SUBJECT TO COMPLETION, SEPTEMBER 15, 2000
DREYFUS PREMIER MICRO-CAP GROWTH FUND
Investing in micro-cap growth companies for
capital appreciation
PROSPECTUS _____, 2000
DREYFUS [LOGO]
As with all mutual funds, the Securities
and Exchange Commission has not approved
or disapproved these securities or
passed upon the adequacy of this
prospectus. Any representation to the
contrary is a criminal offense.
The information in this Prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
CONTENTS
THE FUND
--------------------------------------------------------------------------------
Goal/Approach
Main Risks
Past Performance
Expenses
Management
Financial Highlights
YOUR INVESTMENT
--------------------------------------------------------------------------------
Account Policies
Distributions and Taxes
Services for Fund Investors
Instructions for Regular Accounts
Instructions for IRAs
FOR MORE INFORMATION
--------------------------------------------------------------------------------
Back Cover
<PAGE>
DREYFUS PREMIER MICRO-CAP GROWTH FUND THE FUND
-------------------------------------
Ticker Symbols: N/A
[ICON] GOAL/APPROACH
The fund seeks capital appreciation. To pursue this goal, the fund will invest
primarily in stocks of micro-cap companies which are characterized as "growth"
companies. Micro-cap companies typically are small and relatively unknown
companies. The fund also may invest in companies with larger market
capitalizations if the portfolio managers believe they represent better
prospects for capital appreciation. In addition, the fund is not obligated to
sell a security that has appreciated beyond the micro-cap capitalization range.
Although the fund normally will invest in common stocks of U.S.-based companies,
it may invest up to 30% of its total assets in foreign securities. The fund's
stock investments may include common stocks, preferred stocks and convertible
securities, including those purchased in initial public offerings.
The portfolio managers seek investment opportunities for the fund in companies
with fundamental strengths that indicate the potential for growth in earnings
per share. The portfolio managers focus on individual stock selection, building
the portfolio from the bottom up, searching one by one for companies whose
fundamental strengths suggest the potential to provide superior earnings growth
over time. The fund will seek to invest in micro-cap companies that the
portfolio managers believe display one or more of the following characteristics:
o strong, entrepreneurial management team
o competitive industry position
o focused business plan
o positive change in management, product or market opportunities
o strong business prospects
o the ability to benefit from changes in technology, regulations and
industry sector trends
Although the fund looks for companies with the potential for strong earnings
growth rates, some of the fund's investments may be in companies that are
experiencing losses.
The fund currently intends to close after it reaches total assets of
approximately $300 million. The fund reserves the right to reopen to investors
at any time.
[SIDE BAR]
CONCEPTS TO UNDERSTAND
MICRO-CAP COMPANIES: generally, those companies that, at the time of initial
purchase, have market capitalizations of less than $500 million. This range may
fluctuate depending on changes in the value of the stock market as a whole.
GROWTH COMPANIES: companies of any capitalization whose earnings are expected to
grow faster than the overall market. Often, growth stocks have relatively higher
price-to-earnings, price-to-book and price-to-sales ratios.
INITIAL PUBLIC OFFERINGS (IPOS): the first offering of a company's stock to the
public.
[ICON] MAIN RISKS
While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment will go up and down,
sometimes dramatically, which means that you could lose money.
Micro-cap stocks may offer greater opportunity for capital appreciation than the
stocks of larger and more established companies; however, they also involve
substantially greater risks of loss and price fluctuations. Micro-cap companies
carry additional risks because their earnings and revenues tend to be less
predictable (and some companies may be experiencing significant losses), and
their share prices tend to be more volatile and their markets less liquid
relative to companies with larger market capitalizations. Micro-cap companies
may be newly formed or in the early stages of development with limited product
lines, markets or financial resources and may lack management depth. In
addition, there may be less public information available about these companies.
The shares of micro-cap companies tend to trade less frequently than those of
larger, more established companies, which can have an adverse effect on the
pricing of these securities and on the fund's ability to sell these securities
at an acceptable price, especially in periods of market volatility. Also, it may
take a substantial period of time before the fund realizes a gain, if any, on an
investment in a micro-cap company.
The fund may also purchase securities of companies in IPOs. The prices of
securities purchased in IPOs can be very volatile. The effect of IPOs on the
fund's performance depends on a variety of factors, including the number of IPOs
the fund invests in, whether and to what extent a security purchased in an IPO
appreciates in value, and the asset base of the fund. As a fund's asset base
increases, IPOs often have a diminished effect on the fund's performance.
Investors often expect growth companies to increase their earnings at a certain
rate. If these expectations are not met, investors can punish the stocks
inordinately, even if earnings show an absolute increase. In addition, growth
stocks typically lack the dividend yield that may cushion stock prices in market
downturns.
Securities of companies within specific sectors of the economy can perform
differently than the overall market. This may be due to changes in such things
as the regulatory or competitive environment or to changes in investor
perceptions regarding a sector. Because the fund may allocate relatively more
assets to certain industry sectors than others, the fund's performance may be
more sensitive to developments which affect those sectors emphasized by the
fund.
Any foreign securities purchased by the fund include special risks, such as
exposure to currency fluctuations, changing political climate, lack of
comprehensive company information and potentially less liquidity.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
Under adverse market conditions, the fund could invest some or all of its assets
in money market securities. Although the fund would do this to avoid losses, it
could reduce the benefit from any upswing in the market. During such periods,
the fund may not achieve its investment objective.
[SIDE BAR]
OTHER POTENTIAL RISKS
The fund may engage in short-term trading, which could produce higher brokerage
costs and taxable distributions and lower the fund's after-tax performance
accordingly.
The fund has agreed to pay its investment adviser a performance fee based on the
fund's performance compared to that of the Russell 2000 Growth Index. As
described below, the fund could pay the maximum management fee even though both
the fund's share price and the Index decline.
[ICON] PAST PERFORMANCE
As a new fund, past performance information is not available for the fund as of
the date of this prospectus.
[LEFT SIDE BAR]
WHAT THIS FUND IS AND ISN'T
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in the fund is not a bank deposit. It is not insured or guaranteed
by the FDIC or any other government agency. It is not a complete investment
program. You could lose money in this fund, but you also have the potential to
make money.
[ICON] EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the table below.
-------------
FEE TABLE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
SHAREHOLDER TRANSACTION FEES
(FEES PAID FROM YOUR ACCOUNT)
<S> <C> <C> <C> <C>
Maximum front-end sales charge on 5.75 none none 4.50
purchases AS A % OF OFFERING PRICE
Maximum contingent deferred sales charge none* 4.00 1.00 none*
(CDSC) AS A % OF PURCHASE OR SALE PRICE, WHICHEVER IS
LESS
Maximum redemption fee AS A % OF SALE PRICE WHEN 1.00 1.00 1.00 1.00
SELLING SHARES OWNED FOR LESS THAN ONE YEAR
-------------
* Shares bought without an initial sales charge as part of an investment of
$1 million or more or, for Class A, through a "wrap account" or similar
program, as described in the Statement of Additional Information, may be
charged a CDSC of 1% if sold within one year.
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID
FROM FUND ASSETS) AS A % OF
AVERAGE DAILY NET ASSETS
<S> <C> <C> <C> <C>
Management fees* 1.35 1.35 1.35 1.35
Rule 12b-1 fee None 0.75 0.75 0.25
Shareholder services fee 0.25 0.25 0.25 0.25
Other expenses 0.25 0.25 0.25 0.25
---------------------------------------------------------------- -------------- ----------- ------------ ------------
TOTAL 1.85 2.60 2.60 2.10
-------------
* The basic management fee is 1.35% but, after the fund's first year of
operations, it may vary from 0.55% to 2.15% depending on the fund's
performance compared to the Russell 2000 Growth Index.
</TABLE>
<PAGE>
EXPENSE EXAMPLE
1 Year 3 Years
------------------------------------- -------------- -----------
CLASS A $ 752 $ 1,123
CLASS B
WITH REDEMPTION $ 663 $ 1,108
WITHOUT REDEMPTION $ 263 $ 808
CLASS C
WITH REDEMPTION $ 363 $ 808
WITHOUT REDEMPTION $ 263 $ 808
CLASS T $ 653 $ 1,078
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
returns and expenses will be different, the example is for comparison only.
--------------------------------------------------------------------------------
[LEFT SIDE BAR]
CONCEPTS TO UNDERSTAND
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor to finance the sale and
distribution of Class B, Class C and Class T shares. Because this fee is paid
out of the fund's assets on an ongoing basis, over time it will increase the
cost of your investment and may cost you more than paying other types of sales
charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: estimated fees to be paid by the fund for the current fiscal
year for miscellaneous items such as transfer agency, custody, professional and
registration fees.
<PAGE>
----------------------------------
[ICON] MANAGEMENT
The fund's investment adviser is The Dreyfus Corporation, 200 Park Avenue, New
York, New York 10166. Founded in 1947, Dreyfus manages one of the nation's
leading mutual fund complexes, with more than $130 billion in over 160 mutual
fund portfolios. Dreyfus is the primary mutual fund business of Mellon Financial
Corporation, a global financial services company with approximately $2.8
trillion of assets under management, administration or custody, including
approximately $521 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
Dreyfus has engaged its growth specialist affiliate, Founders Asset Management
LLC (Founders), to serve as the fund's sub-investment adviser. Founders, located
at 2930 East Third Avenue, Denver, Colorado 80206, and its predecessor companies
have been offering tools to help investors pursue their financial goals since
1938. As of June 30, 2000, Founders managed mutual funds and other client
accounts having aggregate assets of approximately $8.5 billion.
The fund has agreed to pay Dreyfus a performance-based fee (the Basic Fee), so
that if the fund's performance is greater than that of the Russell 2000 Growth
Index, Dreyfus earns more, and if it is less than that of the Index, Dreyfus
earns less. For the first year after the fund begins its operations, the fee is
fixed at 1.35% and does not have a performance adjustment. After that, if the
performance of the class of shares expected to bear the highest total fund
operating expenses (the Measuring Class) exceeds the Index, Dreyfus will get
paid up to 0.80% more each year (and could get paid up to 0.80% less if
performance lags). The minimum annual management fee payable to Dreyfus is 0.55%
of the fund's average daily net assets. The table below shows what the
adjustments could be.
<TABLE>
<CAPTION>
PERCENTAGE POINT DIFFERENCE* BETWEEN
PERFORMANCE OF THE MEASURING CLASS ADJUSTMENT TO 1.35% BASIC ANNUAL FEE RATE
SHARES AND THE INDEX** FEE AS ADJUSTED
<S> <C> <C>
+8 +.80% 2.15%
+7 +.70% 2.05%
+6 +.60% 1.95%
+5 +.50% 1.85%
+4 +.40% 1.75%
+3 +.30% 1.65%
+2 +.20% 1.55%
+1 +.10% 1.45%
0 0 1.35%
-1 -.10% 1.25%
-2 -.20% 1.15%
-3 -.30% 1.05%
-4 -.40% .95%
-5 -.50% .85%
-6 -.60% .75%
-7 -.70% .65%
-8 -.80% .55%
--------------------------------
* Fractions of a percentage point will be rounded to the nearer whole point (to
the higher whole point if exactly one-half).
** Measured over the performance period, which, beginning twelve months
after the fund has commenced operations, will be the period from
_______, 2000 to the most recent month-end until _____, 2003, at which
time the performance period will become a rolling 36-month period
ending with the most recent calendar month. During the first twelve
months of operations, the fund will pay Dreyfus the Basic Fee of 1.35%
of the fund's average daily net assets with no performance adjustment.
</TABLE>
Since the adjustment to the Basic Fee is based on the comparative performance of
the Measuring Class shares against the Index, the controlling factor is not
whether the performance of the Measuring Class shares is up or down, but whether
that performance is up or down more than or less than that of the Index. In
addition, the relative performance of the Measuring Class shares against the
Index is measured only for the relevant performance period, and does not take
into account performance over longer or shorter periods of time.
The fund's primary portfolio managers are Robert T. Ammann, C.F.A. and _____.
They have been the fund's primary portfolio managers since its inception. Mr.
Ammann has been employed by Founders since 1993. He is a vice president of
investments and a senior portfolio manager at Founders. _______ is ________.
The fund, Dreyfus, Founders and Dreyfus Service Corporation (the fund's
distributor) each have adopted a code of ethics that permits its personnel,
subject to such code, to invest in securities, including securities that may be
purchased or held by the fund. The Dreyfus and Founders codes of ethics restrict
the personal securities transactions of their employees, and require portfolio
managers and other investment personnel to comply with the code's preclearance
and disclosure procedures. Each code's primary purpose is to ensure that
personal trading by Dreyfus or Founders employees does not disadvantage any
Dreyfus- or Founders-managed fund.
[LEFT SIDE BAR]
CONCEPT TO UNDERSTAND
RUSSELL 2000 GROWTH INDEX:
The Russell 2000 Growth Index measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth values.
Investment results assume the reinvestment of dividends.
<PAGE>
----------------------------------
[ICON] FINANCIAL HIGHLIGHTS
As a new fund, financial highlights information is not available for the fund as
of the date of this prospectus.
----------------------------------
<PAGE>
YOUR INVESTMENT
[ICON] ACCOUNT POLICIES
ESTABLISHING AN ACCOUNT
THE DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from those
described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it may be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a
contingent deferred sales charge (CDSC).
o CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and/or have a longer-term investment horizon.
o CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a longer-term investment horizon.
o CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a shorter-term investment horizon.
o CLASS T shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and have a shorter-term investment horizon.
Your financial representative can help you choose the share class that is
appropriate for you.
[LEFT SIDE BAR]
REDUCED CLASS A AND CLASS T SALES CHARGE
RIGHT OF ACCUMULATION: lets you add the value of any shares you own in this fund
or any other Dreyfus Premier fund, or any other fund that is advised by Founders
sold with a sales load, to the amount of your next Class A or Class T investment
for purposes of calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
<PAGE>
SHARE CLASS CHARGES
EACH SHARE CLASS has its own fee structure. In some cases, you may not have to
pay or may qualify for a reduced sales charge to buy or sell shares. Consult
your financial representative or refer to the SAI to see if this may apply to
you. Because Class A has lower expenses than Class T, if you invest $1 million
or more in the fund you should consider buying Class A shares.
SALES CHARGES
CLASS A AND CLASS T - CHARGED WHEN YOU BUY SHARES
<TABLE>
<CAPTION>
Sales charge deducted as a % OF Sales charge as a % of
YOUR INVESTMENT OFFERING PRICE YOUR NET INVESTMENT
--------------- -------------------------- -------------------
CLASS A CLASS T CLASS A CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
up to $49,999............................. 5.75% 4.50% 6.10% 4.70%
$50,000-$99,999........................... 4.50% 4.00% 4.70% 4.20%
$100,000-$249,999......................... 3.50% 3.00% 3.60% 3.10%
$250,000-$499,999......................... 2.50% 2.00% 2.60% 2.00%
$500,000-$999,999......................... 2.00% 1.50% 2.00% 1.50%
$1 million or more*....................... 0.00% 0.00% 0.00% 0.00%
-------------
* A 1.00% CDSC may be charged on any shares sold within one year of purchase
(except shares bought through dividend reinvestment). In addition, a 1.00%
CDSC may be charged on Class A shares purchased without an initial sales
charge through a "wrap account" or similar program and sold within one year
of purchase.
</TABLE>
Class T shares also carry an annual Rule 12b-1 fee of 0.25% of the class's
average daily net assets.
--------------------------------------------
<PAGE>
CLASS B - CHARGED WHEN YOU SELL SHARES
<TABLE>
<CAPTION>
CDSC as a % of your initial
investment or your redemption
YEARS SINCE PURCHASE WAS MADE (WHICHEVER IS LESS)
----------------------------- -------------------
<S> <C>
up to 2 years..................................... 4.00%
2-4 years......................................... 3.00%
4-5 years......................................... 2.00%
5-6 years......................................... 1.00%
More than 6 years................................. Shares will automatically convert to Class A
</TABLE>
Class B shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
CLASS C - CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
BUYING SHARES
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange (NYSE) (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. 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. Because the fund currently intends
to close after it reaches total assets of approximately $300 million, fund
shares are not offered to 401(k) and other group retirement plans and may not be
an appropriate investment for other programs that require regular continuing
investments.
ORDERS TO BUY AND SELL SHARES RECEIVED BY DEALERS by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
MINIMUM INVESTMENTS
Initial Additional
------------------------ -------------------------- ----------------------------
Regular accounts $10,000 $100; $500
FOR TELETRANSFER INVESTMENTS
Traditional IRAs $750 no minimum
Spousal IRAs $750 no minimum
Roth IRAs $750 no minimum
Education IRAs $500 no minimum
AFTER THE FIRST YEAR
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
----------------------------------
[LEFT SIDE BAR]
CONCEPTS TO UNDERSTAND
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding. The fund's Class
A and Class T shares are offered to the public at NAV plus a sales charge.
Classes B and C are offered at NAV, but generally are subject to higher annual
operating expenses and a CDSC.
<PAGE>
----------------------------------
SELLING SHARES
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult your financial
representative or the SAI for details.
[RIGHT SIDE BAR]
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that:
o if you send a written request to sell shares recently purchased by check or
TeleTransfer, the fund may delay sending the proceeds for up to eight
business days following the purchase of those shares
o the fund will not process wire, telephone or TeleTransfer redemption
requests for up to eight business days following the purchase of shares by
check or TeleTransfer
o if you are selling or exchanging shares you have owned for less than one
year, the fund may deduct a 1% redemption fee (not charged on shares
acquired through dividend reinvestment or sold through a systematic
withdrawal plan in connection with a qualified distribution to an IRA
account for which The Dreyfus Trust Company acts as custodian)
WRITTEN SELL ORDERS
Some circumstances require written sell orders along with signature guarantees.
These include:
o amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
o requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
----------------------------------
<PAGE>
GENERAL POLICIES
UNLESS YOU DECLINE TELEPHONE PRIVILEGES ON YOUR APPLICATION, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
o refuse any purchase or exchange request that could adversely affect
the fund or its operations, including those from any individual or
group who, in the fund's view, is likely to engage in excessive
trading (usually defined as more than four exchanges out of the fund
within a calendar year)
o refuse any purchase or exchange request in excess of 1% of the fund's
total assets
o change or discontinue its exchange privilege, or temporarily suspend
the privilege during unusual market conditions
o change its minimum investment amounts
o delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or
during unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
[LEFT SIDE BAR]
SMALL ACCOUNT POLICIES
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; and accounts opened through a financial
institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 30 days, the fund may close your account and
send you the proceeds.
<PAGE>
----------------------------------
[ICON] DISTRIBUTIONS AND TAXES
THE FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income,
and distributes any net capital gains it has realized once a year. Each share
class will generate a different dividend because each has different expenses.
Your distributions will be reinvested in the fund unless you instruct the fund
otherwise. There are no fees or sales charges on reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE to most investors (unless your
investment is in an IRA or other tax-advantaged account). High portfolio
turnover and more volatile markets can result in taxable distributions to
shareholders, regardless of whether their shares increased in value. The tax
status of any distribution is the same regardless of how long you have been in
the fund and whether you reinvest your distributions or take them in cash. In
general, distributions are taxable at the federal level as follows:
TAXABILITY OF DISTRIBUTIONS
<TABLE>
<CAPTION>
Federal tax rate for Federal tax rate for
Type of distribution 15% bracket 28% bracket or above
-------------------------------------- ----------------------------------- ---------------------------------------
<S> <C> <C>
Income dividends Ordinary income rate Ordinary income rate
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
[RIGHT SIDE BAR]
TAXES ON TRANSACTIONS
Except for tax-advantaged accounts, any sale or exchange of fund shares may
generate a tax liability. Of course, withdrawals or distributions from
tax-deferred accounts are taxable when received.
The table above can provide a guide for potential tax liability when selling or
exchanging fund shares. "Short-term capital gains" applies to fund shares sold
or exchanged up to 12 months after buying them. "Long-term capital gains"
applies to shares sold or exchanged after 12 months.
<PAGE>
[ICON] SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
<PAGE>
EXCHANGE PRIVILEGE
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class of another Dreyfus Premier fund
or Founders-advised fund. You can also exchange Class T shares into Class A
shares of certain Dreyfus Premier fixed-income funds. You can request your
exchange by contacting your financial representative. Be sure to read the
current prospectus for any fund into which you are exchanging before investing.
Any new account established through an exchange will generally have the same
privileges as your original account (as long as they are available). There is
currently no fee for exchanges, although you may be charged a sales load when
exchanging into any fund that has a higher one.
TELETRANSFER PRIVILEGE
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contacting your financial representative.
REINVESTMENT PRIVILEGE
UPON WRITTEN REQUEST, YOU CAN REINVEST up to the number of Class A, B or T
shares you redeemed within 45 days of selling them at the current share price
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
<PAGE>
ACCOUNT STATEMENTS
EVERY FUND INVESTOR automatically receives regular account statements. You'll
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
----------------------------------
<PAGE>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
[ICON] IN WRITING
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
[ICON] BY TELEPHONE
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA# 021000018
o DDA# _________
o the fund name
o the share class
o your Social Security or tax ID number
o name(s) of investor(s)
o dealer number if applicable
Call us to obtain an account number.
Return your application with the account number on the application.
[ICON] AUTOMATICALLY
____ ____
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA # 021000018
o DDA # __________
o the fund name
o the share class
o your account number
o name(s) of investor(s)
o dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
<PAGE>
TO SELL SHARES
Write a letter of instruction that includes:
o your name(s) and signature(s)
o your account number
o the fund name
o the dollar amount you want to sell
o the share class
o how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see "Account
Policies--Selling Shares").
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
[LEFT SIDE BAR]
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611
Make checks payable to:
THE DREYFUS FAMILY OF FUNDS
[RIGHT SIDE BAR]
CONCEPTS TO UNDERSTAND
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
----------------------------------
<PAGE>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
[ICON] IN WRITING
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
[ICON] BY TELEPHONE
____ ____
[ICON] AUTOMATICALLY
____ ____
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail the slip and the check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA # 021000018
o DDA # _________
o the fund name
o the share class
o your account number
o name of investor
o the contribution year
o dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
<PAGE>
TO SELL SHARES
Write a letter of instruction that includes:
o your name and signature
o your account number
o the fund name
o the dollar amount you want to sell
o the share class
o how and where to send the proceeds
o whether the distribution is qualified or premature
o whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see "Account
Policies--Selling Shares").
Mail your request to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
------------------ ---------------
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
[RIGHT SIDE BAR]
For information and assistance, contact your financial representative or call
toll free in the U.S.
1-800-554-4611
Make checks payable to:
THE DREYFUS TRUST COMPANY, CUSTODIAN
----------------------------------
<PAGE>
FOR MORE INFORMATION
DREYFUS PREMIER MICRO-CAP GROWTH FUND
A SERIES OF DREYFUS PREMIER OPPORTUNITY FUNDS SEC file number: 811-9891
More information on this fund is available free upon request, including the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Provides more details about the fund and its policies. A current SAI is on
file with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
[LEFT SIDE BAR]
TO OBTAIN INFORMATION:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
Attn: Institutional Servicing
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of certain fund documents can be
viewed online or downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room
in Washington, DC (for information, call 1-202-942-8090) or, after
paying a duplicating fee, by e-mail request to [email protected], or
by writing to the SEC's Public Reference Section, Washington, DC
20549-0102.
(C) 2000 Dreyfus Service Corporation
<PAGE>
SUBJECT TO COMPLETION, SEPTEMBER 15, 2000
--------------------------------------------------------------------------------
DREYFUS PREMIER OPPORTUNITY FUNDS
DREYFUS PREMIER NEXTECH FUND
DREYFUS PREMIER MICRO-CAP GROWTH FUND
CLASS A, CLASS B, CLASS C AND CLASS T SHARES
STATEMENT OF ADDITIONAL INFORMATION
________, 2000
-----------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier NexTech Fund dated May 24, 2000, and Dreyfus Premier Micro-Cap
Growth Fund dated _______, 2000 (each, a "Fund" and collectively, the "Funds")
of Dreyfus Premier Opportunity Funds (the "Company"), as each may be revised
from time to time. To obtain a copy of the relevant Fund's Prospectus, please
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call 1-800-554-4611.
TABLE OF CONTENTS
PAGE
Description of the Company and Funds........................................B-3
Management of the Company..................................................B-15
Management Arrangements....................................................B-19
How to Buy Shares..........................................................B-27
Distribution Plan and Shareholder Services Plan............................B-35
How to Redeem Shares.......................................................B-37
Shareholder Services.......................................................B-42
Determination of Net Asset Value...........................................B-47
Dividends, Distributions and Taxes.........................................B-48
Portfolio Transactions.....................................................B-50
Performance Information....................................................B-52
Information About the Company and Funds....................................B-53
Counsel and Independent Auditors...........................................B-55
Appendix...................................................................B-56
Financial Statement and Report of Independent Auditors.....................B-63
<PAGE>
DESCRIPTION OF THE COMPANY AND FUNDS
The Company is a Massachusetts business trust organized on April 13,
2000, and commenced operations on June 26, 2000. Each Fund is a separate series
of the Company, an open-end management investment company, known as a mutual
fund.
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser. The Manager has engaged Founders Asset Management LLC
("Founders") to serve as sub-investment adviser to Dreyfus Premier Micro-Cap
Growth Fund and to provide day-to-day management of such Fund's investments,
subject to the supervision of the Manager.
Dreyfus Service Corporation (the "Distributor") is the distributor of
each Fund's shares.
CERTAIN PORTFOLIO SECURITIES
The following information supplements and should be read in
conjunction with the relevant Fund's Prospectus.
CONVERTIBLE SECURITIES. (All Funds) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy seniority in
right of payment to all equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower ratings than
similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
Convertible securities provide for a stable stream of income with
generally higher yields than common stocks, but there can be no assurance of
current income because the issuers of the convertible securities may default on
their obligations. A convertible security, in addition to providing fixed
income, offers the potential for capital appreciation through the conversion
feature, which enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.
DEPOSITARY RECEIPTS. (All Funds) A Fund may invest in the securities
of foreign issuers in the form of American Depositary Receipts and American
Depositary Shares (collectively, "ADRs") and Global Depositary Receipts and
Global Depositary Shares (collectively, "GDRs") and other forms of depositary
receipts. 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. GDRs are
receipts issued outside the United States 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 GDRs in bearer form are designed for use
outside the United States.
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary. A depositary may establish an unsponsored
facility without participation by the issuer of the deposited security. Holders
of unsponsored depositary receipts generally bear all the costs of such
facilities, and the depositary of an unsponsored facility frequently is under no
obligation to distribute shareholder communications received from the issuer of
the deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES.
(All Funds) Each Fund may invest in obligations issued or guaranteed by one or
more foreign governments or any of their political subdivisions, agencies or
instrumentalities that the Manager (or Founders with respect to Dreyfus Premier
Micro-Cap Growth Fund) determines to be of comparable quality to the other
obligations in which the Fund may invest. Such securities also include debt
obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Examples include the International
Bank for Reconstruction and Development (the World Bank), the European Coal and
Steel Community, the Asian Development Bank and the InterAmerican Development
Bank.
WARRANTS. (All Funds) A warrant gives the holder the right to
subscribe to a specified amount of the issuing corporation's capital stock at a
set price for a specified period of time. Each Fund may invest up to 5% of its
net assets in warrants, except that this limitation does not apply to warrants
purchased by the Fund that are sold in units with, or attached to, other
securities.
INVESTMENT COMPANIES. (All Funds) A Fund may invest in securities
issued by registered and unregistered investment companies. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), the Fund's investment in such
securities, subject to certain exceptions, currently is limited to (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Fund's total
assets with respect to any one investment company and (iii) 10% of the Fund's
total assets in the aggregate. Investments in the securities of other investment
companies may involve duplication of advisory fees and certain other expenses.
ILLIQUID SECURITIES. (All Funds) Each 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. These securities may include securities that are not readily
marketable, such as securities that are subject to legal or contractual
restrictions on resale, repurchase agreements providing for settlement in more
than seven days after notice, and certain privately negotiated, non-exchange
traded options and securities used to cover such options. As to these
securities, the Fund is subject to a risk that should it 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.
MONEY MARKET INSTRUMENTS. (All Funds) When the Manager (or Founders
with respect to Dreyfus Premier Micro-Cap Growth Fund) determines that adverse
market conditions exist, a Fund may adopt a temporary defensive position and
invest up to 100% of its assets in money market instruments, including U.S.
Government securities, repurchase agreements, bank obligations and commercial
paper. A Fund also may purchase money market instruments when it has cash
reserves or in anticipation of taking a market position.
INVESTMENT TECHNIQUES
The following information supplements and should be read in
conjunction with the relevant Fund's Prospectus.
FOREIGN CURRENCY TRANSACTIONS. (All Funds) Each Fund may enter into
foreign currency transactions for a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a security the
Fund has agreed to buy or sell; to hedge the U.S. dollar value of securities the
Fund already owns, particularly if it expects a decrease in the value of the
currency in which the foreign security is denominated; or to gain exposure to
the foreign currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, a Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies. A short position 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. A
Fund's success in these transactions will depend principally on the ability of
the Manager (or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund)
to predict accurately the future exchange rates between foreign currencies and
the U.S. dollar.
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, or failure to intervene, by U.S.
or foreign governments or central banks, or by currency controls or political
developments in the United States or abroad.
SHORT-SELLING. (Dreyfus Premier NexTech Fund) In these transactions,
the Fund sells a security it does not own in anticipation of a decline in the
market value of the security. To complete the transaction, the Fund must borrow
the security to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it subsequently at the market price at the time
of replacement. The price at such time may be more or less than the price at
which the security was sold by the Fund, which would result in a loss or gain,
respectively.
Securities will not be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of the Fund's net assets. The Fund may not make a short
sale which results in the Fund having sold short in the aggregate more than 5%
of the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in which the
Fund enters into a short sale of a security it owns. At no time will more than
15% of the value of the Fund's net assets be in deposits on short sales against
the box.
Until the Fund closes its short position or replaces the borrowed
security, the Fund will: (a) segregate permissible liquid assets in an amount
that, together with the amount deposited with the broker as collateral, always
equals the current value of the security sold short; or (b) otherwise cover its
short position.
BORROWING MONEY. (All Funds) Each Fund is permitted to borrow to the
extent permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 33-1/3% of the value of its total assets. Dreyfus
Premier Micro-Cap Growth Fund, however, currently intends to borrow money only
for temporary or emergency (not leveraging) purposes, in an amount up to 15% of
the value of its total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount borrowed)
at the time the borrowing is made. While such borrowings exceed 5% of the Fund's
total assets, the Fund will not make any additional investments.
LEVERAGE. (Dreyfus Premier NexTech Fund) Leveraging (buying securities
using borrowed money) exaggerates the effect on net asset value of any increase
or decrease in the market value of the Fund's portfolio. These borrowings will
be subject to interest costs which may or may not be recovered by appreciation
of the securities purchased; in certain cases, interest costs may exceed the
return received on the securities purchased. For borrowings for investment
purposes, the 1940 Act requires the Fund to maintain continuous asset coverage
(total assets including borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If the required coverage should decline as a result
of market fluctuations or other reasons, the Fund may be required to sell some
of its portfolio holdings within three days to reduce the amount of its
borrowings and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that time.
The Fund also may be required to maintain minimum average balances in connection
with such borrowing or pay a commitment or other fee to maintain a line of
credit; either of these requirements would increase the cost of borrowing over
the stated interest rate.
The Fund may enter into reverse repurchase agreements with banks,
broker/dealers or other financial institutions. This form of borrowing involves
the transfer by the Fund of an underlying debt instrument in return for cash
proceeds based on a percentage of the value of the security. The Fund retains
the right to receive interest and principal payments on the security. At an
agreed upon future date, the Fund repurchases the security at principal plus
accrued interest. As a result of these transactions, the Fund is exposed to
greater potential fluctuations in the value of its assets and its net asset
value per share. To the extent the Fund enters into a reverse repurchase
agreement, the Fund will segregate permissible liquid assets at least equal to
the aggregate amount of its reverse repurchase obligations, plus accrued
interest, in certain cases, in accordance with releases promulgated by the
Securities and Exchange Commission. The Securities and Exchange Commission views
reverse repurchase transactions as collateralized borrowings by the Fund. Except
for these transactions, the Fund's borrowings generally will be unsecured.
DERIVATIVES. (All Funds) Each Fund may invest in, or enter into,
derivatives, such as options and futures, for a variety of reasons, including to
hedge certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for a Fund to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities. However, derivatives may entail investment
exposures that are greater than their cost would suggest, meaning that a small
investment in derivatives could have a large potential impact on a Fund's
performance.
If a Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or result
in a loss. A Fund also could experience losses if its derivatives were poorly
correlated with its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market for many
derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.
Although neither Fund will be a commodity pool, certain derivatives
subject the Funds to the rules of the Commodity Futures Trading Commission which
limit the extent to which a Fund can invest in such derivatives. A Fund may
invest in futures contracts and options with respect thereto for hedging
purposes without limit. However, a Fund may not invest in such contracts and
options for other purposes if the sum of the amount of initial margin deposits
and premiums paid for unexpired options with respect to such contracts, other
than for bona fide hedging purposes, exceeds 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and unrealized
losses on such contracts and options; provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the 5% limitation.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily variation margin system operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
derivatives purchased on an exchange. In contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly, the
Manager (or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund) will
consider the creditworthiness of counterparties to over-the-counter derivatives
in the same manner as it would review the credit quality of a security to be
purchased by a Fund. Over-the-counter derivatives are less liquid than
exchange-traded derivatives since the other party to the transaction may be the
only investor with sufficient understanding of the derivative to be interested
in bidding for it.
FUTURES TRANSACTIONS--IN GENERAL. Each Fund may enter into futures contracts in
U.S. domestic markets or, if applicable, on exchanges located outside the United
States. Foreign markets may offer advantages such as trading opportunities or
arbitrage possibilities not available in the United States. Foreign markets,
however, may have greater risk potential than domestic markets. For example,
some foreign exchanges are principal markets so that no common clearing facility
exists and an investor may look only to the broker for performance of the
contract. In addition, any profits a Fund might realize in trading could be
eliminated by adverse changes in the currency exchange rate, or the Fund could
incur losses as a result of those changes. Transactions on foreign exchanges may
include commodities which are traded on domestic exchanges or those which are
not. Unlike trading on domestic commodity exchanges, trading on foreign
commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Fund's net assets. Although each Fund
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the ability of
the Manager (or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund)
to predict correctly movements in the direction of the relevant market and, to
the extent the transaction is entered into for hedging purposes, to ascertain
the appropriate correlation between the securities being hedged and the price
movements of the futures contract. For example, if the Fund uses futures to
hedge against the possibility of a decline in the market value of securities
held in its portfolio and the prices of such securities instead increase, the
Fund will lose part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in its futures
positions. Furthermore, if in such circumstances the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin requirements. The
Fund may have to sell such securities at a time when it may be disadvantageous
to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Fund may be required to segregate permissible liquid
assets to cover its obligations relating to its transactions in derivatives. To
maintain this required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
derivative position at a reasonable price. In addition, the segregation of such
assets will have the effect of limiting the Fund's ability otherwise to invest
those assets.
SPECIFIC FUTURES TRANSACTIONS. Each Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures contract
multiplied by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock prices
of the securities that comprise it at the opening of trading in such securities
on the next business day.
Each Fund may purchase and sell interest rate futures contracts. An
interest rate future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.
Each Fund may purchase and sell currency futures. A foreign currency
future obligates the Fund to purchase or sell an amount of a specific currency
at a future date at a specific price.
OPTIONS--IN GENERAL. Each Fund may purchase call and put options, and write
(i.e. sell) covered call and put option contracts. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date. Conversely, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any time during the
option period, or at a specific date.
A covered call option written by a Fund is a call option with respect
to which the Fund owns the underlying security or otherwise covers the
transaction by segregating permissible liquid assets. A put option written by a
Fund is covered when, among other things, the Fund segregates permissible liquid
assets having a value equal to or greater than the exercise price of the option
to fulfill the obligation undertaken. The principal reason for writing covered
call and put options is to realize, through the receipt of premiums, a greater
return than would be realized on the underlying securities alone. The Fund
receives a premium from writing covered call or put options which it retains
whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, a 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.
SPECIFIC OPTIONS TRANSACTIONS. Each Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than in the case of a call, or less than in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
Each Fund may purchase and sell call and put options on foreign
currency. These options convey the right to buy or sell the underlying currency
at a price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
Each Fund may purchase cash-settled options on equity index swaps in
pursuit of its investment objective. Equity index swaps involve the exchange by
the Fund with another party of cash flows based upon the performance of an index
or a portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by a Fund of options will be subject to the ability of
the Manager (or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund)
to predict correctly movements in the prices of individual stocks, the stock
market generally or foreign currencies. To the extent such predictions are
incorrect, the Fund may incur losses.
FUTURE DEVELOPMENTS. (All Funds) A Fund may take advantage of
opportunities in the area of options and futures contracts and options on
futures contracts and any other derivatives which are not presently contemplated
for use by the Fund or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before entering into
such transactions or making any such investment, the Fund will provide
appropriate disclosure in its Prospectus or Statement of Additional Information.
LENDING PORTFOLIO SECURITIES. (All Funds) Each Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. In
connection with such loans, the Fund continues to be entitled to payments in
amounts equal to the interest, dividends or other distributions payable on the
loaned securities, which affords the Fund an opportunity to earn interest on the
amount of the loan and on the loaned securities' collateral. Loans of portfolio
securities may not exceed 33-1/3% of the value of the Fund's total assets and
the Fund will receive collateral consisting of cash, U.S. Government securities
or irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. These loans are terminable by the Fund at any time upon specified
notice. The Fund might experience risk of loss if the institution with which it
has engaged in a portfolio loan transaction breaches its agreement with the
Fund. In connection with its securities lending transactions, the Fund may
return to the borrower or a third party which is unaffiliated with the Fund, and
which is acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.
FORWARD COMMITMENTS. (All Funds) Each Fund may purchase or sell
securities on a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date of the
commitment to purchase or sell. The payment obligation and the interest rate
receivable on a forward commitment or when-issued security are fixed when the
Fund enters into the commitment, but the Fund does not make payment until it
receives delivery from the counterparty. The Fund will commit 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 will segregate permissible liquid assets at least equal at
all times to the amount of the Fund's purchase commitments.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment or when-issued basis may expose the Fund to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued basis when 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.
INVESTMENT CONSIDERATIONS AND RISKS
EQUITY SECURITIES. (All Funds) Equity securities, including common
stock, preferred stock, convertible securities and warrants, fluctuate in value,
often based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of a Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
Each Fund invests in securities issued by companies in the technology
sector, which has been among the most volatile sectors of the stock market.
Each Fund may purchase securities of small capitalization companies,
the prices of which may be subject to more abrupt or erratic market movements
than larger, more established companies. These securities typically are traded
in lower volume and the issuers typically are more subject to changes in
earnings and prospects.
Each Fund will seek to purchase securities of companies in initial
public offerings or shortly thereafter. The prices of these companies'
securities may be very volatile, rising and falling rapidly based, among other
reasons, solely on investor perceptions rather than economic reasons.
Each Fund may purchase securities of companies which have no earnings
or have experienced losses. A Fund generally will make these investments based
on a belief that actual anticipated products or services will produce future
earnings. If the anticipated event is delayed or does not occur, or if investor
perception about the company changes, the company's stock price may decline
sharply and its securities may become less liquid.
Dreyfus Premier NexTech Fund may invest in securities of venture
capital companies, which present all the risks of investment in small companies
described above plus certain additional risks. Venture capital companies
represent highly speculative investments by the Fund, because the concepts
generally are unproven, the companies have little or no track record, and the
prospect of an initial public offering is highly contingent upon factors that
are often not in the companies' control. For example, since venture capital
companies do not file periodic reports with the Securities and Exchange
Commission, there is less publicly available information about them than there
is for other small companies, if there is any at all. The Fund must therefore
rely solely on the Manager to obtain adequate information to evaluate the
potential returns from investing in these companies. In addition, venture
capital companies tend to rely even more heavily on the abilities of their key
personnel than more mature companies do. Competition for qualified personnel and
high turnover of personnel are particularly prevalent in venture capital
technology companies. The loss of one or a few key managers can substantially
hinder or delay a venture capital company's implementation of its business plan.
The Fund's ability to realize value from an investment in a venture
capital company is to a large degree dependent upon the successful completion of
the company's IPO or the sale of the venture capital company to another company,
which may not occur for a period of several years after the date of the Fund's
investment, if ever.
Venture capital funds involve all the risks of investing in small
companies and venture capital companies, plus certain additional risks. In
particular, the Fund must rely upon the judgment of the general partner or other
manager of a venture capital fund in selecting the companies in which the
venture capital fund invests and in deciding when to sell its investments. A
venture capital fund may employ a high degree of leverage, which can magnify any
losses incurred by its investors, including the Fund. A venture capital fund
will also require the Fund to pay management fees and/or performances fees or
allocations to its general partner or manager, which can reduce the return to
investors, including the Fund and its shareholders. These fees are in addition
to the management fee paid by the Fund. Investments in venture capital funds may
be highly illiquid. The Fund may not be able to dispose of a venture capital
fund holding when it wishes to, or may be able to do so only at a substantial
loss.
Each Fund, together with other investment companies advised by the
Manager, Founders and their affiliates, may own significant positions in
portfolio companies which, depending on market conditions, may affect adversely
a Fund's ability to dispose of some or all of its positions should it desire to
do so.
FOREIGN SECURITIES. (All Funds) Foreign securities markets generally
are not as developed or efficient as those in the United States. Securities of
some foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times, volatility
of price can be greater than in the United States.
Because evidence of ownership of such securities usually are held
outside the United States, a Fund will be subject to additional risks which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental restrictions
which might adversely affect or restrict the payment of principal and interest
on the foreign securities to investors located outside the country of the
issuer, whether from currency blockage or otherwise. Moreover, foreign
securities held by a Fund may trade on days when the Fund does not calculate its
net asset value and thus affect the Fund's net asset value on days when
investors have no access to the Fund.
Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable than those of
developed countries. The markets of developing countries may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many developing countries providing
investment opportunities for the Funds have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.
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.
SIMULTANEOUS INVESTMENTS. (All Funds) Investment decisions for each
Fund are made independently from those of the other Fund and investment
companies advised by the Manager (and Founders). If, however, such other
investment companies desire to invest in, or dispose of, the same securities as
a 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.
INVESTMENT RESTRICTIONS
Each Fund's investment objective is a fundamental policy, which cannot
be changed, as to a Fund, without approval by the holders of a majority (as
defined in the 1940 Act) of the Fund's outstanding voting shares. In addition,
the Funds have adopted investment restrictions numbered 1 through 7 as
fundamental policies. Investment restrictions numbered 8 through 11 are not
fundamental policies and may be changed by a vote of a majority of the Company's
Board members at any time. Neither Fund may:
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. The technology sector in general
is not considered an industry.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this Investment Restriction, the entry
into options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not constitute
borrowing.
4. Lend any securities or make loans to others, if, as a result, more
than 33-1/3% of its total assets would be lent to others, except that this
limitation does not apply to the purchase of debt obligations and the entry into
repurchase agreements. However, the Fund may lend its portfolio securities in an
amount not to exceed 33-1/3% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Company's Board.
5. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
6. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 2, 4, 9 and 10 may be deemed to give rise to a senior security.
7. 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 indices, and options on futures contracts
or indices.
8. 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
indices, and options on futures contracts or indices.
9. Purchase, sell or write puts, calls or combinations thereof, except
as described in its Prospectus and this Statement of Additional Information.
10. 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.
11. Purchase securities of other investment companies, except to the
extent permitted under the 1940 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.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision
of each Fund. The Board approves all significant agreements between the Company,
on behalf of the Funds, and those companies that furnish services to the Funds.
These companies are as follows:
The Dreyfus Corporation......................Investment Adviser
Founders Asset Management LLC................Sub-Investment Adviser to
Dreyfus Premier Micro-Cap
Growth Fund
Dreyfus Service Corporation..................Distributor
Dreyfus Transfer, Inc........................Transfer Agent
Mellon Bank, N.A.............................Custodian
Board members and officers of the Company, together with information
as to their principal business occupations during at least the last five years,
are shown below.
BOARD MEMBERS OF THE COMPANY
JOSEPH S. DiMARTINO, CHAIRMAN OF THE BOARD. Since January 1995, Chairman of the
Board of various funds in the Dreyfus Family of Funds. He also is a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk management
services to health and other benefit programs, Carlyle Industries, Inc.
(formerly, Belding Heminway Company, Inc.), a button packager and
distributor, Century Business Services, Inc., a provider of various
outsourcing functions for small and medium size companies, and QuikCAT.com,
Inc., a private company engaged in the development of high speed movement,
routing, storage and encryption of data across cable, wireless and all
other modes of data transport. For more than five years prior to January
1995, he was President, a director and, until August 1994, Chief Operating
Officer of the Manager and Executive Vice President and a director of the
Distributor. From August 1994 until December 31, 1994, he was a director of
Mellon Financial Corporation. He is 56 years old and his address is 200
Park Avenue, New York, New York 10166.
CLIFFORD L. ALEXANDER, JR., BOARD MEMBER. Chairman of the Board and Chief
Investment Officer of The Dun & Bradstreet Corporation and President of
Alexander & Associates, Inc., a management consulting firm. From 1977 to
1981, Mr. Alexander served as Secretary of the Army and Chairman of the
Board of the Panama Canal Company, and from 1975 to 1977, he was a member
of the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson
and Alexander. He is a director of American Home Products Corporation, IMS
Health, a service provider of marketing information and information
technology, The Dun & Bradstreet Corporation, MCI WorldCom and Mutual of
America Life Insurance Company. He is 66 years old and his address is 400 C
Street, N.E., Washington, D.C. 20002.
LUCY WILSON BENSON, BOARD MEMBER. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of COMSAT
Corporation and The International Executive Series. She is also a Trustee
of the Alfred P. Sloan Foundation, Vice Chairman of the Board of Trustees
of Lafayette College, Vice Chairman of the Citizens Network for Foreign
Affairs and of The Atlantic Council of the U.S. and a member of the Council
on Foreign Relations. From 1980 to 1994, Mrs. Benson was a director of The
Grumman Corporation and, from 1990 to 1998, she was a director of the
General RE Corporation, and from 1987 to 1999, she was a director of the
Logistics Management Institute. Mrs. Benson served as a consultant to the
U.S. Department of State and to SRI International from 1980 and 1981. From
1977 to 1980, she was Under Secretary of State for Security Assistance,
Science and Technology. She is 72 years old and her address is 46 Sunset
Avenue, Amherst, Massachusetts 01002.
The Company has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Company, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Company for election to the
Company's Board.
The Company typically pays its Board members its allocated portion of
an annual retainer of $25,000 and a fee of $4,000 per meeting ($500 per
telephone meeting) attended for the Company and four other funds in the Dreyfus
Family of Funds, and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board members,
if any, are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation estimated to be paid to each Board member by the Company (based on
estimated aggregate Fund assets of $1.3 billion and by all funds in the Dreyfus
Family of Funds for which such person is a Board member (the number of which is
set forth in parenthesis next to each Board member's total compensation)* for
the year ending December 31, 2000, is as follows:
<TABLE>
<CAPTION>
Total Estimated
Aggregate Estimated Compensation From the
Compensation From the Company and Fund Complex
Name of Boad Member the Company Paid to Board Member
<S> <C> <C>
Joseph S. DiMartino........................................ $______ $755,000(192)
Clifford S. Alexander...................................... $______ $127,500(46)
Lucy Wilson Benson......................................... $______ $102,500(32)
----------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund Complex, including the Funds, for which the Board
members serve.
</TABLE>
OFFICERS OF THE COMPANY
STEPHEN E. CANTER, PRESIDENT. President, Chief Operating Officer, Chief
Investment Officer and a director of the Manager, and an officer of other
investment companies advised and administered by the Manager. Mr. Canter
also is a Director and Executive Committee Member of the other investment
management subsidiaries of Mellon Financial Corporation, each of which is
an affiliate of the Manager. He is 54 years old.
MARK N. JACOBS, VICE PRESIDENT. Vice President, Secretary and General Counsel of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 54 years old.
JOSEPH CONNOLLY, VICE PRESIDENT AND TREASURER. Director - Mutual Fund Accounting
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 42 years old.
STEVEN F. NEWMAN, SECRETARY. Assistant Secretary and Associate General Counsel
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 50 years old.
MICHAEL A. ROSENBERG, ASSISTANT SECRETARY. Associate General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. He is 40 years old.
JEFF PRUSNOFSKY, ASSISTANT SECRETARY. Assistant General Counsel of the Manager,
and an officer of other investment companies advised and administered by
the Manager. He is 35 years old.
JAMES WINDELS, ASSISTANT TREASURER. Senior Accounting Manager - Equity Funds of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 41 years old.
The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166.
The Company's Board members and officers, as a group, owned less than
1% of each Fund's shares outstanding on October ____, 2000.
<PAGE>
MANAGEMENT ARRANGEMENTS
INVESTMENT ADVISER. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). Mellon is a global multibank financial holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international markets.
Mellon is among the twenty largest bank holding companies in the United States
based on total assets.
The Manager provides management services pursuant to a Management
Agreement (the "Agreement") between the Manager and the Company. As to each
Fund, the Agreement is subject to annual approval by (i) the Company's Board or
(ii) vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the continuance also is
approved by a majority of the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Company or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. As to each Fund,
the Agreement is terminable without penalty, on 60 days' notice, by the
Company's Board or by vote of the holders of a majority of such Fund's shares,
or, on not less than 90 days' notice, by the Manager. The Agreement will
terminate automatically, as to the relevant Fund, in the event of its assignment
(as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment Officer
and a director; Thomas F. Eggers, Vice Chairman-Institutional and a director;
Lawrence S. Kash, Vice Chairman; Ronald P. O'Hanley III, Vice Chairman; J. David
Officer, Vice Chairman and a director; William T. Sandalls, Jr., Executive Vice
President; Stephen R. Byers, Senior Vice President; Patrice M. Kozlowski, Senior
Vice President-Corporate Communications; Mark N. Jacobs, Vice President, General
Counsel and Secretary; Diane P. Durnin, Vice President-Product Development; Mary
Beth Leibig, Vice President-Human Resources; Ray Van Cott, Vice
President-Information Systems; Theodore A. Schachar, Vice President-Tax; Wendy
Strutt, Vice President; William H. Maresca, Controller; James Bitetto, Assistant
Secretary; Steven F. Newman, Assistant Secretary; and Mandell L. Berman, Burton
C. Borgelt, Steven G. Elliott, Martin G. McGuinn, Richard W. Sabo and Richard F.
Syron, directors.
SUB-INVESTMENT ADVISER. With respect to Dreyfus Premier Micro-Cap
Growth Fund, the Manager has entered into a Sub-Investment Advisory Agreement
with Founders (the "Founders Sub-Advisory Agreement"). As to Dreyfus Premier
Micro-Cap Growth Fund, the Founders Sub-Advisory Agreement is subject to annual
approval by (i) the Company's Board or (ii) vote of a majority (as defined in
the 1940 Act) of the Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Company or
Founders, by vote cast in person at a meeting called for the purpose of voting
on such approval. As to Dreyfus Premier Micro-Cap Growth Fund, the Founders
Sub-Advisory Agreement is terminable without penalty (i) by the Manager on 60
days' notice, (ii) by the Company's Board or by vote of the holders of a
majority of the Fund's outstanding voting securities on 60 days' notice, or
(iii) by Founders upon not less than 90 days' notice. The Founders Sub-Advisory
Agreement will terminate automatically, as to Dreyfus Premier Micro-Cap Growth
Fund, in the event of its assignment (as defined in the 1940 Act).
The following persons are officers of Founders: Christopher M.
Condron, Chairman; Richard W. Sabo, President and Chief Executive Officer;
Robert T. Ammann, Vice President; Curtis J. Anderson, Vice President; Thomas M.
Arrington, Vice President; Marissa A. Banuelos, Vice President; Angelo Barr,
Senior Vice President and National Sales Manager; Scott A. Chapman, Vice
President; Kenneth R. Christoffersen, Senior Vice President, General Counsel and
Secretary; Gregory P. Contillo, Executive Vice President and Chief Marketing
Officer; Julie D. DiIorio, Vice President; Francis P. Gaffney, Senior Vice
President; Laurine M. Garrity, Senior Vice President; Robert T. Kelly, Vice
President; Douglas A. Loeffler, Vice President; Andra C. Ozols, Vice President;
David L. Ray, Senior Vice President and Treasurer; Richard A. Sampson, Vice
President; Kevin S. Sonnett, Vice President; Tracy P. Stouffer, Vice President;
and Lisa G. Warshafsky, Vice President.
PORTFOLIO MANAGEMENT. The Manager manages each Fund's investments in
accordance with the stated policies of the Fund, subject to the approval of the
Company's Board. Founders, with respect to Dreyfus Premier Micro-Cap Growth
Fund, provides day-to-day management of the Fund's investments, subject to the
supervision of the Manager and the Company's Board. Each Fund's adviser is
responsible for investment decisions, and provides the Fund with portfolio
managers who are authorized by the Board to execute purchases and sales of
securities. Dreyfus Premier NexTech Fund's portfolio managers are Mark
Herskovitz and Barry Mills, and Dreyfus Premier Micro-Cap Growth Fund's
portfolio managers are Robert T. Ammann and _____. The Manager and Founders
maintain research departments with professional portfolio managers and
securities analysts who provide research services for the Funds and for other
funds advised by the Manager or Founders.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan and commercial banking or other relationships with the issuers of
securities purchased by a Fund. The Manager has informed the Company that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Company, the Manager, Founders and the Distributor each have
adopted a Code of Ethics that permits its personnel, subject to such respective
Code of Ethics, to invest in securities, including securities that may be
purchased or held by a Fund. The Manager's Code of Ethics subjects its
employees' personal securities transactions to various restrictions to ensure
that such trading does not disadvantage any fund advised by the Manager. In that
regard, portfolio managers and other investment personnel of the Manager must
preclear and report their personal securities transactions and holdings, which
are reviewed for compliance with the Code of Ethics and also are subject to the
oversight of Mellon's Investment Ethics Committee. Portfolio managers and other
investment personnel who comply with the preclearance and disclosure procedures
of the Code of Ethics and the requirements of the Committee may be permitted to
purchase, sell or hold securities which also may be or are held in fund(s) they
manage or for which they otherwise provide investment advice.
The Manager maintains office facilities on behalf of the Company, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Company. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fees paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
EXPENSES. All expenses incurred in the operation of the Company are
borne by the Company, except to the extent specifically assumed by the Manager
(or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund). The
expenses borne by the Company include: taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of the
Manager, Founders 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 Company's existence, costs of independent pricing services,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. In addition, each Fund's Class B,
Class C and Class T shares are subject to an annual distribution fee, and Class
A, Class B, Class C and Class T shares are subject to an annual service fee. See
"Distribution Plan and Shareholder Services Plan."
As compensation for the Manager's services to the Company, the Company
has agreed to pay the Manager a management fee at the annual rate of 1.50% of
Dreyfus Premier NexTech Fund's and 1.35% of Dreyfus Premier Micro-Cap Growth
Fund's respective average daily net assets (the "Basic Fees").
After a Fund's first twelve months of operations, the Basic Fee with
respect to that Fund will be adjusted depending on the extent to which the
investment performance of the class of shares (the "Measuring Class") expected
to bear the highest total Fund operating expenses, after expenses, exceeds or is
exceeded by the percentage change in the investment record of the NASDAQ
Composite Index (the "NASDAQ" or "Index") with respect to Dreyfus Premier
NexTech Fund and the Russell 2000 Growth Index (the "Russell 2000 Growth" or
"Index") with respect to Dreyfus Premier Micro-Cap Growth Fund, as described
below. The fee will be accrued daily and payable monthly except as described
below.
For the first twelve-month period after the Fund commences operations,
the Manager will receive the Basic Fee with no performance adjustment. For each
month thereafter, the fee will equal 1.50% with respect to Dreyfus Premier
NexTech Fund and 1.35% with respect to Dreyfus Premier Micro-Cap Growth Fund
annualized, if the performance of the Measuring Class shares equals the
performance of the relevant Index. A maximum increase to 2.50% annualized with
respect to Dreyfus Premier NexTech Fund, and 2.15% annualized with respect to
Dreyfus Premier Micro-Cap Growth Fund, would be payable if the investment
performance of the Measuring Class shares exceeds the performance of the
relevant Index by eight or more percentage points for the performance period and
the minimum fee of 0.50% annualized with respect to Dreyfus Premier NexTech Fund
and 0.55% annualized with respect to Dreyfus Premier Micro-Cap Growth Fund,
would be payable if the performance of the relevant Index exceeds the
performance of the Measuring Class shares by eight or more percentage points for
the performance period.
For Dreyfus Premier NexTech Fund, the performance period will be from
July 1, 2000 through the then-current calendar month. After the Fund has had 36
full calendar months of operations, the performance period becomes a rolling
36-month period. The Basic Fee will be increased (or decreased) at the monthly
rate of 1/12th of 0.125% depending on the extent, if any, by which the
investment performance of the Measuring Class shares exceeds by (or is exceeded
by) at least one percentage point (rounded to the higher whole point if exactly
one-half) the performance of the NASDAQ for the performance period. The maximum
increase or decrease in the Basic Fee for any month may not exceed 1/12th of
1.00%.
Therefore, starting in July 2001, the maximum monthly fee for Dreyfus
Premier NexTech Fund is 2.50% annualized, which would be payable if the
investment performance of the Measuring Class shares exceeds the performance of
the NASDAQ by eight or more percentage points for the performance period.
Starting in July 2001, the minimum monthly fee for Dreyfus Premier NexTech Fund
is 0.50% annualized, and would be payable if the performance of the NASDAQ
exceeds the investment performance of the Measuring Class shares by eight or
more percentage points for the performance period.
The following table illustrates the full range of permitted increases
or decreases to the Basic Fee for Dreyfus Premier NexTech Fund.
<TABLE>
<CAPTION>
PERCENTAGE POINT DIFFERENCE* BETWEEN
PERFORMANCE OF THE MEASURING CLASS ADJUSTMENT TO 1.50% BASIC ANNUAL FEE RATE
SHARES AND THE NASDAQ** FEE AS ADJUSTED
<S> <C> <C>
+8 +1.00% 2.50%
+7 +.875% 2.375%
+6 +.75% 2.25%
+5 +.625% 2.125%
+4 +.50% 2.00%
+3 +.375% 1.875%
+2 +.25% 1.75%
+1 +.125% 1.625%
0 0 1.50%
-1 -.125% 1.375%
-2 -.25% 1.25%
-3 -.375% 1.125%
-4 -.50% 1.00%
-5 -.625% .875%
-6 -.75% .75%
-7 -.875% .625%
-8 -1.00% .50%
--------------------------------
* Fractions of a percentage point will be rounded to the nearer whole point
(to the higher whole point if exactly one-half).
** Measured over the performance period, which beginning twelve months after
Dreyfus Premier NexTech Fund has commenced operations, will be the period
from July 1, 2000 to the most recent month-end until June 30, 2003, at
which time the performance period will become a rolling 36-month period
ending with the most recent calendar month. During the first twelve months
of operations, Dreyfus Premier NexTech Fund will pay the Manager the Basic
Fee of 1.50% of the Fund's average daily net assets with no performance
adjustment.
</TABLE>
For Dreyfus Premier Micro-Cap Growth Fund, the performance period will
be from ____, 2000 through the then-current calendar month. After the Fund has
had 36 full calendar months of operations, the performance period becomes a
rolling 36-month period. The Basic Fee will be increased (or decreased) at the
monthly rate of 1/12th of 0.10% depending on the extent, if any, by which the
investment performance of the Measuring Class shares exceeds by (or is exceeded
by) at least one percentage point (rounded to the higher whole point if exactly
one-half) the performance of the Russell 2000 Growth for the performance period.
The maximum increase or decrease in the Basic Fee for any month may not exceed
1/12th of 0.80%.
Therefore, starting in _____, 2001, the maximum monthly fee for
Dreyfus Premier Micro-Cap Growth Fund is 2.15% annualized, which would be
payable if the investment performance of the Measuring Class shares exceeds the
performance of the Russell 2000 Growth by eight or more percentage points for
the performance period. Starting in _____, 2001, the minimum monthly fee for
Dreyfus Premier Micro-Cap Growth Fund is 0.55% annualized, and would be payable
if the performance of the Russell 2000 Growth exceeds the investment performance
of the Measuring Class shares by eight or more percentage points for the
performance period.
The following table illustrates the full range of permitted increases
or decreases to the Basic Fee for Dreyfus Premier Micro-Cap Growth Fund.
<TABLE>
<CAPTION>
PERCENTAGE POINT DIFFERENCE* BETWEEN
PERFORMANCE OF THE MEASURING CLASS ADJUSTMENT TO 1.35% BASIC ANNUAL FEE RATE
SHARES AND THE RUSSELL 2000 GROWTH** FEE AS ADJUSTED
<S> <C> <C>
+8 +.80% 2.15%
+7 +.70% 2.05%
+6 +.60% 1.95%
+5 +.50% 1.85%
+4 +.40% 1.75%
+3 +.30% 1.65%
+2 +.20% 1.55%
+1 +.10% 1.45%
0 0 1.35%
-1 -.10% 1.25%
-2 -.20% 1.15%
-3 -.30% 1.05%
-4 -.40% .95%
-5 -.50% .85%
-6 -.60% .75%
-7 -.70% .65%
-8 -.80% .55%
--------------------------------
* Fractions of a percentage point will be rounded to the nearer whole point
(to the higher whole point if exactly one-half).
** Measured over the performance period, which beginning twelve months after
Dreyfus Premier Micro-Cap Growth Fund has commenced operations, will be the
period from ____, 2000 to the most recent month-end until _____, 2003, at
which time the performance period will become a rolling 36-month period
ending with the most recent calendar month. During the first twelve months
of operations, Dreyfus Premier Micro-Cap Growth Fund will pay the Manager
the Basic Fee of 1.35% of the Fund's average daily net assets with no
performance adjustment.
</TABLE>
Since the adjustment to the Basic Fee for each Fund is based on the
comparative performance of the Measuring Class shares against the relevant
Index, the controlling factor is not whether the performance of the Measuring
Class shares is up or down, but whether that performance is up or down more than
or less than that of the relevant Index. In addition, the relative performance
of the Measuring Class shares against the relevant Index is measured only for
the relevant performance period, and does not take into account performance over
longer or shorter periods of time.
The investment performance of the Measuring Class shares during any
performance period will be measured by the percentage difference between (i) the
opening net asset value ("NAV") of a Measuring Class share and (ii) the sum of
(a) the closing NAV of a Measuring Class share, (b) the value of any dividends
and distributions on such share during the period treated as if reinvested in
additional Measuring Class shares and (c) the per Measuring Class share value of
any capital gains taxes paid or payable by the Fund on undistributed realized
long-term capital gains. The measurement of the performance of the Measuring
Class shares will not include any effects resulting from the issuance, sale,
repurchase or redemption of shares of the Fund. The performance of the relevant
Index is measured by the percentage change in the Index between the beginning
and the end of the performance period with cash distributions on the securities
that constitute the relevant Index being treated as reinvested in the Index.
For the first year after Dreyfus Premier Micro-Cap Growth Fund begins
its operations, as compensation for Founder's services, the Manager has agreed
to pay Founders a sub-advisory fee at the annual rate of 0.55% of Dreyfus
Premier Micro-Cap Growth Fund's average daily net assets. After that, the
Manager has agreed to pay Founders an annual sub-advisory fee equal to one-half
of the annual investment advisory fee the Manager receives from Dreyfus Premier
Micro-Cap Growth Fund.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a Fund's net assets increases.
DISTRIBUTOR. The Distributor, a wholly-owned subsidiary of the Manager
located at 200 Park Avenue, New York, New York 10166, serves as each Fund's
distributor on a best efforts basis pursuant to an agreement with the Company
which is renewable annually.
The Distributor may pay dealers a fee based on the amount invested
through such dealers in Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and reserves the right to
cease paying these fees at any time. The Distributor will pay such fees from its
own funds, other than amounts received from a Fund, including past profits or
any other source available to it.
The Distributor, at its expense, may provide promotional incentives to
dealers that sell shares of funds advised by the Manager which are sold with a
sales load. In some instances, those incentives may be offered only to certain
dealers who have sold or may sell significant amounts of shares.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN. Dreyfus
Transfer, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Company's transfer
and dividend disbursing agent. Under a transfer agency agreement with the
Company, the Transfer Agent arranges for the maintenance of shareholder account
records for each Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions payable
by the Fund. For these services, the Transfer Agent receives a monthly fee
computed on the basis of the number of shareholder accounts it maintains for
each Fund during the month, and is reimbursed for certain out-of-pocket
expenses.
Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as custodian for the investments of each
Fund. The custodian has no part in determining the investment policies of the
Funds or which securities are to be purchased or sold by the Funds. Under a
custody agreement with the Company, the custodian holds each Fund's securities
and keeps all necessary accounts and records. For its custody services, the
custodian receives a monthly fee based on the market value of each Fund's assets
held in custody and receives certain securities transaction charges.
HOW TO BUY SHARES
GENERAL. Each Fund's shares may be purchased only by clients of
securities dealers, banks or other financial institutions (collectively,
"Service Agents"), except that full-time or part-time employees of the Manager
or any of its affiliates or subsidiaries, directors of the Manager, Board
members of a fund advised by the Manager, including members of the Company's
Board, or the spouse or minor child of any of the foregoing may purchase Class A
shares directly through the Distributor. Subsequent purchases may be sent
directly to the Transfer Agent or your Service Agent.
When purchasing Fund shares, you must specify which Class is being
purchased. Share certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Company reserves the right to
reject any purchase order.
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different from
those described in the relevant Fund's Prospectus and this Statement of
Additional Information, and, to the extent permitted by applicable regulatory
authority, may charge their clients direct fees. You should consult your Service
Agent in this regard.
The minimum initial investment in each Fund is $10,000. Subsequent
investments must be at least $100. However, the minimum initial investment is
$750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal
IRAs for a non-working spouse, Roth IRAs, Simplified Employee Pension Plans
("SEP-IRAs") and rollover IRAs) and 403(b)(7) Plans with only one participant
and $500 for Dreyfus-sponsored Education IRAs with no minimum for subsequent
purchases. The initial investment must be accompanied by the Account
Application. For full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing, the minimum initial investment for
shares of each Fund is $2,500. The Company reserves the right to offer its
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 Company. The Company reserves the right to
vary further the initial and subsequent investment minimum requirements at any
time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to certain retirement
plans. These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in a Fund
by a retirement plan. Participants and plan sponsors should consult their tax
advisers for details.
Dreyfus Premier NexTech Fund shares also may be purchased through
Dreyfus-AUTOMATIC Asset Builder(R), Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan described under "Shareholder Services." These
services enable you to make regularly scheduled investments and may provide you
with a convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit and
will not protect an investor against loss in a declining market.
Fund shares are sold on a continuous basis. 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
of each Class is computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of its assets less liabilities) by
the total number of shares of such Class outstanding. Each 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 Company's
Board. For further information regarding the methods employed in valuing the
Funds' investments, see "Determination of Net Asset Value."
If an order is received in proper form by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund by the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time) on a business day, Fund shares will be purchased at the public
offering price determined as of the closing of trading on the floor of the New
York Stock Exchange on that day. Otherwise, Fund shares will be purchased at the
public offering price determined as of the close of trading on the floor of the
New York Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on any business day
and transmitted to the Distributor or its designee by the close of its business
day (normally 5:15 p.m., New York time) will be based on the public offering
price per share determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, the orders will be based on the next
determined public offering price. It is the dealer's responsibility to transmit
orders so that they will be received by the Distributor or its designee before
the close of its business day. For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of Fund shares may be
transmitted, and must be received by the Transfer Agent, within three business
days after the order is placed. If such payment is not received within three
business days after the order is placed, the order may be canceled and the
institution could be held liable for resulting fees and/or losses.
CLASS A SHARES. The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD CLASS A SHARES
As a % of offering As a % of net asset Dealers' Reallowance as a
Amount of Transactions price per share value per share % of offering price
<S> <C> <C> <C>
Less than $50,000 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of an investment of at
least $1,000,000 or purchased through "wrap accounts" or similar programs
described below and redeemed within one year of purchase. The Distributor may
pay Service Agents an amount up to 1% of the net asset value of Class A shares
purchased by their clients as part of a $1,000,000 or more investment in Class A
shares that are subject to a CDSC.
The scale of sales loads applies to purchases of Class A shares made
by any "purchaser," which term includes an individual and/or spouse purchasing
securities for his, her or their own account or for the account of any minor
children, or a trustee or other fiduciary purchasing securities for a single
trust estate or a single fiduciary account trust estate or a single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Code) although
more than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established pursuant
to Sections 403(b), 408(k) and 457 of the Code); or an organized group which has
been in existence for more than six months, provided that it is not organized
for the purpose of buying redeemable securities of a registered investment
company and provided, that the purchases are made through a central
administration or a single dealer, or by other means which result in economy of
sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Class A shares of a Fund. The example assumes a purchase of Class A
shares of the Fund aggregating less than $50,000, subject to the schedule of
sales charges set forth above at a price based upon a net asset value of the
Fund's Class A shares of $12.50:
Net Asset Value Per Share............................... $12.50
Per Share Sales Charge
Class A - 5.75% of offering price
(6.10% of net asset value per share)........... 0.76
------
Per Share Offering Price to the Public.................. $13.26
=====
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or which otherwise have a
brokerage related or clearing arrangement with an NASD member firm or financial
institution with respect to the sale of such shares) may purchase Class A shares
for themselves directly or pursuant to an employee benefit plan or other
program, or for their spouses or minor children, at net asset value, provided
that they have furnished the Distributor with such information as it may request
from time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible to
purchase Class A shares at net asset value. In addition, Class A shares are
offered at net asset value to full-time or part-time employees of the Manager or
any of its affiliates or subsidiaries, directors of the Manager, Board members
of a fund advised by the Manager, including members of the Company's Board, or
the spouse or minor child of any of the foregoing.
Class A shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided that,
at the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders Asset Management LLC ("Founders"), an affiliate of the
Manager, or certain other products made available by the Distributor to such
plans, or (b) invested all of its assets in certain funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares be
sold for the benefit of clients participating in a "wrap account" or a similar
program under which such clients pay a fee to such broker-dealer or other
financial institution. A CDSC of 1% will be assessed at the time of redemption
of Class A shares purchased without an initial sales charge as part of an
investment through a "wrap account" or a similar program and redeemed within one
year of such purchase.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by an
insurance company pursuant to the laws of any State or territory of the United
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501(c)(3) of the Code) investing
$50,000 or more in Fund shares, and (iv) a charitable remainder trust (as
defined in Section 501(c)(3) of the Code).
CLASS B SHARES. The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions of
Class B shares as described in the relevant Fund's Prospectus and in this
Statement of Additional Information under "How to Redeem Shares--Contingent
Deferred Sales Charge--Class B Shares."
Approximately six years after the date of purchase, Class B shares
automatically will convert to Class A shares, based on the relative net asset
values for shares of each such Class. Class B shares that have been acquired
through the reinvestment of dividends and distributions will be converted on a
pro rata basis together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the total
Class B shares not acquired through the reinvestment of dividends and
distributions.
CLASS C SHARES. The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on redemptions of Class C
shares made within the first year of purchase. See "How to Redeem
Shares--Contingent Deferred Sales Charge--Class C Shares."
CLASS B AND CLASS C SHARES. The Distributor compensates certain
Service Agents for selling Class B and Class C shares at the time of purchase
from its own assets. The proceeds of the CDSC and the Distribution Plan fee, in
part, are used to defray these expenses.
CLASS T SHARES. The public offering price for Class T shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load Class T Shares
As a % of offering As a % of net asset Dealers' Reallowance as a
Amount of Transactions price per share value per share % of offering price
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.00
$50,000 to less than $100,000 4.00 4.20 3.50
$100,000 to less than $250,000 3.00 3.10 2.50
$250,000 to less than $500,000 2.00 2.00 1.75
$500,000 to less than $1,000,000 1.50 1.50 1.25
$1,000,000 or more -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class T
shares purchased without an initial sales charge as part of an investment of at
least $1,000,000 and redeemed within one year of purchase. The Distributor may
pay Service Agents an amount up to 1% of the net asset value of Class T shares
purchased by their clients that are subject to a CDSC. Because the expenses
associated with Class A shares will be lower than those associated with Class T
shares, purchasers investing $1,000,000 or more in a Fund generally will find it
beneficial to purchase Class A shares rather than Class T shares.
Class T shares also may be purchased at net asset value, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a registered
open-end management investment company not managed by the Manager or its
affiliates. The purchase of Class T shares of a Fund must be made within 60 days
of such redemption and the shares redeemed must have been subject to an initial
sales charge or a contingent deferred sales charge.
The scale of sales loads applies to purchases of Class T shares made
by any "purchaser," as defined above under Class A Shares.
Set forth below is an example of the method of computing the offering
price of the Class T shares of a Fund. The example assumes a purchase of Class T
shares of the Fund aggregating less than $50,000, subject to the schedule of
sales charges set forth above at a price based upon a net asset value of the
Fund's Class T shares of $12.50:
Net Asset Value Per Share............................... $12.50
Per Share Sales Charge
Class T - 4.50% of offering price
(4.70% of net asset value per share)........... 0.59
------
Per Share Offering Price to the Public.................. $13.09
=====
Class T shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class T shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders, or certain other products made available by the Distributor
to such plans, or (b) invested all of its assets in funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
DEALER REALLOWANCE--CLASS A AND CLASS T SHARES. The dealer reallowance
provided with respect to Class A and Class T shares may be changed from time to
time but will remain the same for all dealers. The Distributor, at its own
expense, may provide additional promotional incentives to dealers that sell
shares of funds advised by the Manager which are sold with a sales load, such as
Class A and Class T shares. In some instances, these incentives may be offered
only to certain dealers who have sold or may sell significant amounts of such
shares.
RIGHT OF ACCUMULATION--CLASS A AND CLASS T SHARES. Reduced sales loads
apply to any purchase of Class A and Class T shares, shares of other funds in
the Dreyfus Premier Family of Funds, shares of certain other funds advised by
the Manager or Founders, which are sold with a sales load and shares acquired by
a previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined below, where the
aggregate investment including such purchase, is $50,000 or more. If, for
example, you previously purchased and still hold Class A or Class T shares of an
Eligible Fund with an aggregate current market value of $40,000 and subsequently
purchase Class A or Class T shares of a Fund or any other Eligible Fund having a
current value of $20,000, the sales load applicable to the subsequent purchase
would be reduced to 4.50% of the offering price in the case of Class A shares or
4.00% of the offering price in the case of Class T shares. All present holdings
of Eligible Funds may be combined to determine the current offering price of the
aggregate investment in ascertaining the sales load applicable to each
subsequent purchase.
To qualify at the time of purchase, you or your Service Agent must
notify the Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to confirmation of
your holdings through a check of appropriate records.
DREYFUS TELETRANSFER PRIVILEGE. You may purchase shares by telephone
if you have checked the appropriate box and supplied the necessary information
on the Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House ("ACH") member may be so designated.
Dreyfus TELETRANSFER purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day the Transfer Agent and
the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the Dreyfus TELETRANSFER Privilege, the initial payment for
purchase of shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature-guaranteed. See "How to Redeem Shares--Dreyfus TELETRANSFER
Privilege."
REOPENING AN ACCOUNT. You 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.
DISTRIBUTION PLAN AND
SHAREHOLDER SERVICES PLAN
Class B, Class C and Class T shares of each Fund are subject to a
Distribution Plan, and Class A, Class B, Class C and Class T shares of each Fund
are subject to a Shareholder Services Plan.
DISTRIBUTION PLAN. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 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 Company's Board has adopted
such a plan (the "Distribution Plan") with respect to each Fund's Class B, Class
C and Class T shares pursuant to which each Fund pays the Distributor for
distributing each such Class of shares at the annual rate of 0.75% of the value
of the average daily net assets of Class B and Class C shares, and 0.25% of the
value of the average daily net assets of Class T shares. The Company's Board
believes that there is a reasonable likelihood that the Distribution Plan will
benefit each Fund and the holders of its Class B, Class C and Class T shares.
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 Board for its review. In addition, the Distribution Plan provides that it
may not be amended to increase materially the costs which holders of a Fund's
Class B, Class C or Class T shares may bear pursuant to the Distribution Plan
without the approval of the holders of such shares and that other material
amendments of the Distribution Plan must be approved by the Company's Board, and
by the Board members who are not "interested persons" (as defined in the 1940
Act) of the Company 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. As to each Fund, the
Distribution Plan is subject to annual approval by such vote of the Board cast
in person at a meeting called for the purpose of voting on the Distribution
Plan. As to the relevant Class of shares of a Fund, the Distribution Plan may be
terminated at any time by vote of a majority of the Board members 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
such Class of shares.
SHAREHOLDER SERVICES PLAN. The Company has adopted a Shareholder
Services Plan with respect to each Fund, pursuant to which each Fund pays the
Distributor for the provision of certain services to the holders of its Class A,
Class B, Class C and Class T shares a fee at the annual rate of 0.25% of the
value of the average daily net assets of each such Class. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing reports and
other information, and services related to the maintenance of such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make payments
to certain Service Agents in respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan and the purposes for which such expenditures were incurred, must
be made to the Board for its review. In addition, the Shareholder Services Plan
provides that material amendments must be approved by the Company's Board, and
by the Board members who are not "interested persons" (as defined in the 1940
Act) of the Company 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. As to each Fund,
the Shareholder Services Plan is subject to annual approval by such vote of the
Board members cast in person at a meeting called for the purpose of voting on
the Shareholder Services Plan. As to the relevant Class of shares of a Fund, the
Shareholder Services Plan is terminable at any time by vote of a majority of the
Board members who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services Plan or
in any agreements entered into in connection with the Shareholder Services Plan.
<PAGE>
HOW TO REDEEM SHARES
GENERAL. Each 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(R)
(which is available for Dreyfus Premier NexTech Fund only) and subsequently
submit a written redemption request to the Transfer Agent, the Fund may delay
sending the redemption proceeds for up to eight business days after the purchase
of such shares. In addition, a Fund will reject requests to redeem shares by
wire or telephone or pursuant to the Dreyfus TELETRANSFER Privilege, for a
period of eight days after receipt by the Transfer Agent of the purchase check,
the Dreyfus TELETRANSFER purchase or the Dreyfus AUTOMATIC Asset Builder(R)
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.
Fund shares may not be redeemed until the Transfer Agent has received your
Account Application.
REDEMPTION FEE. (Dreyfus Premier Micro-Cap Growth Fund only) The Fund
will deduct a redemption fee equal to 1% of the net asset value of Fund shares
redeemed (including redemptions through the use of the Fund Exchanges service)
less than one year following the issuance of such shares. The redemption fee
will be deducted from the redemption proceeds and retained by the Fund.
No redemption fee will be charged on the redemption or exchange of
shares acquired through the reinvestment of dividends or capital gain
distributions or on shares redeemed through a systematic withdrawal plan in
connection with a qualified distribution to an IRA account for which The Dreyfus
Trust Company acts as custodian. The redemption fee may be waived, modified or
terminated at any time.
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES. A CDSC payable to
the Distributor is imposed on any redemption of Class B shares which reduces the
current net asset value of your Class B shares to an amount which is lower than
the dollar amount of all payments by you for the purchase of Class B shares of
the Fund held by you at the time of redemption. No CDSC will be imposed to the
extent that the net asset value of the Class B shares redeemed does not exceed
(i) the current net asset value of Class B shares acquired through reinvestment
of dividends or capital gain distributions, plus (ii) increases in the net asset
value of your Class B shares above the dollar amount of all your payments for
the purchase of Class B shares held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be applied
to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class B
shares until the time of redemption of such shares. Solely for purposes of
determining the number of years from the time of any payment for the purchase of
Class B shares, all payments during a month will be aggregated and deemed to
have been made on the first day of the month. The Distributor receives the
proceeds from the CDSC imposed on the redemption of Class B shares.
The following table sets forth the rates of the CDSC for Class B
shares:
CDSC as a % of
Year Since Amount Invested or
Purchase Payment Redemption Proceeds
Was Made (whichever is less)
First....................................... 4.00
Second...................................... 4.00
Third....................................... 3.00
Fourth...................................... 3.00
Fifth....................................... 2.00
Sixth....................................... 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amounts of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of shares
purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired five additional
shares through dividend reinvestment. During the second year after the purchase
the investor decided to redeem $500 of the investment. Assuming at the time of
the redemption the net asset value had appreciated to $12 per share, the value
of the investor's shares would be $1,260 (105 shares at $12 per share). The CDSC
would not be applied to the value of the reinvested dividend shares and the
amount which represented appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of $9.60.
CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES. A CDSC of 1% is
imposed on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be the
method used in calculating the CDSC for Class B shares. See "Contingent Deferred
Sales Charge--Class B Shares" above. The Distributor receives the proceeds from
the CDSC imposed on the redemption of Class C shares.
WAIVER OF CDSC. The CDSC may be waived in connection with (a)
redemptions made within one year after the death or disability, as defined in
Section 72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger, acquisition of
assets or otherwise, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 70-1/2 in the case of an IRA
or Keogh plan or custodial account pursuant to Section 403(b) of the Code, and
(e) redemptions pursuant to the Automatic Withdrawal Plan, as described below.
If the Company's Board determines to discontinue the waiver of the CDSC, the
disclosure herein will be revised appropriately. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such waiver will have the
CDSC waived as provided in the relevant Fund's Prospectus or this Statement of
Additional Information at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
entitlement.
REDEMPTION THROUGH A SELECTED DEALER. If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected Dealer. If
the Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent prior to the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), the redemption request will
be effective on that day. If a redemption request is received by the Transfer
Agent after the close of trading on the floor of the New York Stock Exchange,
the redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to your
account with the Selected Dealer. See "How to Buy Shares" for a discussion of
additional conditions or fees that may be imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by dealers
by the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee prior to the
close of its business day (normally 5:15 p.m., New York time), are effected at
the price determined as of the close of trading on the floor of the New York
Stock Exchange on that day. Otherwise, the shares will be redeemed at the next
determined net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE. Upon written request, you may reinvest up to
the number of Class A, Class B or Class T shares you have redeemed, within 45
days of redemption, at the then-prevailing net asset value without a sales load,
or reinstate your account for the purpose of exercising Fund Exchanges. Upon
reinstatement, with respect to Class B shares, or Class A or Class T shares if
such shares were subject to a CDSC, your account will be credited with an amount
equal to the CDSC previously paid upon redemption of the shares reinvested. The
Reinvestment Privilege may be exercised only once.
WIRE REDEMPTION PRIVILEGE. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption 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.
Ordinarily, the Company will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer Agent of
the redemption request in proper form. Redemption proceeds ($1,000 minimum) will
be transferred by Federal Reserve wire only to the commercial bank account
specified by you on the Account Application or Shareholder Services Form, or to
a correspondent bank if your bank is not a member of the Federal Reserve System.
Fees ordinarily are imposed by such bank and borne by the investor. Immediate
notification by the correspondent bank to your bank is necessary to avoid a
delay in crediting the funds to your bank account.
If you have access to telegraphic equipment, you 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
If you do not have direct access to telegraphic equipment, you may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171,
toll free. You should advise the operator that the above transmittal code must
be used and should also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent. This
request must be signed by each shareholder, with each signature guaranteed as
described below under "Share Certificates; Signatures."
DREYFUS TELETRANSFER PRIVILEGE. You may request by telephone that
redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an ACH member may be designated. Holders of jointly registered Fund or
bank accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $500,000 within any 30-day period. You
should be aware that if you have selected the Dreyfus TELETRANSFER Privilege,
any request for a wire redemption will be effected as a Dreyfus TELETRANSFER
transaction through the ACH system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in your account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "How to Buy Shares--Dreyfus TELETRANSFER Privilege."
SHARE 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 the telephone number listed on the cover.
REDEMPTION COMMITMENT. The Company has committed itself to pay in cash
all redemption requests by any shareholder of record of a Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value of
such Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such amount, the
Board reserves the right to make payments in whole or in part in securities or
other assets in case of an emergency or any time a cash distribution would
impair the liquidity of the Fund to the detriment of the existing shareholders.
In such event, the securities would be valued in the same manner as the Fund's
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 relevant Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange Commission
so that disposal of the Fund's investments or determination of its net asset
value is not reasonably practicable, or (c) for such other periods as the
Securities and Exchange Commission by order may permit to protect the Fund's
shareholders.
SHAREHOLDER SERVICES
FUND EXCHANGES. Clients of certain Service Agents may purchase, in
exchange for shares of a Fund, shares of the same Class of the other Fund or
another fund in the Dreyfus Premier Family of Funds, shares of the same Class of
certain funds advised by Founders, or shares of certain other funds in the
Dreyfus Family of Funds, and, with respect to Class T shares of a Fund, Class A
shares of certain Dreyfus Premier fixed-income funds, to the extent such shares
are offered for sale in your state of residence. Dreyfus Premier Micro-Cap
Growth Fund will deduct a redemption fee equal to 1% of the net asset value of
Fund shares exchanged where the exchange occurs less than one year following the
issuance of such shares. 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 offered without a sales load will
be made without a sales load in shares of other funds offered
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"), but 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.
E. Shares of funds subject to a CDSC exchanged for shares of another
fund will be subject to the higher applicable CDSC of the two
funds and, for purposes of calculating CDSC rates and conversion
periods, if any, will be deemed to have been held since the date
the shares being exchanged were initially purchased.
To accomplish an exchange under item D above, you or your Service
Agent acting on your behalf must notify the Transfer Agent of your prior
ownership of Fund shares and your account number.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. The ability to issue exchange instructions by telephone is given to
all Fund shareholders automatically, unless you check the applicable "No" box on
the Account Application, indicating that you specifically refuse this Privilege.
By using the Telephone Exchange Privilege, you authorize the Transfer Agent to
act on telephonic instructions (including over The Dreyfus Touch(R) automated
telephone system) 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. 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. No fees currently are
charged shareholders directly in connection with exchanges, although the Company
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules promulgated
by the Securities and Exchange Commission.
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.
DREYFUS AUTO-EXCHANGE PRIVILEGE. (Dreyfus Premier NexTech Fund only)
Dreyfus Auto-Exchange Privilege permits you to purchase, in exchange for shares
of the Fund, shares of another fund in the Dreyfus Premier Family of Funds (not
including Dreyfus Premier Micro-Cap Growth Fund), shares of the same Class of
certain funds advised by Founders, or shares of certain other funds in the
Dreyfus Family of Funds, and, with respect to Class T shares of the Fund, Class
A shares of certain Dreyfus Premier fixed-income funds, of which you are a
shareholder. This Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by you. You
will be notified if your account falls below the amount designated to be
exchanged under this Privilege. In this case, your 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 accounts 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.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Company reserves the right to reject any
exchange request in whole or in part. Shares may be exchanged only between
accounts having identical names and other identifying designations. The Fund
Exchanges service or Dreyfus Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
DREYFUS-AUTOMATIC ASSET BUILDER(R). (Dreyfus Premier NexTech Fund
only) Dreyfus-AUTOMATIC Asset Builder permits you to purchase the Fund's 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.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE. (Dreyfus Premier NexTech
Fund only) Dreyfus Government Direct Deposit Privilege enables you to purchase
the Fund's 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 U.S. Government automatically deposited into your fund
account. You may deposit as much of such payments as you elect.
DREYFUS PAYROLL SAVINGS PLAN. (Dreyfus Premier NexTech Fund only)
Dreyfus Payroll Savings Plan permits you to purchase the Fund's 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 ACH
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. It
is the sole responsibility of your employer to arrange for transactions under
the Dreyfus Payroll Savings Plan.
DREYFUS DIVIDEND OPTIONS. (Dreyfus Premier NexTech Fund only) Dreyfus
Dividend Sweep allows you to invest automatically your dividends or dividends
and capital gain distributions, if any, from the Fund in shares of the same
Class of another fund in the Dreyfus Premier Family of Funds (not including
Dreyfus Premier Micro-Cap Growth Fund), shares of the same Class of certain
funds advised by Founders, or shares of certain other funds in the Dreyfus
Family of Funds, and with respect to Class T shares of a Fund, Class A shares of
certain Dreyfus Premier fixed-income funds, of which you are 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
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 that charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), but 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 CDSC and the applicable CDSC,
if any, will be imposed upon redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends
or dividends and capital gain distributions, if any, from Dreyfus Premier
NexTech Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an ACH member may be so designated.
Banks may charge a fee for this service.
AUTOMATIC WITHDRAWAL PLAN. (Dreyfus Premier NexTech Fund only) 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. Withdrawal payments are the proceeds from sales
of Fund shares, not the yield on the shares. If withdrawal payments exceed
reinvested dividends and distributions, your shares will be reduced and
eventually may be depleted. The Automatic Withdrawal Plan may be terminated at
any time by you, the Company or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Certain retirement plans, including Dreyfus-sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal plan
from such retirement plans. Participants should consult their retirement plan
sponsor and tax adviser for details. Such a withdrawal plan is different than
the Automatic Withdrawal Plan.
No CDSC with respect to Class B shares of the Fund will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that any amount
withdrawn under the plan does not exceed on an annual basis 12% of the greater
of (1) the account value at the time of the first withdrawal under the Automatic
Withdrawal Plan, or (2) the account value at the time of the subsequent
withdrawal. Withdrawals with respect to Class B shares under the Automatic
Withdrawal Plan that exceed such amounts will be subject to a CDSC. Withdrawals
of Class A and Class T shares subject to a CDSC and Class C shares under the
Automatic Withdrawal Plan will be subject to any applicable CDSC. Purchases of
additional Class A and Class T shares where the sales load is imposed
concurrently with withdrawals of Class A and Class T shares generally are
undesirable.
LETTER OF INTENT - CLASS A AND CLASS T SHARES. (Dreyfus Premier
NexTech Fund only) By signing a Letter of Intent form, which can be obtained by
calling 1-800-554-4611, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a 13 month
period pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable sales
load, the offering price of shares you hold (on the date of submission of the
Letter of Intent) in any Eligible Fund that may be used toward "Right of
Accumulation" benefits described above may be used as a credit toward completion
of the Letter of Intent. However, the reduced sales load will be applied only to
new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not purchase
the full amount indicated in the Letter of Intent. The escrow will be released
when you fulfill the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load reduction, the sales
load will be adjusted to reflect your total purchase at the end of 13 months. If
total purchases are less than the amount specified, you will be requested to
remit an amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If such
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of Class A or Class T shares of the Fund held in escrow to
realize the difference. Signing a Letter of Intent does not bind you to
purchase, or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended purchase to
obtain the reduced sales load. At the time you purchase Class A or Class T
shares, you must indicate your intention to do so under a Letter of Intent.
Purchases pursuant to a Letter of Intent will be made at the then-current net
asset value plus the applicable sales load in effect at the time such Letter of
Intent was executed.
CORPORATE PENSION/PROFIT-SHARING AND RETIREMENT PLANS. The Company
makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs
for a non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education
IRAs), 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan,
a 403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
SHARES MAY BE PURCHASED IN CONNECTION WITH THESE PLANS ONLY BY DIRECT
REMITTANCE TO THE ENTITY ACTING AS CUSTODIAN. PURCHASES FOR THESE PLANS MAY NOT
BE MADE IN ADVANCE OF RECEIPT OF FUNDS.
You should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and tax
implications, and you should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
VALUATION OF PORTFOLIO SECURITIES. Each Fund's portfolio 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 that
open short positions are valued at the asked price. Bid price is used when no
asked price is available. Any assets or liabilities initially expressed in terms
of foreign currency will be translated into U.S. dollars at the midpoint of the
New York interbank market spot exchange rate as quoted on the day of such
translation or, if no such rate is quoted on such date, such other quoted market
exchange rate as may be determined to be appropriate by the Manager. Forward
currency contracts will be valued at the current cost of offsetting the
contract. If a Fund has to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset value may not take
place contemporaneously with the determination of prices of certain of the
Fund's securities. Short-term investments may be carried at amortized cost,
which approximates value. Expenses and fees, including the management fee and
fees pursuant to the Distribution Plan, if applicable, and the Shareholder
Services Plan, are accrued daily and taken into account for the purpose of
determining the net asset value of the relevant Fund's shares.
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Board, are valued at fair value as determined in
good faith by the Board. The Board will review the method of valuation on a
current basis. In making their good faith valuation of restricted securities,
the Board members generally will take the following factors into consideration:
restricted securities which are, or are convertible into, securities of the same
class of securities for which a public market exists usually will be valued at
market value less the same percentage discount at which purchased. This discount
will be revised periodically by the Board if the Board members believe that it
no longer reflects the value of the restricted securities. Restricted securities
not of the same class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment from cost will be
based upon considerations deemed relevant by the Board.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund intends to qualify as a "regulated investment company" under
the Code, if such qualification is in the best interest 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 such income
and gains are distributed to shareholders. 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 and
meet certain asset diversification and other requirements. If a Fund does not
qualify as a regulated investment company, it will be treated for tax purposes
as an ordinary corporation subject to Federal income tax. The term "regulated
investment company" does not imply the supervision of management or investment
practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Any dividend or distribution paid shortly after your purchase may have
the effect of reducing the aggregate net asset value of your shares below the
cost of your investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the relevant
Fund's Prospectus. In addition, if a shareholder holds shares of a Fund for six
months or less and has received a capital gain distribution with respect to such
shares, any loss incurred on the sale of such shares will be treated as
long-term capital loss to the extent of the capital gain distribution received.
In general, dividends (other than capital gain dividends) paid by a
Fund to U.S. corporate shareholders may be eligible for the dividends received
deduction to the extent that the Fund's income consists of dividends paid by
U.S. corporations on shares that have been held by the Fund for at least 46 days
during the 90-day period commencing 45 days before the shares become
ex-dividend. In order to claim the dividends received deduction, the investor in
the Fund must have held its shares in the Fund for at least 46 days during the
90-day period commencing 45 days before the Fund shares become ex-dividend.
Additional restrictions on an investor's ability to claim the dividends received
deduction may apply.
A Fund may qualify for and make an election under which 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. The Fund may make that election 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 certain
distribution requirements. The foreign tax credit available to shareholders is
subject to certain limitations.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies and non-U.S. dollar
denominated securities (including debt instruments and certain forward contracts
and options) may be treated as ordinary income or loss. In addition, all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds will be treated as ordinary income. Finally, all or a
portion of the gain realized from engaging in "conversion transactions"
(generally including certain transactions designed to convert ordinary income
into capital gain) may be treated as ordinary income.
Gain or loss, if any, realized by a Fund from certain forward
contracts and options transactions ("Section 1256 contracts") 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 Section 1256 contracts as well as
from closing transactions. In addition, any Section 1256 contracts 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 a Fund involving certain futures or
forward contracts or options transactions with respect to actively traded
personal property may be considered, for tax purposes, to constitute
"straddles." To the extent the straddle rules apply to positions established by
the Fund, losses realized by the Fund may be deferred to the extent of
unrealized gain in the offsetting position. In addition, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gains on straddle positions may be treated as short-term
capital gains or ordinary income. Certain of the straddle positions held by the
Fund may constitute "mixed straddles." The Fund may make one or more elections
with respect to the treatment of "mixed straddles," resulting in different tax
consequences. In certain circumstances, the provisions governing the tax
treatment of straddles override or modify certain of the provisions discussed
above.
If a Fund either (1) holds an appreciated financial position with
respect to stock, certain debt obligations, or partnership interests
("appreciated financial position") and then enters into a short sale, futures,
forward, or offsetting notional principal contract (collectively, a "Contract")
respecting the same or substantially identical property or (2) holds an
appreciated financial position that is a Contract and then acquires property
that is the same as, or substantially identical to, the underlying property, the
Fund generally will be taxed as if the appreciated financial position were sold
at its fair market value on the date the Fund enters into the financial position
or acquires the property, respectively.
If a Fund enters into certain derivatives (including forward
contracts, long positions under notional principal contracts, and related puts
and calls) with respect to equity interests in certain pass-thru entities
(including other regulated investment companies, real estate investment trusts,
partnerships, real estate mortgage investment conduits and certain trusts and
foreign corporations), long-term capital gain with respect to the derivative may
be recharacterized as ordinary income to the extent it exceeds the long-term
capital gain that would have been realized had the interest in the pass-thru
entity been held directly by the Fund during the term of the derivative
contract. Any gain recharacterized as ordinary income will be treated as
accruing at a constant rate over the term of the derivative contract and may be
subject to an interest charge. The Treasury has authority to issue regulations
expanding the application of these rules to derivatives with respect to debt
instruments and/or stock in corporations that are not pass-thru entities.
Investment by a Fund in securities issued or acquired at a discount,
or providing for deferred interest or for payment of interest in the form of
additional obligations, could under special tax rules affect the amount, timing
and character of distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the Fund could be
required each year to accrue a portion of the discount (or deemed discount) at
which the securities were issued and to distribute such income in order to
maintain its qualification as a regulated investment company. In such case, the
Fund may have to dispose of securities which it might otherwise have continued
to hold in order to generate cash to satisfy the distribution requirements.
If a 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 held beyond the
end of the Fund's taxable year may be treated as ordinary income under Section
1291 of the Code and, with respect to PFIC securities that are marked-to-market,
under Section 1296 of the Code.
Federal regulations require that you provide a certified taxpayer
identification number ("TIN") upon opening or reopening an account. See the
Account Application for further information concerning this requirement. Failure
to furnish a certified TIN to the Company could subject you to a $50 penalty
imposed by the Internal Revenue Service.
PORTFOLIO TRANSACTIONS
Purchases and sales of portfolio securities on a securities exchange
or over-the-counter market (or underwritten offerings with respect to purchases
only) are effected by the Manager (or Founders with respect to Dreyfus Premier
Micro-Cap Growth Fund) through brokers, dealers or underwriters, as the case may
be. Allocation of brokerage transactions, including their frequency, is made in
the best judgment of the Manager (or Founders with respect to Dreyfus Premier
Micro-Cap Growth Fund) 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 research facilities of the Manager (or
Founders with respect to Dreyfus Premier Micro-Cap Growth Fund) with statistical
data, investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be performed
by the Manager (or Founders with respect to Dreyfus Premier Micro-Cap Growth
Fund). Such information may be useful to the Manager or Founders in serving both
the Fund and other funds the Manager and Founders advise and, conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Manager or Founders in carrying out its obligations to the
Fund.
Sales by a broker of shares of a Fund or other funds managed, advised
or administered by the Manager or its affiliates 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, in
certain cases, may result from two or more funds advised or administered by the
Manager or Founders being engaged simultaneously in the purchase or sale of the
same security. Certain of a 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, a Fund will deal with the primary market makers
unless a more favorable price or execution otherwise is obtainable. Foreign
exchange transactions are made with banks or institutions in the interbank
market at prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as within a
year. In periods in which extraordinary market conditions prevail, the Manager
(or Founders with respect to Dreyfus Premier Micro-Cap Growth Fund) will not be
deterred from changing a Fund's 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 the Manager (or Founders with respect to Dreyfus Premier
Micro-Cap Growth Fund) based upon its knowledge of available information as to
the general level of commissions paid by other institutional investors for
comparable services. Higher portfolio turnover rates usually generate additional
brokerage commissions and transaction costs and any short-term gains realized
from these transactions are taxable to shareholders as ordinary income.
The Company contemplates that, consistent with the policy of obtaining
prompt execution of orders at the most favorable net price, brokerage
transactions may be conducted through the Manager, Founders or their affiliates,
including Dreyfus Investment Services Corporation ("DISC") and Dreyfus Brokerage
Services, Inc. ("DBS"). The Company's Board has adopted procedures in conformity
with Rule 17e-1 under the 1940 Act to ensure that all brokerage commissions paid
to the Manager, Founders or their affiliates are reasonable and fair.
<PAGE>
PERFORMANCE INFORMATION
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum offering
price in the case of Class A or Class T) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial investment,
taking the "n"th root of the quotient (where "n" is the number of years in the
period) and subtracting 1 from the result. A Class' average annual total return
figures calculated in accordance with such formula assume that in the case of
Class A or Class T, the maximum sales load has been deducted from the
hypothetical initial investment at the time of purchase or in the case of Class
B or Class C, the maximum applicable CDSC has been paid upon redemption at the
end of the period.
Aggregate total return is calculated by subtracting the amount of the
Fund's net asset value (maximum offering price in the case of Class A or Class
T) 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 any applicable CDSC), and
dividing the result by the net asset value (maximum offering price in the case
of Class A or Class T) per share at the beginning of the period. Aggregate total
return also may be calculated based on the net asset value per share at the
beginning of the period instead of the maximum offering price per share at the
beginning of the period for Class A or Class T shares or without giving effect
to any applicable CDSC at the end of the period for Class B or Class C shares.
In such cases, the calculation would not reflect the deduction of the sales load
with respect to Class A or Class T shares or any applicable CDSC with respect to
Class B or Class C shares, which, if reflected, would reduce the performance
quoted.
Comparative performance information may be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Micropal, Morningstar, Inc., Standard & Poor's 500 Composite
Stock Price Index, Standard & Poor's MidCap 400 Index, the Dow Jones Industrial
Average, Russell Mid Cap Index, Russell 2000 Index, Russell 2000 Growth Index,
Russell 2000 Value Index, the NASDAQ, the NASDAQ 100, MONEY MAGAZINE, Wilshire
5000 Index and other industry publications. From time to time, advertising
materials for a Fund may include biographical information relating to its
portfolio manager, and may refer to or include commentary by the Fund's
portfolio manager relating to investment strategy (including "growth" and
"value" investing), asset growth, current or past business, political, economic
or financial conditions and other matters of general interest to investors.
Also, from time to time, advertising materials for a Fund may include
information concerning retirement and investing for retirement, may refer to the
approximate number of then-current Fund shareholders and may refer to Lipper or
Morningstar ratings and related analysis supporting the ratings. In addition,
from time to time, advertising materials may refer to studies performed by the
Manager or its affiliates, such as "The Dreyfus Tax Informed Investing Study" or
"The Dreyfus Gender Investment Comparison Study" or other such studies.
Advertisements for a Fund also may discuss the technology sector and sectors
within the technology sector including the growth and performance of such
sectors and the stocks included in such sectors, the potential benefits and
risks of investing in the technology sector and small-cap and micro-cap stocks
and the number of stocks the Fund holds or intends to hold in its portfolio.
INFORMATION ABOUT THE COMPANY AND FUNDS
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 have equal rights as to dividends and in liquidation. Shares have no
preemptive or subscription rights and are freely transferable.
The Company is organized as a business trust under the laws of the
Commonwealth of Massachusetts. Under Massachusetts law, shareholders of a Fund,
under certain circumstances, could be held personally liable for the obligations
of that Fund. However, the Company's Agreement and Declaration of Trust (the
"Trust Agreement") disclaims shareholder liability for acts or obligations of
the Company and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Company or a
Trustee. The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations, a possibility
which management believes is remote. Upon payment of any liability incurred by a
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Company intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate liability
of the shareholders for liabilities of the Fund.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Board members or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of two-thirds of
the Company's outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of two series of
shares. All consideration received by the Company for shares of a series, and
all assets in which such consideration is invested, will belong to that series
(subject only to the rights of creditors of the Company) and will be subject to
the liabilities related thereto. The income attributable to, and the expenses
of, a series will be treated separately from those of the other series. The
Company has the ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. The Rule exempts the selection of independent
accountants and the election of Board members from the separate voting
requirements of the Rule.
Each Fund will send annual and semi-annual financial statements to all
its shareholders.
Each Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculation on short-term market
movements. A pattern of frequent purchases and exchanges can be disruptive to
efficient portfolio management and, consequently, can be detrimental to a Fund's
performance and its shareholders. Accordingly, if the Company's management
determines that an investor is engaged in excessive trading, the Company, with
or without prior notice, may temporarily or permanently terminate the
availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's account. Such investors also
may be barred from purchasing other funds in the Dreyfus Family of Funds.
Generally, an investor who makes more than four exchanges out of a Fund during
any calendar year or who makes exchanges that appear to coincide with an active
market-timing strategy may be deemed to be engaged in excessive trading.
Accounts under common ownership or control will be considered as one account for
purposes of determining a pattern of excessive trading. In addition, the Company
may refuse or restrict purchase or exchange requests by any person or group if,
in the judgment of the Company's management, the Fund would be unable to invest
the money effectively in accordance with its investment objective and policies
or could otherwise be adversely affected or if the Fund receives or anticipated
receiving simultaneous orders that may significantly affect the Fund (e.g.,
amounts equal to 1% or more of the Fund's total assets). If an exchange request
is refused, the Company will take no other action with respect to the shares
until it receives further instructions from the investor. A Fund may delay
forwarding redemption proceeds for up to seven days if the investor redeeming
shares is engaged in excessive trading or if the amount of the redemption
request otherwise would be disruptive to efficient portfolio management or would
adversely affect the Fund. The Company's policy on excessive trading applies to
investors who invest in a Fund directly or through financial intermediaries, but
does not apply to the Dreyfus Auto-Exchange Privilege, to any automatic
investment or withdrawal privilege described herein, or to participants in
employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Company may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components--redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but the
purchase order would be effective only at the net asset value next determined
after the fund being purchased receives the proceeds of the redemption, which
may result in the purchase being delayed.
To offset the relatively higher costs of servicing smaller accounts,
each Fund will charge regular accounts with balances below $2,000 an annual fee
of $12. The valuation of accounts and the deductions are expected to take place
during the last four months of each year. The fee will be waived for any
investor whose aggregate Dreyfus mutual fund investments total at least $25,000,
and will not apply to IRA accounts or to accounts participating in automatic
investment programs or opened through a securities dealer, bank or other
financial institution, or to other fiduciary accounts.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the Company.
<PAGE>
APPENDIX
Description of certain ratings assigned by S&P, Moody's, Fitch and
Duff:
S&P
BOND RATINGS
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
a 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
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation 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 (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
BOND RATINGS
Aaa
Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and generally are 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 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 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 rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba
Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and, therefore, not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa
Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
COMMERCIAL PAPER RATING
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirements for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Fitch
BOND RATINGS
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
VERY STRONG CREDIT QUALITY. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
Duff
BOND RATINGS
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. Considerable
variability in risk exists during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are narrow
and risk can be substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.
COMMERCIAL PAPER RATING
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS
DREYFUS PREMIER NEXTECH FUND
STATEMENT OF ASSETS AND LIABILITIES
May 22, 2000
ASSETS:
Cash.............................................. $279,000
LIABILITIES:
Accrued organization costs payable................ 179,000
NET ASSETS $100,000
========
--------------
COMPOSITION OF NET ASSETS
Paid-in capital................................... $279,000
Accumulated net
investment loss................................ (179,000)
---------------
NET ASSETS $100,000
========
<TABLE>
<CAPTION>
Net Asset Value Per Share
CLASS A CLASS B CLASS C CLASS T
<S> <C> <C> <C> <C>
Net Assets............................................. $25,000 $25,000 $25,000 $25,000
Shares Outstanding..................................... 2,000 2,000 2,000 2,000
Net Asset Value Per Share.............................. $12.50 $12.50 $12.50 $12.50
Sales charge - 5.75% and 4.50% of public offering price of Class A and Class T
shares,
respectively........................................... 0.76 - - 0.59
---- ----- ----- ----
Maximum Offering Price................................. $13.26 $12.50 $12.50 $13.09
====== ====== ====== ======
See notes to financial statements.
</TABLE>
<PAGE>
DREYFUS PREMIER NEXTECH FUND
STATEMENT OF OPERATIONS
For the Period from April 13, 2000 (date of organization) to May 22, 2000
INVESTMENT INCOME $-
EXPENSES
ORGANIZATION EXPENSE (179,000)
NET INVESTMENT (LOSS) $(179,000)
==========
See notes to financial statements.
Dreyfus Premier NexTech Fund
NOTES TO FINANCIAL STATEMENTS
Dreyfus Premier NexTech Fund (the "Fund") is the initial series of Dreyfus
Premier Opportunity Funds (the "Company"). The Company was organized as a
Massachusetts business trust and has had no operations as of the date hereof
other than matters relating to its organization and registration as an open-end
investment company under the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended, and the sale and issuance of 2,000 shares of
beneficial interest each of Class A, Class B, Class C and Class T, respectively,
of the Fund to The Dreyfus Corporation.
The Fund has agreed to pay The Dreyfus Corporation a management fee at the
annual rate of 1.50% of the Fund's average daily net assets (the "Basic Fee").
After the Fund's first twelve months of operations, the Basic Fee will be
adjusted depending on the extent to which the investment performance of the
class of shares expected to bear the highest total Fund operating expenses,
after expenses, exceeds or is exceeded by the percentage change in the
investment record of the NASDAQ Composite Index.
The Fund is authorized to issue an unlimited number of $.001 par value shares in
the following classes of shares: Class A, Class B, Class C and Class T shares.
Class A and Class T shares are subject to a sales charge imposed at the time of
purchase, Class B shares are subject to a contingent deferred sales charge
("CDSC") imposed on Class B share redemptions made within six years of purchase
and Class C shares are subject to a CDSC imposed on Class C shares redeemed
within one year of purchase. Other differences between the classes include the
services offered to and the expenses borne by each class and certain voting
rights.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
In accordance with AICPA Statement of Position 98-5 "Reporting on the Costs of
Start-Up Activities", organizational costs estimated at $179,000 have been
charged to expense.
The Fund intends to qualify as a regulated investment company by complying with
the applicable provisions of the Internal Revenue Code of 1986, as amended, and
to make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income and excise taxes.
REPORT OF INDEPENDENT AUDITORS
Shareholder and Board of Trustees
Dreyfus Premier NexTech Fund
We have audited the accompanying statement of assets and liabilities
of Dreyfus Premier NexTech Fund (one of the funds comprising Dreyfus Premier
Opportunity Funds) as of May 22, 2000 and the related statement of operations
for the period from April 13, 2000 (date of organization) to May 22, 2000. These
financial statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. 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 referred to above present
fairly, in all material respects, the financial position of Dreyfus premier
NexTech Fund at May 22, 2000 and the results of its operations for the period
from April 13, 2000 to May 22, 2000 in conformity with accounting principles
generally accepted in the United States.
ERNST & YOUNG LLP
