File Nos. 2-40341
811-2192
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 44 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 44 [X]
(Check appropriate box or boxes.)
THE DREYFUS THIRD CENTURY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
X on October 1, 1997 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the fiscal
year ended May 31, 1997 was filed on July 24, 1997.
THE DREYFUS THIRD CENTURY FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 3
4 General Description of Registrant 4, 18
5 Management of the Fund 7
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 18
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 14
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-22
13 Investment Objectives and Policies B-2
14 Management of the Fund B-6
15 Control Persons and Principal B-8
Holders of Securities
16 Investment Advisory and Other B-10
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
THE DREYFUS THIRD CENTURY FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-22
19 Purchase, Redemption and Pricing B-13, B-14
of Securities Being Offered
20 Tax Status *
21 Underwriters B-12
22 Calculation of Performance Data *
23 Financial Statements B-25
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-14
20 Location of Accounts and Records C-17
31 Management Services C-17
32 Undertakings C-17
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PROSPECTUS OCTOBER 1, 1997
THE DREYFUS THIRD CENTURY FUND, INC.
THE DREYFUS THIRD CENTURY FUND, INC. (THE "FUND") - CREATED TO MARK
THE ENTRY OF THE UNITED STATES INTO THE THIRD CENTURY OF ITS POLITICAL
EXISTENCE - IS AN OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY,
KNOWN AS A MUTUAL FUND. THE FUND'S PRIMARY GOAL IS TO PROVIDE CAPITAL GROWTH.
CURRENT INCOME IS A SECONDARY GOAL.
THE FUND INVESTS PRINCIPALLY IN COMMON STOCKS, OR SECURITIES
CONVERTIBLE INTO COMMON STOCK, OF COMPANIES WHICH, IN THE OPINION OF THE
FUND'S MANAGEMENT, NOT ONLY MEET TRADITIONAL INVESTMENT STANDARDS, BUT ALSO
SHOW EVIDENCE THAT THEY CONDUCT THEIR BUSINESS IN A MANNER THAT CONTRIBUTES
TO THE ENHANCEMENT OF THE QUALITY OF LIFE IN AMERICA.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY. YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S INVESTMENT
ADVISER. NCM CAPITAL MANAGEMENT GROUP, INC. ("NCM") SERVES AS THE FUND'S
SUB-INVESTMENT ADVISER AND PROVIDES DAY-TO-DAY MANAGEMENT OF THE FUND'S
PORTFOLIO.
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 OCTOBER 1, 1997, 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. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, 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.
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.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <S> <C>
PAGE PAGE
ANNUAL FUND OPERATING EXPENSES ..... 3 HOW TO REDEEM SHARES............ 14
CONDENSED FINANCIAL INFORMATION..... 3 SHAREHOLDER SERVICES PLAN....... 16
DESCRIPTION OF THE FUND............. 4 DIVIDENDS, DISTRIBUTIONS AND TAXES 16
MANAGEMENT OF THE FUND.............. 7 PERFORMANCE INFORMATION......... 17
HOW TO BUY SHARES................... 9 GENERAL INFORMATION............. 18
SHAREHOLDER SERVICES................ 11
</TABLE>
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.
[Page 1]
[This Page Intentionally Left Blank]
[Page 2]
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C>
Management Fees............................................................................. .75%
Other Expenses ............................................................................. .28%
Total Fund Operating Expenses............................................................... 1.03%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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: $11 $33 $57 $126
</TABLE>
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%.
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' annual return. The
foregoing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. You can purchase Fund shares without
charge directly from the Fund's distributor; you may be charged a fee if you
effect transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund," "How to Buy Shares,"
"How to Redeem Shares" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended May 31,
--------------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
--- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $7.73 $5.76 $6.33 $7.01 $7.79 $7.80 $8.48 $7.80 $7.45 $9.25
--- --- --- --- --- --- --- --- --- ---
INVESTMENT OPERATIONS:
Investment income-net.... .19 .29 .21 .06 .05 .04 .05 .07 .03 .02
Net realized and unrealized gain (loss)
on investments........... (.53) .84 .84 1.07 .26 .74 (.08) .65 2.39 2.16
--- --- --- --- --- --- --- --- --- ---
TOTAL FROM INVESTMENT OPERATIONS (.34) 1.13 1.05 1.13 .31 .78 (.03) .72 2.42 2.18
--- --- --- --- --- --- --- --- --- ---
DISTRIBUTIONS:
Dividends from investment income-net (.36) (.30) (.18) (.12) (.08) (.05) (.04) (.07) (.05) (.02)
Dividends from net realized gain on
investments.............. (1.27) (.26) (.19) (.23) (.22) (.05) (.61) (1.00) (.57) (1.40)
--- --- --- --- --- --- --- --- --- ---
TOTAL DISTRIBUTIONS...... (1.63) (.56) (.37) (.35) (.30) (.10) (.65) (1.07) (.62) (1.42)
--- --- --- --- --- --- --- --- --- ---
Net asset value, end of year $5.76 $6.33 $7.01 $7.79 $7.80 $8.48 $7.80 $7.45 $9.25 $10.01
=== === === === === === === === === ===
TOTAL INVESTMENT RETURN (3.92%) 20.54% 17.26% 17.19% 3.92% 10.02% (.63%) 11.81% 33.63% 25.70%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets 1.02% 1.04% 1.05% 1.04% 1.08% 1.11% 1.17% 1.12% 1.11% 1.03%
Ratio of net investment income to average
net assets............... 2.94% 4.71% 3.19% 1.10% .83% .48% .52% .93% .36% .22%
Portfolio Turnover Rate.. 36.76% 52.82% 162.82% 72.57% 47.92% 67.30% 71.70% 133.54% 92.08% 66.52%
Average Commission Rate Paid* - - - - - - - - - $.0616
Net Assets, end of year
(000's Omitted) $152,533 $168,579 $195,658 $266,126 $443,533 $526,335 $390,340 $368,833 $473,452.$677,084
*For fiscal years beginning June 1, 1996, the Fund is required to disclose
its average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
[Page 3]
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
<TABLE>
<CAPTION>
Debt Outstanding
YEAR ENDED MAY 31, 1997(1)
----------------------------
PER SHARE DATA:
<S> <C>
Amount of debt outstanding at
end of year (in thousands)................................................... -
Average amount of debt outstanding
throughout year (in thousands)(2)............................................ $118
Average number of shares outstanding
throughout year (in thousands)(3)............................................ 57,598
Average amount of debt per
share throughout year........................................................ Less than $0.01 per share
(1) At May 31, 1996, the Fund had no outstanding debt.
(2) Based upon daily outstanding borrowings.
(3) Based upon month-end balances.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES - The Fund's primary goal is to provide capital growth
through equity investment in companies that, in the opinion of the Fund's
management, not only meet traditional investment standards but which also
show evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America. Current income is
secondary to the primary goal. There can be no assurances that the Fund's
investment objectives will be achieved.
SPECIAL CONSIDERATIONS - TYPES OF COMPANIES SOUGHT FOR INVESTMENT - To
assess whether a company contributes to the enhancement of the quality of
life in America, the Fund considers a company's record in the areas of (1)
protection and improvement of the environment and the proper use of our
natural resources, (2) occupational health and safety, (3) consumer
protection and product safety, and (4) equal employment opportunity.
Consistent with its consumer protection screen, the Fund will not purchase
shares in a company which manufactures tobacco products. There are few
generally accepted measures of achievement in these areas. The development of
suitable measurement techniques, therefore, will be largely within the
discretion and judgment of the management of the Fund. Management does not
intend at present to evaluate in depth a company's activities not directly
connected with the conduct of its business (such as participation in
community improvement projects) or the secondary implications of corporate
activities (for example, in examining banks, the business activities of their
borrowers will not be evaluated).
The Fund's special considerations tend to limit the availability of
investment opportunities more than is customary with other investment
companies, including those managed by Dreyfus. Management believes, however,
that there are sufficient investment opportunities among companies which meet
the Fund's special considerations to permit full investment, if management
believes it desirable, in securities which meet the Fund's investment
objective of capital growth through equity investment.
The Fund's objectives and special considerations described above
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.
The Fund's Board of Directors may adopt additional criteria or
restrictions governing the Fund's investments if the Board of Directors
determines that the new criteria or restrictions are consistent with the
Fund's objective of investing in a socially responsible manner, but the Board
may not change the four existing special considerations described above
without shareholder approval.
[Page 4]
THE INVESTMENT SELECTION PROCESS - Potential investment portfolio selections
(based on traditional investment considerations, including an opinion of the
fundamental value of the security and other market factors) are designated to
the Dreyfus research staff. The staff begins a process of searching publicly
available information about the company to determine its record in the areas
of special concern to the Fund. Researchers use commercially available
computer data bases and reviews and evaluations published or made available
by "watchdog" groups whose interests focus on one or more of the special
areas, such as the environment, equal employment opportunity, product safety
or occupational safety and health, as applicable. Additional data may be
obtained, where practical, from local, state and federal agencies which
maintain surveillance in certain areas of interest to the Fund and which
provide this data to the public.
If the initial evaluation reveals no negative pattern in the areas of
special concern to the Fund, a company's securities are eligible for
purchase. The research staff supplements this initial screening by asking the
company to complete a questionnaire designed by the Fund to aid in the
evaluation of the company's conduct in the areas of special concern. The
examination of a company may also include personal interviews with company
officials, inspection of facilities and other techniques that may be
applicable to specific companies or industries.
If it is determined at any stage that purchase or retention of the
portfolio security is not consistent with the Fund's goal of investing in
companies whose conduct contributes to the enhancement of the quality of life
in America, the security will not be purchased or, if already purchased, will
be sold as expeditiously as possible, consistent with the best interests of
the Fund.
The Board will review new portfolio acquisitions in light of the
Fund's special concerns at their next regular meeting. While the Board of
Directors will disqualify a company evidencing a pattern of conduct that is
inconsistent with the Fund's special standards, the Board need not disqualify
a company on the basis of incidents that, in the Board's judgment, do not
reflect the company's policies and overall current level of performance in
the areas of special concern to the Fund. The performance of companies in the
areas of special concern are reviewed regularly to determine their continued
eligibility.
MANAGEMENT POLICIES - Depending on market conditions, the Fund attempts to be
fully invested in common stock, or securities convertible into common stock,
which meet both traditional investment standards and the Fund's investment
criteria described under "Types of Companies Sought for Investment."
As a fundamental policy, the Fund is permitted to borrow to the
extent permitted under the Act. 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.
The Fund may invest up to 15% of the value of its net assets in
securities which are illiquid securities, provided such investments are
consistent with the Fund's investment objective. Illiquid securities are
securities which are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days after notice, and
certain options traded in the over-the-counter market and securities used to
cover such options. Investment in illiquid securities subjects the Fund to
the risk that it will not be able to sell such securities when it may be
opportune to do so.
During periods in which management believes adverse trends are
occurring in the financial markets or the economy, the Fund may adopt a
temporary defensive posture to preserve shareholders' capital by investing in
U.S. Government securities, and also in corporate bonds, high grade
commercial paper, repurchase agreements, time deposits, bank certificates of
deposit, bankers' acceptances and other short-term bank obligations issued in
this country as well as those issued in dollar denominations
[Page 5]
by the foreign branches of U.S. banks, and cash or cash equivalents, without
limit as to amount, as long as such investments are made in securities of
eligible companies and domestic banks. When the Fund has adopted a temporary
defensive posture, the entire portfolio can be so invested. During such
periods, the Fund may not achieve its investment objectives.
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. The Fund's custodian will have
custody of, and will hold in a segregated account, securities acquired by the
Fund under a repurchase agreement. Repurchase agreements are considered by
the staff of the Securities and Exchange Commission to be loans by the Fund.
In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of one billion dollars or primary
government securities dealers reporting to the Federal Reserve Bank of New
York with respect to securities of the type in which the Fund may invest, and
the Fund will require that additional securities be deposited with its
custodian if the value of the securities purchased should decrease below
resale price. Dreyfus will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
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. The Fund will consider on an ongoing
basis the creditworthiness of the institutions with which it enters into
repurchase agreements.
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 (in no event longer than seven
days) 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 full amount of
the instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
To earn additional income on its portfolio, the Fund may write and
sell covered call option contracts on securities it owns to the extent of 20%
of the value of its net assets at the time such option contracts are written.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise price
at any time during the option period. A covered call option sold by the Fund,
which is a call option on a security owned by the Fund, exposes the Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or to possible
continued holding of a security which might otherwise have been sold to
protect against depreciation in the market price of the security.
A more detailed description of the securities in which the Fund may
invest can be found in the Statement of Additional Information.
The Fund may invest in companies with substantial overseas
activities, but, at present, management will not examine corporate activities
carried on outside the United States.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money to the extent
permitted under the Act, which currently limits borrowing to no more than 331/
3% of the value of the Fund's total assets; (ii) invest up to 5% of the value
of its total net assets in the securities of any one issuer (except
securities of the U.S. Government or any instrumentality thereof); (iii)
invest in companies having less
[Page 6]
than three years continuous operating history (including that of
predecessors) but only in an amount up to 5% of the value of its net assets;
and (iv) invest up to 25% of the value of its total assets in any single
industry. This paragraph describes fundamental policies of the Fund which
cannot be changed without approval by the holders of a majority (as defined
in the Act) of the Fund's outstanding voting shares. See "Investment
Objectives and Management Policies-Investment Restrictions" in the Fund's
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
days after notice and in other illiquid securities. See "Investment
Objectives and Management Policies - Investment Restrictions" in the Fund's
Statement of Additional Information.
INVESTMENT CONSIDERATIONS - The Fund will not seek to realize profits by
anticipating short-term market movements. When market conditions permit, the
Fund generally intends to retain securities for at least the statutory
long-term capital gain period. The annual portfolio turnover rate indicates
the rate of change in the Fund's portfolio; for instance, a rate of 100%
would result if all the securities in the portfolio at the beginning of an
annual period had been replaced by the end of the period. While the rate of
portfolio turnover will not be a limiting factor when management deems
changes appropriate, it is anticipated that, in view of the Fund's investment
objectives, its annual portfolio turnover rate generally should not exceed
75%. When extraordinary market conditions prevail, a higher turnover rate and
increased brokerage expenses may be expected.
Investment decisions for the Fund are made independently from those
of other investment companies advised by Dreyfus. However, if such other
investment companies are prepared to invest in, or desire to dispose of,
securities of the type which the Fund invests in 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
INVESTMENT ADVISER - Dreyfus, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser.
Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As of July 31,
1997, Dreyfus managed or administered approximately $92 billion in assets for
1.7 million investor accounts nationwide.
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
overall authority of the Fund's Board of Directors in accordance with
Maryland law.
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, Mellon managed approximately $259 billion in assets as of
June 30, 1997, including $88 billion in mutual fund assets. As of March 31,
1997, Mellon, through various subsidiaries, provided non-investment services,
such as custodial or administration services, for approximately $1.061
trillion in assets including approximately $58 billion in mutual fund assets.
[Page 7]
Under the terms of the Management Agreement, the Fund has agreed to
pay Dreyfus a fee, payable monthly, at the annual rate of .75 of 1% of the
value of the Fund's average daily net assets. For the fiscal year ended
May 31, 1997, the Fund paid Dreyfus a management fee at the annual rate
of .75 of 1% of the value of the Fund's average daily net assets.
In allocating brokerage transactions, Dreyfus seeks to obtain the
best execution of orders at the most favorable net price. Subject to this
determination, Dreyfus may consider, among other things, the receipt of
research services and/or the sale of shares of the Fund or other funds
managed, administered or advised by Dreyfus as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the Statement of Additional Information.
SUB-INVESTMENT ADVISER - NCM, located at 103 West Main Street, Durham, North
Carolina 27705-3638, a registered investment adviser, serves as the Fund's
sub-investment adviser. NCM was incorporated in 1986 and is one of the
nation's largest minority-owned investment management firms. Prior to August
2, 1994, NCM had not advised a registered investment company. As of June 30,
1997, NCM managed or administered approximately $4.2 billion in assets.
NCM, subject to the supervision and approval of Dreyfus, provides
investment advisory assistance and the day-to-day management of the Fund's
portfolio, as well as research and statistical information under an Amended
and Restated Sub-Investment Advisory Agreement with Dreyfus dated April 22,
1996, subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Amended and Restated Sub-Investment
Advisory Agreement contains a restriction on NCM's ability to act as the
investment adviser or sub-investment adviser for other registered funds with
socially responsible investment policies without the consent of Dreyfus or
the Fund.
Under the Amended and Restated Sub-Investment Advisory Agreement,
Dreyfus has agreed to pay NCM an annual fee, payable monthly, as set forth
below:
<TABLE>
<CAPTION>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
<S> <C>
0 to $400 million............................. .10 of 1%
In excess of $400 million
to $500 million.............................................. .15 of 1%
In excess of $500 million
to $750 million.............................................. .20 of 1%
In excess of $750 million..................... .25 of 1%
</TABLE>
For the fiscal year ended May 31, 1997, Dreyfus paid NCM pursuant to
the Amended and Restated Sub-Investment Advisory Agreement a monthly fee at
the effective aggregate annual rate of .12% of the value of the Fund's
average daily net assets.
The Fund's portfolio managers primarily responsible for management of
the Fund's portfolio are Eric W. Steedman, with respect to the Fund's areas
of special concern, and Maceo K. Sloan, with respect to selection of
portfolio securities. Mr. Steedman has held that position since May 1, 1996
and has been employed by Dreyfus since January 1995. From June 1994 to
December 1994, he was employed by the Council on Economic Priorities. Mr.
Sloan has held his position with the Fund since August 1994 and has been
employed by NCM since 1986. The Fund's other portfolio managers are
identified under"Management of the Fund" in the Fund's Statement of
Additional Information. Dreyfus also provides research services for the Fund
as well as for other funds advised by Dreyfus through a professional staff of
portfolio managers and security analysts.
EXPENSES - From time to time, Dreyfus 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
[Page 8]
increasing yield to investors at the time such amounts are waived or assumed,
as the case may be. The Fund will not pay Dreyfus at a later time for any
amounts it may waive, nor will the Fund reimburse Dreyfus for any amounts it
may assume.
Dreyfus may pay the Fund's distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Fund. The Fund's distributor may use part or all of such
payments to pay securities dealers or others in respect of these services.
DISTRIBUTOR - The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT - Mellon Bank, N.A., One
Mellon Bank Center, Pittsburgh, P.A. 15258, is the Custodian of the Fund's
investments. Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer
and Dividend Disbursing Agent (the "Transfer Agent").
HOW TO BUY SHARES
Fund shares are sold without a sales charge if you purchase them
directly from the Distributor; you may be charged a fee if you effect
transactions in shares of the Fund through a securities dealer, bank or other
financial institution. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund reserves
the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, investment adviser or bank which maintains an
omnibus account in the Fund and has made an aggregate minimum initial
purchase for its customers of $2,500, or $750 if the investment is for
Dreyfus sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant. Subsequent investments normally must be at least $100,
although there is no minimum for retirement plans. The initial investment must
be accompanied by the Fund's Account Application. The Fund reserves the
right to offer Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified or non-qualified employee
benefit plans or other programs where contributions or account information
can be transmitted in a manner and in a form acceptable to the Fund. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries, directors of Dreyfus, Board members of a fund advised by
Dreyfus, including members of the Fund's Board, or the spouse or minor child
of any of the foregoing, the minimum initial investment is $1,000. For
full-time or part-time employees of Dreyfus or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. Fund shares also
are offered without regard to the minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the
Dreyfus Step Program described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market. The Fund reserves
the right to vary further the initial and subsequent investment minimum
requirement 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.
[Page 9]
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 #8900051787/The Dreyfus
Third Century Fund, Inc. for purchase of Fund shares in your name. The wire
must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares
is by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number on
the Fund's Account Application and promptly mail the Account Application to
the Fund, as no redemptions will be permitted until the Account Application
is received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be 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 may also be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration, and
your Fund account number PRECEDED BY THE DIGITS "1111."
If an order is received in proper form by the Transfer 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 the close of trading on that day. Otherwise,
Fund shares will be purchased at the next determined net asset value.
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 or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 U.S.-based 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. 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 that the New York
Stock Exchange is open for business. For purposes of determining net asset
value per share, options will be valued 15 minutes after the close of trading
on the floor of the New York Stock Exchange. Net asset value per share is
computed by dividing the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding.
[Page 10]
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 method employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares (minimum of
$500, maximum of $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 by calling 1-800-645-6561 or, if you
are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES - You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by Dreyfus, to the
extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this 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
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a current 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, by a separate signed
Shareholder Services Form, available by calling 1-800-645-6561 or, by oral
request from any of the authorized signatories on the account, by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege, you
may telephone exchange instructions (including over The Dreyfus Touch
Registration Mark automated telephone system) by calling 1-800-645-6561.
If you are calling from overseas, call 516-794-5452. See "How to Redeem Fund
Shares-Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, 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 from which you are
exchanging or transferring were: (a) pur
[Page 11]
chased with a sales load, (b) acquired by a previous exchange or transfer
from shares 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 or transfer you must
notify the Transfer Agent. Any such qualification is subject to confirmation
of your holdings through a check of appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees currently are
charged shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' notice, to charge
shareholders a nominal administrative 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 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 an exchanging shareholder, therefore, 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 certain other funds
in The Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged automatically on the
first and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or 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 BUILDERRegistration 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 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
[Page 12]
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 this Privilege. The appropriate form may be obtained
by calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS DIVIDEND OPTIONS - Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share prices
which do not include the sales load or which reflect a reduced sales load.
If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject upon 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 your dividends or
dividends and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so designated.
Banks may charge a fee for this service.
For more information concerning these privileges, or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for Dreyfus Dividend Sweep.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House 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, Dreyfus, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus Payroll Savings
Plan. The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM - The Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-Automatic Asset BuilderRegistration Mark, 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
[Page 13]
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 BuilderRegistration Mark, 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 reserves the right to redeem
your account if you have terminated your participation in the Program and
your account's net asset value is $500 or less. See "How to Redeem Fund
Shares." 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."
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which stock certificates have
been issued may not be redeemed through this Plan.
You may make additional investments in Fund shares while an Automatic
Withdrawal Plan is in effect.
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 are
also available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL - You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
the Distributor. Securities dealers, banks and other financial institutions
may charge a fee for effecting redemptions of Fund shares. Any stock
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then-current net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark 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.
[Page 14]
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value has
been reduced to $500 or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Wire Redemption Privilege, or the Dreyfus TELETRANSFER
Privilege, if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. The Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
The Fund may modify or terminate any redemption Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for the
Wire Redemption, Telephone Redemption or Dreyfus TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) 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, investors
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, or if for Dreyfus retirement
plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. 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 THEREOF. 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, please call one of the telephone numbers listed under "General
Information."
[Page 15]
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, telephone or letter
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. 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
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE - You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
DREYFUS TELETRANSFER PRIVILEGE - You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
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. 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.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a subsidiary of Dreyfus, an
amount not to exceed an annual rate of .25 of 1% of the value of the average
daily net assets of the Fund's shares 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income and
makes distributions from 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
Act. The Fund will not make distributions from net realized securities gains
unless capital loss carryovers, if any, have been utilized or have expired.
You may choose whether to receive dividends and distributions in cash or to
reinvest in additional Fund shares at net asset value. All expenses are
accrued daily and deducted before the declaration of dividends to investors.
Dividends paid by the Fund derived from net investment income,
together with distributions from net realized short-term securities gains and
all or a portion of gains realized from the sale or other disposition of
certain market discount bonds, will be taxable to U.S. shareholders as
ordinary income whether or not reinvested. 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
reinvest
[Page 16]
ed in Fund shares. The Code provides that an individual generally will be
taxed on the net amount of his or her capital gain at a maximum rate of 28%
with respect to capital gain from property held for more than one year but
not more than 18 months and at a maximum rate of 20% with respect to capital
gain from property held for more than 18 months. Special rules (and generally
lower maximum rates) apply for individuals in lower tax brackets. 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 gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes 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 any U.S. nonresident
withholding tax. However, such distributions and redemption proceeds may be
subject to backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder of the Fund 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, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended May 31, 1997 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify so long as 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 realized capital gains are
distributed in accordance with the 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 and local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance will be calculated on the
basis of average annual total return and/or total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the 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
[Page 17]
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., Dow Jones Industrial Average, Standard & Poor's
500 Composite Stock Price Index, Morningstar, Inc. or other industry
publications.
GENERAL INFORMATION
The Fund was incorporated under Delaware law on May 6, 1971 and began
operations on March 29, 1972. On July 30, 1982, the Fund changed its state of
incorporation to Maryland. In April 1996, at a meeting of shareholders of the
Fund, shareholders approved changes in the Fund's fundamental policies and
investment restrictions and an Amended and Restated Sub-Investment Advisory
Agreement between Dreyfus and NCM.
The Fund is authorized to issue 150 million shares of Common Stock,
par value $.331/3 per share. Each share has one vote, has equal voting,
redemption, dividend and liquidation rights, and, when issued in accordance
with the terms of this offering, is fully-paid and non-assessable. Shares are
freely transferable and are redeemable at net asset value, at the option of
the shareholder.
Unless otherwise required by the Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require
the Fund to hold a special meeting of shareholders for the purpose of
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
holding office at the time were elected by shareholders.
The Transfer Agent maintains a record of each shareholder's ownership
and will send confirmations and statements of account to each shareholder.
[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
718-895-1206; outside the U.S. 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
Third Century
Fund, Inc.
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
B035p1097
This Prospectus is Printed on Recycled Paper.
[Page 20]
THE DREYFUS THIRD CENTURY FUND, INC.
(STATEMENT OF ADDITIONAL INFORMATION)
PART B
OCTOBER 1, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
The Dreyfus Third Century Fund, Inc. (the "Fund"), dated October 1, 1997, 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 718-895-1206
Outside the U.S. -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
NCM Capital Management Group, Inc. ("NCM") serves as the Fund's sub-
investment adviser. NCM provides day-to-day management of the Fund's
portfolio, subject to the supervision of the Manager.
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-02
Management of the Fund B-06
Investment Advisory Agreements B-10
Purchase of Shares B-13
Redemption of Shares B-14
Shareholder Services B-16
Determination of Net Asset Value B-19
Shareholder Services Plan B-19
Dividends, Distributions and Taxes B-20
Portfolio Transactions B-22
Performance Information B-24
Information About the Fund B-24
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors B-25
Financial Statements B-26
Report of Independent Auditors B-35
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."
Portfolio Securities. During a period when it becomes desirable to
move the Fund toward a defensive position because of adverse trends in the
financial markets or the economy, the Fund may invest in securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities.
These include a variety of U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance: Treasury Bills have
initial maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally have initial
maturities of greater than ten years. Some obligations issued or guaranteed
by U.S. Government agencies and instrumentalities, such as Government
National Mortgage Association pass-through certificates, are supported by
the full faith and credit of the U.S. Treasury; others, such as those of the
Federal Home Loan Banks, by the right of the issuer to borrow from the U.S.
Treasury; others, such as those issued by the Federal National Mortgage
Association, by discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others, such as
those issued by the Student Loan Marketing Association, only by the credit
of the 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.
The Board of Directors of the Fund may, to a limited extent, authorize
the purchase of securities of foreign companies which have not been declared
eligible for investment ("ineligible securities") in order to facilitate the
purchase of securities of other foreign companies which are contributing or
will contribute to the enhancement of the quality of life in America and
which have been declared eligible for investment ("eligible securities").
Certain countries have limited, either permanently or temporarily, the
ability of foreigners to purchase shares of their domestic companies, shares
which are already owned outside the country or shares which may be obtained
through the sale of shares of other companies located in the same country
which are owned outside that country. Accordingly, the Fund may purchase
ineligible securities so that these securities may be sold or redeemed in
the country of origin, and the proceeds thus received used for the purchase
of eligible securities.
Otherwise ineligible securities purchased for this limited purpose
would be held in the Fund's portfolio for a maximum of 60 days in order to
enable the Fund to have sufficient time to provide for the transportation of
the securities and their sale or redemption. Most transactions of this
type, however, are expected to be completed in a much shorter period.
Furthermore, such investments are limited, as a fundamental policy, in the
aggregate, to a maximum of 2% of the net assets of the Fund at the time of
investment. Engaging in these transactions will result in additional expense
to the Fund in the form of brokerage commissions incurred in the purchase
and sale of the ineligible security. Finally, the Board of Directors would
authorize investments in ineligible securities only for the purpose of
facilitating the purchase of securities of a specific eligible company.
Writing and Purchasing Options. To earn additional income on its
portfolio, the Fund, to a limited extent, may write covered call options on
securities owned by the Fund ("covered options" or "options") and purchase
call options in order to close option transactions, as described below.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise price
at any time during the option period, regardless of the market price of the
security. The premium paid to the writer is the consideration for
undertaking the obligations under the option contract. When a covered
option is written by the Fund, the Fund will make arrangements with the
Fund's Custodian, to segregate the underlying securities until the option
either is exercised, expires or the Fund closes out the option as described
below. A covered option sold by the Fund exposes the Fund during the term
of the option to possible loss of opportunity to realize appreciation in the
market price of the underlying security or to possible continued holding of
a security which might otherwise have been sold to protect against
depreciation in the market price of the security. To limit this exposure,
the value of the portfolio securities underlying covered call options
written by the Fund will be limited to an amount not in excess of 20% of the
value of the Fund's net assets at the time such options are written.
The Fund will purchase call options only to close out open positions.
To close out a position, the Fund may make a "closing purchase transaction,"
which involves purchasing a call option on the same security with the same
exercise price and expiration date as the option which it has previously
written on a particular security. The Fund will realize a profit (or loss)
from a closing purchase transaction if the amount paid to purchase a call
option is less (or more) than the amount received from the sale thereof.
Illiquid Securities. The Fund may invest up to 15% of the value of its
net assets in securities which are illiquid securities. Illiquid securities
are securities which are not readily marketable, including those with
restrictions on resale. Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), permits certain resales of restricted
securities to qualified institutional buyers without registration under the
Securities Act ("Rule 144A Securities"). Because it is not possible to
predict with assurance how the market for Rule 144A Securities 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,
and has approved procedures to determine whether a readily available market
exists. Rule 144A Securities for which there is a readily available market
are not illiquid.
When the Fund purchases securities that are illiquid due to the fact
that such securities have not been registered under the Securities Act, 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 securities and the registration of the securities
permitting sale. The valuation of illiquid securities will be monitored by
the Manager subject to the supervision of the Fund's Board.
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 16 as fundamental policies. These restrictions cannot be
changed without approval by the holders of a majority, as defined in the
Investment Company Act of 1940, as amended (the "Act"), of the Fund's
outstanding voting shares. Investment restrictions numbered 17 and 18 are
not fundamental policies and may be changed by vote of a majority of the
Fund's Directors at any time.
1. The Fund's special considerations described under "Special
Considerations-Types of Companies Sought for Investment" in the Fund's
Prospectus will not be changed without stockholder approval. The Board of
Directors may from time to time without stockholder approval adopt
additional criteria or restrictions governing the Fund's investments if the
Board of Directors determines that the new criteria or restrictions are
consistent with the Fund's objective of investing in a socially responsible
manner. Any such new criteria or restrictions would not be fundamental
policies of the Fund and could be subsequently terminated or changed by the
Board of Directors at any time without stockholder approval.
2. The Fund may not 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).
3. The Fund may not purchase the securities of any issuer if such
purchase would cause the Fund to hold more than 10% of the outstanding
voting securities of such issuer.
4. The Fund may not purchase securities of any company having less
than three years' continuous operating history (including that of any
predecessors) if such purchase would cause the value of the Fund's
investments in all such securities to exceed 5% of the value of its net
assets. See also Investment Restriction No. 10.
5. The Fund may not purchase securities of closed-end investment
companies except in connection with a merger or consolidation of portfolio
companies. The Fund shall not purchase or retain securities issued by
open-end investment companies other than itself.
6. The Fund may not purchase or retain the securities of any issuer
if officers or directors of the Fund or of its investment adviser, 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.
7. The Fund may not purchase, hold or deal in commodities or
commodity contracts, in oil, gas, or other mineral exploration or
development programs, or in real estate but this shall not prohibit the Fund
from investing, consistent with Item 18 below, in securities of companies
engaged in oil, gas or mineral investments or activities. This limitation
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 in interests other than mortgages or other security
interests.
8. The Fund may not 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).
9. The Fund may not make loans other than by the purchase, consistent
with Item 18 below, of bonds, debentures or other debt securities of the
types commonly offered privately and purchased by financial institutions.
The purchase of a portion of an issue of publicly distributed debt
obligations shall not constitute the making of loans.
10. The Fund may not act as an underwriter of securities of other
issuers.
11. The Fund may not 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.
12. The Fund may not 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.
13. The Fund may not 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.
14. The Fund may not sell any security short or engage in the purchase
and sale of put, call, straddle, or spread options or combinations thereof,
or in writing such options, except that the Fund may write and sell covered
call option contracts on securities owned by the Fund up to, but not in
excess of, 20% of the market value of its net assets at the time such option
contracts are written. The Fund may also purchase call options for the
purpose of terminating its outstanding obligations with respect to
securities upon which covered call option contracts have been written. In
connection with the writing of covered call options, the Fund may pledge
assets to an extent not greater than 20% of the market value of its total
net assets at the time such options are written.
15. The Fund may not 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.
16. The Fund may not purchase warrants in excess of 2% of the value of
its net assets. Such warrants shall be valued at the lower of cost or
market, except that warrants acquired by the Fund in units or attached to
securities shall be deemed to be without value, for purposes of this
restriction only.
17. The Fund may not pledge, mortgage, hypothecate or otherwise
encumber its assets, except to the extent necessary to secure permitted
borrowings.
18. The Fund may not 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.
The Fund may make commitments more restrictive than the restrictions
noted 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
interests 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 occupation during at least the last five years, are
shown below.
Directors of the Fund
CLIFFORD L. ALEXANDER, JR., Director. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander
served as Secretary of the Army and Chairman of the Board of the Panama
Canal Company and from 1975 to 1977 he was a member of the Washington,
D.C. law firm of Verner, Liipfert, Bernhard, McPherson and Alexander.
He is a Director of American Home Products Corporation, The Dun &
Bradstreet Corporation, Equitable Resources, Inc., a producer and
distributor of natural gas and crude petroleum, MCI Communications
Corporation and Mutual of America Life Insurance Company. He is 64
years old and his address is 400 C Street N.E., Washington, D.C. 20002.
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
of the Atlantic Council of the U.S. and a member of the Council on
Foreign Relations. From 1980 to 1994, Mrs. Benson was a director of The
Grumman Corporation. 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 70 years old and her address is 46
Sunset Avenue, Amherst, Massachusetts 01002.
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board for various funds in the Dreyfus Family of Funds. He is
Chairman of the Board of Directors of Noel Group, Inc.; a venture
capital company, and Staffing Resources, Inc., a temporary placement
agency. Mr. DiMartino also serves as a director of The Muscular
Dystrophy Association; HealthPlan Services Corporation, a provider of
marketing, administrative and risk management services to health and
other benefit programs; Carlyle Industries, Inc. (formerly, Belding
Heminway Company, Inc.), a button packager and distributor; and Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware. For more than five years
prior to January 1995, he was President, a director and, until August
1994, Chief Operating Officer of the Manager and Executive Vice
President and a director of Dreyfus Service Corporation, a wholly-owned
subsidiary of the Manager and, until August 24, 1994, the Fund's
distributor. From August 1994 until December 31, 1994, he was a
director of Mellon Bank Corporation. He is 53 years old and his
address is 200 Park Avenue, New York, New York 10166.
PETER C. GOLDMARK, JR., Director. Since July 1988, President of The
Rockefeller Foundation, an organization which promotes research and
educational activities. He is also a trustee of The Rockefeller
Foundation and a director of Knight-Ridder, Inc. From 1985 to 1988,
Mr. Goldmark was Senior Vice President of Times Mirror Company and from
1977 to 1985 he was Executive Director of The Port Authority of New
York and New Jersey. He is 56 years old and his address is 420 Fifth
Avenue, New York, New York 10018.
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.
The Fund typically pays its Directors an annual retainer fee and
reimburses them for their Board meeting expenses. The Chairman of the Board
receives an additional 25% of such compensation. Any Director who becomes
an Emeritus Director shall be entitled to receive an annual retainer fee of
one-half the amount paid to Directors. The aggregate amount of compensation
paid to each Director by the Fund for the fiscal year ended May 31, 1997 and
by all other funds in the Dreyfus Family of Funds for which such person is a
Board member (the number of which is set forth in parenthesis next to each
Director's total compensation) for the year ended December 31, 1996, were as
follows:
(3)
Total
(2) Compensation
(1) Aggregate From Fund and
Name of Board Compensation Fund
Member From Fund1 Complex Paid to
Board Member
Clifford L. Alexander $10,000 $ 82,436 (18)
Lucy Wilson Benson $10,000 $ 69,018 (15)
Joseph S. DiMartino $12,500 $517,075 (96)
Peter C. Goldmark $10,000 $ 10,852 (1)
_________________________
1 Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $1,803 for all Directors as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a Director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 40 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc. and an officer of other investment
companies advised or administered by the Manager. From April 1993 to
January 1995, he was a Senior Fund Accountant for Investors Bank and
Trust Company. From December 1991 to March 1993, he was employed as a
Fund Accountant at The Boston Company. He is 28 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Executive Vice
President of Funds Distributor, Inc. and an officer of other investment
companies advised or administered by the Manager. From March 1994 to
November 1995, he was Vice President and Division Manager for First
Data Investor Services Group. From 1989 to 1994, Mr. Ingram was Vice
President, Assistant Treasurer and Tax Director - Mutual Funds of The
Boston Company. He is 42 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Vice President
of the Distributor since September 1995 and an officer of other
investment companies advised or administered by the Manager. She is 28
years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company. She is 33 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President,
General Counsel, Secretary and Clerk of the Distributor and Funds
Distributor, Inc., 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. He is 33 years
old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Senior Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial business development and compliance
positions. He also served as Treasurer of the GE Funds and as Director
of the GE Investment Services. He is 36 years old.
JOSEPH F. TOWER, III Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
Funds Distributor, Inc., 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 35 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 outstanding common stock of the Fund on September 3, 1997.
The following person is known by the Fund to own of record 5% or more
of the Fund's voting securities outstanding on September 3, 1997:
Nationwide Life Insurance Company, FBO Naco Variable Account, c/o IPO C064,
PO Box 182029, Columbus, OH 43218-2029 - 6.8292.
INVESTMENT ADVISORY AGREEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. The Manager provides investment advisory
services pursuant to the Management Agreement (the "Agreement") dated August
2, 1994, between the Manager and the Fund which is subject to annual
approval by (i) the Board of Directors of the Fund or (ii) vote of a
majority (as defined in the Act) of the outstanding voting securities of the
Fund, provided that in either event the continuance also is approved by a
majority of the Board of Directors who are not "interested persons" (as
defined in the Act) of any party to the Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval. The Board of
Directors, including a majority of the Directors who are not "interested
persons," last approved the Agreement at a meeting held on July 24, 1997.
Shareholders approved the Agreement on August 2, 1994. The Agreement is
terminable without penalty, on 60 days' notice, by the Board of Directors of
the Fund or by vote of the holders 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).
As compensation for the Manager's services to the Fund, under the
Agreement the Fund has agreed to pay the Manager a fee payable monthly at an
annual rate of .75 of 1% of the Fund's average daily net assets. Prior to
August 2, 1994, the Manager provided investment advisory services to the
Fund pursuant to an Investment Advisory Agreement with the Fund (the "Prior
Advisory Agreement") dated August 27, 1990. Pursuant to the Prior Advisory
Agreement, the Fund agreed to pay the Manager an advisory fee at the annual
rate of .65 of 1% of the Fund's average daily net assets up to $200 million;
.40 of 1% of the Fund's average daily net assets for the next $100 million;
and .375 of 1% of the Fund's average daily net assets in excess of $300
million. For the period from June 1, 1994 through August 1, 1994, the Fund
paid the Manager pursuant to the Prior Advisory Agreement a fee of $332,837.
For the period from August 2, 1994 through May 31, 1995, the Fund paid the
Manager pursuant to the Agreement a fee of $2,229,348. For the fiscal years
ended May 31, 1996 and 1997, the Fund paid the Manager pursuant to the
Agreement a fee of $3,154,864 and $4,045,691, respectively.
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman-Distribution and a director; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Kozlowski, Vice
President-Corporate Communications; Mary Beth Leibig, Vice President-Human
Resources; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting; Andrew
S. Wasser, Vice President-Information Systems; William V. Healey, Assistant
Secretary; and Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet,
directors.
Amended and Restated Sub-Investment Advisory Agreement. NCM provides
sub-investment advisory services pursuant to an Amended and Restated
Sub-Investment Advisory Agreement dated April 22, 1996 between the Manager
and NCM. The Amended and Restated Sub-Investment Advisory Agreement is
subject to annual approval by (i) the Board of Directors of the Fund 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 any party to the Amended and Restated Sub-Investment Advisory
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. The Board of Directors, including a majority of
the Directors who are not "interested persons", last approved the Amended
and Restated Sub-Investment Advisory Agreement at a meeting held on July 18,
1996. Shareholders approved the Amended and Restated Sub-Investment
Advisory Agreement on April 18, 1996. The Amended and Restated Sub-
Investment Agreement contains a restriction on NCM's ability to act as the
investment adviser or sub-investment adviser for other registered funds with
socially responsible investment policies without the consent of the Fund or
the Manager. The Amended and Restated Sub-Investment Advisory Agreement is
terminable without penalty, on 60 days' notice, by the Manager, by the Board
of Directors of the Fund or by vote of the holders of a majority of the
Fund's shares, or, upon not less than 90 days' notice, by NCM. The Amended
and Restated Sub-Investment Advisory Agreement will terminate automatically
in the event of its assignment (as defined in the Act). In addition, if the
Management Agreement terminates for any reason, the Amended and Restated Sub-
Investment Advisory Agreement will terminate effective upon the date the
Management Agreement terminates.
As compensation for NCM's services under the Amended and Restated
Sub-Investment Advisory Agreement, the Manager has agreed to pay NCM a fee,
payable monthly, at an annual rate as set forth in the Fund's Prospectus.
For the period August 2, 1994 through April 21, 1996, NCM served as the
Fund's sub-investment adviser pursuant to a sub-investment advisory
agreement (the "Former NCM Agreement") dated August 2, 1994 between NCM and
Dreyfus. Pursuant to the Former NCM Agreement, Dreyfus agreed to pay NCM a
sub-investment advisory fee at the annual rate of .10 of 1% of the Fund's
average daily net assets up to $500 million; and .20 of 1% of the Fund's
average daily net assets in excess of $500 million. Prior to August 2,
1994, Tiffany Capital Advisors, Inc. ("Tiffany") served as the Fund's sub-
investment adviser pursuant to a sub-investment advisory agreement (the
"Prior Sub-Advisory Agreement") dated August 27, 1990 between Tiffany and
the Fund. Pursuant to the Prior Sub-Advisory Agreement, the Fund agreed to
pay Tiffany a sub-investment advisory fee at the annual rate of .10 of 1% of
the Fund's average daily net assets up to $200 million; .35 of 1% of the
Fund's average daily net assets for the next $100 million; and .375 of 1% of
the Fund's average daily net assets in excess of $300 million. The sub-
investment advisory fee paid by the Fund pursuant to the Prior Sub-Advisory
Agreement for the period from June 1, 1994 to August 1, 1994 was $141,170.
For the period from August 2, 1994 to May 31, 1995, Dreyfus paid NCM a sub-
advisory fee of $297,131 pursuant to the Former NCM Agreement. For the
period from June 1, 1995 to April 21, 1996, Dreyfus paid NCM a sub-advisory
fee of $382,143 pursuant to the Former NCM Agreement and for the period from
April 22, 1996 to May 31, 1996, Dreyfus paid NCM a sub-advisory fee of
$42,614 pursuant to the Amended and Restated Sub-Investment Advisory
Agreement. For the fiscal year ended May 31, 1997 Dreyfus paid NCM a sub-
investment advisory fee of $632,271 pursuant to the Amended and Restated Sub-
Investment Advisory Agreement.
The following persons are officers and/or directors of NCM: Maceo K.
Sloan, Chairman, President and Chief Executive Officer; Justin F. Beckett,
Executive Vice President and Director; Peter J. Anderson, Director; Morris
Goodwin, Jr., Director, Stephen W. Rozzell, Director; Edith H. Noel, Senior
Vice President, Corporate Secretary and Treasurer; Clifford D. Mpare,
Executive Vice President and Co-Chief Investment Officer; Ben Blakney,
Executive Vice President and Chief Operating Officer; Paul L. VanKampen,
Senior Vice President-Director of Fixed Income; David Carter, Vice President-
Fixed; Lorenzo Newsome, Vice President-Fixed; David Halloran, Vice President-
Equity; Drake Craig, Vice President-Equity; Michael Ferraro, Vice President-
Head Trader; Deborah Bronson, Vice President-Director of Operations; Mary M.
Ford, Senior Vice President-Client Services; Victoria Treadwell, Vice
President-Director of Client Services; Linda Jordan, Regional Vice President-
Marketing; Lee Baker, Vice President-Client Services; Marc Reid, Assistant
Vice President-Marketing.
NCM provides day-to-day management of the Fund's portfolio of
investments in accordance with the stated policies of the Fund, subject to
the supervision of the Manager and the approval of the Fund's Board of
Directors. The Manager and NCM provide the Fund with Portfolio Managers who
are authorized by the Directors to execute purchases and sales of
securities. The Fund's Portfolio Managers are Eric Steedman, Maceo K. Sloan
and Clifford D. Mpare, 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 Directors' review
at the meeting subsequent to such transactions.
Expenses. All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by the Manager or
NCM. The expenses borne by the Fund include: organizational costs, taxes,
interest, loan commitment fees, interest and distributions on securities
sold short, 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 or NCM, or any affiliate of the
Manager or NCM, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining
the Fund's existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), cost of shareholders' reports and meetings, costs
of preparing, printing and distributing certain prospectuses and statements
of additional information, and any extraordinary expenses.
The Manager and NCM have agreed that if, in any fiscal year, the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest and
(with the prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management and sub-advisory fees,
exceed 1-1/2% of the average value of the Fund's net assets for the fiscal
year, the Fund may deduct from the fees to be paid to the Manager and NCM or
each will bear, the excess expense. For each fiscal year of the Fund, the
Manager and NCM will pay or bear such excess on a pro rata basis in proportion
to the relative fees otherwise payable to each pursuant to the Management
Agreement and the Amended and Restated Sub-Investment Advisory Agreement,
respectively. Such deduction or payment, if any, will be estimated,
reconciled and effected or paid, as the case may be, on a monthly basis and
will be limited to the amount of fees otherwise payable to the Manager and NCM
under each respective agreement.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy 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.
Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent") or the Fund may attempt to
notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities
dealer, bank or other financial institution and his order to purchase Fund
shares is paid for other than in Federal Funds, the securities dealer, bank
or other financial institution, acting on behalf of its customer, will
complete the conversion into, or itself advance, Federal Funds generally on
the business day following receipt of the customer order. The order is
effective only when so converted and received by the Transfer Agent. An
order for the purchase of Fund shares placed by an investor with sufficient
Federal Funds or cash balance in his brokerage account with a securities
dealer, bank or other financial institution will become effective on the day
that the order, including Federal Funds, is received by the Transfer Agent.
In some states, banks or other financial institutions effecting transactions
in Fund shares may be required to register as a dealer pursuant to state
law.
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 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
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
also "Redemption of Shares - Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided that the information on the old Account Application is still
applicable.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire, telephone or letter redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt if the Transfer Agent
receives the redemption request in proper form. Redemption proceeds 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 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 selected the Dreyfus TeleTransfer Privilege, requests for redemption,
including wire redemption will be effected as a Dreyfus TeleTransfer
transaction, not a Wire Redemption 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 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 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. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" should 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 numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash for
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or in part in securities or other assets 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 portfolio of the Fund. If the
recipient sold such securities, brokerage charges would be incurred.
There is no charge for redemption. Should such a charge be
established, shareholders will be given written notice and a reasonable
period within which to redeem shares without charge.
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 normally 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 (including
over The Dreyfus Touchr automated telephone system) from any person
representing himself or herself to be the investor, and believed by the
Transfer Agent to be genuine. The Transfer Agent's records of such
instructions are binding. Telephone exchanges may be subject to limitations
as to 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 and IRAs, including 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. The 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. Investors will
be notified if their accounts fall 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 Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which the fund being acquired may
legally be sold. Shares may be exchanged only between fund accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds in the
Dreyfus Family of Funds may be obtained by calling 1-800-645-6561. The Fund
reserves the right to reject any exchange request. The Fund Exchange
services or Dreyfus Auto-Exchange Privilege may be modified or terminated at
any time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. The Automatic Withdrawal Plan 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 automatically their dividends and any capital gains distributions
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 Dreyfus Dividend Sweep 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 the 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 can obtain details on the various plans by calling
the following numbers toll free: for Keogh Plans, please call 1-800-358-
5566; for IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-
800-322-7880.
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 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 also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the Bank
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 Shares."
Valuation of Portfolio Securities. Portfolio securities, including
warrants and covered call options written, are valued at the last sales
price on the securities exchange on which the 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 in 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 into 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. The Fund's Board will
review the method of valuation on a regular basis. In making their good
faith valuation, the Board will generally take the following into
consideration: restricted securities which are, or are convertible into,
securities of the same class of securities for which a public market exists
usually will be valued at market value less the same percentage discount at
which purchased. This discount will be revised periodically by the Fund's
Board if they believe that it no longer reflects the value of the restricted
securities. Restricted securities not of the same class as securities for
which a public market exists will usually be valued initially at cost. Any
subsequent adjustments from cost will be based upon considerations deemed
relevant by the Board of Directors. Expenses and fees, including the
advisory fees, 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, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
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, a wholly-owned
subsidiary of the Manager, 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
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the operation
of the 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 Directors 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 Directors who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Plan.
For the fiscal year ended May 31, 1997, $780,224 was charged to the
Fund under the Plan.
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
May 31, 1997 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.
Qualification as a "regulated investment company" 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 applicable
provisions of the Code. Among the requirements for such qualification is
that less than 30% of the Fund's income be derived from gains from the sale
or other disposition of securities held for less than three months, the Fund
must distribute at least 90% of its net income (consisting of net investment
income and net short-term capital gain) to its shareholders, and the Fund
must meet certain asset diversification and other requirements.
Accordingly, the Fund may be restricted in the selling of securities held
for less than three months, and in the utilization of certain of the
investment techniques described in the Prospectus. The Code's rules
regarding the determination of the holding period of property comprising a
straddle, however, should make it easier for the Fund to satisfy the 30%
test. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the
original cost of his investment. Such 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 regulations) and has received a capital gain dividend 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 dividend
received.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends from net investment income may qualify for the
dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to 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. However, Section 246(c) of the Code provides that if a qualifying
corporate shareholder has disposed of Fund shares not held for 46 days or
more during the 90 day period commencing 45 days before the shares become ex-
dividend and has received a dividend from net investment income with respect
to such shares, the portion designated by the Fund as qualifying for the
dividends received deduction will not be eligible for such shareholder's
dividends received deduction. In addition, the Code provides other
limitations with respect to the ability of a qualifying corporate
shareholder to claim the dividends received deduction in connection with
holding Fund shares.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of the gain
or loss from the disposition of non-U.S. dollar denominated securities
(including debt instruments, certain financial forward, futures and option
contracts, 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 gain realized from engaging in "conversion transactions" may be treated
as ordinary income under Section 1258. "Conversion transactions" are
defined to include certain forward, futures, option and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss realized by the Fund
from certain 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 the exercise or lapse of such options as well as from closing
transactions. In addition, any such 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 financial
forward, futures or options contracts may be considered, for tax purposes,
to constitute "straddles." "Straddles" are defined to include "offsetting
positions" in personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, override or modify the provisions of Sections 988 and 1256.
As such, all or a portion of any short or long-term capital gains from
certain "straddle" transactions may be recharacterized as ordinary income.
Recently enacted legislation added constructive sale provisions that
may apply if the Fund enters into short sales, or futures, forwards, or
offsetting notional principal contracts with respect to appreciated stock
and certain debt obligations that it holds. In such event, with certain
exceptions, the Fund will be taxed as if the appreciated property were sold
at its fair market value on the date the Fund entered into such short sale
or contract. Such legislation similarly may apply if the Fund has entered
into a short sale, option, futures or forward contract, or other position
with respect to property, which has appreciated in value, and the Fund
acquires that same or substantially identical property. In such event, with
certain exceptions, the Fund will be taxed as if the appreciated position
were sold at its fair market value on the date of such acquisition.
Transactions that are identified hedging or straddle transactions under
other provisions of the Code can be subject to the constructive sale
provisions.
If the Fund were treated as entering into "straddles" by reason of its
engaging in certain financial forward, futures or options contracts, such
"straddles" could be characterized as "mixed straddles" if at least one (but
not all) of the positions comprising such straddles are "Section 1256
contracts." A "Section 1256 contract" is defined to include any regulated
futures contract, foreign currency contract, non-equity option, and dealer
equity option. Section 1256(d) of the Code permits the Fund to elect not to
have Section 1256 apply with respect to "mixed straddles." If no such
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 offsetting positions. 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 gain may be recharacterized as
short-term capital gain or ordinary income.
Recently enacted legislation added constructive sale provisions that
may apply if the Fund enters into short sales, or futures, forwards, or
offsetting notional principal contracts with respect to appreciated stock
and certain debt obligations that it holds. In such event, with certain
exceptions, the Fund will be taxed as if the appreciated property were sold
at its fair market value on the date the Fund entered into such short sale
or contract. Such legislation similarly may apply if the Fund has entered
into a short sale, option, futures or forward contract, or other position
with respect to property, which has appreciated in value, and the Fund
acquires that same or substantially identical property. In such event, with
certain exceptions, the Fund will be taxed as if the appreciated position
were sold at its fair market value on the date of such acquisition.
Transactions that are identified hedging or straddle transactions under
other provisions of the Code can be subject to the constructive sale
provisions.
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 Manager's
best judgment and in a manner deemed fair and reasonable to shareholders,
rather than by any formula. The primary consideration in all portfolio
securities transactions is prompt execution of orders at the most favorable
net price. When this primary consideration is met to the satisfaction of
the Manager, brokers may also be selected because of their ability to handle
special executions such as are involved in large block trades or broad
distributions. Large block trades may, in certain cases, result from two or
more funds advised or administered by the Manager being engaged
simultaneously in the purchase or sale of the same security. Subject to the
primary consideration, particular brokers selected may also include those
who supplement the Manager's and NCM's research facilities with statistical
data, investment information, economic facts and opinions; sales of Fund
shares by a broker may be taken into consideration. Information so received
is in addition to and not in lieu of services required to be performed by
the Manager and NCM and their fees are 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 to
NCM in serving both the Fund and the other accounts it manages, and,
conversely, supplemental information obtained by the placement of business
of other clients may be useful to the Manager and NCM in carrying out their
obligations to the Fund. 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 or execution is otherwise
obtainable. Although it is not possible to place a dollar value on the
research services received from brokers who effect transactions in portfolio
securities, it is the opinion of the Manager that these services should not
reduce the overall expenses of its research department.
For its portfolio securities transactions for the fiscal years ended
May 31, 1995, 1996 and 1997, the Fund paid total brokerage commissions of
$1,445,266, $777,679 and $531,274, respectively, none of which was paid to
the Distributor. The above figures for brokerage commissions paid do not
include gross spreads and concessions on principal transactions which, where
determinable, amounted to $0, $0 and $29,760 in fiscal years 1995, 1996 and
1997 respectively, none of which was paid to the Distributor.
The Fund's portfolio turnover rates (exclusive of U.S. Government
securities and short-term investments) for the fiscal years ended May 31,
1996 and 1997 were 92.08% and 66.52%, 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 one, five and ten year
periods ended May 31, 1997 was 25.70%, 15.48% and 13.01%, 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 March 29, 1972 to May 31, 1997
was 1,959.42%. 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 material for the Fund may include
biographical information relating to its portfolio managers and may refer
to, or include commentary by the portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic, or
financial conditions and other matters of general interest to investors. It
may also discuss or portray the principles of dollar-cost-averaging and may
refer to Morningstar or Value Line ratings and related analyses supporting
the ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Shares of
stock are of one class and have equal rights as to voting, redemption,
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
Mellon Bank, N.A. (the "Custodian"), Dreyfus' parent and a subsidiary
of Mellon Bank Corporation, is located at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, and serves as the custodian of the Fund.
Under its Custody Agreement with the Fund, the Custodian holds the Fund's
portfolio securities and keeps all necessary accounts and records. For its
custody services, the Custodian receives a monthly fee based on the market
value of the Fund's assets held in custody and receives certain securities
transactions charges. For the fiscal year ended May 31, 1997, the Fund paid
the Custodian $42,287.
Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-
of-pocket expenses. For the fiscal year ended May 31, 1997, the Fund paid
the Transfer Agent $265,039.
Neither the Transfer Agent nor the Custodian has any part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103, as counsel for the Fund, has rendered its opinion as to certain legal
matters in connection with the shares of capital stock being sold pursuant
to the Fund's Prospectus to which this Statement of Additional Information
relates.
Ernst & Young LLP, independent auditors, 787 Seventh Avenue, New York,
New York 10019 have been selected as auditors of the Fund.
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments May 31, 1997
<TABLE>
<CAPTION>
Common Stocks--88.9% Shares Value
- ---------------------------------------------------------------------------- -------- --------------
<S> <C> <C> <C>
Consumer Non-Durables--14.0% Avon Products............................ 150,000 $ 9,562,500
CPC International........................ 110,000 9,460,000
Clorox................................... 110,000 13,887,500
Coca-Cola................................ 194,800 13,295,100
Colgate-Palmolive........................ 280,000 17,360,000
Gillette................................. 176,600 15,695,325
Interstate Bakeries...................... 90,000 4,837,500
Jones Apparel Group...................(a) 130,000 6,093,750
NIKE, Cl. B.............................. 81,600 4,651,200
--------------
94,842,875
--------------
Consumer Services--6.3% BET Holdings, Cl. A...................(a) 85,000 2,730,625
CUC International.....................(a) 418,550 9,626,650
Disney (Walt)............................ 198,600 16,260,375
Service Corp. International.............. 400,000 14,100,000
--------------
42,717,650
--------------
Electronic Technology--10.7% Cisco Systems.........................(a) 235,000 15,921,250
EMC...................................(a) 214,100 8,537,237
Intel.................................... 75,000 11,362,500
Linear Technology.....................(a) 170,000 8,521,250
Seagate Technology....................(a) 150,000 6,093,750
Sun Microsystems......................(a) 247,200 7,972,200
3COM..................................(a) 86,300 4,185,550
U.S. Robotics.........................(a) 120,000 10,080,000
--------------
72,673,737
--------------
Finance--20.1% AFLAC.................................... 171,150 8,728,650
Allstate................................. 213,070 15,687,278
American International Group............. 74,700 10,112,512
BANKBOSTON............................... 170,000 12,410,000
BankAmerica.............................. 115,000 13,440,625
Chase Manhattan.......................... 50,000 4,725,000
Citicorp................................. 99,200 11,346,000
Fannie Mae............................... 410,600 17,912,425
Green Tree Financial..................... 366,800 12,838,000
PNC Bank................................. 225,000 9,421,875
Summit Bancorp........................... 133,000 6,566,875
SunAmerica............................... 270,000 12,757,500
--------------
135,946,740
--------------
</TABLE>
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments (continued) May 31, 1997
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------- -------- -------------
<S> <C> <C> <C>
Health Technology--14.2% Amgen.................................(a) 200,600 $ 13,415,125
Boston Scientific.....................(a) 100,000 5,337,500
Bristol-Myers Squibb..................... 207,000 15,188,625
Guidant.................................. 150,000 11,643,750
Johnson & Johnson........................ 299,080 17,907,415
Medtronic................................ 219,600 16,250,400
Merck & Co............................... 184,762 16,605,484
------------
96,348,299
------------
Industrial Services--3.6% Global Marine.........................(a) 200,000 4,500,000
Schlumberger............................. 122,210 14,558,266
Seitel................................(a) 150,000 5,568,750
------------
24,627,016
------------
Process Industries--3.6% Avery Dennison........................... 200,000 7,525,000
Bemis.................................... 300,600 12,024,000
Fort Howard...........................(a) 102,600 4,713,187
------------
24,262,187
------------
Producer Manufacturing--2.0% Dover.................................... 235,800 13,499,550
------------
Retail Trade--4.0% Consolidated Stores...................(a) 141,250 5,402,812
OfficeMax.............................(a) 400,000 5,550,000
Sears, Roebuck & Co...................... 238,700 11,726,137
Viking Office Products................(a) 250,000 4,718,750
------------
27,397,699
------------
Technology Services--7.6% BMC Software..........................(a) 327,120 17,705,375
Computer Associates International........ 188,425 10,316,269
Microsoft.............................(a) 90,000 11,160,000
Oracle................................(a) 260,500 12,145,812
------------
51,327,456
------------
Transportation--1.0% Federal Express.......................(a) 125,640 6,580,395
------------
Utilities--1.8% WorldCom..............................(a) 400,000 11,850,000
------------
TOTAL COMMON STOCKS
(cost $431,659,916).................... $602,073,604
------------
------------
</TABLE>
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments (continued) May 31, 1997
<TABLE>
<CAPTION>
Principal
Short-Term Investments--6.9% Amount Value
- ----------------------------------------------------------------------------- ------------- ---------------
<S> <C> <C> <C>
U.S. Treasury Bills: 5.13%, 7/24/1997......................... $ 1,261,000 $ 1,252,097
5.06%, 8/7/1997.......................... 2,121,000 2,102,462
4.98%, 8/21/1997......................... 43,537,000 43,068,107
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $46,401,685)..................... $ 46,422,666
============
TOTAL INVESTMENTS (cost $478,061,601)........................................ 95.8% $648,496,270
====== ============
CASH AND RECEIVABLES (NET)................................................... 4.2% $ 28,587,912
====== ============
NET ASSETS................................................................... 100.0% $677,084,182
====== ============
</TABLE>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Non-income producing.
See notes to financial statements.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities May 31, 1997
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments.... $478,061,601 $648,496,270
Cash....................................................... 27,678,441
Receivable for shares of Common Stock subscribed........... 1,018,871
Dividends receivable...................................... 499,236
Prepaid expenses........................................... 64,834
------------
677,757,652
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.............. 437,618
Payable for shares of Common Stock redeemed................ 27,625
Accrued expenses........................................... 208,227
------------
673,470
------------
NET ASSETS..................................................................... $677,084,182
============
REPRESENTED BY: Paid-in capital............................................ $477,876,791
Accumulated undistributed investment income--net.......... 917,401
Accumulated net realized gain (loss) on investments........ 27,855,321
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4............................... 170,434,669
------------
NET ASSETS..................................................................... $677,084,182
============
SHARES OUTSTANDING
(150 million shares of $.33 1/3 par value Common Stock authorized)............. 67,611,406
NET ASSET VALUE, offering and redemption price per share....................... $10.01
======
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations Year Ended May 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends................................... $ 5,201,271
Interest ........................................ 1,534,525
------------
Total Income................................ $ 6,735,796
EXPENSES: Management fee--Note 3(a)........................ 4,045,691
Shareholder servicing costs--Note 3(b)........... 1,133,683
Professional fees................................ 97,242
Registration fees................................ 73,435
Prospectus and shareholders' reports............. 67,592
Directors' fees and expenses--Note 3(c).......... 42,827
Custodian fees--Note 3(b)........................ 42,287
Interest--Note 2................................. 7,510
Loan commitment fees--Note 2..................... 3,856
Miscellaneous.................................... 18,348
------------
Total Expenses.............................. 5,532,471
------------
INVESTMENT INCOME--NET......................................................... 1,203,325
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments ......... $ 62,677,975
Net unrealized appreciation (depreciation) on
investments.................................... 66,809,492
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 129,487,467
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $130,690,792
============
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets Year Ended May 31, 1997
<TABLE>
<CAPTION>
Year Ended Year Ended
May 31, 1997 May 31, 1996
---------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 1,203,325 $ 1,507,162
Net realized gain (loss) on investments................................. 62,677,975 62,835,662
Net unrealized appreciation (depreciation) on investments............... 66,809,492 54,728,281
-------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 130,690,792 119,071,105
-------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................. (1,059,465) (2,113,842)
Net realized gain on investments........................................ (73,897,734) (27,118,179)
-------------- -------------
Total Dividends..................................................... (74,957,199) (29,232,021)
-------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 1,044,680,240 347,500,025
Dividends reinvested.................................................... 72,507,283 27,798,267
Cost of shares redeemed................................................. (969,289,077) (360,518,670)
-------------- -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... 147,898,446 14,779,622
-------------- -------------
Total Increase (Decrease) in Net Assets........................... 203,632,039 104,618,706
NET ASSETS:
Beginning of Period..................................................... 473,452,143 368,833,437
-------------- -------------
End of Period........................................................... $ 677,084,182 $473,452,143
-------------- -------------
-------------- -------------
Undistributed investment income--net...................................... $ 917,401 $ 773,541
-------------- -------------
<CAPTION>
Shares Shares
-------------- -------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 109,951,947 40,415,926
Shares issued for dividends reinvested.................................. 8,277,087 3,419,227
Shares redeemed......................................................... (101,819,266) (42,120,754)
-------------- -------------
Net Increase (Decrease) in Shares Outstanding....................... 16,409,768 1,714,399
-------------- -------------
-------------- -------------
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Reference is made to page 3 of the Fund's Prospectus dated October 1, 1997.
See notes to financial statements.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus Third Century Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to
provide capital growth. The Dreyfus Corporation ("Dreyfus") serves as the
Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A.
("Mellon"). NCM Capital Management Group, Inc. ("NCM") serves as the Fund's
sub-investment adviser. Premier Mutual Fund Services, Inc. is the distributor
of the Fund's shares which are sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(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.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.
(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--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. At May 31, 1997, there were no
outstanding borrowings under the Facility.
The average daily amount of borrowings outstanding under a previous line of
credit during the period ended May 31, 1997, was approximately $118,000, with a
related weighted average annualized interest rate of 5.83%. The maximum amount
borrowed at any time during the period ended May 31, 1997 was $15 million.
<PAGE>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(a) Pursuant to the management agreement ("Agreement") with Dreyfus, the
management fee is computed at an annual rate of .75 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings, commitment fees and extraordinary
expenses, exceed 11/2% of the value of the Fund's average net assets, the Fund
may deduct from the fees paid to Dreyfus, or Dreyfus will bear such excess
expense. There was no expense reimbursement for the period ended May 31, 1997.
Pursuant to a Sub-Investment Advisory Agreement with NCM, the
sub-investment advisory fees are payable monthly by Dreyfus, and are based upon
the value of the Fund's average daily net assets, computed at the following
rates:
Average Net Assets
------------------
0 to $400 million....................................... .10 of 1%
$400 to $500 million.................................... .15 of 1%
$500 to $750 million.................................... .20 of 1%
In excess of $750 million............................... .25 of 1%
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus, an amount not to
exceed an annual rate of .25 of 1% of the value of the Fund's average daily net
assets 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. During the period
ended May 31, 1997, the Fund was charged an aggregate of $780,224 pursuant to
the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $265,039 during the period ended May 31, 1997.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended May 31, 1997, $42,287 was charged
by Mellon pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $10,000. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended May 31, 1997 amounted
to $346,080,414 and $338,005,328, respectively.
At May 31, 1997, accumulated net unrealized appreciation on investments was
$170,434,669, consisting of $172,683,615 gross unrealized appreciation and
$2,248,946 gross unrealized depreciation.
At May 31, 1997, 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>
The Dreyfus Third Century Fund, Inc.
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
The Dreyfus Third Century Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Dreyfus Third Century Fund, Inc., including the statement of investments, as of
May 31, 1997, 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 and financial highlights. Our procedures included verification by
examination of securities held as of May 31, 1997 and confirmation of securities
not held by the custodian by correspondence with others. 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 Third Century Fund, Inc. at May 31, 1997, and 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.
New York, New York
July 7, 1997
THE DREYFUS THIRD CENTURY FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for each of the ten years in
the period ended May 31, 1997.
Included in Part B of the Registration Statement:
Statement of Investments--May 31, 1997.
Statement of Assets and Liabilities--May 31, 1997.
Statement of Operations--year ended May 31, 1997.
Statement of Changes in Net Assets--for each of the years
ended May 31, 1996 and 1997.
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors, dated
July 7, 1997.
Schedules No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Articles of Incorporation in the State of Maryland are
incorporated by reference to Exhibit (1) of Post-Effective
Amendment No. 21 to the Registration Statement on Form N-1A, filed
on July 30, 1982 ("Post-Effective Amendment No. 21").
(2) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 32 to the Registration
Statement on Form N-1A, filed on July 6, 1990.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Post-Effective
Amendment No. 21.
(5)(a) Management Agreement is incorporated by reference to Exhibit 5(a)
of Post-Effective Amendment No. 38 to the Registration Statement on
Form N-1A, filed on September 16, 1994.
(b) Amended and Restated Sub-Investment Advisory Agreement
is incorporated by reference to Exhibit 5(b) of Post-Effective
Amendment No. 42 to the Registration Statement on Form N-1A filed
on September 20, 1996.
(6) Distribution Agreement is incorporated by reference to Exhibit 6 of
the Post-Effective Amendment No.38 to the Registration Statement on
Form N-1A, filed on September 16, 1994.
(8)(a) Custody Agreement is incorporated by reference to Exhibit 8(a) of
Post-Effective Amendment No. 42 to the Registration Statement on
Form N-1A filed on September 20, 1996.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 21, and to Exhibit 8(c) of
Post-Effective Amendment No. 32 to the Registration Statement on
Form N-1A, filed on July 6, 1990.
(9) Shareholder Services Plan is incorporated by reference to Exhibit 9
of Post-Effective Amendment No. 38 to the Registration Statement on
Form N-1A, filed on September 16, 1994.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (3) of Post-Effective Amendment No. 1 to the
Registration Statement on Form S-5, filed on March 29, 1972.
(11) Consent of Independent Auditors.
(14) The documents making up model plans in the establishment of
retirement plans in conjunction with which Registrant offers its
securities is incorporated by reference to Exhibit (14) of Post-
Effective Amendment No. 16 to the Registration Statement on Form N-
1A, filed on August 24, 1979.
(16) Schedules of Computation of Performance Data is incorporated by
reference to Exhibit 16 of Post-Effective Amendment No. 38 to the
Registration Statement in Form N-1A, filed on September 16, 1994.
(17) Financial Data Schedule.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Power of Attorney of the Directors and officers are
incorporated by reference to Other Exhibits (a) of Post-
Effect Amendment No. 38 to the Registration Statement on
Form N-1A, filed on September 16, 1994.
(b) Certificate of Assistant Secretary is incorporated by
reference to Other Exhibits (b) of Post-Effective
Amendment No. 38 to the Registration Statement on Form N-
1A, filed on September 16, 1994.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of
September 3, 1997
______________ _____________________________
Common Stock 23, 988
(Par value $.33 1/3)
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 4 of Part II of
Post-Effective Amendment No. 21 to the Registration Statement on
Form N-1A, filed on July 30, 1982.
Reference is also made to the Distribution Agreement attached as
Exhibit (6) of Post-Effective Amendment No. 22 to the Registration
Statement on Form N-1A, filed on September 30, 1983.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser and manager for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, provides shareholder servicing for investment
companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as investment adviser, sub-investment
adviser or administrator. Dreyfus Management, Inc., another
wholly-owned subsidiary, provides investment management services
to various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
World Balanced Fund++++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Secretary:
General Counsel The Dreyfus Consumer Credit Corporation*;
and Secretary Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY
Assistant Secretary
President:
The Truepenny Corporation
Vice President and Director:
The Dreyfus Consumer Credit Corporation
Secretary and Director:
Dreyfus Partnership Management Inc.
Director:
The Dreyfus Trust Company
Assistant Secretary:
Dreyfus Service Corporation
Dreyfus Investment Advisors, Inc.
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route 'd'Esch,
L-1470 Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'Esch,
L-2953 Luxembourg.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier International Growth Fund, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Worldwide Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus S&P 500 Index Fund
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Tresurer and Chief Financial Officer and Assistant
Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Elizabeth A. Keeley++ Vice President Vice President
and Assistant
Secretary
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State
of New York on the 25th day of September, 1997.
THE DREYFUS THIRD CENTURY FUND, INC.
BY: /s/Marie E. Connolly*
-------------------------------------
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
date indicated.
Signatures Title Date
__________________________ ______________________________ _________
/s/Marie E. Connolly* President and Treasurer
- ---------------------------- (Principal Executive, Financial 9/25/97
Marie E. Connolly and Accounting Officer)
/s/Clifford L. Alexander, Jr.* Director 9/25/97
- ----------------------------
Clifford L. Alexander, Jr.
/s/Lucy Wilson Benson* Director 9/25/97
- ----------------------------
Lucy Wilson Benson
/s/Joseph DiMartino* Chairman of the Board of 9/25/97
- ---------------------------- Directors
Joseph DiMartino
/s/Peter C. Goldmark, Jr.* Director 9/25/97
- ----------------------------
Peter C. Goldmark, Jr.
*BY: ___________________________
Elizabeth A. Keeley
Attorney-in-Fact
EXHIBIT INDEX
Exhibits
(11) Consent of Independent Auditors
(17) Financial Data Schedule
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors" and to the use of our report dated July 7,
1997, in this Registration Statement (Form N-1A No. 2-40341) of The Dreyfus
Third Century Fund, Inc.
ERNST & YOUNG LLP
New York, New York
September 25, 1997
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