FOR USE BY BANKS ONLY
May 1, 1995
THE DREYFUS FUND INCORPORATED
Supplement to Prospectus
Dated May 1, 1995
All mutual fund shares involve certain investment risks, including
the possible loss of principal.
026/s050195IST
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PROSPECTUS MAY 1, 1995
THE DREYFUS FUND INCORPORATED
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THE DREYFUS FUND INCORPORATED (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A
MUTUAL FUND. ITS GOAL IS TO PROVIDE YOU WITH LONG-TERM CAPITAL GROWTH
CONSISTENT WITH THE PRESERVATION OF CAPITAL. CURRENT INCOME IS A SECONDARY
BUT IMPORTANT GOAL.
THE FUND IS THE FLAGSHIP FUND OF THE DREYFUS FAMILY OF FUNDS. IT IS
ONE OF THE LARGEST, OLDEST AND BEST KNOWN MUTUAL FUNDS AND INVESTS PRIMARILY
IN COMMON STOCKS.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
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THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
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MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM
TIME TO TIME.
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TABLE OF CONTENTS
Page
ANNUAL FUND OPERATING EXPENSES........................................... 3
CONDENSED FINANCIAL INFORMATION.......................................... 4
DESCRIPTION OF THE FUND.................................................. 4
MANAGEMENT OF THE FUND................................................... 8
HOW TO BUY FUND SHARES................................................... 9
SHAREHOLDER SERVICES..................................................... 11
HOW TO REDEEM FUND SHARES................................................ 14
DIVIDENDS, DISTRIBUTIONS AND TAXES....................................... 16
PERFORMANCE INFORMATION.................................................. 18
GENERAL INFORMATION...................................................... 18
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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[This Page Intentionally Left Blank]
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C> <C> <C> <C>
Management Fees.............................................................................63%
Other Expenses .............................................................................11%
Total Fund Operating Expenses...............................................................74%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $8 $24 $41 $92
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in
understanding the various costs and expenses borne by the Fund, and therefore
indirectly by investors, the payment of which will reduce investors' return
on an annual basis. You can purchase Fund shares without charge directly from
the Fund's distributor; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year $12.45 $13.86 $12.55 $10.28 $10.55 $12.07 $10.80 $13.14 $13.27 $13.10
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net .55 .49 .47 .51 .58 .50 .34 .27 .24 .21
Net realized and unrealized
gain (loss) on investments 2.33 1.49 .60 .38 1.89 (.89) 2.63 .44 .58 (.76)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT OPERATIONS 2.88 1.98 1.07 .89 2.47 (.39) 2.97 .71 .82 (.55)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from
investment income-net (.49) (.59) (.77) (.46) (.59) (.51) (.35) (.24) (.30) (.22)
Dividends in excess of investment
income-net......... --- --- --- --- --- --- --- --- (.03) ---
Dividends from net realized
gain on investments (.98) (2.70) (2.57) (.16) (.36) (.37) (.28) (.34) (.66) (.40)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.47) (3.29) (3.34) (.62) (.95) (.88) (.63) (.58) (.99) (.62)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year $13.86 $12.55 $10.28 $10.55 $12.07 $10.80 $13.14 $13.27 $13.10 $11.93
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 25.07%* 16.32%* 8.62%* 8.74%* 23.64%* (3.33%) 28.02% 5.53% 6.36% (4.26%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets......... .75% .74% .71% .77% .75% .77% .78% .74% .74% .74%
Ratio of net investment income
to average net assets 4.24% 3.77% 3.51% 4.62% 4.73% 4.20% 2.65% 2.08% 1.67% 1.63%
Portfolio Turnover Rate 83.17% 149.07% 110.09% 179.38% 104.28% 98.58% 79.70% 55.42% 39.29% 27.70%
Net Assets, end of year
(000's omitted).... $2,166,028$2,308,564$2,369,023$2,262,433$2,536,151$2,525,321$2,996,663$3,148,858$2,850,523$2,445,300
- --------------------------
*Exclusive of sales charge.
</TABLE>
Further information about the Fund's performance is contained in
the Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES -- The Fund's primary goal is to provide you with
long-term capital growth consistent with the preservation of capital. Current
income is a secondary but important goal. The Fund's investment objectives
cannot be changed without approval by the holders of a majority (as defined
in the Investment Company Act of 1940) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment objectives will
be achieved.
Page 4
MANAGEMENT POLICIES -- Depending on market conditions, the Fund attempts to
be fully invested in common stocks. If market conditions warrant, the Fund
may purchase fixed income securities such as preferred stocks, bonds and
debentures. For defensive purposes, the Fund may invest in investment grade
corporate bonds, securities issued or guaranteed as to principal and interest
by the U.S. Government or its agencies or instrumentalities, high grade
commercial paper, repurchase agreements, bankers' acceptances, bank
certificates of deposit or time deposits, without limitation. The Fund may
invest up to 20% of the value of its assets in foreign securities which are
not publicly traded in the United States. By investing in foreign securities,
the Fund seeks to further its goal of capital growth.
The Fund will invest primarily in the securities of seasoned
companies. Although the Fund may invest up to 5% of its assets in new
enterprises, very few companies with an operating record of less than three
years would be considered appropriate for the Fund's portfolio. The Fund also
may purchase put and call options; however, in order to qualify the sale of
its shares in certain states, the Fund has undertaken that the aggregate
premiums paid for all such options held will not exceed 2% of the Fund's net
assets.
Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities include U.S. Treasury securities, which differ
in their interest rates, maturities and times of issuance. Some obligations
issued or guaranteed by U.S. Government agencies and instrumentalities, for
example, Government National Mortgage Association pass-through certificates,
are supported by the full faith and credit of the U.S. Treasury; others, such
as those of the Federal Home Loan Banks, by the right of the issuer to borrow
from the Treasury; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. Principal and interest may fluctuate
based on generally recognized reference rates or the relationship of rates.
While the U.S. Government provides financial support to such U.S.
Government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so since it is not so obligated by law. The Fund will
invest in such securities only when the Fund is satisfied that the credit
risk with respect to the issuer is minimal.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price usually
not more than one week after its purchase. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
The Fund may purchase certificates of deposit, time deposits,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries of domestic banks, foreign branches of domestic
banks, and domestic and foreign branches of foreign banks and other banking
institutions. Certificates of deposit are negotiable certificates evidencing
the obligation of a bank to repay funds deposited with it for a specified
period of time. Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time at a stated interest rate.
Time deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. Bankers'
acceptances are credit instruments evidencing the obligation of a bank to pay
a draft drawn on it by a customer. These instruments reflect the obligation
both of the bank and of the drawer to pay the face amount of the instrument
upon maturity. Other short-term obligations may include uninsured, direct
obligations bearing fixed, floating or variable rates of interest.
Page 5
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objectives. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions or resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
FOREIGN CURRENCY TRANSACTIONS -- The Fund may engage in currency exchange
transactions either on a spot (i.e., cash) basis at the rate prevailing in
the currency exchange market, or through entering into forward contracts to
purchase or sell currencies. A forward currency contract involves an
obligation to purchase or sell a specific currency at a future date, which
must be more than two days from the date of the contract, at a price set at
the time of the contract. These contracts are entered into in the interbank
market conducted directly between currency traders (typically commercial
banks or other financial institutions) and their customers.
LENDING PORTFOLIO SECURITIES -- From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other institutional
investors needing to borrow securities to complete certain transactions. Such
loans may not exceed 10% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, U.S. Government securities or irrevocable letters of credit issued by
domestic financial institutions, which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. The Fund can increase its income through the investment of such
collateral. The Fund continues to be entitled to payments in amounts equal to
the interest, dividends or other distributions payable on the loaned
securities and receives interest on the amount of the loan. Such loans will
be terminable at any time upon specified notice. The Fund might experience
risk of loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
BORROWING MONEY -- As a fundamental policy, the Fund is permitted to borrow
to the extent permitted under the Investment Company Act of 1940. However,
the Fund currently intends to borrow money only for temporary or emergency
(not leveraging) purposes, in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments.
CERTAIN FUNDAMENTAL POLICIES -- The Fund may: (i) borrow money to the extent
permitted under the Investment Company Act of 1940, which currently limits
borrowing to no more than 33 1/3 of the value of the Fund's total assets; (ii)
invest up to 5% of its total assets in the obligations of any one issuer,
except that up to 25% of the value of the Fund's total assets may be
invested, and obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities may be purchased, without regard to any such
limitation; (iii) lend portfolio securities to brokers, dealers or other
institutional investors, provided the aggregate value of the securities
loaned does not exceed 10% of the value of the Fund's total assets; and (iv)
invest up to 25% of the value of its assets in any single industry. This
paragraph describes fundamental policies that cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940) of the Fund's outstanding voting shares. See "Investment
Objectives and Management Policies_Investment Restrictions" in the Statement
of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES -- The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 15% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
Page 6
days after notice and in other illiquid securities. See "Investment
Objectives and Management Policies --Investment Restrictions"in the Statement
of Additional Information.
RISK FACTORS
INVESTING IN FOREIGN SECURITIES -- In making foreign investments, the Fund
will give appropriate consideration to the following factors, among others.
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. In addition, there may be less publicly available
information about a non-U.S. issuer, and non-U.S. issuers generally are not
subject to uniform accounting and financial reporting standards, practices
and requirements comparable to those applicable to U.S. issuers.
Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions which might
adversely affect the payment of principal and interest on the foreign
securities or might restrict the payment of principal and interest to
investors located outside the country of the issuer, whether from currency
blockage or otherwise. Custodial expenses for a portfolio of non-U.S.
securities generally are higher than for a portfolio of U.S. securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in currency
rates and exchange control regulations. Some currency exchange costs may be
incurred when the Fund changes investments from one country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Income received by the
Fund from sources within foreign countries may be reduced by withholding and
other taxes imposed by such countries. Tax conventions between certain
countries and the United States, however, may reduce or eliminate such taxes.
All such taxes paid by the Fund will reduce its net income available for
distribution to shareholders.
FOREIGN CURRENCY EXCHANGE -- Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the U.S. or abroad.
The foreign currency market offers less protection against defaults
in the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract would
deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
OTHER INVESTMENT CONSIDERATIONS -- Although the Fund invests for long-term
growth rather than short-term profits, a limited amount of short-term trading
can be expected in order to maintain a flexible portfolio strategy. In
addition, the possible need to realize cash for redemption of Fund shares may
make it necessary to sell securities even though such sales would not
otherwise be desirable from an investment standpoint. Consequently, portfolio
turnover may vary from year to year, as well as within the year. Moreover,
when extraordinary market conditions prevail, investment strategy may shift
rapidly,
Page 7
in which case high turnover rates can be expected. Higher portfolio
turnover rates are likely to result in comparatively greater brokerage
commissions or transaction costs. Short-term gains realized from portfolio
transactions are taxable to shareholders as ordinary income. See "Portfolio
Transactions" in the Statement of Additional Information.
Investment decisions for the Fund are made independently from those
of the other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, securities of the type in which the Fund invests at the
same time as the Fund, available investments or opportunities for sales will
be allocated equitably to each investment company. In some cases, this
procedure may adversely affect the size of the position obtained for or
disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of March 31, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for approximately 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's primary portfolio manager is Ernest
G. Wiggins, Jr. Mr. Wiggins joined The Dreyfus Corporation in January 1994.
Prior thereto, he was President of Gabelli International from 1992 to 1993;
and from 1980 to 1992, he was employed by Fidelity Management and Research
Company, serving as Director of Training and Development from 1990 to 1992
and as manager of Fidelity Value Fund from 1982 to 1990. The Fund's other
portfolio managers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus Corporation also
provides research services for the Fund as well as for other funds advised by
The Dreyfus Corporation through a professional staff of portfolio managers
and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $70
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
The Fund paid The Dreyfus Corporation a monthly management fee at
the annual rate of .63 of 1% of the value of the Fund's average daily net
assets for the fiscal year ended December 31, 1994. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of lowering the
overall expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The Fund will
not pay The Dreyfus Corporation at a later time for any amounts it may waive,
nor will the Fund reimburse The Dreyfus Corporation for any amounts it may
assume.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund.
Page 8
The Fund's distributor may use part or all of such payments to pay securities
dealers or others in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Share certificates are issued
only upon your written request. No certificates are issued for fractional
shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500; subsequent investments
must be at least $100. The initial investment must be accompanied by the
Fund's Account Application. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors of
The Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or minor
child of any of the foregoing, the minimum initial investment is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund account, the minimum initial investment is $50. In
addition, the Fund reserves the right to offer Fund shares without regard to
minimum purchase requirements to employees participating in certain qualified
and non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and form
acceptable to the Fund. Fund shares also are offered without regard to the
minimum initial investment requirements through the Dreyfus Step Program
described under "Shareholder Services." The Fund reserves the right to vary
further the initial and subsequent minimum investment requirements at any
time.
You may purchase Fund shares by check or wire, or through the
Dreyfus TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open new
accounts which are mailed should be sent to The Dreyfus Family of Funds, P.O.
Box 9387, Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to The
Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For
Dreyfus retirement plan accounts, both initial and subsequent investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900051779/The Dreyfus Fund
Incorporated, for purchase of Fund shares in your name. The wire must include
your Fund
Page 9
account number (for new accounts, your Taxpayer Identification
Number ("TIN") should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House system to The Bank of New York with instructions to credit
your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified and non-qualified employee benefit plans or other programs where
(i) the employers or affiliated employers maintaining such plans or programs
have a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in the Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value
per share next determined after an order in proper form is received by the
Transfer Agent or other agent. Net asset value per share is determined as of
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), on each day the New York Stock Exchange is open
for business. Net asset value per share is computed by dividing the value of
the Fund's net assets (i.e., the value of its assets less liabilities) by the
total number of shares outstanding. The Fund's investments are valued based
on market value or, where market quotations are not readily available, based
on fair value as determined in good faith by the Board of Directors. For
further information regarding the methods employed in valuing Fund
investments, see "Determination of Net Asset Value" in the Fund's Statement
of Additional Information.
If an order is received by the Transfer Agent or other agent by the
close of trading on the floor of the New York Stock Exchange (currently 4:00
p.m., New York time) on a business day, Fund shares will be purchased at the
net asset value determined as of such close of trading on that day.
Otherwise, Fund shares will be purchased at the net asset value determined as
of such 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 a 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 net
asset value determined as of such close of trading on the New York Stock
Exchange on that day. Otherwise, the orders will be based on the next
determined net asset value. It is the responsibility of dealers to transmit
orders to the Distributor or its designee on a timely basis.
Page 10
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions are
imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of Personal Retirement Plans, the shares
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "NO" box on the Account Application, indicating that you
specifically refuse this privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange instructions by
telephoning 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will automatically be carried over to the
fund in which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER
Privilege and the dividend/capital gain distribution option (except for Dreyfus
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares of the fund purchased with a sales load,
or (c) acquired through reinvestment of dividends or distributions paid with
respect to the foregoing categories of shares. To qualify, at the time of
your exchange you must notify the Transfer Agent. Any such qualification is
subject to confirmation of your holdings through a check of appropriate
Page 11
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in
part. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of other funds in the
Dreyfus Family of Funds of which you are currently an investor. The amount
you designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER(Registration Mark) -- Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in the
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in the Privilege.
You may elect at any time to terminate your
Page 12
participation by notifying in writing the appropriate Federal agency. Further,
the Fund may terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN -- Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for this Privilege.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Fund's
Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time. Investors who wish to purchase
Fund shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts." You should consider your financial condition and the
possibility of having to redeem your Fund shares in times of rising prices or
declining Fund share prices.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $20) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Plan.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share prices
which do not include the sales load or which reflect a reduced sales load.
If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends and
capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
Page 13
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527. Enrollment in or
cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dreyfus Dividend Sweep.
RETIREMENT PLANS -- The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
following numbers: for Keogh Plans, please call 1-800-358-5566; for IRAs and
IRA "Rollover Accounts," please call 1-800-645-6561; and for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL -- You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending on the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request
in proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE
OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY
IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST.
PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS
OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
PROCEDURES -- You may redeem shares by using the regular redemption procedure
through the Transfer Agent, the Wire Redemption Privilege, the Telephone
Redemption Privilege or the Dreyfus TELETRANSFER Privilege, or through
certain securities dealers. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a
Page 14
telephone redemption privilege or telephone exchange privilege (which is
automatically granted unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions from any person representing himself or herself to
be you and reasonably believed by the Transfer Agent to be genuine. The Fund
will require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Fund or the Transfer
Agent may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay the Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
your shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day)made out to the owners of record and mailed to your address.
Redemption proceeds of less than $1,000 will be paid automatically by check.
Holders of jointly registered Fund or bank accounts may have redemption
proceeds of not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any redemption request, including requests made shortly after a change
of address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a
Page 15
Shareholder Services Form with the Transfer Agent. The redemption proceeds will
be paid by check and mailed to your address. You may telephone redemption
instructions by calling 1-800-221-4060 or, if you are calling from overseas,
call 1-401-455-3306. The Fund reserves the right to refuse any request made by
telephone, including requests made shortly after a change of address, and may
limit the amount involved or the number of telephone redemption requests. This
Privilege may be modified or terminated at any time by the Transfer Agent or
the Fund. Shares held under Keogh Plans, IRAs or other retirement plans, and
shares for which the certificates have been issued, are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE -- You may redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in one
of these documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
issued in certificate form, are not eligible for this Privilege.
REDEMPTION THROUGH DEALERS -- The Distributor or its designee will accept
orders from dealers with which it has sales agreements for the repurchase of
shares held by shareholders. Repurchase orders received by the dealer prior
to 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 dealer to
transmit orders on a timely basis. The dealer may charge the shareholder a
fee for executing the order. This repurchase arrangement is discretionary and
may be withdrawn at any time.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income
quarterly and distributes net realized securities gains, if any, once a year,
but it may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
Investment Company Act of 1940. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive dividends and
distributions of securities gains in cash or to reinvest such amounts in
additional shares at net asset value. You also may elect to receive only
dividends and distributions of short-term securities gains in cash and
automatically reinvest all distributions of long-term securities gains at net
asset value. You may make these elections by sending a written request to the
Transfer Agent or, if you have purchased shares through a securities dealer,
by notifying your dealer at the time the shares are purchased. All expenses
are accrued daily and deducted before declaration of dividends to investors.
Page 16
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional Fund
shares. Depending upon the composition of the Fund's income, a portion of the
dividends from net investment income may qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of the Fund will be taxable to U.S.
shareholders as long-term capital gains, regardless of how long shareholders
have held their Fund shares and whether such distributions are received in
cash or reinvested in additional Fund shares. The Code provides that the net
capital gains of an individual generally will not be taxed at a rate in
excess of 28%. Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by the
Fund to a foreign investor as well as the proceeds of any redemptions from a
foreign investor's account, regardless of the extent to which gain or loss
may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions
will be mailed to you annually. You also will receive periodic summaries of
your account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains of the Fund and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended December 31, 1994 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its net investment
income and realized capital gains are distributed in accordance with
applicable provisions of the Code. The Fund is subject to a non-deductible 4%
excise tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes, if any.
Page 17
PERFORMANCE INFORMATION
For purposes of advertising, performance will be calculated on the
basis of average annual total return. Advertisements may also include
performance calculated on the basis of total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., the Dow Jones Industrial Average, Morningstar,
Inc., Standard & Poor's 500 Composite Stock Price Index and other industry
publications.
GENERAL INFORMATION
The Fund, a Maryland corporation incorporated on January 2, 1947,
began operations under its present name on May 24, 1951. The Fund is
authorized to issue 300 million shares of Capital Stock, par value $1 per
share. Each share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for the purpose of removing a Director from office and the
holders of at least 25% of such shares may require the Fund to hold a special
meeting of shareholders for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's outstanding
voting shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of your ownership and sends
you confirmations and statements of account.
Page 18
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; outside of the
U.S. and Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 19
The Dreyfus Fund
Incorporated
PROSPECTUS
Registration Mark
Copy Rights 1995 Dreyfus Service Corporation
026P18050195
THE DREYFUS FUND INCORPORATED
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of The Dreyfus Fund Incorporated (the "Fund"), dated May 1, 1995, as it may
be revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") is the Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . B-5
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . B-9
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . B-11
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . B-12
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . B-13
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . B-16
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . B-17
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . B-19
Performance Information . . . . . . . . . . . . . . . . . . . . . . B-19
Information About the Fund. . . . . . . . . . . . . . . . . . . . . B-20
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . B-21
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . B-22
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . B-36
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
Investment Approach. Fund management is chiefly concerned with two
factors:
1. Individual Securities Values - These are determined through
fundamental studies of the relative worth and position of
individual companies.
2. Major Trends - These are evaluated through technical studies
which give a broad picture of overall market trends.
Management Policies
Repurchase Agreements. The Fund's custodian or subcustodian will have
custody of, and will hold in a segregated account, securities acquired by
the Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund. In an attempt to reduce the risk of incurring a loss on
a repurchase agreement, the Fund will enter into repurchase agreements only
with domestic banks with total assets in excess of one billion dollars or
primary government securities dealers reporting to the Federal Reserve Bank
of New York, with respect to securities of the type in which the Fund may
invest, and will require that additional securities be deposited with it if
the value of the securities purchased should decrease below resale price.
The Manager will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the repurchase price. The Fund
will consider on an ongoing basis the creditworthiness of the institutions
with which it enters into repurchase agreements.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board. Because it is not
possible to predict with assurance how the market for restricted securities
pursuant to Rule 144A will develop, the Fund's Board has directed the
Manager to monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers or other institutional
investors, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral. For
the purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 10% of the value of the
Fund's total assets. From time to time, the Fund may return to the
borrower and/or a third party, which is unaffiliated with the Fund, and
which is acting as a "placing broker," a part of the interest earned from
the investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Directors must
terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. These
requirements may be subject to future modification.
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 15 as fundamental policies. These restrictions cannot
be changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940 (the "Act")) of the Fund's outstanding
voting shares. Investment restrictions numbered 16 and 17 are not
fundamental policies and may be changed by vote of a majority of the Fund's
Directors at any time. The Fund may not:
1. Borrow money, except to the extent permitted under the Act (which
currently limits borrowing to no more than 33% of the value of
the Fund's total assets).
2. Purchase any securities on margin.
3. Sell any securities short.
4. Lend any funds or other assets. This shall not prevent the
purchase of a portion of an issue of publicly distributed bonds,
debentures or other evidences of indebtedness of corporations, or
the purchase of bankers' acceptances and commercial paper of
corporations listed on the New York Stock Exchange or their
subsidiaries. However, the Fund may lend securities to
broker-dealers or other institutional investors, but only when
the borrower pledges cash collateral to the Fund and agrees to
maintain such collateral so that it amounts at all times to at
least 100% of the value of the securities loaned. Such loans
will not be made if, as a result, the aggregate value of the
securities loaned exceeds 10% of the value of the Fund's total
assets.
5. Participate in any underwriting or selling group in connection
with the public distribution of securities, except for its own
capital stock.
6. Invest more than 5% of the market value of its net assets in the
securities of any one issuer, except that up to 25% of the value
of the Fund's total assets may be invested, and securities issued
or guaranteed by the U.S. Government, or its agencies or
instrumentalities may be purchased, without regard to such
limitation.
7. Hold more than 10% of the voting securities of any one issuer.
This restriction applies only with respect to 75% of the Fund's
total assets.
8. Purchase from or sell to any of its officers or directors, or
firms of which any of them are members, any securities (other
than capital stock of the Fund), but such persons or firms may
act as brokers for the Fund for customary commissions.
9. Retain securities of any issuer in which those officers or
directors of the Fund who beneficially own more than 1/2 of 1% of
the securities of the issuer together own more than 5% of the
securities of the issuer.
10. Purchase any securities issued by any investment company, except
in connection with a merger, consolidation, acquisition or
reorganization, if more than 10% of the market value of the
Fund's total assets would be invested in securities of other
investment companies, more than 5% of the market value of the
Fund's total assets would be invested in the securities of any
one investment company or the Fund would own more than 3% of the
total voting stock of any one investment company. This
limitation, however, shall not prevent the Fund from investing in
securities issued by a real estate investment trust, provided
that such trust is not permitted to invest in real estate or
interests in real estate other than mortgages or other security
interests.
11. Purchase the securities of any issuer the business of which has
been in continuous operation for less than three years if such
purchase would cause the Fund's investments in such issuers to
exceed 5% of the market value of the Fund's net assets.
12. Lease, acquire or hold real estate, except for office purposes.
This limitation, however, shall not prevent the Fund from
investing in securities issued by a real estate investment trust,
provided that such trust is not permitted to invest in real
estate or interests in real estate other than mortgages or other
security interests.
13. Purchase and sell commodities or commodity contracts.
14. Invest in the securities of a company for the purpose of
management or the exercise of control, but the Fund votes the
securities it owns in its portfolio as a shareholder in
accordance with its own views. The Manager may make
recommendations to portfolio companies on financial and operating
matters relevant to the conduct of their business if the Manager
believes it desirable to do so, in the best interests of the Fund
and for the protection of the value of the Fund's investments.
15. Invest in a particular industry if any such investment would
result in the Fund holding more than 25% of the value of its
assets in any single industry.
16. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
17. 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.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of that restriction.
In addition to the foregoing, while not a fundamental policy, the Fund
has undertaken not to invest in oil, gas or mineral programs.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Directors of the Fund
LUCY WILSON BENSON, Director. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of
Communications Satellite Corporation, General RE Corporation and
Logistics Management Institute. She is also a trustee of the Alfred
P. Sloan Foundation, Vice Chairman of the Board of Trustees of
Lafayette College, Vice Chairman of the Citizens Network for Foreign
Affairs and a member of the Council on Foreign Relations. Mrs. Benson
served as a consultant to the U.S. Department of State and to SRI
International from 1980 to 1981. From 1977 to 1980, she was Under
Secretary of State for Security Assistance, Science and Technology.
She is also a Board member of 13 other funds in the Dreyfus Family of
Funds. She is 67 years old and her address is 46 Sunset Avenue,
Amherst, Massachusetts 01002.
*DAVID W. BURKE, Director. Consultant to the Manager since August 1994.
From October 1994 to August 1994, he was Vice President and Chief
Administrative Officer of the Manager. From 1977 to 1990, Mr. Burke
was involved in the management of national television news, as Vice
President and Executive Vice President of ABC News, and subsequently
as President of CBS News. He is also a Board member of 51 other funds
in the Dreyfus Family of Funds. He is 59 years old and his address is
200 Park Avenue, New York, New York 10166.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Mr.
DiMartino has served as Chairman of the Board of various funds in the
Dreyfus Family of Funds. For more than five years prior thereto, he
was President, a director and, until August 1994, Chief Operating
Officer of Dreyfus and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus and,
until August 1994, the Fund's distributor. From August 1994 to
December 31, 1994, he was a director of Mellon Bank Corporation. Mr.
DiMartino is a director and former Treasurer of The Muscular Dystrophy
Association; a trustee of Bucknell University; Chairman of the Board
of Directors of Noel Group, Inc.; director of HealthPlan Corporation;
a director of Belding Heminway Company, Inc.; and a director of Curtis
Industries, Inc. Mr. DiMartino is also a Board member of 93 other
funds inthe Dreyfus Family of Funds. He is 51 years old and his
address is 200 Park Avenue, New York, New York 10166.
MARTIN D. FIFE, Director. President of Fife Associates, Inc. and other
related companies that are engaged in the chemical and plastics
industries. He is also a Board member of 11 other funds in the
Dreyfus Family of Funds. He is 68 years old and his address is The
Chrysler Building, 405 Lexington Avenue, New York, New York 10174.
WHITNEY I. GERARD, Director. Partner of the New York City law firm of
Chadbourne & Parke. He is also a Board member of 11 other funds in
the Dreyfus Family of Funds. He is 60 years old and his address is 30
Rockefeller Plaza, New York, New York 10112.
ROBERT R. GLAUBER, Director. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University, since January 1992. Mr. Glauber was Under Secretary of
the Treasury for Finance at the U.S. Treasury Department from May 1989
to January 1992. For more than 5 years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University and, from 1985 to 1989, Chairman of its Advanced
Management Program. He is also a Board member of 20 other funds in
the Dreyfus Family of Funds. He is 56 years old and his address is 79
John F. Kennedy Street, Cambridge, Massachusetts 02138.
ARTHUR A. HARTMAN, Director. Senior consultant with APCO Associates Inc.
From 1981 to 1987, he was United States Ambassador to the former
Soviet Union. He is a director of the ITT Hartford Insurance Group,
Ford Meter Box Corporation and Lawter International and a member of
the advisory councils of several other companies, research institutes
and foundations. He is a former President of the Harvard Board of
Overseers. He is also a Board member of 11 other funds in the Dreyfus
Family of Funds. He is 69 years old and his address is 2738 McKinley
Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Director. An economist and Senior Fellow at the Brookings
Institution since 1969. He is co-director of the Brookings Panel on
Economic Activity and editor of its journal, The Brookings Papers. He
is also a director of the State Farm Mutual Automobile Association,
State Farm Life Insurance Company and Federal Realty Investment Trust.
He is also a Board member of 11 other funds in the Dreyfus Family of
Funds. He is 60 years old and his address is 1775 Massachusetts
Avenue, N.W., Washington, D.C. 20036.
PAUL D. WOLFOWITZ, Director. Dean of The Paul H. Nitze School of Advanced
International Studies at Johns Hopkins University. From 1989 to 1993,
he was Under Secretary of Defense for Policy. From 1986 to 1989, he
was the U.S. Ambassador to the Republic of Indonesia. From 1982 to
1986, he was Assistant Secretary of State for East Asian and Pacific
Affairs of the Department of State. He is also a Board member of 10
other funds in the Dreyfus Family of Funds. He is 50 years old and
his address is 1740 Massachusetts Avenue, N.W., Washington, D.C.
20036.
The Fund typically pays its directors an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. The aggregate
amount of compensation paid to each director by the Fund for the fiscal
year ended December 31, 1994 and by all other funds in the Dreyfus Family
of Funds for which such person is a board member for the fiscal year ended
December 31, 1994 are as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual from Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund Fund's Expenses Retirement Board Members
- ------------------ ------------------ ------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Lucy Wilson Benson $8,500 none none $ 64,459
David W. Burke $3,297 none none $ 27,898
Joseph S. DiMartino** $9,902 none none $445,000
Martin D. Fife $8,500 none none $ 51,750
Whitney I. Gerard $8,500 none none $ 52,000
Robert R. Glauber $8,000 none none $ 79,696
Arthur A. Hartman $8,500 none none $ 52,000
George L. Perry $8,500 none none $ 52,000
Paul D. Wolfowitz $7,536 none none $ 32,631
______________________________
* Amount does not include reimbursed expenses for attending Board meetings, which amount to $708 for all Directors as a
group.
** Estimated amounts for current fiscal year ending December 31, 1995.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., a wholly-owned subsidiary of The Boston
Company,Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray, and prior to August 1990, he was employed
as an Associate at Sidley & Austin. He is 30 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September 1992
to August 1994, he was an attorney with the Board of Governors of the
Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was Manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 years old.
JOSEPH F. TOWER,III, Assistant Treasurer. Senior Vice President, Treasurer
and Chief Financial Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
July 1988 to August 1994, he was employed by The Boston Company, Inc.
where he held various management positions in the Corporate Finance
and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer, Vice President of the Distributor and
an officer of other investment companies advised or administered by
the Manager. From 1984 to July 1994, he was Assistant Vice President
in the Mutual Fund Accounting Department of the Manager. He is 59
years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
She is 50 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992,
he was a mutual fund accountant, for The Boston Company Advisors, Inc.
He is 28 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of Capital Stock outstanding on February 17, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Contract (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event the continuance also is approved
by a majority of the Directors who are not "interested persons" (as defined
in the Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons" (as defined in the Act) of any party to the Agreement, last voted
to renew the Agreement at a meeting held on May 4, 1994. Shareholders last
approved the Agreement on August 4, 1994. The Agreement is terminable upon
60 days' notice by either party and will terminate automatically in the
event of its assignment (as defined in the Act).
The following persons are officers and/or directors of Dreyfus:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration; Paul H. Snyder, Vice President and Chief Financial Officer;
Daniel C. Maclean, Vice President and General Counsel; Barbara E. Casey,
Vice President--Retirement Services; Henry D. Gottmann, Vice President-
Retail; Elie M. Genadry, Vice President--Wholesale; Jeffrey N. Nachman,
Vice President-Mutual Fund Accounting; Diane M. Coffey, Vice President-
Corporate Communications; William F. Glavin, Jr., Vice President--Product
Management; Andrew Wasser, Vice President--Information Systems; Katherine
C. Wickham, Vice President-Human Resources; Elvira Oslapas--Vice President;
Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and David B.
Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions
and provides the Fund with portfolio managers who are authorized by the
Board of Directors to execute purchases and sales of securities. The
Fund's portfolio managers are Howard Stein, Ernest G. Wiggins, Jr. and
Wolodymyr Wronskyj. The Manager also maintains a research department with
a professional staff of portfolio managers and securities analysts who
provide research services for the Fund as well as for other funds advised
by the Manager. All purchases and sales are reported for the Board of
Directors' review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes, among other things, statistical and research data, clerical
help, accounting, data processing, bookkeeping, internal auditing services
and certain other required services to the Fund. The Manager also may make
such advertising and promotional expenditures, using its own resources, as
it from time to time deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, advisory fees, state
Blue Sky qualification fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of maintaining corporate
existence, costs of independent pricing services, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and corporate meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses.
As compensation for its services, the Fund has agreed to pay the
Manager an annual fee, payable monthly, as follows:
Annual Fee Average Daily Net Assets
---------- ------------------------
.65 of 1% of the first $1.5 billion
.625 of 1% between $1.5 billion and $2.0 billion
.60 of 1% between $2.0 billion and $2.5 billion
.55 of 1% over $2.5 billion
The Agreement also provides that if the aggregate expenses of the
Fund, exclusive of taxes and brokerage commissions but including the
management fee, exceed 1% of the value of the Fund's average daily net
assets for any full fiscal year, the Manager will bear such expenses or
refund to the Fund the amount of such excess. No expense reimbursement was
required for the last three fiscal years.
The management fees paid by the Fund to the Manager for the fiscal
years ended December 31, 1992, 1993 and 1994 amounted to $17,847,268,
$18,514,648 and $16,866,777, respectively.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time, on
any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase of
Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of Fund
Shares--Dreyfus TeleTransfer Privilege."
Sales and Other Charges. There is no sales or service charge by the
Fund or the Distributor, although investment dealers, banks and other
institutions may make reasonable charges to investors for their services.
The services provided and the applicable fees are established by each
dealer or other institution acting independently of the Fund. The Fund has
been given to understand that fees may be charged for customer services
including, but not limited to, same-day investment of client funds;
same-day access to client funds; advice to customers about the status of
their accounts, yield currently being paid or income earned to date;
provision of periodic account statements showing security and money market
positions; other services available from the dealer, bank or other
institution; and assistance with inquiries related to their investment.
Any such fees will be deducted from the investor's account monthly and on
smaller accounts could constitute a substantial portion of the
distribution. Small, inactive, long-term accounts involving monthly
service charges may not be in the best interest of investors. Investors
should be aware that they may purchase shares of the Fund directly from the
Fund without imposition of any maintenance or service charges, other than
those already described herein. In some states, banks or other
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
Maintenance expenses of a Fund account are presently borne by the
Fund, although the Fund reserves the right, upon not less than 90 days'
notice, to charge shareholders a nominal fee for such maintenance expenses.
During the 90-day notice period, a shareholder would be able to withdraw
shares without charge.
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds will be transferred
by Federal Reserve wire only to the commercial bank account specified by
the investor on the Account Application or Shareholder Services Form.
Redemption proceeds, if wired, must be in the amount of $1,000 or more and
will be wired to the investor's account at the bank of record designated in
the investor's file at the Transfer Agent, if the investor's bank is a
member of the Federal Reserve System, or to a correspondent bank if the
investor's bank is not a member. Fees ordinarily are imposed by such bank
and usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- -----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have also selected the Dreyfus TeleTransfer Privilege, any request for
a wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any stock certificates representing
Fund shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission and is a fundamental policy of the Fund which may not be changed
without shareholder approval. In the case of requests for redemption in
excess of such amount, the Board of Directors reserves the right to make
payments in whole or in part in securities or other assets of the Fund in
case of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing shareholders. In
such event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges would be incurred.
Suspension of Redemption. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be
deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To request an exchange, a shareholder must give exchange instructions
to the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "NO" box on the
Account Application, indicating that the investor specifically refuses this
privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible
for telephone exchanges.
To establish a Personal Retirement Plan by exchange, shares of the
Fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this Privilege
is effective three business days following notification by the investor.
An investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are made
in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts from regular accounts to IRA accounts, but not from IRA accounts
to regular accounts. With respect to all other retirement accounts,
exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. Fund Exchanges or the Dreyfus
Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $20) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which stock certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by the Fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
the sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a Fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services are also
available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate forms.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, salary reduction
plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is ordinarily $750 with no minimum on
subsequent purchases. Individuals who open an IRA may also open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plans and the form
of Custodial Agreement for further details as to eligibility, service fees
and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities are valued at
the last sale price on the securities exchange or national securities
market on which such securities are primarily traded. Securities not
listed on an exchange or national securities market, or securities in which
there were no transactions, are valued at the average of the most recently
reported bid and asked prices. Bid price is used when no asked price is
available. Options are valued at the last sale price on an exchange.
Options for which there were no transactions are valued at the average of
the most recently reported bid and asked prices. Market quotations of
foreign securities in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Any securities or other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors. Expenses and fees,
including the management fee, reduced by the expense limitation, if any,
are accrued daily and taken into account for the purpose of determining the
net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified for the fiscal year ended
December 31, 1994 as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code"). The Fund intends to
continue to so qualify if such qualification is in the best interests of
its shareholders. Such qualification relieves the Fund of any liability
for Federal income taxes to the extent its net investment income and net
realized capital gains are distributed in accordance with the applicable
provisions of the Code. The term "regulated investment company" does not
imply the supervision of management or investment practices or policies by
any government agency.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends from net investment income may qualify for
the dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to its qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that (i)
the Fund's income consists of dividends paid by U.S. corporations and (ii)
the Fund would have been entitled to the dividends received deduction with
respect to such dividend income if the Fund were not a regulated investment
company. The dividends received deduction for qualifying corporate
shareholders may be further reduced if the shares of the Fund held by them
with respect to which dividends are received are treated as debt-financed
or deemed to have been held for less than 46 days. In addition, the Code
provides other limitations with respect to the ability of a qualifying
corporate shareholder to claim the dividends received deduction in
connection with holding Fund shares.
The Code provides that if a shareholder holds shares of the Fund for
six months (or such shorter period as the Internal Revenue Service may
prescribe by regulation) 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 addition, any dividend or distribution paid
shortly after an investor's purchase may have the effect of reducing the
net asset value of the shares below the cost of the investment. Such a
distribution would be a return on investment in an economic sense although
taxable as described above.
Ordinarily, gains or losses realized from portfolio transactions will
be treated as capital gains or losses. However, a portion of the gain or
loss realized from the disposition of certain non-U.S. dollar denominated
securities (including debt instruments, certain forward and option
transactions and certain preferred stock) may be treated as ordinary income
or loss under Section 988 of the Code. In addition, all or a portion of
the gain realized from the disposition of certain market discount bonds
will be treated as ordinary income under Section 1276. Finally, all or a
portion of the gains realized from engaging in "conversion transactions"
may be treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain foreign currency forward contracts and options transactions, other
than those subject to Section 988 of the Code, will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and
options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner described
above.
Offsetting positions held by the Fund involving foreign currency
forward contracts or options may be considered, for tax purposes, to
constitute "straddles." "Straddles" are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections
1256 and 988. As such, all or a portion of any short or long-term capital
gain from certain "Straddle" and/or conversion transactions may be
recharacterized to ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in forward contracts or options transactions, such "straddles"
would be characterized as "mixed straddles" if the forward contracts or
options transactions comprising a part of such "straddles" were governed by
Section 1256 of the Code. The Fund may make one or more elections with
respect to "mixed straddles." If no election is made, to the extent the
"straddle" rules apply to positions established by the Fund, losses
realized by the Fund will be deferred to the extent of unrealized gain in
any related offsetting position. Moreover, as a result of the "straddle"
and conversion transaction rules, short-term capital loss on "straddle"
positions may be recharacterized as long-term capital loss, and long-term
capital gain may be treated as short-term capital gain or ordinary income.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made according to the best
judgment of the Manager and the Fund's portfolio managers and in a manner
deemed fair and reasonable to the shareholders. The primary consideration
is prompt and effective execution of orders at the most favorable net
price. Subject to this consideration, the brokers selected include those
that supplement the Manager's research facilities with statistical data,
investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be
performed by the Manager and the Manager's fee is not reduced as a
consequence of the receipt of such supplemental information. Such
information may be useful to the Manager in serving both the Fund and other
funds which it advises and, conversely, supplemental information obtained
by the placement of business of other clients may be useful to the Manager
in carrying out its obligation to the Fund. Brokers also will be selected
for their ability to handle special executions, such as are involved in
large block trades or broad distributions, provided the primary con-
sideration is met. Large block trades may, in certain cases, result from
two or more funds in the Dreyfus Family of Funds being engaged
simultaneously in the purchase or sale of the same security. The overall
reasonableness of brokerage commissions paid is evaluated by the Manager
based upon its knowledge of available information as to the general level
of commissions paid by other institutional investors for comparable
services. When transactions are executed in the over-the-counter market,
the Fund will deal with the primary market makers unless a more favorable
price is otherwise obtainable.
In connection with its portfolio securities transactions for 1992,
1993 and 1994 the Fund paid brokerage commissions of $1,980,626, $2,968,900
and $2,564,232, respectively, none of which was paid to Dreyfus Service
Corporation, which served as the Fund's distributor until August 24, 1994,
or the Distributor. The above figures for brokerage commissions paid do
not include gross spreads and concessions on principal transactions, which,
where determinable, amounted to $3,084,285, $348,000 and $189,000 in 1992,
1993 and 1994, respectively, none of which was paid to Dreyfus Service
Corporation or the Distributor.
The Fund's investment policy, which stresses flexibility, may result
in more trading of securities than would be the case for a fund with more
restricted investment policies, although the Fund's portfolio turnover rate
generally should not exceed 100%. Portfolio turnover rates for 1993 and
1994 were 39.29% and 27.70%, respectively.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's average annual total return for the 1, 5 and 10 year
periods ended December 31, 1994 was -4.26%, 5.87% and 10.94%,
respectively. Average annual total return is calculated by determining the
ending redeemable value of an investment purchased with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of the
initial investment, taking the "n"th root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.
The Fund's total return for the period May 24, 1951 to December 31,
1994 was 13,892.22%. Total return is calculated by subtracting the amount
of the Fund's net asset value per share at the beginning of a stated period
from the net asset value per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during the
period), and dividing the result by the net asset value per share at the
beginning of the period.
From time to time, advertising materials for the Fund may provide
historical information about the Fund or the Manager such as: the
aggregate size of the Fund's assets for the number of shareholder accounts
in the Fund at various points in time; causes for the Fund's growth in
assets during various time periods; portfolio philosophy and practices
utilized in managing the Fund's assets; past promotional efforts on behalf
of the Fund such as the use of the "Dreyfus Lion" as a logo or the "Dreyfus
Lion/Subway" television commercial; biographical information about Jack J.
Dreyfus, Jr., the Fund's first President; the public offering of shares of
the Manager in 1965; the public awareness of the concept of growth funds at
the time of the Fund's inception; or the role played by Jack J. Dreyfus,
Jr. and/or the Fund in popularizing the concept of mutual funds as an
investment vehicle or the growth of assets in the mutual fund industry
since the Fund's inception.
From time to time, advertising materials for the Fund may refer to or
discuss current or past business, political, economic or financial
conditions, such as any U.S. monetary or fiscal policies. In addition,
from time to time, advertising materials for the Fund may include
information concerning retirement and investing for retirement.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote, and when issued and paid for in
accordance with the terms of the offering, is fully paid and nonassessable.
Fund shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
acts as custodian of the Fund's investments. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's transfer and dividend
disbursing agent. Neither The Bank of New York nor The Shareholder
Services Group, Inc. has any part in determining the investment policies of
the Fund or which portfolio securities are to be purchased or sold by the
Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Capital Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, independent auditors, 787 Seventh Avenue, New York,
New York 10019, have been selected as independent auditors of the Fund.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS December 31, 1994
COMMON STOCKS--83.5% SHARES VALUE
------------ --------------
<S> <C> <C> <C>
BASIC INDUSTRIES--3.0% Grace (W.R.)......................... 500,000 $ 19,312,500
Mead................................. 500,000 24,312,500
SK Equity Fund, L.P. (Units)......... 15.647(c) 15,902,148
Weyerhaeuser......................... 400,000 15,000,000
--------------
74,527,148
--------------
CAPITAL GOODS--4.6% Eastman Kodak........................ 750,000 35,812,500
General Electric..................... 1,090,000 55,590,000
Varity............................... 600,000(a) 21,750,000
--------------
113,152,500
--------------
CHEMICALS--.7% duPont (E.I.) de Nemours............. 300,000 16,875,000
--------------
CONGLOMERATES--2.5% Dial................................. 2,000,000 42,500,000
Tenneco.............................. 400,000 17,000,000
--------------
59,500,000
--------------
CONSUMER CYCLICAL--14.8% Chrysler............................. 1,500,000 73,500,000
Dayton Hudson........................ 200,000 14,150,000
Echlin............................... 500,000 15,000,000
Ford Motor........................... 1,600,000 44,800,000
Fruit of The Loom, Cl. A............. 700,000(a) 18,900,000
General Motors....................... 500,000 21,125,000
Home Depot........................... 400,000 18,400,000
NIKE, Cl. B.......................... 300,000 22,387,500
Office Depot......................... 500,000(a) 12,000,000
Penney (J.C.)........................ 400,000 17,850,000
Reebok International................. 500,000 19,750,000
Sears, Roebuck....................... 1,000,000 46,000,000
Toys R Us............................ 250,000(a) 7,625,000
Wal-Mart Stores...................... 500,000 10,625,000
Whirlpool............................ 400,000 20,100,000
--------------
362,212,500
--------------
CONSUMER SERVICES--4.4% Columbia/HCA Healthcare.............. 250,000 9,125,000
Cracker Barrel Old Country........... 500,000 9,250,000
Mattel............................... 1,250,000 31,406,250
McDonald's........................... 2,000,000 58,500,000
--------------
108,281,250
--------------
CONSUMER STAPLES--10.6% ConAgra.............................. 500,000 15,625,000
Gillette............................. 800,000 59,800,000
PepsiCo.............................. 650,000 23,562,500
Philip Morris Cos.................... 1,000,000 57,500,000
Premark International................ 400,000 17,900,000
Procter & Gamble..................... 1,000,000 62,000,000
Roche Holdings A.D.S................. 275,000(b) 13,182,813
Sara Lee............................. 400,000 10,100,000
--------------
259,670,313
--------------
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
CREDIT CYCLICAL--3.7% Green Tree Financial................. 700,000 $ 21,262,500
Lowe's Cos........................... 2,000,000 69,500,000
--------------
90,762,500
--------------
ENERGY--5.2% Canadian Gas Gathering Systems, Cl.
A.................................... 245,312(a,c) 2,453,123
Chevron.............................. 400,000 17,850,000
GE Investment Private Placement
Partners I, L.P. (Units)........... 14.175(c) 14,753,448
Mobil................................ 300,000 25,275,000
Royal Dutch Petroleum................ 300,000 32,250,000
Texaco............................... 300,000 17,962,500
Williams Cos......................... 350,000 8,793,750
Yorktown Energy Partners, L.P.
(Units).............................. 7.357(c) 8,262,362
--------------
127,600,183
--------------
FINANCIAL--11.2% ADVANTA, Cl. A....................... 15,000 393,750
ADVANTA, Cl. B....................... 485,000 12,246,250
Bank of New York..................... 800,000 23,200,000
Chase Manhattan (Warrants)........... 11,772(a) 57,388
First Data........................... 800,000 37,900,000
First Financial Management........... 500,000 30,812,500
First USA............................ 500,000 16,437,500
GFC Financial........................ 650,000 20,637,500
Galen Partners II, L.P. (Units)...... 3.290(c) 2,991,595
MBNA................................. 2,250,000 52,593,750
Mellon Bank.......................... 324,700 9,943,938
NationsBank.......................... 500,000 22,562,500
Travelers............................ 666,666 21,666,645
Western National..................... 1,750,000 22,531,250
--------------
273,974,566
--------------
TECHNOLOGY--11.6% Advanced Micro Devices............... 500,000(a) 12,437,500
Computer Associates International.... 500,000 24,250,000
Computer Sciences.................... 500,000(a) 25,500,000
Electronic Arts...................... 525,000(a) 10,106,250
Hewlett-Packard...................... 600,000 59,925,000
Intel................................ 500,000 31,937,500
MCI Communications................... 1,025,000 18,834,375
Sprint............................... 950,000 26,243,750
TRW.................................. 400,000 26,400,000
United Technologies.................. 300,000 18,862,500
Xerox................................ 300,000 29,700,000
--------------
284,196,875
--------------
TRANSPORTATION--9.7% Burlington Northern.................. 700,000 33,687,500
CSX.................................. 600,000 41,775,000
Conrail.............................. 1,140,000 57,570,000
Federal Express...................... 173,800(a) 10,471,450
Illinois Central..................... 1,000,000 30,750,000
Norfolk Southern..................... 500,000 30,312,500
Ryder System......................... 400,000 8,800,000
Union Pacific........................ 500,000 22,812,500
--------------
236,178,950
--------------
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
UTILITIES--1.5% AT&T................................. 700,000 $ 35,175,000
--------------
TOTAL COMMON STOCKS
(cost $1,622,238,925).............. $2,042,106,785
--------------
--------------
CONVERTIBLE PREFERRED STOCK--.3%
USF&G, Ser. B, Cum., $10.25
(cost $4,925,000).................. 50,000(c) $ 6,515,066
--------------
--------------
PRINCIPAL
CORPORATE BONDS--.3% AMOUNT
------------
Canadian Gas Gathering Systems:
14%, 8/29/2005..................... $ 187,500(c) $ 187,500
14%, 10/31/2005.................... 187,500(c) 187,500
14%, 7/24/2006..................... 531,633(c) 531,633
14%, 12/10/2006.................... 2,184,406(c) 2,184,406
14%, 4/8/2007...................... 549,478(c) 549,478
14%, 11/17/2007.................... 1,675,266(c) 1,675,266
14%, 6/30/2008..................... 1,930,747(c) 1,930,747
14%, 12/29/2008.................... 112,831(c) 112,831
--------------
TOTAL CORPORATE BONDS
(cost $7,359,361).................. $ 7,359,361
--------------
--------------
SHORT-TERM INVESTMENTS--15.9%
TIME DEPOSITS--6.9% Chemical Bank (London),
5%, 1/3/1995....................... $ 85,000,000 $ 85,000,000
Republic National Bank of New York
(London),
4%, 1/3/1995....................... 83,000,000 83,000,000
--------------
168,000,000
--------------
U.S. GOVERNMENT & AGENCIES--9.0% Federal Home Loan Mortgage:
5.90%, 1/4/1995.................... 50,000,000 49,975,417
5.97%, 1/26/1995................... 96,212,000 95,813,121
Federal National Mortgage
Association,
5.96%, 1/31/1995................... 75,000,000 74,627,500
--------------
220,416,038
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $388,416,038)................ $ 388,416,038
--------------
--------------
TOTAL INVESTMENTS (cost $2,022,939,324)................................. 100.0% $2,444,397,250
------ --------------
------ --------------
CASH AND RECEIVABLES (NET).............................................. 0.0% $ 903,232
------ --------------
------ --------------
NET ASSETS.............................................................. 100.0% $2,445,300,482
------ --------------
------ --------------
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1994
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. This security amounted to .54%
of net assets.
(c) Securities restricted as to public resale. Investments in restricted
securities with an aggregate market value of $58,237,103 represent
approximately 2.38% of net assets:
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
------------------ ------------- ------------- -------------------------
Canadian Gas Gathering Systems, Cl. A 8/29/90-7/1/94 $ 10.00 .10% $ 10.00 per share
Canadian Gas Gathering Systems 14%:
8/29/2005-12/29/2008 8/29/90-7/1/94 100.00 .30 par
GE Investment Private Placement
Partners I, L.P. (Units) 5/28/91-6/22/94 1,040,807.62 .60 1,040,807.62 per unit
Galen Partners II, L.P. (Units) 12/8/93-11/29/94 909,299.39 .12 909,299.39 per unit
SK Equity Fund, L.P. (Units) 12/16/92-11/7/94 1,016,306.51 .65 1,016,306.51 per unit
USF&G, Ser. B, Cum., $10.25 6/3/91 98.50 .27 130.30 per share
Yorktown Energy Partners, L.P. (Units) 3/25/91-3/30/94 1,123,061.30 .34 1,123,061.30 per unit
<FN>
* Average cost.
+ The valuation of these securities has been determined in good faith under the
direction of the Board of Directors.
- ------------------
Subject to certain limitations, the Fund has commitments to invest in limited
partnerships listed below:
PORTION OF COMMITTED
ISSUER AMOUNTS UNINVESTED
- ------ --------------------
GE Investment Private Placement Partners I, L.P. (Units) $ 4,791,314
Galen Partners II, L.P. (Units) 1,710,116
SK Equity Fund, L.P. (Units) 30,383,919
See notes to financial statements.
</TABLE>
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
ASSETS AND LIABILITIES
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $2,022,939,324)--see statement.......................... $2,444,397,250
Cash............................................................ 64,731
Dividends and interest receivable............................... 6,106,820
Receivable for subscriptions to Capital Stock................... 923,822
Prepaid expenses................................................ 56,786
--------------
2,451,549,409
LIABILITIES:
Due to The Dreyfus Corporation.................................. $1,302,463
Payable for Capital Stock redeemed.............................. 4,247,219
Accrued expenses................................................ 699,245 6,248,927
---------- --------------
NET ASSETS........................................................ $2,445,300,482
--------------
--------------
REPRESENTED BY:
Paid-in capital................................................. $1,979,375,418
Accumulated undistributed net realized gain on investments...... 44,467,138
Accumulated net unrealized appreciation on investments--Note
3(b).......................................................... 421,457,926
--------------
NET ASSETS at value applicable to 204,909,040 shares outstanding
(300 million shares of $1 par value Capital Stock authorized)... $2,445,300,482
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($2,445,300,482 divided by 204,909,040 shares).................. $11.93
------
------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
OPERATIONS
Year ended December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $81,474 foreign taxes withheld at
source).................................................... $ 48,229,678
Interest..................................................... 15,424,350
------------
TOTAL INCOME............................................ $ 63,654,028
EXPENSES:
Management fee--Note 2(a).................................... 16,866,777
Shareholder servicing costs.................................. 2,427,619
Custodian fees............................................... 191,739
Prospectus and shareholders' reports......................... 144,311
Professional fees............................................ 108,237
Directors' fees and expenses--Note 2(b)...................... 62,350
Registration fees............................................ 57,369
Miscellaneous................................................ 32,262
------------
TOTAL EXPENSES.......................................... 19,890,664
-------------
INVESTMENT INCOME--NET.................................. 43,763,364
-------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments
(including options transactions)--Note 3(a).................. $116,754,284
Net realized (loss) on forward currency exchange
contracts--Note 3(a); Short transactions..................... (775,318)
------------
NET REALIZED GAIN....................................... 115,978,966
Net unrealized (depreciation) on investments and forward
currency exchange contracts.................................. (270,620,589)
-------------
NET REALIZED AND UNREALIZED (LOSS) ON
INVESTMENTS........................................... (154,641,623)
-------------
NET (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS..................................................... $(110,878,259)
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1993 1994
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................... $ 49,842,001 $ 43,763,364
Net realized gain on investments.......................... 134,240,029 115,978,966
Net unrealized appreciation (depreciation) on investments
for the year............................................ 12,667,571 (270,620,589)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................ 196,749,601 (110,878,259)
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net............................... (63,624,901) (43,763,364)
In excess of investment income--net....................... (6,130,584) --
From net realized gain on investments..................... (140,044,515) (79,518,304)
--------------- ---------------
TOTAL DIVIDENDS......................................... (209,800,000) (123,281,668)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................. 12,798,442,290 6,662,064,854
Dividends reinvested...................................... 181,237,341 105,591,624
Cost of shares redeemed................................... (13,264,963,957) (6,938,719,174)
--------------- ---------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS.......................................... (285,284,326) (171,062,696)
--------------- ---------------
TOTAL (DECREASE) IN NET ASSETS........................ (298,334,725) (405,222,623)
NET ASSETS:
Beginning of year......................................... 3,148,857,830 2,850,523,105
--------------- ---------------
End of year............................................... $ 2,850,523,105 $ 2,445,300,482
--------------- ---------------
--------------- ---------------
SHARES SHARES
<S> <C> <C>
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................... 965,802,077 517,021,740
Shares issued for dividends reinvested.................... 13,953,428 8,762,943
Shares redeemed........................................... (999,357,279) (538,493,724)
--------------- ---------------
NET (DECREASE) IN SHARES OUTSTANDING.................... (19,601,774) (12,709,041)
--------------- ---------------
--------------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
Reference is made to page 4 of the Fund's prospectus dated May 1, 1995.
NOTES TO FINANCIAL
STATEMENTS
NOTE 1-- SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act") as a
diversified open-end management investment company. Dreyfus Service Corporation,
until August 24, 1994, acted as the exclusive distributor of the Fund's shares,
which are sold to the public without a sales charge. Dreyfus Service Corporation
is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager"). Effective
August 24, 1994, the Manager became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor") was
engaged as the Fund's distributor. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market. Securities
not listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Short-term investments are carried at amortized cost, which approximates value.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the offsetting rate.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a
quarterly basis. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise
taxes.
<PAGE>
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is payable monthly, based on the following annual percentages of
the average daily value of the Fund's net assets: .65 of 1% of the first $1.5
billion; .625 of 1% of the next $500 million; .60 of 1% of the next $500
million; and .55 of 1% over $2.5 billion.
The Agreement provides for an expense reimbursement from the Manager should
the Fund's aggregate expenses, exclusive of taxes and brokerage commissions,
exceed 1% of the average daily value of the Fund's net assets for any full
year. No expense reimbursement was required pursuant to the Agreement for the
year ended December 31, 1994.
(B) Prior to August 24, 1994, certain officers and directors of the Fund were
"affiliated persons," as defined in the Act, of the Manager and/or Dreyfus
Service Corporation. Each director who is not an "affiliated person" receives
an annual fee of $6,500 and an attendance fee of $500 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, options transactions and forward currency
exchange contracts, during the year ended December 31, 1994, amounted to
$646,736,881 and $918,369,071, respectively.
When executing forward currency exchange contracts, the Fund is obligated to
buy or sell a foreign currency at a specified rate on a certain date in the
future. With respect to sales of forward currency exchange contracts, the Fund
would incur a loss if the value of the contract increases between the date the
forward contract is opened and the date the forward contract is closed. The
Fund realizes a gain if the value of the contract decreases between those
dates. With respect to purchases of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract decreases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract increases
between those dates. At December 31, 1994, there were no forward currency
exchange contracts outstanding.
(B) At December 31, 1994, accumulated net unrealized appreciation on
investments was $421,457,926, consisting of $491,341,068 gross unrealized
appreciation and $69,883,142 gross unrealized depreciation.
At December 31, 1994, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS FUND INCORPORATED
We have audited the accompanying statement of assets and liabilities of The
Dreyfus Fund Incorporated, including the statement of investments, as of
December 31, 1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Dreyfus Fund Incorporated at December 31, 1994, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated years, in conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
January 30, 1995
