PROSPECTUS
MARCH 31, 1995
TABLE OF CONTENTS
ANNUAL FUND OPERATING EXPENSES............ 3
CONDENSED FINANCIAL INFORMATION........... 4
YIELD INFORMATION......................... 4
DESCRIPTION OF THE FUND................... 5
MANAGEMENT OF THE FUND.................... 6
HOW TO BUY FUND SHARES.................... 7
SHAREHOLDER SERVICES...................... 10
HOW TO REDEEM FUND SHARES................. 12
SERVICE PLAN AND DISTRIBUTION PLAN........ 15
SHAREHOLDER SERVICES PLANS................ 15
DIVIDENDS, DISTRIBUTIONS AND TAXES........ 16
GENERAL INFORMATION....................... 17
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GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC. (THE "FUND") IS
AN OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL OF CURRENT
INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE
OF LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY THE FUND.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THE FUND'S SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS
AS DESCRIBED HEREIN. BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A AND
CLASS B SHARES. CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO
THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. SHARES OF EACH
CLASS BEAR CERTAIN COSTS PURSUANT TO SEPARATE PLANS ADOPTED IN ACCORDANCE
WITH RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
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 MARCH 31, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-554-4611. WHEN TELEPHONING, ASK FOR OPERATOR 666.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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975p00033195
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page 2
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<TABLE>
CLASS A CLASS B
SHARES SHARES
-------- --------
<S> <C> <C>
Management Fees.................................................. .50% .50%
12b-1 Fees....................................................... .20% .20%
Other Expenses................................................... .13% .31%
Total Fund Operating Expenses.................................... .83% 1.01%
</TABLE>
<TABLE>
EXAMPLE:
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:
<S> <C> <C> <C>
1 YEAR $ 8 $ 10
3 YEARS $ 26 $ 32
5 YEARS $ 46 $ 56
10 YEARS $103 $124
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. Other Expenses of Class B are based on amounts for Class A for the
Fund's last fiscal year. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Certain Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "Management of the Fund," "How to Buy
Fund Shares," "Service Plan and Distribution Plan" and "Shareholder Services
Plans."
page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes for Class A are included in the Statement of Additional Information,
available upon request. No financial information is available for Class B
shares, which had not been offered as of the date of this Prospectus.
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>
Yield Information
YEAR ENDED JANUARY 31,
____________________________________________________________________________________________
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
____ ____ ____ ____ ____ ___ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year..... $.9998 $.9999 $1.0000 $1.0001 $1.0000 $1.0000 $.9999 $.9999 $1.0000 $1.0000
___-- ___-- ___--- ___---- ___---- ___--- ------ ------ ------- -------
INVESTMENT OPERATIONS:
Investment income-net..... .0744 .0575 .0580 .0678 .0823 .0718 .0532 .0330 .0266 .0383
Net realized gain (loss)
on investments........ .0001 .0001 .0001 -_ .0001 (.0001) -_ .0001 -_ --
___-- ___-- ___--- ___---- ___---- ___--- ------ ------ ------- -------
TOTAL FROM
INVESTMENT OPERATIONS.... .0745 .0576 .0581 .0678 .0824 .0717 .0532 .0331 .0266 (.0383)
___-- ___-- ___--- ___---- ___---- ___--- ------ ------ ------- -------
DISTRIBUTIONS:
Dividends from investment
income-net........ (.0744) (.0575) (.0580) (.0678) (.0823) (.0718) (.0532) (.0330) (.0266) (.0383)
Dividends from net realized gain on
investments............ -_ -_ -_ (.0001) (.0001) -_ -_ -_ -_ -_
___-- ___-- ___--- ___---- ___---- ___--- ------ ------ ------- -------
TOTAL DISTRIBUTIONS.... (.0744) (.0575) (.0580) (.0679) (.0824) (.0718) (.0532) (.0330) (.0266) (.0383)
___-- ___-- ___--- ___---- ___---- ___--- ------ ------ ------- -------
Net asset value,
end of year...... $.9999 $1.0000 $1.0001 $1.0000 $1.0000 $.9999 $.9999 $1.0000 $1.0000 $1.0000
====== ======= ======= ======= ======= ====== ====== ======= ======= =======
TOTAL INVESTMENT RETURN.. 7.70% 5.91% 5.96% 6.99% 8.56% 7.42% 5.46% 3.36% 2.69% 3.90%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets............. .94% .92% .83% .87% .87% .86% .82% .82% .81% .83%
Ratio of net investment income
to average net assets.. 7.38% 5.61% 5.80% 6.74% 8.23% 7.14% 5.27% 3.28% 2.66% 3.82%
Decrease reflected in above expense
ratios due to expense reimbursement
pursuant to undertakings by
The Dreyfus Corporation -_ -_ -_ -_ -_ -_ -_ -_ -_ -_
Net assets, end of year
(000's Omitted)...... $149,863 $286,778 $292,204 $263,130 $306,610 $408,817 $609,015 $725,419 $536,884 $513,345
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund." Both yield
figures also take into account any applicable class expenses. As a result, at
any
Page 4
given time, the performance of Class B should be expected to be lower
than that of Class A. See "Annual Fund Operating Expenses."
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
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., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund Report, Morningstar Registration Mark Inc.,
and other industry publications.
DESCRIPTION OF THE FUND
GENERAL _ By this Prospectus, two classes of shares of the Fund are being
offered _ Class A shares and Class B shares (each such class being referred
to as a "Class"). The Classes are identical, except for the services offered
to and expenses borne by each Class pursuant to separate plans adopted by the
Fund's Board of Directors. See "Service Plan and Distribution Plan" and
"Shareholder Services Plans." In addition, Class B shares are charged
directly for sub-accounting services provided by Service Agents at the annual
rate of .05% of the value of the average daily net assets of Class B. The
sub-accounting fee paid by Class B, together with amounts payable pursuant to
the Distribution Plan and Shareholder Services Plan, will cause Class B to
have a higher expense ratio and to pay lower dividends than Class A. You
should consult your Service Agent to determine which Class is offered by the
Service Agent.
INVESTMENT OBJECTIVE _ The Fund's goal is to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved. Securities in which the Fund invests may not earn as high a level
of current income as long-term or lower quality securities which generally
have less liquidity, greater market risk and more fluctuation in market
value.
MANAGEMENT POLICIES _ To achieve its goal the Fund invests in securities
issued or guaranteed as to principal and interest by the U.S. Government or
its agencies or instrumentalities, and repurchase agreements in respect of
such securities.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940, certain requirements of which are summarized as follows. In
accordance with Rule 2a-7, the Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in U.S. dollar
denominated securities. For further information regarding the amortized cost
method, see "Determination of Net Asset Value" in the Fund's Statement of
Additional Information. There can be no assurance that the Fund will be able
to maintain a stable net asset value of $1.00 per share.
PORTFOLIO SECURITIES _ Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear
Page 5
fixed, floating or variable rates of interest. 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 it is satisfied that the credit risk with
respect to the issuer is minimal.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should be the Fund desire to sell them when a ready buyer is not available at
a price the Fund deems representative of their value, the value of the Fund's
net assets could be adversely affected.
CERTAIN FUNDAMENTAL POLICY _ The Fund may borrow money from banks, but 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) based
on 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 value of the Fund's total assets, the Fund will not make any additional
investments. This paragraph describes a fundamental policy that cannot be chan
ged without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares. See
"Investment Objective and Management Policies _ Investment Restrictions" in
the Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES _ The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to security
permitted borrowings; and (ii) invest up to 10% of the value of its net
assets in repurchase agreements providing for settlement in more than seven da
ys after notice and in other illiquid securities. See "Investment Objective
and Management Policies_Investment Restrictions" in the Statement of
Additional Information.
INVESTMENT CONSIDERATIONS _ The Fund attempts to increase yields by trading
to take advantage of short-term market variations. This policy is expected to
result in high portfolio turnover but should not adversely affect the Fund
since the Fund usually does not pay brokerage commissions when it purchases
U.S. Government securities. The value of the portfolio securities held by the
Fund will vary inversely to changes in prevailing interest rates. Thus, if
interest rates have increased from the time a security was purchased, such sec
urity, if sold, might be sold at a price less than its cost. Similarly, if
interest rates have declined from the time a security was purchased, such
security, if sold, might be sold at a price greater than its purchase cost.
In either instance, if the security was purchased at face value and held to
maturity, no gain or loss would be realized.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of February 28, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for more than 1.9 million investor
accounts nationwide.
Page 6
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the 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, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $70
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
For the fiscal year ended January 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts it may waive, nor will
the Fund reimburse The Dreyfus Corporation for any amounts it may assume.
Shares of each Class bear certain costs of distributing shares in
accordance with separate plans adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. See "Annual Fund Operating Expenses" and
"Service Plan and Distribution Plan."
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service Agents
in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDIHoldings, Inc., the parent company of which is
Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, is the Fund's sub-custodian.
HOW TO BUY FUND SHARES
Fund shares may be purchased only by clients of certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers"), and other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Agents") that
have entered into service agreements with the Distributor. 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 Service Agent which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application.
page 7
The Fund reserves the right to offer Fund shares without regard
to minimum purchase requirements to employees participating in certain
qualified and non-qualified employee benefit plans or other programs where con
tributions or account information can be transmitted in a manner and form
acceptable to the Fund.
You may purchase Fund shares by check or wire. 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 indicating which Class of shares if being purchased. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to the
Dreyfus Financial Center located in the lobby of 200 Park Avenue, New York,
New York. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED
ONLY UPON RECEIPT THEREBY. Other purchase procedures may be in effect for
clients of certain Service Agents.
Wire payments may be made either to The Bank of New York or to First
Interstate Bank of California 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 #8900052414/General
Government Securities Money Market Fund, Inc. _ Class A, or DDA
#8900251689/General Government Securities Money Market Fund, Inc._Class B; or
to First Interstate Bank of California, DDA #250939725/General Government
Securities Money Market Fund, Inc. _ Class A, or DDA #250340300/General
Government Securities Money Market Fund, Inc._Class B, for purchase of Fund
shares in your name. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will be
permitted until the Account Application is received. You may obtain further
information about remitting funds in this manner from your bank. All payments
should be made in U.S. dollars and, to avoid fees and delays, should be drawn
only on U.S. banks. A charge will be imposed if any check used for investment
in your account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House 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."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for Servicing (as defined under "Service
Plan and Distribution Plan_Service Plan"). These fees would be in addition to
any amounts which might be received under the Fund's Service Plan or
Distribution Plan. Service Agents may receive different levels of
compensation for selling different Classes of shares. Each Service Agent has
agreed to transmit to its clients a schedule of such fees. You should consult
your Service Agent in this regard.
page 8
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 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in the Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent in written or
telegraphic form, or by First Interstate Bank of California in telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
The Fund's net asset value per share is determined twice each day: as
of 12:00 Noon, New York time/9:00 a.m., California time, and as of the close
of trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
New York time/1:00 p.m., California time), on each day the New York Stock
Exchange is open for business. Net asset value per share of each Class is
computed by dividing the value of the Fund's net assets represented by such
Class (i.e., the value of its assets less liabilities) by the total number of
shares of such Class outstanding. See "Determination of Net Asset Value" in
the Fund's Statement of Additional Information.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent, or received in Federal
Funds by 12:00 Noon, California time, by First Interstate Bank of California,
on a business day, you will receive the dividend declared that day. If your
payments are received in or converted into Federal Funds after 12:00 Noon,
New York time, by the Transfer Agent, or received in Federal Funds after
12:00 Noon, California time, by First Interstate Bank of California, you will
begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares. A telephone order placed to the Distributor or its designee in New
York will become effective at the price determined at 12:00 Noon, New York
time, and the shares purchased will receive the dividend on Fund shares
declared on that day if such order is placed by 12:00 Noon, New York time,
and Federal Funds are received by the Transfer Agent by 4:00 p.m., New York
time, on that day. A telephone order placed to the Distributor or its
designee in California will become effective at the price determined at 1:00
p.m., California time, and the shares purchased will receive the dividend on
Fund shares declared on that day if such order is placed by 12:00 Noon,
California time, and Federal Funds are received by First Interstate Bank of
California by 4:00 p.m., California time, on that day.
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").
Page 9
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of the Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this service, you
should consult your Service Agent or 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 or your Service Agent acting on your
behalf 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 value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request, signed by all shareholders on the
account, or by a separate signed Shareholder Services Form, also available by
calling 1-800-645-6561. If you have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306. See "How to Redeem
Fund Shares _ Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must notify
the Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The availability of Fund Exchanges may
be modified or terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Page 10
AUTO-EXCHANGE PRIVILEGE _ The Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual basis), in
exchange for shares of the Fund, in shares of other funds in the Dreyfus
Family of Funds of which you are currently an investor. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
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 an Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
AUTOMATIC ASSET BUILDER Registration Mark _ 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 an AUTOMATIC Asset Builder account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form from your Service Agent or by calling
1-800-645-6561. You may cancel your participation in this Privilege or change
the amount of purchase at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671,
or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427, and the
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in 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 from your Service Agent or 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.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from the Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been issued
must be presented before redemption under the Plan.
Page 11
DIVIDEND SWEEP OPTIONS _ 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. See
"Shareholder Services" in the Statement of Additional Information. Dividend
ACH permits you to transfer electronically on the payment date 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. 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 Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated. Shares
held under Keogh Plans or IRAs are not eligible for Dividend Sweep.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS _ The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
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 FUND SHARES
GENERAL _ You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Service Agents
may charge a nominal fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed
page 12
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 OR THROUGH AUT
OMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO
THE TRANSFER AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR
PURCHASE CHECK OR AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM
SHARES BY WIRE OR TELEPHONE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES _ You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege, or, if you are
a client of a Selected Dealer, through the Selected Dealer. If you have given
your Service Agent authority to instruct the Transfer Agent to redeem shares
and to credit the proceeds of such redemptions to a designated account at
your Service Agent, you may redeem shares only in this manner and in
accordance with the regular redemption procedure described below. If you wish
to use the other redemption methods described below, you must arrange with
your Service Agent for delivery of the required application(s) to the
Transfer Agent. Other redemption procedures may be in effect for clients of
certain Service Agents. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your Service Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-
Page 13
9671. Redemption requests may be delivered in person only to the Dreyfus
Financial Center located in the lobby of 200 Park Avenue, New York, New York.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON
RECEIPT THEREBY. 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
omestic 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
questions with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may request on the Account Application,
Shareholder Services Form or by later written request that the Fund provide
Redemption Checks drawn on the Fund's account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or more. Redemption
Checks should not be used to close your account. Redemption Checks are free,
but the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor a Redemption Che
ck due to insufficient funds or other valid reason. You should date your
Redemption Checks with the current date when you write them. Please do not
postdate your Redemption Checks. If you do, the Transfer Agent will honor,
upon presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check. Shares
held under Keogh Plans, IRAs or other retirement plans are not eligible for
this Privilege. This Privilege may be modified or terminated at any time by
the Fund or the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of not more than $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the right
to refuse any redemption request, including requests made shortly after a chan
ge of address, and may limit the amount involved or the number of such
requests. This Privilege may be modified or terminated at any time by the
Transfer Agent or the Fund. The Fund's Statement of Additional Information
sets forth instructions for transmitting redemption requests by wire. Shares
held under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the
Page 14
amount involved or the number of telephone redemption requests. This
Privilege may be modified or terminated at any time by the Transfer Agent or
the Fund. Shares held under Keogh Plans, IRAs or other retirement plans, and
shares for which certificates have been issued, are not eligible for this
Privilege.
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent by 12:00 Noon, New York time, or by the Los Angeles office
of the Distributor or its designee by 12:00 Noon, California time, on a
business day, the proceeds of the redemption ordinarily will be transmitted
in Federal Funds on the same day and the shares will not receive the dividend
declared on that day. If a redemption request is received by the Transfer
Agent after 12:00 Noon, New York time, or by the Los Angeles office of the
Distributor or its designee after 12:00 Noon, California time, the shares
will receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. It
is the responsibility of the Selected Dealer to transmit a request so that it
is received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer.
SERVICE PLAN AND DISTRIBUTION PLAN
SERVICE PLAN (CLASS A ONLY) _ Under the Service Plan, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, the Fund directly bears,
with respect to Class A, the costs of preparing, printing and distributing
prospectuses and statements of additional information and of implementing and
operating the Service Plan. In addition, the Fund reimburses (a) the
Distributor for payments made for distributing the Class A shares and
servicing shareholder accounts ("Servicing") and (b) The Dreyfus Corporation,
Dreyfus Service Corporation, a wholly-owned subsidiary of The Dreyfus
Corporation, and any affiliate of either of them (collectively, "Dreyfus")
for payments made for Servicing, at an aggregate annual rate of up to .20 of
1% of the value of the average daily net assets of Class A. Each of the
Distributor and Dreyfus may pay one or more Service Agents a fee in respect
of Class A shares owned by shareholders with whom the Service Agent has a
Servicing relationship or for whom the Service Agent is the dealer or holder o
f record. The schedule of such fees and the basis upon which such fees will
be paid shall be determined from time to time by the Fund's Board. If a
holder of Class A shares ceases to be a client of a Service Agent, but
continues to hold Class A shares, Dreyfus will be permitted to act as a
Service Agent in respect of such Fund shareholders and receive payments under
the Service Plan for Servicing. The fees payable for Servicing are payable
without regard to actual expenses incurred.
DISTRIBUTION PLAN (CLASS B ONLY) _ Under the Distribution Plan, adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
directly bears, with respect to Class B, the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, the Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the average daily
net assets of Class B.
SHAREHOLDER SERVICES PLANS
CLASS A _ The Fund has adopted a Shareholder Services Plan with respect to
Class A pursuant to which the Fund reimburses Dreyfus Service Corporation an
amount not to exceed an annual rate of .25 of 1% of the value of the average
daily net assets of Class A for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. At no time,
however, will the amount paid under this Plan, together with amounts
otherwise paid with respect to Class A under the Fund's Service Plan as a "ser
vice fee" pursuant to Article III, Section 26, of the NASD Rules of Fair
Practice, exceed the maximum amount permitted to be paid under the NASD Rules
as a service fee. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder
Page 15
inquiries regarding the Fund and providing reports and other information,
and services related to the maintenance of shareholder accounts.
CLASS B _ The Fund has adopted a Shareholder Services Plan with respect to
Class B pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class B shares a fee at the annual rate of
.25 of 1% of the value of the average daily net assets of Class B. 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 maintenan
ce of such shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any compensation payable
to it by the Fund pursuant to the Shareholder Services Plan and any other
compensation payable by their clients in connection with the investment of
their assets in Fund shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day the New York Stock Exchange is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. Dividends usually are paid on the last calendar day
of each month and automatically are reinvested in additional Fund shares at
net asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption.
Distributions from net realized securities gains, if any, generally are
declared and paid once a year, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), in all events in a manner
consistent with the provisions of the Investment Company Act of 1940. The
Fund will not make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. You may
choose whether to receive distributions in cash or to reinvest in additional
Fund shares at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors. Dividends paid by each Class
will be calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to a Class will be
borne exclusively by such Class. Class B shares will receive lower per share
dividends than Class A shares because of the higher expenses borne by Class
B. See "Annual Fund Operating Expenses."
Dividends derived from interest, together with distributions from any
net realized short-term securities gains and all or a portion of any gains
realized from the sale or other disposition of certain market discount bonds,
paid by the Fund are subject to Federal income tax as ordinary income,
whether received in cash or reinvested in additional Fund shares.
Distributions from net realized long-term securities gains of the Fund, if
any, will be taxable as long-term capital gains for Federal income tax purpose
s if you are a citizen or resident of the United States. The Code provides
that the net capital gains of an individual generally will not be subject to
Federal income tax at a rate in excess of 28%. Dividends and distributions
may be subject to state and local taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Fund to individuals
currently are not subject to tax in most states. Dividends and distributions
attributable to interest from other securities in which the Fund may invest
may be subject to state tax. The Fund intends to provide shareholders with a
statement which sets forth the percentage of dividends and distributions paid
by the Fund that is attributable to interest income from direct obligations
of the United States.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of cer-
Page 16
tain market discount bonds, paid by the Fund to a foreign investor generally
are subject to U.S. nonresident withholding taxes at the rate of 30%, unless
the foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor generally will not be subject to U.S.
nonresident withholding tax. However, such distributions may be subject to
backup withholding, as described below, unless the foreign investor certifies
his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. No dividends will qualify for
the dividend received deduction allowable to certain U.S. corporations.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended January 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. 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.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on April 8, 1982, and
commenced operations on February 7, 1983. The Fund is authorized to issue 15
billion shares of Class A Common Stock and one billion shares of Class B
Common Stock, par value $.01 per share. The Fund's shares are classified into
two classes_Class A and Class B. Each share has one vote and shareholders
will vote in the aggregate and not by Class except as otherwise required by
law.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for purposes of removing a Director from office 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 special
meeting of shareholders for the purpose of electing Directors if, at any
time, less than a majority of the Directors then holding office have been
elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Page 17
Shareholder inquiries may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or by calling toll free 1-800-242-8671. In New York City, call
1-718-895-1396; on Long Island, call 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.
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First Albany Corporation
Service Agent
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