1995
Administration Reduction Net
Portfolio Fee Payable in Fee Fee Paid
Large Company Growth Portfolio $29,667 $29,667 -0-
Large Company Value Portfolio $31,669 $31,669 -0-
Small Company Growth Portfolio $31,260 $31,260 -0-
Small Company Value Portfolio $50,421 $50,421 -0-
Expenses and Expense Information. From time to time,
Wilshire or First Data may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have
the effect of lowering the overall expense ratio of the Fund and
increasing yield to investors at the time such amounts are waived
or assumed, as the case may be. The Fund will not pay Wilshire or
First Data for any amounts which may be waived, nor will the Fund
reimburse Wilshire or First Data for any amounts which may be
assumed. In addition to shareholder services fees which may be
paid by 440 Financial out of amounts which it receives under the
Fund's shareholder services plan, 440 Financial, Wilshire or First
Data may bear other expenses of distribution of the shares of the
Fund or of the provision of shareholder services to the Fund's
shareholders, including payments to securities dealers or other
financial intermediaries or service providers, out of its profits
and available resources other than the advisory and administration
fees paid by the Fund.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by 440
Financial, Wilshire or First Data. The expenses borne by the Fund
include: organizational costs, taxes, interest, brokerage fees
and commissions, if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of 440 Financial, Wilshire or First Data or any
of their affiliates, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory and administration
fees, shareholder services plan 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 Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses. Expenses
attributable to a particular class of shares or Portfolio are
charged against the assets of that class or Portfolio;
accordingly, shareholder services plan fees payable with respect
to a particular class of shares are charged only to that class of
shares. Other expenses of the Fund are allocated between the
Portfolios on the basis determined by the Board of Directors,
including, but not limited to, proportionately in relation to the
net assets of each Portfolio.
As to each Portfolio, Wilshire and First Data have agreed
that if in any fiscal year the aggregate annual expenses of the
Portfolio, exclusive of taxes, brokerage, interest on borrowings,
Rule 12b-1 plan expenses and extraordinary expenses, but including
the advisory and administration fees, exceed the expense
limitation of any state in which shares of the Portfolio are
qualified for offer and sale, the Fund may deduct from the
payments to be made to each of Wilshire and First Data, or
Wilshire and First Data will bear such excess expense in
proportion to their investment advisory fee and administration fee
otherwise payable, 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.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the
"Plan") with respect to the Institutional Class Shares of each
Portfolio pursuant to Section 12b of the 1940 Act and Rule 12b-1
thereunder. The Fund reimburses 440 Financial, which acts as the
distributor of the Institutional Class Shares of each Portfolio,
at an annual rate of up to 0.15 of 1% of the value of the average
daily net assets attributable to the Shares of each Portfolio for
certain shareholder services provided by securities dealers or
other financial intermediaries. The shareholder services provided
may include personal services to holders of Institutional Class
Shares and/or the maintenance of shareholder accounts. The amount
payable under the Shareholder Services Plan is charged to, and
therefore reduces, income allocated to the Institutional Class
Shares.
The Plan has been, and any material amendments to the Plan
must be, approved (i) by votes of the majority of both (a) the
Directors of the Fund, and (b) those Directors of the Fund who are
not interested persons of the Fund, and have no direct or indirect
financial interest in the operation of the Plan or any agreements
related to it (the "Independent Directors"), in each case cast in
person at a meeting called for the purpose of voting on the Plan,
and (ii) and by vote of a majority of the outstanding
Institutional Class shares. The Plan shall continue in effect for
a period of more than one year after May 31, 1996 only so long as
such continuance is specifically approved at least annually by
votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the Investment Company
Act of 1940 or the rules and regulations thereunder) of both (a)
the Directors of the Fund, and (b) the Independent Directors of
the Fund, cast in person at a meeting called for the purpose of
voting on the Plan or such agreement.
Under the Plan, 440 Financial is required to provide to the
Directors of the Fund for their review, at least quarterly, a
written report of the amounts so expended and the purposes for
which such expenditures were made. The Plan may be terminated at
any time by vote of a majority of the Independent Directors, or by
vote of a majority of the outstanding Institutional Class shares.
The Plan may not be amended to increase materially the amount of
expenses permitted without approval by a vote of at least a
majority of the outstanding Institutional Class shares.
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.
For the fiscal year ended August 31, 1995, the following
amounts
were charged to each Portfolio under the Fund's former Shareholder
Services Plan:
Large Company Growth Portfolio $34,200
Large Company Value Portfolio $39,503
Small Company Growth Portfolio $38,741
Small Company Value Portfolio $62,831
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."
The Distributor. 440 Financial, a subsidiary of First Data
Corporation, c/o First Data Corporation, 53 State Street, Boston,
Massachusetts 02109, serves as the Fund's distributor pursuant to
an agreement which is renewable annually.
Transactions Through Securities Dealers. Fund shares may be
purchased and redeemed through securities dealers which may charge
a nominal transaction fee for such services. Some dealers will
place the Fund's shares in an account with their firm. Dealers
also may require that the customer not take physical delivery of
share certificates; the customer not request redemption checks to
be issued in the customer's name; fractional shares not be
purchased; or other conditions.
There is no sales or service charge to individual investors
by the Fund or by 440 Financial, although investment dealers,
banks and other institutions may make reasonable charges to
investors for their services. The services provided and the
applicable fees are established by each dealer or other
institution acting independently of the Fund. The Fund has been
given to understand that these fees may be charged for customer
services including, but not limited to, same-day investment of
client funds; same-day access to client funds; advice to customers
about the status of their accounts, yield currently being paid or
income earned to date; provision of periodic account statements
showing security and money market positions; other services
available from the dealer, bank or other institution; and
assistance with inquiries related to their investment. Any such
fees will be deducted from the investor's account monthly and on
smaller accounts could constitute a substantial portion of the
distribution. Investors should be aware that they may purchase
shares of the Fund directly from the Fund through 440 Financial
without imposition of any maintenance or service charges, other
than those already described herein. In some states, banks or
other financial institutions effecting transactions in Fund shares
may be required to register as dealers pursuant to state law.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Fund Shares."
Wire Redemption Privilege. By using this Privilege, the
investor authorizes First Data (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
Fund will initiate payment for shares redeemed pursuant to this
Privilege on the next business day after receipt if the Transfer
Agent receives the redemption request in proper form. Redemption
proceeds ($1,000 minimum) will be transferred by Federal Reserve
wire only to the commercial bank account specified by the investor
on the Account Application or Shareholder Services Form, or to a
correspondent bank if the investor's bank is not a member of the
Federal Reserve System. Fees ordinarily are imposed by such bank
and 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
______ _______________
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT Cables
operator at toll free. Investors should advise the
operator that the above transmittal code must be used and should
also inform the operator of the Transfer Agent's answer back sign.
To change the commercial bank or account designated to
receive wire redemption proceeds, a written request must be sent
to the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described below
under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with the
redemption request. Written redemption requests must be signed by
each shareholder, including each holder of a joint account, and
each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed.
The Transfer Agent has adopted standards and procedures pursuant
to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees
must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians,
and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more
information with respect to signature-guarantees, please call one
of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay
in cash all redemption requests by any shareholder of record,
limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of the Portfolio'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 of Directors 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 readily marketable, to the extent
available, and would be valued in the same manner as the
Portfolio's investment 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
Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Portfolio Exchanges. You may purchase, in exchange for
shares of a Portfolio, shares of the same class of one of the
other Portfolios offered by the Fund, to the extent such shares
are offered for sale in your state of residence. Shares of other
Portfolios purchased by exchange will be purchased on the basis of
relative net asset value per share as follows:
To request an exchange, the investor 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.
The Portfolio Exchanges service is available to shareholders
resident in any state in which shares of the Portfolio being
acquired may legally be sold. Shares may be exchanged only
between accounts having identical names and other identifying
designations.
The Fund reserves the right to reject any exchange request
in whole or in part. The Portfolio Exchanges service may be
modified or terminated at any time upon notice to shareholders.
Corporate Pension/Profit-Sharing and Personal Retirement
Plans. The Fund makes available to corporations a variety of
prototype pension and profit-sharing plans. To obtain details on
available plans, please call the following toll-free number:
The 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 the Fund's Prospectus entitled
"How to Buy Fund Shares."
Valuation of Portfolio Securities. Each Portfolio's
investment securities are valued at the last sale price on the
securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an
exchange or national securities market, or securities in which
there were no transactions, are valued at the average of the most
recent bid and asked prices. Bid price is used when no asked
price is available. Short-term investments are carried at
amortized cost, which approximates value. Any securities or other
assets for which recent market quotations are not readily
available are valued at fair value as determined in good faith by
the Board of Directors. Expenses and fees, including the advisory
and administration fees, are accrued daily and taken into account
for the purpose of determining the net asset value of each
Portfolio's shares.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed currently
are: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTION AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
Management of the Fund believes that each Portfolio
qualified for the fiscal year ended August 31, 1995 as a
"regulated investment company" under the Internal Revenue Code of
1986, as amended (the "Code"). Each Portfolio intends to continue
to so qualify. Qualification as a regulated investment company
relieves the Portfolio from any liability for Federal income taxes
to the extent its earnings are distributed in accordance with the
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.
Depending on the composition of a Portfolio's income, all or
a portion of the dividends paid by such Portfolio from net
investment income may qualify for the dividends received deduction
allowable to certain U.S. corporate shareholders ("dividends
received deduction"). In general, dividend income of a Portfolio
distributed to qualifying corporate shareholders will be eligible
for the dividends received deduction only to the extent that (i)
such Portfolio's income consists of dividends paid by U.S.
corporations and (ii) the Portfolio would have been entitled to
the dividends received deduction with respect to such dividend
income if the Portfolio were not a regulated investment company.
The dividends received deduction for qualifying corporate
shareholders may be reduced if the shares of the Portfolio held by
them with respect to which dividends are received are treated as
debt-financed or deemed to have been held for less than 46 days.
In addition, the Code provides other limitations with respect to
the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding a
Portfolio's shares.
Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the aggregate
net asset value of his shares below the cost of his investment.
Such a dividend or distribution would be a return on investment in
an economic sense, although taxable as stated in the Fund's
Prospectus. In addition, the Code provides that if a shareholder
holds shares of the Fund for six months or less and has received a
capital gain distribution with respect to such shares, any loss
incurred on the sale of such shares will be treated as a long-term
capital loss to the extent of the capital gain distribution
received.
If a shareholder holds shares of a Portfolio while holding a
short position in a regulated futures contract or an option in
such regulated futures contract that substantially diminishes the
shareholders risk of loss in its Portfolio shares (an "offsetting
position"), recently proposed Internal Revenue Service regulations
clarify that (i) any losses on the disposition of Portfolio shares
will be required to be deferred to the extent of any unrealized
appreciation in the short position and (ii) such holding will
limit the shareholder's ability to claim the corporate dividends
received deduction in respect of Portfolio dividends.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. All or a
portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section
1258. "Conversion transactions" are defined to include certain
forward, futures, option and "straddle" transactions, transactions
marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by a
Portfolio from certain financial futures transactions will be
treated as 60% long- term capital gain or loss and 40% short-term
capital gain or loss. Gain or loss will arise upon the exercise
or lapse of such futures as well as from closing transactions. In
addition, any such futures remaining unexercised at the end of the
Portfolio's taxable year will be treated as sold for their then
fair market value, resulting in additional gain or loss to such
Portfolio characterized in the manner described above.
Offsetting positions held by a Portfolio involving financial
futures may constitute "straddles." Straddles are defined to
include "offsetting positions" in actively traded personal
property. The tax treatment of straddles is governed by Sections
1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256. As such,
all or a portion of any short or long-term capital gain from
certain "straddle" and/or conversion transactions may be
recharacterized to ordinary income.
If a Portfolio were treated as entering into straddles by
reason of its futures transactions, such straddles could be
characterized as "mixed straddles" if the futures transactions
comprising such straddles were governed by Section 1256 of the
Code. The Portfolio may make one or more elections with respect
to "mixed straddles." Depending upon which election is made, if
any, the results to the Portfolio may differ. If no election is
made, to the extent the straddle rules apply to positions
established by the Portfolio, losses realized by such Portfolio
will be deferred to the extent of unrealized gain in any
offsetting positions. Moreover, as a result of the straddle
rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital
gain on straddle positions may be recharacterized as short-term
capital gain, and as a result of the conversion transaction rules,
long-term capital gain may be recharacterized as ordinary income.
Investment by a Portfolio 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 such Portfolio to
recognize income prior to the receipt of cash payments. For
example, the Portfolio 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, such Portfolio may have to dispose of securities which
it might otherwise have continued to hold in order to generate
cash to satisfy these distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Large Company Growth Portfolio's average annual total
return for the 1 and 2.921 year periods ended August 31, 1995 was
23.67% and 10.75%, respectively. The Large Company Value
Portfolio's average annual total return for the 1 and 2.921 year
periods ended August 31, 1995 was 18.97% and 12.48%, respectively.
The Small Company Growth Portfolio's average annual total return
for the 1 and 2.918 year periods ended August 31, 1995 was 23.04%
and 19.03%, respectively. The Small Company Value Portfolio's
average annual total return for the 1 and 2.921 year periods ended
August 31, 1995 was 11.84% and 10.51%, respectively. Average
annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value per
share 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 "nth" root of the quotient (where "n" is the number of
years in the period) and subtracting 1 from the result.
The total return for the period September 30, 1992(1)
(commencement of operations) to August 31, 1995 for each Portfolio
was as follows:
Large Company Growth Portfolio 34.74%
Large Company Value Portfolio 40.98%
Small Company Growth Portfolio 66.33%
Small Company Value Portfolio 33.88%
Total return is calculated by subtracting the amount of the
Portfolio'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.
_____________________
(1) Small Company Growth Portfolio commenced operations on October
1, 1992.
From time to time advertising materials for the Fund may
refer to Morningstar ratings and related analysis supporting such
ratings.
PORTFOLIO TRANSACTIONS
Wilshire supervises the placement of orders on behalf of
each Portfolio for the purchase or sale of portfolio securities.
Allocation of brokerage transactions, including their frequency,
is made in the best judgment of Wilshire 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 may include
those that supplement Wilshire'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 Wilshire and its fees
are not reduced as a consequence of the receipt of such
supplemental information. Such information may be useful to
Wilshire in serving both the Fund and other clients which it
advises and, conversely, supplemental information obtained by the
placement of business of other clients may be useful to Wilshire
in carrying out its obligations to the Fund. Brokers also are
selected because of their ability to handle special executions
such as are involved in large block trades or broad distributions,
provided the primary consideration is met. Large block trades, in
certain cases, may result from two or more clients Wilshire might
advise being engaged simultaneously in the purchase or sale of the
same security. When transactions are executed in the
over-the-counter market, the Fund will deal with the primary
market makers unless a more favorable price or execution otherwise
is obtainable.
Portfolio turnover may vary from year to year, as well as
within a year. Under normal market conditions, each Portfolio's
turnover rate generally will not exceed 60%. High turnover rates
are likely to result in comparatively greater brokerage expenses.
The overall reasonableness of brokerage commissions paid is
evaluated by the Adviser based upon its knowledge of available
information as to the general level of commissions paid by other
institutional investors for comparable services.
For its portfolio securities transactions for the period
September 30, 1992 (commencement of operations for all Portfolios
except Small Company Growth Portfolio which commenced operations
on October 1, 1992) through August 31, 1993 and for the fiscal
years ended August 31, 1994 and 1995, the Fund paid total
brokerage commissions as follows:
Period Ended Year Ended Year Ended
Portfolio August 31, 1993 August 31, 1994 August
31, 1995
Large Company Growth Portfolio $ 8,191 $ 2,199 $13,487
Large Company Value Portfolio $ 9,779 $10,349 $23,243
Small Company Growth Portfolio $21,107 $12,919 $42,766
Small Company Value Portfolio $17,687 $37,422 $61,819
No brokerage commissions were paid to the former distributor, The
Dreyfus Corporation. There were no spreads or concessions on
principal transactions for any such period.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."
Each share of a Portfolio has one vote and, when issued and
paid for in accordance with the terms of the offering, is fully
paid and non-assessable. Shares of each class of a Portfolio 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 Fund, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding
shares of each Portfolio affected by such matter. Rule 18f-2
further provides that a Portfolio shall be deemed to be affected
by a matter unless it is clear that the interests of each
Portfolio in the matter are identical or that the matter does not
affect any interest of such Portfolio. However, the Rule exempts
the selection of independent accountants and the election of
Directors from the separate voting requirements of the Rule. Rule
18f-3 under the 1940 Act makes further provision for the voting
rights of each class of Shares, such as the Institutional Class
shares, of an investment company which issues more than one class
of voting shares. In particular, Rule 18f-3 provides that each
class shall have exclusive voting rights on any matter submitted
to shareholders that relates solely to the class' arrangement for
services and expenses, and shall have separate voting rights on
any matter submitted to shareholders in which the interests of one
class differ from the interests of any other class.
The Fund will send annual and semi-annual financial
statements to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT ACCOUNTANTS
Northern Trust Company, an Illinois trust company located at
50 South LaSalle Street, Chicago, Illinois 60675, acts as
custodian of the Fund's investments. First Data Investor 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. Neither Northern Trust Company nor
First Data has any part in determining the investment policies of
the Fund or which securities are to be purchased or sold by the
Fund.
Ropes & Gray, One International Place, Boston, Massachusetts
02110-2624, is counsel for the Fund.
Coopers & Lybrand L.L.P., 1301 Avenue of the Americas, New
York, New York 10019, independent accountants, have been selected
as auditors of the Fund.
APPENDIX
Description of the highest commercial paper rating assigned
by Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc. ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, L.P. ("Fitch") and Duff &
Phelps Credit Rating Co. ("Duff").
The rating A is the highest rating and is assigned by S&P to
issues that are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with the
number 1, 2 or 3 to indicate the relative degree of safety. Paper
rated A-1 indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess
overwhelming safety characteristics are denoted with a plus (+)
sign designation.
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.
The rating F-1 is among the highest commercial paper ratings
assigned by Fitch. Very strong credit quality. Issues assigned
this rating reflect an assurance for timely payment only slightly
less than those issues rated F-1+.
The rating D-1 is the highest commercial paper rating
assigned by Duff. Paper rated D-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.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO
SHARES COMMON STOCKS-99.5% VALUE
_______ _______
ADVERTISING-.3%
900 Interpublic Group Cos. $ 34,988
500 Omnicom Group 31,375
______
66,363
______
AEROSPACE & DEFENSE-2.1%
4,300 Boeing
274,125
600 Northrop Grumman 36,525
1,600 Raytheon
129,400
______
440,050
______
AUTO PARTS-.6%
1,800 (a) AutoZone 48,375
1,600 Genuine Parts 63,000
900 Pep Boys-Manny, Moe & Jack 24,750
______
136,125
______
BANKING-.9%
1,800 MBNA 63,900
4,100 Norwest
123,512
______
187,412
______
BASIC INDUSTRIES-.9%
7,215 Archer-Daniels-Midland
119,949
1,100 Fluor 64,350
______
184,299
______
BEVERAGES-7.9%
3,300 Anheuser-Busch
188,513
16,200 Coca-Cola
1,040,850
10,100 PepsiCo
457,025
______
1,686,388
______
BUILDING MATERIALS-.4%
1,100 Nucor 53,900
1,100 Sherwin-Williams 39,463
______
93,363
______
CHEMICALS-.7%
800 Great Lakes Chemical 52,900
500 Loctite 24,000
800 Lubrizol 24,800
600 Millipore 20,925
600 Sigma-Aldrich 28,800
______
151,425
______
COMMERCIAL SERVICES-.7%
2,250 (a) CUC International 76,781
SHARES COMMON STOCKS (CONTINUED)
VALUE
____
_______
COMMERCIAL SERVICES (CONTINUED)
800 Ecolab
$21,900
1,200 Service Corp International 42,000
______
140,681
______
COMPUTER SOFTWARE & SERVICES-9.4%
800 (a) ADC Telecommunications 31,000
800 Adobe Systems 40,800
600 Autodesk 27,675
1,800 Automatic Data Processing
117,000
600 (a) BMC Software 25,575
900 (a) Cabletron Systems 47,587
2,000 Computer Associates International
139,000
800 (a) Computer Sciences 48,200
500 (a) Dell Computer 38,500
600 (a) Electronic Arts 22,800
400 HBO & Co. 22,000
500 Linear Technology 40,500
400 (a) Maxim Integrated Products 30,500
2,600 Micron Technology
199,875
7,400 (a) Microsoft
684,500
4,900 (a) Novell 88,200
5,600 (a) Oracle
224,700
700 (a) Parametric Technology 38,675
500 Paychex 20,500
900 (a) Seagate Technology 39,825
1,200 (a) Sun Microsystems 69,450
______
1,996,862
______
COSMETICS & TOILETRIES-1.9%
900 Avon Products 63,563
1,800 Colgate-Palmolive
122,400
5,500 Gillette
229,625
______
415,588
______
DRUGS & PHARMACEUTICALS-11.5%
10,100 Abbott Laboratories........
391,375
800 Allergan 24,300
3,400 (a). Amgen
162,775
600 Cardinal Health 32,100
600 (a) Forest Labs 26,850
1,400 IVAX 35,875
8,300 Johnson & Johnson
572,700
15,800 Merck & Co.................
788,025
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____ ______-
DRUGS & PHARMACEUTICALS (CONTINUED)
1,500 Mylan Laboratories
$34,312
1,700 Rhone-Poulenc Rorer 75,225
4,600 Schering-Plough
214,475
2,200 . Upjohn 93,225
______
2,451,237
______
ELECTRONICS-16.8%
500 (a). Altera 31,313
1,600 Duracell 71,400
3,000 Emerson Electric
214,125
21,700 General Electric.
1,277,588
600 Grainger (W.W.) 35,700
6,500 Hewlett-Packard
520,000
415 Hubbell, Cl. B 24,329
10,600 Intel
650,575
1,200 . Loral 65,700
7,500 Motorola
560,625
500 . Perkin-Elmer 17,062
900 Premier Industrial 21,600
1,200 Sensormatic Electronics 25,200
600 (a) Vishay Intertechnology 24,300
894 (a). Xilinx 38,330
______
3,577,847
______
ENTERTAINMENT-.8%
3,700 Carnival Cruise Lines, Cl. A 80,475
1,300 (a) Circus Circus Enterprises 42,575
1,300 (a) Harrah's Entertainment 41,438
400 (a) King World Productions 15,200
______
179,688
______
ENVIRONMENTAL-.3%
975 (a) Thermo Instrument Systems 24,984
2,300 Wheelabrator Technologies 35,938
______
60,922
______
FINANCE & FINANCIAL SERVICES-2.3%
550 ADVANTA, Cl. A 22,756
1,300 Block (H & R) 50,700
1,100 Equifax 42,762
800 ... Fifth Third Bancorp 45,000
1,000 . Franklin Resources 55,000
900 ... Green Tree Financial 52,425
600 Kansas City Southern Industries 26,400
1,366 Mercury Finance 31,247
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FINANCE & FINANCIAL SERVICES (CONTINUED)
700 Northern Trust $31,500
1,200 . Schwab (Chas) 55,800
1,100 State Street Boston 40,563
1,100 Synovus Financial 28,050
______
482,203
______
FOOD DISTRIBUTORS-.3%
2,400 Sysco 69,000
______
FOODS-4.4%
3,100 .. Campbell Soup
141,825
3,100 . ConAgra
117,413
2,000 .. General Mills
103,250
3,300 Heinz (H.J.) 139,837
1,100 Hershey Foods
65,863
900 Hormel (Geo A) 21,600
2,800 Kellogg
189,000
1,050 Pioneer Hi-Bred International
45,150
1,600 Quaker Oats
55,600
1,400 Wrigley, (WM) Jr. 63,175
______
942,713
______
HEALTH CARE-1.5%
5,700 Columbia/HCA Healthcare
267,900
700 (a)... Foundation Health 24,238
700 Manor Care 22,663
______
314,801
______
HOUSEHOLD APPLIANCES-.2%
900 Whirlpool
49,050
______
HOUSEHOLD PRODUCTS-3.7%
800 Clayton Homes 18,900
2,000 Newell 50,000
800 .. Premark International 41,900
8,800 Procter & Gamble
610,500
2,000 Rubbermaid 59,500
______
780,800
______
INSURANCE-4.6%
1,325 .. AFLAC 54,159
6,075 American International Group
489,797
800 .. GEICO 54,600
1,100 . General Re
163,487
800 MGIC Investment 44,800
800 . Progressive Corp, Ohio 35,500
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
INSURANCE (CONTINUED)
400 . SunAmerica
$23,900
900 .. Torchmark 36,000
300 . Transatlantic Holdings 21,000
2,000 U.S. HealthCare 64,000
______
987,243
______
LEISURE TIME-.1%
2,100 International Game Technology 29,925
______
MACHINERY-.2%
1,125 Thermo Electron 48,516
______
MANUFACTURING-1.1%
1,100 (a) American Power Conversion 18,425
900 . Hillenbrand Industries
26,662
1,400 Illinois Tool Works
85,750
600 . Leggett & Platt
29,025
1,500 Pall 32,813
600 (a) Solectron 21,300
1,200 . Worthington Industries 24,000
______
237,975
______
MEDICAL SUPPLIES-1.3%
800 Becton, Dickinson
45,100
1,300 (a).. Biomet
20,963
1,500 Medtronic
141,562
600 (a). St. Jude Medical 35,775
700 Stryker
29,225
______
272,625
______
OFFICE & BUSINESS EQUIPMENT-.4%
1,900 Pitney Bowes 77,187
______
OIL & GAS-.2%
2,000 . Enron Oil & Gas 46,500
______
PACKAGING-.5%
900 Bemis 26,100
1,100 (a).. Crown Cork & Seal 49,500
1,100 . Sonoco Products 29,562
______
105,162
______
PRINTING & PUBLISHING-1.0%
1,000 American Greetings, Cl. A 30,750
1,700 Gannett 90,950
1,600 (a) Marvel Entertainment Group 23,000
1,400 Readers Digest Association, Cl. A
64,750
______
209,450
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RADIO & TV BROADCASTING-1.3%
2,000 Capital Cities/ABC
$230,000
1,100 Scripps (E.W.), Cl. A 36,987
______
266,987
______
RESTAURANTS-1.6%
725 (a) Brinker International 12,144
600 Cracker Barrel Old Country 12,225
8,800 McDonald's
321,200
______
345,569
______
RETAIL-8.4%
3,100 Albertson's 98,813
1,200 Circuit City Stores 41,400
900 Dayton Hudson 65,812
725 Dollar General 19,031
1,800 Gap 57,825
5,766 Home Depot
229,919
4,600 Limited 85,100
3,100 .. May Department Stores 131,363
1,000 . Nordstrom 41,250
2,000 (a) Office Depot 62,250
3,600 (a). Toys `R' Us 93,600
500 (a) Viking Office Products 18,000
29,400 Wal-Mart Stores
723,975
3,200 Walgreen 78,400
900 Winn-Dixie Stores 53,550
______
1,800,288
______
TECHNOLOGY-7.1%
20,200 AT&T...
1,141,300
1,100 (a). Applied Materials
114,400
1,200 (a). Atmel 37,950
3,400 (a).. cisco Systems
223,125
______
1,516,775
______
TELECOMMUNICATIONS-.5%
500 (a).. Andrew 29,125
1,100 (a). Tellabs 51,425
249 (a)... U.S. Robotics 34,922
______
115,472
______
TEXTILES-1.1%
800 . Cintas 30,200
900 NIKE, Cl. B 83,363
1,100 ... Reebok International 39,050
1,500 Shaw Industries 22,500
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY GROWTH PORTFOLIO (CONTINUED)
LARGE COMPANY VALUE PORTFOLIO
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TEXTILES (CONTINUED)
800 .. Unifi
$20,200
800 ... V.F. 43,800
______
239,113
______
TIRE & RUBBER GOODS-.1%
1,100 Cooper Tire & Rubber 28,600
______
TOBACCO-.3%
2,500 UST 68,125
______
TOYS-.6%
1,000 . Hasbro 32,375
2,900 . Mattel 84,100
______
116,475
______
TRANSPORTATION-.1%
500 ... Illinois Central 19,188
______
UTILITIES-TELEPHONE-1.4%
700 Century Telephone Enterprises 19,512
2,818 (a) Citizens Utility, Cl. A 30,998
1,100 ... Frontier 30,663
9,000 . MCI Communications
216,562
______
297,735
______
TOTAL COMMON STOCKS
(cost $17,491,165).
$21,235,727
============
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-.6%
____
U.S. TREASURY BILLS:
65,000 5.84%, 11/2/1995...
$64,407
65,000 6.15%, 11/16/1995.. 64,272
______
TOTAL SHORT-TERM INVESTMENTS
(cost $128,662)
$128,679
========
TOTAL INVESTMENTS
(cost $17,619,827).. 100.1%
$21,364,406
======
===========
LIABILITIES, LESS CASH
AND RECEIVABLES. (.1%)
$(15,959)
=======
==========
NET ASSETS 100.0%
$21,348,447
=======
===========
SHARES COMMON STOCKS-99.2% VALUE
____
_______
AEROSPACE & DEFENSE-1.0%
1,700 ... General Dynamics
$89,463
2,200 Textron
150,700
______
240,163
______
AUTOMOTIVE-6.0%
9,500 ... Chrysler
511,812
26,500 Ford Motor.
811,562
900 . PACCAR 44,550
______
1,367,924
______
BANKING-24.6%
3,200 Ahmanson (HF) & Co. 76,000
5,200 ... American General
183,300
1,600 AmSouth Bancorp 59,800
10,300 Banc One...
346,338
1,350 . Bancorp Hawaii 45,225
2,907 . Bank of Boston
127,908
5,000 ... Bank of New York
217,500
9,800 BankAmerica
553,700
2,100 ... Bankers Trust NY
144,637
2,600 .. Barnett Banks
148,525
3,400 ... Boatmen's Bancshares
125,800
4,700 Chase Manhattan
270,250
6,300 ... Chemical Banking
366,975
3,100 ... Comerica
110,438
3,600 .. First Bank System
164,250
2,400 .. First Chicago
152,100
2,300 . First Fidelity Bancorp
150,362
1,800 .. First of America Bank 79,650
1,400 . First Security 44,100
1,000 First Tennessee National 53,000
4,500 First Union
225,562
900 ... First Virginia Banks 37,012
2,000 Firstar 74,250
1,000 .. Integra Financial 56,125
6,228 KeyCorp
193,068
1,600 . Mercantile Bancorp 72,400
1,800 ... Meridian Bancorp 72,225
400 .. Michigan National 43,025
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
LARGE COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
BANKING (CONTINUED)
1,400 .. Midlantic $
72,100
4,900 .. Morgan (J.P.)
357,087
4,200 NBD Bancorp
150,150
3,900 .. National City 116,025
1,250 . Old Kent Financial 47,656
6,000 PNC Bank
157,500
1,600 .. Regions Financial 64,400
1,400 .. Republic New York 78,750
1,900 . Signet Banking 49,637
2,400 . SouthTrust 62,100
900 .. Star Banc 47,700
1,600 .. UJB Financial 55,400
4,500 Wachovia
178,875
______
5,630,905
______
BEVERAGES-.3%
1,900 Brown-Forman, Cl. B
70,300
______
BROKERAGE-1.6%
3,025 .. Bear Stearns Cos.
62,390
1,400 Edwards (AG) 34,125
4,500 .. Merrill Lynch
259,313
______
355,828
______
CHEMICALS-.4%
2,700 .. Ethyl 29,363
1,600 .. Witco 53,200
______
82,563
______
ELECTRONICS-.1%
1,100 National Service Industries 31,900
______
ENERGY-12.9%
1,600 Ashland Oil
52,400
32,400 Exxon..
2,227,500
200 FINA, Cl. A 9,250
1,200 .. Pennzoil 52,800
6,700 . Texaco
433,825
8,513 . USX-Marathon Group
175,581
______
2,951,356
______
FINANCE-4.5%
1,100 .. Crestar Financial
62,012
2,000 First Interstate Bancorp
191,000
3,600 .. Fleet Financial Group
133,200
3,500 Great Western Financial
81,813
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FINANCE (CONTINUED)
7,100 NationsBank
$435,763
1,800 Transamerica
122,400
______
1,026,188
______
FOREST & PAPER PRODUCTS-1.3%
1,000 Federal Paper Board 39,625
5,400 Weyerhaeuser
248,400
______
288,025
______
HOLDING COMPANIES-1.4%
600 Harsco 33,600
7,140 RJR Nabisco
203,490
1,500 Temple-Inland 77,625
______
314,715
______
INSURANCE-3.9%
2,900 . Aetna Life & Casualty
197,925
2,700 Aon
105,300
1,900 CIGNA
183,825
1,200 Jefferson-Pilot 75,450
2,600 Lincoln National
111,800
1,600 . SAFECO
103,400
2,100 . St. Paul Cos.
113,925
______
891,625
______
MACHINE TOOLS-.2%
1,200 Snap-On 49,200
______
MANUFACTURING-.4%
1,100 . Johnson Controls 66,962
700 .. Timken 31,588
______
98,550
______
MINING & MINERALS-.3%
2,400 Cyprus Amax Minerals 67,200
______
OFFICE & BUSINESS EQUIPMENT-.3%
1,000 Harris 57,625
______
PUBLISHING-.6%
2,500 .. New York Times, Cl. A 62,188
2,800 Times Mirror, Cl. A 85,750
______
147,938
______
RAILROADS-1.5%
5,300 Union Pacific
347,150
______
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
LARGE COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RETAIL-3.0%
2,700 Melville
$90,113
6,100 Penney (J.C.)
276,025
10,000 Sears, Roebuck.
323,750
______
689,888
______
TELECOMMUNICATIONS-11.6%
13,000 BellSouth..
893,750
25,000 GTE
915,625
10,900 Pacific Telesis Group..
309,288
12,200 U S West
530,700
______
2,649,363
______
TOBACCO-.9%
5,100 American Brands
214,200
______
TRANSPORTATION-.2%
2,200 Ryder System 53,350
______
UTILITIES-21.6%
3,400 . Allegheny Power System 82,875
4,800 American Electric Power
163,800
3,700 Baltimore Gas & Electric 97,125
2,400 CMS Energy 59,100
4,000 . Carolina Power & Light
122,500
3,400 Centerior Energy 36,550
6,100 Consolidated Edison
172,325
2,900 DPL 64,525
1,800 DQE 42,975
1,800 . Delmarva Power & Light 39,150
3,900 .. Detroit Edison
119,437
4,400 Dominion Resources
158,950
5,300 . Duke Power
215,312
5,900 . Entergy
141,600
4,800 FPL Group
186,600
2,600 Florida Progress 78,975
3,400 Houston Industries
144,075
900 IPALCO Enterprises 31,162
2,100 Illinova 52,762
1,400 Kansas City Power & Light 31,325
3,100 Long Island Lighting 52,700
1,200 Montana Power 26,400
1,500 NIPSCO Industries 49,125
1,800 New England Electric System 63,000
1,800 New York State Electric & Gas 43,425
3,700 Niagara Mohawk Power 44,400
3,100 Northeast Utilities 70,912
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
UTILITIES (CONTINUED)
1,700 .. Northern States Power
$72,462
4,000 Ohio Edison 86,500
1,200 Oklahoma Gas & Electric 42,450
5,800 . PECO Energy
154,425
4,000 PP & L Resources
87,500
11,100 Pacific Gas & Electric.
319,125
7,800 . PacifiCorp
141,375
2,400 .. Pinnacle West Capital 59,700
3,100 . Potomac Electric Power 66,263
1,700 Public Service Co. of Colorado 55,038
6,400 Public Service Enterprise Group
176,000
1,900 Puget Sound P&L 41,088
2,700 .. SCANA 62,775
11,900 SCEcorp.
197,838
2,900 San Diego Gas & Electric 63,075
17,200 Southern.
363,350
5,900 .. Texas Utilities
205,025
5,500 . Unincom
154,688
2,600 Union Electric 92,625
1,800 Western Resources 54,450
2,700 . Wisconsin Energy 72,563
______
4,959,400
______
UTILITIES-NATURAL GAS DISTRIBUTORS-.6%
2,100 . Pacific Enterprises 50,400
3,700 Panhandle Eastern 92,500
______
142,900
______
TOTAL COMMON STOCKS
(cost $20,522,037)
$22,728,256
===========
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-1.3%
____
U.S. TREASURY BILLS:
$104,000 5.84%, 11/2/1995.
$103,052
100,000 . 6.15%, 11/16/1995 98,880
101,000 . 5.72%, 11/24/1995 99,749
______
TOTAL SHORT-TERM INVESTMENTS
(cost $301,641)
$301,681
=========
TOTAL INVESTMENTS
(cost $20,823,678). 100.5%
$23,029,937
======
===========
LIABILITIES, LESS CASH
AND RECEIVABLES.. (.5%)
$(103,682)
=====
===========
NET ASSETS 100.0%.
$22,926,255
=====
===========
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY GROWTH PORTFOLIO
SHARES COMMON STOCKS-99.4% VALUE
____
_______
AIR TRANSPORTATION-.4%
2,500 Air Express International
$56,875
1,400 . Skywest
31,675
______
88,550
______
AUTO PARTS-.8%
2,550 (a) Jason 25,341
5,100 Superior Industries International
151,088
______
176,429
______
BANKING-.7%
2,600 Astoria Financial
111,800
1,200 (a).. CSF Holdings 46,650
______
158,450
______
BIOTECHNOLOGY-1.3%
1,200 Collagen 21,600
4,900 (a). Nellcor
254,800
______
276,400
______
BROKERAGE-.2%
1,000 . Pioneer Group 28,500
600.. SEI 13,275
______
41,775
______
BUILDING MATERIALS-.2%
1,500 (a). Fibreboard 35,625
______
CHEMICALS-1.5%
3,900 (a).. Airgas
107,250
1,200 (a).. IDEXX Laboratories 40,650
7,600 (a) Scotts Company (The), Cl. A
171,000
______
318,900
______
COMMERCIAL SERVICES-2.4%
2,200 (a) DeVRY 48,675
4,100 (a) Franklin Quest 94,812
1,400 (a) Insurance Auto Auctions 17,850
2,200 (a). Interim Services 57,200
10,800(a) Robert Half International
306,450
______
524,987
______
COMPUTER SOFTWARE & SERVICES-15.7%
2,700 (a).. Acxiom 72,562
5,600 (a) American Management Systems
142,800
1,200 (a). BancTec 20,700
3,100 (a). Broderbund Software
228,238
3,400 (a).. Cerner
116,450
1,900 (a) Computer Network Technology 16,150
SHARES COMMON STOCKS (CONTINUED) VALUE
COMPUTER SOFTWARE & SERVICES (CONTINUED)
2,540 (a). Comverse Technology
$50,800
2,000 (a) Electronics For Imaging
113,000
2,900 (a). Exabyte 43,862
6,600 (a).. FIserv
188,100
1,400 . Fair Issac & Co. 36,400
1,900 (a) Franklin Electronic Publishers 57,237
100 (a) Hutchinson Technology 7,825
900 (a) Hyperion Software 41,850
3,600 (a) Information Resources 46,350
3,450 (a) Keane 90,563
3,900 (a) Komag
242,775
2,900 (a) MICROS Systems
98,963
1,000 (a).. Network General 35,187
1,300 (a) Progress Software 75,725
5,500 (a) Pyxis
124,438
7,600 (a). Quantum
182,400
6,300 Reynolds & Reynolds, Cl. A
202,387
3,900 (a) Safeguard Scientifics
195,488
9,600 (a). Stratus Computer
268,800
3,600 (a) Structural Dynamics Research 65,250
8,700 (a) SunGard Data Systems
241,425
1,000 .. System Software 31,564
4,600 (a) Systems & Computer Technology
122,475
4,800 (a).. Tech Data 57,000
4,973 (a) Zilog
221,298
______
3,438,062
______
COSMETICS & TOILETRIES-.2%
1,572 Nature's Sunshine Products 36,942
______
DISTRIBUTION-.1%
3,500 (a). Merisel 22,313
______
ELECTRONICS-12.0%
8,700 Allen Group
283,837
3,000 Dallas Semiconductor 71,250
2,100 (a).. Gentex 51,450
2,500 (a). ITEL 94,375
19 (a).. Input/Output 708
5,600 (a) Lattice Semiconductor
184,100
7,800 (a). Marshall Industries
247,650
3,000 (a). Novellus Systems
221,062
6,400 (a) Oak Industries
189,600
200 .. Pacific Scientific
5,025
1,850 Pioneer Standard Electronics 47,638
2,200 (a) Presstek
113,850
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
ELECTRONICS (CONTINUED)
400 (a).. Rogers
$11,400
2,200 (a) SCI Systems 68,200
3,800 (a) Silicone Valley Group
163,400
1,200 (a).. Special Devices 21,300
6,600 (a). Symbol Technologies
229,350
3,500 (a) Tech-Sym
101,937
2,400 (a).. Three-Five Systems 71,700
3,300 (a) Unitrode 99,000
6,100 (a).. VLSI Technology
201,300
5,250 . Wireless Telecom Group 92,531
2,700 .. X-Rite 53,325
______
2,623,988
______
ENTERTAINMENT-.7%
700 (a). Grand Casinos 25,638
4,000 (a).. Primadonna Resorts 81,000
3,400 (a).. Rio Hotel & Casino 44,200
______
150,838
______
ENVIRONMENTAL-1.8%
4,400 (a) Allwaste 23,650
500 IMCO Recycling 10,125
4,600 (a) Sanifill
146,625
3,500 (a).. USA Waste Services 68,250
6,700 (a) U.S. Filter
147,400
______
396,050
______
FINANCE-1.8%
2,100 (a) Autofinance Group 34,650
3,500 (a) Concord EFS 99,750
3,600 Money Store
236,250
1,100 (a). Primark 27,775
______
398,425
______
FOODS-1.3%
2,700 (a) Canandaigua Wine, Cl. A
127,575
5,000 Richfood Holdings
121,250
2,000 (a). Smithfield Foods 44,500
______
293,325
______
HOMEBUILDING-1.2%
6,600 .. Centex 193,050
4,200 (a). Toll Brothers 75,075
______
268,125
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
HOSPITAL MANAGEMENT-10.8%
5,300 (a) Genesis Health Ventures $
167,612
5,800 (a).. HealthCare COMPARE
218,225
11,700(a) Health Care & Retirement
368,550
4,300 (a).. Healthsource
172,000
9,300 (a).. Horizon Healthcare
203,438
7,700 Integrated Health Services
230,037
2,400 (a) Living Centers of America 73,200
1,400 (a) Pacific Physician Services 24,500
1,900 (a) Quantum Health Resources 24,225
7,300 (a) Sierra Health Services
195,275
2,500 (a) Universal Health Services, Cl. B 85,938
10,400 (a) Vencor
308,100
8,900 (a) Vivra
294,812
______
2,365,912
______
INSURANCE-2.8%
5,800 (a). Capsure Holdings 79,750
7,632 (a) FHP International
188,892
1,300 (a) Fund American Enterprise 94,250
600 (a). Markel 40,800
4,800 (a). United Insurance 70,800
3,700 Vesta Insurance Group
138,750
______
613,242
______
LEISURE TIME-3.1%
6,900 (a) Acclaim Entertainment
174,225
3,650 Arctco 49,731
10,300 Callaway Golf..
159,650
4,500 (a) Chris-Craft Industries
202,500
1,200 (a). Coleman 45,300
1,100 (a). GC Companies 36,850
______
668,256
______
MACHINERY-3.3%
3,700 AGCO
179,912
2,200 (a). Cognex
109,725
800 (a). Electroglas 60,400
100 (a). Ionics 3,938
2,600 (a) Kulicke & Soffa Industries
101,075
1,900 Roper Industries 64,600
5,600 (a) Thermo Power 89,600
1,900 (a) Zebra Technologies, Cl. A
110,675
______
719,925
______
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
MANUFACTURING-6.2%
9,200 Breed Technologies
$175,950
7,900 (a) Champion Enterprises
134,300
700.. IDEX 28,175
1,700 (a). InterVoice 37,612
1,300 (a). Lydall 31,038
2,100 Medusa 57,750
3,000 NACCO Industries, Cl. A
172,500
7,400 Oakwood Homes
236,800
3,400 (a). Paxar
62,475
5,400 (a). Shorewood Packaging 97,200
2,200 (a) Thermo Process Systems 25,850
6,800 (a). VeriFone
192,950
3,000 Wabash National
109,500
600 Winnebago Industries 5,025
______
1,367,125
______
MEDICAL SUPPLIES & SERVICES-4.7%
2,800 . Arrow International
114,800
2,800 (a) Coastal Physician Group 42,350
2,100 (a) Cordis
162,225
4,500 . DENTSPLY International
167,625
2,000 (a). Datascope 42,000
1,800 Invacare 77,850
2,400 (a). Respironics 42,600
1,400 (a). Rotech Medical 36,050
3,600 (a) STERIS
105,750
7,700 (a). Sunrise Medical
199,237
2,300 (a) Tecnol Medical Products 41,688
______
1,032,175
______
METALS-1.7%
3,800 (a).. Magma Copper Cl. B 69,350
950 (a) Material Sciences 18,287
2,000 (a).. Mueller Industries
110,500
2,300 (a). WHX 29,038
5,300 (a) Whittaker
103,350
1,200 (a). Wolverine Tube 46,800
______
377,325
______
OIL & GAS-3.2%
1,100 (a) BJ Services 27,500
4,900 (a). Ensco International 88,200
12,800(a) Nabors Industries.
118,400
2,517 (a). Nuevo Energy 62,296
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
OIL & GAS (CONTINUED)
3,000 (a) Oceaneering International
$35,250
4,300 (a).. Offshore Logistics 59,125
3,000 .. Phoenix Resource Cos.
109,875
200 Pogo Producing 4,750
3,100 (a). Seitel 80,988
600 (a). Southern Union 10,500
1,100 (a). Tejas Gas 54,725
2,700 . Vintage Petroleum 54,000
______
705,609
______
PRINTING & PUBLISHING-2.3%
6,600 . Belo (A.H.), Cl. A
231,825
3,300 (a).. Catalina Marketing
178,200
1,100 (a). Devon Group 44,137
1,875 Thomas Nelson 47,812
______
501,974
______
RADIO & TV BROADCASTING-2.3%
10,400 (a) BET Holdings, Cl. A..
191,100
2,955 (a) Clear Channel Communication
220,517
3,300 (a) Heritage Media, Cl. A 93,225
300 (a) Westcott Communications 4,463
______
509,305
______
RESTAURANTS-1.9%
3,150 Apple South 77,175
900 Applebee's International 27,000
3,900 (a). Buffets 51,188
1,300 (a). IHOP 33,313
5,500 (a) Lone Star Steakhouse & Saloon
220,687
______
409,363
______
RETAIL-6.3%
6,700 (a) Best Buy
182,575
4,150 (a).. Bombay 34,756
5,150 (a) Burlington Coat Factory 61,800
2,400 .. Claire's Stores 51,900
8,000 (a). Consolidated Stores
176,000
1,200 (a). Dress Barn 11,400
1,000 (a) Fabri-Centers America, Cl. A 13,625
1,000 (a) Fabri-Centers America, Cl. B 11,375
5,000 Fastenal
165,000
4,400 (a). Lands' End 76,450
6,200 .. Lennar
120,125
3,300 (a) MacFrugals Bargains Closeouts 55,275
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY GROWTH PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
RETAIL (CONTINUED)
8,600 (a).. Michaels Stores
$139,750
1,500 (a) MicroAge 17,625
1,400 (a). Proffitt's 36,925
5,300 (a).. Starbucks
212,000
600 (a) Timberland, Cl. A 17,475
______
1,384,056
______
TELECOMMUNICATIONS-2.0%
3,300 (a) Aspect Telecommunications
157,575
2,900 (a) Boston Technology 40,600
1,500 (a) California Microwave 39,375
700 (a). CommNet Cellular 19,775
400 (a).. Dial Page 7,500
1,800 (a).. Digi International 50,850
1,200 (a) Nationwide Cellular Service 33,000
1,900 (a) Octel Communications 64,837
1,600 (a) United States Long Distance 23,600
______
437,112
______
TEXTILES-1.9%
3,900 (a) Fieldcrest Cannon 93,112
3,600 (a). Jones Apparel Group
125,100
4,600 St. John Knits
203,550
______
421,762
______
TRANSPORTATION-2.0%
1,500 Expeditors International,
Washington.. 34,875
2,600 (a).. Fritz Companies
185,250
3,600 (a) National Auto Credit
52,200
2,800 (a). Wisconsin Central
Transportation.
166,600
______
438,925
______
TRUCKING-1.6%
7,000 (a) American Freightways
135,625
1,591 (a) Heartland Express 46,935
1,700 (a). M.S. Carriers 31,875
3,100 (a) Swift Transportation
61,225
3,200 .. Werner Enterprises 64,800
______
340,460
______
UTILITIES-1.0%
10,400(a) California Energy.
217,100
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TOTAL COMMON STOCKS
(cost $19,717,062)
$21,758,810
===========
CONVERTIBLE PREFERRED STOCKS-.2%
1,440 FHP International, Series A
(cost $33,817).
$35,100
========
PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS-1.6%
____
U.S. TREASURY BILLS:
$131,000 5.84%, 11/2/1995..
$129,805
49,000 .. 6.15%, 11/16/1995
48,451
182,000 .. 5.72%, 11/24/1995
179,747
______
TOTAL SHORT-TERM INVESTMENTS
(cost $357,990)
$358,003
=========
TOTAL INVESTMENTS
(cost $20,108,869). 101.2%
$22,151,913
=======
============
LIABILITIES, LESS CASH
AND RECEIVABLES. (1.2%)
$(269,735)
____
____________
NET ASSETS 100.0%.
$21,882,178
=======
=============
SMALL COMPANY VALUE PORTFOLIO
SHARES COMMON STOCKS-99.0%
____
ADVERTISING-.2%
3,000 True North Communications
$64,500
______
AEROSPACE & DEFENSE-1.0%
1,300 . Curtiss-Wright
57,200
5,500 .. Thiokol
191,812
______
249,012
______
AUTO PARTS-2.5%
4,600 .. Excel Industries 60,950
8,283 .. Federal-Mogul
184,296
14,100 . Safety - Kleen
190,350
9,000 Smith (A.O.)
223,875
______
659,471
- -------
BANKING-19.6%
3,575 . Associated Banc-Corp
127,136
2,925 .. Bancorp South
117,000
14,300 .. Bank South
326,218
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
BANKING (CONTINUED)
2,400 . Bankers
$42,600
3,342 CNB Bancshares
96,082
9,700 . Central Fidelity Banks
317,675
1,675 . Chittenden 45,643
3,400 Citizens Bancorp Maryland
104,125
4,900 . Citizens Banking
149,450
2,394 . Commerce Bancorp 53,566
700 . Commerce Bancshares 25,112
9,300 .. Compass Bancshares
279,000
2,500 Cullen Frost Bankers
115,000
6,900 .. Dauphin Deposit 189,750
4,400 . Deposit Guaranty 173,800
3,702 .. F&M National 64,785
6,300 First American (Tennessee)
269,325
2,200 .. Firstbank of Illinois 62,150
8,200 . FirstMerit
219,350
3,920 . First Michigan Bank 98,490
2,600 . Fort Wayne National 82,550
3,400 Jefferson Bankshares 76,500
5,300 .. Keystone Financial 169,600
5,400 .. Liberty Bancorp
198,450
3,600 .. Mark Twain Bancshares
126,000
11,700 Mercantile Bankshares
311,513
3,889 .. Mid Am 60,523
1,100 .. North Fork Bancorp 21,313
2,900 Old National Bancorp (Ind) 99,325
3,960 One Valley Bancorp of
West Virginia..
121,770
3,700 . Republic Bancorp 49,488
7,460 .. Summit Bancorporation
186,500
2,400 . Susquehanna Bancshares 67,800
4,600 United Carolina Bancshares
161,000
600 United Counties Bancorp
116,400
1,500 . U.S. Trust
119,625
5,900 Westcorp
122,425
3,600 .. Whitney Holding
119,700
______
5,086,739
______
BEVERAGES-.5%
8,200 .. Coors (Adolph), Cl. B
139,400
______
CAPITAL MAINTENANCE SERVICES-.2%
2,100 ABM Industries 54,075
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
CHEMICALS-1.1%
2,200 .. Chemed $77,550
4,600 .. Dexter 113,850
2,000 LeaRonal
45,500
3,400 .. Stepan 57,375
______
294,275
______
COMMERCIAL & PERSONAL SERVICES-2.0%
12,000 Ogden. 279,000
2,700 Omega Healthcare Investors 69,525
3,800 .. PHH
165,775
______
514,300
______
FINANCE-10.7%
4,100 . Albank Financial
125,050
3,700 . Alex Brown
222,000
1,750 . Amcore Financial 35,875
3,400 . CCB Financial
164,050
5,100 . Centura Banks
158,738
6,600 First Commerce
212,850
5,000 First Commonwealth Financial
75,625
6,700 First Financial-Wisconsin
132,325
7,200 First Hawaiian
200,700
6,100 . Fourth Financial
216,550
6,250 . Fulton Financial
120,313
3,400 . JSB Financial
105,400
6,200 Magna Group
142,600
3,200 .. ONBANCorp 91,600
6,000 Piper Jaffray Cos 87,000
3,700 Provident Bancorp
154,937
1,400 . TCF Financial 77,875
4,300 . UMB Financial
165,550
4,900 .. USLIFE
211,312
2,700 United Bancshares
80,325
______
2,780,675
______
FOOD DISTRIBUTORS-2.1%
200 American Maize - Products, Cl. A 7,775
9,200 .. Flowers Industries
189,750
4,000 .. Ingles Markets, Cl. A 41,500
1,500 Lance
27,000
3,300 . Michael Foods 42,900
3,700 . Midwest Grain Products 64,750
2,500 . Nash Finch 50,625
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
FOOD DISTRIBUTORS (CONTINUED)
1,300 . Smith's Food &
Drug Centers, Cl. B..
$24,537
2,900 .. Smucker (J.M.), Cl. A 60,900
730 .. Universal Foods 23,177
______
532,914
______
FOREST PRODUCTS-1.1%
1,100 . Chesapeake 40,013
12,200 Longview Fibre. 196,725
3,000 . Pope & Talbot 46,875
______
283,613
______
HOME FURNISHINGS-1.2%
4,800 Kimball International, Cl. B
123,600
1,500 La-Z Boy Chair
42,563
4,400 Stanhome
136,400
______
302,563
______
HOUSEHOLD APPLIANCES-.3%
1,700 National Presto Industries
72,250
______
HOUSING-.3%
6,100 Kaufman & Broad Home
81,587
______
INSURANCE-5.6%
2,400 Foremost Corp., America
96,600
3,815 Fremont General
103,958
1,600 .. Hartford Steam Boiler 74,200
3,600 . Home Beneficial, Cl. B 83,700
8,900 .. Ohio Casualty
295,925
1,400 Protective Life
39,900
27,900 Reliance Group Holdings.
223,200
4,600 Security-Connecticut
122,475
3,200 Selective Insurance Group
109,600
1,200 . Trenwick Group
56,700
5,300 United Wisconsin Services
113,950
6,000 Zenith National Insurance
137,250
______
1,457,458
______
LEISURE TIME-2.3%
3,518 .. Anthony Industries 70,800
14,500 Fleetwood Enterprises
284,562
7,500 Handleman 71,250
500 National Golf Properties 10,937
200 Outboard Marine 4,275
2,500 Skyline 44,062
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
LEISURE TIME (CONTINUED)
3,000 . Sturm Ruger
$101,250
______
587,136
______
MACHINERY-.2%
3,400 Thomas Industries 58,225
______
MANUFACTURING-2.8%
5,200 . Arvin Industries 113,750
3,200 Bassett Furniture 79,200
4,000 . Brown Group
73,000
2,500 . Cross (A.T.), Cl. A
39,687
200 Jostens 4,800
1,800 Manitowoc 49,275
3,700 O'Sullivan 40,700
2,500 Sealright 32,500
3,300 Standard Products 64,350
6,300 Winnebago Industries 52,763
11,100 Zero.
174,825
______
724,850
______
MEDICAL SUPPLIES-.9%
3,600 ADAC Laboratories 41,400
700 . Beckman Instruments 20,037
4,400 . Block Drug Cl. A
172,700
______
234,137
______
METALS-2.1%
4,600 Amcast Industrial 87,400
3,200 Ball
108,800
900 Barnes Group 37,125
3,800 .. Cleveland - Cliffs
171,950
4,100 .. Simpson Industries 48,175
11,600 UNR Industries.. 91,350
______
544,800
______
OFFICE & BUSINESS EQUIPMENT-3.3%
3,650 American Business Products 68,893
3,500 General Binding 71,750
9,600 .. Hunt Manufacturing
130,800
6,100 Miller (Herman)
160,125
6,400 Standard Register
136,000
5,100 Wallace Computer Services
294,525
______
862,093
______
OIL & GAS-1.2%
3,500 National Fuel Gas 98,438
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST
31, 1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
OIL & GAS (CONTINUED)
6,100 .. ONEOK $
133,437
3,000 Questar 91,500
______
323,375
______
RAILROADS-.9%
4,400 GATX
227,150
______
RESTAURANTS-1.0%
7,500 Luby's Cafeterias
149,063
4,800 . Sbarro
109,800
______
258,863
______
RETAIL-4.8%
5,800 .. Blair 193,575
12,700 Family Dollar Stores.
231,775
4,600 .. Fay's 36,800
2,400 Hancock Fabrics
25,200
4,600 Longs Drug Stores
170,200
1,300 . Ross Stores 20,800
5,600 Ruddick
149,800
7,200 .. Shopko Stores 90,900
2,424 Strawbridge-Clothier, Cl. A 44,237
21,500 TJX Companies
268,750
3,900 . Venture Stores 22,913
______
1,254,950
______
STEEL-1.0%
500 . Birmingham Steel 10,125
2,000 Carpenter Technology
152,500
6,700 Chaparral Steel 77,050
100 Oregon Steel Mills 1,675
______
241,350
______
TELECOMMUNICATIONS-1.0%
11,600 Comsat..
269,700
______
TEXTILES-2.2%
8,400 Guilford Mills
210,000
4,800 Kellwood
100,800
3,000 Oxford Industries 54,000
5,000 Springs Industries, Cl. A
215,625
______
580,425
______
TOBACCO-.7%
8,200 Universal
184,500
______
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
TRANSPORTATION-1.0%
10,500 Alexander & Baldwin
$238,875
______
UTILITIES-ELECTRIC POWER-17.4%
13,320 Atlantic Energy.
253,080
3,300 Black Hills 80,025
3,000 CILCORP
107,250
8,400 CIPSCO
276,150
3,900 Central Hudson Gas & Electric
108,225
7,300 Central Maine Power 83,950
2,600 Central Vermont Public Service 35,750
4,500 Eastern Utilities Association
105,188
4,800 Empire District Electric 85,200
5,300 Hawaiian Electric Industries
191,463
7,200 IES Industries
181,800
6,300 Interstate Power
154,350
4,300 MDU Resources Group
130,075
2,400 . Madison Gas & Electric 79,200
30,870 MidAmerican Energy.
439,898
7,700 Minnesota Power & Light
206,938
11,300 Nevada Power.
230,238
1,800 Northwestern Public Service 45,225
3,100 Orange/Rockland Utilities
101,913
12,416 Portland General
297,984
9,400 Rochester Gas & Electric
209,150
6,600 Sierra Pacific Resources
141,900
3,600 Southern Indiana Gas & Electric
113,850
3,900 Southwestern Public Service
117,000
5,800 United Illuminating
194,300
6,900 WPL Holdings
196,650
5,400 WPS Resources
155,925
13,300 Washington Water Power..
206,150
______
4,528,827
______
UTILITIES-NATURAL GAS DISTRIBUTORS-6.1%
3,000 Bay State Gas
70,500
2,000 Colonial Gas
39,000
2,000 Connecticut Energy
38,750
2,300 Connecticut Natural Gas
50,600
4,700 Eastern Enterprises
143,938
8,000 El Paso Natural Gas
225,000
2,500 Energen 54,688
3,900 Laclede Gas 77,513
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31,
1995
SMALL COMPANY VALUE PORTFOLIO (CONTINUED)
SHARES COMMON STOCKS (CONTINUED) VALUE
____
_______
UTILITIES-NATURAL GAS DISTRIBUTORS (CONTINUED)
3,000 NUI
$45,375
4,000 New Jersey Resources 96,000
3,300 .. Northwest Natural Gas
102,300
2,400 Pennsylvania Enterprises 76,200
7,800 Peoples Energy
212,550
6,400 Piedmont Natural Gas
130,400
4,500 Public Service Company of
North Carolina. 68,625
2,414 South Jersey Industries
47,978
2,800 United Cities Gas 43,400
2,900 Washington Energy 48,213
______
1,571,030
______
UTILITIES-WATER-1.7%
6,100 American Water Works
182,238
2,600 California Water Service
80,600
1,700 E'town 45,688
2,700 .. Philadelphia Suburban 48,600
7,136 United Water Resources 92,768
______
449,894
______
TOTAL COMMON STOCKS
(cost $24,192,376)
$25,713,012
===========
TOTAL INVESTMENTS
(cost $24,192,376). 99.0%
$25,713,012
=====
===========
CASH AND RECEIVABLES (NET). 1.0%
$265,200
=====
===========
NET ASSETS 100.0%.
$25,978,212
=======
===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
<TABLE>
<CAPTION
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995
LARGE LARGE SMALL SMALL
COMPANY COMPANY COMPANY COMPANY
GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
________ ___________ __________ __________
<S> <C>
<C> <C> <C>
ASSETS:
Investments in securities, at value
[cost-Note 4(b)]-see statement.
$21,364,406 $23,029,937 $22,151,913 $25,713,012
Cash..
22,166 12,991 42,237 49,544
Receivable for investment securities sold
_ _ _ 179,966
Dividends receivable.
21,983 110,924 4,173 99,935
Prepaid expenses and other assets
10,317 11,164 10,386 9,177
Due from The Dreyfus Corporation.
_ 20,304 _ 7,427
_______ ______ _______ _______
21,418,872 23,185,320 22,208,709 26,059,061
____________ ____________ ____________ ____________
LIABILITIES:
Due to Wilshire
$ 1,784 $ 1,833 $ 1,831 $ 2,083
Payable for investment securities purchased
_ 198,163 256,560 __
Payable for Common Stock redeemed
40 7,228 40 18,463
Accrued expenses and other liabilities.
68,601 51,841 68,100 60,303
______ _______ _______ _______
70,425 259,065 326,531 80,849
_____ ________ _______ _______
NET ASSETS
$21,348,447 $22,926,255 $21,882,178 $25,978,212
============ ============ ========== ===========
REPRESENTED BY:
Paid-in capital
$17,284,473 $19,679,928 $16,955,970 $23,045,250
Accumulated undistributed investment
income-net
89,061 470,916 _ 733,991
Accumulated investment (loss).
_ _ (87,165) _
Accumulated undistributed net realized gain
on investments..
230,334 569,152 2,970,329 678,335
Accumulated net unrealized appreciation on
investments-Note 4(b).
3,744,579 2,206,259 2,043,044 1,520,636
__________ __________ __________ _________
NET ASSETS at value
$21,348,447 $22,926,255 $21,882,178 $25,978,212
=========== ============ =========== ============
SHARES OF COMMON STOCK OUTSTANDING
[400 million shares (with 100 million allocated
to each series) of $.001 par value
Common Stock authorized]
1,306,134 1,430,928 1,179,532 1,685,300
=========== ============ =========== ============
NET ASSET VALUE per share
(Net Assets Shares Outstanding)
$16.34 $16.02 $18.55 $15.41
======= ======= ======= =======
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1995
LARGE LARGE SMALL SMALL
COMPANY COMPANY COMPANY COMPANY
GROWTH VALUE GROWTH VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
______ ______ ______ ______
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $34 and $72
foreign taxes withheld at source for the
Small Company Growth Portfolio and
Small Company Value Portfolio) $
244,485 $710,822 $40,037 $1,176,442
Interest..
20,211 15,590 22,934 36,416
______ ______ ______ ______
TOTAL INCOME.
264,696 726,412 62,971 1,212,858
______ ______ ______ ______
EXPENSES-Note 2(c):
Investment advisory fee-Note 3(a). $
14,834 $15,835 $15,630 $ 25,210
Administration fee-Note 3(a)
29,667 31,669 31,260 50,421
Shareholder servicing costs-Note 3(b)
45,596 50,022 61,059 83,095
Auditing fees
22,531 22,533 25,534 25,549
Registration fees..
18,057 15,907 18,172 13,752
Prospectus and shareholders' reports.
9,807 8,527 10,369 11,207
Custodian fees..
4,976 5,084 5,343 5,442
Directors' fees and expenses-Note 3(c)
4,375 4,584 5,199 7,491
Legal fees
1,476 1,932 2,207 2,922
Miscellaneous
4,801 6,474 6,668 3,833
______ ______ ______ ______
156,120 162,567 181,441 228,922
Less-fees waived by Wilshire and Dreyfus
due to undertakings-Note 3(a).
31,339 33,740 33,455 54,566
______ ______ ______ ______
TOTAL EXPENSES..
124,781 128,827 147,986 174,356
________ ________ ________ _______
INVESTMENT INCOME
(LOSS)-NET..
139,915 597,585 (85,015) 1,038,502
________ ________ ________ _______
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments-Note 4(a) $
381,982 $ 680,162 $3,009,406 $ 793,177
Net unrealized appreciation on investments
3,125,221 2,162,794 775,482 1,360,207
________ ________ ________ _______
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS..
3,507,203 2,842,956 3,784,888 2,153,384
________ ________ ________ _______
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
$3,647,118 $3,440,541 $3,699,873 $3,191,886
========== =========== =========== ==========
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
LARGE COMPANY LARGE COMPANY
GROWTH PORTFOLIO VALUE PORTFOLIO
_______________________ _______________________
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31,
___________________________ ___________________________
1994 1995 1994 1995
________ ________ ________ ________
OPERATIONS:
Investment income-net
$ 96,341 $139,915 $ 447,331 $597,585
Net realized gain (loss) on investments
(119,770) 381,982 135,129 680,162
Net unrealized appreciation (depreciation) on
investments for the year.
526,588 3,125,221 (920,730) 2,162,794
________ ________ ________ ________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
503,159 3,647,118 (338,270) 3,440,541
________ ________ ________ ________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net
(146,578) (91,631) (314,400) (461,355)
Net realized gain on investments.
_ _ (259,490) (117,646)
________ ________ ________ ________
TOTAL DIVIDENDS
(146,578) (91,631) (573,890) (579,001)
________ ________ ________ ________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.
6,136,117 15,277,226 11,201,295 11,530,692
Dividends reinvested.
145,901 86,969 551,033 568,732
Cost of shares redeemed.
(6,274,916) (5,995,631) (6,799,014) (4,192,263)
________ ________ ________ ________
INCREASE IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS.
7,102 9,368,564 4,953,314 7,907,161
________ ________ ________ ________
TOTAL INCREASE IN NET ASSETS
363,683 12,924,051 4,041,154 10,768,701
NET ASSETS:
Beginning of year.
8,060,713 8,424,396 8,116,400 12,157,554
________ ________ ________ ________
End of year. $
8,424,396(1) $21,348,447(1) $12,157,554(2) $22,926,255(2)
================ =============== ==============
=============
SHARES SHARES SHARES SHARES
________ ________ ________ ________
CAPITAL SHARE TRANSACTIONS:
Shares sold.
478,006 1,070,812 780,559 815,733
Shares issued for dividends reinvested.
11,258 6,609 39,052 44,156
Shares redeemed
(488,901) (404,353) (485,042) (298,264)
________ ________ ________ ________
NET INCREASE IN SHARES OUTSTANDING
363 673,068 334,569 561,625
======== ========= ========= ==========
(1) Includes undistributed investment income-net: $40,777 in
1994 and $89,061 in 1995.
(2) Includes undistributed investment income-net: $334,686 in
1994 and $470,916 in 1995.
See notes to financial statements.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SMALL COMPANY SMALL COMPANY
GROWTH PORTFOLIO VALUE PORTFOLIO
_______________________ ___________________________
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31,
___________________________ ___________________________
1994 1995 1994 1995
________ ________ ________ ________
OPERATIONS:
OPERATIONS:
Investment income (loss)-net.. $
(33,247) $ (85,015) $ 761,845 $ 1,038,502
Net realized gain on investments.
284,483 3,009,406 64,244 793,177
Net unrealized appreciation (depreciation)
on investments for the year.
253,279 775,482 (755,152) 1,360,207
________ ________ ________ ________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.
504,515 3,699,873 70,937 3,191,886
________ ________ ________ ________
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.
_ _ (441,748) (842,828)
In excess of investment income-net..
(32,220) _ _ _
From net realized gain on investments..
(677,557) (274,014) (212,842) (131,692)
________ ________ ________ ________
TOTAL DIVIDENDS
(709,777) (274,014) (654,590) (974,520)
________ ________ ________ ________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.
12,327,171 12,371,344 26,817,975 18,676,103
Dividends reinvested.
674,755 259,640 630,047 852,961
Cost of shares redeemed.
(9,135,407) (5,363,057) (18,580,966) (19,206,167)
________ ________ ________ ________
INCREASE IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS.
3,866,519 7,267,927 8,867,056 322,897
________ ________ ________ ________
TOTAL INCREASE IN NET ASSETS
3,661,257 10,693,786 8,283,403 2,540,263
NET ASSETS:
Beginning of year.
7,527,135 11,188,392 15,154,546 23,437,949
________ ________ ________ ________
End of year.
$11,188,392(1) $21,882,178(1) $23,437,949(2) $25,978,212(2)
============== ============== ==============
==============
SHARES SHARES SHARES SHARES
________ ________ ________ ________
CAPITAL SHARE TRANSACTIONS:
Shares sold.
799,229 761,531 1,879,823 1,332,739
Shares issued for dividends reinvested.
43,146 17,183 43,906 64,716
Shares redeemed
(584,999) (326,229) (1,310,912) (1,348,397)
________ ________ ________ ________
NET INCREASE IN SHARES OUTSTANDING
257,376 452,485 612,817 49,058
========== ========== ========= ________
(1) Includes distributions in excess of investment income-net:
($2,150) in 1994 and accumulated investment (loss)-net;
($87,165) in 1995.
(2) Includes undistributed investment income-net: $538,317 in
1994 and
$733,991 in 1995.
See notes to financial statements.
</TABLE>
DREYFUS-WILSHIRE TARGET FUNDS, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated
November 15, 1995.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
Reference is made to page 5 of the Fund's Prospectus dated
November 15, 1995.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company and operates as a series company issuing four classes of
shares of Common Stock: the Large Company Growth Portfolio, the
Large Company Value Portfolio, the Small Company Growth Portfolio
and the Small Company Value Portfolio. The Fund accounts
separately for the assets, liabilities and operations of each
series. Wilshire Associates Incorporated ("Wilshire") serves as
the Fund's investment adviser. The Dreyfus Corporation ("Dreyfus")
serves as the Fund's administrator. Dreyfus is a direct subsidiary
of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. (the
"Distributor") acts as the distributor of the Fund's shares. The
Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned subsidiary of FDI Holdings, Inc., the
parent company of which is Boston Institutional Group, Inc.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Each series' investments in
securities (including financial futures) are valued at the last
sales price on the securities exchange on which such securities
are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the
national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are recorded
on the identified cost basis. Dividend income is recognized on the
ex-dividend date and interest income, including, where applicable,
amortization of discount on investments, is recognized on the
accrual basis.
(C) EXPENSES: Expenses directly attributable to each
series are charged to that series' operations; expenses which are
applicable to all series are allocated among them.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends payable to
shareholders are recorded by each series on the ex-dividend date.
Dividends from investment income-net and dividends from net
realized capital gain, with respect to each series, are normally
declared and paid annually, but each series may make distributions
on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that a
net realized capital gain of a series can be offset by a capital
loss carryover of that series, if any, such gain will not be
distributed.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes.
For Federal income tax purposes, each series is treated as a
single entity for the purpose of determining such qualifications.
NOTE 3--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Fees paid by the Fund pursuant to the provisions of an
Investment Advisory Agreement with Wilshire and an Administration
Agreement with Dreyfus are payable monthly based on annual rates
of .10 of 1% and .20 of 1%, respectively, of the average daily
value of each series' net assets. The agreements further provide
that if in any full fiscal year the aggregate expenses of any
series, exclusive of interest on borrowings, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any state
having jurisdiction over the Fund, that series may deduct from
payments to be made to Wilshire and Dreyfus, or Wilshire and
Dreyfus will bear, the amount of such excess to the extent
required by state law in proportion to their respective fees. The
most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full fiscal
year that such expenses of a series exceed 2-1\2% of the first $30
million, 2% of the next $70 million and 1-1\2% of the excess over
$100 million of the average value of that series' net assets in
accordance with California "blue sky" regulations. However,
Wilshire and Dreyfus had undertaken from September 1, 1994 through
November 7, 1994, to waive receipt of the advisory fee and
administration fee payable to it by each series, and thereafter,
Dreyfus had undertaken through August 31, 1995, to waive the
administration fee paid by each Series.
The expenses waived, pursuant to the undertakings
amounted to the following for the year ended August 31, 1995:
ADVISORY FEE
ADMINISTRATION FEE
WAIVED BY
WAIVED BY
WILSHIRE
DREYFUS TOTAL
____________
__________________ _______
[S] [C]
[C] [C]
Large Company Growth Portfolio $1,672
$29,667 $31,339
Large Company Value Portfolio. 2,071
31,669 33,740
Small Company Growth Portfolio 2,195
31,260 33,455
Small Company Value Portfolio. 4,145
50,421 54,566
(B) Pursuant to the Fund's Shareholder Services Plan, each
series reimburses Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, an amount not to exceed an annual rate of
.25 of 1% of the value of a series' average daily net assets for
servicing shareholder accounts. The services provided may include
personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder accounts. The following summarizes the
aggregate amount charged by Dreyfus Service Corporation pursuant
to the Shareholder Services Plan during the year ended August 31,
1995:
Large Company Growth Portfolio $34,200
Small Company Growth Portfolio $38,741
Large Company Value Portfolio 39,503
Small Company Value Portfolio 62,831
(C) Each director who is not an "affiliated person" as
defined in the Act receives from the Fund an annual fee of $2,500
and an attendance fee of $500 per meeting. The Chairman of the
Board receives an additional 25% of such compensation.
(D) A 1% redemption fee is charged on certain redemptions
of Series' shares (including redemptions through use of the
Exchange Privilege) where the redemption or exchange occurs within
a six-month period following the date of issuance. During the
year ended August 31, 1995, redemption fees for each series were
as follows:
<TABLE>
<CAPTION>
<S> <C>
<S> <C>
Large Company Growth Portfolio $ 568
Small Company Growth Portfolio $1,783
Small Company Value Portfolio 2,214
</TABLE>
NOTE 4-SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of
purchases and sales of investment securities, other than
short-term securities, for the year ended August 31, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
_____________ _________
<S>
<C> <C> <C>
Large Company Growth Portfolio..
$13,681,190 $ 4,368,078
Large Company Value Portfolio
16,565,048 9,119,354
Small Company Growth Portfolio..
24,340,972 16,876,853
Small Company Value Portfolio
21,374,619 22,164,749
(B) The following summarizes the accumulated net
unrealized appreciation (depreciation) on investments for each
series at August 31, 1995:
GROSS GROSS
APPRECIATION (DEPRECIATION) NET
_______ ________ _______
Large Company Growth Portfolio..
$3,942,237 $ (197,658) $3,744,579
Large Company Value Portfolio
2,449,022 (242,763) 2,206,259
Small Company Growth Portfolio..
2,906,473 (863,429) 2,043,044
Small Company Value Portfolio
2,256,076 (735,440) 1,520,636
At August 31, 1995, the cost of investments of each series for
Federal
income tax purposes was substantially the same as the
cost for financial reporting purposes. The cost of investments for
each
series for financial reporting purposes as of August 31, 1995 was
as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <S>
<C>
Large Company Growth Portfolio $17,619,827 Small
Company Growth Portfolio $20,108,869
Large Company Value Portfolio 20,823,678 Small
Company Value Portfolio 24,192,376
</TABLE>
DREYFUS-WILSHIRE TARGET FUNDS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF THE
DREYFUS-WILSHIRE TARGET FUNDS, INC.
We have audited the accompanying statements of assets and
liabilities, including the statements of investments, of
Dreyfus-Wilshire Target Funds, Inc. (comprised of the Large
Company Growth Portfolio, the Large Company Value Portfolio, the
Small Company Growth Portfolio and the Small Company Value
Portfolio) as of August 31, 1995, the related statements of
operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and
the financial highlights for each of the two years in the period
then ended and for the period from September 30,1992 (when
operations commenced for all Series except Small Company Growth
Portfolio, which commenced operations on October 1, 1992) to
August 31, 1993. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of August 31, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of each of the respective
portfolios constituting the Dreyfus-Wilshire Target Funds, Inc. as
of August 31, 1995, the results of their operations for the year
then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights for
the periods referred to above, in conformity with generally
accepted accou nting principles.
[Coopers & Lybrand signature logo]
COOPERS & LYBRAND L.L.P.
New York, New York
October 6, 1995
DREYFUS-WILSHIRE TARGET FUNDS, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Dreyfus-Wilshire
Target Funds, Inc. (Large Company Value Portfolio, Small Company
Value Portfolio and Small Company Growth Portfolio) hereby make
the following designations of long-term capital gain distributions
regarding the fiscal year ended August 31, 1995.
<TABLE>
<CAPTION>
LONG-TERM
CAPITAL GAIN
DISTRIBUTION TOTAL PAID PAYABLE
PER SHARE PER SHARE DATE
_________ __________ _________
<S>
<C> <C> <C>
Large Company Value Portfolio.
$ .0900 $ .502 12/30/94
Small Company Value Portfolio.
$ .065 $ .518 12/30/94
Small Company Growth Portfolio
$ .314 $ .314 12/30/94
</TABLE>
WILSHIRE TARGET FUNDS, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for the period from September 30,
1992 (commencement of operations for all Portfolios except Small
Company Growth Portfolio which commenced operations October 1,
1992) to August 31, 1993, and for the fiscal years ended August
31, 1994 and 1995.
Included in Part B of the Registration Statement:
Statement of Investments-- August 31, 1995
Statement of Assets and Liabilities-- August 31, 1995
Statement of Operations-- For the fiscal year ended
August 31, 1995.
Statement of Changes in Net Assets-- For the fiscal
year ended August 31, 1994 and 1995.
Notes to Financial Statements
Report of Independent Accountants dated October 6,
1995
Schedules No. I through VII and other financial statement
information, for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission,
are either omitted because they are not required under the related
instructions, they are inapplicable, or the required information
is presented in the financial statements or notes which are
included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
(b) Exhibits:
(1)(a) Articles of Incorporation is incorporated by reference
to Exhibit (1)(a) of Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A, filed on November 12, 1993.
(1)(b) Articles of Amendment to the Articles of Incorporation
is incorporated by reference to Exhibit (1)(b) of Post-Effective
Amendment No. 3 to the Registration Statement on Form N-1A, filed
on November 12, 1993.
(1)(c) Form of Articles of Amendment to the Articles of
Incorporation amending the name of the Fund and the name of a
class of shares of each Series of the Fund.
(1)(d) Form of Articles Supplementary to the Articles of
Incorporation classifying shares of each Series of the Fund.
(2) By-Laws are incorporated by reference to Exhibit (2) of
Post-Effective Amendment No. 3 to the Registration Statement on
Form N-1A, filed on November 12, 1993.
(5)(a) Form of Investment Advisory Agreement, to be dated May
31, 1996.
(5)(b) Form of Administration Agreement, to be dated May 31,
1996.
(6)(a) Form of Distribution Agreement, to be dated May 31,
1996.
(8)(a) Form of Custody Agreement, to be dated May 31, 1996.
(9)(a) Form of Transfer Agency Agreement.
(9)(b) Form of Transfer Agency and Services Agreement, to be
dated May 31, 1996.
(11)(a) Consent of Coopers & Lybrand, Independent Accountants.
(11(b) Powers of Attorney of the Directors and officers.
(15) Form of 12b-1 Plans, effective May 31, 1996.
(17) Financial Data Schedule.
(18) Form of Rule 18f-3 Plan, effective May 31, 1996.
Item 25. Persons Controlled by or under Common Control with
Registrant.
Not Applicable.
Item 26. Number of Holders of Securities.
(1) (2)
Title of Class Number of Record
Investment Class Holders as of March 14, 1996
Common Stock
Par value $.01 per share
Large Company Growth Portfolio 415
Large Company Value Portfolio 315
Small Company Growth Portfolio 899
Small Company Value Portfolio 470
(1) (2)
Title of Class Number of Record
Institutional Class Holders as of March 14, 1996
Common Stock
Par value $.01 per share
Large Company Growth Portfolio 0
Large Company Value Portfolio 0
Small Company Growth Portfolio 0
Small Company Value Portfolio 0
Item 27. Indemnification.
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 27 of Part C of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on September 23, 1992.
Reference is also made to the Form of Distribution Agreement to be
dated May 31, 1996 attached as Exhibit 6(a).
Item 28. Business and Other Connections of Investment Adviser.
1. Since 1992, Dennis A. Tito has been the president, a
director, and 100% shareholder of Summit Advisors, Inc., located
at 100 Wilshire Boulevard, Suite 1960, Santa Monica, CA 90401.
2. Since 1993, Dennis A. Tito has been chairman of the
Water and Power Commission of the City of Los Angeles, located at
200 North Spring Street, Los Angeles, CA 90012.
3. Since 1993, Robert J. Raab, Jr. has been chairman of
the board of directors of Optical Laser Data Equipment and
Supplies Co., located at 5862 Bolsa Avenue, Suite 103, Huntington
Beach, CA 92549.
Item 29. Principal Underwriters.
(a) Other investment companies for which Registrant's
principal underwriter (exclusive distributor) acts as principal
underwriter or exclusive distributor:
440 Financial Distributors, Inc. (the "Distributor") currently
acts as distributor for BT Insurance Funds Trust, The Galaxy Fund,
The Galaxy VIP Fund, Galaxy Fund II, The Kent Funds and Armada
Funds (formerly known as NCC Funds). The Distributor is
registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of
Securities Dealers. The Distributor is a wholly-owned subsidiary
of First Data Corporation, 53 State Street, Mail Zone BOS425,
Boston, MA 02109.
(b)
The information required by this Item 29(b) with respect to each
director, officer or partner of 440 Financial Distributors, Inc.
is incorporated by reference to Schedule A of Form BD filed by 440
Financial Distributors, Inc. with the Securities and Exchange
Commission pursuant to the Securities Act of 1934 (File No. 8-
45467). No director, officer or partner of 440 Financial
Distributors, Inc. holds a Position or Office with the Registrant.
Item 30. Location of Accounts and Records.
1. The First Data Investment Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Northern Trust Company
50 LaSalle Street
Chicago, Illinois 60675
3. Wilshire Associates Incorporated
1299 Ocean Avenue
Suite 700
Santa Monica, CA 90401
Item 31. Management Services.
Not Applicable
Item 32. Undertakings.
(1) To call a meeting of shareholders for the purpose of voting
upon the question of removal of a 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.
(2) To furnish each person to whom a prospectus is delivered
with a copy of the Fund's latest Annual Report to Shareholders,
upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant has duly
caused this Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts on the 1st
day of April, 1996.
DREYFUS WILSHIRE TARGET FUNDS, INC.
BY: Marie E. Connolly*
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, this Amendment to the
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
Marie E. Connolly* President and Treasurer
(Principal Executive Officer
and Principal Financial Officer) 4/1/96
MARIE E. CONNOLLY
Thomas D. Stevens* Director, Chairman of Board
4/1/96
THOMAS D. STEVENS
DeWitt F. Bowman* Director 4/1/96
DEWITT F. BOWMAN
Anne Wexler* Director 4/1/96
ANNE WEXLER
*BY: Robert D. Guiod
Robert D. Guiod
Attorney-in-Fact
3115727.doc
C-1
EXHIBIT INDEX
Item Exhibit
(1)(c) Form of Articles of Amendment to the Articles of
Incorporation.
(1)(d) Form of Articles Supplementary to the Articles of
Incorporation.
(5)(a) Form of Investment Advisory Agreement to be dated May
31, 1996.
(5)(b) Form of Administration Agreement to be dated May 31,
1996.
(6)(a) Form of Distribution Agreement to be dated May 31,
1996.
(8)(a) Form of Custody Agreement to be dated May 31, 1996.
(9)(a) Form of Transfer Agency Agreement.
(9)(b) Form of Transfer Agency and Services Agreement to be
dated May 31, 1996.
(11)(a) Consent of Coopers & Lybrand, Independent Accountants.
(11)(b) Powers of Attorney of the Directors and officers
(15) Form of 12b-1 Plans to be adopted May 31, 1996.
(17) Financial Data Schedule.
(18) Form of Rule 18f-3 Plan to be adopted May 31, 1996.
3116830.01
FORM OF
DREYFUS-WILSHIRE TARGET FUNDS, INC.
ARTICLES OF AMENDMENT
Dreyfus-Wilshire Target Funds, Inc., a Maryland corporation
having its principal office in the State of Maryland in Baltimore
City, Maryland (hereinafter called the "corporation"), hereby
certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: The Articles of Incorporation 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 Wilshire Target Funds, Inc.
SECOND: The Charter of the corporation is further amended
by redesignating all of the currently issued and unissued shares
of the corporation's Common Stock as follows:
<TABLE>
<CAPTION>
Number of Shares
Class Designation New Class Designation Presently Allocated
<S> <C> <C>
Large Company Growth Portfolio Investment Class shares of Common
Stock of the Large Company Growth
Portfolio 100,000,000
Large Company Value Portfolio Investment Class shares of Common Stock
of Large Company Value Portfolio 100,000,000
Small Company Growth Portfolio Investment Class shares of Common Stock
of the Small Company Growth Portfolio
100,000,000
Small Company Value Portfolio Investment Class shares of Common Stock
of the Small Company Value Portfolio
100,000,000
</TABLE>
THIRD: These Articles of Amendment shall become effective
on _________, 1996 at __:__.m.
FOURTH: The foregoing amendments to the Articles of
Incorporation of the corporation were approved by a majority of
the entire Board of Directors of the corporation and the
amendments to the Articles of Incorporation 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
stockholders.
FIFTH: The corporation is registered as an open-end
company under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, Dreyfus-Wilshire Target Funds, Inc. has
caused these presents to be signed in its name and on its behalf
on the _____ day of ______________, 1996 by its duly authorized
officers, who acknowledge that these Articles of Amendment are the
act of the corporation and that to the best of their knowledge,
information and belief, all matters and facts set forth herein
relating to the authorization and approval of these Articles are
true in all material respects and that this statement is made
under the penalties of perjury.
DREYFUS-WILSHIRE TARGET FUNDS, INC.
WITNESS:
________________________________
By:____________________________________
Name:__________________________
Name:_______________________________
Title: [Assistant] Secretary Title: [Vice] President
- -2-
EXHIBIT NO. 1d
FORM OF
ARTICLES SUPPLEMENTARY
WILSHIRE TARGET FUNDS, INC., a Maryland
corporation having its principal office in the State of
Maryland in Baltimore, Maryland (hereinafter called the
"corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland
that:
FIRST: The aggregate number of shares of stock
that the corporation has authority to issue is four
hundred million (400,000,000) shares of Common Stock,
$.001 par value per share, with an aggregate par value
of four hundred thousand dollars ($400,000), heretofore
consisting of one hundred million (100,000,000) shares
classified as Investment Class shares of Common Stock
of the Large Company Growth Portfolio, one hundred
million (100,000,000) shares classified as Investment
Class shares of Common Stock of the Large Company Value
Portfolio, one hundred million (100,000,000) shares
classified as Investment Class shares of Common Stock
of the Small Company Growth Portfolio, and one hundred
million (100,000,000) shares classified as Investment
Class shares of Common Stock of the Small Company Value
Portfolio. These Articles Supplementary do not
increase the total authorized capital stock of the
corporation or the aggregate par value thereof. The
Board of Directors hereby reclassifies fifty million
(50,000,000) authorized but unissued Investment Class
shares of Common Stock of the Large Company Growth
Portfolio as fifty million (50,000,000) Institutional
Class shares of Common Stock of the Large Company
Growth Portfolio, fifty million (50,000,000) authorized
but unissued Investment Class shares of Common Stock of
the Large Company Value Portfolio as fifty million
(50,000,000) Institutional Class shares of Common Stock
of the Large Company Value Portfolio, fifty million
(50,000,000) authorized but unissued Investment Class
shares of Common Stock of the Small Company Growth
Portfolio as fifty million (50,000,000) Institutional
Class shares of Common Stock of the Small Company
Growth Portfolio, and fifty million (50,000,000)
authorized but unissued Investment Class shares of
Common Stock of the Small Company Value Portfolio as
fifty million (50,000,000) Institutional Class shares
of Common Stock of the Small Company Value Portfolio.
SECOND: The Institutional Class shares of Common
Stock of each Portfolio, which term as used herein
refers to an investment portfolio in which particular
classes of Common Stock have an interest, classified by
the corporation's Board of Directors 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 of the corporation's
Articles of Incorporation and shall be subject to all
provisions of the corporation's Articles of
Incorporation relating to stock of the corporation
generally, subject to the following:
(1) As more fully set forth hereinafter, the
assets and liabilities and the income and expenses of
the Institutional Class shares of Common Stock of each
Portfolio shall be determined separately from those of
any other class of the corporation's stock and,
accordingly, the net asset value, the dividends and
distributions payable to holders, and the amounts
distributable in the event of liquidation of the
Portfolio to holders of shares of the Institutional
Class shares of such Portfolio may vary from the other
classes of the corporation's stock. Except for these
differences, and certain other differences set forth
hereinafter or elsewhere in the Articles of
Incorporation of the corporation, the Institutional
Class shares of Common Stock of each Portfolio and each
other class of the corporation's Common Stock of the
same Portfolio shall have the same preferences,
conversion and other rights, voting powers,
restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption.
(2) Assets of the corporation attributable to the
Institutional Class shares of Common Stock of a
Portfolio and assets attributable to the Investment
Class shares of Common Stock of the same Portfolio
shall be invested in the same investment portfolio with
each other and with any other class of Common Stock of
the same Portfolio.
(3) The dividends and distributions of investment
income and capital gains with respect to the
Institutional Class shares of Common Stock of each
Portfolio shall be in such amounts as may be declared
from time to time by the Board of Directors, and such
dividends and distributions may vary between the
Institutional Class shares of Common Stock of the
Portfolio and any other class of the corporation's
Common Stock of the same Portfolio to reflect differing
allocations of the expenses and liabilities of the
corporation among the classes of Common Stock of the
Portfolio and any resultant differences between the net
asset values per share of the classes, to such extent
and for such purposes as the Board of Directors may
deem appropriate. The allocation of investment income,
capital gains, expenses and liabilities of the
corporation among the Institutional Class shares of
Common Stock of each Portfolio and any other class of
the corporation's stock shall be determined by the
Board of Directors in a manner that is consistent with
applicable law.
(4) Except as may otherwise be required by law,
the holders of the Institutional Class shares of Common
Stock of each Portfolio shall have (i) except as set
forth below, the same voting rights as the holders of
other classes of stock of that Portfolio, (ii)
exclusive voting rights with respect to any matters
submitted to a vote of stockholders that affects only
holders of such Institutional Class of shares of Common
Stock of that Portfolio, including, without limitation,
the provisions of any distribution plan adopted by the
corporation pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Plan"),
applicable to such Institutional Class of shares of
Common Stock of that Portfolio, (iii) no voting rights
with respect to the provisions of any Plan applicable
solely to one or more other classes of stock of the
corporation or with respect to any other matters
submitted to a vote of stockholders that does not
affect holders of such Institutional Class of shares of
Common Stock of that Portfolio and (iv) to the extent
required by law, separate voting rights with respect to
any matters submitted to a vote of stockholders.
THIRD: The Board of Directors of the corporation
has classified the shares described above pursuant to
authority provided in the corporation's Articles of
Incorporation.
FOURTH: These Articles Supplementary shall become
effective at _______, __.m., on ___________, 1996.
The undersigned [Vice] President of the
corporation acknowledges these Articles Supplementary
to be the corporate act of the corporation and states
that to the best of her 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, WILSHIRE TARGET 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 as of
__________, 1996.
WILSHIRE TARGET FUNDS, INC.
By:____________________________
[Vice] President
Witness:
____________________________
[Assistant] Secretary
- -3-
EXHIBIT NO. 5a
FORM OF
INVESTMENT ADVISORY AGREEMENT
WILSHIRE TARGET FUNDS, INC.
Providence, Rhode Island
May 31, 1996
Wilshire Associates Incorporated
1299 Ocean Avenue
Santa Monica, California 90401-1085
Ladies and Gentlemen:
Wilshire Target Funds, Inc., a Maryland
corporation (the "Fund") consisting of the series set
forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series"), herewith
confirms its agreement with Wilshire Associates
Incorporated ("Wilshire") as follows:
The Fund desires to employ its capital by
investing and reinvesting the same in investments of
the type and in accordance with the limitations
specified in its Articles of Incorporation 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 the Wilshire, and in such
manner and to such extent as from time to time may be
approved by the Fund's Board of Directors. The Fund
currently employs Wilshire (the "Adviser") to act as
its investment adviser pursuant to an investment
advisory agreement, dated August 12, 1992, as revised
September 17, 1992, and desires to continue the
employment of the Adviser as its investment adviser
pursuant to this Agreement. The Fund also employs
First Data Investor Services Group, Inc. (the
"Administrator") as its administrator pursuant to a
separate agreement of even date herewith.
In this connection it is understood that from time
to time the Adviser may employ or associate with itself
such other person or persons as the Adviser may believe
to be particularly fitted to perform, or to assist it
in the performance of, some or all of its
responsibilities under this Agreement. Such person or
persons may be persons who are employed by the Adviser,
the Administrator and/or the Fund as officers or
employees or to furnish other services to or for the
Fund. The compensation of such person or persons shall
be paid by the Adviser 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 of Directors, the Adviser will provide
investment management of each Series' portfolio in
accordance with such Series' investment objective and
policies as stated in the Fund's Prospectus and
Statement of Additional Information as from time to
time in effect. In connection therewith, the Adviser
will supervise such Series' investments and, if
appropriate, the sale and reinvestment of the Series'
assets. The Adviser will furnish to the Fund such
statistical information, with respect to the
investments which the Fund may hold or contemplate
purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments
materially affecting any Series' portfolio and shall
expect the Adviser, on its own initiative, to furnish
to the Fund from time to time such information as the
Adviser may believe appropriate for this purpose.
In addition, the Adviser will supply office
facilities (which may be in the Adviser's own offices),
data processing services, clerical, internal executive
services, and stationery and office supplies; make
available information necessary to prepare reports to
each Series' stockholders, tax returns, reports to and
filings with the Securities and Exchange Commission and
state Blue Sky authorities; and generally assist in all
aspects of the Fund's operations.
The Adviser shall exercise its best judgment in
rendering the services to be provided to the Fund
hereunder and the Fund agrees as an inducement to the
Adviser's undertaking the same that the Adviser shall
not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by any Series,
provided that nothing herein shall be deemed to protect
or purport to protect the Adviser against any liability
to a Series or to its securityholders to which the
Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of
the Adviser's reckless disregard of its obligations and
duties hereunder.
In consideration of the services rendered pursuant
to this Agreement, the Fund will pay the Adviser a fee
calculated daily and paid monthly at the annual rate
set forth opposite each Series' name on Exhibit A
hereto based on the value of such Series' average daily
net assets. Net asset value shall be computed on such
days and at such time or times as described in the
Fund's then-current Prospectus and Statement of
Additional Information. 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 the
Adviser, the value of each Series' net assets shall be
computed in the manner specified in the Fund's Articles
of Incorporation for the computation of the value of
each Series' net assets.
However, for the three month period June 1, 1996
through August 31, 1996 and the fiscal year September
1, 1996 through August 31, 1997, if the aggregate
operating expenses of any Series (exclusive of
interest, taxes, brokerage, 12b-1fees and extraordinary
expenses) for such period exceed the annual rate
specified in the following table for such class, the
investment advisory fee otherwise payable for that
period by the Series under this Agreement will be
reduced by the amount of the excess, but not below an
annual fee rate of .10 of 1% of such Series' average
daily net assets.
Series Annual Rate (%)
Large company Growth Portfolio .80
Large company Value Portfolio .77
Small company Growth Portfolio .91
Small company Value Portfolio .66
The Adviser will bear all expenses in connection
with the performance of its 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 the Adviser. The
expenses to be borne by the Fund include, without
limitation, the following: distribution expense,
transfer agency expense, dividend disbursing and
shareholder services agency expense, organizational
costs, taxes, interest, brokerage fees and commissions,
if any, fees of Directors who are not officers,
directors, employees or holders of 5% or more of the
outstanding voting securities of Wilshire or any of its
affiliates, Securities and Exchange Commission fees and
state Blue Sky qualification fees, investment advisory
and administration fees, charges of custodians, certain
insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent
pricing services, costs of maintaining corporate
existence, costs attributable to investor services
(including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses
and statements of additional information for regulatory
purposes and for distribution to existing stockholders,
costs of stockholders' reports and corporate meetings,
and any extraordinary expenses.
As to each Series, if in any fiscal year the
aggregate annual expenses of the Series (including fees
pursuant to this Agreement, but excluding interest,
taxes, brokerage, 12b-1 plan fees and extraordinary
expenses) exceed the expense limitation of any state in
which shares of the Series are qualified for offer and
sale, the Fund may deduct the amount of the excess from
the fees to be paid hereunder, to the extent required
by state law and to the extent that such excess has not
been born by the Administrator or any other person
furnishing services to the Fund. The Adviser's
obligation pursuant hereto is limited to the amount of
its fees hereunder. Such deduction, if any, will be
estimated daily, and reconciled and deducted on a
monthly basis.
The Fund understands that the Adviser now acts, or
may in the future act, as investment adviser to various
investment companies and fiduciary or other managed
accounts, and the Fund has no objection to the
Adviser's so acting, provided that when the purchase or
sale of securities of the same issuer is suitable for
the investment objectives of two or more companies or
accounts managed by the Adviser which have available
funds for investment, the available securities will be
allocated in a manner believed by the Adviser to be in
keeping with its fiduciary or contractual duties to
each company or account. It is recognized that in some
cases this procedure may adversely 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 the Adviser to assist in the performance of
its duties hereunder will not devote their full time to
such service and nothing contained herein shall be
deemed to limit or restrict the right of the Adviser or
the right of any of its affiliates to engage in and
devote time and attention to other businesses or to
render services of whatever kind or nature.
Any person, even though also an officer, director,
partner, employee or agent of the Adviser, who may be
or become an officer, director, 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 an officer, director, partner, employee
or agent or one under control or direction of the
Adviser even though paid by the Adviser.
The Fund recognizes that from time to time
directors, officers and employees of the Adviser 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 "Wilshire" as part of their name, and
that the Adviser or its affiliates may enter into
investment advisory or other agreements with such other
entities. If the Adviser ceases to act as the Fund's
investment adviser, the Fund agrees to take all
necessary action to change the name of the Fund as soon
as practicable, and in no event longer than nine
months, after receipt of a request from the Adviser to
do so, to a name not including "Wilshire" in any form
or combination of words.
As to each Series, this Agreement shall continue
in effect until the date set forth opposite such
Series' name on Exhibit A hereto (the "Reapproval
Date"), and thereafter shall continue automatically for
successive annual periods ending on the day of each
year set forth opposite such Series' name on Exhibit A
hereto (the "Reapproval Day"), provided such
continuance is specifically approved at least annually
by (i) the Fund's Board of Directors or (ii) vote of a
majority (as defined in the 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 Funds Directors 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 of Directors or by vote of holders of a
majority of such Series' shares or, upon not less than
90 days' notice, by the Adviser. This Agreement also
will terminate automatically, as to the relevant
Series, in the event of its assignment (as defined in
said Act).
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,
WILSHIRE TARGET FUNDS, INC.
By:_______________________________
Accepted:
WILSHIRE ASSOCIATES INCORPORATED
By:_______________________________
EXHIBIT A
Annual Fees as a Reapproval Date Reapproval Day
Name of Series Percentage of
Average Daily Net
Assets
Large Company Growth
Portfolio .25 of 1% May 31, 1998 May 31
Large Company Value
Portfolio .25 of 1% May 31, 1998 May 31
Small Company Growth
Portfolio .25 of 1% May 31, 1998 May 31
Small Company Value
Portfolio .25 of 1% May 31, 1998 May 31
EXHIBIT NO. 5b
FORM OF
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of May 31, 1996, by
and between FIRST DATA INVESTOR SERVICES GROUP, INC., a
Massachusetts corporation ("FDISG"), and WILSHIRE TARGET FUNDS,
INC. (the "Company").
In consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FDISG to act
as Administrator on the terms set forth in this Agreement. FDISG
accepts such appointment and agrees to render the services herein
set forth for the compensation herein provided. In the event that
the Company decides to retain FDISG to act as Administrator
hereunder with respect to one or more portfolios other than the
Funds, the Company shall notify FDISG in writing. If FDISG is
willing to render such services, it shall notify the Company in
writing whereupon such portfolio shall become a Fund hereunder.
2. Delivery of Documents. The Company has furnished
FDISG with copies properly certified or authenticated of each of
the following:
(a) The Company's Articles of Incorporation (the
"Articles") filed with the state of Maryland and all amendments
thereto;
(b) The Company's Registration Statement on Form N-
1A (the "Registration Statement") under the Securities Act of 1933
and under the 1940 Act, as filed with the Securities and Exchange
Commission (the "SEC") on April 2, 1996, relating to shares of the
Company's Common Stock, $0.001 par value per share, and all
amendments thereto; and
(c) Each Fund's most recent prospectus and statement
of additional information, and all amendments and supplements
thereto (collectively, the "Prospectuses").
The Company will furnish FDISG from time to time with
copies, properly certified or authenticated, of all amendments of
or supplements to the foregoing. Furthermore, the Company will
provide FDISG with any other documents that FDISG may reasonably
request and will notify FDISG as soon as possible of any matter
materially affecting the performance by FDISG of its services
under this Agreement.
3. Duties as Administrator. FDISG, as Administrator,
will assist in supervising all aspects of the Company's
administrative operations and undertakes to perform all services
and to furnish all personnel and facilities ordinarily incident to
the administration of a mutual fund, including but not limited to
the following specific services:
(a) Maintaining office facilities (which may be in
the offices of FDISG or a corporate affiliate) and furnishing
corporate officers for the Company at its request;
(b) Furnishing data processing services, clerical
services, and internal legal, executive and administrative
services and stationery and office supplies in connection with the
foregoing;
(c) Accounting and bookkeeping services (including
maintenance of such accounts, books and records of the Company as
may be required by Section 31(a) of the 1940 Act and the rules
thereunder);
(d) Internal auditing;
(e) Performing all functions ordinarily performed by
the office of a corporate treasurer, and furnishing the services
and facilities ordinarily incident thereto, including calculating
the net asset value of the shares of each Fund at the close of
trading on the New York Stock Exchange (the "NYSE") on each day on
which the NYSE is open for trading and at such other times as the
Board of Directors may reasonably request;
(f) Preparing reports to the Company's shareholders
of record and the SEC including, but not necessarily limited to,
Annual Reports and Semi-Annual Reports on Form N-SAR;
(g) Preparing and filing various applications,
registration statements, reports or other documents required by
federal, and state laws and regulations, other than those filed or
required to be filed by the Adviser or Transfer Agent;
(h) Preparing and filing the Company's tax returns;
(i) At the Adviser's request, monitoring and
developing compliance procedures for the Company which will
include, among other matters, monitoring compliance with each
Fund's investment objective, policies, restrictions, tax matters
and applicable laws and regulations;
(j) Performing all functions ordinarily performed by
the office of a corporate secretary, and furnishing the services
and facilities incident thereto, including all functions
pertaining to matters organic to the organization, existence and
maintenance of the corporate franchise of the Company, including
preparation for, conduct of, and recording directors' meeting and
shareholder meetings. Directors' meetings in excess of five in
any calendar year and shareholder meetings in excess of one in any
two year period shall be for an additional reasonable charge as
may be agreed upon by the Administrator and FDISG;
(k) Performing "Blue Sky" compliance functions,
including maintaining registrations or "Blue Chip" exemptions (if
available) in all U.S. jurisdictions requested by the Company,
monitoring sales of shares in all such jurisdictions and applying
for such additional or amended registrations as may be reasonably
anticipated to be necessary to permit continuous sales of the
shares of the Funds in all such jurisdictions, filing sales
literature and advertising materials to the extent required, with
such Blue Sky authorities, and making and filing all other
applications, reports, notices, documents and exhibits in
connection with the foregoing; and
(l) Furnishing all other services identified on
Schedule D annexed hereto and incorporated herein which are not
otherwise specifically set forth above.
In performing all services under this Agreement, FDISG: (a)
shall act in conformity with the Articles, the Prospectuses and
the instructions and directions of the Administrator, and will
conform to and comply with the requirements of the 1940 Act and
all other applicable federal or state laws and regulations; and
(b) will consult with legal counsel to the Fund, as necessary or
appropriate. Furthermore, FDISG shall not have or be required to
have any authority to supervise the investment or reinvestment of
the securities or other properties which comprise the assets of
the Company or any of its Funds and shall not provide any
investment advisory services to the Company or any of its Funds.
4. Compensation and Allocation of Expenses. FDISG shall
bear all expenses in connection with the performance of its
services under this Agreement, except as indicated below.
(a) FDISG may from time to time employ or associate
with itself such person or persons as FDISG may believe to be
particularly suited to assist it in performing services under this
Agreement. Such person or persons may be officers or employees of
FDISG. The compensation of such person or persons shall be paid by
FDISG and no obligation shall be incurred on behalf of the Company
in such respect.
(b) FDISG shall not be required to pay any of the
following expenses which may be incurred by the Company:
membership dues in the Investment Company Institute or any similar
organization; investment advisory expenses; costs of printing and
mailing stock certificates, prospectuses, reports and notices;
interest on borrowed money; brokerage commissions; stock exchange
listing fees; taxes and fees payable to Federal, state and other
governmental agencies; salaries or fees of Officers or Directors
of the Company who are not affiliated with FDISG; outside auditing
expenses; outside legal expenses; or other expenses not specified
in this Section 4 which may be properly payable by the Company.
(c) For the services to be rendered, the facilities
to be furnished and the payments to be made by FDISG, as provided
for in this Agreement, the Company will pay FDISG on the first
business day of each month a fee for the previous month as set
forth on Schedule B annexed hereto and incorporated herein. Upon
any termination of this Agreement before the end of any month, the
fee for such part of a month shall be prorated 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 FDISG, the value of
each Fund's net assets shall be computed at the times and in the
manner specified in the Registration Statement.
(d) The Company shall compensate FDISG for its
services rendered pursuant to this Agreement in accordance with
the fees set forth on Schedule B. Such fees do not include out-
of-pocket disbursements of FDISG for which FDISG shall be entitled
to bill separately. Out-of-pocket disbursements shall include the
items specified on Schedule C annexed hereto and incorporated
herein and such other items upon which the Administrator and FDISG
may agree from time to time.
(e) FDISG will bill the Company as soon as
practicable after the end of each calendar month, and such
billings will be detailed in accordance with the out-of-pocket
schedule. The Company will pay to FDISG the amount of such
billing within thirty (30) days of receipt.
5. Limitation of Liability.
(a) FDISG shall at all times act in good faith and
agrees to use its best efforts within commercially reasonable
limits to ensure the accuracy of all services performed under this
Agreement, but assumes no responsibility for loss or damage to the
Company unless said errors are caused by FDISG's own negligence,
bad faith or willful misconduct or that of its employees.
(b) Notwithstanding any provision in this Agreement
to the contrary, FDISG's cumulative liability (to the Fund) for
all losses, claims, suits, controversies, breaches, or damages for
any cause whatsoever (including but not limited to those arising
out of or related to this Agreement) and regardless of the form of
action or legal theory, except to the extent not covered by
FDISG's liability insurance and fidelity bond coverage shall not
exceed one million ($1,000,000) dollars. The Company understands
the limitation on FDISG's damages to be a reasonable allocation of
risk and the Company expressly consents with respect to such
allocation of risk. In allocating risk under the Agreement, the
parties agree that the damage limitation set forth above shall
apply to any alternative remedy ordered by a court in the event
such court determines that sole and exclusive remedy provided for
in the Agreement fails of its essential purpose.
(c) Neither party may assert any cause of action
against the other party under this Agreement that accrued more
than two (2) years prior to the filing of the suit (or
commencement of arbitration proceedings ) alleging such cause of
action.
(d) Each party shall have the duty to mitigate
damages for which the other party may become responsible.
(e) [NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
THE CONTRARY, IN NO EVENT SHALL EITHER PARTY, THEIR AFFILIATES OR
ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES.]
6. Indemnification.
(a) The Company shall indemnify and hold FDISG
harmless from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses, damages, charges,
payments and liabilities of any sort or kind which may be asserted
against FDISG or for which FDISG may be held to be liable in
connection with this Agreement or FDISG's performance hereunder (a
"Claim"), unless such Claim arose by reason of FDISG's willful
misfeasance, bad faith or gross negligence in the performance of
its duties hereunder, or by reason of FDISG's reckless disregard
of its obligations and duties hereunder. FDISG shall indemnify
and hold the Company harmless from and against any and all claims,
costs, expenses (including reasonable attorney's fees), losses,
damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Company or for which the Company
may be liable in connection with this Agreement or FDISG's
performance hereunder (also, a "Claim"), if such Claim arises by
reason of FDISG's negligence in the performance of its duties
hereunder.
(b) In any case in which one party hereto may be
asked to indemnify or hold the other harmless pursuant to the
provision of Section 6(a) hereof, the party seeking
indemnification will notify the other promptly after identifying
any situation which it believes presents or appears likely to
present a claim for indemnification hereunder, although the
failure to do so shall not prevent recovery by the party seeking
indemnification except to the extent that such failure prejudices
the other party in its defense of any such claim, and shall keep
the other advised with respect to all developments concerning such
situation. The party from which indemnification is sought shall
have the option to defend the other against any Claim which may be
the subject of this indemnification, and, in the event that the
party from which indemnification is sought so elects, such defense
shall be conducted by counsel chosen by the party from which
indemnification is sought and satisfactory to the other, and
thereupon the party from which indemnification is sought shall
take over complete defense of the Claim and the other shall
sustain no further legal or other expenses in respect of such
Claim. The party seeking indemnification will not confess any
Claim or make any compromise in any case in which the other will
be asked to provide indemnification, except with the party's from
which indemnification is sought prior written consent. The
obligations of the parties hereto under this Section 6 shall
survive the termination of this Agreement.
7. EXCLUSION OF WARRANTIES. THIS IS A SERVICE AGREEMENT.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, FDISG DISCLAIMS
ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, MADE
TO THE ADMINISTRATOR OR ANY OTHER PERSON, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE)
OF ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES
PROVIDED UNDER THIS AGREEMENT. FDISG DISCLAIMS ANY WARRANTY OF
TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT.
8. Term and Termination of Agreement.
(a) This Agreement shall be effective on the date
first written above and shall continue for a period of two (2)
years (the "Initial Term"), unless earlier terminated pursuant to
the terms of this Agreement. In addition, the term of this
Agreement shall automatically be extended for a third year unless
the Administrator notifies FDISG to the contrary in writing at
least six (6) months prior to the second anniversary of the
effective date. Thereafter, the term of this Agreement shall
continue for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Company's
Board of Directors or (ii) a vote of a "majority" (as defined in
the 1940 Act) of the Company's outstanding voting securities,
provided that in either event the continuance is also approved by
a majority of the Board of Directors who are not "interested
persons" (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval.
(b) Upon termination, for whatever reason, the
Company and FDISG shall cooperate fully with each other and with
any new administrator in the transfer of the administration of the
Company's business and affairs to such new administrator, and
shall act promptly and expeditiously in all matters relating
thereto, including the transfer of all records, data and
information reasonably necessary or appropriate to the conversion
and/or the continuation of the administration of the Company
thereafter, with a view toward achieving an orderly, efficient and
cost-effective transition on any reasonable schedule which may be
established therefor by the Company. The parties agree that any
transition schedule allowing for a period of sixty (60) days or
more to complete the transition shall be deemed a "reasonable
schedule" for purposes of this Section 8(b). In the event that
such termination occurs prior to the third anniversary of the
effective date of this Agreement, for successive annual periods,
provided such continuance is specifically approved at least
annually by (i) the Company's Board of Directors or (ii) a vote of
a "majority" (as defined in the 1940 Act) of the Company's
outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of
Directors who are not "interested persons" (as defined in the 1940
Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval, each
party hereto shall bear its own costs and expenses in connection
with the transfer of administration.
(c) If a party hereto is guilty of a material
failure to perform its duties and obligations hereunder (a
"Defaulting Party") resulting in a material loss to the other
party, such other party (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, and if such
material breach shall not have been remedied within thirty (30)
days after such written notice is given, then the Non-Defaulting
Party may terminate this Agreement by giving thirty (30) days
written notice of such termination to the Defaulting Party. The
termination of this Agreement by a Non-Defaulting Party under this
Section 8(c) shall not constitute a waiver of any other rights or
remedies of such Party with respect to services performed prior to
such termination or rights of FDISG to be reimbursed for out-of-
pocket expenses hereunder. In all cases, termination by the Non-
Defaulting Party shall not constitute a waiver by the Non-
Defaulting Party of any other rights it might have under this
Agreement or otherwise against the Defaulting Party.
9. Modifications and Waivers. No change, termination,
modification, or waiver of any term or condition of the Agreement
shall be valid unless in writing signed by each party. No such
writing shall be effective as against FDISG unless said writing is
executed by a Senior Vice President, Executive Vice President or
President of FDISG. A party's waiver of a breach of any term or
condition in the Agreement shall not be deemed a waiver of any
subsequent breach of the same or another term or condition.
10. No Presumption Against Drafter. FDISG and the Company
have jointly participated in the negotiation and drafting of this
Agreement. The Agreement shall be construed as if drafted jointly
by the Company and FDISG, and no presumptions arise favoring any
party by virtue of the authorship of any provision of this
Agreement.
11. Publicity. Neither FDISG nor the Company shall
release or publish news releases, public announcements,
advertising or other publicity relating to this Agreement or to
the transactions contemplated by it without prior review and
written approval of the other party; provided, however, that
either party may make such disclosures as are required by legal,
accounting or regulatory requirements after making reasonable
efforts in the circumstances to consult in advance with the other
party.
12. Severability. The parties intend every provision of
this Agreement to be severable. If a court of competent
jurisdiction determines that any term or provision is illegal or
invalid for any reason, the illegality or invalidity shall not
affect the validity of the remainder of this Agreement. In such
case, the parties shall in good faith modify or substitute such
provision consistent with the original intent of the parties.
Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed of
its essential purpose, then all other provisions of this
Agreement, including the limitations on liability and exclusion of
warranties, shall remain fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Company
or FDISG shall be sufficiently given if addressed to the party and
received by it at its office set forth below or at such other
place as it may from time to time designate in writing.
To the Company:
c/o Wilshire Associates, Incorporated
1299 Ocean Avenue, Suite 700
Santa Monica, California 90401
Attention: Alan L. Manning, Esq.
Vice President and General Counsel
To FDISG:
First Data Investor Services Group, Inc.
53 State Street
Boston, Massachusetts 02109-2873
Attention: Vincent Fabiani
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns and is not intended to confer upon any other
person any rights or remedies hereunder. This Agreement may not
be assigned or otherwise transferred by either party hereto,
without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however,
that FDISG may, in its sole discretion, assign all its right,
title and interest in this Agreement to an affiliate, parent or
subsidiary, provided that such assignment shall not materially
effect the financial capability or quality or capacity of the
personnel or facility to provide the services set forth herein.
FDISG may, in it sole discretion, engage subcontractors to perform
any of the obligations contained in this Agreement to be performed
by FDISG, provided, however, that FDISG shall at all times remain
fully responsible for the acts or omissions of such sub-
contractors as if it were providing such services directly.
(c) The laws of the Commonwealth of Massachusetts,
excluding the laws on conflicts of laws, shall govern the
interpretation, validity, and enforcement of this Agreement. All
actions arising from or related to this Agreement shall be brought
in the state and federal courts sitting in the City of Boston, and
FDISG and the Company hereby submit themselves to the exclusive
jurisdiction of those courts.
(d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
which collectively shall be deemed to constitute only one
instrument.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect.
14. Confidentiality.
(a) The parties agree that the Proprietary
Information (defined below) (collectively "Confidential
Information") is confidential information of the parties and their
respective licensers. The Company and FDISG shall exercise
reasonable care to safeguard the confidentiality of the
Confidential Information of the other. The Company and FDISG may
each use the Confidential Information only to exercise its rights
or perform its duties under this Agreement. The Company and FDISG
shall not duplicate, sell or disclose to others the Confidential
Information of the other, in whole or in part, without the prior
written permission of the other party. The Company and FDISG may,
however, disclose Confidential Information to its employees who
have a need to know the Confidential Information to perform work
for the other, provided that each shall use reasonable efforts to
ensure that the Confidential Information is not duplicated or
disclosed by its employees in breach of this Agreement. The
Company and FDISG may also disclose the Confidential Information
to independent contractors, auditors and professional advisors,
provided they first agree in writing to be bound by the
confidentiality obligations substantially similar to this Section
14. Notwithstanding the previous sentence, in no event shall
either the Company or FDISG disclose the Confidential Information
to any competitor of the other without specific, prior written
consent.
(b) Proprietary Information means:
(i) any data or information that is completely
sensitive material, and not generally known to the public,
including, but not limited to, information about product plans,
marketing strategies, finance, operations, customer relationships,
customer profiles, sales estimates, business plans, and internal
performance results relating to the past, present or future
business activities of the Company or FDISG, their respective
subsidiaries and affiliated companies and the customers, clients
and suppliers of any of them;
(ii) any scientific or technical information,
design, process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its
confidentiality affords the Company, or FDISG a competitive
advantage over its competitors; and
(iii) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software,
source code, object code, flow charts, databases, inventions,
know-how, show-how and trade secrets, whether or not patentable or
copyrightable.
(c) Confidential Information includes, without
limitation, all documents, inventions, substances, engineering and
laboratory notebooks, drawings, diagrams, specifications, bills of
material, equipment, prototypes and models, and any other tangible
manifestation of the foregoing of either party hereto which now
exist or come into the control or possession of the other party
hereto.
(d) The Company acknowledges that breach of the
restrictions on use, dissemination or disclosure of any
Confidential Information would result in immediate and irreparable
harm, and money damages would be inadequate to compensate FDISG
for that harm. FDISG shall be entitled to equitable relief, in
addition to all other available remedies, to redress any such
breach.
15. Force Majeure. No party shall be liable for any
default or delay in the performance of its obligations under this
Agreement if and to the extent such default or delay is caused,
directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities,
war, riots or civil disorders in any country, (iii) any act or
omission of any governmental authority; (iv) any labor disputes
(whether or not the employees' demands are reasonable or within
the party's power to satisfy); or (v) nonperformance by a third
party or any similar cause beyond the reasonable control of such
party, including without limitation, failures or fluctuations in
telecommunications or other equipment. In any such event, the
non-performing party shall be excused from any further performance
and observance of the obligations so affected only for so long as
such circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance as soon as practicable.
16. Entire Agreement. This Agreement, including all
Schedules hereto, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes
all prior and contemporaneous proposals, agreements, contracts,
representations, and understandings, whether written or oral,
between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly
authorized officers as of the date first written above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
Name:
Title:
WILSHIRE TARGET FUNDS, INC.
By:
Name:
Title:
SCHEDULE A
NAMES OF FUNDS
Large Company Growth Portfolio
Large Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
SCHEDULE B
FEES (ON AN ANNUAL BASIS)
First $1 billion in aggregate assets .15% of monthly average
net assets
Next $4 billion in aggregate assets .10% of monthly average
net assets
Excess .08% of monthly average
net assets
Minimum of $100,000 per year for four Funds
Plus: Flat fee of $25,000 per Fund per annum
Additional charge of $2,000 per annum per additional class
FDISG reserves the right to renegotiate the fees set forth on this
Schedule B and in Section 4 of the Agreement should the actual
services required vary materially from the assumptions provided.
It is specifically understood by the parties that fees for those
services provided by FDISG which are not described in Section 3 of
the Agreement and which are not included on Schedule D-1 under
"Routine Projects", which fees shall be negotiated between the
Company and FDISG, will be charged separately by FDISG and are not
included in the fees referenced above.
SCHEDULE C
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the
following:
- - Postage (including overnight or other courier services)
- - Telephone
- - Telecommunications charges (including FAX)
- - Duplicating charges
- - Pricing services
- - Forms and supplies
- - Travel expenses
- - Vendor set-up charges for Blue Sky services
- - Such other expenses as are agreed to by FDISG and the
Company
G:\SHARED\3RDPARTY\WILSHIRE\AGMTS\ADM.DOC 13
G:\SHARED\3RDPARTY\WILSHIRE\AGMTS\SUBADM.DOC
EXHIBIT NO. 6a
FORM OF
DISTRIBUTION AGREEMENT
WILSHIRE TARGET FUNDS, INC.
Providence, Rhode Island
May 31, 1996
440 FINANCIAL DISTRIBUTORS, INC.
c/o First Data Investor Services Group, Inc.
53 State Street
Boston, MA 02109
Ladies and Gentlemen:
This is to confirm that, in consideration of the
agreements hereinafter contained, the Wilshire Target
Funds, Inc. (the "Fund") has agreed that you shall be,
for the period of this agreement, the distributor of
shares of each Class 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"). For
purposes of this agreement the term "Shares" shall mean
the authorized shares of the relevant Classes and
Series.
1. Services as Distributor
2. 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.
3. You agree to use your best efforts to solicit
orders for, and otherwise to promote, the sale of
Shares. To the extent that you receive shareholder
services fees under any shareholder services plan
adopted by the Fund, you agree to furnish, and/or enter
into arrangements with others for the furnishing of,
personal and/or account maintenance services with
respect to the relevant shareholders of the Fund as may
be required pursuant to such plan. 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 may act as agent for the Fund or on your
own behalf as principal.
4. 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 Securities Exchange
Act of 1934, as amended.
5. 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.
6. 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.
7. 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 connection
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 and
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.
8. 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 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.
9. The Fund represents to you that all registration
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
prospectus will be true and correct when such
registration statement becomes effective; and that
neither any registration 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 prospectus, of whatever character,
as the Fund may deem advisable, such right being in all
respects absolute and unconditional.
10. The Fund authorizes you to use any prospectus in
the form furnished to you time to time, in connection
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 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 registration
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 paragraph 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
conducted 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 controlling
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 connection with the issue and sale of
Shares.
11. 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
state securities law, federal or state 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, (i) 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,
(ii) 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, or (iii) shall arise out of any violation
by you of any provision of this agreement or any
provision of applicable law. 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
participate 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.
12. 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.
13. The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration 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 registration 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.
14. 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 (except with respect to sales to those persons
set forth in the then-current prospectus to whom sales
may be made without sales charge), 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.
15. Term
As to each Series, this agreement shall continue
until the date (the "Reapproval Date") set forth
opposite such Series name on Exhibit A hereto, 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 Investment 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 (the
"Independent Directors"), 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 a
majority of such Independent Directors as to the Fund
or the relevant Series, as the case may be, or by you.
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). If
the Fund has adopted a multiple class plan or a
distribution plan, you agree to furnish such
information as may be reasonably necessary to assist
the Directors of the Fund in their periodic evaluation
of such plan or plans.
16. Non-exclusivity
The Fund recognizes that you may act as the
distributor of securities of other persons (including
other investment companies) and that you and your
affiliates may furnish brokerage, distribution and
other services to other persons (including other
investment companies), and the Fund has no objection to
your so acting. 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 the
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 agreement between us.
Very truly yours,
WILSHIRE TARGET FUNDS, INC.
By:_______________________________
Accepted:
440 FINANCIAL DISTRIBUTORS, INC..
By:_______________________________
EXHIBIT A
The Institutional Class shares and the Investment
Class shares of each of the following Series of the
Fund:
Name of Series Reapproval Date
Reapproval Day
Large Company Growth Portfolio May 31, 1997 May 31
Large Company Value Portfolio May 31, 1997 May 31
Small Company Growth Portfolio May 31, 1997 May 31
Small Company Value Portfolio May 31, 1997 May 31
EXHIBIT NO. 8a
FORM OF
CUSTODY AGREEMENT
AGREEMENT dated as of ____________________ 1996,
between _____________________________, a corporation
organized under the laws of the State of
_________________, having its principal office and
place of business at
____________________________________ (the "Company"),
and THE NORTHERN TRUST COMPANY (the "Custodian"), an
Illinois Company with its principal place of business
at 50 South LaSalle Street, Chicago, Illinois 60675.
W I T N E S S E T H:
That for and in consideration of the mutual promises
hereinafter set forth, the Company and the Custodian
agree as follows:
1. Definitions.
Whenever used in this Agreement or in any
Schedules to this Agreement, the following words and
phrases, unless the context otherwise requires, shall
have the following meanings:
(a) The "1940 Act" shall mean the Investment Company
Act of 1940, and the Rules and Regulations thereunder,
all as amended from time to time.
(b) "Authorized Person" shall be deemed to include the
Chairman of the Board of Directors, the President, and
any Vice President, the Secretary, the Treasurer or any
other person, whether or not any such person is an
officer or employee of the Company, duly authorized by
the Board of Directors to give Oral Instructions and
Written Instructions on behalf of the Company and
listed in the certification annexed hereto as Schedule
A or such other certification as may be received by the
Custodian from time to time.
(c) "Board of Directors" shall mean the Board of
Directors of
the Company.
(d) "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.
(e) "Certificate" shall mean any notice, instruction
or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, which
is actually received by the Custodian and signed on
behalf of the Company by any two Authorized Persons or
any two officers thereof.
(f) "Articles of Incorporation" shall mean the
Articles of Incorporation of the Company dated
_______________________, as amended.
(g) "Depository" shall mean The Depository Trust
Company, a clearing agency registered with the
Securities and Exchange Commission under Section 17(a)
of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in
which the Custodian is hereby specifically authorized
to make deposits. The term "Depository" shall further
mean and include any other person to be named in a
Certificate authorized to act as a depository under the
1940 Act, its successor or successors and its nominee
or nominees.
(h) Fund Accountant shall mean the person appointed
by the Company who performs the daily calculations of
the net asset values of the Portfolios and determines
the amount of cash available in each Portfolio on a
daily basis for investment. The Fund Accountant shall
be identified to the Custodian in writing.
(i) "Money Market Security" shall be deemed to
include, without limitation, debt obligations issued or
guaranteed as to interest and principal by the
Government of the United States or agencies or
instrumentalities thereof, commercial paper, bank
certificates of deposit, bankers' acceptances and
short-term corporate obligations, where the purchase or
sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale,
and repurchase agreements with respect to any of the
foregoing types of securities.
(j) "Oral Instructions" shall mean an oral
communication actually received by the Custodian from a
person reasonably believed by the Custodian to be an
Authorized Person.
(k) "Portfolio" refers to the
________________________________________ or any such
other separate and distinct investment portfolio as may
from time to time be created and designated by the
Company in accordance with the provisions of the
Articles of Incorporation and Certificate of
Designation and which the Company and the Custodian
shall have agreed in writing shall be subject to this
Agreement pursuant to the provisions of Section 5(b).
(l) "Prospectus" shall mean the Company's current
prospectus and statement of additional information
relating to the registration of the Portfolio's Shares
under the Securities Act of 1933, as amended.
(m) "Shares" refers to the shares of beneficial
interest of the Portfolio.
(n) "Security" or "Securities" shall be deemed to
include bonds, debentures, notes, stocks, shares,
evidences of indebtedness, and other securities,
commodity interests and investments from time to time
owned by the Portfolio.
(o) "Sub-Custodian" shall mean and include (i)
any branch of the Custodian, (ii) any branch of a
"qualified U.S. bank," as that term is defined in Rule
17f-5 under the 1940 Act, (iii) any "eligible foreign
custodian," as that term is defined in Rule 17f-5 under
the 1940 Act, approved by the Board of Directors and
having a contract with the Custodian which contract has
been approved by the Board of Directors, and (iv) any
securities depository or clearing agency, incorporated
or organized under the laws of a country other than the
United States, which operates the central system for
handling of securities or equivalent book-entries in
that country or a transnational system for the central
handling of securities or equivalent book-entries,
which securities depository or clearing agency has been
approved by the Board of Directors; provided, that the
Custodian or a Sub-Custodian has entered into an
agreement with such securities depository or clearing
agency.
(p) "Transfer Agent" shall mean the person which
performs as the transfer agent, dividend disbursing
agent and shareholder servicing agent for the Company.
(q) "Written Instructions" shall mean a written
communication actually received by the Custodian from a
person reasonably believed by the Custodian to be an
Authorized Person by any system whereby the receiver of
such communication is able to verify through codes or
otherwise with a reasonable degree of certainty the
authenticity of the sender of such communication;
however, "Written Instructions" from the Company to the
Custodian shall mean a facsimile or an electronic
communication transmitted by fund accountants, transfer
agents and/or the manager(s) (who have been provided an
access code by the Company) and actually received by
the Custodian. Except as otherwise provided in this
Agreement, Written Instructions may include
instructions given on a standing basis.
2. Appointment of Custodian.
(a) The Company hereby constitutes and appoints the
Custodian as custodian of all the Securities and monies
owned by or in the possession of the Portfolio during
the period of this Agreement.
(b) The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
3. Appointment and Removal of Sub-Custodians.
(a) The Custodian may appoint one or more Sub-
Custodians to act as Depository or Depositories or as
sub-custodian or sub-custodians of Securities and
moneys at any time owned by any Portfolio, upon terms
and conditions as are specified in this Agreement. The
Custodian shall oversee the maintenance of any
Securities or moneys of any Portfolio by any Sub-
Custodian.
(b) If, after the initial approval of Sub-
Custodians by the Board of Directors in connection with
this Agreement, the Custodian wishes to appoint other
Sub-Custodians to hold property of the Portfolios, it
will so notify the Company and provide it with
information reasonably necessary to determine any such
new Sub-Custodian's eligibility under Rule 17f-5 under
the 1940 Act, including a copy of the proposed
agreement with such Sub-Custodian. The Company shall
at the meeting of the Board of Directors next following
receipt of such notice and information give a written
approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each
Sub-Custodian acting hereunder shall contain the
required provisions set forth in Rule 17f-5(a)(1)(iii).
(d) If the Custodian intends to remove any Sub-
Custodian previously approved by the Board of
Directors, it shall so notify the Company and move the
property of the Portfolio(s) deposited with such Sub-
Custodian to another Sub-Custodian previously approved
by the Board of Directors. The Custodian shall
promptly take such steps as may be required to remove
any Sub-Custodian that has ceased to meet the
requirements of Rule 17f-5 under the 1940 Act.
(e) The Custodian hereby warrants to the Company that
in its opinion, after due inquiry, the established
procedures to be followed by each Sub-Custodian (that
is not being used as a foreign securities depository or
clearing agency) in connection with the safekeeping of
property of the Portfolio pursuant to this Agreement
afford protection for such property not materially
different from that afforded by the Custodian's
established safekeeping procedures with respect to
similar property held by it (and its securities
depositories) in Chicago, Illinois.
4. Use of Sub-Custodians.
With respect to property of a Portfolio which is
maintained by the Custodian in the custody of a Sub-
Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as
belonging to the particular Portfolio any property held
by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of
the Securities placed in its care to be held in an
eligible foreign securities depository, such Sub-
Custodian will be required by its agreement with the
Custodian to identify on its books such Securities as
being held for the account of the Custodian as a
custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be
subject only to the instructions of the Custodian or
its agents; and any Securities held in an eligible
foreign securities depository for the account of a Sub-
Custodian will be subject only to the instructions of
such Sub-Custodian.
(d) The Custodian will only deposit property of a
Portfolio in an account with a Sub-Custodian which
includes exclusively the assets held by the Custodian
for its customers, and will cause such account to be
designated by such Sub-Custodian as a special custody
account for the exclusive benefit of customers of the
Custodian.
5. Compensation.
(a) The Company will compensate the Custodian for its
services rendered under this Agreement in accordance
with the fees set forth in the Fee Schedule annexed
hereto as Schedule B and incorporated herein for the
existing Portfolios. Such Fee Schedule does not
include out-of-pocket disbursements of the Custodian
for which the Custodian shall be entitled to bill
separately. Out-of-pocket disbursements may include
only the items specified in Schedule B and which may be
modified by the Custodian if the Company consents in
writing to the modification.
(b) The parties hereto will agree upon the
compensation for acting as Custodian for any Portfolio
hereafter established and designated, and at the time
that the Custodian commences serving as such for said
Portfolio, such agreement shall be reflected in a Fee
Schedule for that Portfolio, dated and signed by an
officer of each party hereto, which shall be attached
to Schedule B of this Agreement.
(c) Any compensation agreed to hereunder may be
adjusted from time to time by attaching to Schedule B
of this Agreement a revised Fee Schedule, dated and
signed by an officer of each party hereto.
(d) The Custodian will bill the Company for its
services to each Portfolio hereunder as soon as
practicable after the end of each calendar quarter, and
said billings will be detailed in accordance with the
Fee Schedule for the Company. The Company will
promptly pay to the Custodian the amount of such
billing. The Custodian shall have a claim of payment
against the property in each Portfolio for any
compensation or expense amount owing to the Custodian
in connection with such Portfolio from time to time
under this Agreement.
(e) The Custodian (not the Company) will be
responsible for the payment of the compensation of each
Sub-Custodian.
6. Custody of Cash and Securities
(a) Receipt and Holding of Assets. The Company will
deliver or cause to be delivered to the Custodian and
the Sub-Custodians all Securities and monies owned by
the Portfolio at any time during the period of this
Agreement and shall specify the Portfolio to which the
Securities and monies are to be specifically allocated.
The Custodian will not be responsible for such
Securities and monies until actually received by it or
by a Sub-Custodian. The Company shall instruct the
Custodian from time to time in its sole discretion, by
means of Written Instructions, as to the manner in
which and in what amounts Securities, and monies of a
Portfolio are to be deposited on behalf of such
Portfolio in the Book-Entry System or a Depository;
provided, however, that prior to the deposit of
Securities of a Portfolio in the Book-Entry System or a
Depository, including a deposit in connection with the
settlement of a purchase or sale, the Custodian shall
have received a Certificate specifically approving such
deposits by the Custodian or a Sub-Custodian in the
Book-Entry System or a Depository. Securities and
monies of a Portfolio deposited in the Book-Entry
System or a Depository will be deposited in accounts
which include only assets held by the Custodian for its
customers.
(b) Accounts and Disbursements. The Custodian shall
establish and maintain a separate account for each
Portfolio and shall credit to the separate account all
monies received by it or a Sub-Custodian for the
account of such Portfolio and shall disburse, or cause
a Sub-Custodian to disburse, the same only:
1. In payment for Securities purchased for the
Portfolio, as provided
in Section 7 hereof;
2. In payment of dividends or distributions with
respect to the Shares
of such Portfolio, as provided in Section 10
hereof;
3. In payment of original issue or other taxes
with respect to the
Shares of such Portfolio, as provided in Section
11(c) hereof;
4. In payment for Shares which have been
redeemed by such
Portfolio, as provided in Section 11 hereof;
5. In payment of fees and in reimbursement of
the expenses and
liabilities of the Custodian attributable to the
Company, as provided in
Sections 5 and 15(h) hereof;
6. Pursuant to Written Instructions setting
forth the name of the
Portfolio and the name and address of the person
to whom the payment is
to be made, the amount to be paid and the purpose
for which payment is
to be made.
(c) Fail Float. In the event that any payment made
for a Portfolio under this Section 6 exceeds the funds
available in that Portfolio's account, the Custodian or
relevant Sub-Custodian, as the case may be, may, in its
discretion, advance the Company on behalf of that
Portfolio an amount equal to such excess and such
advance shall be deemed an overdraft from the Custodian
or such Sub-Custodian to that Portfolio payable on
demand, bearing interest at the rate of interest
customarily charged by the Custodian or such Sub-
Custodian on similar overdrafts.
(d) Confirmation and Statements. Promptly after the
close of business on each business day, the Custodian
shall furnish the Company with confirmations and a
summary of all transfers to or from the account of each
Portfolio during said day. Such summary shall include
without limitation, as to property acquired for a
Portfolio, the identity of the entity having physical
possession of such property. Where securities
purchased by a Portfolio are in a fungible bulk of
securities registered in the name of the Custodian (or
its nominee) or shown on the Custodian's account on the
books of a Depository, the Book-Entry System or a Sub-
Custodian, the Custodian shall by book entry or
otherwise identify the quantity of those securities
belonging to such Portfolio. At least monthly, the
Custodian shall furnish the Company with a detailed
statement of the Securities and monies held by it and
all Sub-Custodians for each Portfolio. In the absence
of the filing in writing with the Custodian by the
Company of exceptions or objections to any such
statement within 60 days after the date that a material
defect is reasonably discoverable, the Company shall be
deemed to have approved such statement; and in such
case or upon written approval of the Company of any
such statement the Custodian shall, to the extent
permitted by law and provided the Custodian has met the
standard of care in Section 14 hereof, be released,
relieved and discharged with respect to all matters and
things set forth in such statement as though such
statement had been settled by the decree of a court of
competent jurisdiction in an action in which the
Company and all persons having any equity interest in
the Company were parties.
(e) Registration of Securities and Physical
Separation. All Securities held for a Portfolio 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 or a Sub-Custodian in that
form; all other Securities held for a Portfolio may be
registered in the name of that Portfolio, in the name
of any duly appointed registered nominee of the
Custodian or a Sub-Custodian as the Custodian or such
Sub-Custodian may from time to time determine, or in
the name of the Book-Entry System or a Depository or
their successor or successors, or their nominee or
nominees. The Company reserves the right to instruct
the Custodian as to the method of registration and
safekeeping of the Securities. The Company agrees to
furnish to the Custodian appropriate instruments to
enable the Custodian or any Sub-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 a Depository, any Securities
which the Custodian of a Sub-Custodian may hold for the
account of a Portfolio and which may from time to time
be registered in the name of a Portfolio. The
Custodian shall hold all such Securities specifically
allocated to a Portfolio which are not held in the
Book-Entry System or a Depository in a separate account
for such Portfolio in the name of such Portfolio
physically segregated at all times from those of any
other person or persons.
(f) Segregated Accounts. Upon receipt of a Written
Instruction, the Custodian will establish segregated
accounts on behalf of a Portfolio to hold liquid or
other assets as it shall be directed by a Written
Instruction and shall increase or decrease the assets
in such Segregated Accounts only as it shall be
directed by subsequent Written Instruction.
(g) Collection of Income and Other Matters Affecting
Securities. Unless otherwise instructed to the
contrary by a Written Instruction, the Custodian, by
itself or through the use of the Book-Entry System or a
Depository with respect to Securities therein
deposited, shall, or shall instruct the relevant Sub-
Custodian to:
1. Collect all income due or payable with
respect to Securities held
for a Portfolio in accordance with this Agreement;
2. Present for payment and collect the amount
payable upon all
Securities which may mature or be called, redeemed
or retired, or otherwise become payable;
3. Surrender Securities in temporary form for
derivative Securities;
4. Execute any necessary declarations or
certificates of ownership
under the federal income tax laws or the laws or
regulations of any other
taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry
System or a Depository with respect to Securities
therein deposited, for the account of
each Portfolio all rights and similar Securities
issued with respect to any
Securities held by the Custodian or relevant Sub-
Custodian for each
Portfolio.
If the Custodian or any Sub-Custodian causes the
account of a Portfolio to be credited on the payable
date for interest, dividends or redemptions, the
particular Portfolio involved will promptly return to
the Custodian any such amount or property so credited
upon oral or written notification that neither the
custodian nor the relevant Sub-Custodian can collect
such amount or property in the ordinary course of
business. The Custodian or such Sub-Custodian, as the
case may be, shall have no duty or obligation to
institute legal proceedings, file a claim or proof of
claim in any insolvency proceeding or take any other
action with respect to the collection of such amount or
property beyond its ordinary collection procedures
unless it is specifically requested to do so by the
Company and indemnified to its satisfaction for any
liability, cost or expense arising therefrom.
(h) Delivery of Securities and Evidence of
Authority. Upon receipt of a Written Instruction and
not otherwise, except for subparagraphs 5, 6, 7, and 8
of this section 6(h) which may be effected by Oral or
Written Instructions, the Custodian, directly or
through the use of the Book-Entry System or a
Depository, shall, or shall instruct the relevant Sub-
Custodian to:
1. Execute and deliver or cause to be executed
and delivered to such persons as may be designated in
such Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the
authority of the Company as owner of any Securities may
be exercised;
2. Deliver or cause to be delivered any Securities
held for a Portfolio in exchange for other Securities
or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation,
or the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities
held for a Portfolio to any protective committee,
reorganization committee or other person in connection
with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of
any corporation, and receive and hold under the terms
of this Agreement in the separate account for each such
Portfolio certificates of deposit, interim receipts or
other instruments or documents as may be issued to it
to evidence such delivery;
4. Make or cause to be made such transfers
or exchanges of the assets specifically allocated to
the separate account of a Portfolio and take such other
steps as shall be stated in Written Instructions to be
for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Company;
5. Deliver Securities upon sale of such
Securities for
the account of a Portfolio pursuant to
Section 7;
6. Deliver Securities upon the receipt of
payment in
connection with any repurchase agreement
related to such Securities
entered into by a
Portfolio;
7. Deliver Securities owned by a Portfolio
to the issuer thereof or its
agent when such Securities are called, redeemed,
retired or otherwise become payable; provided, however,
that in any such case the cash or other consideration
is to be delivered to the Custodian or Sub-Custodian,
as the case may be;
8. Deliver Securities for delivery in
connection with any loans of
securities made by a Portfolio but only
against receipt of adequate
collateral as agreed upon from time to time
by the Custodian and the
Company which may be in the form of cash or
obligations issued by the
United States Government, its agencies or
instrumentalities;
9. Deliver Securities for delivery as
security in connection with any
borrowings by a Portfolio requiring a pledge
of Portfolio assets, but only
against receipt of the amounts borrowed;
10. Deliver Securities to the Transfer Agent
or to the holders of Shares
in connection with distributions in kind, as
may be described from time to
time in the Prospectus, in satisfaction of
requests by holders of Shares for
repurchase or redemption;
11. Deliver Securities owned by any
Portfolio for any purpose
expressly permitted by and in accordance with
procedures described in the
Prospectus; and
12. Deliver Securities owned by any Portfolio for any
other proper business purpose, but only upon receipt
of, in addition to Written Instructions, a certified
copy of a resolution of the Board of Directors signed
by an Authorized Person and certified by the Secretary
of the Company, specifying the Securities to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper business purpose, and naming the person or
persons to whom delivery of such Securities shall be
made.
(i) Endorsement and Collection of Checks, Etc. The
Custodian is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of
money received by the Custodian for the account of a
Portfolio.
7. Purchase and Sale of Investments of a Portfolio.
(a) Promptly after each purchase of Securities for a
Portfolio, the Company shall deliver to the Custodian
(i) with respect to each purchase of Securities which
are not Money Market Securities, a Written Instruction
and (ii) with respect to each purchase of Money Market
Securities, either a Written Instruction or Oral
Instruction, in either case specifying with respect to
each purchase: (1) the name of the Portfolio to which
such Securities are to be specifically allocated; (2)
the name of the issuer and the title of the Securities;
(3) the number of shares or the principal amount
purchased and accrued interest, if any; (4) the date of
purchase and settlement; (5) the purchase price per
unit; (6) the total amount payable upon such purchase;
and 7) the name of the person from whom or the broker
through whom the purchase was made, if any. The
Custodian or specified Sub-Custodian shall receive the
Securities purchased by or for a Portfolio and upon
receipt thereof shall pay to the broker or other person
designated by the Company out of the monies held for
the account of such Portfolio the total amount payable
upon such purchase, provided that the same conforms to
the total amount payable as set forth in such Written
or Oral Instruction.
(b) Promptly after each sale of Securities of a
Portfolio, the Company shall deliver to the Custodian
(i) with respect to each sale of Securities which are
not Money Market Securities, a Written Instruction, and
(ii) with respect to each sale of Money Market
Securities, either Written Instructions or Oral
Instructions, in either case specifying with respect to
such sale: (1) the name of the Portfolio to which the
Securities sold were specifically allocated; (2) the
name of the issuer and the title of the Securities; (3)
the number of shares or principal amount sold, and
accrued interest, if any; (4) the date of sale; (5) the
sale price per unit; (6) the total amount payable to
the Portfolio upon such sale; and (7) the name of the
broker through whom or the person to whom the sale was
made. The Custodian or relevant Sub-Custodian shall
deliver or cause to be delivered the Securities to the
broker or other person designated by the Company upon
receipt of the total amount payable to such Portfolio
upon such sale, provided that the same conforms to the
total amount payable to such Portfolio as set forth in
such Written or Oral Instruction. Subject to the
foregoing, the Custodian or relevant Sub-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.
(c) Notwithstanding (a) and (b) above, cash in any of
the Portfolios may be invested by the Custodian for
short term purposes pursuant to standing Written
Instructions from the Company.
8. Lending of Securities.
If any Portfolio is permitted by the terms of
the Articles of Incorporation and Certificate of
Designation and the Prospectus to lend Securities, then
the Board of Directors may approve a separate written
agreement between the Company and the Custodian
authorizing the Custodian to lend such Securities.
Such agreement may provide for the payment of
additional reasonable compensation to the Custodian.
9. Investment in Futures and Options
The Custodian shall pursuant to Written
Instructions (which may be standing instructions) from
an Authorized Person (i) transfer initial margin to a
safekeeping bank or, with respect to options, broker;
(ii) pay or demand variation margin to or from a
designated futures commission merchant or other broker
based on daily marking to market calculations and in
accordance with accepted industry practices; and (iii)
subject to the consent of the Custodian, enter into
separate procedural, safekeeping or other agreements
with safekeeping banks, futures commission merchants
and other brokers pursuant to which such banks and, in
the case of options, brokers, will act as custodian for
initial margin deposits in transactions involving
futures contracts and options. The Custodian shall
have no custodial or investment responsibility for any
assets transferred to a safekeeping bank, futures
commission merchant or broker pursuant to this
paragraph.
10. Payment of Dividends or Distributions.
(a) The Company shall furnish to the Custodian the
vote of the Board of Directors or the Dividend
Committee thereof, as the case may be, certified by the
Secretary of the Company (i) authorizing the
declaration of distributions with respect to a
Portfolio on a specified periodic basis and authorizing
the Custodian to rely on Oral or Written Instructions
specifying the date of the declaration of such
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 the record date and the
total amount payable to the Transfer Agent on the
payment date, or (ii) setting forth the date of
declaration of any distribution by a Portfolio, 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 the record date and the total amount
payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral
Instructions, or Written Instructions, as the case may
be, the Custodian shall pay the total amount payable to
the Transfer Agent out of the monies specifically
allocated to and held for the account of the
appropriate Portfolio.
11. Sale and Redemption of Shares of the Company.
(a) Whenever the Company shall sell any Shares of a
Portfolio, the Company shall deliver or cause to be
delivered to the Custodian a Written Instruction duly
specifying:
1. The name of the Portfolio whose Shares were
sold;
2. The number of Shares sold, trade date, and
price; and
3. The amount of money to be received by the
Custodian
for the sale of such Shares.
The Custodian understands and agrees that Written
Instructions may be furnished subsequent to the
purchase of Shares of a Portfolio and that the
information contained therein will be derived from the
sales of Shares as reported to the Company by the
Transfer Agent.
(b) Upon receipt of such money from the Transfer
Agent, the Custodian shall credit such money to the
separate account of the Portfolio specified in (a)(1)
above.
(c) Upon issuance of any Shares of a Portfolio in
accordance with the foregoing provisions of this
Section 11, the Custodian shall pay all original issue
or other taxes required to be paid in connection with
such issuance upon the receipt of a Written Instruction
specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares
of a Portfolio are redeemed, the Company shall cause
the Transfer Agent to promptly furnish to the Custodian
Written Instructions specifying:
1. The name of the Portfolio whose Shares were
redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares
redeemed.
The Custodian further understands that the information
contained in such Written Instructions will be derived
from the redemption of Shares as reported to the
Company by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice
setting forth the number of Shares of a Portfolio being
redeemed pursuant to valid instructions as described in
the Prospectus, the Custodian shall make payment to the
Transfer Agent out of the monies specifically allocated
to and held for the account of the Portfolio specified
in (d)(1) above of the total amount specified in a
Written Instruction issued pursuant to paragraph (d) of
this Section 11.
12. Indebtedness.
(a) The Company will cause to be delivered to the
Custodian by any bank (excluding the Custodian) from
which the Company borrows money, using Securities as
collateral, a notice or undertaking in the form
currently employed by any such bank setting forth the
amount which such bank will loan to the Company against
delivery of a stated amount of collateral. The Company
shall promptly deliver to the Custodian Written
Instructions stating with respect to each such
borrowing: (1) the name of the Portfolio for which the
borrowing is to be made; (2) the name of the bank; (3)
the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached
promissory note, duly endorsed by the Company, or other
loan agreement; (4) the time and date, if known, on
which the loan is to be entered into (the "borrowing
date"); (5) the date on which the loan becomes due and
payable; (6) the total amount payable to the Company
for the separate account of the Portfolio on the
borrowing date; (7) 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;
(8) whether the Custodian is to deliver such collateral
through the Book-Entry System or a Depository; and (9)
a statement that such loan is in conformance with the
1940 Act and the Prospectus.
(b) Upon receipt of the Written Instruction referred
to in paragraph (a) above, the Custodian shall deliver
on the borrowing date the specified collateral and the
executed promissory note, if any, against delivery by
the lending bank of the total amount of the loan
payable, provided that the same conforms to the total
amount payable as set forth in the Written Instruction.
The Custodian may, at the option of the lending bank,
keep such collateral in its possession, but such
collateral shall be subject to all rights therein given
the lending bank by virtue of any promissory note or
loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the
Company from time to time such Securities specifically
allocated to such Portfolio as may be specified in
Written Instruction to collateralize further any
transaction described in this Section 12. The Company
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 Company fails to specify in Written
Instruction all of the information required by this
Section 12, the Custodian shall not be under any
obligation to deliver any Securities. Collateral
returned to the Custodian shall be held hereunder as it
was prior to being used as collateral.
13. Corporate Action
Whenever the Custodian or any Sub-Custodian
(other than a foreign securities depository or clearing
agency) receives information concerning Securities held
for a Portfolio which requires discretionary action by
the beneficial owner of the Securities (other than a
proxy), such as subscription rights, bond issues, stock
repurchase plans and rights offerings, or legal notices
or other material intended to be transmitted to
Securities holders ("Corporate Actions"), the Custodian
will give the Company notice of such Corporate Actions
to the extent that the Custodian's central corporate
actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest
resulting from a rights issue, stock dividend, stock
split or similar Corporate Action is received which
bears an expiration date, the Custodian will endeavor
to obtain Written or Oral Instructions from the
Company, but if such Instructions are not received in
time for the Custodian to take timely action, or actual
notice of such Corporate Action was received too late
to seek such Instructions, the Custodian is authorized
to sell, or cause a Sub-Custodian to sell, such rights
entitlement or fractional interest and to credit the
applicable account with the proceeds and to take any
other action it deems, in good faith, to be
appropriate, in which case, provided it has met the
standard of care in Section 15 hereof, it shall be held
harmless by the particular Portfolio involved for any
such action.
The Custodian will deliver proxies to the Company or
its designated agent pursuant to special arrangements
which may have been agreed to in writing between the
parties hereto. Such proxies shall be executed in the
appropriate nominee name relating to Securities
registered in the name of such nominee but without
indicating the manner in which such proxies are to be
voted; and where bearer Securities are involved,
proxies will be delivered in accordance with Written or
Oral Instructions from Authorized Persons.
14. Persons Having Access of the Portfolios.
(a) No Company or agent of the Company, and no
officer, director, employee or agent of the Company's
investment adviser, of any sub-investment adviser of
the Company, or of the Company, shall have physical
access to the assets of any Portfolio held by the
Custodian or any Sub-Custodian or be authorized or
permitted to withdraw any investments of a Portfolio,
nor shall the Custodian or any Sub-Custodian deliver
any assets of a Portfolio to any such person. No
officer, director, employee or agent of the Custodian
who holds any similar position with the Company's
investment adviser, with any sub-investment adviser of
the Company or with the Company shall have access to
the assets of any Portfolio.
(b) Nothing in this Section 14 shall prohibit any
officer, employee or agent of the Company, or any
officer, director, employee or agent of the investment
adviser, of any sub investment adviser of the Company
or of the Company, from giving Oral Instructions or
Written Instructions to the Custodian or executing a
Certificate so long as it does not result in delivery
of or access to assets of a Portfolio prohibited by
paragraph (a) of this Section 14.
(c) The Custodian represents that it maintains a
system that is reasonably designed to prevent
unauthorized persons from having access to the assets
that it holds (by any means) for its customers.
15. Concerning the Custodian.
(a) Scope of Services. The Custodian shall be
obligated to perform only
such services as are set forth in this Agreement
or expressly contained in a
Certificate, Written Instructions or Oral
Instructions given to the Custodian which
are not contrary to the provisions of this
Agreement.
(b) Standard of Care.
1. The Custodian will use reasonable care with
respect to its obligations under this Agreement and the
safekeeping of property of the Portfolios. The
Custodian shall be liable to, and shall indemnify and
hold harmless the Company from and against any loss
which shall occur as the result of the failure of the
Custodian or a Sub-Custodian (other than a foreign
securities depository or clearing agency) to exercise
reasonable care with respect to their respective
obligations under this Agreement and the safekeeping of
such property. The determination of whether the
Custodian or Sub-Custodian has exercised reasonable
care in connection with the safekeeping of Portfolio
property shall be made in light of the standards
applicable to the Custodian with respect to similar
property held by it in Chicago, Illinois. The
determination of whether the Custodian or Sub-Custodian
has exercised reasonable care in connection with their
other obligations under this Agreement shall be made in
light of prevailing standards applicable to
professional custodians in the jurisdiction in which
such custodial services are performed. In the event of
any loss to the Company by reason of the failure of the
Custodian or a Sub-Custodian (other than a foreign
securities depository or clearing agency) to exercise
reasonable care, the Custodian shall be liable to the
Company only to the extent of the Company's direct
damages and expenses, which damages, for purposes of
property only, shall be determined based on the market
value of the property which is the subject of the loss
at the date of discovery of such loss and without
reference to any special condition or circumstances.
2. The Custodian will not be responsible for any act,
omission, default or for the solvency of any foreign
securities depository or clearing agency approved by
the Board of Directors pursuant to Section (1)(n) or
Section 3 hereof.
3. The Custodian will not be responsible for any act,
omission, default or for the solvency of any broker or
agent (not referred to in paragraph (b)(2) above) which
it or a Sub-Custodian appoints and uses unless such
appointment and use is made or done negligently or in
bad faith. In the event such an appointment and use is
made or done negligently or in bad faith, the Custodian
shall be liable to the Company only for direct damages
and expenses (determined in the manner described in
paragraph (b)(1) above) resulting from such appointment
and use and, in the case of any loss due to an act,
omission or default of such agent or broker, only to
the extent that such loss occurs as a result of the
failure of the agent or broker to exercise reasonable
care ("reasonable care" for this purpose to be
determined in light of the prevailing standards
applicable to agents or brokers, as appropriate, in the
jurisdiction where services are performed).
4. The Custodian shall be entitled to rely, and may
act upon the advice of counsel (who may be counsel for
the Company) on all matters and shall be without
liability for any action reasonably taken or omitted in
good faith and without negligence pursuant to such
advice.
5. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing
received by the Custodian and reasonably believed by
the Custodian to be genuine and to be signed by two
officers of the Company. The Custodian shall be
entitled to rely upon any Written Instructions or Oral
Instructions actually received by the Custodian
pursuant to the applicable Sections of this Agreement
and reasonably believed by the Custodian to be genuine
and to be given by an Authorized Person. The Company
agrees to forward to the Custodian Written Instructions
from an Authorized Person confirming such Oral
Instructions in such manner so that such Written
Instructions are received by the Custodian, whether by
hand delivery, telex or otherwise, by the close of
business on the same day that such Oral Instructions
are given to the Custodian. The Company 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 Company. The
Company agrees that the Custodian shall incur no
liability to the Company in (i) acting upon Oral
Instructions given to the Custodian hereunder
concerning such transactions provided such instructions
reasonably appear to have been received from a duly
Authorized Person or (ii) deciding not to act solely
upon Oral Instructions, provided that the Custodian
shall be required to contact the giver of such Oral
Instructions and request written confirmation
immediately following any such decision not to act.
6. The Custodian shall supply the Company and/or Fund
Accountant with such daily information regarding the
cash and securities positions and activity of each
Portfolio as the Custodian and the Company and/or Fund
Accountant shall from time to time agree. It is
understood that such information will not be audited by
Custodian and Custodian represents that such
information will be the best information then available
to the Custodian. The Custodian shall have no
responsibility whatsoever for the pricing of Portfolio
Securities or for the failure of the Company and/or
Fund Accountant to reconcile differences between the
information supplied by the Custodian and information
obtained by the Company and/or Fund Accountant from
other sources, including but not limited to pricing
vendors and the Company's investment adviser. Subject
to the foregoing, to the extent that any miscalculation
by the Company and/or Fund Accountant of a Portfolio's
net asset value is attributable to the willful
misfeasance, bad faith or negligence of the Custodian
(including any Sub-Custodian other than a foreign
securities depository or clearing agency) in supplying
or omitting to supply the Company and/or Fund
Accountant with information as aforesaid, the Custodian
shall be liable to the Company for any resulting loss
(subject to such de minims rule of change in value as
the Board of Directors may from time to time adopt).
(c) Limit of Duties. Without limiting the generality
of the foregoing, the Custodian shall be under no duty
or obligation to inquire into, and shall not be liable
for:
1. The validity of the issue of any Securities
purchased by any Portfolio, the legality of the
purchase thereof, or the propriety of the amount
specified by the Company for payment therefor;
2. The legality of the sale of any Securities by any
Portfolio or the propriety of the amount of
consideration for which the same are sold;
3. The legality of the issue or sale of any Shares,
or
the sufficiency of the amount to be received
therefor;
4. The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of any Portfolio;
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for
the exclusive benefit of the Company, but hereby
warrants that as of the date of this Agreement it is
maintaining a bankers Blanket Bond and hereby agrees to
notify the Company in the event that such bond is
canceled or otherwise lapses.
(e) Consistent with and without limiting the language
contained in Section 15(b), it is specifically
acknowledged that the Custodian shall have no duty or
responsibility to:
1. Question Written Instructions or Oral Instructions
or make any suggestions to the Company or an Authorized
Person regarding such Instructions;
2. Supervise or make recommendations with respect to
investments or the retention of Securities;
3. Subject to Section 15(b)(3) hereof, evaluate or
report to the Company or an Authorized Person regarding
the financial condition of any broker, agent or other
party to which Securities are delivered or payments are
made pursuant to this Agreement; or
4. Review or reconcile trade confirmations received
from brokers.
(f) Amounts Due for Transfer Agent. The Custodian
shall not be under any duty or obligation to take
action to effect collection of any amount due to any
Portfolio from the Transfer Agent nor to take any
action to effect payment or distribution by the
Transfer Agent of any amount paid by the Custodian to
the Transfer Agent in accordance with this Agreement.
(g) No Duty to Ascertain Authority. The Custodian
shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held
by it for the Company and specifically allocated to a
Portfolio are such as may properly be held by the
Company under the provisions of the Articles of
Incorporation and Certificate of Designation and the
Prospectus.
(h) Indemnification. The Company agrees to indemnify
and hold the Custodian harmless from all loss, cost,
taxes, charges, assessments, claims, and liabilities
(including, without limitation, liabilities arising
under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the 1940 Act and state or
foreign securities laws) and expenses (including
reasonable attorneys fees and disbursements) arising
directly or indirectly from any action taken or omitted
by the Custodian (i) at the request or on the direction
of or in reliance on the advice of the Company or in
reasonable reliance upon the Prospectus or (ii) upon a
Certificate or Oral or Written Instructions; provided,
that the aforegoing indemnity shall not apply to any
loss, cost, tax, charge, assessment, claim, liability
or expense to the extent the same is attributable to
the Custodian's or any Sub-Custodian's (other than a
foreign securities depository or clearing agency)
negligence, willful misconduct, bad faith or reckless
disregard of duties and obligations under this
Agreement or any other agreement relating to the
custody of Company property.
(i) The Company on behalf of the particular Portfolio
involved agrees to hold the Custodian harmless from any
liability or loss resulting from the imposition or
assessment of any taxes or other governmental charges
on a Portfolio.
(j) Without limiting the foregoing, the Custodian
shall not be liable for any loss which results from:
1. the general risk of investing, or
2. subject to Section 15(b) hereof, investing or
holding property in a particular country including, but
not limited to, losses resulting from nationalization,
expropriation or other governmental actions; regulation
of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market
conditions which prevent the orderly execution of
securities transactions or affect the value of property
held pursuant to this Agreement.
(k) No party shall be liable to the other for any loss
due to forces beyond their control including but not
limited to strikes or work stoppages, acts of war or
terrorism, insurrection, revolution, nuclear fusion,
fission or radiation, or acts of God.
(1) Inspection of Books and Records. The books and
records of the Custodian shall be open to inspection
and audit at reasonable times by officers and auditors
employed by the Company and by the appropriate
employees of the Securities and Exchange Commission.
(m) Accounting Control Reports. The Custodian shall
provide the Company with any report obtained by the
Custodian on the system of internal accounting control
of the Book-Entry System, each Depository, and each
Sub-Custodian and with an annual report on its own
systems of internal accounting control.
16. Term and Termination.
(a) This Agreement shall become effective on the date
first set forth above (the "Effective Date") and shall
continue in effect thereafter as the parties may,
mutually agree.
(b) Either of the parties hereto may terminate this
Agreement with respect to any Portfolio by giving to
the other party a notice in writing specifying the date
of such termination, which, in case the Company is the
terminating party, shall be not less than 60 days after
the date of receipt of such notice or, in case the
Custodian is the terminating party, shall be not less
than 90 days after the date of receipt of such notice.
In the event such notice is given by the Company, it
shall be accompanied by a certified vote of the Board
of Directors, electing to terminate this Agreement with
respect to any Portfolio and designating a successor
custodian or custodians, which shall be a person
qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, the
Company shall, on or before the termination date,
deliver to the Custodian a certified vote of the Board
of Directors, designating a successor custodian or
custodians. In the absence of such designation by the
Company, the Custodian may designate a successor
custodian, which shall be a person qualified to so act
under the 1940 Act. If the Company fails to designate
a successor custodian with respect to any Portfolio,
the Company 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 Company) and monies then owned by
such Portfolio, be deemed to be its own custodian and
the Custodian shall thereby be relieved of all duties
and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the
Book-Entry System which cannot be delivered to the
Company.
(c) Upon the date set forth in such notice under
paragraph (b) of this Section
16, this Agreement shall terminate to the extent
specified in such notice, and the Custodian shall upon
receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the
successor custodian all Securities and monies then held
by the Custodian and specifically allocated to the
Portfolio or Portfolios specified, after deducting all
fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled with
respect to such Portfolio or Portfolios.
17. Limitation of Liability.
The Company and the Custodian agree that the
obligations of the Company under this Agreement shall
not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past,
present or future, of the Company individually, but are
binding only upon the assets and property of the
Company or of the appropriate Portfolio(s) thereof. The
execution and delivery of this Agreement have been
authorized by the Board of Directors of the Company,
and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such
the Board of Directors nor such execution and delivery
by such officer shall be deemed to have been made by
any of them or any shareholder of the Company
individually or to impose any liability on any of them
or any shareholder of the Company personally, but shall
bind only the assets and property of the Company or of
the appropriate Portfolio(s) thereof.
18. Miscellaneous.
(a) Annexed hereto as Schedule A is a certification
signed by two of the present officers of the Company
setting forth the names and the signatures of the
present Authorized Persons. The Company agrees to
furnish to the Custodian a new certification in similar
form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the
event that other or additional Authorized Persons are
elected or appointed. Until such new certification
shall be received, the Custodian shall be fully
protected in acting under the provisions of this
Agreement upon Oral Instructions or signatures of the
present Authorized Persons as set forth in the last
delivered certification.
(b) 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 its address stated on the first page hereof
or at such other place as the Custodian may from time
to time designate in writing.
(c) Any notice or other instrument in writing,
authorized or required by this Agreement to be given to
the Company, shall be sufficiently given if addressed
to the Company and mailed or delivered to it at its
offices at its address shown on the first page hereof
or at such other place as the Company may from time to
time designate in writing, with a copy to:
(d) This Agreement may not be amended or modified in
any manner except by a written agreement executed by
both parties with the same formality as this Agreement,
(i) authorized and approved by a vote of the Board of
Directors, including a majority of the members of the
Board of Directors who are not "interested persons" of
the Company (as defined in the 1940 Act), or (ii)
authorized and approved by such other procedures as may
be permitted or required by the 1940 Act.
(e) 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 Company
without the written consent of the Custodian, or by the
Custodian without the written consent of the Company
authorized or approved by a vote of the Board of
Directors, and any attempted assignment without such
written consent shall be null and void.
(f) This Agreement shall be construed in accordance
with the laws of the State of Illinois.
(g) The captions of the Agreement are included for
convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise
affect their construction or effect.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective
representatives duly authorized as of the day and year
first above written.
By: _______________________________________
Name:
Title:
THE NORTHERN TRUST COMPANY
By:
______________________________________
Name:
Title:
1
Document #c2014
Revised 3/15/96
TRANSFER AGENCY AGREEMENT
Transfer Agency Agreement dated as of __________, 199_
between _____________________________________________________, [a
Corporation organized and existing under the laws of the State of
Maryland] [a business trust organized and existing under the laws
of the Commonwealth of Massachusetts], having its principal office
and place of business at 200 Park Avenue, New York, New York 10166
(hereinafter referred to as the "Fund"), and DREYFUS TRANSFER,
INC., a Maryland corporation, having its principal office and
place of business at One American Express Plaza, Providence, Rhode
Island 02903.
W I T N E S S E T H :
That for and in consideration of the mutual promises
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words
and phrases shall have the following meanings:
1. "Approved Institution" shall mean an entity so
named in a Certificate. From time to time the Fund may amend a
previously delivered Certificate by delivering to the Transfer
Agent (as hereinafter defined) a Certificate naming an additional
entity or deleting any entity named in a previously delivered
Certificate.
2. "Certificate" shall mean any notice, instruction,
or other instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent by the Fund, which is
signed by any Officer, as hereinafter defined, and actually
received by the Transfer Agent.
3. "Computer tape" shall include any tapes physically
delivered, or electronic transmission inputted or transmitted via
a remote terminal or other similar link, into a data processing,
storage, or collection system, or similar system, utilized by the
Transfer Agent. All computer tapes shall be compatible with
either the Transfer Agent's tape layout package existing on the
date of this Agreement, or such other format as may be developed
pursuant to the software enhancement procedures (see Appendix
C(2)).
4. "Custodian" shall mean The Bank of New York, as
custodian under the terms and conditions of the Custody
Agreement between The Bank of New York and the Fund, or its
successor(s), or any other custodian appointed by the Fund.
5. "Dreyfus" shall mean The Dreyfus Corporation
and/or any presently existing or future subsidiary thereof
(excluding the Transfer Agent), as the context requires.
6. "Dreyfus-affiliated fund" shall mean any mutual
fund sponsored, advised, sub-advised or administered by Dreyfus,
or for which Dreyfus acts as the primary distributor.
7. "Fund Business Day" shall be deemed to be each day
on which the Fund is required to determine its net asset value,
and any other day on which the Securities and Exchange Commission
may require the Fund to be open for business.
8. "Officer" shall be deemed to be the Fund's
Chairman of the Board, the Fund's President, any Vice President of
the Fund, the Fund's Secretary, the Fund's Treasurer, the Fund's
Controller, any Assistant Controller of the Fund, any Assistant
Treasurer of the Fund, any Assistant Secretary of the Fund, and
any other person duly authorized by the Fund's Board to execute
any Certificate, instruction, notice or other instrument on behalf
of the Fund and named in the Certificate annexed hereto as
Appendix A, as such Certificate may be amended from time to time.
9. "Prospectus" shall mean the most current Fund
prospectus and statement of additional information with respect to
which a registration statement under the Securities Act of 1933,
as amended, has become effective.
10. "Shares" shall mean all or any part of each class
of [Common Stock] [shares of beneficial interest] of the Fund
listed in the Certificate annexed hereto as Appendix B, as it may
be amended from time to time, which from time to time are
authorized and/or issued by the Fund.
11. "Transfer Agent" shall mean Dreyfus Transfer,
Inc., as transfer agent, registrar and dividend disbursing agent
under the terms and conditions of this Agreement, its permitted
agent(s), sub-contractor(s), successor(s) or assign(s).
12. Unless otherwise specified, "written" or "in
writing" refers to an original, manually-signed document.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the
Transfer Agent as transfer agent of all the Shares of the Fund and
as dividend disbursing agent during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as
transfer agent and dividend disbursing agent and agrees to perform
the duties thereof as hereinafter set forth, including those set
forth on Appendices C(1) and C(2), and Exhibit 1 - "System Report
Output," for the fees set forth therein.
3. In connection with such appointment, the Fund
shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the Fund's [Articles of
Incorporation] [Agreement and Declaration of Trust] and all
amendments thereto;
(b) A certified copy of the By-Laws of the
Fund;
(c) A certified copy of a resolution of the
Fund's Board appointing the Transfer Agent and authorizing the
execution of this Transfer Agency Agreement;
(d) A Certificate signed by the Secretary of
the Fund specifying with respect to each class of Shares: the
number of authorized Shares, and the number of such authorized
Shares issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund, and the name and address
of the legal counsel for the Fund;
(e) Specimen Share certificates for each class
of Shares in the form approved by the Fund's Board, together with
a certificate signed by the Secretary of the Fund as to such
approval;
(f) Copies of the Fund's Registration
Statement, as amended to date, and the most recently filed Post-
Effective Amendment thereto, 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,
together with any applications filed in connection therewith;
(g) Opinion of counsel for the Fund with
respect to the validity of the authorized and outstanding Shares,
whether such Shares are fully paid and non-assessable and the
status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the Registration Statement has become effective or, if
exempt, the specific grounds therefor); and
(h) Such other documents as may reasonably be
requested by the Transfer Agent in order for it to properly
perform its duties under this Agreement.
4. The Fund shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates and will replenish
such supply within 30 days after receiving a request therefor from
the Transfer Agent. Such blank Share certificates shall be
properly signed, by facsimile or otherwise, by Officers of the
Fund authorized by law or by the By-Laws to sign Share
certificates, and, if required, shall bear the corporate seal or
facsimile thereof.
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. The Fund shall deliver to the Transfer Agent the
following documents on or before the effective date of any
increase or decrease in the total number of Shares authorized to
be issued:
(a) A certified copy of a resolution of the
Fund's Board authorizing the amendment to the [Articles of
Incorporation] [Agreement and Declaration of Trust] giving effect
to such increase or decrease;
(b) In the case of an increase, an opinion of
counsel for the Fund with respect to the validity of the increased
number of Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the Registration Statement has
become effective or, if exempt, the specific grounds therefor);
and
(c) In the case of an increase, if the
appointment of the Transfer Agent was theretofore expressly
limited, a certified copy of a resolution of the Fund's Board
increasing the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares of
the Fund pursuant to stock dividends or stock splits, etc., and
prior to any reduction in the number of Shares outstanding, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A Board certified copy of the resolution(s)
adopted by the Fund and/or the shareholders of the Fund
authorizing such issuance of additional Shares of the Fund or such
reduction, as the case may be; and
(b) An opinion of counsel for the Fund with
respect to the validity of the additional Shares of the Fund and
the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the Registration Statement has become effective, or, if
exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split,
recapitalization or other capital adjustment requiring a change in
the form of Share certificates, the Transfer Agent will issue
Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of
Share certificates in the new form;
(b) A certified copy of any amendment to the
[Articles of Incorporation] [Agreement and Declaration of Trust]
with respect to the change;
(c) Specimen Share certificates for each class
of Shares in the new form approved by the Fund's Board, with a
Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with
respect to the validity of the Shares in the new form and the
status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that the Shares have been registered
and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor).
2. The Fund shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates in the new form, and
will replenish such supply within 30 days after receiving a
request therefor from the Transfer Agent. Such blank Share
certificates shall be properly signed by Officers of the Fund
authorized by law or by the by-laws to sign Share certificates
and, if required, shall bear the Fund's seal or facsimile thereof.
ARTICLE V
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
1. (a) The Transfer Agent shall accept with respect
to the Fund's Shares on each Fund Business Day, at such times as
are specified in the Prospectus and at such other times as are
agreed upon from time to time by the Transfer Agent and the Fund,
each (i) purchase order received from a purchaser, or shareholder,
whether or not an Approved Institution, and (ii) redemption
request either received from a shareholder or an Approved
Institution, or contained in a Certificate, provided that such
purchase order or redemption request, as the case may be, is in
conformity with the Fund's purchase and redemption procedures
described in the Prospectus.
(b) The Transfer Agent also shall accept with
respect to the Fund's Shares on each Fund Business Day, at such
times as are specified in the Prospectus and at such other times
as are agreed upon from time to time by the Transfer Agent and the
Fund, a computer tape containing the information set forth in
Section 1(a) which is furnished by or on behalf of any Approved
Institution.
2. On each Fund Business Day, the Transfer Agent
shall, as of the time at which the Fund computes its net asset
value, record the issuance to, and redemption from, the accounts
specified in a purchase order, redemption request, or computer
tape which, in accordance with the Prospectus, is effective on
such Fund Business Day, the appropriate number of full and
fractional Shares based on the net asset value per Share of such
class specified in an advice or computer tape received on such
Fund Business Day from the Fund. Notwithstanding the foregoing,
if a redemption specified in a computer tape is for a dollar value
of Shares in excess of the dollar value of uncertificated Shares
in the specified account, the Transfer Agent shall not record such
redemption in whole or part, and shall immediately orally advise
the Approved Institution which supplied such tape of such
discrepancy, with an advice in writing faxed to the Approved
Institution on that same day and mailed to the Approved
Institution on the following day.
3. The Transfer Agent shall, as of each Fund Business
Day specified in a Certificate or resolution described in
paragraph 1 of succeeding Article VI, record the issuance of
Shares of a class, based on the net asset value per Share of such
class specified in an advice or computer tape received from the
Fund on such Fund Business Day, in connection with a reinvestment
of a dividend or distribution on Shares of such class.
4. On each Fund Business Day, the Transfer Agent
shall supply the Fund as early as is reasonably practicable with a
statement specifying with respect to the immediately preceding
Fund Business Day: the total number of Shares of each class
(including fractional Shares) issued and outstanding at the
opening of business on such day; the total number of Shares of
each class recorded by the Transfer Agent as having been issued on
such day pursuant to preceding paragraph 2 of this Article; the
total number of Shares of each class recorded by the Transfer
Agent as having been redeemed on such day; the total number of
Shares of each class, if any, recorded by the Transfer Agent as
having been issued on such day pursuant to preceding paragraph 3
of this Article, and the total number of Shares of each class
issued and outstanding as of the close of such business day. As
soon as is reasonably practicable after such statement is received
by the Fund, the Fund shall confirm the number of Shares of each
class issued and outstanding contained therein, and may make any
necessary corrections, by delivering to the Transfer Agent a
Certificate with respect to the same.
5. In connection with each purchase and each
redemption of Shares, the Transfer Agent shall send such
statements as are described in either of the Prospectus or this
Agreement. In the event of conflicting language with respect to
such statements, the Prospectus will control. If the Prospectus
indicates that certificates for Shares are available, and if
specifically requested in writing by any shareholder, or if
otherwise required hereunder, the Transfer Agent will countersign,
record the issuance of and mail, by not less than first class
insured mail, to such shareholder at the address set forth in the
records of the Transfer Agent, a Share certificate for any full
Shares requested. In addition, the Transfer Agent shall record
the issuance of and mail Share Certificates for full Shares
requested otherwise than in writing provided such request is in
accordance with the Prospectus.
6. As of each Fund Business Day, the Transfer Agent
shall furnish, at the Fund's direction, an advice in writing or,
if requested by the Fund, a computer tape, setting forth the
number and dollar amount of Shares to be redeemed or purchased on
such Fund Business Day in accordance with paragraph 2 of this
Article.
7. The Transfer Agent shall direct the Custodian to
transfer moneys to the dividend disbursing/redemption payment
account in connection with a redemption of Shares, and then shall
cancel the redeemed Shares and after making appropriate deduction
for any withholding of taxes required of it by applicable law (a)
in the case of a redemption of Shares pursuant to a redemption
described in preceding paragraph 1(a) of this Article, make
payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus and the shareholder's
instructions with respect thereto (so long as such instructions do
not conflict with the Prospectus), and (b) in the case of a
redemption of Shares pursuant to a computer tape described in
preceding paragraph 1(b) of this Article, make payment by
directing a federal funds wire order to the account previously
designated by the Approved Institution specified in said computer
tape.
8. The Transfer Agent shall not be required to record
the issuance of Shares after it has received from an Officer of
the Fund or from an appropriate federal or state authority written
notification that the sale of such Shares has been suspended or
discontinued, nor shall it be required to record the redemption of
any Shares after it has received written notification to such
effect from an Officer of the Fund or from an appropriate federal
authority. The Fund will supply to the Transfer Agent a
Certificate listing the states in which the Fund's shares are
qualified for sale, as amended from time to time, and the Transfer
Agent will record the issuance of Shares only with respect to
persons or entities having addresses in such States.
9. The Transfer Agent shall accept a computer tape
which is furnished by or on behalf of any Approved Institution and
is represented to be instructions with respect to the transfer of
Shares from one account of such Approved Institution to another
account of such Approved Institution, and shall effect the
transfers specified in said computer tape.
10. Except as otherwise provided in paragraph 11 of
this Article, Shares will be transferred or redeemed upon
presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent reasonably
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes, if any. The Transfer Agent
reserves the right to refuse to transfer or record the redemption
of Shares until it is reasonably satisfied that the endorsement on
the Share certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by
an authorized Officer of the Fund, a guarantee of signature
pursuant to standards and a program adopted in accordance with
Rule 17Ad-15 under the Securities Exchange Act of 1934. The
Transfer Agent also reserves the right to refuse to transfer or
record the redemption of Shares until it is satisfied that the
requested transfer or redemption is legally authorized, and it
shall incur no liability for the refusal, in good faith, to make
transfers or record redemptions which the Transfer Agent, in its
reasonable judgment, deems improper or unauthorized, or until it
is satisfied that there is no basis to any claims adverse to such
transfer or redemption. The Transfer Agent may, in effecting
transfers or recording redemptions of Shares, rely upon those
provisions of the Uniform Act for the Simplification of Fiduciary
Security Transfers or the Uniform Commercial Code, as the same may
be amended from time to time, applicable to the transfer of
securities.
11. Notwithstanding any provision contained in this
Agreement to the contrary, the Transfer Agent shall not be
required or expected to obtain, as a condition to any transfer of
any Shares pursuant to paragraph 9 of this Article, any documents,
including, without limitation, any documents of the kind described
in paragraph 10 of this Article, to evidence the authority of the
person requesting the transfer or redemption and/or the payment of
any stock transfer taxes.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall advise the Transfer Agent as to the
following: (i) with respect to each class of Shares, the date of
the declaration of a dividend or distribution, the date of accrual
or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case
may be, shall be determined, the amount per Share of such dividend
or distribution, the payment date on which all previously accrued
and unpaid dividends are to be paid, and the total amount, if any,
payable to the Transfer Agent on such payment date, or
(ii) whether the Fund has authorized the declaration of dividends
and distributions on a daily or other periodic basis.
2. Upon the payment date specified in paragraph 1
above, the Transfer Agent shall, in the case of a cash dividend or
distribution, cause the Custodian to transfer to the dividend
disbursing/redemption payment account an amount of cash, if any,
sufficient for the Transfer Agent to make the payment, if any, to
such Shareholders of record as of such payment date who have not
elected to reinvest such dividend or distribution in shares of the
Fund. The Transfer Agent will, upon the transfer of any such
cash, make payment of such cash dividends or distributions to such
Shareholders of record as of the record date by: (i) mailing a
check, payable to the registered shareholder or other properly
authorized payee, to the address of record or dividend mailing
address, or (ii) wiring such amounts, or transferring such amounts
through the Automated Clearing House, to the accounts previously
designated by an Approved Institution, as the case may be. If the
Custodian shall not transfer sufficient cash to enable the
Transfer Agent to make payments of any cash dividend or
distribution on the payable date to all shareholders of record of
the Fund as of the record date, the Transfer Agent shall
immediately so notify the Fund, and only after such notification
may withhold payment to all shareholders of record as of the
record date until sufficient cash is provided.
3. It is understood that the Transfer Agent shall
file timely such appropriate information returns concerning the
payment of dividends and other distributions with the proper
federal, state and local authorities as are required by law to be
filed by the Fund and shall be responsible for the collection or
withholding of taxes due on such dividends or distributions due to
shareholders to the extent required of it by applicable law or as
agreed between the Transfer Agent and the Fund.
ARTICLE VII
CONCERNING THE FUND
1. The Fund shall deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign
Share certificates, Certificates, notifications or requests,
together with a specimen signature of each new Officer. In the
event any Officer who shall have signed manually or whose
facsimile signature shall have been affixed to blank Share
certificates shall die, resign or be removed prior to issuance of
such Share certificates, the Transfer Agent may issue such Share
certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall deliver to the Transfer Agent such
approval, adoption or ratification as may be required by law.
2. Each copy of the charter documents of the Fund and
copies of all amendments thereto shall be certified by the
Secretary of State (or other appropriate official) of the state of
organization. Each copy of the By-Laws and copies of all
amendments thereto, and copies of resolutions of the Fund's Board,
shall be certified by the Secretary or Assistant Secretary of the
Fund under its corporate seal.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent shall keep such records as are
specified in Appendix C(1) hereto in the form and manner, and for
such period, as are required by the rules and regulations of
appropriate government authorities, in particular Rules 31a-2 and
31a-3 under the Investment Company Act of 1940, as amended from
time to time. The records specified in Appendix C(1) hereto
maintained by the Transfer Agent pursuant to this paragraph 1
shall be considered to be the property of the Fund and the
Transfer Agent shall make such records available promptly upon
request for inspection by representatives of the Fund's auditors
and legal counsel, employees of the Fund, officers of the Fund and
employees of Dreyfus or any of its affiliates designated by the
Fund, and such records shall be delivered to the Fund (or a
designated successor transfer agent) upon request and in any event
upon the date of termination of this Agreement, in all forms and
manner kept by the Transfer Agent on such date of termination or
such earlier date as may be requested by the Fund. By way of
illustration only, and in no way limiting the generality of the
foregoing provisions, if the Transfer Agent or its agent captures
signatures from Fund applications for the purpose of verifying
signatures on redemption checks, the captured signatures
(representations of the shareholder's signature which are relied
upon to verify signatures) are considered to be the property of
the Fund in all forms maintained. In addition, account history
data or other account information maintained on microfiche,
microfilm, hard copy or other format, are all considered to be
property of the Fund. The Fund will pay the Transfer Agent's
reasonable out-of-pocket expenses for handling and delivering
records to the Fund (or a designated successor transfer agent)
pursuant to this paragraph, but will not be charged any amount for
the compilation of such records.
Inspections of records hereunder shall take place only
during business hours, and upon not less than one business day's
prior notice to the Transfer Agent.
2. The Transfer Agent may, upon written approval of
the Fund, employ agents, sub-contractors or attorneys-in-fact.
The Transfer Agent shall have with respect to the actions or
omissions to act of each such agent, sub-contractor or attorney-
in-fact the same rights, duties, and responsibilities as the
Transfer Agent would have had if any such actions or omissions to
act were the action or omission to act of the Transfer Agent or
any officer or employee of the Transfer Agent. By executing this
Agreement, the Fund gives its approval to the utilization of First
Data Investor Services Group, Inc., and its permitted successors
and assigns, as sub-contractor for the performance of any or all
of the services required to be performed by the Transfer Agent
hereunder.
3. Share certificates, the value of which does not
exceed the limits of the Transfer Agent's Blanket Bond, shall be
sent by the Transfer Agent by certified mail. Share certificates,
the value of which exceeds the limits of the Transfer Agent's
Blanket Bond, will be sent by the Transfer Agent by registered
mail with adequate insurance.
4. The Transfer Agent may issue new Share
certificates in place of Share certificates represented to have
been lost, stolen or destroyed upon receiving instructions in
writing from an Officer and indemnity provided by the alleged
owner of the Share certificates reasonably deemed satisfactory by
the Transfer Agent. Such instructions from the Fund shall be in
such form as approved by the Fund's Board of in accordance with
the provisions of law or of the By-Laws of the Fund governing such
matters. The Transfer Agent may issue new Share
certificates in exchange for, and upon surrender of, mutilated
Share certificates.
5. The Transfer Agent will issue and mail
subscription warrants for the Shares; Shares representing
dividends, exchanges or splits, or act as conversion agent upon
receiving written instructions from an Officer and such other
documents as the Transfer Agent reasonably may deem necessary.
6. The Transfer Agent will supply shareholder lists
to the Fund from time to time, at no cost to the Fund, upon
receiving a request therefor from an Officer of the Fund.
7. At the request of an Officer, the Transfer Agent
will address and mail such appropriate notices to shareholders as
the Fund may direct.
8. Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any
Shares to, the sufficiency of the amount to be received therefor
from, or the authority of, any Approved Institution or the Fund,
as the case may be, to request such sale or issuance;
(b) The legality of a transfer or redemption
of Shares requested by, the propriety of the amount to be paid
therefor by, or the authority of any Approved Institution or the
Fund, as the case may be, to request, such transfer or redemption;
(c) The legality of the declaration of any
dividend by the Fund, or the legality of the issuance of any
Shares in payment of any stock dividend; or
(d) The legality of any recapitalization or
readjustment of the Shares.
9. The Transfer Agent shall be entitled to receive
and the Fund hereby agrees to pay to the Transfer Agent for its
performance hereunder, including its performance of the duties and
functions set forth in the Appendices hereto, the amounts set
forth therein, as amended from time to time.
10. The Transfer Agent will at all times during the
term of this Agreement maintain the following insurance policies,
issued by a qualified insurance carrier with a Best's rating of
'A' or better, in at least the following minimum amounts: (i) an
Investment Company Asset Protection Bond providing coverage for,
among other things, employee dishonesty, loss of money/securities,
and forgery, in the amount of $125 million, such amount to be
increased annually in proportion to the extent the total of all
assets being serviced by the Transfer Agent increases, and (ii) a
Professional Liability Policy providing errors and omissions
coverage in the amount of $5 million. Such bonds may be in the
form of a joint bond insuring the Dreyfus-affiliated funds, and
Dreyfus and its affiliates, and in the case of (i) above, the
Transfer Agent may rely on such bond maintained by the Dreyfus-
affiliated funds.
11. The Transfer Agent will not give any other
organization or mutual fund, whether or not affiliated with the
Transfer Agent, any preference in supplying any material service
to be provided hereunder.
ARTICLE IX
TERMINATION
This Agreement shall continue until terminated as
provided hereafter. Each of the rights of termination provided in
this Article is separable and independent, and a party's ability
or inability to terminate this Agreement under one of such
provisions shall not, by itself, preclude such party from
exercising any other of such provisions.
1. The Fund may terminate this Agreement in
accordance with the provisions of Appendix D hereto.
2. The Fund may terminate this Agreement immediately
if the Transfer Agent shall fail to perform the transfer agency
services provided for hereunder in any material respect, and such
failure shall continue to be unremedied for a period of forty-five
(45) days after receipt of written notice from the Fund specifying
the failure and demanding that the same be remedied, except for
such failures which by their nature require a longer period to
effect a cure. With respect to those failures, the Transfer Agent
must commence cure immediately and continue to work diligently
until such cure is effected. The Transfer Agent will in all cases
notify the Fund promptly once a cure is effected. The Transfer
Agent's right to cure a failure to provide transfer agency
services pursuant to this paragraph will not be available, and the
Fund will therefore have the right to immediately terminate this
Agreement, with respect to a second failure to provide the same or
substantially similar services within any six month period after
notice of the cure of the initial failure.
3. The Fund may terminate this Agreement immediately,
and at any point during a period of two years thereafter, if:
(a) the Transfer Agent is adjudicated insolvent or bankrupt or
ceases to do business, is unable or admits in writing its
inability to pay all debts as they mature or make a general
assignment for the benefit of, or enters into a composition or
arrangement with, creditors; (b) all or a substantial part of the
property of the Transfer Agent is sequestered by court order and
such order remains in effect for more than thirty (30) days;
(c) the Transfer Agent authorizes, applies for or consents to the
appointment of a receiver, trustee or liquidator of all or a
substantial part of its assets or has such proceedings seeking
such appointment commenced against it which are not terminated
within thirty (30) days of such commencement; or (d) the Transfer
Agent files a voluntary petition under the reorganization or
arrangement provisions of the laws of the United States pertaining
to bankruptcy or any similar law of any jurisdiction, or has
proceedings under any law instituted against it, which are not
terminated within thirty (30) days of such commencement.
4. The Transfer Agent may, at any time, give the Fund
written notice of the proposed acquisition of the Transfer Agent
(or substantially all of its assets) or of any entity (or
substantially all of its assets), which controls, directly or
indirectly, the Transfer Agent, by an unaffiliated third party
which, directly or indirectly, neither controls, is controlled by
or is under common control with, the Transfer Agent. The Fund
may, in its sole discretion, and at any time within the sixty (60)
days following receipt of such notice from the Transfer Agent,
give to the Transfer Agent the Fund's written consent to such
acquisition. In the event of any such acquisition of the Transfer
Agent of which the Fund was not given notice, or to which the Fund
did not consent in writing, the Fund may at any time thereafter
terminate this Agreement upon one day's notice. No consent of the
Fund will be required for the acquisition of the Transfer Agent,
or substantially all of its assets, by any entity which now or in
the future controls, is controlled by or is under common control
with the Transfer Agent.
5. The Fund may terminate this Agreement, upon twelve
months prior written notice to the Transfer Agent (unless the date
of this Agreement is less than twelve months prior to the
effective termination date of which the Transfer Agent has been
given notice by the other Dreyfus-affiliated funds pursuant to
their respective transfer agency agreements).
6. The Transfer Agent may not terminate this
Agreement prior to June 30, 1998 and thereafter may terminate this
Agreement by giving the Fund notice in writing specifying the date
of such termination, which shall be not less than twenty-four
months after the date of receipt of such notice, and in any event
not prior to June 30, 2000. If the Transfer Agent gives such
notice, the Fund will have the option to extend such proposed
termination date by an additional six months. The Fund may
exercise this option by giving notice thereof to the Transfer
Agent in writing no less than three months prior to the Transfer
Agent's originally proposed termination date.
7. 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 specifying the
date of termination. The Fund shall designate a successor
transfer agent or transfer agents prior to the date of termination
specified in such notice. In the event notice of termination is
given by the Transfer Agent, the Fund shall, on or before the
termination date, deliver to the Transfer Agent a copy of a
resolution of its Board certified by the Secretary or any
Assistant Secretary designating a successor transfer agent or
transfer agents. In the absence of such designation by the Fund,
the Transfer Agent may designate a successor transfer agent. If
the Fund fails to designate a successor transfer agent and if the
Transfer Agent is unable to find a successor transfer agent, the
Fund shall, upon the date specified in the notice of termination
of this Agreement and delivery of the records required to be
maintained hereunder, be deemed to be its own transfer agent and
the Transfer Agent shall thereby be relieved of all further duties
and responsibilities pursuant to this Agreement.
8. Anything in this Agreement to the contrary
notwithstanding, any liability of the Transfer Agent to the Fund
arising out of and during the term of this Agreement, or the
period of confidentiality provided for in paragraph 7 of Article
XIII, shall survive the termination of this Agreement for a period
of six years and, with respect to the provisions of paragraph 7 of
Article XIII, shall survive the period of such confidentiality for
a period of six years, regardless of whether such respective
liability is discovered prior to such termination or prior to the
end of such period.
ARTICLE X
CASH MANAGEMENT SERVICES
Except as provided herein or otherwise agreed to in
writing between the parties, the cash management services set
forth in Appendix E shall be provided by a third-party cash
manager (the "Cash Manager"). During the term of such agreement,
the Transfer Agent will interface with the Cash Manager in all
respects as are reasonably necessary for the provision of such
cash management services to the Fund.
ARTICLE XI
FEES
The fees to be paid to the Transfer Agent by the Fund
pursuant to this Agreement shall only be earned by the Transfer
Agent, and the Fund will be liable for the payment thereof,
beginning on the later of the date of this Agreement or the date
the Transfer Agent first provides the transfer agency functions
contemplated hereby.
The Transfer Agent's fees shall not be subject to any
increase prior to June 1, 1996. Thereafter, the Transfer Agent's
fees hereunder (except those fees provided for under "Benefit
Plans" on page C-10 hereof, which are not subject to any change,
except as may be mutually agreed) will be subject to an annual
percentage increase or decrease based upon the numerically smaller
of: (a) seventy-five percent (75%) of the percentage change, for
the immediately preceding year, in the Bureau of Labor Statistics
"Consumer Price Index for all Urban Consumers: U.S. City Average
by Expenditure Category and Service Group - Services (less rent)"
(the "CPI") or any successor index, or (b) seven percent (7%).
Any such increase or decrease will, however, be subject to the
following: (i) the Transfer Agent must provide the Fund with
written notice of any proposed increase at least six months prior
to the effectiveness thereof, (ii) a decrease in fees shall only
occur when the CPI has decreased for two consecutive years and
will then be based upon the decrease for the second year, e.g. if
75% of the CPI's decrease equals 4% in year four and 8% in year
five, the fees to be paid by the Fund hereunder would not
otherwise change in year five, and would decrease by 7% in year
six, and (iii) all fees to be paid to the Transfer Agent by the
Fund hereunder, whether for services currently enumerated or added
in the future, will at all times be at a rate no greater than the
fees charged to any other mutual fund by the Transfer Agent for
substantially equivalent services, after adjusting for any float
benefits to put such fees on a comparable basis for the purposes
of this calculation. The Transfer Agent will deliver to the Fund,
on an annual basis within thirty (30) days after the end of each
year, a statement signed by the president or chief financial
officer of the Transfer Agent, confirming the Fund's "most favored
customer" status. The Fund shall have the right, at its option,
to request the Transfer Agent's independent auditors to
independently confirm such status of the Fund. In connection
therewith, the Transfer Agent shall give its independent auditors
full and unimpeded access to the information and documents deemed
by such auditors to be necessary for the accomplishment of such
audit. The Transfer Agent and the Fund will each pay one-half of
the cost of such audit.
ARTICLE XII
LIABILITY AND INDEMNITY
1. The Transfer Agent shall be liable hereunder for
any loss, cost, expense or damage, including reasonable counsel
fees, which result from the acts or omissions to act of the
Transfer Agent, its agents or attorneys-in-fact, in breach of this
Agreement or when such acts or omissions to act constitute
negligence, bad faith or willful misconduct.
2. So long as the Transfer Agent has acted or omitted
to act in good faith, without negligence or willful misconduct,
the Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with
or without basis in fact or law), demands, expenses (including
reasonable attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may
be asserted against the Transfer Agent by any person by reason of
or as a result of any action taken or omitted to be taken by the
Transfer Agent in connection with its duties under this Agreement
and in reliance upon or pursuant to: (i) any provision of this
Agreement; (ii) the Prospectus; (iii) any instruction or order
including, without limitation, any computer tape received by the
Transfer Agent from an Approved Institution; (iv) any instrument,
order or Share certificate reasonably believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized
Officer of the Fund; (v) any Certificate or other instructions of
an Officer, or resolution of the Fund's Board; or (vi) any opinion
of legal counsel for the Fund. The Transfer Agent will notify the
Fund prior to incurring any expense (including attorney's fees) in
connection with any claim, demand or liability for which it may
seek indemnification from the Fund hereunder. The Fund will be
entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, and in such case, such defense
will be conducted by counsel of good standing chosen by the Fund
and approved by the Transfer Agent, such approval not to be
unreasonably withheld. The Fund will not settle any such action
without the prior written consent of the Transfer Agent, if such
settlement would require the Transfer Agent to perform any action
or incur any liability not otherwise required by this Agreement.
The Transfer Agent will not, without the Fund's prior written
consent, settle any claim, demand or liability for which the Fund
will be asked for indemnification hereunder. The Fund's indemnity
of the Transfer Agent hereunder will survive termination of this
Agreement for a period of six years and, with respect to the
provisions of paragraph 7 of Article XIII, for a period of six
years after the end of the period of confidentiality provided
thereunder.
3. Specifically, but not by way of limitation, the
Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with
or without basis in fact or law), demands, expenses (including
reasonable attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may
be asserted against the Transfer Agent by any person in connection
with the genuineness of a Share Certificate or the form and amount
of authorized Shares, provided the Transfer Agent has acted in
good faith and without negligence or willful misconduct.
4. At any time the Transfer Agent may apply to an
Officer of the Fund for written instructions with respect to any
matter arising in connection with the Transfer Agent's duties and
obligations under this Agreement, and the Transfer Agent shall not
be liable for any action taken or permitted by it in good faith in
accordance with such written instructions.
ARTICLE XIII
MISCELLANEOUS
1. The Fund, representatives of the Fund's auditors
and legal counsel, and employees, and officers of the Fund or
other persons designated by the Fund shall have the right from
time to time to perform on-site audits at the facility of the
Transfer Agent which do not result in an unreasonable disruption
of the business of the Transfer Agent, such audits to include, but
not be limited to, monitoring phone conversations (to the extent
permitted by law) and reviewing correspondence and operating
procedures as they relate to the provision of services under this
Agreement. On-site audits are intended to permit the Fund, among
other things, to assure itself that the Transfer Agent's system of
internal accounting controls is adequate and shall be conducted in
accordance with an audit program, the scope and frequency of which
shall be agreed upon from time to time in good faith by the
parties. Visits to the Transfer Agent's facility may take place
only during business hours and upon request given to the Transfer
Agent not less than one business day prior to the proposed date of
audit, unless such notice is inconsistent with the objectives of
the audit program. The Fund and such persons also may obtain a
reasonable number of copies of records and accounts directly
related to the services to be supplied hereunder by the Transfer
Agent.
The Transfer Agent shall provide the Fund with a
report, which includes control objectives, in accordance with
Statement on Auditing Standards No. 44, Paragraphs Nos. 42 through
46, "Special Purpose Reports on Internal Accounting Control at
Service Organizations," as amended or replaced from time to time,
issued by the American Institute of Certified Public Accountants,
on the Transfer Agent's system of internal controls with respect
to its shareowner accounting system. The report shall be prepared
by the Transfer Agent's auditing firm
annually, on or before February 28 for the prior year ended
December 31.
The Transfer Agent shall provide the Fund with an
updated semi-annual review report on the Transfer Agent's system
of internal controls with respect to its shareowner accounting
system. The semi-annual report shall be prepared by the Transfer
Agent's independent auditing firm within 30 days after the close
of each semi-annual period.
2. During the term of this Agreement, at no
additional cost to the Fund, the Transfer Agent shall provide
back-up facilities to the data center or centers used by the
Transfer Agent to provide transfer agency services to the Fund
(collectively, the "Back-Up Facility") capable of supplying the
transfer agency services specified herein to the Fund in case of
damage to the primary facility providing those services. The
back-up to the data center operations facility will have no other
function that could not be suspended immediately for an indefinite
period of time to allow the facility to function as a back-up
facility. Transfer to the Back-Up Facility shall commence
immediately after the primary facility fails to provide the
transfer agency services described herein for 24 consecutive
hours. Transfer shall be completed within an additional 24 hours
after failure to the primary facility. If the Transfer Agent
determines, prior to the expiration of the initial 24 hour period,
that the primary facility will be unable to resume providing such
transfer agency services prior to the end of such period, transfer
to the Back-Up Facility shall commence at the time of such
determination. Within forty eight hours after failure of the
primary facility, the Transfer Agent will perform its services
from the Backup Facility to 100% of all financial transactions and
advice and, within two weeks, to at least 80% of each of the other
service level objectives defined in Appendix D. The Fund shall
bear no costs related to such transfer. Once the primary facility
has recovered, it shall again provide the transfer agency services
to the Fund with no loss of time and at no additional cost to the
Fund. The Transfer Agent shall use reasonable efforts to provide
the services described in this Agreement from the Back-Up Facility
at service levels described in Appendix D. Notwithstanding the
foregoing, the parties agree that for a period of six months from
the date of transfer to the Back-Up Facility or such shorter
period ending on the date the primary facility is able to provide
service, if the primary facility is so able prior to the
expiration of such six-month period (the "Back-Up Period"), the
"Fee Credits" (and only the "Fee Credits") described in said
Appendix D shall be suspended for those services provided from the
Back-Up Facility during that period; provided, however, that the
Fee Credit provisions of said Appendix D shall not be so suspended
unless the transfer to the Back-Up Facility shall have occurred by
reason of Causes (as defined in said Appendix D), other than a
Cause described in clause (c) of the penultimate paragraph under
the caption "General" in Appendix D (a "Clause (c) Cause"). If
providing service from the Back-Up Facility continues for longer
than the Back-Up Period referred to above, or at any time when
such services are again provided from the primary facility, all
terms and conditions of Appendix D shall be reinstated in full
force and effect. The Transfer Agent shall act to have the
primary facility restored as promptly as is reasonably
practicable. The Transfer Agent shall not be excused from the
performance of its obligations under this Agreement pursuant to
the provisions of the penultimate paragraph under the caption
"General" in Appendix D unless the primary facility is rendered
incapable of providing the transfer agency services as a result of
Causes, other than a Clause (c) Cause, and the Back-Up Facility is
subject to any Cause, including a Clause (c) Cause, and then shall
be excused only to the extent set forth in such paragraph. The
Transfer Agent shall also demonstrate its ability to effect a
transfer to and provide adequate services from a backup facility
by developing, maintaining and testing "Disaster Recovery
procedures" for both its data center operations facility and
transfer agent operations facility. Plans should be provided to
the Fund in written form annually and should be updated at regular
intervals to incorporate changes in regular operating procedures.
The Data Center recovery plans and transfer agent operations
recovery plan should be tested annually with the Fund
participating to test its interaction (i.e., data communication,
voice communication, etc.) with the backup facilities as specified
in Service Level Agreement #13 - 'Annual Disaster Recovery Tests',
in Appendix D.
3. The Transfer Agent agrees to comply with
(including, without limitation, maintaining its software in
compliance with) all laws, rules and regulations relevant and
material to the performance of its duties hereunder and shall be
liable for its failure to do so only to the extent such failure
constitutes negligence, lack of good faith or willful misconduct.
4. Upon written request of the Fund, but not more
frequently than once in any twelve (12) month period, the parties
shall select a third party (the "Third Party Auditor") to review
all documentation (user and technical) for the computer software
system utilized by the Transfer Agent to provide the transfer
agency services to be provided hereunder (the "System") to
determine whether the documentation sufficiently reflects the
System, can be used by third parties to independently operate and
maintain the System, and that the documentation is adequate for
its purposes consistent with general industry standards.
Compensation and expenses of the Third Party Auditor shall be paid
equally by the parties. The Third Party Auditor shall submit a
report in writing to both parties as promptly as possible. Both
parties shall cooperate fully with the Third Party Auditor,
including permitting full access to the System, including all
documentation, personnel and source code, subject to the Third
Party Auditor signing a reasonable confidentiality agreement
containing provisions similar to those contained in paragraph 7 of
this Article. The Transfer Agent shall promptly correct any
defects in the documentation determined to exist by the Third
Party Auditor to the satisfaction of the Third Party Auditor.
When the Third Party Auditor is satisfied that the documentation
meets the foregoing requirements, it shall so notify both parties
in writing.
5. The Fund agrees that prior to effecting any change
in the Prospectus (other than changes required by applicable law
or regulation) which would increase or alter the duties and
obligations of the Transfer Agent hereunder, it shall advise the
Transfer Agent of such proposed change at least 30 days prior to
the intended date of the same, if reasonably practicable, and
shall proceed with such change only if it shall have received the
consent of the Transfer Agent thereto, and the Transfer Agent
shall not unreasonably withhold such consent. In connection with
any such increase or alteration of the duties and obligations of
the Transfer Agent hereunder, the Transfer Agent shall receive
such additional charges as the parties may mutually agree.
6. Unless otherwise specified, any notice or other
instrument in writing authorized or required by this Agreement to
be given to either party hereto shall be sufficiently given when
delivered by express mail service such as Federal Express or by
registered or certified mail (return receipt requested) or by hand
to the following persons at the following addresses:
If to the Fund:
200 Park Avenue
New York, New York 10166
Attention: President
If to the Transfer Agent:
One American Express Plaza
Providence, Rhode Island 02903
Attention: President
with a copy to:
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Attention: General Counsel
or to such other person or address as shall have been specified in
writing by the party to whom such notice is to be given.
7. The Fund's records, including all those maintained
hereunder by the Transfer Agent, whether in magnetic media, hard
copy, film form or other format, shall be the Fund's property for
all purposes and the Transfer Agent shall treat confidentially and
as proprietary information of the Fund all such records and other
information relative to the Fund and its shareholders which is not
independently available to the Transfer Agent or in the public
domain and, in the case of a shareholder list, in the same format,
and shall have no interest therein and shall use such records only
in connection with the performance of its duties hereunder and for
no other purpose. The Transfer Agent's documentation, system
specifications and other information relating to the Transfer
Agent's computer software system to provide transfer agency
services to mutual funds shall be the Transfer Agent's property
for all purposes, and the Fund shall treat confidentially and as
proprietary information of the Transfer Agent all such
documentation, system specifications and other information which
is not independently available to the Fund or in the public
domain. The Fund shall treat confidentially and as proprietary
information of any sub-contractor employed by the Transfer Agent
pursuant to paragraph 2 of Article VIII of this Agreement all
documentation, system specifications and other information which
is not independently available to the Fund or in the public domain
relating to the sub-contractor's computer software system to
provide transfer agency services to mutual funds and the same
shall be the property of such sub-contractor. Both parties agree
to take such precautions with respect to all such information and
data, including information and data of any sub-contractor
employed by the Transfer Agent, that they take to guard the
secrecy and confidentiality of their own most confidential
information and data. In particular, each party agrees with
respect to such information and data, and any information and data
of any sub-contractor employed by the Transfer Agent:
(a) that all information and data so acquired
by it or its employees, agents or contractors under this
Agreement, or in contemplation thereof, shall be and shall remain
the other party's exclusive property;
(b) to inform its employees, agents or
contractors engaged in handling such information and data of the
confidential character of such information and data;
(c) to limit access to such information and
data to authorized employees, agents or contractors of the
Transfer Agent and the Fund who have a need to know and use such
information and data in connection with this Agreement and the
services to be supplied hereunder;
(d) to keep, and have their employees, agents
and contractors keep, any and all such information and data
confidential;
(e) not to copy or publish or disclose such
information and data to others or authorize their employees,
agents, contractors or anyone else, to copy or publish or disclose
such information and data to others without the other party's
written approval except if required by a State or Federal court or
agency and in such an event prompt written notice of such
disclosure requirement shall be provided to the other party if
permitted by law; and
(f) that upon termination of this Agreement:
(i) all records and other confidential information of the Fund in
the possession of the Transfer Agent shall be returned to the Fund
(or designated successor transfer agent) as provided in paragraph
1 of Article VIII, and (ii) all records and other confidential
information of the Transfer Agent in the possession of the Fund
shall be destroyed or, upon the written request and at the expense
of the Transfer Agent, returned to the Transfer Agent.
The confidentiality provisions noted above will
survive termination of this Agreement for a period of 20 years.
The parties further agree that this Agreement will be
considered confidential during the term of its existence, that
access to it will be limited to those employees, agents,
contractors or other persons who have a need to know of or utilize
the Agreement (including, without being limited to, the Fund's
Board and the auditors and/or counsel to the Transfer Agent, the
Fund and Dreyfus), and that neither party will otherwise publish
or disclose the Agreement to others without the other party's
written approval except if required by a State or Federal court or
agency, and in such event prompt written notice of such disclosure
requirement shall be provided to the other party if permitted by
law.
8. The Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties
with the formality of this Agreement. If any of the provisions of
this Agreement conflict with the provisions of Appendices hereto,
such Appendices shall control.
9. No right or remedy available to any party at law
or in equity is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
10. 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
assigned, by operation of law or otherwise, by either party
without the written consent of the non-assigning party.
11. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New
York, without giving effect to principles of conflict of laws.
Each party hereto submits and consents to the exclusive
jurisdiction of the State and Federal courts sitting in the State
of New York, New York County, in any action arising out of or
connected in any way with this Agreement. This provision shall
have no effect if its implementation would be to deny a party the
right to maintain an action in respect of this Agreement. Each
party agrees that the service of process or of any other papers
upon any of them by certified mail at their respective address set
forth herein shall be deemed good, proper and effective service
and hereby expressly waives any defense based on lack of personal
jurisdiction for any such purpose.
12. 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.
13. The provisions of this Agreement are intended to
benefit only the Transfer Agent and the Fund, and their respective
permitted agents, successors and assigns.
14. The relationship between the parties hereto
shall be that of independent contractors and not partners or co-
venturers, and neither party shall hold itself out as an agent of
the other with the authority to bind the other.
15. The Fund will not use the Transfer Agent's name,
or the name of any sub-contractor employed by the Transfer Agent
pursuant to paragraph 2 of Article VIII, in any Prospectus, sales
literature or other material relating to the Fund in a manner not
approved by the Transfer Agent in writing before such use,
provided, however, that the Transfer Agent hereby consents, and
undertakes to secure the consent of any sub-contractor employed by
the Transfer Agent (without the necessity of the Fund doing any
additional acts) to all uses of the name of the Transfer Agent or
sub-contractor, respectively, which merely refer in accurate terms
to the Transfer Agent's appointments hereunder, or the appointment
of any sub-contractor by the Transfer Agent, or which are required
by the Securities and Exchange Commission or a state securities
commission and, provided further, that in no case will the
Transfer Agent unreasonably withhold or delay such approval, and
the Transfer Agent undertakes to ensure that any sub-contractor
employed by the Transfer Agent will not unreasonably withhold or
delay such approval. The Transfer Agent will not use the Fund's
name, nor that of its adviser, sub-adviser, administrator or
distributor, without the prior written consent of such respective
entity (such approval not to be unreasonably withheld), except as
may reasonably be necessary for the performance of the Transfer
Agent's duties under this Agreement.
16. In case any provision contained in this
Agreement shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity,
legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby insofar as
possible and reasonable.
17. Each of the parties hereto warrants to the other
that it is validly organized and in good standing in the state of
its organization, that it has the right and authority under its
organizing documents to enter into this Agreement and perform the
duties or assume the responsibilities required hereunder, and that
its entry into this Agreement, performance of the duties or
assumption of the responsibilities hereunder is not prohibited by
any applicable law, rule or regulation, nor will it violate any
other agreement to which such party is now or shall become a
party.
18. All times of day referred to in this Agreement
shall be New York time.
19. Except as otherwise provided hereafter, any
controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitrators, one to be
chosen by each party and a third to be chosen by the said two
arbitrators before entering upon arbitration. If one of the
parties fails to appoint an arbitrator within 30 days of notice by
the other party that it has chosen arbitration, or if the two
appointed arbitrators are unable to agree on the choice of a third
within 30 days of their appointment, then the American Arbitration
Association shall be requested to make such selection. If the
American Arbitration Association fails within ten days of such
request to make such selection, then either party, upon notice to
the other, may apply to the Supreme Court, New York County for
such selection (or any other court having complete power and
jurisdiction to entertain the application and make the
appointment). Each arbitrator chosen or appointed pursuant to
this paragraph shall be a disinterested person having at least ten
years experience in the County of New York in a calling connected
with the dispute. The arbitrators' decision will be final and
binding upon both parties, and judgment upon the award rendered by
the arbitrators may be entered in any Court having jurisdiction
thereof.
Each party recognizes that the property and
proprietary information of the other is unique, and that the other
party cannot be fully compensated by money damages and would be
irreparably harmed by the disclosure of its confidential
information and data in violation of the provisions of paragraph 7
of this Article. The parties therefore agree that each may seek
immediate relief at equity for any failure to comply with
paragraph 7 of this Article, in addition to any other remedies
such party may have in law or in equity.
20. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the
subject matter hereof, and merges and supersedes all prior
discussions, agreements and understandings of every kind and
nature between them relating to the subject matter hereof.
Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided in
this Agreement or as may be, on or subsequent to the date hereof,
set forth in a writing signed by the party to be bound thereby.
21. This Agreement has been executed on behalf of
the Fund by the undersigned officer of the Fund in his capacity as
an officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and shall
not be binding upon any Board member, officer or shareholder of
the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized and their respective seals to be
hereunto affixed, as of the day and year first above written.
DREYFUS TRANSFER, INC.
WITNESS:
By:
________________________________
_________________________
[NAME OF FUND]
WITNESS:
By:
________________________________
_________________________
[NAME OF FUND]
TRANSFER AGENCY AGREEMENT
APPENDIX A
I, Eric B. Fischman, Assistant Secretary of
_____________________________________________ (the "Fund"), do
hereby certify that the following individuals,* whose specimen
signatures are on file with the Transfer Agent, have been duly
authorized by the Board members of the Fund to execute any
Certificate, instruction, notice or other instrument in
connection herewith, including any amendment to Appendix B
hereto, or to give oral instructions on behalf of the Fund:
Paul R. Casti, Jr. Mark N. Jacobs
Joseph Connolly Daniel C. Maclean
Lawrence Kash Paul Molloy
Thomas Durante Jeffrey N. Nachman
Gregory S. Gruber Philip Toia
Walter T. Harris James Windels
[Portfolio Manager]
Eric B. Fischman
Assistant Secretary
_________________
* Two (2) signatures required.
[NAME OF FUND]
TRANSFER AGENCY AGREEMENT
APPENDIX B
I, Eric B. Fischman, Assistant Secretary of
____________________________, a [corporation organized and
existing under the laws of the State of Maryland] [business
trust organized and existing under the laws of the Commonwealth
of Massachusetts] (the "Fund"), do hereby certify that the only
series of shares of the Fund issued and/or authorized by the
Fund as of the date of this Transfer Agency Agreement are shares
of [Common Stock] [beneficial interest], $.001 par value [, as
follows:]
[List Series and Classes, if any]
_
Eric B. Fischman
Assistant Secretary
APPENDIX C(1)
ANNUAL PER-ACCOUNT FEE AND SERVICES THEREFOR
For the purposes of fees to be paid pursuant to this
Agreement, an "open account" shall mean a shareholder account
which has a balance at any time during a given month, a "closed
account" shall mean an account that has a zero balance
throughout any given month, and a "purged account" shall mean a
closed account which the Fund has directed the Transfer Agent to
remove from the System. In consideration of an Annual Per -
Account Fee of $ per open account (charged on a monthly
basis), plus payment by the Fund of out-of-pocket expenses in
accordance with Appendix G hereto, the Transfer Agent shall
provide the services provided for in this Agreement on any Fund
Business Day, except as otherwise specifically noted. The
annual fee (charged and payable on a quarterly basis) for each
"Omnibus Account" shall be $100.00, less the Annual Per-Account
Fee set forth above. "Omnibus Accounts" subject to this fee
shall include (i) all institutional accounts coded with a social
code of "12" and a nominee flag of "yes"; (ii) all benefit plan
omnibus accounts listed under a "B" number and linked for
"Qualified Plan Only"; and (iii) such other accounts as the
parties may mutually agree. The Annual Per-Account Fee for a
closed account will be $1.20; there is no fee for a purged
account.
If, for any given month, the average monthly total
number of open accounts of Dreyfus-affiliated funds exceeds
1,871,469 (the sum of the Base Number plus 50,000), then an
aggregate monthly reduction in per-account fees
will be calculated by multiplying the quotient of $.26/12
(such amount to be increased in proportion to any fee increases
the Transfer Agent has received pursuant to the provisions of
this Agreement) times the number of average monthly open
accounts in excess of 1,821,469. The total amount of this
aggregate monthly reduction will be reported by the Transfer
Agent to Dreyfus' Mutual Fund Accounting Department for
allocation to the Fund.
DAILY ACTIVITY
Maintain the following shareholder information on
disc or in such other manner as the Transfer Agent shall
reasonably determine:
* Name and Address, including Zip Code, in such
format as the parties mutually agree upon
* Balance of Uncertificated Shares
* Balance of Shares in Certificate form
* Certificate number, number of shares, issuance
date of each certificate outstanding and cancellation date for
each certificate no longer outstanding
* Balance of shares having paid a commission,
and the rate of commission charged ("Privileged")
* Balance of dollars available for redemption
(excludes certain purchases within a specified number of prior
business days)
* Dividend code (daily accrual, daily reinvest,
dividend sweep, dividend ACH, monthly reinvest, monthly cash or
quarterly cash)
* Type of account code (regular account,
Automatic Withdrawal Plans)
* Dealer, Branch, Salesman and related "Dealer
File" information
* List promotion and package codes and client
identification code
* Contract date indicating the date an account
was opened
* Original contract date for accounts opened by
exchange
* Perform periodic reporting, withholding, and
due diligence in accordance with Federal tax law requirements
* State of residence code/country code
* Social Security/EIN number, and indication of
certification (SSN should also be usable as a reference for on-
line account lookup)
* Historical transactions on the account for the
most recent 18 months, or other period as mutually agreed to
from time to time
* Indication as to whether phone transactions
can be accepted and phone balances provided for this account
* Fed wire, Automated Clearing House (ACH) or
alternate payee instructions to allow initiation of Fed wires,
ACH or checks to alternate payees
* Investor's PIN # and/or mother's maiden name
* Social code, i.e. male, female, joint tenant,
etc.
* An alternate or "Secondary" account number
issued by a dealer (or bank, etc.) to a customer for use in
inquiry and transaction input by "remote accessors." (Fund
client institutions with remote terminal access)
* Investment Adviser
* All further information required for the
proper maintenance, reporting and servicing of benefit accounts
* Other fields not listed, but available to be
entered on the System based on the latest version of the System
user guide, data dictionary or file documentation, or were
entered and stored at the Fund's previous transfer agent, if any
FUNCTIONS
* Answer all investor and dealer telephone
and/or written inquiries, except those concerning Fund policy
which will be referred to the Fund
* Maintain system availability for inquiry (via
terminal, voice response system or Cross Domain network
communication) purposes as set forth in Appendix D herein
* Utilize the electronic mail system utilized by
Dreyfus (T.O.S.S. or a successor system) for key individuals
designated by the Transfer Agent within its organization, to
correspond with designated T.O.S.S. system users at Dreyfus
* Deposit Fund share certificates into accounts
upon receipt of instructions from the investor or other
authorized person
* Examine and process all transfers of shares
insuring that all transfer requirements and legal documents have
been supplied
* Process and confirm address changes to the
former address of record reflecting the new address
* Process standard account record changes as
required, i.e., DLR, Salesman Codes, Dividend Codes, etc., in
accordance with required documentation
* Microform source documents for transactions,
such as account applications and correspondence, maintaining
segregated media copies for all Dreyfus-affiliated funds
* Refer correspondence, transactions,
applications, or other documents and phone calls which are for
Dreyfus-affiliated funds and accounts processed by another
transfer agent, which may be used from time to time, to the
appropriate destination/contact, defined in facilitated
transaction procedures, mutually agreed to from time to time
* Respond to research inquiries ("Inquiries")
from Dreyfus via Dreyfus' C.S.S. System (a "Response"), such
access (other than terminal and line costs) to be provided at no
additional cost to the Transfer Agent
* Respond to or otherwise act upon subpoenas,
levies, restraining orders and other similar documents served on
the Fund, its affiliates or the Transfer Agent with respect to
Fund shareholder accounts
* Handle foreign collection items
* Perform backup withholding for those accounts
as required by federal government regulation
* Use of automatic allocation system to credit
multiple participant fund accounts by percentage breakdown
* Use of master account application to establish
individual participant accounts
* Process bulk wires for multiple participant
and broker dealer account liquidations
* Perform withholdings on liquidations, if
applicable, for employee benefit plans. Prepare and mail 5498's
and 1099-R's
* Purge "closed" accounts as directed by the
Fund
* Receive relevant information in automated or
manual form (at the Fund's direction) concerning Fund redemption
checks presented for payment on each day that the Federal
Reserve is open for business, and post this information as
redemptions to individual shareholders' accounts. The Transfer
Agent shall cause certain redemption checks to be returned in
the event of insufficient assets, uncollected funds, or such
other reason as defined by the Fund or in the Prospectus, within
the time limits provided by the Federal Reserve Payments System,
as may be amended from time to time, and shall collect such fees
as the Fund may specify and shall remit such fees to the Fund or
a third party
* Process new accounts, verifying completeness
of application; establish new account records with standard
abbreviations and registration formats
* Record data on sales, exempt sales,
redemptions and exchanges for state securities registration
purposes and transmit information daily to Dreyfus Legal
Department
* To the extent not performed by cash management
provider ("CMP"), pick up mail addressed to P.O. Boxes
identified by the Fund three times daily at a minimum. Two of
these pick-ups take place in the morning with one additional
pick-up in the afternoon
* To the extent not performed by the CMP for
Institutional Lockbox and Exception Items referred by CMP, a
$.30 fee will be applied to each item.
* To the extent not performed by CMP, verify
that the Fund security code identified from the OCR stub
compares to the payee of the checks or a generic alternative
(e.g. "Dreyfus"). If they do not compare, stub and check will
be indexed on same day for further processing
* To the extent not performed by CMP, process
payment transactions by reading optical character recognition
information printed on remittance document
* To the extent not performed by CMP, retain and
file remittance stubs, and microfilm investment checks and
supporting documentation daily, in a form not commingled with
other funds
* To the extent not performed by CMP, in the
absence of an accurate and complete remittance stub, Transfer
Agent will create a substitute stub if the investor's security
code and account number is written on the check or an
accompanying document
* To the extent not performed by CMP, multiple
checks with one remittance will be processed. Each check hold
period governs the investment date
* To the extent not performed by CMP, one check
with split remittance will be processed provided amounts are
stated and they prove
* To the extent not performed by CMP, checks
drawn on foreign banks in U.S. dollars - send for collection;
checks drawn on foreign banks in foreign currencies - return to
drawer
* To the extent not performed by CMP, stub with
no remittance amount - the payment will be processed based on
the amount of the check
* To the extent not performed by CMP, improperly
printed stubs - if an account number and security code are
legible, a substitute remittance stub will be created
* To the extent not performed by CMP,
correspondence accompanying any investment - correspondence
shall be noted with customer's account number with an indication
of "Payment In Process"
* To the extent not performed by CMP, retain and
process out of proof checks with multiple stub remittances not
equal to checks
* To the extent not performed by CMP, the
appropriate Account on return items will be debited on date of
receipt. Transfer Agent will maintain a returned items log and
copies of checks, indicate account number and security code (if
available), amount, and microfilm reference number for each item
on the day these items are presented
* Endorse and microfilm all checks received and
process all items daily
* Isolate on a best efforts basis all non-
individual third-party investment checks for $25,000 or more
received for both new accounts and subsequent investments and
process in accordance with procedures agreed to between the Fund
and the Transfer Agent
* Examine and process all shareholder payments
and liquidations; verify the recipient fund on payments and
availability of shares on transactions, maintaining necessary
automated interfaces to cash manager if another entity is CMP
* Provide duplicate copies of statements and/or
transcripts of accounts to shareholders requesting such
information (for such fee as the Fund and Transfer Agent shall
mutually agree)
* On original documents received by Transfer
Agent prior to executing the transaction, examine all Medallion
(STAMP, SEMP or MSP) guarantees received on correspondence
ensuring all program requirements are met
* Contact shareholder on any redemption request
received in writing for specified amounts as mutually agreed to
by the Fund and the Transfer Agent in which either the check is
to be payable to someone other than the registrants, or if a
fedwire, being sent to a bank other than what is on the transfer
agency system for that account per agreed upon procedures on a
best efforts basis
* Process exchanges of Fund shares and confirm
the exchange transaction in a single transaction advice
* Process telephone transactions on recorded
lines on a system in which such recordings can be easily and
accurately retrieved and verify the identity of the originator
as directed by the Fund. In addition, process various
maintenance items pursuant to shareholder telephone requests,
including but not exclusive to changing dividend options and
changing Automatic Asset Builder dollar amounts and cycles, as
authorized by the Fund
* Establish automatic withdrawal records and
process automatic withdrawals as permitted by the Fund
* Issue shares in certificate form as directed
by the Fund
* Process delayed settlement ("Wire Order")
trades as permitted by the Fund, maintaining an inventory of and
performing settlement of such share subscriptions
* Maintain records indicating institutions
eligible for 12b-1 fees, calculate applicable fees, and generate
consolidated 12b-1 reports and checks for payment as directed by
the Fund, in return for a fee of $.10 per account per year
* Calculate dealer commissions in accordance
with rates set by the Fund and generate appropriate periodic
commission reports and checks
* Provide magnetic tape or data transmission of
dividends and/or balances of accounts for various institutions
in various formats on a monthly and ad hoc basis
* Perform due diligence mailings as requested by
the Fund for W-9 solicitation, W-8 solicitation or other
purposes as may be identified and encode shareholder records
with properly returned information
* Generate appropriate information and perform
all mailings as required by regulation, including but not
limited to: 1099 DIV, 1099(B), 1042, 1042(S), 1096, 5498 etc.
* Provide telephone service for the shareholders
of the Fund 24 hours per day, 7 days per week
* Process shareholder services forms and
establish additional account services as indicated, ensuring
that all requirements are met including review of signature
guarantees
* Provide electronic fund transfers, pre-
notifications, debit and credit, via ACH and accept incoming ACH
credits from external services
* Perform all control and reconciliation
functions necessary to assure all financial transactions are
accurately recorded in shareholder accounts, and are reconciled
in total with all bank accounts maintained by the Fund
* Notify and fax copies of all redemption drafts
to Dreyfus for which the Transfer Agent is rejecting due to
various reasons (e.g., insufficient funds, uncollected funds,
etc.)
* Other functions not listed, but which were
performed by the Fund's previous transfer agent, if any
REPORTS PROVIDED
The Transfer Agent will print and deliver or, at the
Fund's option, provide the necessary information and data
communication capabilities to permit the Fund to print, in a
timely fashion in accordance with existing procedures, the
following:
* Daily Journals - Reflecting all share
and dollar activity for the previous day (Net Asset Value) and
an accrued dividend journal both in account number sequence
* Blue Sky Report - Supply information monthly
and/or weekly for the Fund's preparation of Blue Sky Reporting
* N-SAR Report - Supply monthly
correspondence, redemption and liquidation information for use
in Fund's N-SAR Report
* Provide appropriate control reports to allow
independent verification of the accuracy of the data received in
all management tapes
* Prepare and mail copies of summary statements to
dealers and investment advisers
* Prepare monthly consolidated dealer report
* Report on errors in compliance with the Service
Level Agreement
* Generate and mail confirms for all financial
transactions. Match financial transaction confirmations to
corresponding redemption checks, where applicable, and mail
daily to account address of record, unless less frequent
mailings or a different address are specified by the Fund.
Copies of financial transaction confirmations should be sent to
the dealer specified, as well as investment adviser and, at the
Fund's option, a "Fourth Party"
* Line-by-line report to confirm payments to multiple
participant accounts
* Provide plan level reporting for multiple
participant benefit accounts
* Other reports listed in "Exhibit 1- System Report
Output," annexed hereto
* Other reports not listed but which were provided by
the Fund's previous transfer agent, if any
TAPES/TRANSMISSIONS PROVIDED
Provide, in a format to be supplied by the Fund:
* Weekly Management Tapes
- Provide summary level data of account
information on magnetic tape or via data transmission
- Provide a magnetic tape or data
transmission of all new accounts, in a format to be provided
separately
* Provide data communications connection via
dedicated lines to the Fund's data center, to allow on-line
terminal access for inquiry to all terminals in the Dreyfus
network ("SNI/Cross Domain")
* Provide data communications connection via
dedicated lines to a location specified by the Fund, to allow
access to voice response system(s) or similar data processing
devices
* Monthly Management Tape
- Provide detailed, accurate and up-to-
date account information for each account via magnetic tape data
transmission. The Fund shall have the option to receive this
tape/transmission on a weekly basis
* NSCC Interfaces
- Interact by sending and receiving any
necessary transmissions and the associated processing for the
NSCC FUND/SERV system, NSCC's "Networking" facility and any
other future mutual fund processing capabilities provided by
NSCC's network
* Other Interfaces
- Provide the Fund with access to other
mutual fund processing interfaces, either used by the Fund's
previous transfer agent, if any, or developed by the Transfer
Agent
- Develop other mutual fund processing
interfaces at the Fund's request
DIVIDEND ACTIVITY
* Accrue dividends daily or monthly and reinvest
dividends daily or monthly, in accordance with the Fund's
prospectus. Pay dividends in cash monthly, quarterly or so
designated as stated in the Fund's Prospectus, including
reinvesting in other funds within the Dreyfus Group serviced by
the Transfer Agent
* Calculate capital gains distributions
* Suppression of dividend reporting for certain
institutional customers
DEALER SERVICES
* Prepare and mail advice to dealers daily
* Prepare and mail copies of statements to
select dealers as flagged on the System monthly or same
frequency as investor statements
* Prepare and mail daily and monthly line-by-
line reports to selected institutional firms
* Allow on-line access (via telecommunications
lines) to institutions designated by Dreyfus from time to time
to the shareholder accounting system. Only those accounts with
dealer codes for their institution will be available, except
that certain "clearing broker" institutions may be allowed
access to multiple dealer codes representing those institutions
they are authorized to clear for
* Differentiate levels of access by institution,
as instructed by the Fund from time to time, as follows:
* Inquiry Only
* Input New Accounts
* Input Purchases
* Input Redemptions
* Input Exchanges
* Input changes of Account Data for
Address, SSN, Owner Code, Branch or Salesman Code, Dividend Code
* Input Broker/Dealer or other transacting
institution's internal account number, i.e. cross-reference
number
These levels should be controlled
by a unique ID and password assigned to each user within a
remote accessor institution. Each user could be assigned any
combination of the above privileges
* Settle "Bulk" transactions where appropriate,
for institutions doing multiple trades in a fund on a given day,
via wire or check, provided proper instructions are provided as
to which transactions are being settled
* Other services not listed but which were
provided by the Fund's previous transfer agent, if any
ANNUAL MEETINGS
* One proxy mailing per year
* Address and mail proxies and related material.
Tabulate returned proxies and supply daily reports when
sufficient proxies have been received (material must be
adaptable to mechanical equipment as reasonably specified by the
Transfer Agent)
* Prepare certified list of stockholders, hard
copy or microform, and furnish Inspectors of Election for
meetings
PERIODIC ACTIVITIES
* Prepare and mail transaction advice daily to
investors
* Address and mail four (4) periodic financial
reports (material must be adaptable to Transfer Agent's
mechanical equipment as reasonably specified by the Transfer
Agent)
* Mail a Prospectus to a shareholder making a
payment after the Prospectus' effective date, with the
transaction advice of such payment
* Prepare and mail monthly or quarterly
statements to investors, depending upon the policy in effect for
the Fund. Prepare and mail consolidated statements at the
frequency requested by the Fund, which shall be no more frequent
than monthly
* Forward prospectus and application to
shareholders opening new accounts by telephone exchange or Fed
Wire when name and address is supplied
* Generate microform copies of statements for
the accounts of those dealers specified by the Fund
* Compute, prepare and furnish all necessary
reports to Governmental authorities (Forms 1096, 1099DIV, 1099B
and 1042S)
* Enclose various marketing material as
designated by the Fund in all confirm and statement mailings,
i.e. daily confirm and monthly and quarterly statements
(material must be adaptable to mechanical equipment)
* Annually prepare and mail K-1 reports to those
investors in limited partnership funds during the preceding
calendar year, in conformity with applicable Internal Revenue
Code, state or local guidelines
* Prepare and mail annual cost basis information
to all eligible shareholders.
BENEFIT PLANS
Throughout the term of this Agreement, the Transfer
Agent will, through an entity selected and approved by the Fund,
arrange for the custodianship of IRA and Keogh plans sponsored
by Dreyfus for an annual fee (which will include the payment of
any fee negotiated by the Transfer Agent with such custodian) of
$10.00 per account, with a maximum fee of $25.00 per
participant. In the event an account is closed prior to the
assessment of the annual fee, the annual fee will be assessed at
the time the account is closed.
APPENDIX C(2)
ENHANCEMENTS AND FEES THEREFOR
The Fund may request enhancements to be made or
functionality to support new products be developed within the
software system utilized by the Transfer Agent. Any original
product or service feature developed at the request of any fund
advised, sub-advised, administered or distributed by Dreyfus
will not be copied or made available to any other mutual fund
not so advised, sub-advised, administered or distributed for a
period of 9 months from start-up date of the product or service
feature or, if the product is made available by another transfer
agent (other than through disclosure by the Transfer Agent), for
a period of time equal to the time it took to be developed for
the Fund, whichever is sooner. Original products or service
features are those which are not known by the Fund and/or the
Transfer Agent to be generally available at other transfer
agents or mutual fund groups at the time the request for the
product or service feature is originated. The costs of other
enhancements or new products, as well as normal maintenance
shall be borne as follows:
Billable Programming Costs include the following
items to the extent such enhancements and modifications must be
made by systems personnel other than the Transfer Agent's
Dreyfus-dedicated software staff.
- Costs of enhancements, original products and
other modifications that will not result in an earnings stream
or reduction in expense to the Transfer Agent. If new products
result in an earnings stream to the Transfer Agent, the billable
programming costs associated therewith will be reduced by 50%.
Non-Billable Programming Costs include the following
programming which will be done by personnel of the Transfer
Agent other than the Dreyfus dedicated software staff:
Normal maintenance such as dividends, normal
statement changes (blurbs, etc.), change in printing specs for
new forms and legal, regulatory or taxing authority requirements
which are common to all funds, adding/deleting terminals and
data network reconfigurations, proposed changes in technology,
any other request to correct any type of Transfer Agent error
(e.g., coding problems), any new enhancements which will benefit
all funds processed by the Transfer Agent (e.g., NSCC).
Billable and non-billable programming are subject to
sign-off by the appropriate authorized signatories of the Fund
to acknowledge completion and acceptance of the programming
prior to its implementation. The list of authorized signatories
and description of circumstances when sign-off will be required
will be provided to the Transfer Agent by the Fund as part of
the mutually agreed on Software Request Administration
Procedures, attached hereto as Appendix F.
Programming request procedures:
All programming requests will be submitted by the
Fund in writing. Non-billable programming requests as defined
herein will be directed to the Transfer Agent's non Dreyfus-
dedicated staff. All other programming requests will be
addressed to the Dreyfus-dedicated software staff.
Upon receipt of programming requests the Transfer
Agent's dedicated staff will review the request and perform an
initial analysis which will be adequate to provide an estimate
of the number of person hours to complete the request, including
an estimate for the following development phases:
analysis/design, programming, unit testing and acceptance
testing. To the extent a programming request is estimated by
personnel outside the Dreyfus-dedicated software staff, the
initial analysis will not be a billable cost.
Provisions not addressed herein will be subject to a
mutually agreed on "Software Request Administration Procedure",
attached hereto as Appendix F.
Dreyfus-Dedicated Software Staff:
The Transfer Agent will provide, at no additional
cost to the Fund, a programming staff dedicated only to the
completion of Dreyfus programming requests. The staff level
shall be maintained at a ratio of one programmer/analyst for
each 100,000 shareholder accounts within the Dreyfus-affiliated
group of funds, and shall therefore be adjusted up and down, no
less frequently than semi-annually, to maintain such ratio.
The Dreyfus-dedicated software staff will be managed
by the Transfer Agent and is expected to conform to the Transfer
Agent's programming and documentation standards. The Transfer
Agent will provide a dedicated staff whose personnel will at all
times have an average of at least five years data processing
applications software experience, of which at least three years
shall be developing data processing applications software with
respect to mutual fund transfer agency activities. In addition,
at no time will 25% or more of the staff have less than two
years experience developing data processing applications
software for mutual fund transfer agency activities. With
regard to priorities, the staff will be directed at the sole
discretion of Dreyfus to address those software requests which
Dreyfus sees fit.
For each hour of time spent by the Dreyfus-dedicated
software staff on Fund programming requests for new products or
services which result in an earnings stream to the Transfer
Agent, the Fund will be entitled to either a fee credit for one-
half hour's time or, if performed by staff for which Dreyfus is
paying separately, a refund of 50% of the expense of such staff
for each one hour.
Programming Request Cancellation and Refund:
Any program request canceled by the Fund prior to
completion and not implemented by the Transfer Agent for other
clients will be billed to Dreyfus' Mutual Fund Accounting
Department for allocation to the Fund for work completed to the
cancellation date provided, however, that if the program code
for the canceled modification, or knowledge derived therefrom,
is later used by the Transfer Agent for another client or
clients, then the Fund shall be entitled to a refund of the
amount previously paid if the request was billable, or a credit
for the programming hours expended by the Dreyfus-dedicated
software staff toward future billable costs.
Annual Certification:
The Transfer Agent will deliver to the Fund within
thirty (30) days after the end of each calendar year a written
certification of the Transfer Agent's chief financial officer or
its president that the Transfer Agent has been in compliance
with this Appendix C(2). The Fund shall have the right, at its
option, to have the Transfer Agent's independent auditors
confirm compliance with this Appendix C(2). In connection
therewith, the Transfer Agent shall give such independent
auditors full and unimpeded access to the information and
documents deemed by such auditors to be necessary to accomplish
such audit. The cost of such auditors shall be divided equally
between the parties.
Exhibit 1
System Report Output
The following reports are currently being provided and any
others needing to be developed in the future which the Fund
requires (other than mandatory reports that the Fund is
compelled to produce and/or file because of a change in a
regulatory requirement) will be produced by the Transfer Agent
at their indicated frequency in hard copy or microfiche form or,
upon request, electronically transmitted to the Fund, at the
Fund's expense.
DAILY CLERICAL REPORTS
Activity Reports:
Daily Price and Calendar Review
Transaction Activity Report
Money Transfer Activity Report
Exception Reports:
Security Violation Transaction Report
Blue Sky Warning Report
File Maintenance Reports:
Options and Control Maintenance Register
Shareholder Maintenance Register
Shareholder Freeze Register
Client Register Changes
Master Account Maintenance Report
Dealer Maintenance Register
Blue Sky Maintenance Register
Proxy Maintenance Register
Retirement Clerical File Maintenance
DAILY MONETARY REPORTS
Fund Accounting:
Cash and Share Proof
Cash and Share Proof (Cash Credits)
Cash and Share Proof (Cash Debits)
Cash and Share Proof (Share Credits and
Debits)
Cash Receipt Controls
Gain/Loss Journal
Position Control Report (Money Market
Dividend)
Transaction Journals:
Direct Purchase Journal
Pended Purchase Journal
Direct Redemption Journal
Exchange In Journal
Exchange Out Journal
Certificate Journal
Transfer Journal
Adjustment Journal
Direct Fee Journal
Wire Order PD/Wait - Settlement Journal
Wire Order Purchase Placement Journal
Wire Order Full Settlement Journal
Wire Order Redemption Placement Journal
Wire Order Cancel Journal
Spawned Transaction Journal
Net Accrual Change Journal
Distribution Journal
Transaction Reject Report
Transaction Warning Report
Outstanding Rejects Report
Transaction Registers (Microfiched once per week)
Certificate Register
Wire Register
Redemption/Refund Check Register
Distribution Check Register
Systematic Withdrawal Check Register
RPO Check Register
Commission Check Register
AM/PM Wire Register
Cumulative Reports (Microfiched once per week)
Wire Order Reconciliation Report
Wire Order Unpaid Purchases Report
Wire Order Paid and Waiting Report
Wire Order Unsettled Redemption Report
Wire Order Unpaid Purchases Aging Report
Sales Adjustment Detail Report
Daily Sales Report
WEEKLY EXCEPTION REPORTS
Periodic Company Update
Incomplete Registration Report
Certificate Proof Report (Report Type 1)
Account Status Exception Report
Delinquent IPP Report
Master Account Exception Report
LOI Expiration Report
MONTHLY REPORTS
Shareholder History Proof Report
LOI Completion Report
12b-1 Dealer Report
Wire Order Monthly Broker/Dealer Ledger
Sales Report by Fund, Account, Transaction Type
Year-to-Date Sales Report - Gross Amount by fund
Year-to-Date Sales by Territory
Monthly Dealer Activity Report
Dealer Ranking Report
Monthly Blue Sky Summary
Month-to-Date Blue Sky Sales by State
70-1/2 Notification Report
Delinquent Distributions Report
Retirement Periodic Warnings/Totals
Retirement Fee Totals By Plan Report
TTL Fees Due Less Than Accrued Amount Report
Ret Account Closed/Zero Share Balance Report
Monthly Client Billing
OCCASIONAL FUND FUNCTIONS (O.F.F.) REPORTS
Commission Statement
Company Commission Report
Position Control Report (Stock Dividend)
Distribution Check Register
Commission Check Register
Trail Commission Statements
PURGE REPORTS
Shareholder Account Purge Register
Master Account Purge
Money Transfer Purge
Certificate File Delete
ANNUAL REPORTS
Annual Blue Sky Cumulative Sales by State
APPENDIX D
SERVICE LEVEL AGREEMENT
GENERAL
The percentages set forth herein relate to all mutual funds for
which the Transfer Agent now serves or in the future may serve
as transfer agent and which are sponsored, advised, sub-advised
or administered by Dreyfus, or for which Dreyfus acts as primary
distributor (the "Funds"), and do not relate individually to any
specific fund. All fee credits are to be aggregated where there
are instances of not meeting objectives in respect of two or
more different services. A waiver, whether partial, total, or
conditional, of any fee credits, or right to terminate this
Agreement in a particular instance does not constitute a waiver
in any other instance. The Fund must give notice of its intent
to terminate the Transfer Agency Agreement of which this
Appendix is a part within 60 days of receipt of a true and
complete report of the Transfer Agent evidencing the event
giving rise to such right of termination under the terms of the
paragraphs of this Appendix captioned "Termination." Such
notice must specify a date no less than three nor more than
twelve months thereafter as the date upon which such termination
shall be effective. Failure to provide such notice in a timely
manner shall constitute a waiver in respect of the specific
event (but no other). This provision in no way shall limit the
Fund's right to terminate the Transfer Agency Agreement pursuant
to Article IX thereof. A monthly document evidencing the
Transfer Agent's performance with respect to the service levels
set forth below will be delivered to the Funds by the fifteenth
business day of the following month by the Transfer Agent, or as
soon thereafter as is reasonably practicable. Such document
shall be signed by a senior officer of the Transfer Agent. A
failure permitting termination by any one such Fund will give
all of the Funds, including the Fund, the right to terminate
their respective transfer agency agreements with the Transfer
Agent.
For purposes of this Appendix, the term "business day" shall
mean each day that the Fund is open for business as described in
its prospectus.
Notwithstanding any service level or objective specified herein,
for purposes of this Transfer Agency Agreement, the Transfer
Agent's failure to meet any objective or its performance at a
level giving rise to fee credits or the right to terminate this
Transfer Agency Agreement shall not per se constitute negligence
or a breach of this Transfer Agency Agreement nor constitute an
inference of the foregoing provided that nothing herein
contained shall preclude the Fund from introducing evidence of
the Transfer Agent's performance in an effort to prove
negligence or breach of this Transfer Agency Agreement.
There shall be excluded from the calculation for the service
levels described in this Appendix D, and from the consideration
of whether the Transfer Agent has been negligent or has breached
this Agreement, any period of time, and only such period of
time, during which the Transfer Agent's performance is
materially affected, by reason of circumstances beyond its
control (collectively, "Causes") including, without limitation
(except as provided below), (a) acts or omissions to act of the
Fund, its employees, agents, or sub-contractors, including a
third party cash management provider, (b) flood or catastrophe,
acts of God, failures of transportation, strikes, lockouts, work
stoppages, or other similar circumstances, but only if the
Transfer Agent promptly takes all commercially reasonable steps
to ameliorate the consequences of such circumstances, or (c) an
abnormally high level of activity with respect to either the
Fund or the markets in which it invests. An abnormally high
level of activity shall be deemed to have occurred, if the
volume of the activities listed in Appendices C(1) and C(2) on a
given day exceeds both: (i) 133% of the average daily volume of
such activities for the immediately preceding 90 calendar days,
and (ii) 133% of the average daily volume of the same calendar
month in which such day occurs during the immediately preceding
year. The Transfer Agent shall not be responsible for delays or
failures to supply any services where such delays or failures
are caused by the delays or failures of the Fund to supply
necessary instructions, approvals or information in the time
periods agreed upon and all service levels shall again be
measured from the date of the receipt by the Transfer Agent of
any necessary instructions, approvals or information. Nothing
contained herein, however, shall relieve the Transfer Agent from
responsibility for the acts or omissions to act of its own
permitted agents, sub-contractors, or entities acting under the
Transfer Agent's control.
For calculation purposes, a week is considered to be the period
beginning on Monday and concluding on the following Sunday.
When a month ends during the week, that entire week's
performance will be applied to the previous month.
1. Telephone Responsiveness
Service Description:
Telephone Responsiveness represents Telephone Authorization
calls of the Transfer Agent's Automated Call Distribution System
("ACD") from investors in the Fund who are authorized to request
certain transactions by telephone. These telephone
authorization transactions include, without limitation,
(1) exchanges, (2) redemptions and (3) TeleTransfer purchases.
The percentage of calls completed to calls received for the
month represents the Transfer Agent's service level.
Transfer Agent's Objective:
The Transfer Agent's Objective is to manage this service to a
performance level of 98% calls completed to calls received, and
for purposes of the calculation method below, shall omit any
call terminated within 20 seconds.
Method of Calculation:
Using its ACD report, the Transfer Agent will calculate the
average performance for each week. Such number will be compared
to the schedule below to determine the total percentage credit
to Per-Account Fees billed to the Funds for the month. This
credit information would then be passed to Dreyfus' Mutual Fund
Accounting Department for allocation to the Fund against the
fees to be paid hereunder.
Fee Credits:
% Calls Average Performance Level
Completed for Each Week within the Period
Less Than 1 Wk. 2Wks. 3Wks. 4Wks. 5Wks.
98% .02% .06% .14% .25% .39%
97% .06% .14% .25% .39% .56%
96% .14% .25% .39% .56% .75%
95% .25% .39% .56% .75% 1.00%
Termination:
Except for operations during the Back-Up Period (as defined in
paragraph 2 of Article XIII hereof), the Fund shall have the
right to terminate this Agreement, upon the notice provided
under the caption "General" in this Appendix D, if the
percentage of calls completed is less than 95%: (1) for three
consecutive weeks, or (2) for any six weeks (whether or not
consecutive) in any thirteen week period.
2. Timeliness of Research Requests
Service Description:
The Transfer Agent will provide a research and problem
resolution service to the Fund's investors. In connection
therewith, the Transfer Agent agrees to use the C.S.S. System
for receiving research requests from Dreyfus and to communicate
the results of that research to Dreyfus. On a daily basis,
Dreyfus using the C.S.S. System will enter research requests
resulting from investor inquiries concerning their accounts and
activity therein, which are received at its various servicing
locations, and will forward them to the Transfer Agent for
research and resolution. The Transfer Agent will research each
item and respond by entry into the C.S.S. System within
previously determined and agreed upon time frames (See Schedule
A). The C.S.S. System generates reports showing the status of
research items outstanding.
Transfer Agent's Objective:
The Transfer Agent's objective is to accurately respond to 98%
of the research requests within the periods set forth on
Schedule A, maintain an average dispute rate of no more than 4%
while ensuring the average number of days out of standard on
overdue items does not exceed five days. Failure to achieve any
of the parts of the standard results in fee credits as indicated
below.
Method of Calculation:
Using C.S.S. aging reports, the Transfer Agent will calculate an
average number of business days past the established turnaround
times for all research items past due during the month, and for
purposes of such calculation shall exclude any item overdue
because of incomplete data maintained by a previous transfer
agent, if any. (An item is considered past due if not
accurately responded to in the prescribed time frame. If the
Transfer Agent inaccurately or partially responds to an item,
that item is deemed outstanding until a proper response is
received by Dreyfus.) This average number shall be determined
by multiplying daily each past due item times the number of days
the item is past due, summing the daily products, and dividing
the result by the total number of past due requests outstanding
for the day. This daily average then will be averaged for the
weeks during the month and compared to the schedule below to
determine the total percentage credit to Per-Account Fees billed
to the Funds for the month. This credit information would then
be passed to Dreyfus' Mutual Fund Accounting Department for
allocation to the Fund against the fees to be paid hereunder.
Fee Credits:
Business Days Average Weekly Performance for
Past Turnaround Each Week with the Period
Time _ 1Wk. 2Wks. 3Wks. 4Wks. 5Wks.
1 but less than 2 .02% .06% .14% .25% .39%
2 but less than 3 .06% .14% .25% .39% .56%
3 but less than 4 .14% .25% .39% .56% .75%
4 or more .25% .39% .56% .75% 1.00%
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Average Weekly Performance is greater than four
business days: (1) for three consecutive weeks or, (2) for six
weeks in any thirteen week period.
3. Manual Data Entry
Service Description:
The Transfer Agent provides a manual data entry service to the
Fund for establishing new investor accounts or for making file
corrections to existing account records. The Fund places great
importance on the accuracy of name, street address, city, state,
zip code, taxpayer identification number and LPP (List, Pack and
Promotion) Code ("Critical Data"), and all other information
that the Transfer Agent keypunches for submission to its Mutual
Fund System.
Transfer Agent's Objective:
The Transfer Agent's objective is to establish new accounts with
a Data Accuracy Rate (as defined below) of 98% as measured by a
20% daily sample of all new accounts. The Transfer Agent's
Quality Assurance Department will perform the sample of the line
and will measure the quality of all fields entered.
Method of Calculation:
The Transfer Agent will calculate the Data Accuracy Rate for
each calendar month based on the percentage of errors detected
in a 20% daily random sampling of all new accounts. A monthly
average will be calculated based on the daily sampling by adding
the daily rates and dividing the result by the number of
business days for the month. This monthly Data Accuracy Rate
will be compared to the schedule below to determine the total
percentage credit to Per Account Fees billed to the Funds for
the month. This credit information would then be passed to
Dreyfus' Mutual Fund Accounting Department for allocation to the
Fund against the fees to be paid hereunder.
Fee Credits:
Data Entry Accuracy Rate
Less Than
Schedule A 98% 97% 96% 95% 94% 93% 92%
% Credit to
New Account
Fees 0.02% 0.08% 0.18% 0.33% 0.51% 0.73% 1.00%
Termination
If Data Entry Accuracy Rate is less than 90% for two consecutive
months, the Fund shall have the right to terminate this
Agreement, upon the notice provided under the caption "General"
in this Appendix D.
4. System Availability
Service Description:
The Mutual Fund Inquiry System and Rite/Lion System will be
available for access by the Fund and its shareholders at various
locations. These systems allow Dreyfus Service Corporation to
answer inquiries received from the Fund's investors, and the
Rite/Lion System allows clients to print daily and month-end
reports and process transactions.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service to a
performance level of 99% of system availability, for the MFO
System, and the LION System, as follows:
MFO - Monday-Friday:
* From 8 A.M. until 9:50 P.M. - Fully Available
* From 9:50 P.M. until 10 P.M. - Unavailable
* From 10 P.M. until Midnight - In Shadow* (with history
files)
* From Midnight until 2 A.M. - In Shadow (no history files)
* From 2 A.M. until 8 A.M. - In Shadow (with history files)
MFO - Saturday-Sunday:
* From 8 A.M. until 4:50 P.M. on Saturday - Fully Available
* From 4:50 P.M. until 5 P.M. on Saturday - Unavailable
* From 5 P.M. until 10 P.M. on Saturday - In Shadow (with
history files)
* From 10 P.M. Saturday until 8 A.M. Sunday - Unavailable
* From 8 A.M. until 4:50 P.M. on Sunday - Fully Available
* From 4:50 P.M. until 5 P.M. on Sunday - Unavailable
* From 5 P.M. Sunday until 8 A.M. Monday - In Shadow (with
history files)
* In Shadow - This means that the system is available but is
not completely updated as the Transfer Agent is in the process
of completing their production cycle for the day.
LION - Monday-Friday:
* The LION application will be fully available every weekday
from 8 A.M. until 9:50 P.M. This application will be
unavailable on weekends.
Method of Calculation.
The Transfer Agent's failure to meet this objective would result
in a credit to total Per-Account Fees billed to the Funds for
the month. The system will be considered unavailable during
communication line outages if a back-up line for the defective
line has previously been authorized by the Fund. Using the
Mutual Fund Inquiry System reports, the Transfer Agent will
calculate availability for each day in the month and average
those days to arrive at monthly average for Mutual Fund Inquiry
System and Rite/Lion separately. If either's performance is
below 99%, that average would be compared to the schedule below
to determine the percentage credit to total monthly Per Account
Fees. This credit information would be passed to Dreyfus'
Mutual Fund Accounting Department to be allocated to the Fund
against the fees to be paid hereunder. The monthly period
measured coincides with the standard calendar month. Penalties
will be calculated only in the aggregate.
Fee Credits:
% System Monthly Average
Available Performance Below
Less Than Objective _
99% 0.04%
98% 0.16%
97% 0.36%
96% 0.64%
95% 1.00%
Termination:
If the System Availability is less than 95% for two consecutive
months, the Fund shall have the right to terminate this
Agreement, upon the notice provided under the caption "General"
in this Appendix D.
5. Daily System Updates
Service Description:
The Transfer Agent updates the System daily to reflect each
day's business activity. The Fund relies upon the timely update
of information in order to respond to investor's inquiries. The
Transfer Agent will provide Dreyfus with a System report
indicating the time of day that files were updated and available
for Dreyfus. The timeliness of availability of these screens
with updated information will determine the Transfer Agent's
level of performance.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service to an
average weekly performance level of daily system updates by 8:00
a.m. (New York time) the next day. The Transfer Agent must
accurately update all shareholder account records.
Method of Calculation
Should the Transfer Agent fail to meet the above objective, it
would result in a credit to monthly Per-Account Fees of the
affected funds. Using the System reports for each fund, the
Transfer Agent will calculate for each day during the month the
average time by which the shareholder account records were
accurately and completely updated and available for inquiry
purposes, and for purposes of such calculation shall deem that
on a day on which the system was not updated at all it was
updated as of 5:00 p.m. Those numbers would be averaged for
each week and compared to the schedule below to determine the
total percentage credit to Per-Account Fees billed to the
affected fund for the month. This credit information would then
be passed to Dreyfus' Mutual Fund Accounting Department to be
allocated to the Fund against the fees to be paid hereunder.
Fee Credits:
UPDATES
Average Weekly Performance
for Each Week within the Period
1Wk. 2Wks. 3Wks. 4Wks.
5Wks.
Next Day
After 8:00 a.m. to
and including
9:00 a.m. .02% .06% .14% .25% .39%
After 9:00 a.m. to
and including
10:00 a.m. .14% 23% .35% .50% .70%
After 10:00 a.m. .25% .39% .56% .75% 1.00%
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the system is not updated and available by 9:00 a.m. on
the next day: (1) for two consecutive weeks, or (2) for any
four weeks (whether or not consecutive) in any thirteen week
period.
6. Accuracy and Timeliness of Investor Statements
Service Description:
Based upon the type of fund, the Transfer Agent will produce and
mail periodic statements to all its shareholders. The Transfer
Agent will provide the Fund with a mailing report from its
automated mailing operation which will indicate the date on
which all investor statements were mailed.
Transfer Agent's Objective (Monthly Statements):
For Monthly Statement mailings, the Transfer Agent's objective
is to manage this service so that 99% of all Monthly Statements
for each Fund are accurate and are mailed no later than five
business days after statement date.
Method of Calculation:
Failure to meet this objective will result in a credit to total
Per-Account Fees billed to the Fund affected by the delay for
the period. Using the automated mail report, the Transfer Agent
will add the number of days past the objective. That number
would be compared to the schedule below to determine the total
percentage credit to Per-Account Fees billed the Fund for that
month.
Fee Credits (Monthly Statements):
If more than 1.0% of the Monthly Statements are not mailed
within five (5) business days, the Transfer Agent will pay
$5,000 for the first day and $2,000 per day for each day
thereafter until 99.0% or more of such Monthly Statements have
been mailed.
Note: Statements that are to be mailed with check images where
the clearing banks have not delivered the draft checks that have
cleared during the last week of each calendar month by the
second bank business day at 12:00 p.m., New York time, are not
to be included in these calculations
Transfer Agent's Objective (Quarterly Statements):
For Quarterly Statement mailings, the Transfer Agent's objective
is to manage this service so that 75% of all Quarterly
Statements for each Fund are accurate and are mailed no later
than seven business days past statement date, 90% by the eighth
business day and 99% by the ninth business day.
Fee Credits (Quarterly Statements):
Less than 75% Less than 90% Less than 99%
Less than 99%
mailed by mailed by mailed by mailed
each
Day 7 Day 8 Day 9
day thereafter
$2,000 $5,000 $5,000
$2,000 per day
The penalties are cumulative.
Note: Statements that are to be mailed with check images where
the clearing banks have not delivered the draft checks that have
cleared during the last week of each calendar month by the
second bank business day at 12:00 p.m., New York time, are not
to be included in these calculations.
Termination:
If the Transfer Agent fails to mail at least 99.0% of such
statements not later than twelve (12) business days from
statement date for three consecutive periods (a period being the
amount of time to which the statement relates), the Fund shall
have the right to terminate this Agreement, upon the notice
provided under the caption "General" in this Appendix D.
7. Accuracy and Timeliness of Daily Advice Mailings
Service Description:
The Transfer Agent will produce and send, deliver or distribute
an advice to Fund investors whenever a financial transaction is
posted to the investor's account, except where suppressed
pursuant to instructions received from the Fund or Dreyfus. The
Transfer Agent will provide Dreyfus with a mailing report from
its automated mailing operation which will indicate the date on
which all advices were mailed from such operation.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
99.0% of such advices are accurate and are mailed on the next
business day following date of transaction, except where
suppressed pursuant to instructions received from the relevant
fund or Dreyfus.
Method of Calculation:
If more than 1.0% of the Daily Confirmations, Redemption Checks,
and Duplicates are not mailed in a timely fashion during any
week, the Transfer Agent will pay to the Funds $5,000 (for that
week).
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent fails to mail at least 99.9% of all
advices by the fifth business day following the date of the
transaction (not counting suppressed items): (1) for three
consecutive weeks, or (2) for any six weeks (whether or not
consecutive) in any thirteen week period.
8. Timeliness of Distribution Checks
and Dividend Mailings
Service Description:
Periodically, the Transfer Agent will create and mail checks for
certain money market, tax-exempt, and other Funds' respective
investors. The Transfer Agent will provide Dreyfus with a
mailing report from its automated mailing operation, indicating
the date on which all dividend or distribution checks were
mailed.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
99% of all checks (other than checks drawn in connection with
the Fund's Automatic Withdrawal Privilege or Quarterly
Distribution Plan, if offered) are mailed no more than one
business day from the payable date of the check.
Method of Calculation:
If more than 1.0% of the Monthly or Quarterly Dividend Checks
are mailed more than one (1) business day from the Payable Date
of the check, the following charges will be paid by the Transfer
Agent:
Delay of one day $ 5,000
Delay of two days $10,000
Delay of three days $15,000
Delay of four days or more $20,000
The penalties are non-cumulative.
Termination:
If the Transfer Agent fails to mail at least 99% of all checks
by the fifth business day from the payable date of the check for
three consecutive distribution periods or for any six
distribution periods (whether or not consecutive) in any period
of thirteen distributions, the Fund shall have the right to
terminate this Agreement, upon the notice provided under the
caption "General" in this Appendix D.
9. Accuracy and Timeliness of Delivery of Institutional
Tapes/
Transmissions
Service Description:
The Transfer Agent shall provide dividend/position tapes or
transmissions for any number of dealer codes per institutional
client. A monthly report will be provided by the Transfer Agent
indicating the actual date of delivery of tapes to the courier
or transmissions directly to the client.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
99.9% of all tapes/transmissions are accurate. Transmissions
must be received by the client on the first business day
following cut-off date. Tape deliveries must be received by the
second business day.
Method of Calculation:
Should the Transfer Agent fail to meet this objective, it would
result in a miscellaneous credit to total Broker
Dividend/Position Tape/Transmission Fees billed to the Fund.
Using its tape/transmission delivery report, the Transfer Agent
will multiply the number of late tapes/transmissions or
incorrect tapes/transmissions by $250. This credit information
would then be passed to Dreyfus' Mutual Fund Accounting
Department for allocation to the affected funds against the fees
to be paid hereunder.
Fee Credits:
Per late (or incorrect) tape/transmission: $250
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent does not deliver at least 97% of all
tapes/transmissions in accordance with the objective stated
above, for three consecutive months.
10. Institutional Wires
Service Description:
For certain fund institutional clients, all cash dividend
accounts are consolidated into a particular fund and one monthly
wire is sent to the institution's bank. The Transfer Agent will
provide Dreyfus with a monthly report indicating the date on
which all Fed Wires were sent to institutional clients.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
99.9% of all Fed Wires are accurate and are sent by the first
business day following the Fund's dividend payable date.
Method of Calculation:
Should the Transfer Agent fail to meet this objective (except
for delays resulting from disruptions in the Federal Reserve
payment system) it would result in a miscellaneous credit to
total fees billed to the Fund each month. Using its Fed Wire
report, the Transfer Agent will multiply the number of late or
incorrect wires by the fee credit below. This credit
information would then be passed to Dreyfus' Mutual Fund
Accounting Department for allocation to the Fund against the
fees to be paid hereunder.
Fee Credits and Explanatory Letter:
Per late or incorrect wire: Transfer Agent's wire transfer
charge plus reimbursement for unjust enrichment, calculated
based upon the effective Federal Funds rate for the month or the
current yield of the Fund, if an income fund, which ever is
higher, paid to the affected client upon claim. In addition, a
senior employee of the Transfer Agent will, promptly after the
discovery of a late or incorrect wire, send a letter to the
affected client explaining and apologizing for such error.
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent does not send at least 99.9% of the Fed
Wires by the fifth business day after month-end for three
consecutive months.
11. Accuracy and Timeliness of Schedule K-1 Mailings
Service Description:
The Transfer Agent will produce and send a Schedule K-1 to
investors in the Limited Partnership Funds. This schedule
reports the investor's or partner's share of income and expense
with respect to the total income and expense of the Fund. The
Transfer Agent will provide Dreyfus with a mailing report which
will indicate the date on which Schedule K-1's were mailed.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
100% of reports and test account Schedule K-1's are accurate and
are received by Dreyfus via overnight mail within three business
days of receipt of Fund Accounting's allocation factors. Upon
receipt of written client approval of reports on test accounts,
the Transfer Agent will forward sample Schedule K-1's from the
vendor within two business days via fax. Upon receipt of
written client approval of vendor Schedule K-1's, all K-1's will
be mailed within three business days.
Method of Calculation:
Should the Transfer Agent fail to meet this objective, it would
result in a credit to monthly Per-Account fees billed to the
fund affected by the delay. The Transfer Agent will determine
the last business day on which K-1s were generated. That number
would be compared to Schedule A below to determine the
percentage credit to monthly Per-Account Fees billed to the
affected fund. Using the mailing report, the Transfer Agent
will also determine the last business day on which the last late
K-1s were mailed for the affected fund. That number would be
compared to Schedule B below to determine the percentage credit
to monthly Per-Account Fees billed to the affected fund. This
credit information would then be passed to Dreyfus' Mutual Fund
Accounting Department for allocation to the Fund against the
fees to be paid hereunder.
Fee Credits:
(Schedule A)
Business Days Past Receipt of Accounting Allocation Factor
from the Fund _
% Credit to Per-Account Fees
4 but less than 5 .40%
5 but less than 6 1.60%
6 but less than 7 3.60%
7 but less than 8 6.40%
8 or more 10.00%
(Schedule B)
Calendar Days Past Receipt of Authorization from the Fund _
% Credit to Per-Account Fees
4 .40%
5 1.60%
6 3.60%
7 6.40%
8 or more 10.00%
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent fails to generate 100% of such
schedules not more than 20 business days after receipt of
accounting data from the Fund, or fails to mail 100% of such
schedules not more than 7 calendar days after receipt of
authorization from the Fund for two consecutive years.
12. Accuracy and Timeliness of Management Files
Service Description:
The Transfer Agent will produce and transmit the following
weekly and monthly management files and corresponding
reconciliation report to Dreyfus: (a) a weekly file of new
accounts, (b) a weekly file by fund listing all accounts by
List, Pack & Promotion (LPP) Code, and (c) a monthly (or weekly
at the Fund's option) file listing all accounts by fund. The
Transfer Agent will provide the Funds with a report indicating
the date on which these files were transmitted.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
accurate weekly files are transmitted by the first calendar day
following the file cut-off date (the last business day of the
week), and accurate monthly files are transmitted by the second
calendar day following the file cut-off date (month-end).
Method of Calculation:
Failure to meet this objective will result in a credit to total
Per-Account Fees billed to the Funds for the month. The
Transfer Agent will add the number of business days past cut-off
date separately for late weekly tapes and late monthly tapes.
Those numbers would be compared to the schedules below to
determine the total percentage credit to Per-Account Fees billed
to the Funds for the month. This credit information would then
be passed to Dreyfus' Mutual Fund Accounting Department for
allocation to the Fund against the fees to be paid hereunder.
Fee Credits:
Calendar Days Past Weekly
Tape Cut-Off Date _ % Credit to Per-Account Fees
2 .04%
3 .16%
4 .36%
5 .64%
6 or more 1.00%
Calendar Days Past Monthly Tape Cut-Off Date _ %
Credit to Per-Account Fees
3 .04%
4 .16%
5 .36%
6 .64%
7 or more 1.00%
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent fails to deliver accurate weekly tapes
by the sixth calendar day after tape cut-off date and monthly
tapes by the seventh calendar day after tape cut-off for two
consecutive months.
13. Annual Disaster Recovery Tests
Service Description:
At least once per calendar year the Transfer Agent will test its
data center operations recovery procedures and transfer agency
operations recovery procedures.
Transfer Agent's Objective:
The Transfer Agent's objective in the data center recovery test
is to demonstrate its ability to duplicate its data processing
services upon transfer of its application software programs to
the data center backup facility. The data center recovery test
will consist of the Transfer Agent processing 100% of an average
day's data processing volume from the backup facility, and a
data communications test sufficient to demonstrate the ability
to provide access from the data center backup facility to all
production network sites, including remote access of the MAS
system by Rite/Lion users.
The Transfer Agent's objective in the transfer agency operations
recovery test will be to demonstrate its ability to perform the
transfer agency services (as summarized in Appendix C) to the
standards described in Appendix D from its operations backup
facility. The transfer agency operations recovery test will
consist of preparation of at least 50% of the backup facility
for normal daily operations including voice and data
communication links, and transfer of at least 20% of the
transfer agency operation's staff to the facility. The
transferred staff will simulate the processing of 20% of an
average day's transaction volume based on the activity levels of
the preceding six months transaction volumes. If the test is
not able to be successfully performed, the Transfer Agent will
re-run the test within the same calendar year, unless the Fund
agrees in writing to accept the results of the unsuccessful
test, in which event the fee credit and termination provisions
below will be waived.
Method of Calculation:
Should the Transfer Agent fail to perform either of the tests
described above successfully by December 31 of each year it will
result in a credit to the monthly per account fees of the Fund
equal to .4% of the aggregate of the per account fees for the
year in which the tests were not successfully performed.
Termination:
If the tests are not performed within the prescribed time period
the Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D.
14. Timeliness and Accuracy of Noon Day Redemption Wires
(Transfer Agent Provides Cash Management Services)
Service Description:
Certain institutional clients input redemption trades via the
Rite/Lion remote system. Trades are input up until 12:00 noon
at which time Dreyfus will shut down remote access and send a
merge file to the Transfer Agent. The Transfer Agent will
process the trades and send redemption wires to the respective
institutions. The Transfer Agent will provide Dreyfus with a
report indicating the time that noon day redemption wires were
sent to institutional clients.
Transfer Agent's Objective:
The Transfer Agent's objective is to manage this service so that
99.5% of redemption wires are accurate and sent within two and
one-half hours following the shut down, or merge of the system.
Method of Calculation:
Should the Transfer Agent fail to meet this objective it would
result in a credit to total Per-Account Fees billed to the Fund
each month. Using its Noon Day Redemption Wire Report, the
Transfer Agent will multiply the number of late wires by the fee
credit below. This credit information would then be passed to
Dreyfus' Mutual Fund Accounting Department for allocation to the
Fund against the fees to be paid hereunder.
Fee Credits and Explanatory Letter:
Per late or incorrect wire:
Transfer Agent's wire transfer charge plus reimbursement
for any unjust enrichment, calculated based upon the effective
Federal Funds rate for the month or the current yield of the
Fund, if an income fund, whichever is higher, paid to the
affected client upon claim. In addition, a senior employee of
the Transfer Agent will, promptly after the discovery of a late
or incorrect wire, send a letter to the affected client
explaining and apologizing for such error.
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent does not send at least 99.5% of the
noon day wires within two and one-half hours for three days out
of five, for four weeks consecutively.
15. Timeliness and Accuracy of Noon Day Redemption Wires
(Fund Contracts with Cash Manager)
Service Description:
Certain Institutional clients input redemption trades via the
Rite/Lion system. Trades are input up until approximately 12:00
noon at which time Dreyfus will shut down remote access and
designate a merge file to the Transfer Agent. The Transfer
Agent will transmit a file to the cash management provider
containing the necessary information, and in the proper format,
to do automated initiation of Fed wires. The Transfer Agent
will provide Dreyfus with a report indicating the times that
remote access was terminated and the times that the file was
transmitted each day.
Transfer Agent's Objective
The Transfer Agent's objective is to manage this service so that
100% of the daily "wire file" transmissions are completed within
the later of one hour of the merge or 1:30 p.m. In addition, if
Dreyfus requests manual intervention of the merge process, the
merge time would start at the point of interface from Dreyfus.
Method of Calculation
Should the Transfer Agent fail to meet this objective it would
result in a credit to total Per Account Fees billed to the Fund
each month. The total number of days in the month the file is
transmitted later than the objective is used with the chart
below to determine the % credit to Per Account Fees for the
month. This credit information would then be passed to Dreyfus'
Mutual Fund Accounting Department for allocation to the Fund
against the fees to be paid hereunder.
Fees Credits:
# of Days in the Month
the objective is missed % Credit to Per Account Fees
1 .04%
2 .16%
3 .36%
4 .64%
5 or more 1.00%
Termination:
The Fund shall have the right to terminate this Agreement, upon
the notice provided under the caption "General" in this Appendix
D, if the Transfer Agent misses the objective for three days out
of five, for four weeks consecutively.
RESEARCH REQUEST TURNAROUND TIMES
ITEM
SCREEN
DESCRIPTION TURNAROUND TIME
REGULAR IRA INSTITUTIONAL
BNCDCHK BOUNCE REDEMPTION/INVESTMENT CHECK: Why was check
rejected?
3
3
N/A
BKUPHLD BACKUP WITHHOLDING: Incorrect tax status, withholding has
occurred.
4
4
4
BONY PRECONVERSION RESEARCH N/A N/A 5
BPIT IRA TRANSFER: PENDING INCOMING: Have not received funds from
former custodian.
N/A
2
2
BPOT IRA TRANSFER: PENDING OUTGOING: Custodian mailed us request, not
processed.
N/A
2
2
BYADJ YD ADJUSTMENT: IRA contribution shows wrong amount or wrong year.
N/A
3
4
CERT CERTIFICATE SHARES: To shareholder or returned by shareholder. Not
processed.
3
N/A
N/A
COMSTOCK COMSTOCK PRECONV RESEARCH N/A N/A 5
CORREQ INSTITUTIONAL CORRESPONDENCE REQUEST N/A N/A
2
CTRADE CONFIRM TRADE ADJUSTMENT N/A N/A 3
CORRESP
REQUESTS FINANCIAL LIABILITY INQUIRY INVOLVED 2 2
N/A
CORRESP
REQUESTS NON-FINANCIAL INQUIRY INVOLVED 4 4 N/A
CPYCK COPY OF CHECK: Redemption, dividend investment, liquidation or
any other
6
6
6
CUSTFEE CUSTODIAL MAINTENANCE FEE CORRECTION
N/A
3
4
DRYLOSS DREYFUS SERVICE LOSS N/A N/A 3
FCOR FORM CORRECTIONS: Any reporting form with incorrect information.
3
4
4
IARPT INVESTMENT ADVISOR REPORTING: Determine or add fourth party
address.
5
N/A
N/A
INWIRE INCOMING WIRE: Wire proceeds have not been credited to
account; wire information.
1
N/A
0
KEY KEYPUNCH ERROR: Minor corrections on account information screens.
2
1
2
LAUREL LAUREL FUND PRECONVERSION: Preconversion research.
N/A
N/A
5
LOGNP LOGGED ITEM NOT PROCESSED: Problem with Dreyfus Log
transaction request.
2
2
N/A
LOG REQUEST Request for draft checks, deposit slips, statements,
transaction advices, 1099-Div, 1099-B, or 1099-R.
N/A
N/A
N/A
LOIROA LOI/ROA BREAKPOINT N/A N/A 3
MCRPAY MISCREDITED PAYMENT: Check, wire, ACH or other, credited
to wrong account.
3
3
3
MEMO RESEARCH MEMO: Requires research involving transaction 9 months or
older.
4
5
N/A
MISC MISCELLANEOUS: Problem which requires detailed information
4
4
4
NAVADJ NAV FORM ADJUST N/A N/A 3
NONRCPT CHECK NOT RECEIVED, STOP AND REISSUE: Liquidation,
dividend or other.
4
4
3
NOPAYRC DEPOSIT NOT CREDITED (WITH RECEIPT): Deposit sent by
FED EX, registered mail, etc.
3
3
N/A
NR12B1 NON-RECEIPT OF 12B-1 FEE/COMMISSION: Fee or commission
not received.
N/A
N/A
3
NRCERT NON-RECEIPT OF CERT. N/A N/A 2
NRWIRE NON-RECEIPT OF WIRE/ACH: Liquidation occurred, but not
received by bank.
1
N/A
1
PMAILNP PRIORITY MAIL (AUTOMATIC RUSH) N/A N/A 3
PRESSEC PRESIDENTIAL/SEC INQUIRIES: Dreyfus Presidential or
Securities and Exchange Commission inquiries.
3
3
N/A
RPORLSE RPO/RELEASE: Removal of RPO Code and release of distributions.
N/A
N/A
3
SIGN SIGNATORIES: Who is authorized to act on the account?
1
N/A
7
STM NON-LOG STATEMENT REQUEST: Reporting documents not on log
request screen.
4
4
N/A
STPDRFT STOP DRAFT CHECK (AUTOMATIC RUSH) N/A N/A
1
TMAUTH TRANS/MAINT AUTHORIZATION N/A N/A 3
XDEALER INCORRECT DEALER N/A N/A 4
XDFTCKS SPECIAL DRAFT CHECKS: Urgent shareholder(s) redemption draft
request.
1
N/A
N/A
XDHCKS RUSH/SPECIAL DRAFT CHECKS N/A N/A 1
XEXCH EXCHANGE PROCESSED INCORRECTLY: Exchange by letter
done incorrectly.
2
2
N/A
XLIQ LIQUIDATION PROBLEM: Liquidation not processed; liq sent incorrectly;
liq incorrect amount.
2
3
2
XPRIV INCORRECT PRIVILEGES: Any privilege requested on application,
subsequent document or by telephone.
3
3
3
XREGSS INCORRECT REGISTRATION/SS#: Minor changes on registration
and SS#.
N/A
N/A
2
XTELTRN INCORRECTLY PROCESSED TELEPHONE TRANSACTION:
Wire, ACH Purchase/Redemption, Exchange or Check.
1
2
N/A
XTRANS UNAUTHORIZED TRANSACTION: Transaction appears on
account. Investor did not authorize transaction.
2
2
N/A
XTRNSFR TRANSFER NOT PROCESSED OR INCORRECT: Request not
completed or completed incorrectly.
3
2
2
APPENDIX E
CASH MANAGEMENT SERVICES
This Appendix describes the responsibilities of the cash
management provider ("CMP"), and conversely the responsibilities
of the Transfer Agent in working with the CMP. CMP must
establish and maintain all necessary manual and automated
interfaces as described herein with the Transfer agent to
provide accurate and timely delivery of these services. The
Transfer Agent's duties under this Agreement will include
establishing and maintaining all necessary corresponding manual
and automated interfaces with the CMP. All verbal and written
instructions required by the CMP will be provided by the
Transfer Agent on behalf of the Fund. This will include verbal
or written instructions, as appropriate, to the CMP to transfer
money between Fund Accounts (including custody) necessitated by
the cash management activities described herein.
I. ACCOUNT MAINTENANCE - Establish and maintain
separate demand deposit bank Accounts (as defined in Exhibit 1)
for each Fund.
II. INVESTMENT BY CHECK
* CMP will endorse and microfilm all checks received
and process all items daily, and send to Transfer Agent a
transmission at a time mutually agreed to by the Transfer Agent,
CMP and the Fund, which will include for each transaction
security code, account number, ABA routing number, microfilm
reference number, and investment amount with a Blocking
Indicator of the investment type at Fund's direction.
Transmitted file should be retained by CMP for 30 days.
Blocking Indicators
- immediate; no hold
- immediate; hold
- one day delay; no hold
- one day delay; hold
- other blocking indicators which may be
subsequently determined by the Fund
A) Drop Box Processing
* Collect investment envelopes from present drop box
locations (see list attached for present locations) and such
other locations, as mutually agreed upon by the parties, at a
minimum twice daily. Process all checks, together with Optical
Character Recognition ("OCR") remittance stubs, as further
defined under III B) and III C) below, in accordance with the
Fund's Prospectus.
B) OCR - Lock Box (Payment Processing)
* Pick up mail addressed to P.O. Boxes identified by
the Fund three times daily at a minimum. Two of these pick-ups
take place in the morning with one additional pick-up in the
afternoon.
* Verify that the Fund security code identified from
the OCR stub compares to the payee of the checks or a generic
alternative (e.g. "Dreyfus"). If they do not compare, stub and
check will be indexed on same day to Transfer Agent for further
processing. The original will be delivered to Transfer Agent by
overnight delivery.
* Process payment transactions by reading optical
character recognition, information printed on remittance
document.
* Retain and file remittance stubs, and microfilm
investment checks and supporting documentation daily, in a form
not commingled with other funds. At the Fund's option, promptly
provide copies of microfilm to the Transfer Agent.
* Since investments are being placed into securities
with fluctuating prices, CMP will be responsible for
reimbursement of customer losses caused by CMP's actions that
result in incorrect investments due to errors or delays.
C) Special Handling Items
* In the absence of an accurate and complete
remittance stub, CMP will create a substitute stub if the
investor's security code and account number is written on the
check or an accompanying document.
* Multiple checks with one remittance will be
processed. Each check hold period governs the investment date.
* One check with split remittance will be processed
provided amounts are stated and they prove.
* Checks drawn on foreign banks in U.S. dollars - send
for collection; checks drawn on foreign banks in foreign
currencies - return to drawer.
* Stub with no remittance amount - The payment will be
processed based on the amount of the check.
* Improperly printed stubs - If an account number and
security code are legible, a substitute remittance stub will be
created.
* Correspondence accompanying any investment -
Correspondence shall be noted with customer's account number
with an indication of "Payment In Process" and forwarded to the
Transfer Agent.
* Out of proof checks with multiple stubs remittances
not equal to checks - Forward to Transfer Agent.
D) Return Items
* The appropriate Account will be debited on date of
receipt. CMP will fax a returned items log and copies of checks
to Transfer Agent, indicate account number and security code (if
available), amount, and microfilm reference number for each item
on the day these items are presented. Forward returned item to
Transfer Agent for overnight delivery.
III. REDEMPTION DRAFTS
* Transfer Agent will provide the Fund two phone
notifications by fund, per day, of the aggregate dollar amount
of drafts received up to the time of the notification. The
information usually will be available at 10:00 a.m. and 2:30
p.m., New York time.
* On the day of presentment the CMP will debit the
Fund's Account for the total dollar amount of drafts presented
for payment.
* CMP will provide an electronic transmission each
business day to Transfer Agent, at a time mutually agreed to by
the Transfer Agent, CMP and the Fund, to include the security
code, account number, amount and draft number for drafts
presented that day. CMP will fax totals of number of items and
total dollars to Transfer Agent at the time of transmission.
* CMP will also supply Transfer Agent with a hard copy
report reflecting the data sent by transmission for
reconciliation purposes. This will be followed (via overnight
courier) by a microfiche copy to be used for research by the
Transfer Agent.
* CMP will return drafts written for amounts below the
stated minimum (if so instructed by the Fund) or those without
any signature. These items will not be in the transmission.
CMP will notify Transfer Agent, by report, of these returned
drafts by Fund.
* CMP will contact shareholders via mailgram who have
written redemption drafts of $100,000.00 or more, no later than
the day of processing.
* CMP will verify all signatures. Any redemption
draft on which the signature is not in good order will be faxed
to Dreyfus. If Dreyfus does not instruct CMP to honor, said
draft will be rejected with notification to Transfer Agent on
the date of presentment. Transfer Agent will be responsible for
timely maintenance, update and accuracy of signatures or
Signature Verification System, to allow on line retrieval by
security code and investor's account number.
* Transfer Agent will notify CMP regarding any
redemption draft that is to be returned. This information must
be represented to CMP by 12:00 p.m. Noon on the day after the
electronic transmission to the Transfer Agent. Reason for
return must be specified.
* CMP will be responsible for liability associated
with forged redemption drafts.
* If so requested, CMP will credit Account for amount
of drafts being returned on the day of credit from The Federal
Reserve Bank.
* CMP will fine-sort drafts by Fund and account
number.
* CMP will forward all paid redemption drafts to
Transfer Agent or its designee (currently Output Technologies),
or directly to customer on a daily, weekly or monthly basis, as
defined by the Fund, sorted by Security Code and account number.
IV. STOP PAYMENTS
* Accept oral or written stop payment requests on
checks or drafts issued by the Fund or Fund shareholders, and
maintain appropriate stop payment files and capabilities in
accordance with current regulations and banking practices, and
according to the Fund's Prospectus.
* Return stop paid redemption drafts and checks to the
presenting financial institution in accordance with prevailing
return check procedures, unless advised otherwise in writing by
the Fund.
V. INCOMING FED WIRES
* CMP will provide daily a detailed report of all
items received, including security code and account number, on
request.
* CMP will provide on-line notification of all
incoming and outgoing Fed Fund wires to Transfer Agent which
will include security code and account number of investor.
These monies will be credited to the correct Account on day of
receipt.
* Incoming wires not properly identified by a specific
Fund Code and Account Number but that do reference Dreyfus will
be credited by the CMP to a Dreyfus Federal Reserve Wire Omnibus
DDA account that the CMP maintains for Dreyfus. These items
will be reviewed by Transfer Agent for ultimate disposition.
VI. OUTGOING FED WIRES
* Transfer agent will electronically transmit wire
instructions to CMP throughout the day.
* The first transmission will take place at
approximately 10 a.m. CMP will make every effort to send all of
these wires by 12:30 p.m., New York time.
* The second transmission will take place at
approximately 1 p.m. CMP will make every effort to send these
wires by 2:30 p.m., New York time.
* The Transfer Agent will have the ability to send
manual wires directly to CMP's funds transfer department
throughout the day on exception items.
VII. LIQUIDATION BY CHECK
* CMP will honor liquidation checks drawn on the
Fund's Account as issued by Transfer Agent.
* Transfer Agent will transmit an automated checks
issued file to CMP daily, weekly or monthly at the Fund's
direction.
* CMP will provide Transfer Agent with full or partial
reconciliation and on-line inquiry capability with daily
transmissions for updates on paid items, at the Fund's
direction.
* CMP will provide the Transfer Agent with the daily
transmissions for updates on paid items.
VIII. ACH PROCESSING
A) Pre-Notifications
* CMP will receive daily from Transfer Agent pre-
notifications in ACH format to be forwarded pursuant to ACH
processing guidelines.
B) ACH Credits Initiated by other Financial
Institutions ("Direct Deposit")
* Credits would be received by CMP and electronically
transmitted to Transfer Agent as received. The Account for the
respective funds will be credited with funds on settlement date
by CMP.
C) ACH Credit Initiated by CMP (Shareholder
Liquidations)
* Transfer Agent will transmit a properly formatted
file to CMP.
* CMP will include the transactions in the
transmission for evening window to assure the funds will be
received on the following banking day.
* CMP will debit the appropriate Account on projected
settlement date.
D) ACH Debits Initiated by CMP (Shareholder Purchase)
* CMP will receive a transmission from Transfer Agent
in ACH format to debit the customer's bank account pursuant to
ACH settlement guidelines.
* The Fund's Account will be credited on settlement
date.
E) ACH Return Items
* ACH return items will be received by CMP and
transmitted to Transfer Agent on day of receipt. CMP will
debit/credit the appropriate DDA Account on return date.
IX. ELECTRONIC BANKING SERVICES
* The CMP will provide a comprehensive package of
fully automated information reporting and transaction services.
The system will support balance reporting and time critical
information on a same day basis in order to maximize the use of
cash resources while expediting the accurate posting to internal
records. A terminal and/or personal computer may be utilized by
the Transfer Agent to access the respective file.
The system will offer prior day and same day
reporting modules, including summary and transaction detail
reports for both paper-based and electronic transfers.
* Provide all paid check information daily via
magnetic tape or electronic transmission for update of payables.
Balance Reporting
* Summary Report will provide prior day balance and
information on total credits and total debits by type of
transaction.
Detail Report will provide information on the
individual debits and credits in descending order of dollar
amounts.
Dynamic Information Reporting
* CMP will provide access to an on-line, real time
service in order to monitor intra-day balance information. The
detail report should provide selected key information about each
wire transfer, debit and credit, as they are processed. The
service will be available daily from 7 a.m. to 10 p.m., New York
time.
Automatic Advice
* The full text on all incoming and outgoing wire
transfers will be required through on-line notification advice
for each transaction through a dedicated and self-activating
high speed terminal printer located at TA's office.
Item Status Report
* This report shows current status of wire transfer
payments sent through CMP's Money Transfer System. This is
utilized to confirm executed payment orders and obtaining their
wire transfer sequence codes. Three business days of funds'
transfer history should also be provided.
Direct Customer Inquiry
* This service provides direct on-line access to a
history file to retrieve the detail of incoming and outgoing
wire transfers that occurred during the current three months.
Different search criteria may be used, i.e. - Transaction
Reference Number, Account/Amount/Date, etc.
Account Reconciliation Plan Inquiry
* ARP Inquiry will allow Transfer Agent to access
CMP's reconciliation data files (current/history) to determine
the status of a check and to place a stop payment directly on-
line. When a stop payment has been accepted, the system will
respond with a confirmation number.
The following morning, the system may be accessed
for a consolidated report of the prior day's stop payments.
Electronic Funds Transfer Inquiry
* Transfer Agent can obtain same day confirmation of
incoming debits and credits processed through the National
Automated Clearing House Association (NACHA). A full
description of each transaction including addenda records is
available.
Early access to this information enhances control
over the current cash flow position.
DROP BOX LOCATED AT BANK OF NEW YORK BRANCHES:
Downtown Manhattan 20 Broad Street (off Wall Street)
1 Wall Street
48 Wall Street
Midtown Manhattan 530 Fifth Avenue (at 44th Street)
706 Madison Avenue (at 63rd
Street)
909 Madison Avenue (at 73rd
Street)
51 West 51st Street
360 Park Avenue
979 Third Avenue (at 58th Street)
1006 First Avenue (between 55th &
56th Street)
47 West 62nd Street (at Broadway)
Queens Forest Hills, 9900 Metropolitan
Avenue
Long Island Great Neck, 60 Great Neck Road
Melville, 555 Broadhollow Road
Port Washington, 805 Port
Washington Blvd.
Stewart Manor, 110 Covert Avenue
Westchester Mount Kisco, 55 Main Street
Yonkers, 2195 Central Park Avenue
Scarsdale, 40 East Parkway
Rye, Ridge Shopping Center
Rockland New City, 2 New Hempstead Road
DROP BOXES MAINTAINED BY DREYFUS:
Midtown Manhattan 200 Park Avenue - Grand Central
Station
Penn Station (Arcade Level)
APPENDIX F
Software Request Administration Procedures
I. Software Request Process
1. The requestor completes the Software Request Form,
outlining the request, and indicating if the request should be
considered a priority. The requestor must obtain the proper
authorized signatory from his/her department. The form is then
sent to Dreyfus Project Management. The following information
must be supplied on the form:
Requestor information - name, department, phone/fax
number, date of request
Short name for the request
Description of the change requested
Purpose and benefit of the request
Justification - Why this change is being requested;
to enhance service, quality, cost effectiveness, or if it is an
operational necessity or a legal requirement
Number of Funds and/or shareholders affected
Amount of manual effort saved due to this
enhancement
Potential liability
Impacts:
- to quality/customer service
- on business existing accounts, ability to
attract new accounts
- to clients
- on tax reporting
- to month end/quarter end/year end reporting
- financial impact
On-line systems requirements - any on-line changes
that need to be made for the enhancement
Reporting requirements - changes to existing reports
or new reports which must be created as a result of the request
Software interfaces that may be affected by the
request
Special considerations or exceptions to the request
For minor changes or enhancements, the Software request
form serves as the business requirements document for the
request. For large enhancements or changes, the requestor
drafts a business requirements document to accompany the
Software Request Form. The business requirements document
provides a detailed description of all aspects of the
enhancement, including mock ups of reports required, new forms
to be designed, or new on-line screens to be developed.
The current authorized signatories for software requests
are:
Retail Servicing - Irene Pappas
Institutional Servicing - Tracy Hopkins
- Mary Shea
Dreyfus Group
Retirement Plans - Thomas
Orlando
- Marc
Rosenblum
Personal/Business Advisors - Vinnie Masciana
Information Systems - Florence
Gramignano
- Michael
Boccardi
- Michael
Borowski
- Andy
Wasser
Fund Accounting - Jeffrey Nachman
Transfer Agency Administration/
Project Management - Walter Harris
- Gary
Palais
Corporate Accounting - Maurice
Bendrihem
Legal - Mark N. Jacobs
Marketing - Roy Gross
- Peter
Schwab
Financial Centers - Greg Hendel
2. Project Management circulates the request to any other
business area that might be affected by the programming request
in order to determine if these areas have a business interest in
the request or have a similar request being developed in one of
these areas. Dreyfus Project Management will verify whether
functionality already exists for this request and/or identify
possible alternatives to the request, if appropriate.
3. Project Management sends the request to the Transfer
Agent's Client Services department via fax or overnight mail
(depending on the immediacy of the request). The original
request is held on file at the Transfer Agent. A copy of each
referral is kept on file in the Project Management area.
4. The Transfer Agent's Client Services department assigns a
referral number to the request and forwards it to the Transfer
Agent's Systems department for time and cost estimates.
5. The Transfer Agent's Systems department forwards the time
and cost estimates to Project Management. Project Management
reviews the estimates and forwards them to the requesting
department. Project Management and the requesting department
jointly decide if the request should be considered a priority
item.
6. If the request is deemed a priority and a Dreyfus-
dedicated programming resource is available, the Transfer
Agent's Systems Manager assigns the request to a programmer. If
a programming resource is not available, Dreyfus Project
Management is notified.
The Transfer Agent will provide Project Management with
information on how other prioritized requests will be impacted
by the new request. Based on this information, Project
Management then decides how to proceed with the new request
(i.e., to reprioritize existing requests to make resources
available for the new request or assign a lower priority to the
new request which would then be worked on when resources become
available).
When there are several priority items and resources are
not available to work on each request, Project Management will
meet with the department heads whose areas have submitted the
outstanding priority requests in order to determine which
referral or referrals must be worked on first.
7. When a resource is assigned to a particular request,
he/she contacts the requestor if further information is needed
to proceed with the assignment.
8. The Transfer Agent prepares a functional design document
based on the business requirements submitted and any meetings
that may have been held to discuss issues related to the
request.
9. Requestors are asked to review and approve the functional
design before the Transfer Agent begins programming.
10. The Dreyfus requestor will be asked to participate in the
testing of a request. During testing, Dreyfus and Transfer
Agent personnel will identify any deficiencies that must be
corrected prior to sign-off at completion and prior to
installation of the new code or program into the production
region.
11. When Dreyfus and the Transfer Agent agree that testing was
successful, Dreyfus provides sign-off and the request is put
into the production region.
II. Software Request Status Reporting/Resources
The Transfer Agent's Client Services tracks the Dreyfus software
requests and distributes a bi-weekly report to Dreyfus and
Transfer Agent representatives.
The bi-weekly report lists the following:
Requests to be completed within the next 3 months
Remaining requests - Priority requests currently being
worked on that will not be completed in 3 months
Non-priority requests
Adhoc requests - one time requests for specific
information sorted in a specified report format. These requests
do not require a permanent change or enhancement to any software
or system, but more often address the need for a one time,
special report. (See Adhoc Request Procedures)
Completed requests
LION requests - enhancements to the LION System, a remote
entry system used by broker/dealers for on-line trading
The report lists the following for each request:
Referral number
Type of request
Description
Project contacts
Impacts
Phases - (business requirements, functional design,
test plan, print mail impact, if applicable, coding and testing,
acceptance testing, files to OTI, output date and production
date)
A Dreyfus Systems Map is also distributed by the Transfer
Agent's Systems department. The map lists all of Dreyfus's
prioritized requests for the year and the amount of resources
assigned to each request for each month.
Requests to correct an existing system problem or requests that
are determined by Dreyfus Senior Management to be critical
enhancements are assigned the highest priority. Dreyfus Project
Management and the requestors meet separately, if necessary, to
discuss prioritization of specific referrals.
Dreyfus Project Management and representatives from interested
Dreyfus departments meet with the Transfer Agent monthly to
discuss progress on all requests, the prioritization of new
requests, any other outstanding issues, and resource allocation.
III. Adhoc Request Procedures
Adhoc requests - one time requests for specific information
sorted in a specified report format. These requests do not
require a permanent change or enhancement to any software or
system, but more often address the need for a one time, special
report.
1. The requestor submits a memo (by fax or interoffice mail),
to Dreyfus Project Management.
The requestor must specify the following information:
Select: The requestor lists all Funds, accounts, transfer
agency system fields or other data to be searched for the
report.
Sort: The requestor specifies how the report should be
formatted, that is, how the data on the report should be
segregated. Any number of sorts may be requested within one
request. (Example: Retail vs. Institutional, Tax I.D. Number,
Fund code order)
Print: The requestor lists all of the information that
must be printed on the report.
Delivery: The requestor specifies how the report should
be delivered upon completion. (Mail, fax, remote printer on-
site at Dreyfus or diskette)
2. Project Management reviews adhoc requests and, if
necessary, contacts the requestor to discuss and clarify any
unclear issues. Project Management will first determine if this
information is readily available from an internal source, and if
so, notify the requestor.
3. Project Management faxes adhoc requests to a designated
Transfer Agent representative.
4. The request is assigned to a Dreyfus dedicated programmer
at the Transfer Agent.
5. Adhoc requests are usually completed within 48 hours of
the time the request is received at the Transfer Agent.
However, Dreyfus and the Transfer Agent acknowledge that if the
number of adhoc requests submitted is heavy over a short period
of time, the 48 hour timeframe may not be met.
6. Once completed, the Transfer Agent sends the requested
adhoc to the destination specified in the request, either
directly to the requestor or to Dreyfus Project Management.
APPENDIX G
OUT-OF-POCKET CHARGES
The cost of providing all services under this agreement other
than those indicated below is included in the per account fees.
1. Postage for All Mailings
2. Proxy
Initial Mailing
Tabulation and Follow-up
3. Special Forms (Statements, Confirms, Checks)
4. Envelopes and the Materials to be inserted for Fund
Mailings
5. Telephone (Voice) Charges - for Customer
Service/Transactions - External Line Charges Only
6. External Data Lines, Value added Networks (i.e. Tymnet)
7. Hardware at Dreyfus locations (Terminals, Printers,
Modems, etc.)
8. Courier Service/Shipping, Certified Mail, Insurance on
Mailed Items
9. Duplicating for Special Projects (i.e. User Manuals)
10. Stationery for Fund Correspondence
11. All copies of Microfilm or Fiche (i.e. Duplicate cc for
Dreyfus internal use, or selected Dealer Statements)
12. Printing of Confirms and Statements, and Checks, Inserts
and Letters
13. Mailing - Inserting, Bursting, Decollating & Mailing of
Confirms, Statements, Tax Reporting, Regular Fund Mailings and
Checks
14. Fees to Maintain P.O. Boxes
15. Outside Vendor Translation Charges for Shareholder
Correspondence Inquiries
16. Western Union Charges
17. Transaction charges as billed by NSCC
18. Other Charges or Out-of-Pocket Expenses Applicable to
Special Projects, as Agreed to in Advance by the Parties
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EXHIBIT NO. 9b
FORM OF
TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 31st day of May,
1996 between Wilshire Target Funds, Inc. (the "Fund"), a [
] corporation having its principal place of business at
[address], Providence, RI and FIRST DATA INVESTOR SERVICES
GROUP, INC. ("FDISG"), a Massachusetts corporation with
principal offices at One Exchange Place, 53 State Street,
Boston, Massachusetts 02109.
WITNESSETH
WHEREAS, the Fund is authorized to issue Shares in
separate series, with each such series representing
interests in a separate portfolio of securities and other
assets;
WHEREAS, the Fund intends to offer shares in those
Portfolios identified in the attached Exhibit 1, as the
same may be amended from time to time in accordance with
Article 14;
WHEREAS, the Fund on behalf of the Portfolios,
desires to appoint FDISG as its transfer agent, dividend
disbursing agent and agent in connection with certain
other activities and FDISG desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual
covenants and promises hereinafter set forth, the Fund and
FDISG agree as follows:
Article 1 Definitions.
1.1 Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires,
shall have the following meanings:
(a) "Articles of Incorporation" shall mean the
Articles of Incorporation, Declaration of Trust, or other
similar organizational document as the case may be, of the
Fund as the same may be amended from time to time.
(b) "Authorized Person" shall be deemed to include
(i) any authorized officer of the Fund; or (ii) any
person, whether or not such person is an officer or
employee of the Fund, duly authorized to give Oral
Instructions or Written Instructions on behalf of the Fund
as indicated in writing to FDISG from time to time.
(c) "Board of Directors" shall mean the Board of
Directors or Board of Trustees of the Fund, as the case
may be.
(d) "Commission" shall mean the Securities and
Exchange Commission.
(e) "Custodian" refers to any custodian or
subcustodian of securities and other property which the
Fund may from time to time deposit, or cause to be
deposited or held under the name or account of such a
custodian pursuant to a Custodian Agreement.
(f) "1934 Act" shall mean the Securities
Exchange Act of 1934 and the rules and regulations
promulgated thereunder, all as amended from time to time.
(g) "1940 Act" shall mean the Investment Company Act
of 1940 and the rules and regulations promulgated
thereunder, all as amended from time to time.
(h) "Oral Instructions" shall mean instructions,
other than Written Instructions, actually received by
FDISG from a person reasonably believed by FDISG to be an
Authorized Person;
(i) "Portfolio" shall mean each separate series of
shares offered by the Fund representing interest in a
separate portfolio of securities and other assets;
(j) "Prospectus" shall mean the most recently dated
Fund Prospectus and Statement of Additional Information,
including any supplements thereto if any, which has become
effective under the Securities Act of 1933 and the 1940
Act.
(k) "Shares" refers collectively to such shares of
capital stock or beneficial interest, as the case may be,
or class thereof, of each respective Portfolio of the Fund
as may be issued from time to time.
(l) "Shareholder" shall mean a record owner of
Shares of each respective Portfolio of the Fund.
(m) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by
FDISG to be an Authorized Person and actually received by
FDISG. Written Instructions shall include manually
executed originals and authorized electronic
transmissions, including telefacsimile of a manually
executed original or other process.
Article 2 Appointment of FDISG.
The Fund, on behalf of the Portfolios, hereby
appoints and constitutes FDISG as transfer agent and
dividend disbursing agent for Shares of each respective
Portfolio of the Fund and as shareholder servicing agent
for the Fund and FDISG hereby accepts such appointments
and agrees to perform the duties hereinafter set forth.
Article 3 Duties of FDISG.
3.1 FDISG shall be responsible for:
(a) Administering and/or performing the customary
services of a transfer agent; acting as service agent in
connection with dividend and distribution functions; and
for performing shareholder account and administrative
agent functions in connection with the issuance, transfer
and redemption or repurchase (including coordination with
the Custodian) of Shares of each Portfolio, as more fully
described in the written schedule of Duties of FDISG
annexed hereto as Schedule A and incorporated herein, and
in accordance with the terms of the Prospectus of the Fund
on behalf of the applicable Portfolio, applicable law and
the procedures established from time to time between FDISG
and the Fund.
(b) Recording the issuance of Shares and maintaining
pursuant to Rule 17Ad-10(e) of the 1934 Act a record of
the total number of Shares of each Portfolio which are
authorized, based upon data provided to it by the Fund,
and issued and outstanding. FDISG shall provide the Fund
on a regular basis with the total number of Shares of each
Portfolio which are authorized and issued and outstanding
and shall have no obligation, when recording the issuance
of Shares, to monitor the issuance of such Shares or to
take cognizance of any laws relating to the issue or sale
of such Shares, which functions shall be the sole
responsibility of the Fund.
(c) Notwithstanding any of the foregoing provisions
of this Agreement, FDISG shall be under no duty or
obligation to inquire into, and shall not be liable for:
(i) the legality of the issuance or sale of any Shares or
the sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Board
of Directors, or the legality of the issuance of any
Shares in payment of any dividend; or (iv) the legality of
any recapitalization or readjustment of the Shares.
3.2 In addition, FDISG shall have no responsibility
under this Agreement to (i) identify those transactions
and assets to be treated as exempt from blue sky reporting
for each State or (ii) verify the establishment of
transactions for each State on the system prior to
activation and thereafter monitor the daily activity for
each State which shall be the responsibility of the Fund's
blue sky service agent (which may be FDISG under separate
agreement). The responsibility of FDISG under this
Agreement for the Fund's blue sky State registration
status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund
and the reporting of such transactions to the Fund as
provided above.
3.3 In addition to the duties set forth herein,
FDISG shall perform such other duties and functions, and
shall be paid such amounts therefor, as may from time to
time be agreed upon in writing between the Fund and FDISG.
Article 4 Recordkeeping and Other Information.
4.1 FDISG shall create and maintain all records
required of it pursuant to its duties hereunder and as set
forth in Schedule A in accordance with all applicable
laws, rules and regulations, including records required by
Section 31(a) of the 1940 Act. Where applicable, such
records shall be maintained by FDISG for the periods and
in the places required by Rule 31a-2 under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940
Act, FDISG agrees that all such records prepared or
maintained by FDISG relating to the services to be
performed by FDISG hereunder are the property of the Fund
and will be preserved, maintained and made available in
accordance with such section, and will be surrendered
promptly to the Fund on and in accordance with the Fund's
request.
4.3 In case of any requests or demands for the
inspection of Shareholder records of the Fund, FDISG will
endeavor to notify the Fund of such request and secure
Written Instructions as to the handling of such request.
FDISG reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised
by its counsel that it may be held liable for the failure
to comply with such request.
Article 5 Fund Instructions.
5.1 FDISG will have no liability when acting upon
Written or Oral Instructions reasonably believed to have
been executed or orally communicated by an Authorized
Person and will not be held to have any notice of any
change of authority of any person until receipt of a
Written Instruction thereof from the Fund. FDISG will
also have no liability when processing Share certificates
which it reasonably believes to bear the proper manual or
facsimile signatures of the officers of the Fund and the
proper countersignature of FDISG.
5.2 At any time, FDISG may request Written
Instructions from the Fund and may seek advice from legal
counsel for the Fund, or its own legal counsel, with
respect to any matter arising in connection with this
Agreement, and it shall not be liable for any action taken
or not taken or suffered by it in good faith in accordance
with such Written Instructions or in accordance with the
opinion of counsel for the Fund or for FDISG. Written
Instructions requested by FDISG will be provided by the
Fund within a reasonable period of time.
5.3 FDISG, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to
them by any person representing or acting on behalf of the
Fund only if said representative is an Authorized Person.
The Fund agrees that all Oral Instructions shall be
followed within one business day by confirming Written
Instructions, and that the Fund's failure to so confirm
shall not impair in any respect FDISG's right to rely on
Oral Instructions.
Article 6 Compensation.
6.1 The Fund on behalf of each of the Portfolios
will compensate FDISG for the performance of its
obligations hereunder in accordance with the fees set
forth in the written Fee Schedule annexed hereto as
Schedule B and incorporated herein.
6.2 In addition to those fees set forth in Section
6.1 above, the Fund on behalf of each of the Portfolios
agrees to pay, and will be billed separately for,
out-of-pocket expenses incurred by FDISG in the
performance of its duties hereunder. Out-of-pocket
expenses shall include the items specified in the written
schedule of out-of-pocket charges annexed hereto as
Schedule C and incorporated herein. Schedule C may be
modified by written agreement between the parties.
Unspecified out-of-pocket expenses shall be limited to
those out-of-pocket expenses reasonably incurred by FDISG
in the performance of its obligations hereunder and
authorized in advance by an officer of the Fund who is not
an affiliate of FDISG.
6.3 The Fund on behalf of each of the Portfolios
agrees to pay all fees and out-of-pocket expenses within
fifteen (15) days following the receipt of the respective
invoice.
6.4 Any compensation agreed to hereunder may be
adjusted from time to time by attaching to Schedule B, a
revised Fee Schedule executed and dated by the parties
hereto.
6.5 The Fund acknowledges that the fees that FDISG
charges the Fund under this Agreement reflect the
allocation of risk between the parties, including the
disclaimer of warranties in Section 9.3 and the
limitations on liability and exclusion of remedies in
Section 11.2 and Article 12. Modifying the allocation of
risk from what is stated here would affect the fees that
FDISG charges, and in consideration of those fees, the
Fund agrees to the stated allocation of risk.
Article 7 Documents.
In connection with the appointment of FDISG, the Fund
shall, on or before the date this Agreement goes into
effect, but in any case within a reasonable period of time
for FDISG to prepare to perform its duties hereunder,
deliver or caused to be delivered to FDISG the documents
set forth in the written schedule of Fund Documents
annexed hereto as Schedule D.
Article 8 Transfer Agent System.
8.1 FDISG shall retain title to and ownership of any
and all data bases, computer programs, screen formats,
report formats, interactive design techniques, derivative
works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights
utilized by FDISG in connection with the services provided
by FDISG to the Fund herein (the "FDISG System").
8.2 FDISG hereby grants to the Fund a limited
license to the FDISG System for the sole and limited
purpose of having FDISG provide the services contemplated
hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall
immediately terminate with the termination of this
Agreement.
Article 9 Representations and Warranties.
9.1 FDISG represents and warrants to the Fund that:
(a) it is a corporation duly organize and existing
and in good standing under the laws of the Commonwealth of
Massachusetts;
(b) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
(c) all requisite corporate proceedings have been
taken to authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate
regulatory agency as a transfer agent and such
registration will remain in effect for the duration of
this Agreement; and
(e) it has and will continue to have access to the
necessary facilities, equipment and personnel to perform
its duties and obligations under this Agreement.
9.2 The Fund represents and warrants to FDISG that:
(a) it is duly organized and existing and in good
standing under the laws of the jurisdiction in which it is
organized;
(b) it is empowered under applicable laws and by its
Article of Incorporation and By-Laws to enter into this
Agreement;
(c) all corporate proceedings required by said
Articles of Incorporation, By-Laws and applicable laws
have been taken to authorized it to enter into this
Agreement;
(d) a registration statement under the Securities
Act of 1933, as amended, and the 1940 Act relating to each
of the Portfolios is currently effective and will remain
effective, and all appropriate state securities law
filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale;
and
(e) all outstanding Shares are validly issued, fully
paid and non-assessable and when Shares are hereafter
issued in accordance with the terms of the Fund's Articles
of Incorporation and its Prospectus with respect to each
Portfolio, such Shares shall be validly issued, fully paid
and non-assessable.
9.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, FDISG DISCLAIMS ALL
OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
MADE TO THE FUND OR ANY OTHER PERSON, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM
OR USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS PROVIDED
INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT.
FDISG DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT
EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT.
Article 10 Indemnification.
10.1 FDISG shall not be responsible for and the Fund
on behalf of each Portfolio shall indemnify and hold FDISG
harmless from and against any and all claims, costs,
expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or
kind which may be asserted against FDISG or for which
FDISG may be held to be liable (a "Claim") arising out of
or attributable to any of the following:
(a) any actions of FDISG required to be taken
pursuant to this Agreement unless such Claim resulted from
a negligent act or omission to act or bad faith by FDISG
in the performance of its duties hereunder;
(b) FDISG's reasonable reliance on, or reasonable
use of information, data, records and documents (including
but not limited to magnetic tapes, computer printouts,
hard copies and microfilm copies) received by FDISG from
the Fund, or any authorized third party acting on behalf
of the Fund, including but not limited the prior transfer
agent for the Fund, in the performance of FDISG's duties
and obligations hereunder;
(c) the reliance on, or the implementation of, any
Written or Oral Instructions;
(d) except to the extent that FDISG serves as the
Fund's Administrator under separate agreement, the offer
or sales of shares in violation of any requirement under
the securities laws or regulations of any state that such
shares be registered in such state or in violation of any
stop order or other determination or ruling by any state
with respect to the offer or sale of such shares in such
state; and
(e) the Fund's refusal or failure to comply with the
terms of this Agreement, or any Claim which arises out of
the Fund's negligence or misconduct or the breach of any
representation or warranty of the Fund made herein.
10.2 FDISG shall indemnify and hold harmless the
Fund from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses, damages,
charges, payments and liabilities of any sort or kind
which may be asserted against the Fund or for which the
Fund may be held to be liable in connection with this
Agreement or FDISG's performance hereunder (also a
"Claim"), if such Claim arises by reason of FDISG's
refusal to comply with the terms of this Agreement, or any
Claim which arises out of FDISG's negligence or misconduct
hereunder or the breach of any representation or warranty
of FDISG made herein.
10.2 In any case in which the one party hereto may
be asked to indemnify or hold the other harmless pursuant
to the provisions of Sections 10.1 or 10.2 hereof, the
party seeking indemnification will notify the other party
promptly after identifying any situation which it believes
presents or appears likely to present a claim for
indemnification hereunder, although the failure to do so
shall not prevent recovery by the party seeking
indemnification except to the extent that such failure
prejudices the other party in its defense of any such
claim, and shall keep the other party advised with respect
to all developments concerning such situation. The party
from whom indemnification is sought shall have the option
to defend the other party against any Claim which may be
the subject of this indemnification, and, in the event
that the party from whom the indemnification is sought so
elects, such defense shall be conducted by counsel chosen
by the party from whom the indemnification is sought and
satisfactory to the other party, and thereupon the party
from whom the indemnification is sought shall take over
complete defense of the Claim and the other party shall
sustain no further legal or other expenses in respect of
such Claim. The party seeking indemnification will not
confess any Claim or make any compromise in any case in
which the other party will be asked to provide
indemnification, except with the other party's prior
written consent. The obligations of the parties hereto
under this Article 10.3 shall survive the termination of
this Agreement.
10.4 Any claim for indemnification under this
Agreement must be made prior to the earlier of:
(a) one year after the party seeking indemnification
becomes aware of the event for which indemnification is
claimed; or
(b) one year after the earlier of the termination of
this Agreement or the expiration of the term of this
Agreement.
10.5 Except for remedies that cannot be waived as a
matter of law (and injunctive or provisional relief), the
provisions of this Article 10 shall be FDISGs sole and
exclusive remedy for claims or other actions or
proceedings to which the Funds indemnification
obligations pursuant to this Article 10 may apply.
Article 11 Standard of Care.
11.1 FDISG shall at all times act in good faith and
agrees to use its best efforts within commercially
reasonable limits to ensure the accuracy of all services
performed under this Agreement, but assumes no
responsibility for loss or damage to the Fund unless said
errors are caused by FDISG's own negligence, bad faith or
willful misconduct or that of its employees.
[11.2 Notwithstanding any provision in this
Agreement to the contrary, FDISG's cumulative liability
(to the Fund) for all losses, claims, suits,
controversies, breaches, or damages for any cause
whatsoever (including but not limited to those arising out
of or related to this Agreement) and regardless of the
form of action or legal theory, except to the extent not
covered by FDISG's liability insurance and fidelity bond
coverage shall not exceed one million ($1,000,000)
dollars. Fund understands the limitation on FDISG's
damages to be a reasonable allocation of risk and Fund
expressly consents with respect to such allocation of
risk. In allocating risk under the Agreement, the parties
agree that the damage limitation set forth above shall
apply to any alternative remedy ordered by a court in the
event such court determines that sole and exclusive remedy
provided for in the Agreement fails of its essential
purpose.
11.3 Neither party may assert any cause of action
against the other party under this Agreement that accrued
more than two (2) years prior to the filing of the suit
(or commencement of arbitration proceedings) alleging such
cause of action.]
11.4 Each party shall have the duty to mitigate
damages for which the other party may become responsible.
Article 12 Consequential Damages.
[NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT SHALL EITHER PARTY, THEIR AFFILIATES
OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE TO THE OTHER PARTY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES.]
Article 13 Term and Termination.
[13.1 This Agreement shall be effective on the date
first written above and shall continue for a period of two
(2) years (the "Initial Term"), unless earlier terminated
pursuant to the terms of this Agreement. In addition, the
terms of this Agreement shall automatically be extended
for a third year, unless the Fund notifies FDISG to the
contrary in writing at least six (6) moths prior to the
second anniversary of the effective date. Thereafter, the
term of this Agreement shall continue automatically for
successive annual periods, unless either party hereto
elects to terminate at an anniversary of the effective
date upon at least ninety (90) days advance written notice
to the other party.
13.2 Upon termination, for whatever reason, FDISG
shall cooperate fully with the Fund and with any successor
transfer and dividend disbursing or shareholder services
agent for the Fund in connection with the transfer of the
transfer, dividend disbursing or shareholder services
functions to such successor agent, and shall act promptly
and expeditiously in all matters relating thereto,
including the transfer of all records, data and
information reasonable necessary or appropriate to such
transfer of functions, with a view toward achieving an
orderly, efficient and cost-effective transition on any
reasonable schedule which may be established therefor by
the Fund. The parties agree that any transition schedule
allowing for a period of ninety (90) days or more to
complete the transition shall be deemed a "reasonable
schedule" for purposes of this Section 9 (b). In the
event that such termination occurs prior to the third
anniversary of the effective date of this Agreement, the
Fund agrees to reimburse FDISG for its reasonable itemized
costs and expenses incurred in connection with the
transfer to a successor agent, not to exceed in any event
$15,000. In the event of termination on or after the
third anniversary of the effective date of this Agreement,
each party hereto shall bear its own costs and expenses in
connection with the transfer to a successor agent.]
13.4 If a party hereto is guilty of a material
failure to perform its duties and obligations hereunder (a
"Defaulting Party") the other party (the "Non-Defaulting
Party") may give written notice thereof to the Defaulting
Party, and if such material breach shall not have been
remedied within thirty (30) days after such written notice
is given, then the Non-Defaulting Party may terminate this
Agreement by giving thirty (30) days written notice of
such termination to the Defaulting Party. The termination
of this Agreement by a non-defaulting party shall not
constitute a waiver of any other rights or remedies of
such party with respect to services performed prior to
such termination or rights of such party to be reimbursed
for out-of-pocket expenses hereunder. In all cases,
termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting Party of any
other rights it might have under this Agreement or
otherwise against the Defaulting Party.
Article 14 Additional Portfolios.
In the event that the Fund establishes one or more
Portfolios in addition to those identified in Exhibit 1,
with respect to which the Fund desires to have FDISG
render services as transfer agent under the terms hereof,
the Fund shall so notify FDISG in writing, and if FDISG
agrees in writing to provide such services, Exhibit 1
shall be amended to include such additional Portfolios.
Article 15 Confidentiality.
15.1 The parties agree that the Proprietary
Information (defined below) (collectively "Confidential
Information") are confidential information of the parties
and their respective licensors. The Fund and FDISG shall
exercise at least the same degree of care, but not less
than reasonable care, to safeguard the confidentiality of
the Confidential Information of the other as it would
exercise to protect it's own confidential information of a
similar nature. The Fund and FDISG may use the
Confidential Information only to exercise its rights under
this Agreement. The Fund and FDISG shall not duplicate,
sell or disclose to others the Confidential Information of
the other, in whole or in part, without the prior written
permission of the other party. The Fund and FDISG may,
however, disclose Confidential Information to its
employees who have a need to know the Confidential
Information to perform work for the other, provided that
each shall use reasonable efforts to ensure that the
Confidential Information is not duplicated or disclosed by
its employees in breach of this Agreement. The Fund and
FDISG may also disclose the Confidential Information to
independent contractors, auditors, and professional
advisors, provided they first agree in writing to be bound
by the confidentiality obligations substantially similar
to this Section 15.1. Notwithstanding the previous
sentence, in no event shall either the Fund or FDISG
disclose the Confidential Information to any competitor of
the other without specific, prior written consent.
15.2 Proprietary Information means:
(a) any data or information that is competitively
sensitive material, and not generally known to the public,
including, but not limited to, information about product
plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates,
business plans, and internal performance results relating
to the past, present or future business activities of the
Fund or FDISG, their respective subsidiaries and
affiliated companies and the customers, clients and
suppliers of any of them;
(b) any scientific or technical information, design,
process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its
confidentiality affords the Fund or FDISG a competitive
advantage over its competitors; and
(c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer
software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
15.3 Confidential Information includes, without
limitation, all documents, inventions, substances,
engineering and laboratory notebooks, drawings, diagrams,
specifications, bills of material, equipment, prototypes
and models, and any other tangible manifestation of the
foregoing of either party which now exist or come into the
control or possession of the other.
Article 16 Force Majeure.
No party shall be liable for any default or delay in
the performance of its obligations under this Agreement if
and to the extent such default or delay is caused,
directly or indirectly, by (i) fire, flood, elements of
nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders
in any country, (iii) any act or omission of any
governmental authority; (iv) any labor disputes (whether
or not the employees' demands are reasonable or within the
party's power to satisfy); or (v) nonperformance by a
third party or any similar cause beyond the reasonable
control of such party, including without limitation,
failures or fluctuations in telecommunications or other
equipment. In any such event, the non-performing party
shall be excused from any further performance and
observance of the obligations so affected only for as long
as such circumstances prevail and such party continues to
use commercially reasonable efforts to recommence
performance or observance as soon as practicable.
Article 17 Assignment and Subcontracting.
This Agreement, its benefits and obligations shall be
binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted
assigns. This Agreement may not be assigned or otherwise
transferred by either party hereto, without the prior
written consent of the other party, which consent shall
not be unreasonably withheld; provided, however, that
[FDISG may, in its sole discretion, assign all its right,
title and interest in this Agreement to an affiliate,
parent or subsidiary, provided that such assignment shall
not materially effect the financial capability or quality
or capacity of the personnel or facility to provide the
services set forth herein.] FDISG may, in its sole
discretion, engage subcontractors to perform any of the
obligations contained in this Agreement to be performed by
FDISG, provided, however, that FDISG shall at all times
remain fully responsible for the acts or omissions of such
sub-contractors as if it were providing such services
directly.
Article 18 Arbitration.
18.1 Any claim or controversy arising out of or
relating to this Agreement, or breach hereof, shall be
settled by arbitration administered by the American
Arbitration Association in Boston, Massachusetts in
accordance with its applicable rules, except that the
Federal Rules of Evidence and the Federal Rules of Civil
Procedure with respect to the discovery process shall
apply.
18.2 The parties hereby agree that judgment upon the
award rendered by the arbitrator may be entered in any
court having jurisdiction.
18.3 The parties acknowledge and agree that the
performance of the obligations under this Agreement
necessitates the use of instrumentalities of interstate
commerce and, notwithstanding other general choice of law
provisions in this Agreement, the parties agree that the
Federal Arbitration Act shall govern and control with
respect to the provisions of this Article 18.
Article 19 Notice.
Any notice or other instrument authorized or required
by this Agreement to be given in writing to the Fund or
FDISG, shall be sufficiently given if addressed to that
party and received by it at its office set forth below or
at such other place as it may from time to time designate
in writing.
To the Fund:
Wilshire Target Funds, Inc.
c/o Wilshire Associates Incorporated
1299 Ocean Avenue - Suite 700
Santa Monica, CA 90401
Attention: Alan L. Manning
Vice President and General Counsel
To FDISG:
First Data Investor Services Group, Inc.
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: President
with a copy to FDISG's General Counsel
Article 20 Governing Law/Venue.
The laws of the Commonwealth of Massachusetts,
excluding the laws on conflicts of laws, shall govern the
interpretation, validity, and enforcement of this
agreement. All actions arising from or related to this
Agreement shall be brought in the state and federal courts
sitting in the City of Boston, and FDISG and Client hereby
submit themselves to the exclusive jurisdiction of those
courts.
Article 21 Counterparts.
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.
Article 22 Captions.
The captions of this Agreement are included for
convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect
their construction or effect.
Article 23 Publicity.
Neither FDISG nor the Fund shall release or publish
news releases, public announcements, advertising or other
publicity relating to this Agreement or to the
transactions contemplated by it without the prior review
and written approval of the other party; provided,
however, that either party may make such disclosures as
are required by legal, accounting or regulatory
requirements after making reasonable efforts in the
circumstances to consult in advance with the other party.
Article 24 Relationship of Parties.
The parties agree that they are independent
contractors and not partners or co-venturers and nothing
contained herein shall be interpreted or construed
otherwise.
Article 25 Entire Agreement; Severability.
25.1 This Agreement, including Schedules, Addenda,
and Exhibits hereto, constitutes the entire Agreement
between the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous
proposals, agreements, contracts, representations, and
understandings, whether written or oral, between the
parties with respect to the subject matter hereof. No
change, termination, modification, or waiver of any term
or condition of the Agreement shall be valid unless in
writing signed by each party. No such writing shall be
effective as against FDISG unless said writing is executed
by an Executive Vice President, or President of FDISG. A
partys waiver of a breach of any term or condition in the
Agreement shall not be deemed a waiver of any subsequent
breach of the same or another term or condition.
25.2 The parties intend every provision of this
Agreement to be severable. If a court of competent
jurisdiction determines that any term or provision is
illegal or invalid for any reason, the illegality or
invalidity shall not affect the validity of the remainder
of this Agreement. In such case, the parties shall in
good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting
the generality of this paragraph, if a court determines
that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this
Agreement, including the limitations on liability and
exclusion of warranties, shall remain fully effective.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized
officers, as of the day and year first above written.
WILSHIRE TARGET FUNDS, INC.
By:
Title:
FIRST DATA INVESTOR SERVICES
GROUP, INC.
By:
Title:
Exhibit 1
List of Portfolios
Target Company Growth Portfolio
Target Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
Schedule A
DUTIES OF FDISG
1. Shareholder Information. FDISG shall maintain
a record of the number of Shares held by each Shareholder
of record which shall include name, address, taxpayer
identification and which shall indicate whether such
Shares are held in certificates or uncertificated form.
2. Shareholder Services. FDISG shall respond as
appropriate to all inquiries and communications from
Shareholders relating to Shareholder accounts with respect
to its duties hereunder and as may be from time to time
mutually agreed upon between FDISG and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, the Fund shall
supply FDISG with an adequate supply of blank share
certificates to meet FDISG requirements therefor. Such
Share certificates shall be properly signed by facsimile.
The Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose
signature appears on such certificates, FDISG or its agent
may continue to countersign certificates which bear such
signatures until otherwise directed by Written
Instructions.
(b) FDISG shall issue replacement Share
certificates in lieu of certificates which have been lost,
stolen or destroyed, upon receipt by FDISG of properly
executed affidavits and lost certificate bonds, in form
satisfactory to FDISG, with the Fund and FDISG as obligees
under the bond.
(c) FDISG shall also maintain a record of each
certificate issued, the number of Shares represented
thereby and the Shareholder of record. With respect to
Shares held in open accounts or uncertificated form (i.e.,
no certificate being issued with respect thereto) FDISG
shall maintain comparable records of the Shareholders
thereof, including their names, addresses and taxpayer
identification. FDISG shall further maintain a stop
transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy
Materials. FDISG will address and mail to Shareholders of
the Fund, all reports to Shareholders, dividend and
distribution notices and proxy material for the Fund's
meetings of Shareholders. In connection with meetings of
Shareholders, FDISG will prepare Shareholder lists, mail
and certify as to the mailing of proxy materials, process
and tabulate returned proxy cards, report on proxies voted
prior to meetings, act as inspector of election at
meetings and certify Shares voted at meetings.
5. Sales of Shares
(a) FDISG shall not be required to issue any
Shares of the Fund where it has received a Written
Instruction from the Fund or official notice from any
appropriate authority that the sale of the Shares of the
Fund has been suspended or discontinued. The existence of
such Written Instructions or such official notice shall be
conclusive evidence of the right of FDISG to rely on such
Written Instructions or official notice.
(b) In the event that any check or other order
for the payment of money is returned unpaid for any
reason, FDISG will endeavor to: (i) give prompt notice of
such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of
such check or order; and (iii) take such actions as FDISG
may from time to time deem appropriate.
6. Transfer and Repurchase
(a) FDISG shall process all requests to
transfer or redeem Shares in accordance with the transfer
or repurchase procedures set forth in the Fund's
Prospectus.
(b) FDISG will transfer or repurchase Shares
upon receipt of Oral or Written Instructions or otherwise
pursuant to the Prospectus and Share certificates, if any,
properly endorsed for transfer or redemption, accompanied
by such documents as FDISG reasonably may deem necessary.
(c) FDISG reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that
the endorsement on the instructions is valid and genuine.
FDISG also reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the requested
transfer or repurchase is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make
transfers or repurchases which FDISG, in its good
judgement, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims
adverse to such transfer or repurchase.
(d) When Shares are redeemed, FDISG shall, upon
receipt of the instructions and documents in proper form,
deliver to the Custodian and the Fund or its designee a
notification setting forth the number of Shares to be
repurchased. Such repurchased shares shall be reflected
on appropriate accounts maintained by FDISG reflecting
outstanding Shares of the Fund and Shares attributed to
individual accounts.
(e) FDISG, upon receipt of the monies paid to
it by the Custodian for the repurchase of Shares, pay such
monies as are received from the Custodian, all in
accordance with the procedures described in the written
instruction received by FDISG from the Fund.
(f) FDISG shall not process or effect any
repurchase with respect to Shares of the Fund after
receipt by FDISG or its agent of notification of the
suspension of the determination of the net asset value of
the Fund.
7. Dividends
(a) Upon the declaration of each dividend and
each capital gains distribution by the Board of Directors
of the Fund with respect to Shares of the Fund, the Fund
shall furnish or cause to be furnished to FDISG Written
Instructions setting forth the date of the declaration of
such dividend or distribution, the ex-dividend date, 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, the total amount payable on the payment date
and whether such dividend or distribution is to be paid in
Shares at net asset value.
(b) On or before the payment date specified in
such resolution of the Board of Directors, the Fund will
pay to FDISG sufficient cash to make payment to the
Shareholders of record as of such payment date.
(c) If FDISG does not receive sufficient cash
from the Fund to make total dividend and/or distribution
payments to all Shareholders of the Fund as of the record
date, FDISG will, upon notifying the Fund, withhold
payment to all Shareholders of record as of the record
date until sufficient cash is provided to FDISG.
8. In addition to and neither in lieu nor in
contravention of the services set forth above, FDISG
shall: (i) perform all the customary services of a
transfer agent, registrar, dividend disbursing agent and
agent of the dividend reinvestment and cash purchase plan
as described herein consistent with those requirements in
effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs
(if any) set out in the attached fee schedule, include but
are not limited to: maintaining all Shareholder accounts,
preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts where applicable, preparing
and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders.
Schedule B
Fee Schedule
Schedule C
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable
out-of-pocket expenses, including, but not limited to the
following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates,
envelopes, checks and stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first
class) direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including
all lease, maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and
insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and
other equipment and any expenses incurred in connection
with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Fund
- Temporary staff, as approved by the Fund
- Travel and entertainment, as approved by the
Fund
- Record retention, retrieval and destruction
costs, including, but not limited to exit fees charged by
third party record keeping vendors
- Third party audit reviews
- Ad hoc SQL time
- All Systems enhancements after the conversion at
the rate of $100.00 per hour
- Insurance
- Such other miscellaneous expenses similar in
nature to those set forth above and reasonably incurred by
FDISG in performing its duties and responsibilities under
this Agreement.
The Fund agrees that postage and mailing expenses
will be paid on the day of or prior to mailing as agreed
with FDISG. In addition, the Fund will promptly reimburse
FDISG for any other unscheduled expenses incurred by FDISG
whenever the Fund and FDISG mutually agree that such
expenses are not otherwise properly borne by FDISG as part
of its duties and obligations under the Agreement.
Schedule D
Fund Documents
- Certified copy of the Articles of Incorporation
of the Fund, as amended
- Certified copy of the By-laws of the Fund, as
amended,
- Copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement
- Specimens of the certificates for Shares of the
Fund, if applicable, in the form approved by the Board of
Directors of the Fund, with a certificate of the Secretary
of the Fund as to such approval
- All account application forms and other
documents relating to Shareholder accounts or to any plan,
program or service offered by the Fund
- Certified list of Shareholders of the Fund with
the name, address and taxpayer identification number of
each Shareholder, and the number of Shares of the Fund
held by each, certificate numbers and denominations (if
any certificates have been issued), lists of any accounts
against which stop transfer orders have been placed,
together with the reasons therefore, and the number of
Shares redeemed by the Fund
- All notices issued by the Fund with respect to
the Shares in accordance with and pursuant to the Articles
of Incorporation or By-laws of the Fund or as required by
law and shall perform such other specific duties as are
set forth in the Articles of Incorporation including the
giving of notice of any special or annual meetings of
shareholders and any other notices required thereby.
contract\ta\openend\wilshire\agr2
Rev. 11/95
EXHIBIT NO.11a
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 8 to
the Registration
Statement (Form N-1A) of Wilshire Target Funds, Inc. to be filed
with the Securities and Exchange Commission under the provisions
of the Securities Act of 1933 and the Investment Company Act of
1940, as amended, of our report dated October 6, 1995 on our audit
of the financial statements and financial highlights of Dreyfus-
Wilshire Target Funds, Inc.
We also consent to the reference to our firm under the captions
"Condensed Financial Information" in the prospectus and
"Custodian, Transfer
and Dividend Disbursing Agent, Counsel and Independent
Accountants" in the Statement of Additional Information.
COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
New York, New York
March 29, 1996
EXHIBIT NO. 11b
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Edward A. Benjamin, Robert D. Guiod, Thomas D. Stevens
and Julie A. Tedesco and each of them, with full power
to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any and
all amendments to the Registration Statement for
Dreyfus-Wilshire Target Funds, Inc. (including post-
effective amendments and amendments thereto), and to
file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and
authority to do and perform each and every act and
thing ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their or his or
her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
THOMAS D. STEVENS
Thomas D. Stevens, Board Member
DEWITT F. BOWMAN
DeWitt F. Bowman, Board Member
ANNE WEXLER
Anne Wexler, Board Member
Dated: April 1, 1996
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints
Edward A. Benjamin and Robert D. Guiod and each of
them, with full power to act without the other, her
true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for her and
in her name, place and stead, in any and all capacities
(until revoked in writing) to sign any and all
amendments to the Registration Statement for Dreyfus-
Wilshire Target Funds, Inc. (including post-effective
amendments and amendments thereto), and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying
and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by
virtue hereto.
MARIE E. CONNOLLY
Marie E. Connolly
President and Treasurer
EXHIBIT NO. 15
FORM OF
WILSHIRE TARGET FUNDS, INC.
Investment Class Shares
Shareholder Services Plan
Under Rule 12b-1
This Plan (the "Plan") constitutes the Shareholder
Services Plan relating to the Investment Class shares
of each of the Portfolios of Wilshire Target Funds,
Inc. (the "Fund") identified in Appendix A hereto.
Appendix A may be amended from time to time as provided
herein.
Section 1. The Fund will reimburse the distributor of the
Investment Class shares of each Portfolio (the "Distributor"), for
its shareholder services expenses (the "Shareholder Services Fee")
at an annual rate of up to 0.25 of 1% of the average daily net
assets of such Portfolio attributable to its Investment Class
shares. The Shareholder Services Fee shall be accrued daily and
paid monthly or at such other intervals as the Directors shall
determine. The Distributor may be reimbursed for payments to
securities dealers or other organizations as service fees pursuant
to agreements with such organizations for providing personal
services to investors in Investment Class shares and/or the
maintenance of shareholder accounts. It is intended that payments
under this Plan shall qualify as "service fees" as defined in
Section 26 of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (or any successor
provision) as in effect from time to time (the "NASD Rule").
Section 2. This Plan shall not take effect until it has
been approved (i) by votes of the majority of both (a) the
Directors of the Fund, and (b) the Independent Directors of the
Fund, in each case cast in person at a meeting called for the
purpose of voting on this Plan, and (ii) and by vote of a majority
of the outstanding Investment Class shares, and shall in no event
take effect before May 31, 1996. This Plan shall continue in
effect for a period of more than one year after May 31, 1996 only
so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage
may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and
regulations thereunder) of both (a) the Directors of the Fund, and
(b) the Independent Directors of the Fund, cast in person at a
meeting called for the purpose of voting on this Plan or such
agreement.
Section 3. Any person authorized to direct the disposition
of monies paid or payable by the Fund pursuant to this Plan or any
related agreement shall provide to the Directors of the Fund, and
the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such
expenditures were made.
Section 4. This Plan may be terminated at any time by vote
of a majority of the Independent Directors, or by vote of a
majority of the outstanding Investment Class shares.
Section 5. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement
related to this Plan shall provide:
A. That such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Independent Directors or by vote of a majority
of the outstanding Investment Class shares, on not more
than 60 days' written notice to any other party to the
agreement; and
B. That such agreement shall terminate automatically
in the event of its assignment.
Section 6. This Plan may not be amended to increase
materially the amount of expenses permitted pursuant to Section 1
hereof without approval by a vote of at least a majority of the
outstanding Investment Class shares, and all material amendments
of this Plan (including any amendment to add a Portfolio to
Appendix A) shall be approved in the manner prescribed in Section
2(i).
Section 7. As used in this Plan, (a) the term "Independent
Directors" shall mean those Directors of the Fund who are not
interested persons of the Fund, and have no direct or indirect
financial interest in the operation of this Plan or any agreements
related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the Act
and the rules and regulations thereunder, and the term "majority
of the outstanding Investment Class shares" shall mean the lesser
of the 67% or the 50% voting requirements specified in clauses (A)
and (B), respectively, of the third sentence of Section 2(a)(42)
of the Act, all subject to such exemptions as may be granted by
the Securities and Exchange Commission.
APPENDIX A
Large Company Growth Portfolio
Large Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
FORM OF
WILSHIRE TARGET FUNDS, INC.
Institutional Class Shares
Shareholder Services Plan
Under Rule 12b-1
This Plan (the "Plan") constitutes the Shareholder
Services Plan relating to the Institutional Class
shares of each of the Portfolios of Wilshire Target
Funds, Inc. (the "Fund") identified in Appendix A
hereto. Appendix A may be amended from time to time as
provided herein.
Section 1. The Fund will reimburse the distributor of the
Institutional Class shares of each Portfolio (the "Distributor"),
for its shareholder services expenses (the "Shareholder Services
Fee") at an annual rate of up to 0.15 of 1% of the average daily
net assets of such Portfolio attributable to its Institutional
Class shares. The Shareholder Services Fee shall be accrued daily
and paid monthly or at such other intervals as the Directors shall
determine. The Distributor may be reimbursed for payments to
securities dealers or other organizations as service fees pursuant
to agreements with such organizations for providing personal
services to investors in Institutional Class shares and/or the
maintenance of shareholder accounts. It is intended that payments
under this Plan shall qualify as "service fees" as defined in
Section 26 of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (or any successor
provision) as in effect from time to time (the "NASD Rule").
Section 2. This Plan shall not take effect until it has
been approved (i) by votes of the majority of both (a) the
Directors of the Fund, and (b) the Independent Directors of the
Fund, in each case cast in person at a meeting called for the
purpose of voting on this Plan, and (ii) by vote of a majority of
the outstanding Institutional Class shares; and shall in no event
take effect before May 31, 1996. This Plan shall continue in
effect for a period of more than one year after May 31, 1996 only
so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage
may, from time to time, be required by Section 12(b) of the
Investment Company Act of 1940 (the "Act") or the rules and
regulations thereunder) of both (a) the Directors of the Fund, and
(b) the Independent Directors of the Fund, cast in person at a
meeting called for the purpose of voting on this Plan or such
agreement.
Section 3. Any person authorized to direct the disposition
of monies paid or payable by the Fund pursuant to this Plan or any
related agreement shall provide to the Directors of the Fund, and
the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such
expenditures were made.
Section 4. This Plan may be terminated at any time by vote
of a majority of the Independent Directors, or by vote of a
majority of the outstanding Institutional Class shares.
Section 5. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement
related to this Plan shall provide:
A. That such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Independent Directors or by vote of a majority
of the outstanding Institutional Class shares, on not
more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically
in the event of its assignment.
Section 6. This Plan may not be amended to increase
materially the amount of expenses permitted pursuant to Section 1
hereof without approval by a vote of at least a majority of the
outstanding Institutional Class shares, and all material
amendments of this Plan (including any amendment to add a
Portfolio to Appendix A) shall be approved in the manner
prescribed in Section 2(i).
Section 7. As used in this Plan, (a) the term
"Independent Directors" shall mean those Directors of
the Fund who are not interested persons of the Fund,
and have no direct or indirect financial interest in
the operation of this Plan or any agreements related to
it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in
the Act and the rules and regulations thereunder, and
the term "majority of the outstanding Institutional
Class shares" shall mean the lesser of the 67% or the
50% voting requirements specified in clauses (A) and
(B), respectively, of the third sentence of Section
2(a)(42) of the Act, all subject to such exemptions as
may be granted by the Securities and Exchange
Commission.
APPENDIX A
Large Company Growth Portfolio
Large Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
- -3-
- -3-
EXHIBIT NO. 18
FORM OF
WILSHIRE TARGET FUNDS, INC.
Plan pursuant to Rule 18f-3(d) under the Investment
Company Act of 1940
Effective May 31, 1996
WHEREAS, the Board of Directors of the Wilshire
Target Funds, Inc. (the "Fund") have considered the
following multi-class plan (the "Plan") under which the
Fund may offer multiple classes of shares of its now
existing and hereafter created series pursuant to Rule
18f-3 under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, a majority of the Directors of the Fund
and a majority of the Directors who are not interested
persons of the Fund have found the Plan, as proposed,
to be in the best interests of each class of the Fund
individually and the Fund as a whole;
NOW, THEREFORE, the Fund hereby approves and
adopts the following Plan pursuant to Rule 18f-3(d) of
the 1940 Act.
The Plan
Each now existing and hereafter created series
("Portfolio") of the Fund may from time to time issue
one or more of the following classes of shares:
Investment Class shares and Institutional Class
shares. Each class is subject to such investment
minimums and other conditions of eligibility as are set
forth in the Fund's prospectus as from time to time in
effect with respect to such class (the "Prospectus").
The differences in expenses among these classes of
shares, and the exchange features of each class of
shares, are set forth below in this Plan, which is
subject to change, to the extent permitted by law and
by the Articles of Incorporation and By-laws of the
Fund, by action of the Board of Directors of the Fund.
Initial Sales Charge
Investment Class and Institutional Class shares of
the Portfolios are offered at their per share net asset
value, without an initial sales charge.
Redemption Fee
No redemption fee will be imposed upon redemptions
of shares of either Class.
Separate Arrangements and Expense Allocations of Each
Class
Investment Class and Institutional Class shares
will pay the expenses associated with their different
distribution and shareholder servicing arrangements.
Each class will reimburse its distributor for payments
to securities dealers or other organizations as service
fees pursuant to agreements with such organizations for
the provision of personal services rendered to
shareholders of that class and the maintenance of
shareholder accounts ("Shareholder Services Fees").
Shareholder Services Fees are paid pursuant to separate
plans adopted for each class pursuant to Rule 12b-1
under the 1940 Act (the "12b-1 Plans"). Shares of the
Investment Class of a Portfolio pay, pursuant to the
relevant 12b-1 Plan, a Shareholder Services Fee of up
to 0.25% per annum of the average daily net assets of
such Portfolio attributable to such class, as described
in the Prospectus for that class. Shares of the
Institutional Class of a Portfolio pay, pursuant to the
relevant 12b-1 Plan, a Shareholder Services Fee of up
to 0.15% per annum of the average daily net assets of
such Portfolio attributable to such class, as described
in the Prospectus for that class.
Each class may, at the Directors' discretion, also
pay a different share of other expenses, not including
advisory or custodial fees or other expenses related to
the management of the Portfolios assets, if these
expenses are actually incurred in a different amount by
that class, or if the class receives services of a
different kind or to a different degree than other
classes. All other expenses will be allocated to each
class on the basis of the net asset value of that class
in relation to the net asset value of the particular
Portfolio. However, any Portfolio which may hereafter
be established to operate as a money market fund in
reliance on Rule 2a-7 under the 1940 Act and which will
make daily distributions of its net investment income,
may allocate such other expenses to each share
regardless of class, or based on relative net assets
(i.e., settled shares), as permitted by Rule 18f-
3(c)(2) under the 1940 Act.
Exchange and Conversion Features
Exchange Features
A shareholder may exchange shares of any class of
a Portfolio for shares of the same class of any other
Portfolio in an account with identical registration on
the basis of their respective net asset values.
Conversion Features
Shares of one class do not convert into shares of
another class.
Dividends/Distributions
Each Portfolio pays out as dividends substantially
all of its net investment income (which comes from
dividends and interest it receives from its
investments) and net realized short-term capital gains.
All dividends and/or distributions will be paid,
at the election of the shareholder, either in the form
of additional shares of the class of shares of the
Portfolio to which the dividends and/or distributions
relate or in cash. Dividends paid with respect to each
class of a Portfolio are calculated in the same manner
and at the same time as dividends paid with respect to
each other class of that Portfolio.
Voting Rights
Each share entitles the shareholder of record to
one vote. Each Portfolio will vote separately on
matters which require a shareholder vote and which
relate solely to that Portfolio. In addition, each
class of shares of a Portfolio shall have exclusive
voting rights on any matter submitted to shareholders
that relates solely to that class, and shall have
separate voting rights on any matter submitted to
shareholders in which the interests of one class differ
from the interests of any other class. However, all
Portfolio shareholders will have equal voting rights on
matters that affect all Portfolio shareholders equally.
Under the current terms of this Plan and of the
relevant 12b-1 Plans, the Portfolios classes will vote
separately only with respect to their 12b-1 Plans.
WILSHIRE TARGET FUNDS, INC.
By:
Title: President
Date:
Prior to May 31, 1996, each Portfolio of the Fund has issued, and may
issue, shares of a single class
identified as shares of Common Stock, $.001 par value per share. The Board
of Directors has authorized the
classification of all shares of each Portfolio issued and outstanding at
the close of business on May 31, 1996 as
"Investment Class" shares of the Common Stock, $.001 par value per share, of
such Portfolio, and has authorized
the offer, sale and issuance after that date of additional Investment Class
shares and of "Institutional Class" shares
of the Common Stock, $.001 par value per share, of each such Portfolio.
- -3-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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