File No. 33-58248
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. 2 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 4 [X]
(Check appropriate box or boxes.)
DREYFUS INTERNATIONAL EQUITY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b) of Rule 485
X on August 22, 1994 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a) of Rule 485
on (date) pursuant to paragraph (a) of Rule 485
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 ending May 31, 1994 was filed on July 29, 1994.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 3
4 General Description of Registrant 4
5 Management of the Fund 15
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 25
7 Purchase of Securities Being Offered 16
8 Redemption or Repurchase 21
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-9
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-12
Services
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation B-24
18 Capital Stock and Other Securities B-25
19 Purchase, Redemption and Pricing B-15;
of Securities Being Offered B-16;
B-20
20 Tax Status *
21 Underwriters B-12
22 Calculations of Performance Data B-25
23 Financial Statements B-31
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-5
Investment Adviser
29 Principal Underwriters C-29
30 Location of Accounts and Records C-38
31 Management Services C-38
32 Undertakings C-38
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS AUGUST 22, 1994
DREYFUS INTERNATIONAL EQUITY FUND, INC.
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DREYFUS INTERNATIONAL EQUITY FUND, INC. (THE "FUND") IS AN OPEN-END,
NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. ITS
GOAL IS TO PROVIDE YOU WITH CAPITAL GROWTH. THE FUND WILL INVEST PRIMARILY IN
THE EQUITY SECURITIES OF FOREIGN ISSUERS LOCATED THROUGHOUT THE WORLD.
YOU CAN INVEST, REINVEST OR REDEEM FUND SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY IMPOSED BY THE FUND. YOU CAN PURCHASE OR REDEEM SHARES BY
TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S INVESTMENT
ADVISER. DREYFUS HAS ENGAGED M&G INVESTMENT MANAGEMENT LIMITED ("M&G") TO
SERVE AS THE FUND'S SUB-INVESTMENT ADVISER AND PROVIDE DAY-TO-DAY MANAGEMENT
OF THE FUND'S INVESTMENTS. DREYFUS AND M&G ARE REFERRED TO COLLECTIVELY AS
THE "ADVISERS."
THE FUND BEARS CERTAIN COSTS PURSUANT TO A DISTRIBUTION PLAN ADOPTED
IN ACCORDANCE WITH RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND A
SHAREHOLDER SERVICES PLAN.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION), DATED
AUGUST 22, 1994, WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER
DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE
OF INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY,
WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.................... 3
CONDENSED FINANCIAL INFORMATION................... 3
DESCRIPTION OF THE FUND........................... 4
MANAGEMENT OF THE FUND............................ 15
HOW TO BUY FUND SHARES............................ 16
SHAREHOLDER SERVICES.............................. 18
HOW TO REDEEM FUND SHARES......................... 21
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN... 23
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 24
PERFORMANCE INFORMATION........................... 25
GENERAL INFORMATION............................... 25
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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[This Page Intentionally Left Blank]
(2)
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees .......................................... .75%
12b-1 Fees................................................ .56%
Other Expenses............................................ .72%
Total Fund Operating Expenses............................. 2.03%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the
end of each time period: $21 $64 $109 $236
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect. Certain
Service Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. Long-term investors could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. For a further
description of the various costs and expenses incurred in the operation of
the Fund, as well as expense reimbursement or waiver arrangements, see
"Management of the Fund," "How to Buy Fund Shares" and "Distribution Plan and
Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Fund's Statement of Additional Information. Further financial data and
related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the period June 29, 1993 (commencement
of operations) to May 31, 1994. This information has been derived from the
Fund's financial statements.
<TABLE>
<S> <C> <C>
PER SHAREDATA:
Net asset value, beginning of period........................ $12.50
------
INVESTMENT OPERATIONS:
Investment income--net ..................................... .05
Net realized and unrealized gain on investments............. 2.74
------
TOTAL FROM INVESTMENT OPERATIONS........................... 2.79
------
DISTRIBUTIONS:
Dividends from investment income-net........................ (.02)
Dividends in excess of investment income-net................ (.04)
Dividends from net realized gain on investments............. (.03)
------
TOTAL DISTRIBUTIONS......................................... (.09)
------
Net asset value, end of period.............................. $15.20
======
TOTAL INVESTMENT RETURN 22.32%*
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .................... 1.71%*
Ratio of net investment income to average net assets........ .11%*
Decrease reflected in above expense ratio due to
undertakings by The Dreyfus Corporation..................... .16%*
Portfolio Turnover Rate..................................... 51.32%*
Net Assets, end of period (000's omitted)................... $179,907
- ---------------
*Not annualized.
</TABLE>
(3)
Further information about the Fund's performance is contained in the
Fund's annual report which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to provide you with capital growth. The Fund's
investment objective cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that at least 65% of the value
of its total assets (except when maintaining a temporary defensive position)
will be invested in equity securities of foreign issuers. Equity securities
consist of common stocks, convertible securities and preferred stocks. The
Fund also may invest in debt securities of foreign issuers that management
believes, based on market conditions, the financial condition of the issuer,
general economic conditions and other relevant factors, offer opportunities
for capital growth. Under normal market conditions, it is expected that
substantially all of the Fund's assets will be invested in securities of
foreign issuers. While there are no prescribed limits on geographic asset
distribution outside the United States, the Fund ordinarily will seek to
invest its assets in not less than three foreign countries. The Fund may
invest up to 5% of its assets in securities of companies that have been in
continuous operation for fewer than three years. The Fund's policy is to
purchase marketable securities which are not restricted as to public sale;
however, the Fund may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist. See "Certain
Portfolio Securities - Illiquid Securities" below.
The debt securities in which the Fund may invest must be rated at
least Baa by Moody's Investors Service, Inc. ("Moody's") or at least BBB by
Standard & Poor's Corporation ("S&P"), Fitch Investors Service, Inc.
("Fitch") or Duff & Phelps, Inc. ("Duff'') or, if unrated, deemed to be of
comparable quality by the Advisers. Debt securities rated Baa by Moody's or
BBB by S&P, Fitch or Duff are considered investment grade obligations which
lack outstanding investment characteristics and have speculative characteristi
cs as well. See "Risk Factors - Other Investment Considerations" below.
The Fund may invest, in anticipation of investing cash positions, in
money market instruments consisting of U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments, and
repurchase agreements, as set forth under "Certain Portfolio Securities"
below. The Fund also may hold U.S. Government securities to meet certain
asset segregation requirements. Under normal market conditions, the Fund does
not expect to have a substantial portion of its assets invested in money
market instruments. However, when the Advisers determine that adverse market
conditions exist, the Fund may adopt a temporary defensive posture and invest
all of its assets in money market instruments. To the extent the Fund is so
invested, the Fund's investment objective may not be achieved.
INVESTMENT TECHNIQUES
The Fund may engage in various investment techniques, such as foreign
exchange transactions, options and futures transactions and lending portfolio
securities, each of which involves risk. See "Risk Factors" below. Options
and futures transactions involve so-called "derivative securities."
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency exchange
transactions to the extent consistent with its investment objective or to
hedge its portfolio. The Fund will conduct its currency exchange transactions
either on a spot (i.e., cash) basis at the rate prevailing in the currency
exchange market, or through entering into forward contracts to purchase or
sell currencies. A forward currency exchange
(4)
contract involves an obligation to purchase or sell a specific currency at a
future date, which must be more than two days from the date of the contract,
at a price set at the time of the contract. Forward currency exchange
contracts are entered into in the interbank market conducted directly between
currency traders (typically commercial banks or other financial institutions)
and their customers. The Fund also may combine forward currency exchange
contracts with investments in securities denominated in other currencies.
The Fund also may maintain short positions in forward currency
exchange transactions, which would involve the Fund agreeing to exchange an
amount of a currency it did not currently own for another currency at a
future date in anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive in the exchange. The
Fund will maintain in a segregated custodial account cash or U.S. Government
securities or other high quality liquid debt securities at least equal to the
aggregate amount of its short positions, plus accrued interest, in certain
cases, in accordance with releases promulgated by the Securities and Exchange
Commission.
OPTIONS ON FOREIGN CURRENCY - The Fund may purchase and sell call and put
options on foreign currency for the purpose of hedging against changes in
future currency exchange rates. Call options convey the right to buy the
underlying currency at a price which is expected to be lower than the spot
price of the currency at the time the option expires. Put options convey the
right to sell the underlying currency at a price which is anticipated to be
higher than the spot prices of the currency at the time the option expires.
The Fund may use foreign currency options for the same purposes as forward
currency exchange and futures transactions, as described herein. See also
"Call and Put Options on Specific Securities" and "Currency Futures and
Options on Currency Futures" below.
CALL AND PUT OPTIONS ON SPECIFIC SECURITIES - The Fund may invest up to 5% of
its assets, represented by the premium paid, in the purchase of call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) in which the Fund may invest. The Fund may write covered call and
put option contracts to the extent of 20% of the value of its net assets at
the time such option contracts are written. A call option gives the purchaser
of the option the right to buy, and obligates the writer to sell, the
underlying security or securities at the exercise price at any time during
the option period. Conversely, a put option gives the purchaser of the option
the right to sell, and obligates the writer to buy, the underlying security
or securities at the exercise price at any time during the option period. A
covered call option sold by the Fund, which is a call option with respect to
which the Fund owns the underlying security or securities, exposes the Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or securities or
to possible continued holding of a security or securities which might
otherwise have been sold to protect against depreciation in the market price
thereof. A covered put option sold by the Fund exposes the Fund during the
term of the option to a decline in price of the underlying security or
securities. A put option sold by the Fund is covered when, among other
things, cash or liquid securities are placed in a segregated account with the
Fund's custodian to fulfill the obligation undertaken.
To close out a position when writing covered options, the Fund may
make a "closing purchase transaction," which involves purchasing an option on
the same security or securities with the same exercise price and expiration
date as the option which it has previously written. To close out a position
as a purchaser of an option, the Fund may make a "closing sale transaction,"
which involves liquidating the Fund's position by selling the option
previously purchased. The Fund will realize a profit or loss from a closing
purchase or sale transaction depending upon the difference between the amount
paid to purchase an option and the amount received from the sale thereof.
The Fund intends to treat options in respect of specific securities
that are not traded on a U.S. or foreign national securities exchange and the
securities underlying covered call options written by the Fund as illiquid
securities. See "Certain Portfolio Securities - Illiquid Securities" below.
(5)
The Fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the Fund
are qualified for offer and sale.
STOCK INDEX OPTIONS - The Fund may purchase and write put and call options on
stock indexes listed on U.S. or foreign securities exchanges or traded in the
over-the-counter market. A stock index fluctuates with changes in the market
values of the stocks included in the index.
The effectiveness of purchasing or writing stock index options will
depend upon the extent to which price movements in the Fund's investments
correlate with price movements of the stock index selected. Because the value
of an index option depends upon movements in the level of the index rather
than the price of a particular stock, whether the Fund will realize a gain or
loss from the purchase or writing of options on an index depends upon
movements in the level of stock prices in the stock market generally or, in
the case of certain indexes, in an industry or market segment, rather than
movements in the price of a particular stock. Accordingly, successful use by
the Fund of options on stock indexes will be subject to the Advisers' ability
to predict correctly movements in the direction of the stock market generally
or of a particular industry. This requires different skills and techniques
than predicting changes in the price of individual stocks.
When the Fund writes an option on a stock index, the Fund will place
in a segregated account with its custodian or sub-custodian cash or liquid
securities in an amount at least equal to the market value of the underlying
stock index and will maintain the account while the option is open or
otherwise will cover the transaction.
FUTURES TRANSACTIONS--IN GENERAL -- The Fund is not a commodity pool.
However, as a substitute for a comparable market position in the underlying
securities and for hedging purposes, the Fund may engage in futures and
options on futures transactions, as described below.
The Fund may trade futures contracts and options on futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or, to the
extent permitted under applicable law, on exchanges located outside the
United States, such as the London International Financial Futures Exchange
and the Sydney Futures Exchange Limited. Foreign markets may offer advantages
such as trading in commodities that are not currently traded in the United
States or arbitrage possibilities not available in the United States. Foreign
markets, however, may have greater risk potential than domestic markets. See
"Risk Factors - Foreign Commodity Transactions" below.
The Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions pursuant to regulations promulgated by the
Commodity Futures Trading Commission (the "CFTC"). In addition, the Fund may
not engage in such transactions if the sum of the amount of initial margin
deposits and premiums paid for unexpired commodity options, other than for
bona fide hedging transactions, would exceed 5% of the liquidation value of
the Fund'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%. Pursuant to
regulations and/or published positions of the Securities and Exchange
Commission, the Fund may be required to segregate cash or high quality money
market instruments in connection with its commodities transactions in an
amount generally equal to the value of the underlying commodity. To the
extent the Fund engages in the use of futures and options on futures for
other than bona fide hedging purposes, the Fund may be subject to additional
risk.
Initially, when purchasing or selling futures contracts the Fund will
be required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount. This
amount is subject to change by the exchange or board of trade on which the
contract is traded and members of such exchange or board of trade may impose
their own higher requirements. This amount is known as "initial margin" and
is in the nature of a performance bond or good faith deposit on the contract
which is returned to the Fund upon termination of the futures position,
assuming all contrac
(6)
tual obligations have been satisfied. Subsequent payments, known as
"variation margin," to and from the broker generally will be made daily as
the price of the index or securities underlying the futures contract
fluctuates, making the long and short positions in the futures contract more
or less valuable, a process known as "marking-to-market." At any time prior
to the expiration of a futures contract, the Fund may elect to close the
position by taking an opposite position, at the then prevailing price, which
will operate to terminate the Fund's existing position in the contract.
Although the Fund intends to purchase or sell futures contracts only
if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any particular
time. Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single trading day.
Once the daily limit has been reached in a particular contract, no trades may
be made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could move
to the limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and potentially
subjecting the Fund to substantial losses. If it is not possible, or the Fund
determines not, to close a futures position in anticipation of adverse price
movements, the Fund will be required to make daily cash payments of variation
margin. In such circumstances, an increase in the value of the portion of the
portfolio being hedged, if any, may offset partially or completely losses on
the futures contract. However, no assurance can be given that the price of
the securities being hedged will correlate with the price movements in a
futures contract and thus provide an offset to losses on the futures
contract.
In addition, to the extent the Fund is engaging in a futures
transaction as a hedging device, due to the risk of an imperfect correlation
between securities in the Fund's portfolio that are the subject of a hedging
transaction and the futures contract used as a hedging device, it is possible
that the hedge will not be fully effective in that, for example, losses on
the portfolio securities may be in excess of gains on the futures contract or
losses on the futures contract may be in excess of gains on the portfolio
securities that were the subject of the hedge. In futures contracts based on
indexes, the risk of imperfect correlation increases as the composition of
the Fund's portfolio varies from the composition of the index. In an effort
to compensate for the imperfect correlation of movements in the price of the
securities being hedged and movements in the price of futures contracts, the
Fund may buy or sell futures contracts in a greater or lesser dollar amount
than the dollar amount of the securities being hedged if the historical
volatility of the futures contract has been less or greater than that of the
securities. Such "over hedging" or "under hedging" may adversely affect the
Fund's net investment results if market movements are not as anticipated when
the hedge is established.
Successful use of futures by the Fund also is subject to the
Advisers' ability to predict correctly movements in the direction of the
market or interest rates. For example, if the Fund has hedged against the
possibility of a decline in the market adversely affecting the value of
securities held in its portfolio and prices increase instead, the Fund will
lose part or all of the benefit of the increased value of securities which it
has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may
have to sell securities to meet daily variation margin requirements. Such
sales of securities may, but will not necessarily, be at increased prices
which reflect the rising market. The Fund may have to sell securities at a
time when it may be disadvantageous to do so.
An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in a futures contract (a
long position if the option is a call and a short position if the option is a
put) at a specified exercise price at any time during the option exercise
period. The writer of the option is required upon exercise to assume an
offsetting futures position (a short position if the option is a call and a
long position if the option is a put). Upon exercise of the option, the
assumption of offsetting futures positions by the writer and holder of the
option will be accompanied by delivery of the accumulated cash balance in the
writer's futures margin account which represents the amount by which the
market price of the futures contract, at exercise, exceeds, in the case of a
call, or is less than, in the case of a put, the exercise
(7)
price of the option on the futures contract.
Call options sold by the Fund with respect to futures contracts will
be covered by, among other things, entering into a long position in the same
contract at a price no higher than the strike price of the call option, or by
ownership of the instruments underlying, or instruments the prices of which
are expected to move relatively consistently with the instruments underlying,
the futures contract. Put options sold by the Fund with respect to futures
contracts will be covered in the same manner as put options on specific
securities as described above.
STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES - The Fund may
purchase and sell stock index futures contracts and options on stock index
futures contracts.
A stock index future obligates the seller to deliver (and the
purchaser to take) an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of
the last trading day of the contract and the price at which the agreement is
made. No physical delivery of the underlying stocks in the index is made.
With respect to stock indexes that are permitted investments, the Fund
intends to purchase and sell futures contracts on the stock index for which
it can obtain the best price with consideration also given to liquidity.
The Fund may use index futures as a substitute for a comparable
market position in the underlying securities.
The price of stock index futures may not correlate perfectly with the
movement in the stock index because of certain market distortions. First, all
participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which would distort the normal relationship between the index
and futures markets. Secondly, from the point of view of speculators, the
deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market also may cause temporary price distortions.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES
CONTRACTS - The Fund may invest in interest rate futures contracts and
options on interest rate futures contracts as a substitute for a comparable
market position and to hedge against adverse movements in interest rates.
To the extent the Fund has invested in interest rate futures
contracts or options on interest rate futures contracts as a substitute for a
comparable market position, the Fund will be subject to the investment risks
of having purchased the securities underlying the contract.
The Fund may purchase call options on interest rate futures contracts
to hedge against a decline in interest rates and may purchase put options on
interest rate futures contracts to hedge its portfolio securities against the
risk of rising interest rates.
The Fund may sell call options on interest rate futures contracts to
partially hedge against declining prices of its portfolio securities. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contracts. If the futures price at
expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Fund intends to
purchase. If a put or call option sold by the Fund is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the value
of its portfolio securities and changes in the value of its futures
positions, the Fund's losses from existing options on futures may to some
extent be reduced or increased by changes in the value of its portfolio
securities.
The Fund also may sell options on interest rate futures contracts as
part of closing purchase transac
(8)
tions to terminate its options positions. No assurance can be given that such
closing transactions can be effected or that there will be correlation
between price movements in the options on interest rate futures and price
movements in the Fund's portfolio securities which are the subject of the
hedge. In addition, the Fund's purchase of such options will be based upon
predictions as to anticipated interest rate trends, which could prove to be
inaccurate.
CURRENCY FUTURES AND OPTIONS ON CURRENCY FUTURES - The Fund may purchase and
sell currency futures contracts and options thereon. See "Call and Put
Options on Specific Securities" above. By selling foreign currency futures,
the Fund can establish the number of U.S. dollars it will receive in the
delivery month for a certain amount of a foreign currency. In this way, if
the Fund anticipates a decline of a foreign currency against the U.S. dollar,
the Fund can attempt to fix the U.S. dollar value of some or all of its
securities that are denominated in that currency. By purchasing foreign
currency futures, the Fund can establish the number of U.S. dollars it will
be required to pay for a specified amount of a foreign currency in the
delivery month. Thus, if the Fund intends to buy securities in the future and
expects the U.S. dollar to decline against the relevant foreign currency
during the period before the purchase is effected, the Fund, for the price of
the currency future, can attempt to fix the price in U.S. dollars of the
securities it intends to acquire.
The purchase of options on currency futures will allow the Fund, for
the price of the premium it must pay for the option, to decide whether or not
to buy (in the case of a call option) or to sell (in the case of a put
option) a futures contract at a specified price at any time during the period
before the option expires. If the Fund, in purchasing an option, has been
correct in its judgment concerning the direction in which the price of a
foreign currency would move as against the U.S. dollar, it may exercise the
option and thereby take a futures position to hedge against the risk it had
correctly anticipated or close out the option position at a gain that will
offset, to some extent, currency exchange losses otherwise suffered by the
Fund. If exchange rates move in a way the Fund did not anticipate, the Fund
will have incurred the expense of the option without obtaining the expected
benefit. As a result, the Fund's profits on the underlying securities
transactions may be reduced or overall losses incurred.
FUTURE DEVELOPMENTS - The Fund may take advantage of opportunities in the
area of options and futures contracts and options on futures contracts and
any other derivative investments which are not presently contemplated for use
by the Fund or which are not currently available but which may be developed,
to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before entering
into such transactions or making any such investment, the Fund will provide
appropriate disclosure in its prospectus.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
Such loans may not exceed 33l/3% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, U.S. Government securities and/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. The Fund can increase its
income through the investment of such collateral. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned security and receives interest on the
amount of the loan. Such loans will be terminable at any time upon specified
notice. The Fund might experience risk of loss if the institution with which
it has engaged in a loan transaction breaches its agreement with the Fund.
FORWARD COMMITMENTS - The Fund may purchase debt securities on a when-issued
or forward commitment basis, which means that the price is fixed at the time
of commitment, but delivery and payment ordinarily take place a number of
days after the date of the commitment to purchase. The Fund will make
commitments to purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. The Fund
(9)
will not accrue income in respect of a security purchased on a when-issued or
forward commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis and
certain other securities held in the Fund's portfolio are subject to changes
in value (both generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based upon
the public's perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest rates. Securities purchased on
a when-issued or forward commitment basis may expose the Fund to risk because
they may experience such fluctuations prior to their actual delivery.
Purchasing securities on a when-issued or forward commitment basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the when-issued or
forward commitments will be established and maintained at the Fund's
custodian bank. Purchasing debt securities on a when-issued or forward
commitment basis when the Fund is fully or almost fully invested may result
in greater potential fluctuation in the value of the Fund's net assets and
its net asset value per share.
BORROWING MONEY - As a fundamental policy, the Fund is permitted to borrow to
the extent permitted under the Investment Company Act of 1940. However, the
Fund currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments.
CERTAIN PORTFOLIO SECURITIES
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS - The Fund's assets
may be invested in the securities of foreign issuers in the form of American
Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs"). These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the United States
securities markets and EDRs and CDRs in bearer form are designed for use in
Europe. The Fund may invest in ADRs, EDRs and CDRs through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depositary, whereas a depositary may
establish an unsponsored facility without participation by the issuer of the
deposited security. Holders of unsponsored depositary receipts generally bear
all the costs of such facilities and the depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities.
CONVERTIBLE SECURITIES - The Fund may purchase convertible securities, which
are fixed-income securities, such as bonds or preferred stock, which may be
converted at a stated price within a specified period of time into a
specified number of shares of common stock of the same or a different issuer.
Convertible securities are senior to common stock in a corporation's capital
structure, but usually are subordinated to non-convertible debt securities.
While providing a fixed-income stream (generally higher in yield than the
income derivable from a common stock but lower than that afforded by a
non-convertible debt security), a convertible security also affords an
investor the opportunity, through its conversion feature, to participate in
the capital appreciation of the common stock into which it is convertible.
In general, the market value of a convertible security is the higher
of its "investment value" (i.e., its
(10)
value as a fixed-income security) or its "conversion value" (i.e., the value
of the underlying shares of common stock if the security is converted). As a
fixed-income security, the market value of a convertible security generally
increases when interest rates decline and generally decreases when interest
rates rise. However, the price of a convertible security also is influenced
by the market value of the security's underlying common stock. Thus, the
price of a convertible security generally increases as the market value of
the underlying stock increases, and generally decreases as the market value
of the underlying stock declines. Investments in convertible securities
generally entail less risk than investments in the common stock of the same
issuer.
MONEY MARKET INSTRUMENTS -- The Fund may invest, in the circumstances
described under "Management Policies" above, in the following types of money
market instruments.
U.S. GOVERNMENT SECURITIES. The Fund 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. Treasury Bills have initial maturities of
one year or less; Treasury Notes have initial maturities of one to ten years;
and Treasury Bonds generally have initial maturities of greater than ten
years. 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 U.S. 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. Principal and interest may fluctuate based on generally recognized
reference rates or the relationship of rates. 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,
because the U.S. Government is not obligated to do so by law.
BANK OBLIGATIONS. The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations of 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
Fund may be subject to additional investment risks that are different in some
respects from those incurred by a fund which invests only in debt obligations
of U.S. domestic issuers. 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. Time
deposits which may be held by the Fund will not benefit from insurance from
the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. The Fund will not
invest more than 15% of the value of its net assets in time deposits that are
illiquid and in other illiquid securities.
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.
(11)
REPURCHASE AGREEMENTS. Repurchase agreements involve the acquisition
by the Fund of an underlying debt instrument,
subject to an obligation of the seller to repurchase, and the Fund to resell,
the instrument at a fixed price usually not more than one week after its
purchase. Certain costs may be incurred by the Fund in connection with the
sale of the securities if the seller does not repurchase them in accordance
with the repurchase agreement. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the securities, realization on the
securities by the Fund may be delayed or limited.
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 Fund
will consist only of direct obligations which, at the time of their purchase,
are (a) rated not lower than Prime-1 by Moody's, A-l by S&P, F-l by Fitch or
Duff-l by Duff, (b) issued by companies having an outstanding unsecured debt
issue currently rated not lower than Aa3 by Moody's or AA- by S&P, Fitch or
Duff, or (c) if unrated, determined by the Advisers to be of comparable
quality to those rated obligations which may be purchased by the Fund. The
Fund may purchase floating and variable rate demand notes and bonds, which
are obligations ordinarily having stated maturities in excess of one year,
but which permit the holder to demand payment of principal at any time or at
specified intervals.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon U.S. Treasury
securities, which are Treasury Notes and Bonds that have been stripped of
their unmatured interest coupons, the coupons themselves and receipts or
certificates representing interests in such stripped debt obligations and
coupons. The Fund 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.
WARRANTS - The Fund may invest up to 5% of its net assets in warrants, except
that this limitation does not apply to warrants acquired in units or attached
to securities. A warrant is an instrument issued by a corporation which gives
the holder the right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time.
ILLIQUID SECURITIES - The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, and certain options traded
in the over-the-counter market and securities used to cover such options. As
to these securities, the Fund is subject to a risk that should the Fund
desire to sell them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Fund's net assets could
be adversely affected.
RATINGS - The ratings of the various rating agencies represent their opinions
as to the quality of the obligations which they undertake to rate. It should
be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of such
obligations. Therefore, although these ratings may be an initial criterion
for selection of Fund's investments, the Advisers also will evaluate such obli
gations and the ability of their issuers to pay interest and principal. The
Fund will rely on the Advisers' judgment, analysis and experience in
evaluating the creditworthiness of an issuer. In this evaluation, the
Advisers will take into consideration, among other things, the issuer's
financial resources, its sensitivity to economic conditions and trends, the
quality of the issuer's management and regulatory matters. It also is
possible that a rating agency might not
(12)
timely change the rating on a particular issue to reflect subsequent events.
Once the rating of a security in the Fund's portfolio has been changed, the
Advisers will consider all circumstances deemed relevant in determining
whether the Fund should continue to hold the security.
CERTAIN FUNDAMENTAL POLICIES
The Fund may (i) borrow money to the extent permitted under the
Investment Company Act of 1940; and (ii) invest up to 25% of the value of its
total assets in the securities of issuers in a single industry, provided that
there is no such limitation on investments in securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities. This paragraph
describes fundamental policies of the Fund that cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940) of the Fund's outstanding voting shares. See "Investment
Objective and Management Policies - Investment Restrictions" in the Statement
of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES
The Fund may (i) purchase securities of any company having less than
three years' continuous operation (including operations of any predecessors)
if such purchase does not cause the value of its investments in all such
companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
days after notice and in other illiquid securities. Notwithstanding any of
the foregoing policies, the Fund may invest all or substantially all of its
assets in another investment company with substantially the same investment
objective as the Fund. See "Investment Objective and Management Policies -
Investment Restrictions" in the Statement of Additional Information.
RISK FACTORS
INVESTING IN FOREIGN SECURITIES - Foreign securities markets generally are
not as developed or efficient as those in the United States. Securities of
some foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States. The issuers of
some of these securities, such as foreign bank obligations, may be subject to
less stringent or different regulations than are U.S. issuers. In addition,
there may be less publicly available information about a non-U.S. issuer, and
non-U.S. issuers generally are not subject to uniform accounting and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. issuers.
Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions that might
adversely affect the payment of principal, interest and dividends on the
foreign securities or might restrict the payment of principal, interest and
dividends to investors located outside the country of the issuers, whether
from currency blockage or otherwise. Custodial expenses for a portfolio of
non-U.S. securities generally are higher than for a portfolio of U.S.
securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations. Some currency exchange costs may be
incurred when the Fund changes investments from one country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Income received by the
Fund from sources within foreign countries may be reduced by withholding or
other taxes imposed by such countries. Tax conventions between certain
countries and the United States, however, may reduce or eliminate such taxes.
All such taxes paid by the Fund will reduce its net income available for
distribution to investors.
(13)
FOREIGN CURRENCY EXCHANGE - Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad.
The foreign currency market offers less protection against defaults
in the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract would
deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
FOREIGN COMMODITY TRANSACTIONS - Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
CFTC and may be subject to greater risks than trading on domestic exchanges.
For example, some foreign exchanges are principal markets so that no common
clearing facility exists and a trader may look only to the broker for
performance of the contract. In addition, unless the Fund hedges against
fluctuations in the exchange rate between the U.S. dollar and the currencies
in which trading is done on foreign exchanges, any profits that the Fund
might realize in trading could be eliminated by adverse changes in the
exchange rate, or the Fund could incur losses as a result of those changes.
Transactions on foreign exchanges may include both commodities which are
traded on domestic exchanges and those which are not.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value is not fixed and
should be expected to fluctuate. You should purchase Fund shares only as a
supplement to an overall investment program and only if you are willing to
undertake the risks involved.
Investors should be aware that equity securities fluctuate in value,
often based on factors unrelated to the value of the issuer of the
securities, and that fluctuations can be pronounced. Changes in the value of
the Fund's securities, regardless of whether the securities are equity or
debt, will result in changes in the value of a Fund share and thus the Fund's
total return to investors.
For the portion of the Fund's assets invested in debt securities,
investors should be aware that even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations. The values
of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Certain securities purc
hased by the Fund, such as those rated Baa by Moody's and BBB by S&P, Fitch
and Duff, may be subject to such risk with respect to the issuing entity and
to greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Obligations which are rated Baa by Moody's are
considered medium grade obligations; they are neither highly protected nor
poorly secured, and are considered by Moody's to have speculative
characteristics. Bonds rated BBB by S&P are regarded as having adequate
capacity to pay interest and repay principal, and while such bonds normally
exhibit adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than in higher rated
categories. Bonds rated BBB by Fitch are considered investment grade and of
satisfactory credit quality; however, adverse changes in economic conditions
and circumstances are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. Bonds rated BBB by Duff have below
average protection factors but nonetheless are considered sufficient for
prudent investment. See "Appendix" in the Statement of Additional
Information.
The use of investment techniques such as engaging in financial
futures and options transactions and lending portfolio securities involves
greater risk than that incurred by many other funds with similar objectives.
Using these techniques may produce higher than normal portfolio turnover
which usually generates additional brokerage commissions and expenses. In
addition, short-term gains realized from portfolio trans
(14)
actions are taxable to shareholders as ordinary income. The Fund's ability to
engage in certain short-term transactions may be limited by the requirement
that, to qualify as a regulated investment company, the Fund must earn less
than 30% of its gross income from the disposition of securities held for less
than three months. This 30% test limits the extent to which the Fund may sell
securities held for less than three months, write options expiring in less
than three months and invest in certain futures contracts, among other
strategies. With exception of the above requirement, the amount of portfolio
activity will not be a limiting factor when making portfolio decisions. Under
normal market conditions, the Fund's portfolio turnover rate generally will
not exceed 150%. See "Portfolio Transactions" in the Statement of Additional
Information.
The Fund's classification as a "non-diversified"investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act of
1940. A "diversified" investment company is required by the Investment
Company Act of 1940 generally, with respect to 75% of its total assets, to
invest not more than 5% of such assets in the securities of a single issuer
and to hold not more than 10% of the outstanding voting securities of a
single issuer. However, the Fund intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), which requires that, at the
end of each quarter of its taxable year, (i) at least 50% of the market value
of the Fund's total assets be invested in cash, U.S. Government securities,
the securities of other regulated investment companies and other securities,
with such other securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the Fund's total
assets and 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets be invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies). Since a relatively high
percentage of the Fund's assets may be invested in the securities of a
limited number of issuers, some of which may be within the same industry or
economic sector, the Fund's portfolio securities may be more susceptible to
any single economic, political or regulatory occurrence than the portfolio
securities of a diversified investment company.
Investment decisions for the Fund are made independently from those
of other investment companies or accounts advised by Dreyfus or M&G. However,
if such other investment companies or accounts are prepared to invest in, or
desire to dispose of, securities of the type in which the Fund invests at the
same time as the Fund, available investments or opportunities for sales will
be allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by the Fund or
the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER - Dreyfus, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser. As of
June 30, 1994, Dreyfus managed or administered approximately $71 billion in
assets for more than 1.9 million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
overall authority of the Fund's Board of Directors in accordance with
Maryland law.
Dreyfus has engaged M&G, located at Three Quays Tower Hill, London
EC3R 6BQ, England, to serve as the Fund's sub-investment adviser. M&G, a
registered investment adviser formed in 1961, is a wholly-owned subsidiary of
M&G Group P.L.C. As of June 30, 1994, M&G managed or advised approximately
$21.3 billion in assets and served as the investment adviser of two other
Dreyfus investment companies.
M&G, subject to the supervision and approval of Dreyfus, provides
investment advisory assistance and the day-to-day management of the Fund's
investments, as well as investment research and statistical information,
under a Sub-Investment Advisory Agreement with Dreyfus, subject to the
overall authority of the
(15)
Fund's Board of Directors in accordance with Maryland law. The Fund's primary
investment officer is Paul D.A. Nix. He has held that position since the
Fund's inception and has been employed by M&G since 1968. The Fund's other
investment officers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. Dreyfus also provides research
services for the Fund as well as for other funds advised by Dreyfus through a
professional staff of portfolio managers and security analysts.
Under the terms of the Management Agreement, the Fund has agreed to
pay Dreyfus a monthly fee at the annual rate of .75 of 1% of the value of the
Fund's average daily net assets. The management fee paid by the Fund is
higher than that paid by most other investment companies. From time to time,
Dreyfus may waive receipt of its fee 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
Dreyfus at a later time for any amounts it may waive, nor will the Fund
reimburse Dreyfus for any amounts it may assume. For the period from June 29,
1993 (commencement of operations) through May 31, 1994, the Fund paid Dreyfus
a monthly management fee at the effective annual rate of .57 of 1% of the
value of the Fund's average daily net assets pursuant to an undertaking in
effect.
Under the terms of the Sub-Investment Advisory Agreement, Dreyfus has
agreed to pay M&G a monthly fee at the annual rate of .30 of 1% of the value
of the Fund's average daily net assets. For the period from June 29, 1993
(commencement of operations) through May 31, 1994, Dreyfus paid M&G a
sub-advisory fee at the effective annual rate of .25 of 1% of the value of
the Fund's average daily net assets pursuant to an agreement in effect
between Dreyfus and M&G.
Dreyfus may pay Dreyfus Service Corporation for shareholder and
distribution services from Dreyfus' own assets, including past profits but
not including the management fee paid by the Fund. Dreyfus Service
Corporation may use part of all of such payments to pay Service Agents in
respect of these services.
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's Custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent").
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus located at 200 Park Avenue, New York, New York 10166.
The shares it distributes are not deposits or obligations of The Dreyfus
Security Savings Bank, F.S.B. and therefore are not insured by the Federal
Deposit Insurance Corporation.
You can purchase Fund shares through Dreyfus Service Corporation or
certain financial institutions, securities dealers and other industry
professionals (collectively, "Service Agents") that have entered into
agreements with Dreyfus Service Corporation. Stock certificates are issued
only upon your written request. No certificates are issued for fractional
shares. The Fund reserves the right to reject any purchase order.
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees which would be in addition to any
amounts which might be received under the Shareholder Services Plan. Each
Service Agent has agreed to transmit to its clients a schedule of such fees.
You should consult your Service Agent in this regard.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of Dreyfus or any of its
affiliates or subsidiaries, directors of Dreyfus, Board members of a fund
advised by Dreyfus, including members of the Fund's Board, or the spouse or
minor child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employ
(16)
ees of Dreyfus or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application.
For subsequent investments, your Fund account number should appear on the
check and an investment slip should be enclosed and sent to The Dreyfus
Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus
retirement plan accounts, both initial and subsequent investments should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments should be
made by third party check. Purchase orders may be delivered in person only to
a Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900117842/Dreyfus
International Equity Fund, Inc., for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing your wire
payment to obtain your Fund account number. Please include your Fund account
number on the 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 accou
nt does not clear. The Fund makes available to certain large institutions the
ability to issue purchase instructions through compatible computer
facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Dreyfus Service Corporation may pay dealers a fee of up to .5%
of the amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit plans
or other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs, or (ii) such
plan's or program's aggregate initial investment in the Dreyfus Family
of Funds or certain other products made available by Dreyfus Service
Corporation to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in the Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregtated to determine the
fee payable with respect to each such purchase of Fund shares. Dreyfus Service
Corporation reserves the right to cease paying these fees at any time. Dreyfus
Service Corporation will pay such fees from its own funds, other than the
amounts received from the Fund, including past profits or any other
source available to it.
Fund shares are sold on a continuous basis at net asset value per
share next determined after an order in proper form is received by the
Transfer Agent or other agent. Net asset value per share is determined as of
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), on each day the New York Stock Exchange is open
for business. For purposes of determining net asset value, options and
futures contracts will be valued 15 minutes after the close of trading on the
floor of the New York Stock Exchange. Net asset value per share is computed
by dividing the value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The Fund's
investments are valued based on market value or, where market quotations are
not readily available, based on fair value as determined in good faith by the
Fund's Board of Directors. For further information regarding the meth
(17)
ods employed in valuing the Fund's investments, see "Determination of Net
Asset Value" in the Fund's 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").
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those in
this Prospectus. You should consult your Service Agent in this regard.
EXCHANGE PRIVILEGE -- The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by Dreyfus, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this Privilege, you
should consult your Service Agent or Dreyfus Service Corporation to determine
if it is available and whether any conditions are imposed on its use.
To use this Privilege, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing, by
wire or by telephone. If you previously have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. See
"How to Redeem Fund Shares - Procedures." Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into whi
ch the exchange is being made. Prospectuses may be obtained from Dreyfus
Service Corporation. Except in the case of Personal Retirement Plans, the
shares being exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange, the shares being
exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. Telephone
exchanges may be made only if the appropriate "YES" box has been checked on
the Account Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Exchange Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, Dreyfus TELETRANSFER Privilege and the dividend/capital
gain distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvest
(18)
ment of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of your exchange you must
notify the Transfer Agent or your Service Agent must notify Dreyfus Service
Corporation. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The Exchange Privilege may be modified
or terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of other funds in the
Dreyfus Family of Funds of which you are currently an investor. The amount
you designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or canceled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
The Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an exchanging
shareholder may realize a taxable gain or loss. For more information
concerning this Privilege and the funds in the Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER -- Dreyfus-AUTOMATIC Asset Builder permits
you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares are purchased
by transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the specified
amount, and Fund shares will be purchased, once a month, on either the first
or fifteenth day, or twice a month, on both days. Only an account maintained
at a domestic financial institution which is an Automated Clearing House
member may be so designated. To establish a Dreyfus-AUTOMATIC Asset Builder
account, you must file an authorization form with the Transfer Agent. You may
obtain the necessary authorization form from Dreyfus Service Corporation. You
may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer
(19)
Agent a completed Direct Deposit Sign-Up Form for each type of payment that
you desire to include in the Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. Death or legal incapacity will terminate
your participation in this Privilege. You may elect at any time to terminate
your participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced sales
load. If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends
and capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
DREYFUS PAYROLL SAVINGS PLAN -- Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form from Dreyfus Service
Corporation. You may change the amount of purchase or cancel the
authorization only by written notification to your employer. It is the sole
responsibility of your employer, not Dreyfus Service Corporation, Dreyfus,
the Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained from Dreyfus
Service Corporation. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS -- The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts",
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the fol
(20)
lowing numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL -- You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE
OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY
IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST.
PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS
OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES --You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Wire Redemption Privilege, the
Telephone Redemption Privilege, or the Dreyfus TELETRANSFER Privilege. Other
redemption procedures may be in effect for clients of certain Service Agents.
The Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have filed
an Optional Services Form with the Transfer Agent. If you select a telephone
redemption or exchange privilege, you authorize the Transfer Agent to act on
telephone instructions from any person representing himself or herself to be
you or a representative of your Service Agent, 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.
(21)
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by
telephone to request a redemption or exchange of Fund shares. In such cases,
you should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if telephone
redemption had been used. During the delay, the Fund's net asset value may
fluctuate.
REGULAR REDEMPTION - Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be 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. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You 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 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any redemption request, including requests made shortly after a change
of address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Fund's 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 redeem Fund shares (maximum
$150,000 per day) 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. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or the Fund.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares for
which the certificates have been issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares (minimum $500 per
day) by telephone if you have checked the appropriate box and supplied the
necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will
(22)
be transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House member may be so
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account only up to $250,000 within any 30-day period. The Fund
reserves the right to refuse any request made by 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
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
issued in certificate form, are not eligible for this Privilege.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Fund shares are subject to a Distribution Plan and a Shareholder
Services Plan.
DISTRIBUTION PLAN - Under the Distribution Plan, adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Fund pays Dreyfus Service
Corporation for advertising, marketing and distributing Fund shares at an
annual rate of .50 of 1% of the value of the Fund's average daily net assets.
Under the Distribution Plan, Dreyfus Service Corporation may make payments to
Service Agents in respect of these services. Dreyfus Service Corporation
determines the amounts to be paid to Service Agents. Service Agents receive
such fees in respect of the average daily value of Fund shares owned by their
clients. From time to time, Dreyfus Service Corporation may defer or waive
receipt of fees under the Distribution Plan while retaining the ability to be
paid by the Fund under the Distribution Plan thereafter. The fees payable to
Dreyfus Service Corporation under the Distribution Plan for advertising,
marketing and distributing Fund shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
The Fund bears the costs of preparing and printing prospectuses and
statements of additional information used for regulatory purposes and for
distribution to existing Fund shareholders. Under the Distribution Plan, the
Fund bears (a) the costs of preparing, printing and distributing prospectuses
and statements of additional information used for other purposes and (b) the
costs associated with implementing and operating the Distribution Plan, the
aggregate of such amounts not to exceed in any fiscal year of the Fund the
greater of $100,000 or .005 of 1% of the value of the Fund's average daily
net assets for such fiscal year.
SHAREHOLDER SERVICES PLAN - Under the Shareholder Services Plan, the Fund
pays Dreyfus Service Corporation for the provision of certain services to
Fund shareholders a fee at the annual rate of .25 of 1% of the value of the
Fund's average daily net assets. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. Dreyfus Service
Corporation may make payments to Service Agents in respect of these services.
Dreyfus Service Corporation determines the amounts to be paid to Service
Agents. Each Service Agent is required to disclose to its clients any
compensation payable to it by the Fund pursuant to the Shareholder Services
Plan and any other compensation payable by their clients in connection with
the investment of their assets in Fund shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year, but the Fund
may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will not
make distributions from net realized securities gains
(23)
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 Fund shares at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in Fund shares.
Distributions from net realized long-term securities gains of the Fund will
be taxable to U.S. shareholders as long-term capital gains for Federal income
tax purposes, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Dividends and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup wi
thholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended May 31, 1994 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify if such qualification is in
the best interests of its shareholders. Such qualification relieves the Fund
of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. In
addition, the Fund is subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance will be calculated on the
basis of average annual total return. Advertisements also may include
performance calculated on the basis of total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an invest
(24)
ment in the Fund was purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time, after giving
effect to the reinvestment of dividends and distributions during the period.
The return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's performance
will include the Fund's average annual total return for one, five and ten
year periods, or for shorter periods depending upon the length of time during
which the Fund has operated. Computations of average annual total return for
periods of less than one year represent an annualization of the Fund's actual
total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Morgan Stanley Capital International World Index,
Standard & Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap
400 Index, the Dow Jones Industrial Average, Morningstar, Inc. and other
industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on January 27, 1993, and
commenced operations on June 29, 1993. The Fund is authorized to issue 300
million shares of Common Stock, par value $.001 per share. Each share has one
vote.
Unless otherwise required by the Investment Company Act of 1940,
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 purposes of removing 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.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquires may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or by calling toll free, l-800-645-6561. In New York City, call
1-718-895-1206; on Long Island, call 795-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY R
EPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE R
ELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON
STITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERIN
G MAY NOT LAWFULLY BE MADE.
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(Dreyfus Logo)
International
Equity
Fund, Inc.
PROSPECTUS
Registration Mark
Copy Rights Dreyfus Service Corporation, 1994
Distributor 095P3082294
DREYFUS INTERNATIONAL EQUITY FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
AUGUST 22, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus International Equity Fund, Inc. (the "Fund"), dated August 22, 1994,
as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
adviser. Dreyfus has engaged M&G Investment Management Limited ("M&G") to
serve as the Fund's sub-investment adviser and provide day-to-day management
of the Fund's investments, subject to the supervision of Dreyfus. Dreyfus
and M&G are referred to collectively as the "Advisers."
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of Dreyfus, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . B-9
Management Arrangements . . . . . . . . . . . . . . . . . . . . B-12
Distribution Plan and Shareholder Services Plan . . . . . . . . B-14
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . B-15
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . B-16
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . B-17
Determination of Net Asset Value. . . . . . . . . . . . . . . . B-20
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . B-21
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . B-24
Performance Information . . . . . . . . . . . . . . . . . . . . B-25
Information About the Fund. . . . . . . . . . . . . . . . . . . B-25
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . B-26
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
Financial Statements. . . . . . . . . . . . . . . . . . . . . . B-31
Report of Independent Auditors. . . . . . . . . . . . . . . . . B-43
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."
Portfolio Securities
Bank Obligations. Domestic commercial banks organized under Federal
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System only
if they elect to join. In addition, state banks whose certificates of
deposit ("CDs") may be purchased by the Fund are insured by the FDIC
(although such insurance may not be of material benefit to the Fund,
depending on the principal amount of the CDs of each bank held by the Fund)
and are subject to Federal examination and to a substantial body of Federal
law and regulation. As a result of Federal or state laws and regulations,
domestic branches of domestic banks whose CDs may be purchased by the Fund
generally are required, among other things, to maintain specified levels of
reserves, are limited in the amounts which they can loan to a single
borrower and are subject to other regulation designed to promote financial
soundness. However, not all of such laws and regulations apply to the
foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks, such as CDs and time deposits ("TDs"), may be general obligations of
the parent banks in addition to the issuing branch, or may be limited by the
terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal and
interest on the obligations, foreign exchange controls and foreign
withholding and other taxes on interest income. These foreign branches and
subsidiaries are not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations, and accounting, auditing and financial
record keeping requirements. In addition, less information may be publicly
available about a foreign branch of a domestic bank or about a foreign bank
than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch is
located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal and State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Advisers carefully evaluate such
investments on a case-by-case basis.
Repurchase Agreements. The Fund's custodian or sub-custodian will
have custody of, and will hold in a segregated account, securities acquired
by the Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund. In an attempt to reduce the risk of incurring a loss on
a repurchase agreement, the Fund will enter into repurchase agreements only
with domestic banks with total assets in excess of 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 the Fund may
invest, and will require that additional securities be deposited with it if
the value of the securities purchased should decrease below the resale
price. The Advisers will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
The Fund will consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Commercial Paper and Other Short-Term Corporate Obligations. Variable
rate demand notes include variable amount master demand notes, which are
obligations that permit the Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Fund, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. As mutually agreed between the parties, the Fund may increase the
amount under the notes at any time up to the full amount provided by the
note agreement, or decrease the amount, and the borrower may repay up to the
full amount of the note without penalty. Because these obligations are
direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations, although
they are redeemable at face value, plus accrued interest, at any time.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent
on the ability of the borrower to pay principal and interest on demand. In
connection with floating and variable rate demand obligations, the Advisers
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 the Fund may invest in them only if at the
time of an investment the borrower meets the criteria set forth in the
Fund's Prospectus for other commercial paper issuers.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not readily
marketable, the Fund will endeavor to obtain the right to registration at
the expense of the issuer. Generally, there will be a lapse of time between
the Fund's decision to sell any such security and the registration of the
security permitting sale. During any such period, the price of the
securities will be subject to market fluctuations. However, if a
substantial market of qualified institutional buyers develops pursuant to
Rule 144A under the Securities Act of 1933, as amended, for certain
unregistered securities held by the Fund, the Fund intends to treat certain
unregistered securities as liquid securities in accordance with procedures
approved by the Fund's Board of Directors. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board of Directors has directed the
Advisers to monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
Management Policies
The Fund engages in the following practices in furtherance of its
objective.
Options Transactions. The Fund may engage in options transactions,
such as purchasing or writing covered call or put options. The principal
reason for writing covered call options is to realize, through the receipt
of premiums, a greater return than would be realized on the Fund's portfolio
securities alone. In return for a premium, the writer of a covered call
option forfeits the right to any appreciation in the value of the underlying
security above the strike price for the life of the option (or until a
closing purchase transaction can be effected). Nevertheless, the call
writer retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered put options
is to realize income in the form of premiums. The writer of a covered put
option accepts the risk of a decline in the price of the underlying
security. The size of the premiums that the Fund may receive may be
adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing activities.
Options written ordinarily will have expiration dates between one and
nine months from the date written. The exercise price of the options may be
below, equal to or above the market values of the underlying securities at
the time the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and "out-
of-the-money," respectively. The Fund may write (a) in-the-money call
options when the Advisers expect that the price of the underlying security
will remain stable or decline moderately during the option period, (b) at-
the-money call options when the Advisers expect that the price of the
underlying security will remain stable or advance moderately during the
option period and (c) out-of-the-money call options when the Advisers expect
that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. In these circumstances, if the market price of the
underlying security declines and the security is sold at this lower price,
the amount of any realized loss will be offset wholly or in part by the
premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments that such call
options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option continues,
the Fund may be assigned an exercise notice by the broker-dealer through
which the option was sold, requiring the Fund to deliver, in the case of a
call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. The Fund
can no longer effect a closing purchase transaction with respect to an
option once it has been assigned an exercise notice.
While it may choose to do otherwise, the Fund generally will purchase
or write only those options for which the Advisers believe there is an
active secondary market so as to facilitate closing transactions. There is
no assurance that sufficient trading interest to create a liquid secondary
market on a securities exchange will exist for any particular option or at
any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at times have
rendered certain clearing facilities inadequate and resulted in the
institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that
otherwise may interfere with the timely execution of customers' orders, will
not recur. In such event, it might not be possible to effect closing
transactions in particular options. If as a covered call option writer the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise or it otherwise
covers its position.
Stock Index Options. The Fund may purchase and write put and call
options on stock indexes listed on U.S. or foreign securities exchanges or
traded in the over-the-counter market. A stock index fluctuates with
changes in the market values of the stocks included in the index.
Options on stock indexes are similar to options on stock except that
(a) the expiration cycles of stock index options are generally monthly,
while those of stock options are currently quarterly, and (b) the delivery
requirements are different. Instead of giving the right to take or make
delivery of a stock at a specified price, an option on a stock index gives
the holder the right to receive a cash "exercise settlement amount" equal to
(i) the amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied by
(ii) a fixed "index multiplier." Receipt of this cash amount will depend
upon the closing level of the stock index upon which the option is based
being greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. The amount of cash received will be
equal to such difference between the closing price of the index and the
exercise price of the option expressed in dollars times a specified
multiple. The writer of the option is obligated, in return for the premium
received, to make delivery of this amount. The writer may offset its
position in stock index options prior to expiration by entering into a
closing transaction on an exchange or it may let the option expire
unexercised.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option, the writer of the option will deliver to the holder of the option
the futures position and the accumulated balance in the writer's futures
margin account, which represents the amount by which the market price of the
futures contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of options on futures contracts
is limited to the premium paid for the option (plus transaction costs).
Because the value of the option is fixed at the time of sale, there are no
daily cash payments to reflect changes in the value of the underlying
contract; however, the value of the option does change daily and that change
would be reflected in the net asset value of the Fund.
Foreign Currency Transactions. If the Fund enters into a currency
transaction, it will deposit, if so required by applicable regulations, with
its custodian cash or readily marketable securities in a segregated account
of the Fund in an amount at least equal to the value of the Fund's total
assets committed to the consummation of the forward contract. If the value
of the securities placed in the segregated account declines, additional cash
or securities will be placed in the account so that the value of the account
will equal the amount of the Fund's commitment with respect to the contract.
At or before the maturity of a forward contract, the Fund either may
sell a security and make delivery of the currency, or retain the security
and offset its contractual obligation to deliver the currency by purchasing
a second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is obligated to
deliver. If the Fund retains the portfolio security and engages in an
offsetting transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or loss to the extent movement has occurred
in forward contract prices. Should forward prices decline during the period
between the Fund's entering into a forward contract for the sale of a
currency and the date it enters into an offsetting contract for the purchase
of the currency, the Fund will realize a gain to the extent the price of the
currency it has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund will suffer a
loss to the extent the price of the currency it has agreed to purchase
exceeds the price of the currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period and
the market conditions then prevailing. Because transactions in currency
exchange usually are conducted on a principal basis, no fees or commissions
are involved. The use of forward currency exchange contracts does not
eliminate fluctuations in the underlying prices of the securities, but it
does establish a rate of exchange that can be achieved in the future. If a
devaluation generally is anticipated, the Fund may not be able to contract
to sell the currency at a price above the devaluation level it anticipates.
The requirements for qualification as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), may cause the
Fund to restrict the degree to which it engages in currency transactions.
See "Dividends, Distributions and Taxes."
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its securities, the Fund can increase
its income through the investment of the cash collateral. For purposes of
this policy, the Fund considers collateral consisting of U.S. Government
securities or irrevocable letters of credit issued by banks whose securities
meet the standards for investment by the Fund to be the equivalent of cash.
From time to time, the Fund may return to the borrower or a third party
which is unaffiliated with the Fund, and which is acting as a "placing
broker," a part of the interest earned from the investment of collateral
received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection
with the loan; and (6) while voting rights on the loaned securities may pass
to the borrower, the Fund's Board 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
The Fund has adopted investment restrictions numbered 1 through 8 as
fundamental policies. These restrictions cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of
1940, as amended (the "Act")) of the Fund's outstanding voting shares.
Investment restrictions numbered 9 through 14 are not fundamental policies
and may be changed by vote of a majority of the Fund's Directors at any
time. The Fund may not:
1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
3. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but the Fund may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate or real estate investment
trusts.
4. Borrow money, except to the extent permitted under the Act. For
purposes of this Investment Restriction, the entry into options, forward
contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes shall not constitute borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board of Directors.
6. Act as an underwriter of securities of other issuers, except to
the extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section
18(f) of the Act), except to the extent the activities permitted in
Investment Restriction Nos. 2, 4, 11 and 12 may be deemed to give rise to a
senior security.
8. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indexes, and options on
futures contracts or indexes.
9. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
10. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes.
12. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and Statement of Additional
Information.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
14. Purchase securities of other investment companies, except to the
extent permitted under the Act.
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 invest, notwithstanding any other investment restriction
(whether or not fundamental), all of the Fund's assets in the securities of
a single open-end management investment company with substantially the same
fundamental investment objective, policies and restrictions as the Fund.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
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 Act, is indicated by an asterisk.
Directors and Officers of the Fund
*JOSEPH S. DiMARTINO, Director, President and Investment Officer. President,
Chief Operating Officer and a director of Dreyfus, Executive Vice
President and a director of the Distributor and an officer, director
or trustee of other investment companies advised or administered by
Dreyfus. He is also a director of Noel Group, Inc., Vice President
and former Treasurer and a director of The National Muscular Dystrophy
Association and a Trustee of Bucknell University. His address is 200
Park Avenue, New York, New York 10166.
JOHN M. FRASER, JR., Director. President of Fraser Associates, a service
company for planning and arranging corporate meetings and other
events. From September 1975 to June 1978, he was Executive Vice
President of Flagship Cruises, Ltd. Prior thereto, he was Senior Vice
President and Resident Director of the Swedish-American Line for the
United States and Canada. His address is 133 East 64th Street, New
York, New York 10021.
ROBERT R. GLAUBER, Director. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University since January 1992. He was Under Secretary of the Treasury
for Finance at the U.S. Treasury Department from May 1989 to January
1992. For more than five years prior thereto, he was a Professor of
Finance at the Graduate School of Business Administration of Harvard
University and, from 1985 to 1989, Chairman of its Advanced Management
Program. He is also a director of MidOcean Reinsurance Co. Ltd. and
Cooke & Bieler, Inc., investment counselors. His address is 79
John F. Kennedy Street, Cambridge, Massachusetts 02138.
JAMES F. HENRY, Director. President of the Center for Public Resources, a
non-profit organization principally engaged in the development of
alternatives to business litigation. He was of counsel to the law
firm of Lovejoy, Wasson & Ashton from October 1975 to December 1976
and from October 1979 to June 1983, and was a partner of that firm
from January 1977 to September 1979. From September 1971 to December
1976 he was President and a director of the Edna McConnell Clark
Foundation, a philanthropic organization. His address is c/o Center
for Public Resources, 366 Madison Avenue, New York, New York 10017.
ROSALIND GERSTEN JACOBS, Director. Director of Merchandise and Marketing for
Corporate Property Investors, a real estate investment company.
From 1974 to 1976, she was owner and manager of a merchandise and
marketing consulting firm. Prior to 1974, she was Vice President of
Macy's, New York. Her address is c/o Corporate Property Investors,
305 East 47th Street, New York, New York 10017.
*IRVING KRISTOL, Director. Consultant to Dreyfus on economic matters. He is
also John M. Olin Distinguished Fellow of the American Enterprise
Institute for Public Policy Research. From 1969 to 1988, he was
Professor of Social Thought at the Graduate School of Business
Administration, New York University. From September 1969 to August
1979, he was Henry R. Luce Professor of Urban Values at New York
University. He is also co-editor of The Public Interest magazine and
an author or co-editor of several books. He also has been a director
of Lincoln National Corporation, an insurance company, from 1975 to
1990, and Warner-Lambert Company, a pharmaceutical and consumer
products company, from 1977 to 1990. His address is c/o The Public
Interest, 1112 16th Street, N.W., Suite 530, Washington, D.C. 20036.
DR. PAUL A. MARKS, Director. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He was Vice President for
Health Sciences and Director of the Cancer Center at Columbia
University from 1973 to September 1980, and Professor of Medicine and
of Human Genetics and Development at Columbia University from 1968 to
1982. He is also a director of Pfizer, Inc., a pharmaceutical
company, Life Technologies, Inc., a life science company providing
products for cell and molecular biology and microbiology, National
Health Laboratories, a national chemical diagnostic laboratory and
Tulerik, Inc., a biotechnology company. His address is c/o Memorial
Sloan-Kettering Cancer Center, 1275 York Avenue, New York, New York
10021.
DR. MARTIN PERETZ, Director. Editor-in-Chief of The New Republic magazine
and a lecturer in social studies at Harvard University, where he has
been a member of the faculty since 1965. He is a trustee of the
Center for Blood Research at the Harvard Medical School and a director
of Leukosite Inc., a biopharmacutical company. His address is c/o The
New Republic, 1220 19th Street, N.W., Washington, D.C. 20036.
BERT W. WASSERMAN, Director. Executive Vice President and Chief Financial
Officer since January 1990 and a director from January 1990 to March
1993 of Time Warner Inc. From 1981 to 1990, he was a member of the
Office of the President and a director of Warner Communications Inc.
He is also a member of the Chemical Bank National Advisory Board, a
trustee of the Baruch School of the College of the City of New York
and a director of The Dreyfus Germany Fund. His address is c/o Time
Warner Inc., 75 Rockefeller Place, New York, New York 10019.
Mrs. Jacobs, Messrs. Fraser, Glauber, Henry, Kristol and Wasserman and
Drs. Marks and Peretz are also directors of Dreyfus A Bonds Plus, Inc.,
Dreyfus Balanced Fund, Inc., Dreyfus Capital Growth Fund, Dreyfus Growth and
Income Fund, Inc., Dreyfus Growth Opportunity Fund, Inc. and Dreyfus Money
Market Instruments, Inc. and trustees of Dreyfus Institutional Money Market
Fund and Dreyfus Variable Investment Fund. In addition, Mr. Glauber is a
director of Dreyfus Asset Allocation Fund, Inc., Dreyfus California
Municipal Income, Inc., The Dreyfus Fund Incorporated, Dreyfus Municipal
Income, Inc., Dreyfus New York Municipal Income, Inc., Dreyfus Short-Term
Income Fund, Inc. and Dreyfus Worldwide Dollar Money Market Fund, Inc. and a
trustee of Dreyfus Institutional Short Term Treasury Fund and Dreyfus Short-
Intermediate Municipal Bond Fund. In addition, Mr. Fraser is a director of
Dreyfus Focus Funds, Inc.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Directors of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Directors who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
Dreyfus, which totalled $16,630 for the fiscal year ended May 31, 1994 for
all such Directors as a group.
Officers of the Fund Not Listed Above
MARK N. JACOBS, Vice President. Secretary and Deputy General Counsel of
Dreyfus and an officer of other investment companies advised or
administered by Dreyfus.
JEFFREY N. NACHMAN, Vice President and Treasurer. Vice President-Mutual
Fund Accounting of Dreyfus and an officer of other investment
companies advised or administered by Dreyfus.
THOMAS J. DURANTE, Controller. Senior Accounting Manager in the Fund
Accounting Department of Dreyfus and an officer of other investment
companies advised or administered by Dreyfus.
DANIEL C. MACLEAN, Secretary. Vice President and General Counsel of
Dreyfus, Secretary of the Distributor and an officer of other
investment companies advised or administered by Dreyfus.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of Dreyfus
and an officer of other investment companies advised or administered
by Dreyfus.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of Dreyfus, the
Distributor and other investment companies advised or administered by
Dreyfus.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of common stock outstanding on July 27, 1994.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
Management Agreement. Dreyfus supervises investment management of the
Fund pursuant to the Management Agreement (the "Management Agreement") dated
June 14, 1993 between Dreyfus and the Fund. The Management Agreement is
subject to annual approval by (i) the Fund's Board of Directors or (ii) vote
of a majority (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved
by a majority of the Fund's Directors who are not "interested persons" (as
defined in the Act) of the Fund or Dreyfus, by vote cast in person at a
meeting called for the purpose of voting on such approval. The Management
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Directors or by vote of the holders of a majority of the Fund's shares, or,
on not less than 90 days' notice, by Dreyfus. The Management Agreement will
terminate automatically in the event of its assignment (as defined in the
Act).
In addition to the persons named in the section entitled "Management
of the Fund," the following persons also are officers and/or directors of
Dreyfus: Howard Stein, Chairman of the Board of Directors and Chief
Executive Officer; Julian M. Smerling, Vice Chairman of the Board of
Directors; Alan M. Eisner, Vice President and Chief Financial Officer; David
W. Burke, Vice President and Chief Administrative Officer; Robert F. Dubuss,
Vice President; Elie M. Genadry, Vice President--Institutional Sales; Peter
A. Santoriello, Vice President; Kirk V. Stumpp, Vice President--New Product
Development; Philip L. Toia, Vice President; John J. Pyburn, Assistant Vice
President; Katherine C. Wickham, Assistant Vice President--Human Resources;
Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman,
Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
Dreyfus pays the salaries of all officers and employees employed by
both it and the Fund, maintains office facilities, and furnishes the Fund
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
Dreyfus also may make such advertising and promotional expenditures using
its own resources, as it from time to time deems appropriate.
Sub-Investment Advisory Agreement. M&G provides investment advisory
assistance and day-to-day management of the Fund's investments pursuant to
the Sub-Investment Advisory Agreement (the "Sub-Advisory Agreement") dated
June 14, 1993 between M&G and Dreyfus. The Sub-Advisory Agreement is
subject to annual approval by (i) the Fund's Board of Directors or (ii) vote
of a majority (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event the continuance also is approved
by a majority of the Fund's Directors who are not "interested persons" (as
defined in the Act) of the Fund or M&G, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Sub-Advisory
Agreement is terminable without penalty, (i) by Dreyfus on 60 days' notice,
(ii) by the Fund's Board of Directors or by vote of the holders of a
majority of the Fund's shares on 60 days' notice, or (iii) on not less than
90 days' notice, by M&G. The Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the Act) or upon
the termination of the Management Agreement for any reason.
The following persons are officers and/or directors of M&G: Laurence
E. Linaker, Chairman of the Board of Directors; David L. Morgan, Managing
Director and a director; John P. Allard, John W. Boeckmann, Gordon P. Craig,
Robert A. R. Hayes, Richard S. Hughes, David J. Hutchins, Peter D. Jones,
James R.D. Korner, Michael G.A. McLintook, Ewen A. Macpherson, Paul R.
Marsh, Nigel D. Morrison, Roger D. Nightingale, Paul D.A. Nix, William J.
Nott, Neil A. Pegrum, Duncan N. Robertson, J. Christopher Whitaker,
directors; and Anthony J. Ashplant, Secretary.
M&G provides day-to-day management of the Fund's investments in
accordance with the stated policies of the Fund, subject to the supervision
of Dreyfus and approval of the Fund's Board of Directors. Dreyfus and M&G
provide the Fund with Investment Officers who are authorized by the Board of
Directors to execute purchases and sales of securities. The Fund's
Investment Officers are Joseph S. DiMartino, Paul D.A. Nix, David L. Morgan
and William Vincent. Dreyfus also maintains a research department with a
professional staff of portfolio managers and securities analysts who provide
research services for the Fund as well as other funds advised by Dreyfus.
All purchases and sales are reported for the Board of Directors' review at
the meeting subsequent to such transactions.
Expenses. All expenses incurred in the operation of the Fund are
borne by the Fund, except to the extent specifically assumed by Dreyfus
and/or M&G. 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 Dreyfus or M&G or any of their affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the 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, and any extraordinary expenses.
The Fund is subject to an annual distribution fee for advertising, marketing
and distributing its shares and an annual service fee for ongoing personal
services relating to shareholder accounts and services related to the
maintenance of shareholder accounts. See "Distribution Plan and Shareholder
Services Plan."
As compensation for Dreyfus' services, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of .75 of 1% of the value of the
Fund's average daily net assets. All fees and expenses are accrued daily
and deducted before declaration of dividends to shareholders. For the
period from June 29, 1993 (commencement of operations) through May 31, 1994,
the management fee chargeable to the Fund was $731,828, which was reduced
pursuant to an undertaking in effect by $174,169, resulting in a net fee
paid by the Fund of $557,659.
As compensation for M&G's services, Dreyfus has agreed to pay M&G a
monthly fee at the annual rate of .30 of 1% of the value of the Fund's
average daily net assets. For the period from June 29, 1993 (commencement
of operations) through May 31, 1994, the sub-investment advisory fee paid by
Dreyfus was $ 316,827, which was reduced by $51,342, resulting in a net fee
of $265,484 pursuant to an undertaking in effect.
Dreyfus and M&G have agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of interest, taxes, brokerage and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitation of any state having jurisdiction over the Fund, Dreyfus and M&G
will bear the excess expense in proportion to their management fee and sub-
advisory fee to the extent required by state law. Such payment, if any,
will be estimated daily, and reconciled and paid on a monthly basis.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Distribution
Plan and Shareholder Services Plan."
The Fund's shares are subject to a Distribution Plan and a Shareholder
Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board of
Directors has adopted such a plan (the "Distribution Plan") with respect to
the Fund's shares, pursuant to which the Fund pays the Distributor for
advertising, marketing and distributing the Fund's shares. Under the
Distribution Plan, the Distributor may make payments to certain financial
institutions, securities dealers and other financial industry professionals
(collectively, "Service Agents") in respect to these services. The Fund's
Board of Directors believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and its shareholders. In some
states, certain financial institutions effecting transactions in Fund shares
may be required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Directors for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
Fund shareholders may bear for distribution pursuant to the Distribution
Plan without shareholder approval and that other material amendments of the
Distribution Plan must be approved by the Board of Directors, and by the
Directors who are not "interested persons" (as defined in the Act) of the
Fund and have no direct or indirect financial interest in the operation of
the Distribution Plan or in any agreements entered into in connection with
the Distribution Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Distribution Plan is subject to
annual approval by such vote of the Directors cast in person at a meeting
called for the purpose of voting on the Distribution Plan. The Distribution
Plan was so approved by the Directors at a meeting held on June 14, 1993.
The Distribution Plan may be terminated at any time by vote of a majority of
the Directors who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Distribution Plan or in
any agreements entered into in connection with the Distribution Plan or by
vote of the holders of a majority of the Fund's shares.
For the period June 29, 1993 (commencement of operations) through May
31, 1994, the total amount charged to the Fund under the Distribution Plan
was $541,442, of which $487,885 was charged for advertising, marketing and
distributing the Fund's shares and $53,557 was charged for preparing,
printing and distributing prospectuses and statements of additional
information and operating the Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to Fund shareholders.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Directors for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of the Board of Directors, and by the Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services Plan is subject to
annual approval by such vote of the Directors cast in person at a meeting
called for the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan was so approved on June 14, 1993. The Shareholder
Services Plan is terminable at any time by vote of a majority of the
Directors who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan.
For the period June 29, 1993 (commencement of operations) through May
31, 1994, $243,943 was charged to the Fund under the Shareholder Services
Plan.
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. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time, on
any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to use
the Dreyfus TeleTransfer Privilege, the initial payment for purchase of Fund
shares must be drawn on, and redemption proceeds paid to, the same bank and
account as are designated on the Account Application or Shareholder Services
Form on file. If the proceeds of a particular redemption are to be wired to
an account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Fund Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
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 the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, 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 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.
Redemption proceeds, if wired, must be in the amount of $1,000 or more and
will be wired to the investor's account at the bank of record designated in
the investor's file at the Transfer Agent, if the investor's bank is a
member of the Federal Reserve System, or to a correspondent bank if the
investor's bank is not a member. Fees ordinarily are imposed by such bank
and usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The 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
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board 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 valued
in the same manner as the Fund's portfolio is valued. If the recipient sold
such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the applicable sales
load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales load and
additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To use this Privilege, an investor or the investor's Service Agent
acting on the investor's behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. Telephone exchanges may
be made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on file with
the Transfer Agent. By using this Privilege, the investor authorizes the
Transfer Agent to act on telephonic, telegraphic or written exchange
instructions from any person representing himself or herself to be the
investor or a representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and Simplified Employee Pension Plans
("SEP-IRAs") with only one participant, the minimum initial investment is
$750. To exchange shares held in Corporate Plans, 403(b)(7) Plans and IRAs
set up under a SEP-IRAs with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested among the funds
in the Dreyfus Family of Funds. To exchange shares held in Personal
Retirement Plans, the shares exchanged must have a current value of at least
$100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for shares of the Fund, shares of another
fund in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as set forth under "Exchange Privilege" above. Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified
if his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange request
in whole or in part. The Exchange Privilege or Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. An Automatic Withdrawal Plan may be established by completing the
appropriate application available from the Distributor. There is a service
charge of $.50 for each withdrawal check. Automatic Withdrawal may be
terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that are offered
without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load charged by
the fund from which dividends or distributions are being swept, without
giving effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales charge and the
applicable contingent deferred sales charge, if any, will be imposed upon
redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including IRAs set up under a
SEP-IRA and IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support
services also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan or an IRA, including an SEP-IRA, may request from the Distributor forms
for adoption of such plans.
The entity acting as custodian for Keogh 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 Dreyfus-sponsored Keogh Plans, IRAs
and SEP-IRAs 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. The Fund's securities, including
covered call options written by the Fund, 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, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of
foreign currency will be translated into dollars at the midpoint of the New
York interbank market spot exchange rate as quoted on the day of such
translation by the Federal Reserve Bank of New York or if no such rate is
quoted on such date, at the exchange rate previously quoted by the Federal
Reserve Bank of New York or at such other quoted market exchange rate as may
be determined to be appropriate by the Advisers. Forward currency contracts
will be valued at the current cost of offsetting the contract. Because of
the need to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value does not take place
contemporaneously with the determination of prices of a majority of the
Fund's securities. 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 Fund's Board of Directors. Expenses and
fees of the Fund, including the management fee paid by the Fund and
distribution and service fees, are accrued daily and taken into account for
the purpose of determining the net asset value of Fund shares.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Board of Directors, are valued at fair value as
determined in good faith by the Board of Directors. The Board of Directors
will review the method of valuation on a current basis. In making their
good faith valuation of restricted securities, the Directors generally will
take the following factors into consideration: restricted securities which
are, or are convertible into, securities of the same class of securities for
which a public market exists usually will be valued at market value less the
same percentage discount at which purchased. This discount will be revised
periodically by the Board of Directors if the Directors believe that it no
longer reflects the value of the restricted securities. Restricted
securities not of the same class as securities for which a public market
exists usually will be valued initially at cost. Any subsequent adjustment
from cost will be based upon considerations deemed relevant by the Board of
Directors.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
It is expected that the Fund will continue to qualify as a "regulated
investment company" under the Code, as long as such qualification is in the
best interests of its shareholders. As a regulated investment company, the
Fund will pay no Federal income tax on net investment income and net
realized securities gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of the
Code. To qualify as a regulated investment company, the Fund must
distribute at least 90% of its net income (consisting of net investment
income and net short-term capital gain to its shareholders), must derive
less than 30% of its annual gross income from gain on the sale of securities
held for less than three months, and must meet certain asset diversification
and other requirements. Accordingly, the Fund may be restricted in the
selling of securities held for less than three months. The Code, however,
allows the Fund to net certain offsetting positions, making it easier for
the Fund to satisfy the 30% test. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the
cost of the investment. Such a dividend or distribution would be a return
of investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of 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 long-term capital loss to the extent of the capital gain
distribution received.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends from net investment income may qualify for the
dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to the Fund's qualifying corporate shareholders will
be eligible for the dividends received deduction only to the extent that the
Fund's income consists of dividends paid by U.S. corporations. However,
Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for more than 46 days and
has received a dividend from net investment income with respect to such
shares, the portion designated by the Fund as qualifying for the dividends
received deduction will not be eligible for such shareholder's dividends
received deduction. In addition, the Code provides other limitations with
respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
The Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a
credit or deduction on their Federal income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro rata
portion of qualified taxes paid or incurred by the Fund to foreign countries
(which taxes relate primarily to investment income). The Fund may make an
election under Section 853, provided that more than 50% of the value of the
Fund's total assets at the close of the taxable year consists of securities
in foreign corporations, and the Fund satisfies the applicable distribution
provisions of the Code. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, all or a portion of the
gain or loss realized from the disposition of foreign currencies (including
foreign currency denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain forward contracts and
options) may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of any gain realized from the sale or
other disposition of certain market discount bonds will be treated as
ordinary income under Section 1276. Finally, all or a portion of the gain
realized from engaging in "conversion transactions" may be treated as
ordinary income under Section 1258. "Conversion transactions" are defined
to include certain forward, futures, option and straddle transactions,
transactions marketed or sold to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes
from certain forward contracts and options transactions will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and options
as well as from closing transactions. In addition, any such contracts or
options remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain foreign
currency forward contracts or options may constitute "straddles."
"Straddles" are defined to include "offsetting positions" in actively traded
personal property. The tax treatment of "straddles" is governed by Sections
1092 and 1258 of the Code, which, in certain circumstances, override or
modify the provisions of Sections 1256 and 988. As such, all or a portion
of any short or long-term capital gain from certain "straddle" transactions
may be recharacterized as ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in certain forward contracts or options transactions, such
"straddles" would be characterized as "mixed straddles" if the forward
contracts or options transactions comprising a part of such "straddles" were
governed by Section 1256 of the Code. The Fund may make one or more
elections with respect to "mixed straddles." Depending on which election is
made, if any, the results to the Fund may differ. If no election is made to
the extent the "straddle" and conversion transactions rules apply to
positions established by the Fund, losses realized by the Fund will be
deferred to the extent of unrealized gain in the offsetting position.
Moreover, as a result of the "straddle" and conversion transactions rules,
short-term capital loss on "straddle" positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as
short-term capital gains or ordinary income.
If the Fund invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for Federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result
in the imposition of certain Federal income taxes on the Fund. In addition,
gain realized from the sale or other disposition of PFIC securities may be
treated as ordinary income under proposed Section 1291 of the Code.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligation could under special tax rules affect the amount, timing and
character of distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the Fund could
be required to accrue as income each year a portion of the discount (or
deemed discount) at which such securities were issued and to distribute such
income. In such case, the Fund may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
PORTFOLIO TRANSACTIONS
Dreyfus assumes general supervision over placing orders on behalf of
the Fund for the purchase or sale of investment securities. Allocation of
brokerage transactions, including their frequency, is made in Dreyfus' best
judgment and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable
net price. Subject to this consideration, the brokers selected will include
those that supplement the Advisers' research facilities with statistical
data, investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be
performed by the Advisers and the Advisers' fees are not reduced as a
consequence of the receipt of such supplemental information.
Such information may be useful to Dreyfus in serving both the Fund and
other funds which it advises and to M&G in serving both the Fund and the
other funds or accounts it advises, and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Advisers in carrying out their obligations to the Fund. Sales
of Fund shares by a broker may be taken into consideration, and brokers also
will be selected because of their ability to handle special executions such
as are involved in large block trades or broad distributions, provided the
primary consideration is met. Large block trades may, in certain cases,
result from two or more funds advised or administered by Dreyfus being
engaged simultaneously in the purchase or sale of the same security. Certain
of the Fund's transactions in securities of foreign issuers may not benefit
from the negotiated commission rates available to the Fund for transactions
in securities of domestic issuers. 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. Foreign
exchange transactions are made with banks or institutions in the interbank
market at prices reflecting a mark-up or mark-down and/or commission.
The Fund's portfolio turnover rate for the period June 29, 1993
(commencement of operations) through May 31, 1994 was 51.32%. Portfolio
turnover may vary from year to year as well as within a year. It is
anticipated that in any fiscal year the turnover rate may approach the 150%
level; however, in periods in which extraordinary market conditions prevail,
the Advisers will not be deterred from changing investment strategy as
rapidly as needed, in which case higher turnover rates can be anticipated
which would result in greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by Dreyfus based
upon its knowledge of available information as to the general level of
commissions paid by other institutional investors for comparable services.
For the period June 29, 1993 (commencement of operations) through May
31, 1994 the Fund paid total brokerage commissions of $894,844, none of
which was paid to the Distributor.
For the period June 29, 1993 (commencement of operations) through May
31, 1994, there were no gross spreads and concessions on principal
transactions.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's average annual return for the period June 29, 1993
(commencement of operations) through May 31, 1994 was 24.39%. Average
annual total return is calculated by determining the ending redeemable value
of an investment purchased with a hypothetical $1,000 payment made at the
beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period)
and subtracting 1 from the result.
The Fund's total return for the period June 29, 1993 (commencement of
operations) through May 31, 1994 was 22.32%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end
of the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
Comparative performance may be used from time to time in advertising
the Fund's shares, including data from Lipper Analytical Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial
Average, Money Magazine, Morningstar, Inc. and other industry publications.
From time to time, the Fund may compare its performance against inflation
with the performance of other instruments against inflation, such as short-
term Treasury Bills (which are direct obligations of the U.S. Government)
and FDIC-insured bank money market accounts. In addition, advertising for
the Fund may indicate that investors may consider diversifying their
investment portfolios in order to seek protection of the value of their
assets against inflation. From time to time, advertising materials for the
Fund may refer to, or include, commentary by the Fund's portfolio managers
relating to their investment strategy, asset growth of the Fund, current or
past business, political, economic or financial conditions and other matters
of general interest to shareholders. Such materials may also describe
awards bestowed upon M&G Investment Management Limited. The Fund's
advertising materials also may refer to the integration of the world's
securities markets, discuss the investment opportunities available worldwide
and mention the increasing importance of an investment strategy including
foreign investments. In addition, advertising materials or the Fund also
may refer to the clients of M&G.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary
of First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-
9671, is the Fund's transfer and dividend disbursing agent. Neither The
Bank of New York nor The Shareholder Services Group, Inc. has any part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-
2696, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund and the
Fund.
APPENDIX
Description of certain ratings assigned by Standard &
Poor's Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"),
Fitch Investors Service, Inc. ("Fitch") and Duff & Phelps, Inc. ("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues only in small
degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
S&P's letter ratings may be modified by the addition of a
plus (+) or minus
(-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in the Aaa
category. The modifier 1 indicates a ranking for the security in the higher
end of a rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates a ranking in the lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a superior
capacity for repayment of short-term promissory obligations, and ordinarily
will be evidenced by leading market positions in well established
industries, high rates of return on funds employed, conservative
capitalization structures with moderate reliance on debt and ample asset
protection, broad margins in earnings coverage of fixed financial charges
and high internal cash generation, and well established access to a range of
financial markets and assured sources of alternate liquidity.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class of debt.
The ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.
Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than bonds with higher
ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three years,
including commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis than bond
ratings on the existence of liquidity necessary to meet the issuer's
obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance for timely
payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in degree than
issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The
risk factors are negligible, being only slightly more than for risk-free
U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary slightly from
time to time because of economic conditions.
A
Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
BBB
Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent investment.
Considerable variability in risk during economic cycles.
Plus (+) and minus (-) signs are used with a rating symbol
(except AAA) to indicate the relative position of a credit within the rating
category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very high
certainty of timely payment with excellent liquidity factors which are
supported by ample asset protection. Risk factors are minor.
<TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1994
COMMON STOCKS--94.2% SHARES VALUE
-------------- --------------
<S> <C> <C> <C> <C>
ARGENTINA--1.1% YPF S.A., Cl. D, A.D.R. 75,000 $ 1,978,125
--------------
AUSTRALIA--3.7% Brambles Industries 100,000 1,055,340
Commonwealth Bank of Australia... 250,000 1,494,450
Mayne Nickless................... 300,000 1,948,320
Newcrest Mining.................. 300,000 1,560,870
Queensland Metals..............(a) 500,000 627,300
--------------
6,686,280
--------------
AUSTRIA--1.6% BWT.............................. 7,900 1,107,509
Bau Holdings...................(a) 9,000 863,281
Burgenland Holding............... 24,000 872,917
--------------
2,843,707
--------------
CANADA--1.8% Franco Nevada Mining............. 7,000 401,121
Franco Nevada Mining (Warrants)(a) 7,000 37,961
Placer Dome...................... 60,000 1,382,863
TVX Gold.......................(a) 200,000 1,337,672
--------------
3,159,617
--------------
DENMARK--1.1% Tele Danmark A/S, Cl. B........(a) 38,000 1,916,460
--------------
FRANCE--6.0% Assurance Generale de France..... 9,000 762,658
BUT S.A.......................... 7,000 1,057,026
Banque Nationale de Paris......(a) 31,400 1,388,986
Compagnie de Saint Gobain........ 9,272 1,087,141
Compagnie Signaux et
Equipements Electronique.....(a) 12,200 1,332,919
Groupe Zannier................... 3,085 649,445
Imetal........................... 18,000 1,806,715
Naf Naf S.A. ..................(a) 24,000 1,696,927
Skis Rossignol S.A. ............. 3,190 1,092,046
--------------
10,873,863
--------------
GERMANY--3.4% BASF AG.......................... 9,250 1,753,342
Continental AG.................(a) 11,500 1,914,338
Etienne Aigner AG................ 4,000 1,494,532
Felten & Guilleaume Energietechnik 4,200 870,109
--------------
6,032,321
--------------
HONG KONG--5.4% B & B Asia....................... 1,085,000 445,852
Cheung Kong Holdings............. 152,000 767,230
China Light & Power.............. 121,600 676,736
Citic Pacific.................... 500,000 1,449,557
Dah Sing Financial Holdings...... 272,650 864,547
Lamex Holdings................... 1,594,000 624,066
New Island Printing Holdings..... 4,297,000 650,681
Shaw Brothers.................... 529,000 869,514
Swire Pacific, Cl. A............. 230,000 1,786,061
Vitasoy International Holdings.(a) 2,440,000 1,042,128
Vtech Holdings................... 437,000 554,274
--------------
9,730,646
--------------
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
INDIA--.6% Tube Investments...............(a) 121,000 $ 1,076,900
--------------
INDONESIA--.8% Freeport McMoRan Copper & Gold, Cl. A 60,000 1,477,500
--------------
ITALY--3.0% Edison S.P.A..................... 340,000 1,624,231
Fila Holding S.P.A., A.D.R. ...(a) 115,000 1,796,875
SIP.............................. 720,000 1,943,503
--------------
5,364,609
--------------
JAPAN--25.2% Amway Japan...................... 30,000 1,230,916
Anritsu Electric................. 120,000 1,557,252
Asahi Concrete Works............. 50,000 935,115
Canon............................ 70,000 1,162,214
DDI.............................. 22 1,666,794
East Japan Railway............... 280 1,349,237
Enix............................. 29,000 1,383,588
Hitachi Credit................... 100,000 1,908,397
Hogy Medical..................... 11,500 712,166
Honda Motor...................... 120,000 2,152,672
Kissei Pharmaceutical............ 20,000 832,061
Mitsubishi Bank.................. 60,000 1,603,053
NEC.............................. 125,000 1,419,370
NGK Spark Plug................... 160,000 2,061,069
Nippon Express................... 170,000 1,768,130
Nippon Kayaku.................... 150,000 1,140,744
Nippon Shokubai K.K. ............ 120,000 1,213,740
Nippon Steel..................... 500,000 1,793,893
Nippon Telegraph & Telephone..... 200 1,650,763
Nippon Yusen K.K. ............... 325,000 1,997,137
Nissan Chemical Industries....... 300,000 2,109,733
Rinnai........................... 60,000 1,723,282
Seven Eleven Japan............... 20,000 1,475,191
Sharp............................ 80,000 1,374,046
Sony............................. 30,000 1,780,534
Sumitomo Bank.................... 60,000 1,288,168
Sumitomo Metal Mining............ 200,000 1,826,336
Tokio Marine & Fire Insurance.... 50,000 653,626
Toshoku.......................... 200,000 1,610,687
Ushio............................ 200,000 1,893,130
--------------
45,273,044
--------------
MALAYSIA--3.1% Berjaya Singer Berhad (Warrants)(a) 100,560 37,432
Hong Leong Credit Berhad......... 180,000 998,061
Hong Leong Properties Berhad...(a) 485,000 635,634
Kuala Lumpur Industries Holdings Berhad(a) 1,000,000 1,318,341
Leader Universal Holdings Berhad. 173,000 932,416
Metacorp Berhad................(a) 200,000 767,739
Renong Berhad.................... 660,000 813,804
--------------
5,503,427
--------------
MEXICO--4.6% Cemex S.A., Cl. B., A.D.R. 118,125 1,727,578
Cifra S.A. de C.V., A.D.R. ...... 350,000 980,000
Grupo Carso S.A., Ser. B., A.D.R. (a,b) 100,000 2,025,000
Panamerican Beverages, Cl. A .... 10,000 298,750
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
MEXICO (CONTINUED) Telefonos De Mexico S.A., A.D.R. . 35,000 $ 2,174,375
Transportacion Maritima
Mexicana S.A., A.D.R........... 125,000 1,062,500
--------------
8,268,203
--------------
NETHERLANDS--2.2% Ahrend Groep N.V. ............... 15,000 1,238,830
Akzo N.V. ....................... 17,000 1,914,974
Internationale Nederlanden Groep N.V. 21,422 880,547
--------------
4,034,351
--------------
NEW ZEALAND--1.0% Brierley Investments............. 2,350,000 1,788,256
--------------
SINGAPORE--2.9% Fraser & Neave................... 97,300 1,167,093
Haw Par Brothers International... 400,000 886,571
IPCO International............... 185,000 971,250
Keppel........................... 164,600 1,158,853
Robinson & Co.................... 247,000 1,102,966
--------------
5,286,733
--------------
SOUTH AFRICA--3.7% Premier Group Holdings........... 1,500,000 2,003,154
South African Breweries.......... 115,000 2,321,767
Tiger Oats....................... 220,000 2,267,087
--------------
6,592,008
--------------
SPAIN--4.0% Acerinox S.A..................... 15,000 1,524,300
Centros Commercial Pryca......... 86,250 1,251,197
Hidroelectrica del Cantabrico S.A. 46,000 1,449,779
Iberdrola S.A. .................. 234,000 1,717,953
Repsol S.A. ..................... 40,000 1,260,677
--------------
7,203,906
--------------
SWEDEN--1.2% Autoliv AB.....................(a) 60,000 1,387,283
Volvo AB......................... 9,180 851,376
--------------
2,238,659
--------------
SWITZERLAND--4.7% Baloise Holdings................. 900 1,587,669
Elektrowatt AG (Warrants)......(a) 7,000 468,995
Hilti AG......................... 2,100 1,571,632
Pelikan Holding AG............... 7,000 648,610
Rieter Holding AG................ 1,400 1,706,344
Sika Finanz AG................... 4,300 1,219,815
Zurich Versicherungs............. 1,300 1,244,405
--------------
8,447,470
--------------
UNITED KINGDOM--13.1% BAT Industries PLC............... 250,000 1,544,997
Blue Circle Industries PLC....... 250,000 1,099,252
Booker PLC....................... 300,000 1,745,205
British Gas PLC.................. 275,000 1,099,064
British Steel PLC................ 650,000 1,323,447
Burton Group PLC................. 2,125,000 1,814,144
Commercial Union PLC............. 150,000 1,176,597
Cookson Group PLC................ 200,000 746,812
Glaxo Holdings PLC............... 185,000 1,498,308
Hammerson Property Investment &
Development, Cl. A............. 175,000 899,045
Johnson, Matthey PLC............. 145,000 1,233,505
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
UNITED KINGDOM (CONTINUED) Lloyds Bank PLC.................. 135,000 $ 1,093,360
Lucas Industries PLC............. 700,000 1,872,129
Royal Doulton PLC................ 500,000 1,956,745
Saatchi & Saatchi..............(a) 400,000 809,896
Welsh Water PLC.................. 175,000 1,537,631
World Fluids PLC...............(a) 900,000 367,173
Zeneca Group PLC................. 175,000 1,796,768
--------------
23,614,078
--------------
TOTAL COMMON STOCKS
(cost $163,048,699)............ $169,390,163
==============
PREFERRED STOCK--1.0%
GERMANY; Herlitz AG
(cost $1,626,581).............. 8,444 $ 1,803,199
==============
CONVERTIBLE PREFERRED STOCK--.3%
JAPAN; Sakura Bank, 2.25%
(cost $620,456)..............(a) 32,000 $ 610,687
==============
CONVERTIBLE BONDS--1.2%
PRINCIPAL
AMOUNT
--------------
INDONESIA--1.2% Indofood Sukses Makmur, 2.25%, 4/6/97 $ 2,000,000 $ 2,100,000
--------------
MALAYSIA--.0% Berjaya Leisure Berhad, 5%, 5/4/99(c) 38,992 326
--------------
TOTAL CONVERTIBLE BONDS
(cost $2,000,221).............. $ 2,100,326
==============
SHORT-TERM INVESTMENTS--5.0%
UNITED STATES; U.S. TREASURY BILLS:
3.56%, 6/16/94................. $ 1,302,000 $ 1,300,071
3.70%, 6/30/94................. 577,000 575,280
3.63%, 7/21/94................. 2,554,000 2,541,115
4.16%, 8/25/94................. 4,687,000 4,640,963
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $9,057,429).............. $ 9,057,429
==============
TOTAL INVESTMENTS (cost $176,353,386)....................................... 101.7% $182,961,804
====== ==============
LIABILITIES, LESS CASH AND RECEIVABLES ..................................... (1.7%) $ (3,055,286)
====== ==============
NET ASSETS.................................................................. 100.0% $179,906,518
====== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At May 31,
1994, this security amounted to $2,025,000, or 1.1% of net assets.
(c) Denominated in Malaysian Ringgits.
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $176,353,386)_see statement..................................... $182,961,804
Receivable for investment securities sold............................... 7,194,115
Dividends and interest receivable....................................... 585,023
Receivable for subscriptions to Common Stock............................ 5,770
Prepaid expenses_Note 1(e).............................................. 134,698
---------------
190,881,410
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 229,467
Due to Custodian........................................................ 3,237,386
Payable for investment securities purchased............................. 6,742,809
Net unrealized (depreciation) on forward currency exchange
contracts_Note 3(a)................................................... 544,082
Accrued expenses........................................................ 221,148 10,974,892
----------- ---------------
NET ASSETS ................................................................ $179,906,518
===============
REPRESENTED BY:
Paid-in capital......................................................... $171,674,023
Accumulated distributions in excess of investment income--net_Note 1(c). (98,669)
Accumulated undistributed net realized gain on investments and
foreign currency transactions......................................... 2,336,185
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 5,994,979
---------------
NET ASSETS at value applicable to 11,832,802 shares outstanding
(300 million shares of $.001 par value Common Stock authorized)......... $179,906,518
===============
NET ASSET VALUE, offering and redemption price per share
($179,906,518 / 11,832,802 shares)...................................... $15.20
=======
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS
FROM JUNE 29, 1993 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $208,554 foreign taxes withheld at source)..... $1,598,556
Interest (net of $1,604 foreign taxes withheld at source)............. 322,936
------------
TOTAL INCOME.................................................... $1,921,492
EXPENSES:
Management fee_Note 2(a).............................................. 731,828
Shareholder servicing costs_Note 2(b,c)............................... 844,306
Custodian fees........................................................ 172,718
Prospectus and shareholders' reports_Note 2(b)........................ 73,183
Registration fees..................................................... 68,783
Professional fees..................................................... 48,522
Organization expenses_Note 1(e)....................................... 20,073
Directors' fees and expenses_Note 2(d)................................ 16,630
Miscellaneous......................................................... 3,155
------------
1,979,198
Less--reduction in management fee due to
undertakings_-Note 2(a)........................................... 174,169
------------
TOTAL EXPENSES.................................................. 1,805,029
------------
INVESTMENT INCOME--NET.......................................... 116,463
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions_Note 3(a)................................................ $2,792,970
Net unrealized appreciation on investments and foreign currency
transactions.......................................................... 5,994,979
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 8,787,949
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $8,904,412
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FROM JUNE 29, 1993 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1994
OPERATIONS:
<S> <C>
Investment income_net..................................................................... $ 116,463
Net realized gain on investments.......................................................... 2,792,970
Net unrealized appreciation on investments for the period................................. 5,994,979
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... 8,904,412
---------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net............................................................... (136,536)
In excess of investment income_net........................................................ (286,348)
From net realized gain on investments..................................................... (269,107)
---------------
TOTAL DIVIDENDS......................................................................... (691,991)
---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................................. 350,172,480
Dividends reinvested...................................................................... 648,010
Cost of shares redeemed................................................................... (179,226,393)
---------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.................................. 171,594,097
---------------
TOTAL INCREASE IN NET ASSETS........................................................ 179,806,518
NET ASSETS:
Beginning of period_Note 1................................................................ 100,000
---------------
End of period [including distributions in excess of investment
income_net; ($98,669)].................................................................. $ 179,906,518
==============
SHARES
---------------
CAPITAL SHARE TRANSACTIONS:...................................................................
Shares sold............................................................................... 23,578,540
Shares issued for dividends reinvested.................................................... 42,773
Shares redeemed........................................................................... (11,796,511)
---------------
NET INCREASE IN SHARES OUTSTANDING...................................................... 11,824,802
==============
See notes to financial statements.
</TABLE>
DREYFUS INTERNATIONAL EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Fund's Prospectus dated August 22, 1994.
See notes to financial statements.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus International Equity Fund, Inc. (the "Fund") was incorporated on
January 27, 1993 and had no operations until June 29, 1993 (commencement of
operations) other than matters relating to its organization and registration
as a non-diversified open-end management investment company under the
Investment Company Act of 1940 ("Act") and the Securities Act of 1933 and the
sale and issuance of 8,000 shares of Common Stock ("Initial Shares") to The
Dreyfus Corporation ("Dreyfus"), the Fund's investment adviser. M&G
Investment Management Limited ("M&G") serves as the Fund's sub-investment
adviser. Dreyfus Service Corporation ("Distributor"), a wholly-owned
subsidiary of Dreyfus, acts as the distributor of the Fund's shares, which
are sold to the public without a sales load.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Short-term investments are carried at amortized cost, which approximates
value. Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
Dividends in excess of investment income_net result from Federal income
tax distribution requirements, primarily unrealized gains on Passive Foreign
Investment Companies and foreign currency transactions.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income taxes.
(E) OTHER: Organization expenses paid by the Fund are included in prepaid
expenses and are being amortized to operations from June 29, 1993, the date
operations commenced, over the period during which it is expected that a
benefit will be realized, not to exceed five years. At May 31, 1994, the
unamortized balance of such expenses amounted to $91,046. In the event that
any of the Initial Shares are redeemed during the amortization period, the
redemption proceeds will be reduced by any unamortized organization expenses
in the same proportion as the number of such shares being redeemed bears to
the number of such shares outstanding at the time of such redemption.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement with Dreyfus, the management fee
is computed at the annual rate of .75 of 1% of the average daily value of the
Fund's net assets and is payable monthly. Dreyfus and M&G have agreed that if
in any full fiscal year the Fund's aggregate expenses, exclusive of interest,
taxes, brokerage and extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over the Fund, Dreyfus and M&G will bear the
excess expense in proportion to their management fee and sub-advisory fee to
the extent required by state law. The most stringent state expense limitation
applicable to the Fund presently requires reimbursement of expenses in any
full fiscal year that such expenses (exclusive of distribution expenses and
ce rtain expenses as described above) exceed 21/2% of the first $30 million, 2%
of the next $70 million and 11/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California "blue
sky" regulations.
However, Dreyfus had undertaken from June 29, 1993 through January 12,
1994, to reduce the management fee paid by the Fund, by certain specified
annual percentages of the Fund's average net assets. The reduction in
management fee pursuant to the undertakings amounted to $174,169 for the
period ended May 31, 1994.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and M&G,
the sub-advisory fee is computed at the annual rate of .30 of 1% of the
average daily value of the Fund's net assets and is payable monthly by
Dreyfus.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule
12b-1 under the Act, the Fund pays the Distributor, at an annual rate of .50
of 1% of the value of the Fund's average daily net assets, for costs and
expenses in connection with advertising, marketing and distributing the
Fund's shares and for servicing shareholder accounts. The Distributor may
make payments to one or more Service Agents (a securities dealer, financial
institution, or other industry professional) based on the value of the Fund's
shares owned by clients of the Service Agent. The Plan also separately
provides for the Fund to bear the costs of preparing, printing and
distributing certain of the Fund's prospectuses and statements of additional
information and costs associated with implementing and operating the Plan,
not to exceed the greater of $100,000 or .005 of 1% of the Fund's average
daily net assets for any full fiscal year. During the period ended May 31,
1994, the Fund was charged $541,442 pursuant to the Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the Fund pays the
Distributor an annual rate of .25 of 1% of the value of the Fund's 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. During the period ended May 31, 1994, the Fund was charged an
aggregate of $243,943 pursuant to the Shareholder Services Plan.
(D) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of Dreyfus and/or the Distributor. Each director who
is not an "affiliated person" receives an annual fee of $2,500 and an
attendance fee of $500 per meeting. Prior to March 15, 1994, the annual fee
was $1,000 and the attendence fee was $250 per meeting.
(E) On December 5, 1993, Dreyfus entered into an Agreement and Plan of
Merger (the "Merger Agreement") providing for the merger of Dreyfus with a
subsidiary of Mellon Bank Corporation ("Mellon").
DREYFUS INTERNATIONAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, Dreyfus will seek various approvals from the Fund's shareholders
before completion of the merger. Proxy materials, approved by the Fund's
Board, recently have been mailed to Fund shareholders.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period ended May 31, 1994 amounted to $214,333,387 and
$50,708,802, respectively.
In addition, the following summarizes open forward currency exchange
contracts at May 31, 1994:
<TABLE>
<CAPTION>
U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS PROCEEDS VALUE (DEPRECIATION)
- ------------------------------------------ ---------- ----------- ---------------
<S> <C> <C> <C>
French Francs, expiring 10/12/94..... $ 4,645,898 $ 4,871,567 $(225,669)
German Marks, expiring 10/12/94...... 4,113,348 4,300,704 (187,356)
Japanese Yen, expiring 10/12/94...... 22,992,558 23,123,615 (131,057)
-----------
$(544,082)
===========
</TABLE>
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified rate on a certain date in
the future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates.
(B) At May 31, 1994, accumulated net unrealized appreciation on
investments was $6,608,418, consisting of $13,377,916 gross unrealized
appreciation and $6,769,498 gross unrealized depreciation, excluding foreign
currency transactions.
At May 31, 1994, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
DREYFUS INTERNATIONAL EQUITY FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INTERNATIONAL EQUITY FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus International Equity Fund, Inc., including the statement of
investments, as of May 31, 1994, and the related statements of operations and
changes in net assets and financial highlights for the period from June 29,
1993 (commencement of operations) to May 31, 1994. 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 audit.
We conducted our audit 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 May 31, 1994 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus International Equity Fund, Inc. at May 31, 1994, and the
results of its operations, the changes in its net assets and the financial
highlights for the period from June 29, 1993 to May 31, 1994, in conformity
with generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
July 11, 1994
DREYFUS INTERNATIONAL EQUITY FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits - List
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from June 29,
1993 (commencement of operations) to May 31, 1994.
Included in Part B of the Registration Statement:
Statement of Investments--May 31, 1994.
Statement of Assets and Liabilities--May 31, 1994.
Statement of Operations--for the period from June
29, 1993 (commencement of operations) to May 31,
1994.
Statement of Changes in Net Assets--for the period
from June 29, 1993 (commencement of operations) to
May 31, 1994.
Notes to Financial Statements.
Report of Independent Auditors dated July 11, 1994.
Schedules No. I through VII and other Financial Statements, 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) Registrant's Articles of Incorporation are incorporated by
reference to Exhibit (1) of the Registration Statement on Form
N-1A, filed on February 11, 1993.
(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of the Registration Statement on Form N-1A, filed on February 11,
1993.
(5)(a) The Registrant's Management Agreement is incorporated by
reference to Exhibit (5)(a) of Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-1A, filed on June 28, 1993.
(5)(b) The Registrant's Sub-Investment Advisory Agreement is
incorporated by reference to Exhibit (5)(b) of Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A filed
on June 28, 1993.
(6)(a) The Registrant's Distribution Agreement is incorporated by
reference to Exhibit (6)(a) of Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-1A, filed on June 28, 1993.
(6)(b) The Registrant's Form of Distribution Plan Agreement is
incorporated by reference to Exhibit (6)(b) of Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A, Filed
on June 28, 1993.
(6)(c) The Registrant's Form of Shareholder Services Agreement is
incorporated by reference to Exhibit (6)(c) of Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A, Filed
on June 28, 1993.
(8) The Registrant's Custody Agreement is incorporated by reference
to Exhibit (8) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A, filed on June 28, 1993.
(9) The Registrant's Shareholder Services Plan is incorporated by
reference to Exhibit (15)(b) of Pre-Effective Amendment No. 2 to
the Registration Statement on Form N-1A, Filed on June 28, 1993.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A, filed on June 28, 1993.
(11) Consent of Independent Auditors.
(15)(a) The Registrant's Distribution Plan adopted pursuant to Rule 12b-1
is incorporated by reference to Exhibit (15)(a) of the Pre
Effective Amendment No. 2 to Registration Statement on Form N-1A,
Filed on June 28, 1993.
(16) Schedule for Computation of Performance Data is incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on December 27,
1993.
Other Exhibits
(a) Powers of Attorney of the Directors and officers are
incorporated by reference to the signature Page of Pre
Effective Amendment No. 2 to the Registration Statement on
form N-1A, filed on June 28, 1993 and to other Exhibit (a)
of Post-Effective Amendment on Form N-1A, filed on
December 27, 1993.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A, filed on June 24, 1993.
Item 25. Persons Controlled by or under Common Control with Registrant.
Not Applicable
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Title of Class Holders as of July 27, 1994
Common Stock 13,714
(Par value $.001 per share)
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
Pre-Effective Amendment No. 2 to the Registration Statement on
Form N-1A, filed on June 24, 1993.
Reference is also made to the Distribution Agreement filed as
Exhibit (6)(a) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A, filed on June 24, 1993.
Item 28. Business and Other Connections of Investment Adviser.
(a) Investment Adviser - The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a
wholly-owned subsidiary of Dreyfus, serves primarily as
distributor of shares of investment companies sponsored by
Dreyfus and of other investment companies for which Dreyfus
acts as investment adviser, sub-investment adviser or
administrator. Dreyfus Management, Inc., another
wholly-owned subsidiary, provides investment management
services to various pension plans, institutions and
individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer Dreyfus Capital Growth Fund (A Premier
Fund)++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus New Leaders Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc. ++;
The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
HOWARD STEIN Dreyfus Land Development Corporation*;
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Strategic Growth, L.P. ++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Dreyfus Growth Allocation Fund, Inc.++
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
HOWARD STEIN Seven Six Seven Agency, Inc.*;
(cont'd) World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
JOSEPH S. DiMARTINO Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Trustee and Investment Officer:
Premier GNMA Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
JOSEPH S. DiMARTINO Trustee:
(cont'd) Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Fund ++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++;
(cont'd) Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
Dreyfus Growth Opportunity Fund, Inc.++;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
Director:
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond
Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Intermediate Municipal Bond
Fund, Inc.++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New York Tax Exempt Bond
Fund, Inc.++;
Dreyfus Ohio Municipal Money Market
Fund, Inc.++;
Trustee:
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Cash Management++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt
Bond Fund++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
DAVID W. BURKE Dreyfus Pennsylvania Municipal Money
(cont'd) Market Fund++;
Dreyfus Short-Intermediate Government
Fund++
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
DANIEL C. MACLEAN Dreyfus New York Insured Tax Exempt Bond
(cont'd) Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
DANIEL C. MACLEAN Premier New York Municipal Bond Fund++;
(cont'd) Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
DANIEL C. MACLEAN Dreyfus Strategic Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus New Jersey Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
JEFFREY N. NACHMAN General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
JEFFREY N. NACHMAN First Prairie U.S. Treasury Securities
(Cont'd) Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Assistant Vice President - Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Treasurer and Assistant Secretary:
Assistant Vice President The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
JOHN J. PYBURN Dreyfus California Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
JOHN J. PYBURN Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
MAURICE BENDRIHEM Controller:
(cont'd) Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
MARK N. JACOBS Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
MARK N. JACOBS Dreyfus Municipal Cash Management Plus++;
(cont'd) Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
MARK N. JACOBS Premier State Municipal Bond Fund++;
(cont'd) Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund, (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus International Equity Fund, Inc.++;
(cont'd) Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
CHRISTINE PAVALOS The Dreyfus Socially Responsible Growth
(cont'd) Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus Ohio Municipal Money Market Fund, Inc.
57) Dreyfus 100% U.S. Treasury Intermediate Term Fund
58) Dreyfus 100% U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus 100% U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) Dreyfus Short-Term Income Fund, Inc.
66) The Dreyfus Socially Responsible Growth Fund, Inc.
67) Dreyfus Strategic Growth, L.P.
68) Dreyfus Strategic Income
69) Dreyfus Strategic Investing
70) Dreyfus Tax Exempt Cash Management
71) The Dreyfus Third Century Fund, Inc.
72) Dreyfus Treasury Cash Management
73) Dreyfus Treasury Prime Cash Management
74) Dreyfus Variable Investment Fund
75) Dreyfus-Wilshire Target Funds, Inc.
76) Dreyfus Worldwide Dollar Money Market Fund, Inc.
77) First Prairie Cash Management
78) First Prairie Diversified Asset Fund
79) First Prairie Money Market Fund
80) First Prairie Municipal Money Market Fund
81) First Prairie Tax Exempt Bond Fund, Inc.
82) First Prairie U.S. Government Income Fund
83) First Prairie U.S. Treasury Securities Cash Management
84) General California Municipal Bond Fund, Inc.
85) General California Municipal Money Market Fund
86) General Government Securities Money Market Fund, Inc.
87) General Money Market Fund, Inc.
88) General Municipal Bond Fund, Inc.
89) General Municipal Money Market Fund, Inc.
90) General New York Municipal Bond Fund, Inc.
91) General New York Municipal Money Market Fund
92) Pacific American Fund
93) Peoples Index Fund, Inc.
94) Peoples S&P MidCap Index Fund, Inc.
95) Premier Insured Municipal Bond Fund
96) Premier California Municipal Bond Fund
97) Premier GNMA Fund
98) Premier Growth Fund, Inc.
99) Premier Municipal Bond Fund
100) Premier New York Municipal Bond Fund
101) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director President,
Director &
Investment
Officer
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Henry D. Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President and None
Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Secretary
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
James Barr
Newton, MA Regional Vice President None
Mary B. Brundage
Pasadena, CA Regional Vice President None
Edward Donley
Latham, NY Regional Vice President None
Thomas Ellis
Ranchero Murietta, CA Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Richard P. Kundracik
Waterford, MI Regional Vice President None
Michael Lane
Beaver Falls, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Robert J. Richardson
Houston, TX Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Kathleen M. Lewis++ Vice President-Institutional None
Sales Manager
Charles Cardona** Senior Vice President- None
Institutional Services
Stacy Alexander* Vice President-Bank Wholesale None
James E. Baskin+++++++ Vice President-Institutional Sales None
Kenneth Bernstein
Boca Raton, FL Vice President-Bank Wholesale None
Stephen Burke* Vice President-Bank Wholesaler None
Sales Manager
Laurel A. Diedrick
Burrows*** Vice President-Bank Wholesale None
Gary F. Callahan
Somerville, NJ Vice President-Bank Wholesale None
Daniel L. Clawson++++ Vice President-Institutional Sales None
Anthony T. Corallo
San Francisco, CA Vice President-Institutional Sales None
Bonnie M. Cymbryla
Brewerton, NY Vice President-Bank Wholesale None
William Davis
Bellevue, WA Vice President None
William E. Findley**** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Bank Wholesale None
Bradford Lange* Vice President-Bank Wholesale None
Eva Machek***** Vice President-Institutional Sales None
Bradley R. Maybury
Seattle, WA Vice President-Bank Wholesale None
Mary McCabe*** Vice President-Bank Wholesale None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President-Bank Wholesale- None
National Accounts Manager
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President-Bank Wholesale None
Lorianne Pinto* Vice President-Bank Wholesale None
Douglas Rentschler
Grosse Point Park, MI Vice President-Bank Wholesale None
Leah Ryan**** Vice President-Institutional Sales None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President-Institutional None
Administration
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Brant Snavely
Charlotte, NC Vice President-Bank Wholesale None
Thomas Stallings
Richmond, VA Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Thomas Winnick
Malverne, PA Vice President-Bank Wholesale None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Mary Rogers** Assistant Vice President-
Institutional Servicing None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
William Gallagher* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California
Street, San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657,
Duxbury, Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(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 its latest annual report to shareholders, upon request
and without charge, beginning with the annual report to
shareholders for the fiscal year ending May 31, 1994.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 19th day of August, 1994.
DREYFUS INTERNATIONAL EQUITY FUND, INC.
BY: /s/Joseph S. DiMartino *
__________________________________
Joseph S. DiMartino, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 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
date indicated.
Signatures Title Date
_______________________ _______________________________ __________
/s/Joseph S. DiMartino* President (Principal Executive 8/19/94
- -----------------------
Joseph S. DiMartino Officer)
/s/Jeffrey N. Nachman* Vice President and Treasurer 8/19/94
- ----------------------
Jeffrey N. Nachman (Principal Financial and
Accounting Officer)
/s/John M. Fraser, Jr.* Director 8/19/94
- -----------------------
John M. Fraser, Jr.
/s/Robert R. Glauber* Director 8/19/94
- ---------------------
Robert R. Glauber
/s/James F. Henry* Director 8/19/94
- ------------------
James F. Henry
/s/Rosalind G. Jacobs* Director 8/19/94
- ----------------------
Rosalind G. Jacobs
/s/Irving Kristol* Director 8/19/94
- ------------------
Irving Kristol
/s/Paul A. Marks* Director 8/19/94
- -----------------
Paul A. Marks
/s/Martin Peretz* Director 8/19/94
- -----------------
Martin Peretz
/s/Bert W. Wasserman* Director 8/19/94
- ---------------------
Bert W. Wasserman
*BY: /s/Steven F. Newman
----------------------------------
Steven F. Newman, Attorney-in-Fact
INDEX OF EXHIBITS
Page
(11) Consent of Ernst & Young,
Independent Auditors . . . . . . . . . . . . . .
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated July 11, 1994, in this Registration Statement (Form N-1A 33-58248)
of Dreyfus International Equity Fund, Inc.
ERNST & YOUNG LLP
New York, New York
August 16, 1994
