DREYFUS GROWTH OPPORTUNITY FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JULY 1, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Growth Opportunity Fund, Inc. (the "Fund"), dated July 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") serves as 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-8
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . B-12
Shareholder Services Plan. . . . . . . . . . . . . . . . . . . . . . . B-14
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-14
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . B-16
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . B-17
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . B-20
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . B-21
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . B-22
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . B-23
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . B-24
Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors. . . . . . . . . . . . . . . B-24
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . B-25
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . B-33
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 the individual
companies.
2. Major Trends -- These are evaluated through technical studies
which give a broad picture of overall market trends. Technical studies
analyze market conditions that may affect the price of various securities
and develop new yardsticks for security valuation.
Portfolio Securities. The Fund may invest in certificates of deposit
("CDs") which are certificates evidencing the obligation of a bank to repay
funds deposited with it for a specific period of time. Investments in CDs
generally are limited to domestic banks having total assets in excess of
one billion dollars or to foreign branches of such domestic banks. CDs
issued by domestic branches of domestic banks do not benefit materially,
and CDs issued by foreign branches of domestic banks do not benefit at all,
from insurance from the Federal Deposit Insurance Corporation.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However,
if a substantial market of qualified institutional buyers develops pursuant
to Rule 144A under the Securities Act of 1933, as amended, for certain
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.
Short-Selling. Until the Fund replaces a borrowed security in
connection with a short sale, the Fund will: (a) maintain daily a
segregated account, containing cash or U.S. Government securities, at such
a level that (i) the amount deposited in the account plus the amount
deposited with the broker as collateral will equal the current value of the
security sold short and (ii) the amount deposited in the segregated account
plus the amount deposited with the broker as collateral will not be less
than the market value of the security at the time it was sold short; or (b)
otherwise cover its short position.
Options Transactions. The Fund may engage in options transactions,
such as purchasing or writing covered call or put options. In return for a
premium, the writer of a covered call option forfeits the right to any
appreciation in the value of the underlying security above the strike price
for the life of the option (or until a closing purchase transaction can be
effected). Nevertheless, the call writer retains the risk of a decline in
the price of the underlying security. The writer of a covered put option
accepts the risk of a decline in the price of the underlying security. The
size of the premiums that the Fund may receive may be adversely affected as
new or existing institutions, including other investment companies, engage
in or increase their option-writing activities.
Options written ordinarily will have expiration dates between one and
nine months from the date written. The exercise price of the options may
be below, equal to or above the market values of the underlying securities
at the time the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and "out-
of-the-money," respectively. The Fund may write (a) in-the-money call
options when the Manager expects that the price of the underlying security
will remain stable or decline moderately during the option period, (b) at-
the-money call options when the Manager expects that the price of the
underlying security will remain stable or advance moderately during the
option period and (c) out-of-the-money call options when the Manager
expects that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. In these circumstances, if the market price of the
underlying security declines and the security is sold at this lower price,
the amount of any realized loss will be offset wholly or in part by the
premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price
to market price) may be utilized in the same market environments that such
call options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option continues,
the Fund may be assigned an exercise notice by the broker-dealer through
which the option was sold, requiring the Fund to deliver, in the case of a
call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. The
Fund can no longer effect a closing purchase transaction with respect to an
option once it has been assigned an exercise notice.
While it may choose to do otherwise, the Fund generally will purchase
or write only those options for which the Manager believes there is an
active secondary market so as to facilitate closing transactions. There is
no assurance that sufficient trading interest to create a liquid secondary
market on a securities exchange will exist for any particular option or at
any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at times have
rendered certain clearing facilities inadequate and resulted in the
institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that
otherwise may interfere with the timely execution of customers' orders,
will not recur. In such event, it might not be possible to effect closing
transactions in particular options. If as a covered call option writer the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise or it
otherwise covers its position.
Stock Index Options. The Fund may purchase and write put and call
options on stock indexes listed on U.S. or foreign securities exchanges or
traded in the over-the-counter market. A stock index fluctuates with
changes in the market values of the stocks included in the index.
Options on stock indexes are similar to options on stock except that
(a) the expiration cycles of stock index options are generally monthly,
while those of stock options are currently quarterly, and (b) the delivery
requirements are different. Instead of giving the right to take or make
delivery of a stock at a specified price, an option on a stock index gives
the holder the right to receive a cash "exercise settlement amount" equal
to (i) the amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied
by (ii) a fixed "index multiplier." Receipt of this cash amount will
depend upon the closing level of the stock index upon which the option is
based being greater than, in the case of a call, or less than, in the case
of a put, the exercise price of the option. The amount of cash received
will be equal to such difference between the closing price of the index and
the exercise price of the option expressed in dollars times a specified
multiple. The writer of the option is obligated, in return for the premium
received, to make delivery of this amount. The writer may offset its
position in stock index options prior to expiration by entering into a
closing transaction on an exchange or it may let the option expire
unexercised.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option, the writer of the option will deliver to the holder of the
option the futures position and the accumulated balance in the writer's
futures margin account, which represents the amount by which the market
price of the futures contract exceeds, in the case of a call, or in less
than, in the case of a put, the exercise price of the option on the futures
contract. The potential loss related to the purchase of options on futures
contracts is limited to the premium paid for the option (plus transaction
costs). Because the value of the option is fixed at the time of sale,
there are no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does change daily and
that change would be reflected int he net asset value of the Fund.
Foreign Currency Transactions. If the Fund enters into a currency
transaction, it will deposit, if so required by applicable regulations,
with its custodian cash or readily marketable securities in a segregated
account of the Fund in an amount at least equal to the value of the Fund's
total assets committed to the consummation of the forward contract. If the
value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account so that the
value of the account will equal the amount of the Fund's commitment with
respect to the contract.
At or before the maturity of a forward contract, the Fund either may
sell a security and make delivery of the currency, or retain the security
and offset its contractual obligation to deliver the currency by purchasing
a second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is obligated to
deliver. If the Fund retains the portfolio security and engages in an
offsetting transaction, the Fund, at the time of execution of the
offsetting transaction, will incur a gain or loss to the extent movement
has occurred in forward contract prices. Should forward prices decline
during the period between the Fund's entering into a forward contract for
the sale of a currency and the date it enters into an offsetting contract
for the purchase of the currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward prices increase,
the Fund will suffer a loss to the extent the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period
and the market conditions then prevailing. Because transactions in
currency exchange usually are conducted on a principal basis, no fees or
commissions are involved. The use of forward currency exchange contracts
does not eliminate fluctuations in the underlying prices of the securities,
but it does establish a rate of exchange that can be achieved in the
future. If a devaluation generally is anticipated, the Fund may not be
able to contract to sell the currency at a price above the devaluation
level it anticipates. The requirements for qualification as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), may cause the Fund to restrict the degree to which it engages in
currency transactions. See "Dividends, Distributions and Taxes."
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral. For
purposes of this policy, the Fund considers collateral consisting of U.S.
Government securities [or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund] to be the
equivalent of cash. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with the Fund, and which is acting
as a "placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board must terminate the
loan and regain the right to vote the securities if a material event
adversely affecting the investment occurs. These conditions may be subject
to future modification.
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 14 as fundamental policies. Fundamental policies cannot
be changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "Act")) of the Fund's
outstanding voting shares. Investment restrictions numbered 15, 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. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its total assets to be
invested in securities of such issuer (except securities of the
United States Government or any instrumentality thereof).
2. Purchase the securities of any issuer if such purchase would
cause the Fund to hold more than 10% of the voting securities of
such issuer.
3. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors)
if such purchase would cause the value of the Fund's investments
in all such companies to exceed 5% of the value of its total
assets.
4. Purchase securities of closed-end investment companies,
except in the open market where no commission except the
rdinary broker's commission is paid, which purchases are limited
to a maximum of 10% of its net assets, or as part of a merger or
consolidation. This practice has not been employed by the Fund
in the past. The Fund may not purchase or retain securities
issued by open-end investment companies other than itself.
5. Purchase or retain the securities of any issuer if the officers
or directors of the Fund or of the Manager, who own beneficially
more than 1/2 of 1% of the securities of such issuer, together
own beneficially more than 5% of the securities of such issuer.
6. Invest in commodities, except that the Fund may purchase and
sell options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or
indices.
7. Borrow money, except to the extent permitted under the Act
(which currently limits borrowing to no more than 33-1/3% of the
value of the Fund's total assets).
8. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements referred to
in the Fund's Prospectus. However, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board.
9. Act as an underwriter of securities of other issuers.
10. Purchase from or sell to any of its officers or directors or
firms of which any of them are affiliated persons, any
securities (other than capital stock of the Fund), but such
persons or firms may act as brokers for the Fund for customary
commissions.
11. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in
accordance with its views.
12. Purchase securities on margin, but the Fund may obtain such
short-term credit as may be necessary for the clearance of
purchases and sales of securities.
13. Concentrate its investments in any particular industry or
industries, except that the Fund may invest up to 25% of the
value of its total assets in a single industry.
14. Purchase warrants in excess of 2% of net assets. Such warrants
shall be valued at the lower of cost or market (for purposes of
this restriction), except that warrants acquired by the Fund in
units or attached to securities shall not be included within
this 2% restriction.
15. Purchase, sell or write puts, calls, or combinations thereof,
except as described in the Fund's Prospectus and Statement of
Additional Information.
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.
While not fundamental policies, the Fund has undertaken to comply with
the following limitations for the purpose of registering the Fund's shares
for sale in certain states. The Fund will not: (a) invest in oil, gas or
other mineral leases, or (b) invest in real estate limited partnerships.
If a percentage restriction is adhered to at the time an investment is
made, a later change in percentage resulting from a change in values or
assets will not constitute a violation of that restriction.
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
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Fund's Distributor. From August 1994 to December
31, 1994, he was a director of Mellon Bank Corporation. Mr. DiMartino
is Chairman of the Board of the Noel Group, Inc.; a director of The
Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway Company, Inc., Curtis Industries, Inc., Simmons
Outdoor Corporation and Staffing Resources, Inc.; and a trustee of
Bucknell University. He is also a Board member of 93 other funds in
the Dreyfus Family of Funds. Mr. DiMartino is 51 years old and his
address is 200 Park Avenue, New York, New York 10166.
*DAVID P. FELDMAN, Director. Corporate Vice President--Investment
Management of AT&T. He is also a trustee of Corporate Property
Investors, a real estate investment company. He is also a Board
member of 37 other funds in the Dreyfus Family of Funds. Mr. Feldman
is 55 years old and his address is one Oak Way, Berkeley Heights, New
Jersey 07922.
JOHN M. FRASER, JR., Director. President of Fraser Associates, a
service company for planning and arranging corporate meetings and
other events. He was Executive Vice President of Flagship Cruises
Ltd. from September 1975 to June 1978. Prior thereto, he was Senior
Vice President and Resident Director of the Swedish-American Line for
the United States and Canada. He is also a Board member of 14 other
funds in the Dreyfus Family of Funds. Mr. Fraser is 73 years old and
his address is 133 East 64th Street, New York, New York 10021.
ROBERT R. GLAUBER, Director. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University since January 1992. He was Under Secretary of the Treasury
for Finance at the U.S. Treasury Department from May 1989 to January
1992. For more than five years prior thereto, he was a Professor of
Finance at the Graduate School of Business Administration of Harvard
University and, from 1985 to 1989, Chairman of its Advanced Management
Program. He is also a director of MidOcean Reinsurance Co. Ltd. and
Cooke & Bieler, Inc., investment counselors, and a Board member of 20
other funds in the Dreyfus Family of Funds. Mr. Glauber is 56 years
old and his address is 79 John F. Kennedy Street, Cambridge,
Massachusetts 02138.
JAMES F. HENRY, Director. President of the Center for Public Resources, a
non-profit organization principally engaged in the development of
alternatives to business litigation. He was of counsel to the law
firm of Lovejoy, Wasson & Ashton from October 1975 to December 1976
and from October 1979 to June 1983, and was a partner of that firm
from January 1977 to September 1979. He was President and director of
the Edna McConnell Clark Foundation, a philanthropic organization,
from September 1971 to December 1976. He is also a Board member of 10
other funds in the Dreyfus Family of Funds. Mr. Henry is 64 years old
and his address is c/o Center for Public Resources, 366 Madison
Avenue, New York, New York 10017.
ROSALIND GERSTEN JACOBS, Director. Director of Merchandise and Marketing
for Corporate Property Investors, a real estate investment company.
From 1974 to 1976, she was owner and manager of a merchandise and
marketing consulting firm. Prior to 1974, she was a Vice President of
Macy's, New York. She is also a Board member of 20 other funds in the
Dreyfus Family of Funds. Mrs. Jacobs is 64 years old and her address
is c/o Corporate Property Investors, 305 East 47th Street, New York,
New York 10017.
IRVING KRISTOL, Director. John M. Olin Distinguished Fellow of American
Enterprise Institute for Public Policy Research, co-editor of The
Public Interest magazine, and an author or co-editor of several books.
From May 1981 to December 1994, he was a consultant to the Manager on
economic matters; from 1969 to 1988, he was Professor of Social
Thought at the Graduate School of Business Administration, New York
University; from September 1969 to August 1979, he was Henry R. Luce
Professor of Urban Values at New York University; from 1975 to 1990,
he was a director of Lincoln National Corporation, an insurance
company; and from 1977 to 1990, he was a director of Warner-Lambert
Company, a pharmaceutical and consumer products company. He is also a
Board member of 10 other funds in the Dreyfus Family of Funds. Mr.
Kristol is 75 years old and his address is c/o The Public Interest,
1112 16th Street, N.W., Suite 530, Washington, D.C. 20036.
DR. PAUL A. MARKS, Director. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He was Vice President for
Health Sciences and Director of the Cancer Center at Columbia
University from 1973 to 1980, and Professor of Medicine and of Human
Genetics and Development at Columbia University from 1968 to 1982.
From 1976 to 1991, he was a director of the Charles H. Revson
Foundation; from 1992 to 1993, he was a director of Biotechnology
General, Inc., a biotechnology development company; and from 1991 to
1995 he was a director of National Health Laboratories, a national
clinical diagnostic laboratory. He is also a director of Pfizer,
Inc., a pharmaceutical company, Life Technologies, Inc., a life
science company producing products for cell and molecular biology and
microbiology, LINC Venture Lease Partners II, L.P., a limited
partnership engaged in leasing, and Tularik, Inc., a biotechnology
company. He is also a Board member of 10 other funds in the Dreyfus
Family of Funds. Dr. Marks is 68 years old and his address is c/o
Memorial Sloan-Kettering Cancer Center, 1275 York Avenue, New York,
New York 10021.
DR. MARTIN PERETZ, Director. Editor-in-Chief of The New Republic magazine
and a lecturer in Social Studies at Harvard University, where he has
been a member of the faculty since 1965. He is a trustee of The
Center for Blood Research at the Harvard Medical School and a director
of LeukoSite Inc., a biopharmaceutical company. From 1988 to 1989, he
was a director of Bank of Leumi Trust Company of New York; and from
1988 to 1991 he was a director of Carmel Container Corporation. He is
also a Board member of 10 other funds in the Dreyfus Family of Funds.
Dr. Peretz is 55 years old and his address is c/o The New Republic,
1220 19th Street, N.W., Washington, D.C. 20036.
BERT W. WASSERMAN, Director. Financial Consultant. From January 1990 to
March 1995, Executive Vice President and Chief Financial Officer, and
from January 1990 to March 1993 a director, of Time Warner Inc; from
1981 to 1990, he was a member of the office of the President and a
director of Warner Communications, Inc. He is also a member of the
Chemical Bank National Advisory Board and a director of The New
Germany Fund, Mountasia Entertainment International, Inc. and the
Lillian Vernon Corporation. He is also a Board member of 10 other
funds in the Dreyfus Family of Funds. Mr. Wasserman is 62 years
old and his address is 126 East 56th Street, Suite 12 North, New York,
New York 10022-3613.
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 February 28, 1995, and by all other funds in the Dreyfus Family
of Funds for which such person is a Board member for the year ended
December 31, 1994, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual 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>
Joseph S. DiMartino $8,125** none none $445,000***
David P. Feldman $1,474 none none $ 85,631
John M. Fraser, Jr. $6,500 none none $ 46,766
Robert R. Glauber $6,500 none none $ 79,696
James F. Henry $6,500 none none $ 44,946
Rosalind Gersten Jacobs $6,500 none none $ 57,638
Irving Kristol $6,500 none none $ 44,946
Dr. Paul A. Marks $6,500 none none $ 44,946
Dr. Martin Peretz $6,500 none none $ 44,946
Bert W. Wasserman $6,500 none none $ 40,720
___________________________
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $290 for all Directors
as a group.
** Estimated amount for the current fiscal year ending February 29, 1996.
*** Estimated amount for the year ending December 31, 1995.
</TABLE>
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Directors of the Fund
who are not "interested persons" of the Fund, as defined in the Act, will
be selected and nominated by the Directors who are not "interested persons"
of the Fund.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Operating
Officer and Compliance 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,
General Counsel, Secretary and Clerk 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.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was Manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Vice President
and Associate General Counsel of the Distributor and an officer of
other investment companies advised or administered by the Manager.
From September 1992 to August 1994, he was an attorney with the Board
of Governors of the Federal Reserve System. He is 30 years old.
JOSEPH 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. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he held the
position of Assistant Vice President in the Mutual Fund Accounting
Department of the Manager. He is 59 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.
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; and from March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts. She is 50 years old.
The address of each officer of the 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 Common Stock outstanding on April 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
Agreement (the "Agreement") dated August 24, 1994, with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Act) of the outstanding voting securities of
the Fund, provided that in either event its continuance also is approved by
a majority of the Board members who are not "interested persons" (as
defined in 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. Shareholders
approved the Agreement on August 2, 1994. The Board, including a majority
of its members who are not "interested persons" of any party to the
Agreement, last voted to renew the Agreement at a meeting held on June 5,
1995. The Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board or by vote of a majority of the Fund's shares or, upon not
less than 90 days notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Philip L. Toia, Vice Chairman--
Operations and Administration; Paul H. Snyder, Vice President--Finance and
Chief Financial Officer; Daniel C. Maclean, Vice President and General
Counsel; Elie M. Genadry, Vice President--Institutional Sales; William F.
Glavin, Jr., Vice President--Production Management; Henry D. Gottmann, Vice
President--Retail Sales and Service; Jeffrey N. Nachman, Vice President--
Mutual Fund Accounting; Diane M. Coffey, Vice President--Corporate
Communications; Barbara E. Casey, Vice President--Retirement Services;
Katherine C. Wickham, Vice President--Human Resources; Andrew S. Wasser,
Vice President--Information Services; Mark N. Jacobs, Vice President--Legal
and Secretary; Elvira Oslapas, Assistant Secretary; 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. The Manager is responsible for investment decisions and provides
the Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The Fund's portfolio managers are
Thomas A. Frank, Howard Stein and Ernest G. Wiggins, Jr. 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's review at the meeting subsequent to such
transactions.
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 Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of registrars and custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining corporate existence,
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.
The Manager maintains office facilities on behalf of the Fund and
furnishes statistical and research data, clerical help 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.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .75 of 1% of the
average daily value of the Fund's net assets. The management fees paid by
the Fund to the Manager for the fiscal years ended February 28, 1993, 1994
and 1995, amounted to $4,417,415, $3,784,920 and $2,924,725, respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the average value of the Fund's net assets,
the Manager will reduce its fee to the extent of the excess over 1-1/2%.
There was no reduction in management fee for fiscal 1993, 1994 and 1995.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board members for their review. In addition, the Plan provides that
material amendments of the Plan must be approved by the Board and by its
members who are not "interested persons" (as defined in the Act) of the
Fund and have no direct or indirect financial interest in the operation of
the Plan by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual approval by
such vote of the Board members cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable at any time by vote
of a majority of the Board members who are not "interested persons" and
have no direct or indirect financial interest in the operation of the Plan.
The fees paid by the Fund pursuant to the Plan for the fiscal year
ended February 28, 1995 amounted to $519,519.
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 other funds in the Dreyfus Family of Funds and for
certain other investment companies.
Group Purchase and Salary Reduction Plans. For information concerning
minimum initial investments for various retirement plans, see "Shareholder
Services--Corporate Pension/Profit-Sharing and Personal Retirement Plans."
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 Dreyfus TeleTransfer, 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."
Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers which may charge a nominal
transaction fee for such services. Some dealers will place the Fund's
shares in an account with their firm. Dealers also may require that the
customer invest more than the $1,000 minimum investment through dealers;
the customer not take physical delivery of stock certificates; the customer
not request redemption checks to be issued in the customer's name;
fractional shares not be purchased; monthly income distributions be taken
in cash; or other conditions. In some states, banks or other institutions
effecting transactions in Fund shares may be required to register as
dealers pursuant to state law.
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 these fees may be charged for customer services including, but not
limited to, same-day investment of client funds; same-day access to client
funds; advice to customers about the status of their accounts, yield
currently being paid or income earned to date; provision of periodic
account statements showing security and money market positions; other
services available from the dealer, bank or other institution; and
assistance with inquiries related to their investment. Any such fees will
be deducted monthly from the investor's account, which on smaller accounts
could constitute a substantial portion of distributions. 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.
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 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, an investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer Agent
of a redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder
Services Form. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees ordinarily
are imposed by such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
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 owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amounts, 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 Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
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, an investor must give exchange instructions to
the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all fund shareholders
automatically, unless the investor checks the applicable "NO" box on the
Account Application, indicating that the investor specifically refuses this
privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible
for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
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 certain other funds 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 set forth 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 and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Dreyfus Auto-Exchange Privilege may be modified or terminated any time
upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("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, including SEP-IRAs
and IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support services
also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from
the Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$2,500 with no minimum 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 normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA may also open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the form of
Custodial Agreement for further details on eligibility, service fees and
tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities, including
covered call options written, are valued at the last sales price on the
securities exchange on which such securities primarily are traded or at the
last sales price on the national securities market. Securities not listed
on an exchange or 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. Market
quotations of foreign securities in foreign currencies are translated into
U.S. dollars at the prevailing rates of exchange. Any securities or other
assets for which recent market quotations are not readily available are
valued at fair value as determined in good faith by the Board. 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
February 28, 1995 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. At present, such qualification relieves the
Fund from any liability for Federal income taxes to the extent its net
investment income and realized capital gains are distributed in accordance
with applicable provisions of the Code. The term "regulated investment
company" does not imply the supervision of management or investment
practices or policies by any government agency.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain forward contracts and
options) may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of the gain realized from the
disposition of certain market discount bonds will be treated as ordinary
income under Section 1278 of the Code. Finally, all or a portion of the
gain realized from engaging in"conversion transactions" may be treated as
ordinary income under Section 1258 of the Code. "Conversion transactions"
are defined to include certain forward, futures, option and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes
from certain forward contracts and options transactions will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and
options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner described
above.
Offsetting positions held by the Fund involving certain foreign
currency forward contracts or options may constitute "straddles."
"Straddles" are defined to include "offsetting positions" in actively
traded personal property. The tax treatment of "straddles" is governed by
Sections 1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Sections 1256 and 988 of the Code.
As such, all or a portion of any short or long-term capital gain from
certain "straddle" and/or conversion transactions may be recharacterized as
ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in certain forward contracts or options transactions, such
"straddles" would be characterized as "mixed straddles" if the forward
contracts or options transactions comprising a part of such "straddles"
were governed by Section 1256 of the Code. The Fund may make one or more
elections with respect to "mixed straddles." Depending on which election
is made, if any, the results to the Fund may differ. If no election is
made to the extent the "straddles" rules apply to positions established by
the Fund, losses realized by the Fund will be deferred to the extent of
unrealized gain in the offsetting position. Moreover, as a result of the
"straddle" and the conversion transaction rules, short-term capital loss on
"straddle" positions may be
recharacterized as long-term capital loss, and long-term capital gains may
be treated as short-term capital gains or ordinary income.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of his shares below the
original cost of his investment. Such a dividend or distribution would be
a return on investment in an economic sense although taxable as stated
above. In addition, the Code provides that if a shareholder holds shares
of the Fund for six months (or 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 a long-term capital loss to the extent of
the capital gain distribution received.
Depending on the composition of the Fund's income, all or a portion of
the dividends paid by the Fund from net investment income may qualify for
the dividends received deduction allowable to certain U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to 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.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Fund for the purchase or sale of portfolio securities. Allocation
of brokerage transactions, including their frequency, is made in the best
judgment of the Manager and in a manner deemed fair and reasonable to
shareholders. The primary consideration is prompt execution of orders at
the most favorable net price. Subject to this consideration, the brokers
selected will include those that supplement the Manager's research
facilities with statistical data, investment information, economic facts
and opinions. Information so received is in addition to and not in lieu of
services required to be performed by the Manager and the Manager's 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 because of their ability to handle special executions
such as are involved in large block trades or broad distributions, provided
the primary consideration is met. Large block trades may, in certain
cases, result from two or more funds in the Dreyfus Family of Funds being
engaged simultaneously in the purchase or sale of the same security. For
the fiscal years ended February 28, 1994 and 1995, the Fund's portfolio
turnover rate was 194.59% and 242.75%, respectively.
Sales of Fund shares by a broker may be taken into consideration in
allocating brokerage transactions. The overall reasonableness of brokerage
commissions paid is evaluated by the Manager based upon its knowledge of
available information about 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 or execution otherwise
is obtainable.
The Fund paid total brokerage commissions for its portfolio securities
transactions of $1,137,703, $2,092,609 and $2,573,994 for fiscal 1993, 1994
and 1995, respectively, none of which was paid to the Distributor. The
Fund's increased brokerage commissions for fiscal 1994 and 1995 reflect an
increase in the Fund's trading activity and the greater brokerage expenses
associated therewith. The above amounts do not include gross spreads and
concessions in connection with principal transactions, which, where
determinable, totaled $883,179, $975,125 and $303,479 for fiscal 1993, 1994
and 1995, respectively, none of which was paid to the Distributor.
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 one, five and ten year
periods ended February 28, 1995 was (2.11)%, 7.27% and 10.96%,
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 February 4, 1972 to February
28, 1995 was
970.43%. 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 refer to
Morningstar ratings and related analyses supporting the rating.
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.
On June 20, 1983, the Fund changed its name from "Dreyfus Number Nine,
Inc." to "Dreyfus Growth Opportunity Fund, Inc."
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, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary
of First Data Corporation, P. O. Box 9671, Providence, Rhode Island
02940-9671, is the Fund's transfer and dividend disbursing agent. Neither
The Bank of New York nor The Shareholder Services Group, Inc. has any part
in determining the investment policies of the Fund or which securities are
to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS FEBRUARY 28,1995
COMMON STOCKS--95.5% SHARES VALUE
-------------- -------------
<S> <C> <C> <C>
CAPITAL GOODS--5.5% Brown Boveri & Cie 13,000 $ 11,313,939
Deere & Co............................. 100,000 7,662,500
Mitsubishi Heavy Industries............ 250,000 1,576,554
--------------
20,552,993
--------------
CONSUMER SERVICES--5.2% Gaylord Entertainment, Cl. A 300,000 7,875,000
Time Warner............................ 300,000 11,587,500
--------------
19,462,500
--------------
ENERGY--17.5% Amerada Hess 250,000 12,250,000
Anadarko Petroleum..................... 100,000 4,387,500
Arethusa (OFF-Shore)................... 250,000 (a) 3,156,250
Dual Drilling.......................... 218,000 (a) 1,607,750
Energy Service......................... 300,000 (a) 3,525,000
Louisiana Land & Exploration........... 200,000 6,925,000
Rowan Cos.............................. 250,000 (a) 1,562,500
Schlumberger........................... 270,000 15,356,250
Sonat Offshore Drilling................ 100,000 2,087,500
Texaco................................. 225,000 14,343,750
--------------
65,201,500
--------------
FINANCE--18.7% American International Group 120,000 12,450,000
Bank of New York....................... 160,000 5,360,000
Comerica............................... 170,000 4,781,250
EXEL................................... 200,000 8,525,000
First Chicago.......................... 70,000 3,543,750
First Interstate Bancorp............... 145,000 11,799,375
NationsBank............................ 50,000 2,493,750
Shawmut National....................... 123,000 3,151,875
Transatlantic Holdings................. 255,900 14,714,250
Western National....................... 250,000 2,968,750
--------------
69,788,000
--------------
HEALTH CARE--13.4% American Home Products 100,000 7,150,000
Baxter International................... 300,000 9,337,500
Columbia/HCA Healthcare................ 200,000 8,275,000
Genelabs Technologies.................. 166,667 (a) 250,000
Pfizer................................. 75,000 6,206,250
Schering-Plough........................ 75,000 5,878,125
SmithKline Beecham A.D.R............... 100,000 3,887,500
U.S. HealthCare........................ 100,000 4,300,000
United Healthcare...................... 110,000 4,730,000
--------------
50,014,375
--------------
INDUSTRIAL SERVICES--3.2% WMX Technologies 345,000 9,099,375
Wheelabrator Technology................ 200,000 2,750,000
--------------
11,849,375
--------------
PROCESS INDUSTRIES--3.6% Grace (W.R.) 300,000 13,500,000
--------------
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28,1995
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
PRODUCER
MANUFACTURING--6.1% Cooper Industries 300,000 $ 11,775,000
TRINOVA................................ 400,000 10,800,000
--------------
22,575,000
--------------
RETAIL TRADE--5.0% Federated Department Stores 110,000 (a) 2,420,000
Home Shopping Network.................. 500,000 (a) 4,437,500
Premark International.................. 100,000 4,325,000
Sears, Roebuck ........................ 100,000 4,925,000
Wal-Mart Stores........................ 100,000 2,375,000
--------------
18,482,500
--------------
TECHNOLOGY--12.9% Bay Networks 100,000 (a) 3,137,500
Boeing................................. 75,000 3,459,375
cisco Systems.......................... 100,000 (a) 3,375,000
DSC Communications..................... 100,000 (a) 3,600,000
Ericsson (L.M.), Telephone, Cl. B, A.D.R 50,000 2,843,750
General Instrument..................... 165,000 (a) 5,238,750
Intel.................................. 90,000 7,177,500
Microsoft.............................. 100,000 (a) 6,300,000
Motorola............................... 100,000 5,750,000
Novell................................. 100,000 (a) 2,093,750
Texas Instruments...................... 62,500 4,921,875
--------------
47,897,500
--------------
TRANSPORTATION--4.0% Burlington Northern 120,000 6,720,000
OMI.................................... 307,100 (a) 1,612,275
Overseas Shipholding................... 200,000 4,625,000
Tidewater.............................. 100,000 1,962,500
--------------
14,919,775
--------------
UTILITIES-.4% Nippon Telephone & Telegraph 210 1,497,984
--------------
TOTAL COMMON STOCKS
(cost $346,131,831).................. $355,741,502
=============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS--4.2% AMOUNT
--------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES;Federal Home Loan Mortgage
5.95%, 3/1/1995
(cost $15,500,000).................................................... $ 15,500,000 $ 15,500,000
==============
TOTAL INVESTMENTS (cost $361,631,831) ..................................... 99.7% $ 371,241,502
====== ==============
CASH AND RECEIVABLES (NET) ............................................ .3% $ 1,071,143
====== ==============
NET ASSETS.................................................................. 100.0% $ 372,312,645
====== =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $361,631,831)-see statement..................................... $371,241,502
Cash.................................................................... 1,823,088
Receivable for investment securities sold............................... 10,639,281
Dividends receivable.................................................... 842,950
Prepaid expenses........................................................ 42,785
--------------
384,589,606
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 296,720
Payable for investment securities purchased............................. 11,774,135
Payable for Common Stock redeemed....................................... 43,959
Accrued expenses........................................................ 162,147 12,276,961
------------- --------------
NET ASSETS ................................................................ $372,312,645
=============
REPRESENTED BY:
Paid-in capital......................................................... $364,022,096
Accumulated undistributed investment income-net......................... 490,420
Accumulated distributions in excess of net realized gain
on investments-Note 1(c).............................................. (1,809,542)
Accumulated net unrealized appreciation on investments_Note 3........... 9,609,671
--------------
NET ASSETS at value applicable to 42,964,945 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $372,312,645
==============
NET ASSET VALUE, offering and redemption price per share
($372,312,645 / 42,964,945 shares)...................................... $8.67
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1995
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $21,508 foreign taxes withheld at source)...... $ 5,747,128
Interest.............................................................. 2,772,135
--------------
TOTAL INCOME...................................................... $ 8,519,263
EXPENSES:
Management fee_Note 2(a).............................................. 2,924,725
Shareholder servicing costs_Note 2(b)................................. 1,090,089
Custodian fees........................................................ 81,885
Professional fees..................................................... 79,524
Directors' fees and expenses_Note 2(c)................................ 54,747
Registration fees..................................................... 34,258
Prospectus and shareholders' reports.................................. 7,750
Miscellaneous......................................................... 3,263
--------------
TOTAL EXPENSES.................................................... 4,276,241
--------------
INVESTMENT INCOME--NET............................................ 4,243,022
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments_Note 3................................. $ 3,313,992
Net unrealized (depreciation) on investments............................ (19,554,876)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (16,240,884)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (11,997,862)
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED FEBRUARY 28,
--------------------------------
1994 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)-net............................................ $ (707,826) $ 4,243,022
Net realized gain on investments........................................ 110,183,296 3,313,992
Net unrealized (depreciation) on investments for the year............... (55,908,346) (19,554,876)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 53,567,124 (11,997,862)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net.............................................. ___ (3,800,200)
From net realized gain on investments................................... (101,875,165) (67,229,655)
In excess of net realized gain on investments........................... ___ (1,809,542)
-------------- --------------
TOTAL DIVIDENDS....................................................... (101,875,165) (72,839,397)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 399,371,920 215,640,180
Dividends reinvested.................................................... 98,932,125 70,652,644
Cost of shares redeemed................................................. (556,464,733) (292,465,535)
-------------- --------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.............. (58,160,688) (6,172,711)
-------------- --------------
TOTAL (DECREASE) IN NET ASSETS.................................... (106,468,729) (91,009,970)
NET ASSETS:
Beginning of year....................................................... 569,791,344 463,322,615
-------------- --------------
End of year (including undistributed investment income_net:
$47,598 and $490,420, respectively)................................... $463,322,615 $372,312,645
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 32,987,816 22,977,606
Shares issued for dividends reinvested.................................. 8,859,503 8,225,621
Shares redeemed......................................................... (45,962,792) (30,788,833)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... (4,115,473) 414,394
============== ==============
See notes to financial statements.
</TABLE>
DREYFUS GROWTH OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated July 1, 1995.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
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 Administrative 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 (including options)
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.
(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 discounts on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
Dividends in excess of net realized gain on investments for financial
statement purposes result primarily from distributions of realized gain
necessary to satisfy tax requirements.
(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.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of 3/4 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage
commissions and extraordinary expenses, exceed 1 1/2% of the average value of
the Fund's net assets for any full fiscal year. No expense reimbursement was
required for the year ended February 28, 1995.
DREYFUS GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the year ended
February 28, 1995, the Fund was charged an aggregate of $519,519 pursuant to
the Shareholder Services Plan.
(C) 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 $4,500 and an attendance fee of $500 per meeting.
The Chairman of the Board receives an additional 25% of such compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the year ended February 28, 1995,
amounted to $798,933,818 and $834,740,848, respectively.
At February 28, 1995, accumulated net unrealized appreciation on
investments was $9,609,671, consisting of $20,747,563 gross unrealized
appreciation and $11,137,892 gross unrealized depreciation.
At February 28, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS GROWTH OPPORTUNITY FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS GROWTH OPPORTUNITY FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Growth Opportunity Fund, Inc., including the statement of
investments, as of February 28, 1995, 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 February 28, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Growth Opportunity Fund, Inc. at February 28, 1995, 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 Signature Logo)
New York, New York
March 31, 1995
