File No. 2-88822
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 15 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 15 [X]
(Check appropriate box or boxes.)
DREYFUS CAPITAL VALUE 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
Daniel C. Maclean III, 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)
X immediately upon filing pursuant to paragraph (b) of Rule 485
----
on (date) 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 September 30, 1993 was filed on November 23, 1993.
DREYFUS CAPITAL VALUE 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 2
3 Condensed Financial Information 3
4 General Description of Registrant 30
5 Management of the Fund 16
6 Capital Stock and Other Securities 30
7 Purchase of Securities Being Offered 18
8 Redemption or Repurchase 24
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-27
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-12
Holders of Securities
16 Investment Advisory and Other B-13
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS CAPITAL VALUE 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-25
18 Capital Stock and Other Securities B-27
19 Purchase, Redemption and Pricing B-15;
of Securities Being Offered B-18;
B-22
20 Tax Status *
21 Underwriters B-15
22 Calculations of Performance Data B-25
23 Financial Statements B-33
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-29
30 Location of Accounts and Records C-39
31 Management Services C-39
32 Undertakings C-39
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
- -------------------------------------------------------------------------------
PROSPECTUS JANUARY 28, 1994
DREYFUS CAPITAL VALUE FUND(A PREMIER FUND)
DREYFUS CAPITAL VALUE FUND(A PREMIER FUND)(THE "FUND") IS AN
OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A
MUTUAL FUND. ITS GOAL IS TO MAXIMIZE TOTAL RETURN, CONSISTING OF
CAPITAL APPRECIATION AND CURRENT INCOME. THE FUND INVESTS IN A
WIDE RANGE OF EQUITY AND DEBT SECURITIES AND MONEY MARKET
INSTRUMENTS.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S
INVESTMENT ADVISER.
BY THIS PROSPECTUS, CLASS A AND CLASS B SHARES OF THE FUND ARE
BEING OFFERED. CLASS A SHARES ARE SUBJECT TO A SALES CHARGE
IMPOSED AT THE TIME OF PURCHASE AND CLASS B SHARES ARE SUBJECT TO
A CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS MADE
WITHIN SIX YEARS OF PURCHASE. OTHER DIFFERENCES BETWEEN THE TWO
CLASSES INCLUDE THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY
EACH CLASS AND CERTAIN VOTING RIGHTS, AS DESCRIBED HEREIN. THE
FUND OFFERS THESE ALTERNATIVES SO AN INVESTOR MAY CHOOSE THE
METHOD OF PURCHASING SHARES THAT IS MOST BENEFICIAL GIVEN THE
AMOUNT OF THE PURCHASE, THE LENGTH OF TIME THE INVESTOR EXPECTS TO
HOLD THE SHARES AND OTHER CIRCUMSTANCES.
--------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED JANUARY 28, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
--------------
THE FUND'S 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 FUND'S SHARES INVOLVE
CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FUND'S SHARE PRICE AND INVESTMENT RETURN FLUCTUATE AND ARE
NOT GUARANTEED.
_______________________________________________________________________________
TABLE OF CONTENTS
PAGE
FEE TABLE............................................... 2
CONDENSED FINANCIAL INFORMATION......................... 3
ALTERNATIVE PURCHASE METHODS............................ 3
DESCRIPTION OF THE FUND................................. 4
MANAGEMENT OF THE FUND.................................. 16
HOW TO BUY FUND SHARES.................................. 18
SHAREHOLDER SERVICES.................................... 21
HOW TO REDEEM FUND SHARES............................... 24
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN......... 27
DIVIDENDS, DISTRIBUTIONS AND TAXES...................... 28
PERFORMANCE INFORMATION................................. 29
GENERAL INFORMATION..................................... 30
_______________________________________________________________________________
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.
- -------------------------------------------------------------------------------
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
------- -------
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................... 4.50% ---
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)...... --- 4.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees ....................................... .75% .75%
12b-1 Fees............................................. --- .75%
Service Fees........................................... .25% .25%
Other Expenses......................................... .68% .68%
Total Fund Operating Expenses.......................... 1.68% 2.43%
EXAMPLE
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption at
the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS*
------ ------- ------- --------
CLASS A:................... $61 $ 96 $132 $235
CLASS B:................... $65 $106 $150 $241
ASSUMING NO REDEMPTION OF
CLASS B SHARES:........... $25 $ 76 $130 $241
----------------
*Ten-year figures assume conversion of Class B shares to Class A shares
at end of sixth year following the date of purchase.
- --------------------------------------------------------------------------------
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 that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis. For
Class B shares, Other Expenses are estimated based on expenses incurred
by the Class A shares. Prior to January 15, 1993, Class A shares were
subject to 12b-1 fees, but no service fees. Long-term investors in Class B
shares could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. 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" and "Distribution
Plan and Shareholder Services Plan."
(2)
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, 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 information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
PER SHARE DATA 1986(1)(2) 1987(1) 1988(1) 1989(1) 1990(1)
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $ 7.25 $ 9.54 $12.84 $12.68 $14.42
------ ------ ------ ------ ------
Investment from Operations:
Investment income-net(4).................................... .03 .07 .58 .90 .89
Net realized and unrealized gain (loss) on investments(4)... 2.26 3.59 (.18) 1.60 .61
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........................ 2.29 3.66 .40 2.50 1.50
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net(4).................... -- (.03) (.15) (.76) (.84)
Dividends from net realized gain on investments(4)......... -- (.33) (.41) -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS..................................... -- (.36) (.56) (.76) (.84)
------ ------ ------ ------ ------
Net asset value, end of year............................... $ 9.54 $12.84 $12.68 $14.42 $15.08
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (5) 31.59%(6) 39.72% 3.29% 20.95% 10.53%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets.......... 1.47%(6) 1.50% 1.24% 1.22% 1.20%
Ratio of dividends and interest on securities sold
short to average net assets............................. -- .15% .13% .03% .26%
Ratio of net investment income to average net assets....... .45%(6) 2.25% 6.08 6.93% 6.64%
Decrease reflected in above expense ratios due to
expense reimbursements.................................. .84%(6) .29% -- -- --
Portfolio Turnover Rate.................................... 140.99% 102.16% 56.31% 19.46% 62.84%
Net Assets, end of year (000's Omitted).................... $9,444 $139,796 $502,442 $607,192 $741,267
- ----------------------------
(1)Per share data restated to reflect a 100% stock dividend at the close of
business on February 16, 1990.
(2)From October 10, 1985 (commencement of operations) to September 30, 1986.
(3)From January 15, 1993 (commencement of initial offering) to
September 30, 1993.
(4)Per share data for 1986 and 1987 has been restated for comparative purposes.
(5)Exclusive of sales charge.
(6)Not annualized.
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------- ------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED
------------------------------- SEPTEMBER 30,
PER SHARE DATA 1991 1992 1993 1993(3)
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $15.08 $12.97 $12.40 $10.58
------ ------ ------ ------
Investment from Operations:
Investment income-net(4).................................... .73 .40 .24 .03
Net realized and unrealized gain (loss) on investments(4)... (.89) (.39) (.62) .71
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........................ (.16) .01 (.38) .74
------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net(4).................... (.99) (.57) (.61) --
Dividends from net realized gain on investments(4)......... (.96) -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS..................................... (1.95) (.57) (.61) --
------ ------ ------ ------
Net asset value, end of year............................... $12.97 $12.41 $11.42 $11.32
====== ====== ====== ======
TOTAL INVESTMENT RETURN (5) (.70%) (.02%) (2.70%) 6.99%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets.......... 1.19% 1.19% 1.23% 1.49%(6)
Ratio of dividends and interest on securities sold
short to average net assets............................. .49% .39% .45% .31%(6)
Ratio of net investment income to average net assets....... 5.58% 2.83% 1.94% .83%(6)
Decrease reflected in above expense ratios due to
expense reimbursements.................................. -- -- -- --
Portfolio Turnover Rate.................................... 154.07% 344.29% 41.78% 41.78%
Net Assets, end of year (000's Omitted).................... $755,450 $537,392 $412,316 $ 30,378
- ----------------------------
(1)Per share data restated to reflect a 100% stock dividend at the close of
business on February 16, 1990.
(2)From October 10, 1985 (commencement of operations) to September 30, 1986.
(3)From January 15, 1993 (commencement of initial offering) to
September 30, 1993.
(4)Per share data for 1986 and 1987 has been restated for comparative purposes.
(5)Exclusive of sales charge.
(6)Not annualized.
</TABLE>
ALTERNATIVE PURCHASE METHODS
The Fund offers you two methods of purchasing Fund shares; you may
choose the Class of shares that best suits your needs, given the amount of
your purchase, the length of time you expect to hold your shares and any
other relevant circumstances. Each Class A and Class B share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 4.50% of the public offering price imposed at the time
of purchase. The initial sales charge may be reduced or waived for certain
purchases. See "How to Buy Fund Shares - Class A Shares." These shares are
subject to an annual service fee at the rate of .25 of 1% of the value of the
average daily net assets of Class A. See "Distribution Plan and Shareholder
Services Plan - Shareholder Services Plan."
(3)
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a
maximum 4% contingent deferred sales charge ("CDSC"), which is
assessed only if you redeem Class B shares within six years of purchase.
See "How to Buy Fund Shares - Class B Shares" and "How to Redeem Fund
Shares-Contingent Deferred Sales Charge -- Class B Shares." These shares
also are subject to an annual service fee at the rate of .25 of l% of the
value of the average daily net assets of Class B. In addition, Class B
shares are subject to an annual distribution fee at the rate of .75 of 1% of
the value of the average daily net assets of Class B. See "Distribution Plan
and Shareholder Services Plan." The distribution fee paid by Class B will
cause such Class to have a higher expense ratio and to pay lower dividends
than Class A. Approximately six years after the date of purchase, Class B
shares automatically will convert to Class A shares, based on the relative
net asset values for shares of each Class, and will no longer be subject to
the distribution fee. Class B shares that have been acquired through the
reinvestment of dividends and distributions will be converted on a pro
rata basis together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the
total Class B shares not acquired through the reinvestment of dividends
and distributions.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC on
Class B shares prior to conversion would be less than the initial sales
charge on Class A shares purchased at the same time, and to what extent,
if any such differential would be offset by the return of Class A. In this
regard, investors qualifying for reduced initial sales charges who expect
to maintain their investment for an extended period of time might
consider purchasing Class A shares because the accumulated continuing
distribution fees on Class B shares may exceed the initial sales charge on
Class A shares during the life of the investment. Generally, Class A shares
may be more appropriate for investors who invest $100,000 or more in
Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to maximize total return,
consisting of capital appreciation and current income. 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.
MANAGEMENT POLICIES - The Fund seeks to achieve its investment
objective by following an asset allocation strategy that contemplates
shifts, which may be frequent, among a wide range of investments and
market sectors. The Fund will invest in equity securities of domestic and
foreign issuers, including common stocks, preferred stocks, convertible
securities and warrants; debt securities of domestic and foreign issuers,
including bonds, debentures and notes; and domestic and foreign money market
instruments. The Fund will not invest more than 25% of its assets in securities
of foreign issuers.
Dreyfus and Comstock Partners, Inc. ("Comstock Partners"), the Fund's
sub-investment adviser (collectively, the "Advisers"), have broad latitude
in selecting the class of investments and market sectors in which the
Fund will invest. The Fund will not be managed as a balanced portfolio and
is not required to maintain a portion of its investments in each of the
Fund's permitted investment types at all times. Thus, during the course of
a business cycle, for example, the Fund may invest solely in equity
securities, debt securities or money market instruments, or in a
combination of these classes of investments. The asset allocation mix for
the Fund will be determined by the Advisers at any given time in light of
their assessment of current economic conditions and investment
opportunities. The asset allocation mix selected will be a primary
determinant of the Fund's investment performance.
EQUITY AND DEBT SECURITIES - The Fund intends to invest in domestic and
foreign equity and debt securities. The Fund generally seeks to invest in
securities that the Advisers have determined offer above average
potential for total return. In making this determination, they take into
account factors including price-earnings ratios, cash flow and the
relationship of asset value to market value of the securities. The Fund
will be alert to companies engaged in restructuring efforts, such as
mergers, acquisitions and divestitures of less profitable units.
(4)
The Fund typically purchases a debt security if the Advisers believe
that the yield and potential for capital appreciation of the security are
sufficiently attractive in light of the risks of ownership of the security.
In determining whether the Fund should invest in particular debt
securities, the Advisers consider factors such as: the price, coupon and
yield to maturity; their assessment of the credit quality of the issuer; the
issuer's available cash flow and the related coverage ratios; the property,
if any, securing the obligation; and the terms of the debt securities,
including the subordination, default, sinking fund and early redemption
provisions. They also will review the ratings, if any, assigned to the
securities by Moody's Investors Service, Inc. or Standard & Poor's
Corporation or other recognized rating agencies. The judgment of the
Advisers as to credit quality of a debt security may differ, however, from
that suggested by the ratings published by a rating service.
The Fund is not subject to any limit on the percentage of its assets that
may be invested in debt securities having a certain rating. Thus, it is
possible that a substantial portion of the Fund's assets may be invested in
debt securities that are unrated or rated in the lowest categories of the
recognized rating services (i.e., securities rated C by Moody's Investors
Service, Inc. or D by Standard & Poor's Corporation). Low-rated and
unrated securities have special risks relating to the ability of the Fund to
receive timely, or perhaps ultimate, payment of principal and interest.
They are considered to have speculative characteristics and to be of poor
quality; some obligations in which the Fund may invest, such as debt
securities rated D by Standard & Poor's Corporation, may be in default. The
Fund intends to invest less than 35% of its assets in debt securities rated
Ba or lower by Moody's Investors Service, Inc. and BB or lower by Standard
& Poor's Corporation. See "Risk Factors_Lower Rated Securities" below
for a discussion of certain risks.
The Fund generally invests in United States equity and debt securities,
including convertible securities, that are listed on securities exchanges
or traded in the over-the-counter market. Foreign securities in which the
Fund may invest may be listed on foreign securities exchanges or traded in
the over-the-counter market. For further information about certain
portfolio securities, see "Certain Portfolio Securities" below.
The Fund also may purchase to a limited extent securities representing
the right to receive the capital appreciation above a certain amount, and
other securities representing the right to receive dividends and all other
attributes of beneficial ownership, in respect of an entity's common stock
or other similar instrument. These securities typically are sold as shares
in unit investment trusts. The percentage of the Fund's assets that may be
invested in shares of unit investment trusts is subject to the limitations
set forth in the Investment Company Act of 1940.
MONEY MARKET INSTRUMENTS - The money market instruments in which
the Fund may invest include: U.S. Government securities; bank obligations,
including certificates of deposit, time deposits and bankers' acceptances
and other short-term obligations of domestic or foreign banks, domestic
savings and loan associations and other banking institutions having total
assets in excess of $1 billion; commercial paper of any rating; and
repurchase agreements involving U.S. Government securities. The Fund may
invest up to 100% of its assets in money market instruments, but at no time will
the Fund's investments in bank obligations, including time deposits, exceed 25%
of its assets. See "Certain Portfolio Securities" below.
INVESTMENT TECHNIQUES
LEVERAGE THROUGH BORROWING - The Fund may borrow for investment
purposes. This borrowing, which is known as leveraging, generally will be
unsecured, except to the extent the Fund enters into reverse repurchase
agreements described below. The Investment Company Act of 1940
requires the Fund to maintain continuous asset coverage (that is, total
assets including borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If the 300% asset coverage should decline
as a result of market fluctuations or other reasons, the Fund may be
required to sell some of its portfolio holdings within three days to reduce
the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that
time. Leveraging may exaggerate the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio. Money
borrowed for leveraging will be subject to interest costs which may or
may not be recovered by appreciation of the securities purchased; in
certain cases, interest costs may exceed the return received on the
securities purchased. The Fund also may be required to maintain minimum
average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated
interest rate.
(5)
Among the forms of borrowing in which the Fund may engage is the
entry into reverse repurchase agreements with banks, brokers or dealers.
These transactions involve the transfer by the Fund of an underlying debt
instrument in return for cash proceeds based on a percentage of the value
of the security. The Fund retains the right to receive interest and
principal payments on the security. At an agreed upon future date, the Fund
repurchases the security at principal, plus accrued interest. In certain
types of agreements, there is no agreed upon repurchase date and interest
payments are calculated daily, often based on the prevailing overnight
repurchase rate. The Fund will maintain in a segregated custodial account
cash, cash equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal to the aggregate amount of its
reverse repurchase obligations, plus accrued interest, in certain cases, in
accordance with releases promulgated by the Securities and Exchange
Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund. These
agreements, which are treated as if reestablished each day, are expected
to provide the Fund with a flexible borrowing tool.
SHORT-SELLING - The Fund may make short sales, which are transactions
in which the Fund sells a security it does not own in anticipation of a
decline in the market value of that security. To complete such a
transaction, the Fund must borrow the security to make delivery to the
buyer. The Fund then is obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The price at
such time may be more or less than the price at which the security was
sold by the Fund. Until the security is replaced, the Fund is required to pay
to the lender amounts equal to any dividends or interest which accrue
during the period of the loan. To borrow the security, the Fund also may be
required to pay a premium, which would increase the cost of the security
sold. The proceeds of the short sale will be retained by the broker, to the
extent necessary to meet margin requirements, until the short position is
closed out.
Until the Fund replaces a borrowed security in connection with a short
sale, the Fund will: (a) maintain daily a segregated account, containing
cash or U.S. Government securities, at such a level that (i) the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short and (ii)
the amount deposited in the segregated account plus the amount deposited
with the broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position.
The Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a
gain if the security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a long position in
a security. The amount of any gain will be decreased, and the amount of any loss
increased, by the amount of any premium or amounts in lieu of dividends or
interest the Fund may be required to pay in connection with a short sale.
The Fund may purchase call options to provide a hedge against an
increase in the price of a security sold short by the Fund. When the Fund
purchases a call option it has to pay a premium to the person writing the
option and a commission to the broker selling the option. If the option is
exercised by the Fund, the premium and the commission paid may be more
than the amount of the brokerage commission charged if the security were
to be purchased directly. See "Call and Put Options on Specific Securities"
below.
The Fund anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any
specified portion of its assets, as a matter of practice, will be invested
in short sales. However, no securities will be sold short if, after effect is
given to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of the
Fund's net assets. The Fund may not sell short the securities of any class
of an issuer to the extent, at the time of the transaction, of more than 5%
of the outstanding securities of that class.
In addition to the short sales discussed above, the Fund may make short
sales "against the box," a transaction in which the Fund enters into a
short sale of a security which the Fund owns. The proceeds of the short
sale are held by a broker until the settlement date at which time the Fund
delivers the security to close the short position.
(6)
The Fund receives the net proceeds from the short sale. The Fund at no time will
have more than 15% of the value of its net assets in deposits on short sales
against the box.
CALL AND PUT OPTIONS ON SPECIFIC SECURITIES - The Fund may invest up
to 5% of its assets, represented by the premium paid, in the purchase of
call and put options in respect of specific securities (or groups or
"baskets" of specific securities) in which the Fund may invest. The Fund
may write covered call and put option contracts 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 or securities at the
exercise price at any time during the option period. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price
at any time during the option period. A covered call option sold by the
Fund, which is a call option with respect to which the Fund owns the
underlying security or securities, 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 securities or to possible
continued holding of a security or securities which might otherwise have
been sold to protect against depreciation in the market price thereof. A
covered put option sold by the Fund exposes the Fund during the term of
the option to a decline in price of the underlying security or securities. A
put option sold by the Fund is covered when, among other things, cash or
liquid securities are placed in a segregated account with the Fund's
custodian to fulfill the obligation undertaken.
To close out a position when writing covered options, the Fund may
make a "closing purchase transaction," which involves purchasing an
option on the same security or securities with the same exercise price
and expiration date as the option which it has previously written. To close
out a position as a purchaser of an option, the Fund may make a "closing
sale transaction," which involves liquidating the Fund's position by
selling the option previously purchased. The Fund will realize a profit or
loss from a closing purchase transaction depending upon the difference
between the amount paid to purchase an option and the amount received
from the sale thereof.
The Fund intends to treat certain options in respect of specific
securities that are not traded on a securities exchange and the securities
underlying covered call options written by the Fund as illiquid securities.
See "Certain Portfolio Securities - Illiquid Securities" below.
The Fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the Fund
are qualified for offer and sale.
STOCK INDEX OPTIONS - The Fund may purchase and write call and put
options on stock indexes listed on national securities exchanges or traded
in the over-the-counter market as an investment vehicle for the
purpose of realizing its investment objective or for the purpose of hedging
its portfolio. A stock index fluctuates with changes in the market values
of the stocks included in the index.
The effectiveness of purchasing or writing stock index options will
depend upon the extent to which price movements in the Fund's portfolio
correlate with price movements of the stock index selected. Because the
value of an index option depends upon movements in the level of the index
rather than the price of a particular stock, whether the Fund will realize a
gain or loss from the purchase or writing of options on an index depends
upon movements in the level of stock prices in the stock market generally
or, in the case of certain indexes, in an industry or market segment, rather
than movements in the price of a particular stock. Accordingly, successful
use by the Fund of options on stock indexes will be subject to the
Advisers' ability to predict correctly movements in the direction of the
stock market generally or of a particular industry. This requires different
skills and techniques than predicting changes in the price of individual
stocks.
When the Fund writes an option on a stock index, it will place in a
segregated account with its custodian cash or liquid securities in an
amount at least equal to the market value of the underlying stock index
and will maintain the account while the option is open or will otherwise
cover the transaction.
FUTURES TRANSACTIONS - IN GENERAL - The Fund is not a commodity pool.
However, as a substitute for a comparable market position in the
underlying securities and for hedging purposes, the Fund may engage in
futures and options on futures transactions, including those relating to
indexes, as described below.
(7)
The Fund may trade futures contracts and options on futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or, to
the extent permitted under applicable law, on exchanges located outside
the United States, such as the London International Financial Futures
Exchange and the Sydney Futures Exchange Limited. Foreign markets may
offer advantages such as trading in commodities that are not currently
traded in the United States or arbitrage possibilities not available in the
United States. Foreign markets, however, may have greater risk potential
than domestic markets. See "Risk Factors - Foreign Commodity
Transactions" below.
The Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions pursuant to regulations promulgated by
the Commodity Futures Trading Commission (the "CFTC"). In addition, the
Fund may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would exceed 5% of
the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts it has entered
into; provided, however, that in the case of an option that is in-the-money
at the time of purchase, the in-the-money amount may be excluded in
calculating the 5%. Pursuant to regulations and/or published positions of
the Securities and Exchange Commission, the Fund may be required to
segregate cash or high quality money market instruments in connection
with its commodities transactions in an amount generally equal to the
value of the underlying commodity. The segregation of such assets will
have the effect of limiting the Fund's ability to otherwise invest those
assets.
Initially, when purchasing or selling futures contracts the Fund will be
required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of trade on
which the contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from
the broker will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known
as "marking-to-market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position at the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.
Although the Fund intends to purchase or sell futures contracts only if
there is an active market for such contracts, no assurance can be given that a
liquid market will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially
subjecting the Fund to substantial losses. If it is not possible, or the Fund
determines not, to close a futures position in anticipation of adverse
price movements, the Fund will be required to make daily cash payments
of variation margin. In such circumstances, an increase in the value of the
portion of the portfolio being hedged, if any, may offset partially or
completely losses on the futures contract. However, no assurance can be
given that the price of the securities being hedged will correlate with the
price movements in a futures contract and thus provide an offset to losses
on the futures contract.
In addition, to the extent the Fund is engaging in a futures transaction
as a hedging device, due to the risk of an imperfect correlation between
securities in the Fund's portfolio that are the subject of a hedging
transaction and the futures contract used as a hedging device, it is
possible that the hedge will not be fully effective in that, for example,
losses on the portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of gains on the
portfolio securities that were the subject of the hedge. In futures
contracts based on indexes, the risk of imperfect correlation increases as
the composition of the Fund's portfolio varies from the composition of the
index. In an effort to compensate for the imperfect correlation of
(8)
movements in the price of the securities being hedged and movements in
the price of futures contracts, the Fund may buy or sell futures contracts
in a greater or lesser dollar amount than the dollar amount of the
securities being hedged if the historical volatility of the futures contract
has been less or greater than that of the securities. Such "over hedging"
or "under hedging" may adversely affect the Fund's net investment results
if market movements are not as anticipated when the hedge is established.
Successful use of futures by the Fund also is subject to the Advisers'
ability to predict correctly movements in the direction of the market or
interest rates. For example, if the Fund has hedged against the possibility
of a decline in the market adversely affecting the value of securities held
in its portfolio and prices increase instead, the Fund will lose part or all
of the benefit of the increased value of securities which it has hedged
because it will have offsetting losses in its futures positions. In addition,
in such situations, if the Fund has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased prices which
reflect the rising market. The Fund may have to sell securities at a time
when it may be disadvantageous to do so.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the option exercise period.
The writer of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a long position
if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by the writer and holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's
futures margin account which represents the amount by which the market
price of the futures contract, at exercise, exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Call options sold by the Fund with respect to futures contracts will be
covered by, among other things, entering into a long position in the same
contract at a price no higher than the strike price of the call option, or by
ownership of the instruments underlying, or instruments the prices of
which are expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by the Fund with respect
to futures contracts will be covered in the same manner as put options on
specific securities as described above.
STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES - The Fund
may purchase and sell stock index futures contracts and options on stock
index futures contracts.
A stock index future obligates the seller to deliver (and the purchaser
to take) an amount of cash equal to a specific dollar amount times the
difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With
respect to stock indexes that are permitted investments, the Fund intends
to purchase and sell futures contracts on the stock index for which it can
obtain the best price with consideration also given to liquidity.
The Fund may use index futures as a substitute for a comparable market
position in the underlying securities.
There can be no assurance of the Fund's successful use of stock index
futures as a hedging device. In addition to the possibility that there may
be an imperfect correlation, or no correlation at all, between movements
in the stock index future and the portion of the portfolio being hedged, the
price of stock index futures may not correlate perfectly with the
movement in the stock index because of certain market distortions. First,
all participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which would distort the normal relationship between the
index and futures markets. Secondly, from the point of view of
speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market also may
cause temporary price distortions. Because of the possibility of price
distortions in the futures market and the imperfect correlation between
movements in the stock index and movements in the price of stock index
futures, a correct forecast of general market trends by the Advisers still
may not result in a successful hedging transaction.
(9)
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE
FUTURES CONTRACTS - The Fund may invest in interest rate futures
contracts and options on interest rate futures contracts as a substitute
for a comparable market position and to hedge against adverse movements
in interest rates.
To the extent the Fund has invested in interest rate futures contracts
or options on interest rate futures contracts as a substitute for a
comparable market position, the Fund will be subject to the investment
risks of having purchased the securities underlying the contract.
The Fund may purchase call options on interest rate futures contracts
to hedge against a decline in interest rates and may purchase put options
on interest rate futures contracts to hedge its portfolio securities
against the risk of rising interest rates.
The Fund may sell call options on interest rate futures contracts to
partially hedge against declining prices of portfolio securities. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which the Fund
intends to purchase. If a put or call option sold by the Fund is exercised,
the Fund will incur a loss which will be reduced by the amount of the
premium it receives. Depending on the degree of correlation between
changes in the value of its portfolio securities and changes in the value of
its futures positions, the Fund's losses from existing options on futures
may to some extent be reduced or increased by changes in the value of its
portfolio securities.
The Fund also may sell options on interest rate futures contracts as
part of closing purchase transactions to terminate its options positions.
No assurance can be given that such closing transaction can be effected or
that there will be a correlation between price movements in the options
on interest rate futures and price movements in the Fund's portfolio
securities which are the subject of the hedge. In addition, the Fund's
purchase of such options will be based upon predictions as to anticipated
interest rate trends, which could prove to be inaccurate.
FUTURES CONTRACTS BASED ON AN INDEX OF DEBT SECURITIES AND
OPTIONS ON SUCH FUTURES CONTRACTS - The Fund may purchase and sell futures
contracts based on an index of debt securities and options on such futures
contracts to the extent they currently exist and, in the future, may be
developed. At least one exchange trades futures contracts on an index of long-
term municipal bonds, and the Fund reserves the right to conduct futures and
options transactions based on an index which may be developed in the future to
correlate with price movements in certain categories of debt securities.
The Fund's investment strategy in employing futures contracts based on
an index of debt securities will be similar to that used by it in other
financial futures transactions. The Fund also may purchase and write call
and put options on such index futures and enter into closing transactions
with respect to such options.
CURRENCY FUTURES AND OPTIONS ON CURRENCY FUTURES - The Fund may
purchase and sell currency futures contracts and options thereon. See
"Futures Transactions - In General" and "Call and Put Options on Specific
Securities" above. By selling foreign currency futures, the Fund can
establish the number of U.S. dollars it will receive in the delivery month
for a certain amount of a foreign currency. In this way, if the Fund
anticipates a decline of a foreign currency against the U.S. dollar, the Fund
can attempt to fix the U.S. dollar value of some or all of the securities
held in its portfolio that are denominated in that currency. By purchasing
foreign currency futures, the Fund can establish the number of U.S. dollars
it will be required to pay for a specified amount of a foreign currency in
the delivery month. Thus, if the Fund intends to buy securities in the
future and expects the U.S. dollar to decline against the relevant foreign
currency during the period before the purchase is effected, the Fund can
attempt to fix the price in U.S. dollars of the securities it intends to
acquire.
The purchase of options on currency futures will allow the Fund, for the
price of a premium it must pay for the option, to decide whether or not to
buy (in the case of a call option) or to sell (in the case of a put option) a
futures contract at a specified price at any time during the period before
the option expires. If the Fund, in purchasing an option, has been correct in
its judgment concerning the direction in which the price of a foreign
cur-
(10)
rency would move as against the U.S. dollar, it may exercise the option
and thereby take a futures position to hedge against the risk it had
correctly anticipated or close out the option position at a gain that will
offset, to some extent, currency exchange losses otherwise suffered by
the Fund. If exchange rates move in a way the Fund did not anticipate, the
Fund will have incurred the expense of the option without obtaining the
expected benefit. As a result, the Fund's profits on the underlying
securities transactions may be reduced or overall losses incurred.
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency
exchange transactions to protect against uncertainty in the level of future
exchange rates in connection with hedging and other non-speculative
strategies involving specific settlement transactions. The Fund will
conduct its currency exchange transactions either on a spot (i.e., cash)
basis at the rate prevailing in the currency exchange market, or through
entering into forward contracts to purchase or sell currencies. A forward
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which must be more than two days
from the date of the contract, at a price set at the time of the contract.
Transaction hedging is the purchase or sale of forward currency with
respect to specific receivables or payables of the Fund generally arising
in connection with the purchase or sale of its portfolio securities. These
contracts are entered into in the interbank market conducted directly
between currency traders (typically commercial banks or other financial
institutions) and their customers.
OPTIONS ON FOREIGN CURRENCY - The Fund may purchase and sell call and
put options on foreign currency for the purpose of hedging against changes
in future currency exchange rates. Call options convey the right to buy the
underlying currency at a price which is expected to be lower than the spot
price of the currency at the time the option expires. Put options convey
the right to sell the underlying currency at a price which is anticipated to
be higher than the spot prices of the currency at the time the option
expires. The Fund may use foreign currency options for the same purposes
that it could use currency forward and futures transactions as described
herein. See also "Call and Put Options on Specific Securities" above.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain
transactions. Such loans may not exceed 331/3% of the value of the Fund's
total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal
to at least 100% of the current market value of the loaned securities. The
Fund can increase its income through the investment of such collateral. The
Fund continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be terminable at any time
upon specified notice. The Fund might experience risk of loss if the institution
with which it has engaged in a portfolio loan transaction breaches its
agreement with the Fund.
FUTURE DEVELOPMENTS - The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other derivative investments which are not presently
contemplated for use by the Fund or which are not currently available but
which may be developed, to the extent such opportunities are both
consistent with the Fund's investment objective and legally permissible
for the Fund. Before entering into such transactions or making any such
investment, the Fund will provide appropriate disclosure in its prospectus.
FORWARD COMMITMENTS - The Fund may purchase securities on a when-
issued or forward commitment basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate that will be
received on a when-issued security are fixed at the time the Fund enters
into the commitment. The Fund will make commitments to purchase such
securities only with the intention of actually acquiring the securities, but
the Fund may sell these securities before the settlement date if it is
deemed advisable. The Fund will not accrue income in respect of a security
purchased on a when-issued or forward commitment basis prior to its
stated delivery date.
Securities purchased on a when-issued or forward commitment basis
and certain other securities held in the Fund's portfolio are subject to
changes in value (both generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the credit-
(11)
worthiness of the issuer and changes, real or anticipated, in the level of
interest rates. Securities purchased on a when-issued or forward commitment
basis may expose the Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued or
forward commitment basis can involve the additional risk that the yield
available in the market when the delivery takes place actually may be
higher than that obtained in the transaction itself. A segregated account
of the Fund consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least equal at all
times to the amount of the when-issued or forward commitments will be
established and maintained at the Fund's custodian bank. Purchasing
securities on a when-issued or forward commitment basis when the Fund
is fully or almost fully invested may result in greater potential
fluctuations in the value of the Fund's net assets and its net asset value
per share.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES - A convertible security is a fixed-income
security, such as a bond or preferred stock, which may be converted at a
stated price within a specified period of time into a specified number of
shares of common stock of the same or different issuer. Convertible
securities are senior to common stock in a corporation's capital
structure, but usually are subordinated to non-convertible debt securities.
While providing a fixed-income stream (generally higher in yield than the
income derivable from a common stock but lower than that afforded by a
non-convertible debt security), a convertible security also affords an
investor the opportunity, through its conversion feature, to participate in
the capital appreciation of the common stock into which it is convertible.
In general, the market value of a convertible security is the higher of
its "investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common
stock if the security is converted). As a fixed-income security, the market
value of a convertible security generally increases when interest rates
decline and generally decreases when interest rates rise. However, the
price of a convertible security also is influenced by the market value of
the security's underlying common stock. Thus, the price of a convertible
security generally increases as the market value of the underlying stock
increases, and generally decreases as the market value of the underlying
stock declines. Investments in convertible securities generally entail less
risk than investments in the common stock of the same issuer.
Warrants - A warrant is an instrument issued by a corporation which
gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time.
ILLIQUID SECURITIES - The Fund may invest up to 15% of the value of its
net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment 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, 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. As to these securities, the Fund is subject to a risk that should
the Fund desire to sell them when a ready buyer is not available at a price
the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected. However, if a substantial market of
qualified institutional buyers develops pursuant to Rule 144A under the
Securities Act of 1933, as amended, for certain unregistered securities
held by the Fund, the Fund intends to treat such securities as liquid
securities in accordance with procedures approved by the Fund's Board of
Directors. Because it is not possible to predict with assurance how the
market for restricted securities pursuant to Rule 144A will develop, the
Fund's Board of Directors has directed Dreyfus to monitor carefully the
Fund's investments in such securities with particular regard to trading
activity, availability of reliable price information and other relevant
information. To the extent that for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to
Rule 144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in the Fund's portfolio during such
period.
U.S. GOVERNMENT 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. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one
(12)
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, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Principal and interest may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies and 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.
ZERO COUPON U.S. TREASURY SECURITIES - The Fund may invest in zero
coupon U.S. Treasury securities, which are Treasury Notes and Bonds that
have been stripped of their unmatured interest coupons, the coupons
themselves and receipts or certificates representing interests in such
stripped debt obligations and coupons. The Fund also may invest in zero
coupon securities issued by financial institutions which constitute a
proportionate ownership of the issuer's pool of underlying U.S. Treasury
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The amount of
the discount fluctuates with the market price of the security. The market
prices of zero coupon securities generally are more volatile than the
market prices of securities that pay interest periodically and are likely to
respond to a greater degree to changes in interest rates than non-zero
coupon securities having similar maturities and credit qualities.
REPURCHASE AGREEMENTS - 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 or sub-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 will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Advisers 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.
BANK OBLIGATIONS - 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.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These and other short-
term instruments reflect the obligation both of the bank and of the drawer
to pay the face amount of the instrument upon maturity. The other short-
term obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
COMMERCIAL PAPER - Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs.
(13)
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money to the
extent permitted under the Investment Company Act of 1940; (ii) pledge,
mortgage and hypothecate its assets, but only to secure permitted
borrowings and to the extent related to the deposit of assets in escrow in
connection with portfolio transactions; (iii) invest up to 5% of its total
assets in the obligations of any issuer, except that up to 25% of the value
of the Fund's total assets may be invested, and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities may
be purchased, without regard to any such limitation; and (iv) invest up to
25% of its total assets in the securities of issuers in any industry,
provided that there shall be no such limitation on investments in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies that
cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. See "Investment Objective and Management Policies -
Investment Restrictions" in the Statement of Additional Information.
ADDITIONAL NON-FUNDAMENTAL POLICY -- The Fund may 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 Objective and Management Policies-Investment
Restrictions" in the Statement of Additional Information.
RISK FACTORS
CERTAIN INVESTMENT TECHNIQUES - The use of investment techniques
such as short-selling, engaging in financial futures and options and
currency transactions, leverage through borrowing, purchasing securities
on a forward commitment basis and lending portfolio securities involves
greater risk than that incurred by many other funds with a similar
objective. Using these techniques may produce higher than normal
portfolio turnover and may affect the degree to which the Fund's net asset
value fluctuates. Higher portfolio turnover rates are likely to result in
comparatively greater brokerage commissions. See "Portfolio
Transactions" in the Statement of Additional Information. Portfolio
turnover will not be a limiting factor when making portfolio decisions.
INVESTING IN FOREIGN SECURITIES - In making foreign investments, the Fund will
give appropriate consideration to the following factors, among others.
Foreign securities markets generally are not as developed or efficient
as those in the United States. Securities of some foreign issuers are less
liquid and more volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities markets are
less than in the United States and, at times, volatility of price can be
greater than in the United States. The issuers of some of these securities,
such as foreign bank obligations, may be subject to less stringent or
different regulation than are U.S. issuers. In addition, there may be less
publicly available information about a non-U.S. issuer, and non-U.S. issuers
generally are not subject to uniform accounting and financial reporting
standards, practices and requirements comparable to those applicable to
U.S. issuers.
Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions which might
adversely affect the payment of principal and interest on the foreign
securities or might restrict the payment of principal and interest to
investors located outside the country of the issuer, whether from
currency blockage or otherwise. Custodial expenses for a portfolio of non-
U.S. securities generally are higher than for a portfolio of U.S. securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. Some currency exchange
costs may be incurred when the Fund changes investments from one
country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing
the cost of such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale. Income received
by the Fund from sources within foreign countries may
(14)
be reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States, however, may reduce
or eliminate such taxes. All such taxes paid by the Fund will reduce its net
income available for distribution to shareholders.
FOREIGN CURRENCY EXCHANGE - Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central
banks or the failure to intervene or by currency controls or political
developments in the U.S. or abroad.
The foreign currency market offers less protection against defaults in
the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
FOREIGN COMMODITY TRANSACTIONS - Unlike trading on domestic
commodity exchanges, trading on foreign commodity exchanges is not
regulated by the CFTC and may be subject to greater risks than trading on
domestic exchanges. For example, some foreign exchanges are principal
markets so that no common clearing facility exists and a trader may look
only to the broker for performance of the contract. In addition, unless the
Fund hedges against fluctuations in the exchange rate between the U.S.
dollar and the currencies in which trading is done on foreign exchanges,
any profits that the Fund might realize in trading could be eliminated by
adverse changes in the exchange rate, or the Fund could incur losses as a
result of those changes. Transactions on foreign exchanges may include
both commodities which are traded on domestic exchanges and those
which are not.
LOWER RATED SECURITIES _ You should carefully consider the relative
risks of investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest without limitation when
management believes that such securities offer opportunities for capital
growth. Management's decision to invest in these securities is not subject
to shareholder approval. These are securities such as those rated Ba by
Moody's Investors Service, Inc. or BB by Standard & Poor's Corporation or
as low as the lowest rating assigned by Moody's Investors Service, Inc. or
Standard & Poor's Corporation. They generally are not meant
for short-term investing and may be subject to certain risks with respect
to the issuing entity and to greater market fluctuations than certain
lower yielding, higher rated fixed-income securities. Obligations rated Ba
by Moody's Investors Service, Inc. are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate.
Obligations rated BB by Standard & Poor's Corporation are regarded as
having predominantly speculative characteristics and, while such
obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payment.
Obligations rated C by Moody's Investors Service, Inc. are regarded as
having extremely poor prospects of ever attaining any real investment
standing. Obligations rated D by Standard & Poor's Corporation are in
default and the payment of interest and/or repayment of principal is in
arrears. Such obligations, though high yielding, are characterized by great
risk. See "Appendix" in the Statement of Additional Information for a
general description of Moody's Investors Service, Inc. and Standard &
Poor's Corporation securities ratings. The ratings of Moody's Investors
Service, Inc. and Standard & Poor's Corporation represent their opinions as
to the quality of the securities which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
securities. Therefore, although these ratings may be an initial criterion
for selection of portfolio investments, the Advisers also will evaluate
these securities and the ability of the issuers of such securities to pay
interest and principal. The Fund's ability to achieve its investment
objective may be more dependent on the Advisers' credit analysis than
might be the case for a fund that invested in higher rated securities. Once
the rating of a portfolio security has been changed, the Fund will consider
all circumstances deemed relevant in determining whether to continue to
hold the security.
(15)
The market price and yield of debt securities rated Ba or lower by
Moody's Investors Service, Inc. and BB or lower by Standard & Poor's
Corporation are more volatile than those of higher rated securities.
Factors adversely affecting the market price and yield of these securities
will adversely affect the Fund's net asset value. In addition, the retail
secondary market for these securities may be less liquid than that of
higher rated securities; adverse market conditions could make it difficult
at times for the Fund to sell certain securities or could result in lower
prices than those used in calculating the Fund's net asset value.
The market values of certain lower rated debt securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates, and tend to be more sensitive to economic conditions than
are higher rated securities. Companies that issue such securities often
are highly leveraged and may not have available to them more traditional
methods of financing. Therefore, the risk associated with acquiring the
securities of such issuers generally is greater than is the case with
higher rated securities.
The Fund may invest in lower rated zero coupon securities and pay-in-
kind bonds (bonds which pay interest through the issuance of additional
bonds), which involve special considerations. These securities may be
subject to greater fluctuations in value due to changes in interest rates
than interest-bearing securities and thus may be considered more
speculative than comparably rated interest-bearing securities. See "Other
Investment Considerations" below, and "Investment Objective and
Management Policies-Risk Factors-Lower Rated Securities" and "Dividends,
Distributions and Taxes" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value is not
fixed and should be expected to fluctuate. You should purchase Fund shares
only as a supplement to an overall investment program and only if you are
willing to undertake the risks involved. Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price fluctuations.
The values of fixed-income securities also
may be affected by changes in the credit rating or financial condition of
the issuing entities. See "Lower Rated Securities" above.
Federal income tax law requires the holder of a zero coupon security or of
certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. To maintain its
qualification as a regulated investment company and avoid liability for
Federal income taxes, the Fund may be required to distribute such income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Investment decisions for the Fund are made independently from those of
the other investment companies or accounts advised by Dreyfus or
Comstock Partners. However, if such other investment companies or
accounts are prepared to invest in, or desire to dispose of, securities of
the type in which the Fund invests at the same time as the Fund, available
investments or opportunities for sales will be allocated equitably to each.
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. As of December 31, 1993, Dreyfus managed or administered
approximately $78 billion in assets for more than 1.9 million investor
accounts nationwide.
Dreyfus supervises and assists in the overall management of the Fund's
affairs under an Investment Advisory Agreement with the Fund, subject to
the overall authority of the Fund's Board of Directors in accordance with
Maryland law.
Under the terms of the Investment Advisory Agreement, the Fund has
agreed to pay Dreyfus an annual fee, payable monthly, as set forth below:
(16)
Annual Fee as a Percentage of
Average Net Assets Average Daily Net Assets
------------------- -----------------------------
0 up to $25 million................. .60 of 1%
$25 up to $75 million............... .50 of 1%
$75 up to $200 million.............. .45 of 1%
$200 up to $300 million............. .40 of 1%
In excess of $300 million........... .375 of 1%
For the fiscal year ended September 30, 1993, the Fund paid Dreyfus a
monthly investment advisory fee at the effective annual rate of .43 of 1%
of the value of the Fund's average daily net assets.
Dreyfus may pay Dreyfus Service Corporation for shareholder and
distribution services from its own monies, including past profits but not
including the investment advisory fee paid by the Fund. Dreyfus Service
Corporation may pay part or all of these payments to securities dealers or
others for servicing and distribution.
SUB-INVESTMENT ADVISER - Comstock Partners, a registered investment
adviser located at 10 Exchange Place, Suite 2010, Jersey City, New Jersey
07302-3913, was formed in 1986 and serves as the Fund's sub-
investment adviser. As of July 30, 1993, Comstock Partners managed
approximately $1 billion in assets for three investment companies and
several discretionary accounts.
Comstock Partners, 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 a Sub-Investment Advisory Agreement with the Fund, subject to the
overall authority of the Fund's Board of Directors in accordance with
Maryland law. Investment decisions for the Fund are made by the
Investment Policy Committee of Comstock Partners and no person is
primarily responsible for making recommendations to that committee. See
"Management of the Fund" in the Fund's Statement of Additional
Information. Comstock Partners and Dreyfus also provide research
services for the Fund as well as for other funds advised by Comstock
Partners or Dreyfus through their respective professional staffs of
portfolio managers and security analysts.
Stanley Salvigsen, Chairman of the Board and Chief Executive Officer of
Comstock Partners and Charles L. Minter, Vice Chairman and Chief
Operating Officer of Comstock Partners are Investment Officers of the
Fund. In the October 1986 issue of Institutional Investor, Mr. Salvigsen
was selected as the leading portfolio strategist during the preceding 12-
month period, as determined by a survey of the opinions of research or
investment managers at a selected group of large money management
organizations. Subsequent to 1986, Mr. Salvigsen has not been evaluated in
connection with this survey, which considers only brokerage-firm
analysts. Mr. Salvigsen's past performance, or opinions of others as to the
quality of such performance, is no guarantee of future performance by the
Fund.
Under the terms of the Sub-Investment Advisory Agreement, the Fund
has agreed to pay Comstock Partners an annual fee, payable monthly, as
set forth below:
Annual Fee as a Percentage of
Average Net Assets Average Daily Net Assets
------------------ -----------------------------
0 up to $25 million................. .15 of 1%
$25 up to $75 million............... .25 of 1%
$75 up to $200 million.............. .30 of 1%
$200 up to $300 million............. .35 of 1%
In excess of $300 million........... .375 of 1%
For the fiscal year ended September 30, 1993, the Fund paid Comstock
Partners a monthly sub-investment advisory fee at the effective annual
rate of .32 of 1% of the value of the Fund's average daily net assets.
EXPENSES - The aggregate fee paid to the Advisers is higher than that paid
by most other investment companies. From time to time, Dreyfus and/or
Comstock Partners may waive receipt of their 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.
(17)
The Fund will not pay Dreyfus or Comstock Partners at a later
time for any amounts which may be waived, nor will the Fund reimburse
Dreyfus and/or Comstock Partners for any amounts which may be assumed.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN - The
Shareholder Services Group, Inc., a subsidiary of First Data Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank
of New York, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, located at 200 Park Avenue, New York, New York
10166. The shares it distributes are not deposits or obligations of The
Dreyfus Security Savings Bank, F.S.B. and therefore are not insured by the
Federal Deposit Insurance Corporation.
Fund shares can be purchased through Dreyfus Service Corporation or
certain financial institutions (which may include banks), securities
dealers and other industry professionals (collectively, "Service Agents")
that have entered into agreements with Dreyfus Service Corporation.
Service Agents may receive different levels of compensation for selling
different Classes of shares.
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in
this Prospectus, and, to the extent permitted by applicable regulatory
authority, may charge their clients direct fees which would be in addition
to any amounts which might be received under the Shareholder Services
Plan. Each Service Agent has agreed to transmit to its clients a schedule
of such fees. You should consult your Service Agent in this regard.
When purchasing Fund shares, you must specify whether the purchase is
for Class A or Class B shares. 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. 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.
Full-time employees of Comstock Partners may purchase Fund shares
without regard to minimum initial investment requirements. 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
form acceptable to the Fund. The Fund reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TeleTransfer Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to The Dreyfus Family of
Funds, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application indicating which Class of shares is 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 additional 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
(18)
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#8900119551/
Dreyfus Capital Value Fund - Class A shares or DDA#8900115181/
Dreyfus Capital Value Fund - Class B shares, as the case may be, for
purchase of Fund shares in your name. The wire must include your Fund
account number (for new accounts, please include your Taxpayer
Identification Number ("TIN") 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."
Fund shares are sold on a continuous basis. Net asset value per share is
determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York
Stock Exchange is open for business. For purposes of determining net asset
value, options and futures contracts will be valued 15 minutes after the
close of trading on the floor of the New York Stock Exchange. Net asset
value per share of each Class is computed by dividing the value of the
Fund's net assets represented by such Class (i.e., the value of its assets
less liabilities) by the total number of shares of such Class outstanding.
The Fund's investments are valued based on market value, or where market
quotations are not readily available, based on fair value as determined in
good faith by the Board of Directors. For further information regarding the
methods employed in valuing Fund investments, see "Determination of Net
Asset Value" in the Fund's Statement of Additional Information.
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").
If an order is received by the Transfer Agent or other agent by the close
of trading on the floor of the New York Stock Exchange (currently 4:00
p.m., New York time) on any business day, Fund shares will be purchased at
the public offering price determined as of such close of trading on the
floor of the New York Stock Exchange on that day. Otherwise, Fund shares
will be purchased at the public offering price determined as of the close
of trading on the floor of the New York Stock Exchange on the next
business day, except where shares are purchased through a dealer as
provided below.
Orders for the purchase of Fund shares received by dealers by the close
of trading on the floor of the New York Stock Exchange on any business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealers' responsibility to transmit orders so that they will be received by
Dreyfus Service Corporation before the close of its business day.
(19)
CLASS A SHARES - The public offering price for Class A shares is the net
asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
- --------------------- ------------- ------------- ------------------
<S> <C> <C> <C>
Less than $50,000.................... 4.50 4.70 4.25
$50,000 to less than $100,000........ 4.00 4.20 3.75
$100,000 to less than $250,000....... 3.00 3.10 2.75
$250,000 to less than $500,000....... 2.50 2.60 2.25
$500,000 to less than $1,000,000..... 2.00 2.00 1.75
$1,000,000 to less than $3,000,000... 1.00 1.00 1.00
$3,000,000 to less than $5,000,000... .50 .50 .50
$5,000,000 and over.................. .25 .25 .25
</TABLE>
If you were an actual beneficial owner of Fund shares held in a Fund
account on April 16, 1987, you may purchase Class A shares for that Fund
account without a sales load.
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with
Dreyfus Service Corporation pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of
Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children at net asset value, provided that they have
furnished Dreyfus Service Corporation with such information it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time
employees are eligible to purchase Class A shares at net asset value. In
addition, Class A shares are offered at net asset value to full-time
employees of Comstock Partners and full-time or part-time employees 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.
Class A shares purchased in connection with the Dreyfus Managed
Portfolio program will be purchased at net asset value.
Class A shares will be offered at net asset value without a sales load
to 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 initial investment in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date that Class A
shares are first purchased by or on behalf of employees participating in
such plan or program and on each subsequent January 1st. Dreyfus Service
Corporation may pay dealers a fee of up to .5% of the amount invested
through such dealers in Class A shares at net asset value by employees
participating in Eligible Benefit Plans. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each such
purchase of Class A shares. Dreyfus Service Corporation reserves the right
to cease paying these fees at any time. Dreyfus Service Corporation 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.
Class A shares also may be purchased (including by exchange) at net
asset value without a sales load for Dreyfus-sponsored IRA "Rollover
Accounts" with the distribution proceeds from a qualified retirement plan
or a Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) satisfied the requirements set forth under either clause
(i) or clause (ii) above and all or a portion of such plan's assets were
invested in funds in the Dreyfus Family of Funds or certain other products
made available by Dreyfus Service Corporation to such plans, or (b) had all
of its assets invested in
(20)
funds in the Dreyfus Family of Funds or certain
other products made available by Dreyfus Service Corporation to such
plans which funds or other products were sold with a sales load.
In fiscal 1993, Dreyfus Service Corporation retained $394,268 from
sales loads on Class A shares. The dealer reallowance may be changed
from time to time but will remain the same for all dealers. Dreyfus
Service Corporation, at its expense, may provide additional promotional
incentives to dealers that sell shares of funds advised by Dreyfus which
are sold with a sales load, such as the Fund. In some instances, these
incentives may be offered only to certain dealers who have sold or may
sell significant amounts of shares. Dealers receive a larger percentage of
the sales load from Dreyfus Service Corporation than they receive for
selling most other funds.
CLASS B SHARES - The public offering price for Class B shares is the net
asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions
of Class B shares as described under "How to Redeem Fund Shares."
Dreyfus Service Corporation compensates certain Service Agents for
selling Class B shares at the time of purchase from Dreyfus Service
Corporation's own assets. The proceeds of the CDSC and the distribution
fee, in part, are used to defray these
expenses. In fiscal 1993, $20,817 was retained by Dreyfus Service
Corporation from the CDSC on Class B shares.
RIGHT OF ACCUMULATION - CLASS A SHARES - Reduced sales loads apply
to any purchase of Class A shares, shares of certain other funds advised
by Dreyfus which are sold with a sales load or shares acquired by a
previous exchange of shares purchased with a sales load (hereinafter
referred to as "Eligible Funds"), by you and any related "purchaser" as
defined in the Statement of Additional Information, where the aggregate
investment, including such purchase, is $50,000 or more. If, for example,
you previously purchased and still hold Class A shares of the Fund, or of
any other Eligible Fund or combination thereof, with an aggregate current
market value of $40,000 and subsequently purchase Class A shares of the
Fund or an Eligible Fund having a current value of $20,000, the sales load
applicable to the subsequent purchase would be reduced to 4% of the
offering price. All present holdings of Eligible Funds may be combined to
determine the current offering price of the aggregate investment in
ascertaining the sales load applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of a purchase you or your
Service Agent must notify Dreyfus Service Corporation if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed an Optional Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
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.
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for Class A or Class B shares of the Fund, shares of the same
Class in 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 Privilege, you should consult your Service
Agent or Dreyfus Service Corporation to determine if it is available and
whether any conditions are imposed on its use.
To use this Privilege, you or your Service Agent acting on your behalf
must give exchange instructions to the Transfer Agent in writing, by wire
or by telephone. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-
4060 or, if you are calling from over-
(21)
seas, call 1-401-455-3306. See "How
to Redeem Fund Shares-Procedures." 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 from Dreyfus
Service Corporation. 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.
Telephone exchanges may be made only if the appropriate "YES" box has
been checked on the Account Application, or a separate signed Optional
Services Form is on file with the Transfer Agent. Upon an exchange into a
new account, the following share holder services and privileges, as applicable
and where available, will be automatically carried over to the fund into which
the exchange is made: Exchange Privilege, Dreyfus TELETRANSFER Privilege and the
dividend/capital gain distribution option (except for the Dreyfus Dividend
Sweep Privilege) 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 of Class
A shares into funds sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B shares
acquired through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC applicable
on redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. If you are
exchanging Class A shares 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 an exchange
you must notify the Transfer Agent or your Service Agent must notify
Dreyfus Service Corporation. 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 Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semimonthly, monthly, quarterly or
annual basis), in exchange for Class A or Class B shares of the Fund, in
shares of the same Class 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 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 of Class A shares
into funds sold with a sales load. No CDSC will be imposed on Class B
shares at the time of an exchange; however, the Class B shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged shares or acquired shares. The CDSC
applicable on redemption of the acquired Class B shares will be calculated
from the date of the initial purchase of the Class B shares exchanged. 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
(22)
concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum
$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
from Dreyfus Service Corporation. 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.
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
from Dreyfus Service Corporation. There is a service charge of 50 cents
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 stock
certificates have been issued may not be redeemed through the Plan.
Class B shares withdrawn pursuant to the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Purchases of additional Class A
shares where the sales load is imposed concurrently with withdrawals of
Class A shares generally are undesirable. Any correspondence with respect
to the Automatic Withdrawal Plan should be addressed 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.
DREYFUS DIVIDEND SWEEP PRIVILEGE - Dreyfus Dividend Sweep Privilege
enables you to invest automatically dividends or dividends and capital
gain distributions, if any, paid by the Fund in shares of the same Class 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 Class A 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 or class that charges a
CDSC, the shares purchased will be subject on redemption to the CDSC, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. For more information concerning
this Privilege and the funds in The Dreyfus Family of Funds eligible to
participate in this Privilege, or to request a Dividend Sweep Authorization
Form, please call toll free 1-800-645-6561. You may cancel this Privilege
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 authorization form. Enrollment in or
cancellation of this Privilege is effective three business days following
receipt. This Privilege is available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not
apply. The Fund may modify or terminate this Privilege at any time or
charge a service fee. No such fee currently is contemplated. Shares held
under Keogh Plans, IRAs or other retirement plans are not eligible for this
Privilege.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE - Dreyfus Government
Direct Deposit Privilege enables you to purchase Fund shares (minimum of
$100 and maximum of $50,000 per transaction) by having Federal salary,
Social Security, or certain veterans', military or other payments from the
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in
(23)
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
from Dreyfus Service Corporation. 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 PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits you
to purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay period.
To establish a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-
9671. You may obtain the necessary authorization form from Dreyfus
Service Corporation. 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 Dreyfus Service Corporation, 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.
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. For details, please contact Dreyfus
Group Retirement Plans, a division of Dreyfus Service Corporation, by
calling toll free 1-800-358-5566.
LETTER OF INTENT - CLASS A SHARES - By signing a Letter of Intent form,
available from Dreyfus Service Corporation, you become eligible for the
reduced sales load applicable to the total number of Eligible Fund shares
purchased in a 13-month period pursuant to the terms and under the
conditions set forth in the Letter of Intent. A minimum initial purchase of
$5,000 is required. To compute the applicable sales load, the offering
price of shares you hold (on the date of submission of the Letter of Intent)
in any Eligible Fund that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward completion of the
Letter of Intent. However, the reduced sales load will be applied only to
new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by
purchasing the specified amount. If your purchases qualify for a further
sales load reduction, the sales load will be adjusted to reflect your total
purchase at the end of 13 months. If total purchases are less than the
amount specified, you will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load
applicable to the aggregate purchases actually made. If such remittance is
not received within 20 days, the Transfer Agent, as attorney-in-fact
pursuant to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the difference. Signing
a Letter of Intent does not bind you to purchase, or the Fund to sell, the
full amount indicated at the sales load in effect at the time of signing,
but you must complete the intended purchase to obtain the reduced sales
load. At the time you purchase Class A shares, you must indicate your
intention to do so under a Letter of Intent.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your Class A or Class B 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 as
described below. If you hold Fund shares of more than one Class, any
request for redemption must specify the Class of shares being redeemed.
If you fail to specify the Class of shares to be redeemed or if you own
fewer shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further
instructions from
(24)
you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC) when
shares are redeemed directly through Dreyfus Service Corporation. Service
Agents may charge a nominal fee for effecting redemptions of Fund shares.
Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed
may be more or less than their original cost, depending on the Fund's then-
current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC
ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO
THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSER BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL
REJECT REQUESTS TO REDEEM SHARES 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.
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.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES - A CDSC payable to
Dreyfus Service Corporation is imposed on any redemption of Class B
shares which reduces the current net asset value of your Class B shares to
an amount which is lower than the dollar amount of all payments by you
for the purchase of Class B shares of the Fund held by you at the time of
redemption. No CDSC will be imposed to the extent that the net asset
value of the Class B shares redeemed does not exceed (i) the current net
asset value of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the net asset value of
your Class B shares above the dollar amount of all your payments for the
purchase of Class B shares of the Fund held by you at the time of
redemption.
If the aggregate value of the Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC
may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class
B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
- ------------------- -------------------------------
First.................................. 4.00
Second................................. 4.00
Third.................................. 3.00
Fourth................................. 3.00
Fifth.................................. 2.00
Sixth.................................. 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing
(25)
shares acquired pursuant to the reinvestment of dividends
and distributions; then of amounts representing the increase in net asset
value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding six years; then of
amounts representing the cost of shares purchased six years prior to the
redemption; and finally, of amounts representing the cost of shares held
for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired 5 additional
shares through dividend reinvestment. During the second year after the
purchase the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the net asset value had
appreciated to $12 per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
WAIVER OF CDSC - The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability, as defined
in Section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"), of the shareholder, (b) redemptions by Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with
the Fund by merger, acquisition of assets or otherwise, (d) a distribution
following retirement under a tax-deferred retirement plan or attaining
age 701/2 in the case of an IRA or Keogh plan or custodial account
pursuant to section 403(b) of the Code and (e) redemptions by such
shareholders as the Securities and Exchange Commission or its staff may
permit. If the Directors of the Fund determine to discontinue the waiver of
the CDSC, the disclosure in the Fund's prospectus will be revised
appropriately. Any Fund shares subject to a CDSC which were purchased
prior to the termination of such waiver will have the CDSC waived as
provided in the Fund's prospectus at the time of the purchase of such
shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Service Agent must notify Dreyfus
Service Corporation. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent or through the Dreyfus TeleTransfer
Privilege. Other redemption procedures may be in effect for investors who
effect transactions in Fund shares through Service Agents. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
Your redemption request may direct that the redemption proceeds be
used to purchase shares of other funds advised or administered by Dreyfus
that are not available through the Exchange Privilege. The applicable CDSC
will be charged upon the redemption of Class B shares. Your redemption
proceeds will be invested in shares of the other fund on the next business
day. Before you make such a request, you must obtain and should review a
copy of the current prospectus of the fund being purchased. Prospectuses
may be obtained from Dreyfus Service Corporation. The prospectus will
contain information concerning minimum investment requirements and
other conditions that may apply to your purchase.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed an Optional Services Form with the Transfer Agent. If you select the
Dreyfus TeleTransfer Privilege or telephone exchange privilege, 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 Dreyfus TeleTransfer redemption or exchange of Fund shares. In
such
(26)
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 Dreyfus TeleTransfer 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. Written
redemption requests must specify the Class of shares being redeemed.
Redemption requests may be delivered in person only to a Dreyfus
Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call of one of the telephone numbers
lister under "General Information." Redemption requests must be signed
by each shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed
under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares (minimum
$500) by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed
an Optional Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House member may
be so designated. Redemption proceeds will be on deposit in your account
at an Automated Clearing House member bank ordinarily two days after
receipt of the redemption request or, at your request, paid by check
(maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus
TELETRANSFER Privilege for transfer to their bank account only up to
$250,000 within any 30-day period. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of
such requests. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306. Shares of the Fund held under Keogh Plans, IRAs or other Dreyfus
retirement plans, and shares issued in certificate form, are not eligible
for this Privilege.
REINVESTMENT PRIVILEGE - CLASS A - You may reinvest up to the number of
Class A shares you have redeemed, within 30 days of redemption, at the
then-prevailing net asset value without a sales load, or reinstate your
account for the purpose of exercising the Exchange Privilege. The
Reinvestment Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The Class A and Class B shares are subject to a Shareholder Services
Plan and the Class B shares only are subject to a Distribution Plan.
DISTRIBUTION PLAN - Under the Distribution Plan, adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Fund pays Dreyfus
Service Corporation for advertising, marketing and distributing Class B
shares at an annual rate of .75 of 1% of the value of the average daily net
assets of Class B. Under the Distribution Plan, Dreyfus Service Corporation
may make payments to Service Agents in respect of these ser-
(27)
vices. Dreyfus Service Corporation determines the amounts to be paid
to Service Agents. Service Agents receive such fees in respect of the
average daily value of Class B shares owned by their clients. From time to
time, Dreyfus Service Corporation may defer or waive receipt of fees
under the Distribution Plan while retaining the ability to be paid by the
Fund under the Distribution Plan thereafter. The fees payable to Dreyfus
Service Corporation under the Distribution Plan for advertising, marketing
and distributing Class B shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN - Under the Shareholder Services Plan, the Fund
pays Dreyfus Service Corporation for the provision of certain services to
the holders of Class A and Class B shares a fee at an annual rate of up to
.25 of 1% of the value of the average daily net assets of Class A and Class
B. The services provided may include providing 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. Dreyfus
Service Corporation may make payments to Service Agents in respect of
these services. Dreyfus Service Corporation 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 Class A or
Class B shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income and
distributes net realized securities gains, if any, once a year, but it may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional shares of the same class at net asset value without a sales
load. All expenses are accrued daily and are deducted before the
declaration of dividends. 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 Class A or Class B 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 "Fee Table."
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds paid by the
Fund, will be taxable to U.S. shareholders as ordinary income whether
received in cash or reinvested in additional Fund shares. Distributions
from net realized long-term securities gains of the Fund will be taxable
to U.S. shareholders as long-term capital gains, regardless of how long
shareholders have held their Fund shares and whether such distributions
are received in cash or reinvested in additional Fund shares. The Code
provides that the net capital gain of an individual generally will not be
subject to Federal income tax at a rate in excess of 28%. Dividends,
together with 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 gains
from the sale or other disposition of market discount bonds, paid by the
Fund to a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor claims
the benefit of a lower rate specified in a tax treaty. Distributions from
net realized long-term securities gains paid by the Fund to a foreign
investor as well as the proceeds of any redemptions from a foreign
investor's account, regardless of the extent to which gain or loss may be
realized, generally will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to backup withholding, as
described below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
The Code provides for the "carryover" of some or all of the sales load
imposed on Class A shares, if you exchange your Class A shares for shares
in another Dreyfus fund within 91 days after purchase and the other
Dreyfus
(28)
fund reduces or eliminates its otherwise applicable load charge
for the purpose of the exchange. In this case, the amount of
sales load charged the investor for Class A shares, up to the amount of the
reduction of the sales load charged, on the exchange, is not included in the
basis of such investor's Class A shares for purposes of computing gain or
loss on the exchange, and instead is added to the basis of the fund shares
received in the exchange.
Federal regulations generally require the Fund to withhold and remit to
the U.S. Treasury 31%, of dividends, distributions from net realized
securities gains of the Fund and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to
backup withholding as a result of a failure to properly report taxable
dividend or interest income on a Federal income tax return. Furthermore,
the IRS may notify the Fund to institute backup withholding if the IRS
determines that a shareholder's TIN is incorrect or if a shareholder has
failed to properly report 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 September 30, 1993 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. In addition, the Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of shares is
calculated on the basis of average annual total return. Advertisements
also may include performance calculated on the basis of total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made
by the Fund during the measuring period were reinvested in shares of the
same Class. Class A average annual total return figures include the
maximum initial sales charge and Class B average annual total return
figures include any applicable CDSC. These figures also take into account
any applicable service and distribution fees. As a result, at any given
time, the performance of Class B should be expected to be lower than that
of Class A. Performance for each Class will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the average annual total return of Class A and Class B for one, five
and ten year periods, or for shorter time periods depending upon the length
of time during which the Fund has operated.
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
maximum offering price 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.
Total return also may be calculated by using the net asset value per share
at the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B shares.
Calculations based on the net asset value per share do not reflect the
deduction of the applicable sales charge which, if reflected, would reduce the
performance quot-
(29)
ed.
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., Standard & Poor's 500 Composite Stock Price
Index, the Dow Jones Industrial Average, Morningstar, Inc. and other
industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on December 3, 1983,
and commenced operations on October 10, 1985. On February 3, 1993, the
Fund, which is incorporated under the name Dreyfus Capital Value Fund,
Inc., began operating under the name Dreyfus Capital Value Fund (A
Premier Fund). The Fund is authorized to issue 200 million shares of
Common Stock, par value $.01 per share. The Fund's shares are classified
into two classes. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law or when
class voting is permitted by the Board of Directors. However, holders of
Class A and Class B shares will be entitled to vote on matters submitted
to shareholders pertaining to the Shareholder Services Plan and only
holders of Class B shares will be entitled to vote on matters submitted to
shareholders pertaining to the Distribution Plan.
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 meeting of shareholders for the purpose of electing Directors
if, at any time, less than a majority of the Directors then holding office
have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; on Long
Island, call 794-5200.
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.
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 28, 1994
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with the current
Prospectus of Dreyfus Capital Value Fund (A Premier Fund) (the "Fund"),
dated January 28, 1994, 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:
Outside New York State -- Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
(Outside New York City -- Call Collect)
On Long Island -- Call 794-5200
The Dreyfus Corporation ("Dreyfus") serves as the Fund's
investment adviser. Comstock Partners, Inc. ("Comstock Partners") serves as
the Fund's sub-investment adviser. Dreyfus and Comstock Partners are
referred to collectively as the "Advisers."
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of Dreyfus, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . .B-10
Investment Advisory Agreements. . . . . . . . . . . . . . . .B-13
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . .B-15
Distribution Plan and Shareholder Services Plan . . . . . . .B-16
Redemption of Fund Shares . . . . . . . . . . . . . . . . . .B-18
Shareholder Services. . . . . . . . . . . . . . . . . . . . .B-19
Determination of Net Asset Value. . . . . . . . . . . . . . .B-22
Dividends, Distributions and Taxes. . . . . . . . . . . . . .B-23
Portfolio Transactions. . . . . . . . . . . . . . . . . . . .B-25
Performance Information . . . . . . . . . . . . . . . . . . .B-26
Information About the Fund. . . . . . . . . . . . . . . . . .B-27
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . .B-28
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . .B-29
Financial Statements. . . . . . . . . . . . . . . . . . . . .B-34
Report of Independent Auditors. . . . . . . . . . . . . . . .B-45
INVESTMENT OBJECTIVE 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
Bank Obligations. Domestic commercial banks organized under
Federal law are supervised and examined by the Comptroller of the Currency
and are required to be members of the Federal Reserve System and to have
their deposits insured by the Federal Deposit Insurance Corporation (the
"FDIC"). Domestic banks organized under state law are supervised and
examined by state banking authorities but are members of the Federal Reserve
System only if they elect to join. In addition, state banks whose
certificates of deposit ("CDs") may be purchased by the Fund are insured by
the FDIC (although such insurance may not be of material benefit to the
Fund, depending upon the principal amount of the CDs of each bank held by
the Fund) and are subject to Federal examination and to a substantial body
of Federal law and regulation. As a result of Federal or state laws and
regulations, domestic branches of domestic banks generally are required,
among other things, to maintain specified levels of reserves, are limited in
the amounts which they can loan to a single borrower and are subject to
other regulation designed to promote financial soundness. However, not all
such laws and regulations apply to foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks, such as CDs and time deposits ("TDs"), may be general obligations of
the parent banks in addition to the issuing branches, or may be limited by
the terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal and
interest on the obligations, foreign exchange controls and foreign
withholding and other taxes on interest income. Foreign branches and
subsidiaries are not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations, and accounting, auditing and financial
recordkeeping requirements. In addition, less information may be publicly
available about a foreign branch of a domestic bank or about a foreign bank
than about a domestic bank.
Obligations of United States branches of foreign banks may be
general obligations of the parent banks in addition to the issuing branches,
or may be limited by the terms of a specific obligation and by Federal or
state regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch is
located if the branch is licensed in that state. In addition, Federal
branches licensed by the Comptroller of the Currency and branches licensed
by certain states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within the state, a
certain percentage of their assets as fixed from time to time by the
appropriate regulatory authority; and (2) maintain assets within the state
in an amount equal to a specified percentage of the aggregate amount of
liabilities of the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State Branches
generally must be insured by the FDIC if such branches take deposits of less
than $100,000.
In view of the foregoing factors associated with the purchase of
CDs and TDs issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, foreign branches of foreign banks or
domestic branches of foreign banks, the Advisers carefully evaluate such
investments on a case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan
associations and similar institutions with less than $1 billion in assets,
the deposits of which are insured by the FDIC, provided the Fund purchases
any such CD in a principal amount of not more than $100,000, which amount
would be fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the FDIC. Interest payments on such a CD are
not insured by the FDIC. The Fund will not own more than one such CD per
such issuer.
Investment Techniques
Option Transactions. The Fund may engage in options transactions,
such as purchasing or writing covered call or put options. The principal
reason for writing covered call options is to realize, through the receipt
of premiums, a greater return than would be realized on the Fund's portfolio
securities alone. In return for a premium, the writer of a covered call
option forfeits the right to any appreciation in the value of the underlying
security above the strike price for the life of the option (or until a
closing purchase transaction can be effected). Nevertheless, the call
writer retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered put options
is to realize income in the form of premiums. The writer of a covered put
option accepts the risk of a decline in the price of the underlying
security. The size of the premiums that the Fund may receive may be
adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing activities.
Options written ordinarily will have expiration dates between one
and nine months from the date written. The exercise price of the options
may be below, equal to or above the market values of the underlying
securities at the time the options are written. In the case of call
options, these exercise prices are referred to as "in-the-money,"
"at-the-money" and "out-of-the-money," respectively. The Fund may write (a)
in-the-money call options when the Advisers expect that the price of the
underlying security will remain stable or decline moderately during the
option period, (b) at-the-money call options when the Advisers expect that
the price of the underlying security will remain stable or advance
moderately during the option period and (c) out-of-the-money call options
when the Advisers expect that the premiums received from writing the call
option plus the appreciation in market price of the underlying security up
to the exercise price will be greater than the appreciation in the price of
the underlying security alone. In these circumstances, if the market price
of the underlying security declines and the security is sold at this lower
price, the amount of any realized loss will be offset wholly or in part by
the premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments that such call
options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option
continues, the Fund may be assigned an exercise notice by the broker-dealer
through which the option was sold, requiring the Fund to deliver, in the
case of a call, or take delivery of, in the case of a put, the underlying
security against payment of the exercise price. This obligation terminates
when the option expires or the Fund effects a closing purchase transaction.
The Fund can no longer effect a closing purchase transaction with respect to
an option once it has been assigned an exercise notice.
An option position may be closed out only if a secondary market
for an option of the same series exists on a recognized national securities
exchange or in the over-the-counter market. Because of this fact and
current trading conditions, the Fund expects to purchase only call or put
options issued by the Options Clearing Corporation. The Fund expects to
write options on national securities exchanges and in the over-the-counter
market.
While it may choose to do otherwise, the Fund generally will
purchase or write only those options for which the Advisers believe there is
an active secondary market so as to facilitate closing transactions. There
is no assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary
market may exist. A liquid secondary market in an option may cease to exist
for a variety of reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at times have
rendered certain clearing facilities inadequate and resulted in the
institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that may
otherwise interfere with the timely execution of customers' orders, will not
recur. In such event, it might not be possible to effect closing
transactions in particular options. If as a covered call option writer the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise or it otherwise
covers its position.
Stock Index Options. The Fund may purchase and write put and call
options on stock indexes listed on national securities exchanges or traded
in the over-the-counter market as an investment vehicle for the purpose of
realizing its investment objective or for the purpose of hedging its
portfolio. A stock index fluctuates with changes in the market values of
the stocks included in the index.
Options on stock indexes are similar to options on stock except
that (a) the expiration cycles of stock index options are monthly, while
those of stock options are currently quarterly, and (b) the delivery
requirements are different. Instead of giving the right to take or make
delivery of stock at a specified price, an option on a stock index gives the
holder the right to receive a cash "exercise settlement amount" equal to (i)
the amount, if any, by which the fixed exercise price of the option exceeds
(in the case of a put) or is less than (in the case of a call) the closing
value of the underlying index on the date of exercise, multiplied by (ii) a
fixed "index multiplier." Receipt of this cash amount will depend upon the
closing level of the stock index upon which the option is based being
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will be equal to
such difference between the closing price of the index and the exercise
price of the option expressed in dollars times a specified multiple. The
writer of the option is obligated, in return for the premium received, to
make delivery of this amount. The writer may offset its position in stock
index options prior to expiration by entering into a closing transaction on
an exchange or it may let the option expire unexercised.
Interest Rate Futures Contracts and Options on Interest Rate
Futures Contracts. Upon exercise of an option, the writer of the option
will deliver to the holder of the option the futures position and the
accumulated balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of
the option on the futures contract. The potential loss related to the
purchase of an option on interest rate futures contracts is limited to the
premium paid for the option (plus transaction costs). Because the value of
the option is fixed at the point of sale, there are no daily cash payments
to reflect changes in the value of the underlying contract; however, the
value of the option does change daily and that change would be reflected in
the net asset value of the Fund.
Foreign Currency Transactions. The Fund may not hedge with
respect to a particular currency to an extent greater than the aggregate
market value (at the time of making such sale) of the securities held in its
portfolio denominated or quoted in or currently convertible into that
particular currency. If the Fund enters into a hedging transaction, the
Fund will deposit with its custodian cash or readily marketable securities
in a segregated account of the Fund in an amount at least equal to the value
of the Fund's total assets committed to the consummation of the forward
contract. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account so
that the value of the account will equal the amount of the Fund's commitment
with respect to the contract. Hedging transactions may be made from any
foreign currency into U.S. dollars or into other appropriate currencies.
At or before the maturity of a forward contract, the Fund either
may sell a portfolio security and make delivery of the currency, or retain
the security and offset its contractual obligation to deliver the currency
by purchasing a second contract pursuant to which the Fund will obtain, on
the same maturity date, the same amount of the currency which it is
obligated to deliver. If the Fund retains the portfolio security and
engages in an offsetting transaction, the Fund, at the time of execution of
the offsetting transaction, will incur a gain or a loss to the extent that
movement has occurred in forward contract prices. Should forward prices
decline during the period between the Fund's entering into a forward
contract for the sale of a currency and the date it enters into an
offsetting contract for the purchase of the currency, the Fund will realize
a gain to the extent the price of the currency it has agreed to sell exceeds
the price of the currency it has agreed to purchase. Should forward prices
increase, the Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell.
The cost to the Fund of engaging in currency transactions varies
with factors such as the currency involved, the length of the contract
period and the market conditions then prevailing. Because transactions in
currency exchange are usually conducted on a principal basis, no fees or
commissions are involved. The use of forward currency exchange contracts
does not eliminate fluctuations in the underlying prices of the securities,
but it does establish a rate of exchange that can be achieved in the future.
If a devaluation is generally anticipated, the Fund may not be
able to contract to sell the currency at a price above the devaluation level
it anticipates. The requirements for qualification as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), may cause the Fund to restrict the degree to which it engages in
currency transactions. See "Dividends, Distributions and Taxes."
Unit Investment Trust Purchases. Under the Investment Company Act
of 1940, as amended (the "Act"), the Fund's purchases of securities of unit
investment trusts are limited, subject to certain exceptions, to a maximum
of (i) 3% of the total outstanding voting stock of any one unit investment
trust, (ii) 5% of the value of the Fund's total assets with respect to the
purchase of the securities of any one unit investment trust and (iii) 10% of
the value of the Fund's total assets with respect to the Fund's aggregate
purchases of securities of unit investment trusts.
Lending Portfolio Securities. To a limited extent, the Fund may
lend its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund can
increase its income through the investment of the cash collateral. For the
purposes of this policy, the Fund considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by banks whose
securities meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 33 1/3% of the value of the
Fund's total assets. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with the Fund, and which is acting as
a "placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(i) the Fund must receive at least 100% cash collateral from the borrower;
(ii) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (iii) the Fund must
be able to terminate the loan at any time; (iv) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (v) the Fund may pay only reasonable custodian fees in connection
with the loan; and (vi) while voting rights on the loaned securities may
pass to the borrower, the Fund's Directors must terminate the loan and
regain the right to vote the securities if a material event adversely
affecting the investment occurs. These conditions may be subject to future
modification.
Risk Factors-Lower Rated Securities. The Fund is permitted to
invest in securities rated below Baa by Moody's Investors Service, Inc.
("Moody's") and below BBB by Standard & Poor's Corporation ("S&P"). Such
securities, though higher yielding, are characterized by risk. See
"Description of the Fund--Risk Factors--Lower Rated Securities" in the
Prospectus for a discussion of certain risks and "Appendix" for a general
description of Moody's and S&P ratings. Although ratings may be useful in
evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of these securities. The Fund will rely on
the Advisers' judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Advisers will take
into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, its operating history,
the quality of the issuer's management and regulatory matters. It also is
possible that a rating agency might not timely change the rating on a
particular issue to reflect subsequent events. Once the rating of a
security in the Fund's portfolio has been changed, the Advisers will
consider all circumstances deemed relevant in determining whether the Fund
should continue to hold the security.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These securities are
considered by S&P and Moody's, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation and generally will involve more credit risk than
securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The
issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments or the issuer's inability to
meet specific projected business forecasts, or the unavailability of
additional financing. The risk of loss because of default by the issuer is
significantly greater for the holders of these securities because such
securities generally are unsecured and often are subordinated to other
creditors of the issuer.
Because there is no established retail secondary market for many
of these securities, the Advisers anticipate that such securities could be
sold only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these securities does exist, it
generally is not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an adverse
impact on market price and yield and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund's portfolio and
calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play
a greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic
downturns. It is likely that any economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value
of such securities. In addition, it is likely that any such economic
downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and increase the
incidence for default for such securities.
The Fund may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Fund has no arrangement with the Distributor or any other persons concerning
the acquisition of such securities, and the Advisers will review carefully
the credit and other characteristics pertinent to such new issues.
Lower rated zero coupon securities and pay-in-kind bonds, in which
the Fund may invest up to 5% of its total assets, involve special
considerations. Such zero coupon securities, pay-in-kind or delayed
interest bonds carry an additional risk in that, unlike bonds which pay
interest throughout the period to maturity, the Fund will realize no cash
until the cash payment date unless a portion of such securities are sold
and, if the issuer defaults, the Fund may obtain no return at all on its
investment. See "Dividends, Distributions and Taxes."
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 Act) of the Fund's
outstanding voting shares. Investment restriction number 17 is not a
fundamental policy and may be changed by a vote by a majority of the
Directors at any time. The Fund may not:
1. Purchase the securities of any issuer (other than a bank) if
such purchase would cause more than 5% of the value of its total assets to
be invested in securities of such issuer, or invest more than 15% of its
assets in the obligations of any one bank, except that up to 25% of the
value of the Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities may
be purchased, without regard to such limitations.
2. 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. This restriction applies only with respect to 75% of the
Fund's assets.
3. Purchase securities of any company having less than three
years' continuous operations (including operations of any predecessors) if
such purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
4. Purchase securities of closed-end investment companies except
(a) in the open market where no commission except the ordinary broker's
commission is paid, which purchases are limited to a maximum of (i) 3% of
the total voting stock of any one closed-end investment company, (ii) 5% of
its net assets with respect to any one closed-end investment company and
(iii) 10% of its net assets in the aggregate, or (b) those received as part
of a merger or consolidation. The Fund has no present intention of
investing in securities of closed-end investment companies. The Fund may
not purchase or retain securities issued by open-end investment companies
other than itself.
5. Purchase or retain the securities of any issuer if the
officers or Directors of the Fund, Dreyfus or Comstock Partners who
individually own beneficially more than 1/2 of 1% of the securities of such
issuer together own beneficially more than 5% of the securities of such
issuer.
6. Invest in commodities, except that the Fund may purchase or
sell futures contracts, including those relating to indexes, and options on
futures contract or indexes, or purchase, hold or deal in real estate, but
this shall not prohibit the Fund from investing in securities of companies
engaged in real estate activities or investments.
7. Borrow money except to the extent permitted under the Act.
For purposes of this investment restriction, the entry into options futures
contracts, including those relating to indexes, and options on futures
contracts or indexes shall not constitute borrowing.
8. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related to
the deposit of assets in escrow in connection with portfolio transactions,
such as in connection with writing covered options and the purchase of
securities on a when-issued or delayed-delivery basis and collateral and
initial or variation margin arrangements with respect to options, futures
contracts, including those relating to indexes, and options on futures
contracts or indexes, or in connection with the purchase of any securities
on margin for purposes of Investment Restriction No. 12.
9. Make loans to others, except through the purchase of debt
obligations or the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in any amount not to exceed 33 1/3% of the value
of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board of Directors.
10. Act as an underwriter of securities of other issuers, except
to the extent the Fund may be deemed an underwriter under the Securities Act
of 1933, as amended, by virtue of disposing of portfolio securities.
11. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
12. Purchase securities on margin, but the Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and
sales of securities.
13. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and this Statement of
Additional Information.
14. Invest more than 25% of its assets in investments in any
particular industry or industries, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
15. Purchase warrants in excess of 2% of net assets. For
purposes of this restriction, 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 not be included within this 2% restriction.
16. Invest in interests in oil, gas or mineral exploration or
development programs.
17. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are illiquid,
if, in the aggregate, more that 15% of the value of the Fund's net assets
would be so invested.
If a percentage restriction is adhered to at the time an
investment is made, a later increase in percentage resulting from a change
in values or assets will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund shares in certain
states. Should the Fund determine that a commitment is no longer in the
best 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 occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors and Officers of the Fund
HODDING CARTER, III, Director. President of MainStreet, a television
production company. Since 1991, a syndicated columnist for United Media
Syndicate-NEA. From 1985 to 1986, he was editor and chief correspondent of
"Capitol Journal," a weekly Public Broadcasting System ("PBS") series on
Congress. From 1981 to 1984, he was anchorman and chief correspondent for
PBS' "Inside Story," a regularly scheduled half-hour critique of press
performance. From 1977 to July 1980, Mr. Carter served as Assistant
Secretary of State for Public Affairs and as Department of State spokesman.
His address is MainStreet, 918 Sixteenth Street, N.W., Washington, D.C.
20006.
*LAWRENCE M. GREENE, Director. Legal Consultant to and a Director of
Dreyfus, Executive Vice President of the Distributor and an officer,
director or trustee of other investment companies advised or administered by
Dreyfus. His address is 200 Park Avenue, New York, New York 10166.
RICHARD C. LEONE, Director. President of The Twentieth Century Fund, a tax
exempt research foundation engaged in economic, political and social policy
studies. Since April 1990, Chairman, and since April 1988, a Commissioner
of The Port Authority of New York and New Jersey. A member in 1985, and
from January 1986 to January 1989, Managing Director of Dillon, Read & Co.
Inc. and from May 1982 to December 1984, President of Atlantic Inc., a
wholly-owned subsidiary of Amerada Hess Corporation. Mr. Leone is also a
director of Resource Mortgage Capital, Inc. His address is 41 East 70th
Street, New York, New York 10021.
HANS C. MAUTNER, Director. Chairman, Trustee and Chief Executive Officer of
Corporate Property Investors, a real estate investment company. Since
January 1986, a Director of Julius Baer Investment Management, Inc., a
wholly-owned subsidiary of Julius Baer Securities, Inc. His address is 305
East 47th Street, New York, New York 10017.
ROBERT B. RIVEL, Director. Since December 1986, retired. From December
1985 to December 1986, Chairman and Director, and from December 1982 to
December 1985, President, Chief Executive Officer and Director of Private
Export Funding Corporation, a company which provides funding to foreign
borrowers for the purchase of U.S. goods and services. Mr. Rivel was
Consultant to Woodger Associates Inc., an executive search firm, from March
1982 to September 1982, and was President, Chief Executive Officer and
Trustee of Union Dime Savings Bank from January 1975 to December 1981. His
address is 40 Shaker Ridge Drive, Canaan, New York 12029.
*HOWARD STEIN, Director, President and Investment Officer. Chairman of the
Board and Chief Executive Officer of Dreyfus and Chairman of the Board of
the Distributor, and an officer, director, general partner or trustee of
other investment companies advised and administered by Dreyfus. He is also
a director of Avnet, an electronic parts and
equipment company, and a trustee of Corporate Property Investors, a real
estate investment company. His address is 200 Park Avenue, New York, New
York 10166.
JOHN E. ZUCCOTTI, Director. President and Chief Executive Officer of
Olympia & York Companies (U.S.A.), and of counsel to the law firm of Brown &
Wood since January 1990. Since September 1991, Director of Diversicare
Inc., a healthcare services company. From 1986 to 1990, he was a partner in
the law firm of Brown & Wood and from 1978 to 1986, a partner in the law
firm of Tufo & Zuccotti. First Deputy Mayor of the City of New York from
December 1975 to June 1977, and Chairman of the City Planning Commission for
the City of New York from 1973 to 1975. Mr. Zuccotti is also a Director of
the Catellus Development Corporation. His address is 237 Park Avenue, New
York, New York 10017.
The Fund's "non-interested" Directors are also directors of
Dreyfus Insured Municipal Bond Fund, Inc., Dreyfus Municipal Bond Fund,
Inc., Dreyfus Municipal Money Market Fund, Inc., Dreyfus New Leaders Fund,
Inc., Dreyfus Strategic Municipal Bond Fund, Inc. and Dreyfus Strategic
Municipals, Inc., and trustees of Dreyfus California Tax Exempt Money Market
Fund.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain 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 does not pay any remuneration to its officers and
Directors other than fees and expenses to Directors who are not officers,
directors, employees or holders of 5% or more of the outstanding voting
securities of Dreyfus or Comstock Partners which totalled $39,124 for the
fiscal year ended September 30, 1993 for all such Directors as a group.
Officers of the Fund Not Listed Above
THOMAS A. FRANK, Vice President and Investment Officer. An employee of
Dreyfus and an officer or director of other investment companies advised or
administered by Dreyfus.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
Dreyfus, Secretary of the Distributor and an officer of other investment
companies advised or administered by Dreyfus.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund
Accounting of Dreyfus and an officer of other investment companies advised
or administered by Dreyfus.
JOHN J. PYBURN, Treasurer. Assistant Vice President of Dreyfus and an
officer of other investment companies advised or administered by Dreyfus.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of Dreyfus
and an officer of other investment companies advised or administered by
Dreyfus.
THOMAS DURANTE, Controller. Senior Accounting Manager in the Fund
Accounting Department of Dreyfus and an officer of other investment
companies advised or administered by Dreyfus.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel of
Dreyfus and an officer of other investment companies advised or administered
by Dreyfus.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of Dreyfus, the
Distributor and other investment companies advised or administered by
Dreyfus.
The address of all officers of the Fund is 200 Park Avenue, New
York, New York 10166.
As of January 19, 1994: Merrill Lynch Pierce Fenner & Smith Inc.
was the owner of 31% of the Fund's outstanding Class A shares and is deemed
to be a "control person" as defined in the Act. As of such date Merrill
Lynch/Financial Data Services was the owner of 36.7% of the Fund's
outstanding Class B shares and is deemed to be a "control person" as defined
in the Act.
Directors and officers of the Fund, as a group, owned less than 1%
of the Fund's shares of common stock outstanding on December 14, 1993.
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."
Investment Advisory Agreement. Dreyfus provides investment
advisory services pursuant to the Investment Advisory Agreement (the
"Agreement") dated November 15, 1984, as amended, between Dreyfus and the
Fund, which is subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of the Fund or Dreyfus, by vote
cast in person at a meeting called for the purpose of voting such approval.
Shareholders last approved the Agreement on September 11, 1992. The Board
of Directors, including a majority of the Directors who are not "interested
persons" of any party to the Agreement, last approved the Agreement at a
meeting held on November 1, 1993. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Directors or by vote of
the holders of a majority of the Fund's outstanding voting shares, or, upon
not less than 90 days' notice, by Dreyfus. The Agreement will terminate
automatically in the event of its assignment (as defined in the Act).
Dreyfus pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
As compensation for Dreyfus' services to the Fund, the Fund pays
Dreyfus a monthly investment advisory fee at the annual rate as set forth in
the Fund's Prospectus. The investment advisory fee paid for the fiscal
years ended September 30, 1991, 1992 and 1993 amounted to $2,988,509,
$2,642,560 and $1,922,869, respectively.
The following persons are also officers and/or directors of
Dreyfus: Julian M. Smerling, Vice Chairman of the Board of Directors;
Joseph S. DiMartino, President, Chief Operating Officer and a director; Alan
M. Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President--Institutional Sales; Peter A.
Santoriello, Vice President; Robert H. Schmidt, Vice President; Kirk V.
Stumpp, Vice President--New Product Development; Philip L. Toia, Vice
President; Katherine C. Wickham, Assistant Vice President; Maurice
Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Abigail Q.
McCarthy and David B. Truman, directors.
Sub-Investment Advisory Agreement. The Sub-Investment Advisory
Agreement dated April 28, 1987, as amended, between the Fund and Comstock
Partners is subject to annual approval by (i) the Fund's Board of Directors
or (ii) vote of a majority (as defined in the Act) of the Fund's outstanding
voting securities, provided that in either event the continuance also is
approved by a majority of the Directors who are not "interested persons" (as
defined in the Act) of the Fund or Comstock Partners, by vote cast in person
at a meeting called for the purpose of voting on such approval.
Shareholders last approved the Sub-Investment Advisory Agreement on
September 11, 1992. The Board of Directors, including a majority of the
Directors who are not "interested persons" of any party to the
Sub-Investment Advisory Agreement, last approved the Sub-Investment Advisory
Agreement at a meeting held on November 1, 1993. The Sub-Investment
Advisory Agreement is terminable without penalty, on not more than 60 days'
notice, by the Fund's Board of Directors or by vote of the holders of a
majority of the Fund's outstanding voting shares, or, upon not less than 90
days' notice, by Comstock Partners. The Sub-Investment Advisory Agreement
will terminate automatically in the event of its assignment (as defined in
the Act).
As compensation for Comstock Partners' services to the Fund, the
Fund pays Comstock Partners a monthly sub-investment advisory fee at an
annual rate as set forth in the Fund's Prospectus. The sub-investment
advisory fee paid for the fiscal years ended September 30, 1991, 1992 and
1993 amounted to $2,513,509, $2,167,560 and $1,447,869, respectively.
The following persons are the principals of Comstock Partners:
Stanley D. Salvigsen, Chairman of the Board and Chief Executive Officer;
Charles L. Minter, Vice Chairman of the Board and Chief Operating Officer;
and Edward A. Leskowicz, Jr., Vice
President, Treasurer and Chief Financial Officer.
Comstock Partners 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 Dreyfus and the approval of the Fund's Board
of Directors. Dreyfus and Comstock Partners provide the Fund with
Investment Officers who are authorized by the Board of Directors to execute
purchases and sales of securities. The Fund's Investment Officers are
Thomas A. Frank, Charles L. Minter, Elaine Rees,
Stanley D. Salvigsen, Richard C. Shields and Howard Stein. Dreyfus 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 Dreyfus. All purchases and sales are
reported for the Directors' review at the meeting subsequent to such
transactions.
All expenses incurred in the operation of the Fund are borne by
the Fund, except to the extent specifically assumed by the Advisers. The
expenses borne by the Fund include: taxes, interest, loan commitment fees,
dividends and interest paid 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
Dreyfus, Comstock Partners or any of their affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside auditing and
legal expenses, costs of maintaining corporate existence, costs of
independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholders' reports and corporate meetings and any extraordinary expenses.
Class A and Class B shares are subject to an annual service fee for ongoing
personal services relating to shareholder accounts and services related to
the maintenance of shareholder accounts. In addition, Class B shares are
subject to an annual distribution fee for advertising, marketing and
distributing Class B shares pursuant to a distribution plan adopted in
accordance with Rule 12b-1 under the Act. See "Distribution Plan and
Shareholder Services Plan".
The Advisers 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 investment advisory
and sub-investment advisory fees, exceed the expense limitation of any state
having jurisdiction over the Fund, the Fund may deduct from the fees to be
paid to the Advisers, or the Advisers will bear, such excess expense to the
extent required by state law. For each fiscal year of the Fund, the
Advisers will each pay or bear such excess equally to the extent of .15 of
1% or $37,500, whichever is less, and Dreyfus will pay or bear the
remainder. Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly basis.
During the fiscal year ended September 30, 1993, no expense reimbursement
was required pursuant to such limitation.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase
orders may be made between the hours of 8:00 A.M. and 4:00 P.M., New York
time, on any business day that The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), and
the New York Stock Exchange are open. Such purchases will be credited to
the shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase of
Fund shares must be drawn on, and redemption proceeds paid to, the same bank
and account as are designated on the Account Application or Optional
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Fund Shares--Dreyfus TeleTransfer
Privilege."
Sales Loads--Class A. The scale of sales loads applies to
purchases of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) although more than one beneficiary is involved; or a group of accounts
established by or on behalf of the employees of an employer or affiliated
employers pursuant to an employee benefit plan or other program (including
accounts established pursuant to Sections 403(b), 408(k), and 457 of the
Code); or an organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single dealer,
or by other means which result in economy of sales effort or expense.
Offering Prices
Based upon the Fund's net asset value at the close of business on September
30, 1993 the maximum offering price of the Fund's shares would have been as
follows:
Class A Shares:
NET ASSET VALUE per
share............................................... $11.42
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5 percent of offering price
(approximately 4.7 percent of net asset value per
share)............... .54
Offering price to
public......................................................... $11.96
Class B Shares:
NET ASSET VALUE, redemption price and offering
price to public*........................................ $11.32
_______________________________________
*Class B Shares are subject to a contingent deferred sales charge on certain
redemptions, see "How to Redeem Fund Shares" in the Fund's Prospectus.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Distribution
Plan and Shareholder Services Plan."
Class A and Class B shares are subject to a Shareholder Services
Plan and Class B shares only are subject to a Distribution Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the
Securities and Exchange Commission under the Act provides, among other
things, that an investment company may bear expenses of distributing its
shares only pursuant to a plan adopted in accordance with the Rule. The
Fund's Board of Directors has adopted such a plan (the "Distribution Plan")
with respect to Class B shares, pursuant to which the Fund pays the
Distributor for advertising, marketing and distributing Class B shares.
Under the Distribution Plan, the Distributor may make payments to certain
financial institutions, securities dealers and other financial industry
professionals (collectively, "Service Agents") in respect of these services.
The Fund's Board of Directors believes that there is a reasonable likelihood
that the Distribution Plan will benefit the Fund and holders of its Class B
shares. In some states, certain financial institutions effecting
transactions in Fund shares may be required to register as dealers pursuant
to state law.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Directors for its review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B shares may bear for distribution pursuant to the
Distribution Plan without such shareholders' approval and that other
material amendments of the Distribution 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 Distribution Plan or in any agreements
entered into in connection with the Distribution Plan, by vote cast in
person at a meeting called for the purpose of considering such amendments.
The Distribution 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 Distribution Plan. The Distribution Plan was last approved by the Board
of Directors, including a majority of the Directors who are not "interested
persons," at a meeting held on November 1, 1993. The Distribution Plan may
be terminated 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 Distribution Plan or in any agreements entered into in
connection with the Distribution Plan, or by vote of the holders of a
majority of Class B shares.
For the period from January 15, 1993 (effective date of
Distribution Plan) through September 30, 1993, $59,056 was charged to the
Fund, with respect to Class B shares under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A and Class B shares.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Directors for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of 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 Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services 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 Shareholder Services Plan. The
Shareholder Services Plan was so approved on November 1, 1993. The
Shareholder Services Plan is terminable at any time by vote of a majority of
the Directors who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan.
For the period from January 15, 1993 (effective date of
Shareholder Services Plan) through September 30, 1993, $756,019 was charged
to the Fund, with respect to Class A shares, and $19,685 was charged to the
Fund, with respect to Class B shares, under the Shareholder Services Plan.
Prior Rule 12b-1 Plan. As of January 15, 1993, the Fund
terminated its then existing Rule 12b-1 plan, which provided for payments to
be made to Service Agents for advertising, marketing and/or distributing
Class A shares and servicing holders of Class A shares. For the period from
October 1, 1992 through January 15, 1993, the total amount charged to and
paid by the Fund, with respect to Class A shares, under such plan was
$347,875 all of which was for advertising, marketing and distributing Class
A shares and servicing holders of class A shares.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
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. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Redemption Commitment. The Fund has committed itself to pay in
cash all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or part in securities or other assets of the Fund in case of an emergency or
any time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities would
be valued in the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges would be incurred. In
connection with a redemption request where the Fund delivers in-kind
securities instead of cash on settlement date to a Texas investor, the
in-kind securities delivered will be readily marketable securities.
Suspension of Redemption. The right of redemption may be
suspended or the date of payment postponed (a) during any period when the
New York Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Class A and Class B shares of the Fund may be
exchanged for shares of the respective Class of certain other funds advised
or administered by Dreyfus. Shares of the same Class of such other funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load may
be exchanged without a sales load for Class A shares of other funds sold
without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A shares
purchased with a sales load, and additional Class A shares acquired through
reinvestment of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for Class A
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.
D. Class B shares of any fund may be exchanged for Class B shares of
other funds without a sales load. Class B shares of any fund exchanged for
Class B shares of another fund will be subject to the higher applicable
contingent deferred sales charged ("CDSC") of the two funds and, for
purposes of calculating CDSC rates and conversion periods, will be deemed to
have been held since the date the Class B shares being exchanged were
initially purchased.
To accomplish an exchange under item C above, shareholders must
notify the Transfer Agent of their prior ownership of such Class A shares
and their account number.
To use this Privilege, an investor or the investor's Service Agent
acting on his behalf must give exchange instructions to the Transfer Agent
in writing, by wire or by telephone. Telephone exchanges may be made only
if the appropriate "YES" box has been checked on the Account Application or
a separate signed Optional Services Form is on file with the Transfer Agent.
By using this Privilege, the investor authorizes the Transfer Agent to act
on telephonic, telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer Agent
to be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for shares of the same Class of the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs
set up under a Simplified Employee Pension Plan ("SEP-IRAs") with only one
participant, the minimum initial investment is $750. To exchange shares
held in Corporate Plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at least
$2,500 invested among shares of the same Class of the funds in the Dreyfus
Family of Funds. To exchange shares held in Personal Retirement Plans, the
shares exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for Class A or Class B shares of the Fund,
shares of the same Class 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
"Exchange Privilege." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are made
in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Optional Services Forms and prospectuses of other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange request
in whole or in part. The Exchange Privilege or Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Dreyfus Dividend Sweep Privilege. Dreyfus Dividend Sweep
Privilege allows investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from the Fund in the
shares of the same Class of another fund in the Dreyfus Family of Funds of
which the investor is a shareholder. Shares of the same Class of other
funds purchased pursuant to this Privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid with respect to Class A shares by
a fund may be invested without imposition of a sales load in Class A shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid with respect to Class A shares by
a fund which does not charge a sales load may be invested in Class A shares
of other funds sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid with respect to Class A shares by
a fund which charges a sales load may be invested in Class A 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 with respect to Class B shares by
a fund may be invested without imposition of a sales load in Class B shares
of other funds and the applicable CDSC, if any, will not be imposed upon
redemption of such shares.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits
a shareholder 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 shareholder's shares will be reduced and eventually
may be depleted. An Automatic Withdrawal Plan may be established by
completing the appropriate application available from the Distributor.
There is a service charge of $.50 for each withdrawal check. Automatic
Withdrawal may be terminated at any time by the shareholder, the Fund or the
Transfer Agent. Shares for which stock certificates have been issued may
not be redeemed pursuant to the Automatic Withdrawal Plan. Class B shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to any
applicable CDSC.
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 are also
available. For details, please contact the Dreyfus Group Retirement Plans,
a Division of the Distributor, by calling toll free 1-800-358-5566.
Shareholders 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 which acts 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 shareholder should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities are
valued at the last sale price on the securities exchange or national
securities market on which such securities are primarily traded. Securities
not listed on an exchange or national securities market, or securities in
which there were no transactions, are valued at the average of the most
recent bid and asked prices, except in the case of open short positions
where the asked price is used for valuation purposes. Bid price is used
when no asked price is available. Short-term investments are carried at
amortized cost, which approximates value. Market quotations for foreign
securities in foreign currencies are translated into U.S. dollars at the
prevailing rates of exchange. Any securities or other assets for which
recent market quotations are not readily available are valued at fair value
as determined in good faith by the Board of Directors. Expenses and fees,
including advisory fees and, with respect to the Class A and Class B shares,
fees under the Shareholder Services Plan and, with respect to the Class B
shares only, fees under the Distribution Plan, are accrued daily and taken
into account for the purpose of determining the net asset value of the
relevant Class of shares. Because of the difference in operating expenses
incurred by each Class, the per share net asset value of each Class will
differ.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated
investment company" under the ("Code") in fiscal 1993 and the Fund intends
to continue to so qualify if such qualification is in the best interests of
its shareholders. As a regulated investment company, the Fund will pay no
Federal income tax on net investment income and net realized capital gains
to the extent that such income and gains are distributed to shareholders.
To qualify as a regulated investment company, the Fund must distribute at
least 90% of its net income (consisting of net investment income and net
short-term capital gain if any, to its shareholders), must derive less than
30% of its annual gross income from gain on the sale of securities held for
less than three months, and 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 under
"Description of the Fund--Investment Techniques." The Code however, allows
the Fund to net certain offsetting positions making 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 aggregate net asset value of
his shares below the cost of his investment. Such a dividend or
distribution would be a return on investment in an economic sense, although
taxable as stated above. In addition, the Code provides that if a
shareholder holds shares of the Fund for six months or less 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 on the composition of the Fund's income, dividends paid
by the Fund from net investment income may qualify for the dividends
received deduction allowable to certain U.S. corporate shareholders
("dividends received deduction"). In general, dividend income of the Fund
distributed to qualifying corporate shareholders will be eligible for the
dividends received deduction only to the extent that (i) the Fund's income
consists of dividends paid by U.S. corporations and (ii) the Fund would have
been entitled to the dividends received deduction with respect to such
dividend income if the Fund were not a regulated investment company. The
dividends received deduction for qualifying corporate shareholders may be
further reduced if the shares of the Fund held by them with respect to which
dividends are received are treated as debt-financed or deemed to have been
held for less than 46 days. In addition, the Code provides other
limitations with respect to the ability of a qualifying corporate
shareholder to claim the dividends received deduction in connection with
holding Fund shares.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gains or losses. However, a portion of the gain
or loss realized from the disposition of non-U.S. dollar denominated
securities (including debt instruments, certain financial futures and
options transactions and certain preferred stock) may be treated as ordinary
income or loss under Section 988 of the Code. In addition, all or a portion
of the gain realized from the disposition of certain market discount bonds
will be treated as ordinary income under Section 1276. Finally, all or a
portions 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, options and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes
from certain financial futures and options transactions other than those
taxed under Section 988 of the Code, will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Gain or loss
will arise upon exercise or lapse of such futures and options as well as
from closing transactions. In addition, any such futures or options
remaining unexercised at the end of the Fund's taxable year will be treated
as sold for their then fair market value, resulting in additional gain or
loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain forward
currency exchange contracts or options may be considered, for tax purposes,
to constitute "straddles." "Straddles" are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections 1256
and 988. As such all or a portion of any short-term or long term capital
gain from certain "straddle" transactions maybe recharacterized as ordinary
income.
If a Fund were treated as entering into "straddles" by reason of
its engaging in forward currency exchange contracts or options transactions,
such "straddles" could be characterized as "mixed straddles" if the forward
contracts or options transactions comprising a part of such "straddles" were
governed by Section 1256 of the Code. The Fund may make one or more
elections with respect to "mixed straddles." If no election is made, to the
extent the "straddle" and conversion transaction rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to the
extent of unrealized gain in the offsetting position. Moreover, as a result
of the "straddle" rules, short-term capital loss on "straddle" positions may
be recharacterized as long-term capital loss, and long-term capital gain may
be treated as short-term capital gain or ordinary income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the
Fund could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were issued and to
distribute such portion in order to maintain its qualification as a
regulated investment company. In such case, the Fund may have to dispose of
securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
Dreyfus supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made in the best judgment of the
Advisers and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable
net price. Subject to this consideration, the brokers selected include
those that supplement the Advisers' research facilities with statistical
data, investment information, economic facts and opinions. Information so
received is in addition to and not in lieu of services required to be
performed by the Advisers and the Advisers' fees are not reduced as a
consequence of the receipt of such supplemental information. Such
information may be useful to Dreyfus in serving both the Fund and other
funds which it manages and to Comstock Partners 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
Advisers in carrying out their obligations to the Fund. Brokers also are
selected because of their ability to handle special executions such as are
involved in large block trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain cases, result from
two or more funds in the Dreyfus Family of Funds being engaged
simultaneously in the purchase or sale of the same security. Certain of the
Fund's transactions in securities of foreign issuers may not benefit from
the negotiated commission rates available to the Fund for transactions in
securities of domestic issuers. Portfolio turnover may vary from year to
year, as well as within a year. It is anticipated that in any fiscal year,
the turnover rate generally should not exceed 100%; however, in periods in
which extraordinary market conditions prevail, the Advisers will not be
deferred from changing investment strategy as rapidly as needed, in which
case, higher turnover rates can be anticipated. Higher turnover rates are
likely to result in comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by the Advisers
based upon their knowledge of available information as to the general level
of commissions paid by other institutional investors for comparable
services.
In connection with its portfolio securities transactions for the
fiscal years ended 1991, 1992 and 1993, the Fund paid brokerage commissions
of $1,147,785, $997,260 and $940,251, 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 $512,006, $610,071 and $207,750 for the
fiscal years ended 1991, 1992 and 1993, respectively, none of which was paid
to the Distributor. When transactions are executed in the over-the-counter
market the Fund deals with the primary market makers unless a more favorable
price or execution otherwise is obtainable.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The offering of Class B shares commenced on January 15, 1993 and,
accordingly only limited performance data are available for Class B.
The average annual total return for Class A for the 1 and 5 year
periods ended September 30, 1993 was -7.04% and 4.29%, respectively. The
average annual total return for Class A for the 7.975 year period from
October 10, 1985 (commencement of operations) through September 30, 1993 was
11.26%. The average annual total return for Class A for the 6.427 year
period from the date of the effectiveness of the Fund's current investment
objective, fundamental investment policies and investment restrictions
(April 28 1987) through September 30, 1993 was 6.25%. The average annual
total return for Class B for the .710 year period from January 15, 1993
(commencement of initial offering of Class B shares) through September 30,
1993 was 4.24%. 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. A Class's
average annual total return figures calculated in accordance with such
formula assume that in the case of Class A the maximum sales load has been
deducted from the hypothetical initial investment at the time of purchase or
in the case of Class B the maximum applicable CDSC has been paid upon
redemption at the end of the period.
Total return is calculated by subtracting the amount of the
maximum offering price 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 maximum offering price per share at the beginning
of the period. Total return also may be calculated based on the net asset
value per share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for Class A shares
or without giving effect to any applicable CDSC at the end of the period for
Class B shares. In such cases, the calculation would not reflect the
deduction of the sales load with respect to Class A shares or any applicable
CDSC with respect to Class B shares, which, if reflected, would reduce the
performance quoted. The total return for Class A for the period April 28,
1987 to September 30, 1993, based on maximum offering price per share, was
47.65%. Based on net asset value per share, the total return for Class A
was 54.64% for this period. Total return for Class A for the period
October 10, 1985 and ending on September 30, 1993 based on maximum offering
price per share was 134.26%. Based on net asset value, the total return for
Class A was 145.24% for this period. The total return for Class B for the
period January 15, 1993 (commencement of offering Class B shares) through
September 30, 1993, after giving effect to the maximum CDSC per share, was
2.99%. The total return for Class B, without giving effect to the maximum
CDSC, was 6.99% for this period.
Comparative performance may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical
Services, Inc., Standard & Poor's 500 Composite Stock Price Index, the Dow
Jones Industrial Average, Money Magazine Morningstar ratings and related
analyses supporting the ratings and other industry publications.
From time to time, the Fund may compare its performance against
inflation with the performance of other instruments against inflation, such
as short-term Treasury Bills (which are direct obligations of the U.S.
Government) and FDIC-insured bank money market accounts. In addition,
advertising for the Fund may indicate that investors may consider
diversifying their investment portfolios in order to seek protection of the
value of their assets against inflation. The Fund's advertising materials
also may refer to the integration of the world's securities markets, discuss
the investment opportunities available worldwide and mention the increasing
importance of an investment strategy including foreign investments.
From time to time in advertising the Fund's shares, information
may be provided as to Comstock Partners' analysis of various conditions that
may affect the economy. Comstock Partners currently views the economy as
being affected by a rolling recession which involves different industries
and geographical areas at different times. In addition, advertising
materials for the Fund may refer to or discuss then-current or past economic
or financial conditions, development and/or events, including those relating
to the more than 500 point drop of the Dow Jones Industrial Average on
October 19, 1987. From time to time, advertising materials for the Fund
also may refer to Morningstar ratings and related analyses supporting such
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 Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and nonassessable.
Fund shares have no preemptive or subscription rights and are freely
transferable.
The Fund sends annual and semi-annual financial statements to all
its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.
APPENDIX
Description of Standard & Poor's Corporation's ("S&P") and Moody's
Investors Service, Inc. ("Moody's") ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
BB, B, CCC, CC, C
Bonds rated BB, B, CCC, CC and C are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the lowest degree of speculation and C the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposure to adverse conditions.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade bonds. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, they are not
likely to have the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC- rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing within
the major ratings categories.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days.
A
Issues assigned this rating are regarded as having the greatest
capacity for timely payments. Issues in this category are delineated with
the numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major ratings categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirements for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1993
COMMON STOCKS-30.0%
BASIC INDUSTRIES-24.5% SHARES VALUE
----------- ------------
<S> <S> <C>
Chemicals-.6% Cabot........................................... 45,000 $ 2,497,500
------------
Forest Products-.4% Aracruz Celulose S.A., A.D.S....................(a) 226,000 1,949,250
------------
Gold Mining-23.3% Amax Gold....................................... 110,000 742,500
American Barrick Resources...................... 1,167,200 26,407,900
Cambior......................................... 150,000 1,701,000
Hecla Mining....................................(a) 313,500 3,213,375
Homestake Mining................................ 595,800 9,979,650
Newmont Gold.................................... 220,000 8,937,500
Newmont Mining.................................. 622,300 29,481,463
Placer Dome..................................... 1,091,400 20,873,025
Royal Oak Mines.................................(a) 400,000 1,675,000
------------
103,011,413
------------
Metals-.2% ASARCO.......................................... 65,000 1,096,875
------------
TOTAL BASIC INDUSTRIES.......................... 108,555,038
============
CONSUMER CYCLICAL-1.2%
Photography-1.2% Eastman Kodak................................... 90,000 5,332,500
============
CONSUMER STAPLES-.7%
Foods and Beverages-.7% Dole Food....................................... 100,000 3,237,500
============
ENERGY-2.2%
Natural Gas-2.2% Tenneco......................................... 181,600 9,579,400
============
TRANSPORTATION-1.4%
Railroads-1.4% Santa Fe Pacific................................ 327,300 5,973,225
============
TOTAL COMMON STOCKS
(cost $104,637,957)........................... $132,677,663
============
PUT OPTIONS-2.0%
CONTRACTS
SUBJECT
TO PUT VALUE
----------- ------------
Nikkei Index:
June `94 @ $181.33..........................(b,h) 65,674 $ 399,956
August `95 @ $192.25........................(b,h) 64,062 998,727
Standard & Poor's 500 Index:
December `93 @ $418.475.....................(h) 161,180 161,180
December `93 @ $425......................... 524,000 1,211,750
January `94 @ $434.58.......................(h) 65,100 156,240
March `94 @ $425............................ 67,500 379,688
March `94 @ $450............................ 45,000 495,000
April `94 @ $425............................(h) 102,218 654,195
May `94 @ $423.60...........................(h) 93,000 691,920
June `94 @ $425............................. 304,000 2,470,000
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1993
PUT OPTIONS (CONTINUED)
PRINCIPAL
AMOUNT
SUBJECT
TO PUT VALUE
------------ ------------
U.S. Treasury Bonds:
7.625%, 11/15/2022
January `94 @ $101.375..................(h) $ 23,000,000 $ 3,594
7.125%, 2/15/2023:
December `93 @ $99.094..................(h) 11,750,000 1,836
March `94 @ $101.125....................(h) 34,000,000 95,625
April `94 @ $101.875....................(h) 18,300,000 94,359
July `94 @ $107.........................(h) 16,700,000 375,750
6.25%, 8/15/2023:
August `94 @ $97.313....................(h) 11,000,000 252,656
August `94 @ $99.844....................(h) 8,100,000 316,406
------------
TOTAL PUT OPTIONS
(cost $28,375,804).......................... $ 8,758,882
============
CONVERTIBLE PREFERRED STOCKS-.1%
SHARES
------------
Copper-.1% Freeport-McMoRan Copper & Gold
(cost $400,000).............................. 16,000 $ 328,000
============
CONVERTIBLE NOTES-3.6%
PRINCIPAL
AMOUNT
------------
Copper-3.6% Freeport-McMoRan Copper & Gold,
Zero Coupon, 7/2/2011
(cost $15,352,950)........................... $ 58,978,000 $ 16,218,950
============
BONDS-18.9%
Foreign Government-18.9% Austrian Securities;
Republic of Austria,
7.25%, 11/18/1997.......................(c) $ 3,919,861 $ 4,077,000
French Securities;
Obligations Assimiables du Tresor - Strips:
10/25/2019..............................(d) 87,742,388 15,250,000
4/25/2023...............................(d) 43,871,194 6,025,000
German Securities;
Bundesrepublik Deutschland:
9%, 10/20/2000..........................(e) 14,627,871 17,076,588
8.875%, 12/20/2000......................(e) 32,465,544 37,746,600
Netherlands Securities;
Netherlands Government,
7.25%, 7/15/1999........................(f) 3,544,166 3,796,000
------------
TOTAL BONDS
(cost $81,098,143).......................... $ 83,971,188
============
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1993
SHORT-TERM INVESTMENTS-42.7%
PRINCIPAL
AMOUNT VALUE
------------ ------------
U.S Treasury Bills-42.7% 3.026%, 10/14/1993.............................. $ 1,628,000 $ 1,626,221
3.042%, 10/21/1993.............................. 2,230,000 2,226,231
3.046%, 11/18/1993..............................(g) 59,911,000 59,667,696
2.974%, 11/26/1993.............................. 2,306,000 2,295,333
2.91%, 12/16/1993............................... 333,000 330,954
2.89%, 12/23/1993............................... 123,654,000 122,830,087
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $188,976,522)......................... $188,976,522
============
TOTAL INVESTMENTS (cost $418,841,376).................................................... 97.3% $430,931,205
====== ============
CASH AND RECEIVABLES (NET)............................................................... 2.7% $ 11,763,269
====== ============
NET ASSETS............................................................................... 100.0% $442,694,474
====== ============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Strike price converted to U.S. Dollars at the prevailing rate of
exchange.
(c) Denominated in Austrian Schilling.
(d) Denominated in French Francs.
(e) Denominated in German Marks.
(f) Denominated in Netherland Guilder.
(g) Partially held by broker as collateral for open short positions.
(h) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $4,202,444, represents
approximately .95% of net assets:
AQUISTION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- --------- ---------- -------- ------------- ----------
Nikkei Index:
June `94 @ $181.33..................................... 6/21/93 $11.42 .09% fair value
August `95 @ $192.25................................... 8/9/93 15.61 .23 fair value
Standard & Poor's 500 Index:
December `93 @ $418.475................................ 12/18/92 15.51 .04 fair value
January `94 @ $434.58.................................. 1/6/93 23.06 .03 fair value
April `94 @ $425....................................... 4/26/93 18.58 .15 fair value
May `94 @ $423.60...................................... 5/21/93 15.38 .16 fair value
U.S. Treasury Bonds:
7.625%, 11/15/2022 January `94 @ $101.375.............. 1/26/93 .04 .00 fair value
7.125%, 2/15/2023 December `93 @ $99.094............... 2/18/93 .04 .00 fair value
7.125%, 2/15/2023 March `94 @ $101.125................. 4/1/93 .06 .02 fair value
7.125%, 2/15/2023 April `94 @ $101.875................. 4/26/93 .05 .02 fair value
7.125%, 2/15/2023 July `94 @ $107...................... 7/20/93 .06 .08 fair value
6.25%, 8/15/2023 August `94 @ $97.313.................. 8/18/93 .04 .06 fair value
6.25%, 8/15/2023 August `94 @ $99.844.................. 8/18/93 .06 .07 fair value
* The valuation of these securities has been determined in good faith
under the direction of the Board of Directors.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT SEPTEMBER 30, 1993
COMMON STOCKS- 14.9% SHARES VALUE
-------- ------------
<S> <S> <C> <C>
CONSUMER STAPLES-8.4% American Brands................................. 8,900 $ 289,250
Anheuser-Busch Cos.............................. 5,700 261,488
Avon Products................................... 5,600 291,900
Bausch & Lomb................................... 6,000 282,000
Campbell Soup................................... 48,400 1,863,400
Coca-Cola....................................... 58,100 2,454,725
Colgate-Palmolive............................... 15,600 819,000
Coors (Adolph), Cl. B (non-voting).............. 19,900 415,413
Duracell International.......................... 46,000 1,679,000
General Mills................................... 52,000 3,133,000
Gerber Products................................. 69,000 1,854,375
Gillette........................................ 6,000 344,250
Heinz (H.J.).................................... 35,900 1,278,937
Hershey Foods................................... 40,000 1,995,000
International Flavors & Fragrances.............. 3,000 304,875
Ionics.......................................... 18,000 841,500
Kellogg......................................... 50,000 2,475,000
NIKE, Cl. B..................................... 3,800 171,000
Oshkosh B'Gosh, Cl. A........................... 17,800 315,950
PepsiCo......................................... 8,100 316,913
Philip Morris Cos............................... 57,500 2,637,813
Procter & Gamble................................ 54,100 2,569,750
Quaker Oats..................................... 64,000 4,288,000
Reebok International............................ 8,900 213,600
Rubbermaid...................................... 60,300 1,997,437
Sara Lee........................................ 81,000 1,913,625
Sotheby's Holdings, Cl. A....................... 100,000 1,212,500
Tambrands....................................... 18,000 762,750
------------
36,982,451
------------
DRUGS & MEDICAL-3.2% Lilly (Eli) & Co. .............................. 58,000 2,900,000
Marion Merrell Dow.............................. 63,000 1,173,375
Medtronic....................................... 60,000 4,065,000
Merck & Co. .................................... 48,900 1,503,675
Schering-Plough................................. 40,000 2,635,000
Upjohn.......................................... 70,000 1,995,000
------------
14,272,050
------------
FINANCE-1.8% Chase Manhattan................................. 40,000 1,485,000
Chemical Banking................................ 30,000 1,350,000
Conseco......................................... 13,000 963,625
Federal Home Loan Mortage....................... 40,000 2,025,000
Federal National Mortage Association............ 26,500 2,086,875
------------
7,910,500
------------
RETAIL-1.5% Blockbuster Entertainment....................... 40,000 1,145,000
Duty Free International......................... 15,000 228,750
Home Depot...................................... 54,733 2,107,220
Staples......................................... 35,000 1,308,125
Wal-Mart Stores................................. 81,000 1,994,625
------------
6,783,720
------------
TOTAL SECURITIES SOLD SHORT
(proceeds $72,145,729)........................ $ 65,948,721
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $418,841,376)-see statement................................................... $430,931,205
Cash................................................................................... 606,496
Receivable from broker for proceeds on securities sold short........................... 72,145,729
Receivable for investment securities sold.............................................. 4,232,474
Dividends and interest receivable...................................................... 3,908,678
Receivable for subscriptions to Common Stock........................................... 2,220,288
Prepaid expenses....................................................................... 108,967
------------
514,153,837
LIABILITIES:
Due to investment adviser.............................................................. $ 264,957
Due to sub-investment adviser.......................................................... 117,602
Securities sold short, at value
(proceeds $72,145,729)-see statement............................................... 65,948,720
Payable for investment securities purchased............................................ 2,812,367
Payable for Common Stock redeemed...................................................... 1,988,634
Accrued expenses....................................................................... 327,083 71,459,363
----------- ------------
NET ASSETS............................................................................... $442,694,474
REPRESENTED BY:
Paid-in capital........................................................................ $518,814,293
Accumulated distributions in excess of investment income-net........................... (3,712,318)
Accumulated net realized (loss) on investments......................................... (90,694,339)
Accumulated net unrealized appreciation on investments-Note 3(b)....................... 18,286,838
------------
NET ASSETS at value...................................................................... $442,694,474
============
Shares of Common Stock outstanding:
Class A Shares
(100 million shares of $.01 par value authorized)................................ 36,120,577
============
Class B Shares
(100 million shares of $.01 par value authorized)................................ 2,682,926
============
NET ASSET VALUE per share:
Class A Shares
($412,316,430 / 36,120,577 shares)............................................... $11.42
======
Class B Shares
($30,378,044 / 2,682,926 shares)................................................. $11.32
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1993
INVESTMENT INCOME:
INCOME:
<S> <C> <C>
Interest (net of $20,141 foreign taxes withheld at source)........................... $ 14,109,647
Cash dividends (net of $61,100 foreign taxes withheld at source)..................... 2,185,201
------------
TOTAL INCOME.................................................................... $ 16,294,848
EXPENSES:
Investment advisory fee-Note 2(a).................................................... 1,922,869
Sub-investment advisory fee-Note 2(a)................................................ 1,447,869
Dividends on securities sold short................................................... 2,031,775
Shareholder servicing costs-Note 2(b,c).............................................. 1,644,849
Prospectus and shareholders' reports-Note 2(b)....................................... 231,006
Custodian fees....................................................................... 101,178
Professional fees.................................................................... 68,010
Registration fees.................................................................... 66,732
Distribution fees (Class B shares)-Note 2(b)......................................... 59,056
Directors' fees and expenses-Note 2(d)............................................... 39,124
Miscellaneous........................................................................ 22,440
------------
TOTAL EXPENSES............................................................... 7,634,908
------------
INVESTMENT INCOME-NET........................................................ 8,659,940
------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a):
Long transactions (including options transactions)................................. $(38,460,099)
Short sale transactions............................................................ (11,746,186)
Net realized gain on forward currency exchange contracts-Note 3(a);
Short transactions................................................................. 922,842
Net realized (loss) on financial futures-Note 3(a);
Short transactions................................................................. (4,016,955)
------------
NET REALIZED (LOSS)................................................................ (53,300,398)
Net unrealized appreciation on investments and securities sold short
(including $1,020,525 net unrealized appreciation on financial futures)............ 23,538,065
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS.............................. (29,762,333)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................... $(21,102,393)
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-------------------------------
1992 1993
------------- -------------
OPERATIONS:
<S> <C> <C>
Investment income-net.................................................................. $ 18,137,529 $ 8,659,940
Net realized (loss) on investments..................................................... (11,805,327) (53,300,398)
Net unrealized appreciation (depreciation) on investments for the year................. (4,877,270) 23,538,065
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................. 1,454,932 (21,102,393)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares...................................................................... (31,903,324) (24,015,956)
Class B shares...................................................................... --- ---
------------- -------------
TOTAL DIVIDENDS.................................................................. (31,903,324) (24,015,956)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................................... 110,100,530 109,775,771
Class B shares...................................................................... --- 31,906,887
Dividends reinvested:
Class A shares...................................................................... 15,794,720 13,132,836
Class B shares...................................................................... --- ---
Cost of shares redeemed:
Class A shares...................................................................... (313,505,317) (203,749,885)
Class B shares...................................................................... --- (644,618)
------------- -------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS......................... (187,610,067) (49,579,009)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS................................................ (218,058,459) (94,697,358)
NET ASSETS:
Beginning of year...................................................................... 755,450,291 537,391,832
------------- -------------
End of year [including undistributed investment income-net of
$11,643,698 in 1992 and distributions in excess of investment income-net
of ($3,712,318) in 1993]......................................................... $ 537,391,832 $ 442,694,474
============= =============
SHARES
-----------------------------------------------
CLASS A CLASS B
------------------------------ -------------
YEAR ENDED SEPTEMBER 30, PERIOD ENDED
SEPTEMBER 30,
1992 1993 1993(1)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................................... 8,663,829 9,514,487 2,737,990
Shares issued for dividends reinvested................................ 1,255,542 1,235,490 ---
Shares redeemed....................................................... (24,863,325) (17,939,682) (55,064)
------------- ------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING................. (14,943,954) (7,189,705) 2,682,926
============= ============= =============
- -------------------------
(1) From January 15, 1993 (commencement of initial offering) through
September 30, 1993.
See notes to financial statements.
</TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Fund's Prospectus dated January 28, 1994.
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company. The
Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser.
Comstock Partners, Inc. ("Comstock Partners") serves as the Fund's sub-
investment adviser. Dreyfus Service Corporation ("Distributor"), a
wholly-owned subsidiary of Dreyfus, acts as the distributor of the Fund's
shares.
The Fund is incorporated under the name Dreyfus Capital Value Fund,
Inc. and began operating under the name Dreyfus Capital Value Fund (A
Premier Fund) on February 3, 1993.
On August 21, 1992, shareholders approved an amendment to the Fund's
Articles of Incorporation to provide for the issuance of additional classes
of shares. On November 4, 1992, the Fund's Board of Directors classified
the Fund's existing shares as Class A shares and authorized the issuance
of 100 million shares of $.01 par value Class B shares. The Fund began
offering both Class A and Class B shares on January 15, 1993. Class A
shares are subject to a sales charge imposed at the time of purchase and
Class B shares are subject to a contingent deferred sales charge imposed
at the time of redemption on redemptions made within six years of
purchase. Other differences between the two Classes include the services
offered to and the expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments in securities (including options
and financial futures) 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, except for open short positions, where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors. Short-term investments are carried at amortized cost, which
approximates value. Investments traded in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of 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, if any, 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. This may
result in distributions that are in excess of investment income-net and
net realized gain on a fiscal year basis. To the extent that net realized
capital gain can be offset by capital loss carryovers, 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 provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund has an unused capital loss carryover of approximately
$56,700,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to
September 30, 1993. The carryover does not include net realized
securities losses from November 1, 1992 through September 30, 1993
which are treated, for Federal income tax purposes, as arising in fiscal
1994. If not applied, $9,100,000 of the carryover expires in fiscal 1999
and $29,800,000 expires in fiscal 2000 and $17,800,000 expires in fiscal
year 2001.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an
Investment Advisory Agreement with Dreyfus and a Sub-Investment
Advisory Agreement with Comstock Partners (together "Agreements") are
payable monthly, computed on the average daily value of the Fund's net
assets at the following annual rates:
AVERAGE NET ASSETS DREYFUS COMSTOCK PARTNERS
------------------ ----------- -----------------
0 up to $25 million................ .60 of 1% .15 of 1%
$25 up to $75 million.............. .50 of 1% .25 of 1%
$75 up to $200 million............. .45 of 1% .30 of 1%
$200 up to $300 million............ .40 of 1% .35 of 1%
In excess of $300 million.......... .375 of 1% .375 of 1%
The Agreements further provide that the Fund may deduct from the fee
to be paid to Dreyfus and Comstock Partners, or Dreyfus and Comstock
Partners will bear such excess expense, to the extent required by state
law, should the Fund's aggregate expenses, exclusive of taxes, brokerage,
interest on borrowings (which, in the view of Stroock & Stroock & Lavan,
counsel to the Fund, also contemplates dividends and interest accrued on
securities sold short), and extraordinary expenses, exceed the limitation
of any state having jurisdiction over the Fund. The most stringent state
expense limitation applicable to the Fund presently requires
reimbursement in any full fiscal year that such expenses (exclusive of
distribution expenses and certain expenses as described above) exceed 2
1/2% of the first $30 million, 2% of the next $70 million and 1 1/2% of
the excess over $100 million of the average value of the Fund's net assets
in accordance with California "blue sky" regulations. No expense
reimbursement was required for the year ended September 30, 1993.
The Distributor retained $394,268 during the year ended September 30,
1993 from commissions earned on sales of Fund shares.
The Distributor retained $20,817 during the period ended September 30,
1993 from contingent deferred sales charges imposed upon redemptions of
the Fund's Class B Shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, effective January 15, 1993, the
Fund pays the Distributor at an annual rate of .75 of 1% of the value of the
Fund's Class B shares average daily net assets, for the costs and expenses
in connection with advertising, marketing and distributing the Fund's
Class B shares. The Distributor may make payments to one or more Service
Agents (a securities dealer, financial institution, or other industry
professional) based on the value of the Fund's Class B shares owned by
clients of the Service Agent.
Prior to January 15, 1993, the Fund's Service Plan ("prior Service
Plan") provided that the Fund pay the Distributor, at an annual rate of .25
of 1% of the value of the Fund's average daily net assets, for costs and
expenses in connection with advertising, marketing and distributing the
Fund's shares and for servicing shareholder accounts. The Distributor
made payments to one or more Service Agents based on the value of the
Fund's shares owned by clients of the Service Agent. The prior Service
Plan also provided for the Fund to bear the costs of preparing, printing and
distributing certain of the Fund's prospectuses and statements of
additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005 of 1% of
the Fund's average daily net assets for any full fiscal year.
During the period ended September 30, 1993, $347,875 was charged to
the Fund pursuant to the prior Service Plan and $59,056 was charged to
the Fund pursuant to the Class B Distribution Plan.
(C) Under the Shareholder Services Plan, effective January 15, 1993,
the Fund pays the Distributor, at an annual rate of .25 of 1% of the value of
the average daily net assets of Class A and Class B shares for servicing
shareholder accounts.The services provided may include personal services
relating to shareholder accounts, such as answering
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents in respect
of these services. The Distributor determines the amount to be paid to
Service Agents. For the period ended September 30, 1993, $756,019 was
charged to the Fund pursuant to the Class A Shareholder Service Plan and
$19,685 was charged to the Fund pursuant to the Class B Shareholder
Service Plan.
(D) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of Dreyfus or Comstock Partners. Each director who
is not an "affiliated person" receives an annual fee of $4,500 and an
attendance fee of $500 per meeting.
NOTE 3-SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and
sales of investment securities and securities sold short, excluding short-
term securities, forward currency exchange contracts and option
transactions during the year ended September 30, 1993:
PURCHASES SALES
------------ ------------
Long transactions.................. $108,798,116 $220,520,285
Short sale transactions............ 114,929,336 82,785,788
------------ ------------
Total........................... $223,727,452 $303,306,073
============ ============
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value.
The Fund would incur a loss if the price of the security increases between
the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates. Until the Fund replaces the
borrowed security, the Fund will maintain daily, a segregated account
with a broker and custodian, of cash and/or U.S. Government securities
sufficient to cover its short position. Securities sold short at September
30, 1993 and their related market values and proceeds are set forth in the
Statement of Securities Sold Short.
When executing forward currency exchange contracts. the Fund is
obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract
increases between the date the forward contract is open and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract decreases between those dates. With respect to purchases of
forward currency exchange contracts, the Fund would incur a loss if the
value of the contract decreases between the date the forward contract is
open and the date the forward contract is closed. The Fund realizes a gain
if the value of the contract increases between those dates.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change
in market value of the contract at the close of each day's trading.
Accordingly, variation margin payments are made or received to reflect
daily unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial
margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. At September 30,
1993, there were no financial futures contracts outstanding.
The Fund is engaged in trading restricted options, which are not
exchange traded. The Fund's exposure to credit risk associated with
counter party nonperformance on these investments is typically limited to
the unrealized gains inherent in such investments that are recognized in
the statement of assets and liabilities.
(B) At September 30, 1993, accumulated net unrealized appreciation on
investments was $18,286,838, consisting of $45,503,682 gross
unrealized appreciation and $27,216,844 gross unrealized depreciation.
At September 30, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
We have audited the accompanying statement of assets and liabilities
of Dreyfus Capital Value Fund (A Premier Fund), including the statements
of investments and securities sold short, as of September 30, 1993, and
the related statement of operations for the year then ended, the statement
of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 1993 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Capital Value Fund (A Premier Fund) at September 30,
1993, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
Ernst & Young
New York, New York
November 8, 1993
DREYFUS CAPITAL VALUE 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 Highlights - for the period from October
10, 1985 (commencement of operations) to September 30, 1986
and for each of the fiscal years ended September 30, 1987,
1988, 1989, 1990, 1991, 1992 and 1993.
Included in Part B of the Registration Statement:
Statement of Investments--September 30, 1993.
Statement of Securities Sold Short--September 30, 1993.
Statement of Assets and Liabilities--September 30, 1993.
Statement of Operations--Year ended September 30, 1993.
Statement of Changes in Net Assets--For the years ended
September 30, 1992 and 1993.
Notes to Financial Statements.
Report of Ernst & Young, Independent Auditors, dated
November 8, 1993.
Schedule Nos. 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 Amended and Restated Charter and Articles
Supplementary each dated October 23, 1992.
(2) Registrant's By-Laws, as amended April 28, 1992, are incorporated
by reference to Exhibit (2) of Post-Effective Amendment No. 12 to
the Registration Statement on Form N-1A, filed on October 30,
1992.
(4) Specimen stock certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Post-Effective
Amendment No. 1 to the Registration Statement on Form N-1, filed
on March 27, 1986.
(5) Amended Investment Advisory Agreement and Sub-Investment Advisory
Agreement are incorporated by reference to Exhibit (5) of Post-
Effective Amendment No. 13 to the Registration Statement on
Form N-1, filed on November 2, 1992.
(6)(a) Distribution Agreement and Form of Service Agreement are
incorporated by reference to Exhibit (6) of Post-Effective
Amendment No. 3 to the Registration Statement on Form N-1, filed
on March 5, 1987.
(8)(a) Amended and Restated Custody Agreement dated August 18, 1989 is
incorporated by reference to Exhibit 8(a) of Post-Effective
Amendment No. 7 to the Registration Statement on Form N-1A, filed
on January 26, 1990.
(8)(b) Amended Form of Distribution Agreement and Amended Form of Service
Agreement are incorporated by reference to Exhibit (8)(b) of Post-
Effective No. 13 to the Registration Statement on Form N-1, filed
on November 2, 1992.
(8)(c) Foreign Sub-Custodian Agreement is incorporated by reference to
Exhibit 8(b) of Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A, filed on January 26, 1990.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1, filed on August 27, 1985.
(11) Consent of Independent Auditors.
(14) Documents making up model plans in the establishment of retirement
plans in conjunction with which Registrant offers its securities
are incorporated by reference to Exhibit (14) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on January 9, 1985.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(15)(a) The Shareholder Services Plan is incorporated by reference to
Exhibit (15)(a) of Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1, filed on November 2, 1992.
(15)(b) The Distribution Plan relating to Class B shares is incorporated
by reference to Exhibit (15)(b) to Post-Effective Amendment No. 13
to the Registration Statement on Form N-1A, filed on November 2,
1992.
(16) Schedules of Computation of Performance Data.
Other Exhibits
(a) Registrant's Power of Attorney is incorporated by
reference to Other Exhibits (a) of Post-Effective
Amendment Nos. 5, 7, and 8 to the Registration Statement
on Form N-1A, filed on January 19, 1988, January 29,
1990 and January 28, 1991 respectively.
(b) Registrant's Certificate of Corporate Secretary is
incorporated by reference to Other Exhibits (b) of Post-
Effective Amendment No. 6 to the Registration Statement
on Form N-1A, filed on January 25, 1989.
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 January 19, 1994
Common Stock Class A Shares - 21,259
(Par value $.01) Class B Shares - 2,217
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 indemnified
is incorporated by reference to Item 27 of Part C of Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1, filed on
August 27, 1985.
Reference is also made to the Distribution Agreement incorporated
by reference to Exhibit (6) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1, filed on January 9, 1985.
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, manager and distributor 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, serves primarily as distributor of shares of 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;
Director of Independence One Investment
Services, Inc.
Division of Michigan National Corp.
27777 Inkster Road
Farmington Hills, Michigan 48018;
Past Chairman of the Board of Trustees of
Skillman Foundation
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.
767 Fifth Avenue
New York, New York 10153
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer The Dreyfus Leverage Fund, Inc.++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
HOWARD STEIN Dreyfus New Leaders Fund, Inc.++;
(cont'd) The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Land Development Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company (N.J.)++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Managing General Partner:
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Strategic World Investing, L.P.++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and President:
Dreyfus Life Insurance Company*;
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
President:
Dreyfus Consumer Life Insurance Company*;
President and Investment Officer:
Dreyfus Growth Allocation Fund, Inc.++;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Investing, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
HOWARD STEIN Dreyfus Money Market Instruments, Inc.++;
(cont'd) Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc.**;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Consumer Life Insurance Company*;
Dreyfus Land Development Corporation*;
Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
JOSEPH S. DiMARTINO Director and Vice President:
(cont'd) Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and Corporate Member:
Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Director:
Dreyfus Management, Inc.**;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
McDonald Money Market Fund, Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
President, Chief Executive Officer and
Director:
Dreyfus Personal Management, Inc.*;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Consumer Bank+;
Director Director and President:
Dreyfus Land Development Corporation*;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Management, Inc.**;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus-Lincoln, Inc.*;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Life Insurance Company*;
The Truepenny Corporation*;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Management, Inc.**;
Dreyfus Personal Management, Inc.**;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Controller:
Dreyfus Land Development Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Director, Vice President and Chief Financial
Officer:
Dreyfus Life Insurance Company*;
Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Executive Vice President:
Dreyfus Service Corporation*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
ELIE M. GENADRY Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Personal Management, Inc.**;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Life Insurance Company*;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
DANIEL C. MACLEAN Dreyfus California Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
DANIEL C. MACLEAN Dreyfus Treasury Prime Cash Management++;
(cont'd) Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
DANIEL C. MACLEAN Dreyfus Growth Allocation Fund,
(cont'd) Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Land Development Corporation+;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
JEFFREY N. NACHMAN Dreyfus California Tax Exempt Bond Fund,
(cont'd) Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus 100% U.S. Treasury Intermediate
(cont'd) Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN McDonald U.S. Government Money Market
(cont'd) Fund, Inc.++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Global Investing, Inc.++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.**;
Vice President:
Dreyfus Personal Management, Inc.*
ROBERT H. SCHMIDT President and Director:
Vice President Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
Formerly, Chairman and Chief Executive
Officer:
Levine, Huntley, Schmidt & Beaver
250 Park Avenue
New York, New York 10017
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- The Dreyfus Consumer Bank;
Income Research Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Vice President:
Assistant Vice President - Dreyfus Consumer Life Insurance
Human Resources Company++;
Formerly, Assistant Commissioner:
Department of Parks and Recreation of the
City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Vice President and Treasurer:
Assistant Vice President McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
Treasurer and Assistant Secretary:
The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
JOHN J. PYBURN Dreyfus Cash Management++;
(cont'd) Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
JOHN J. PYBURN Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Formerly, Vice President-Financial Planning,
Controller Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019;
Treasurer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Land Development Corporation*;
Dreyfus Life Insurance Company*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
The Dreyfus Convertible Securities Fund,
Inc. ++;
Dreyfus Edison Electric Index Fund,
Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
MARK N. JACOBS Dreyfus New Jersey Intermediate Municipal
(cont'd) Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Director and Secretary:
Dreyfus Life Insurance Company*;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
MARK N. JACOBS Dreyfus Insured Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Management, Inc.**;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Personal Management, Inc.**;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
MARK N. JACOBS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market Fund,
Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund, Inc.++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Convertible Securities Fund,
Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus Florida Intermediate Municipal
(cont'd) Bond Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Investing, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Investors GNMA Fund, L.P.++;
Dreyfus Land Development Corporation*;
The Dreyfus Leverage Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.**;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
CHRISTINE PAVALOS Dreyfus New York Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund, L.P.++;
Dreyfus 100% U.S. Treasury Long Term Fund,
L.P.++;
Dreyfus 100% U.S. Treasury Money Market
Fund, L.P.++;
Dreyfus 100% U.S. Treasury Short Term
Fund, L.P.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic World Investing, L.P.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
First Prairie Tax Exempt Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
CHRISTINE PAVALOS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
McDonald Money Market Fund, Inc.++;
McDonald Tax Exempt Money Market Fund,
Inc.++;
McDonald U.S. Government Money Market
Fund, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier California Insured Municipal
Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 767 Fifth Avenue, New
York, New York 10153.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ 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 One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
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 Strategy Fund, 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 Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Money Market Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Cash Management
13) Dreyfus Cash Management Plus, Inc.
14) Dreyfus Connecticut Intermediate Municipal Bond Fund
15) Dreyfus Connecticut Municipal Money Market Fund, Inc.
16) The Dreyfus Convertible Securities Fund, Inc.
17) Dreyfus Edison Electric Index Fund, Inc.
18) Dreyfus Florida Intermediate Municipal Bond Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Investing, Inc.
21) Dreyfus GNMA Fund, Inc.
22) Dreyfus Government Cash Management
23) Dreyfus Growth and Income Fund, Inc.
24) Dreyfus Growth Opportunity Fund, Inc.
25) Dreyfus Institutional Money Market Fund
26) Dreyfus Institutional Short Term Treasury Fund
27) Dreyfus Insured Municipal Bond Fund, Inc.
28) Dreyfus Intermediate Municipal Bond Fund, Inc.
29) Dreyfus International Equity Fund, Inc.
30) Dreyfus Investors GNMA Fund, L.P.
31) The Dreyfus Leverage Fund, Inc.
32) Dreyfus Life and Annuity Index Fund, Inc.
33) Dreyfus Liquid Assets, Inc.
34) Dreyfus Massachusetts Intermediate Municipal Bond Fund
35) Dreyfus Massachusetts Municipal Money Market Fund
36) Dreyfus Massachusetts Tax Exempt Bond Fund
37) Dreyfus Michigan Municipal Money Market Fund, Inc.
38) Dreyfus Money Market Instruments, Inc.
39) Dreyfus Municipal Bond Fund, Inc.
40) Dreyfus Municipal Cash Management Plus
41) Dreyfus Municipal Money Market Fund, Inc.
42) Dreyfus New Jersey Intermediate Municipal Bond Fund
43) Dreyfus New Jersey Municipal Bond Fund, Inc.
44) Dreyfus New Jersey Municipal Money Market Fund, Inc.
45) Dreyfus New Leaders Fund, Inc.
46) Dreyfus New York Insured Tax Exempt Bond Fund
47) Dreyfus New York Municipal Cash Management
48) Dreyfus New York Tax Exempt Bond Fund, Inc.
49) Dreyfus New York Tax Exempt Intermediate Bond Fund
50) Dreyfus New York Tax Exempt Money Market Fund
51) Dreyfus Ohio Municipal Money Market Fund, Inc.
52) Dreyfus 100% U.S. Treasury Intermediate Term Fund, L.P.
53) Dreyfus 100% U.S. Treasury Long Term Fund, L.P.
54) Dreyfus 100% U.S. Treasury Money Market Fund, L.P.
55) Dreyfus 100% U.S. Treasury Short Term Fund, L.P.
56) Dreyfus Pennsylvania Municipal Money Market Fund
57) Dreyfus Short-Intermediate Government Fund
58) Dreyfus Short-Intermediate Municipal Bond Fund
59) Dreyfus Short-Term Income Fund, Inc.
60) Dreyfus Strategic Growth, L.P.
61) Dreyfus Strategic Income
62) Dreyfus Strategic Investing
63) Dreyfus Strategic World Investing, L.P.
64) Dreyfus Tax Exempt Cash Management
65) The Dreyfus Third Century Fund, Inc.
66) Dreyfus Treasury Cash Management
67) Dreyfus Treasury Prime Cash Management
68) Dreyfus Variable Investment Fund
69) Dreyfus-Wilshire Target Funds, Inc.
70) Dreyfus Worldwide Dollar Money Market Fund, Inc.
71) First Prairie Cash Management
72) First Prairie Diversified Asset Fund
73) First Prairie Money Market Fund
74) First Prairie Tax Exempt Bond Fund, Inc.
75) First Prairie Tax Exempt Money Market Fund
76) First Prairie U.S. Treasury Securities Cash Management
77) FN Network Tax Free Money Market Fund, Inc.
78) General California Municipal Bond Fund, Inc.
79) General California Municipal Money Market Fund
80) General Government Securities Money Market Fund, Inc.
81) General Money Market Fund, Inc.
82) General Municipal Bond Fund, Inc.
83) General Municipal Money Market Fund, Inc.
84) General New York Municipal Bond Fund, Inc.
85) General New York Municipal Money Market Fund
86) Pacific American Fund
87) Peoples Index Fund, Inc.
88) Peoples S&P MidCap Index Fund, Inc.
89) Premier California Insured Municipal Bond Fund
90) Premier California Municipal Bond Fund
91) Premier GNMA Fund
92) Premier Growth Fund, Inc.
93) Premier Municipal Bond Fund
94) Premier New York Municipal Bond Fund
95) Premier State Municipal Bond Fund
Item 28. (b) Business and Other Connections of Sub-Investment Adviser
(continued)
Comstock Partners, Inc. (the "Sub-Investment Adviser") serves as the
Fund's sub-investment adviser. The Sub-Investment Adviser is a registered
investment adviser organized in 1986.
Officers and Directors of Sub-Investment Adviser
Name and Position
With Sub-Investment
Adviser Other Businesses
STANLEY D. SALVIGSEN Chairman of the Board and Chief
Chairman of the Board and Executive Officer:
Chief Executive Officer Comstock Partners
Strategy Fund, Inc.;
Prior to joining the
Sub-Investment Adviser, Chief
Investment Strategist:
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
250 Vesey Street
World Financial Center
New York, NY 10281;
Investment Officer:
Dreyfus Variable Investment
Fund--Asset Allocation
Portfolio
CHARLES L. MINTER Director, Vice President and
Vice Chairman and Secretary:
Chief Operating Officer Comstock Partners
Strategy Fund, Inc.;
Prior to joining the
Sub-Investment Adviser, Vice
President Equity Institutional
Sales:
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
250 Vesey Street
World Financial Center
New York, NY 10281;
Investment Officer:
Dreyfus Variable Investment
Fund--Asset Allocation
Portfolio
EDWARD A. LESKOWICZ, Jr. Vice President, Treasurer
Vice President, Treasurer, and Chief Financial Officer:
and Chief Financial Officer Comstock Partners
Strategy Fund, Inc.;
Prior to joining the
Sub-Investment Adviser, Vice
President-Operations
Gabelli Funds, Inc.
655 Third Avenue
New York, NY 10017;
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board Director
and
President
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Hank Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President None
and Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
Edward Donley
Latham, NY Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Mary Rogers** Assistant Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Charles Cardona** Senior Vice President None
Stacy Alexander* Vice President None
Eric Almquist* Vice President None
James E. Baskin+++++++ Vice President None
Kenneth Bernstein
Boca Raton, FL Vice President-Institutional Sales None
Stephen Burke* Vice President None
Laurel A. Diedrick
Burrows*** Vice President None
Daniel L. Clawson++++ Vice President None
Michael Caraboolad
Gates Mills, OH Vice President-Institutional Sales None
Laura Caudillo++ Vice President-Institutional Sales None
Steven Faticone***** Vice-President-Institutional Sales None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Institutional Sales None
Nancy Knee++++ Vice President-Institutional Sales None
Bradford Lange* Vice President-Institutional Sales None
Kathleen McIntyre
Lewis++ Vice President None
Eva Machek***** Vice President-Institutional Sales None
Mary McCabe*** Vice President-Institutional Sales None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President None
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President None
Lorianne Pinto* Vice President-Institutional Sales None
Douglas Rentschler
Grosse Point Park, MI Vice President-Institutional Sales None
Leah Ryan**** Vice President-Institutional Sales None
Emil Samman* Vice President-Institutional
Marketing None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President None
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Carolyn Warren++ Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Paul Allen* Executive Vice President-
National Sales None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
Wendy Holcomb++ Vice President-Sales None
William Gallagher* Vice President-Sales None
Brent Glading* Vice President-Sales None
Gerald Goz* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) (a) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of common stock 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.
(b) To furnish each person to whom a prospectus is delivered with a
copy of its 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 certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and State of New York on the 28th day of January, 1994.
DREYFUS CAPITAL VALUE FUND, INC.
BY: /s/Howard Stein *
Howard Stein, 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/Howard Stein * President (Principal Executive 1/28/94
Howard Stein Officer) and Director
/s/John J. Pyburn * Treasurer (Principal Financial 1/28/94
John J. Pyburn Officer)
/s/Thomas Durante * Controller (Principal Accounting 1/28/94
Thomas Durante Officer)
/s/Hodding Carter, III * Director 1/28/94
Hodding Carter, III
/s/Lawrence M. Greene * Director 1/28/94
Lawrence M. Greene
/s/Richard C. Leone * Director 1/28/94
Richard C. Leone
/s/Hans C. Mautner * Director 1/28/94
Hans C. Mautner
/s/Robert B. Rivel * Director 1/28/94
Robert B. Rivel
/s/John E. Zuccotti * Director 1/28/94
John E. Zuccotti
BY: *_______________________________________
Robert I. Frenkel,
Attorney-in-Fact
AMENDED AND RESTATED CHARTER
FIRST: DREYFUS CAPITAL VALUE FUND, INC., a Maryland
corporation having its principal place of business in Baltimore
City, Maryland, hereby amends and restates its Charter as
follows and confirms that the provisions set forth below are all
the provisions of the Charter as currently in effect:
SECOND: The name of the corporation (hereinafter
called the "corporation") is Dreyfus Capital Value Fund, Inc.
THIRD: The corporation is formed for the following
purpose or purposes:
(a) to conduct, operate and carry on the
business of an investment company;
(b) to subscribe for, invest in, reinvest
in, purchase or otherwise acquire, hold, pledge, sell,
assign, transfer, lend, write options on, exchange,
distribute or otherwise dispose of and deal in and
with securities of every nature, kind, character, type
and form, including without limitation of the
generality of the foregoing, all types of stocks,
shares, futures contracts, bonds, debentures, notes,
bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest,
certificates of interest, certificates of
participation, certificates, interests,
evidences of ownership, guarantees, warrants, options
or evidences of indebtedness issued or created by or
guaranteed as to principal and interest by any state
or local government or any agency or instrumentality
thereof, by the United States Government or any
agency, instrumentality, territory, district or
possession thereof, by any foreign government or any
agency, instrumentality, territory, district or
possession thereof, by any corporation organized under
the laws of any state, the United States or any
territory or possession thereof or under the laws of
any foreign country, bank certificates of deposit,
bank time deposits, bankers' acceptances and
commercial paper; to pay for the same in cash or by
the issue of stock, including treasury stock, bonds or
notes of the corporation or otherwise; and to exercise
any and all rights, powers and privileges of ownership
or interest in respect of any and all such investments
of every kind and description, including without
limitation, the right to consent and otherwise act
with respect thereto, with power to designate one or
more persons, firms, associations or corporations to
exercise any of said rights, powers and privileges in
respect of any said instruments;
(c) to borrow money or otherwise obtain credit
and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the
corporation;
(d) to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in, shares of
stock of the corporation, including shares of stock of
the corporation in fractional denominations, and to
apply to any such repurchase, redemption, retirement,
cancellation or acquisition of shares of stock of the
corporation any funds or property of the corporation
whether capital or surplus or otherwise, to the full
extent now or hereafter permitted by the laws of the
State of Maryland;
(e) to conduct its business, promote its
purposes and carry on its operations in any and all of
its branches and maintain offices both within and
without the State of Maryland, in any States of the
United States of America, in the District of Columbia
and in any other parts of the world; and
(f) to do all and everything necessary,
suitable, convenient, or proper for the conduct,
promotion and attainment of any of the businesses and
purposes herein specified or which at any time may be
incidental thereto or may appear conducive to or
expedient for the accomplishment of any of such
businesses and purposes and which might be engaged in
or carried on by a corporation incorporated or
organized under the Maryland General Corporation Law,
and to have and exercise all of the powers conferred
by the laws of the State of Maryland upon corporations
incorporated or organized under the Maryland General
Corporation Law.
The foregoing provisions of this Article THIRD shall
be construed both as purposes and powers and each as an
independent purpose and power. The foregoing enumeration of
specific purposes and powers shall not be held to limit or
restrict in any manner the purposes and powers of the
corporation, and the purposes and powers herein specified shall,
except when otherwise provided in this Article THIRD, be in no
wise limited or restricted by reference to, or inference from,
the terms of any provision of this or any other Article of these
Articles of In-corporation; provided, that the corporation shall
not conduct any business, promote any purpose, or exercise any
power or privilege within or without the State of Maryland
which, under the laws thereof, the corporation may not lawfully
conduct, promote, or exercise.
FOURTH: The post office address of the principal
office of the corporation within the State of Maryland, and of
the resident agent of the corporation within the State of Mary-
land, is The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202.
FIFTH: (1) The total number of shares of stock which
the corporation has authority to issue is one hundred million
(100,000,000) shares of Common Stock, all of which are of a par
value of one cent ($.01) each.
(2) The aggregate par value of all the authorized
shares of stock is one million dollars ($1,000,000.00).
(3) The Board of Directors of the corporation is
authorized, from time to time, to fix the price or the minimum
price or the consideration or minimum consideration for, and to
issue, the shares of stock of the corporation.
(4) The Board of Directors of the corporation is
authorized, from time to time, to classify or to reclassify, as
the case may be, any unissued shares of stock of the
corporation.
(5) Subject to the power of the Board of Directors to
reclassify unissued shares, the shares of each class of stock of
the corporation shall have the following preferences, conversion
and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption:
(i) All consideration received by the
corporation for the issuance or sale of shares
together with all income, earnings, profits and
proceeds thereof, shall irrevocably belong to such
class for all purposes, subject only to the rights of
creditors, and are herein referred to as "assets
belonging to" such class. The assets belonging to a
class may be invested with the assets belonging to one
or more other classes in a common investment
portfolio. If the assets belonging to more than one
class are invested in a common investment portfolio,
the income and expenses of the investment portfolio
shall be allocated among the classes in accordance
with the number of shares outstanding of each class or
as otherwise determined by the Board of Directors.
(ii) The assets belonging to such class shall
be charged with the liabilities of the corporation in
respect of such class and with such class' share of
the general liabilities of the corporation, in the
latter case in proportion that the net asset value of
such class bears to the net asset value of all
classes. The determination of the Board of Directors
shall be conclusive as to the allocation of
liabilities, including accrued expenses and reserves,
to a class.
(iii) Dividends or distributions on shares of
each class, whether payable in stock or cash, shall be
paid only out of earnings, surplus or other assets
belonging to such class.
(iv) In the event of the liquidation or
dissolution of the corporation, stockholders of each
class shall be entitled to receive, as a class, out of
the assets of the corporation available for
distribution to stockholders, the assets belonging to
such class and the assets so distributable to the
stockholders of such class shall be distributed among
such stockholders in proportion to the number of
shares of such class held by them.
(v) On each matter submitted to a vote of the
stockholders, each holder of a share of stock shall be
entitled to one vote for each share standing in his
name on the books of the corporation irrespective of
the class thereof. All holders of shares of stock
shall vote as a single class except with respect to
any matter which affects only one or more classes of
stock, in which case only the holders of shares of the
class or classes affected shall be entitled to vote.
Except as provided above, all provisions of the Articles of
Incorporation relating to stock of the corporation shall apply
to shares of, and to the holders of, all classes of stock.
(6) Notwithstanding any provisions of the Maryland
General Corporation Law requiring a greater proportion than a
majority of the votes of stockholders entitled to be cast in
order to take or authorize any action, any such action may be
taken or authorized upon the concurrence of a majority of the
aggregate number of votes entitled to be cast thereon.
(7) The presence in person or by proxy of the holders
of one-third of the shares of stock of the corporation entitled
to vote (without regard to class) shall constitute a quorum at
any meeting of the stockholders, except with respect to any
matter which, under applicable statutes or regulatory
requirements, requires approval by a separate vote of one or
more classes of stock, in which case the presence in person or
by proxy of the holders of one-third of the shares of stock of
each class required to vote as a class on the matter shall
constitute a quorum.
(8) The corporation may issue shares of stock in
fractional denominations to the same extent as its whole shares,
and shares in fractional denominations shall be shares of stock
having proportionately to the respective fractions represented
thereby all the rights of whole shares, including, without
limitation, the right to vote, the right to receive dividends
and distributions and the right to participate upon liquidation
of the corporation, but excluding the right to receive a stock
certificate evidencing a fractional share.
(9) No holder of any shares of any class of the
corporation shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any shares of any class which the
corporation proposes to issue, or any rights or options which
the corporation proposes to issue or to grant for the purchase
of shares of any class or for the purchase of any shares, bonds,
securities, or obligations of the corporation which are
convertible into or exchangeable for, or which carry any rights
to subscribe for, purchase, or otherwise acquire shares of any
class of the corporation; and any and all of such shares, bonds,
securities or obligations of the corporation, whether now or
hereafter authorized or created, may be issued, or may be
reissued or transferred if the same have been reacquired and
have treasury status, and any and all of such rights and options
may be granted by the Board of Directors to such persons, firms,
corporations and associations, and for such lawful
consideration, and on such terms, as the Board of Directors in
its discretion may determine, without first offering the same,
or any thereof, to any said holder.
SIXTH: (1) The number of directors of the
corporation, until such number shall be increased or decreased
pursuant to the by-laws of the corporation, is eight. The
number of directors shall never be less than the minimum number
prescribed by the Maryland General Corporation Law.
(2) The name of the person who shall act as directors
of the corporation until their successors are duly chosen and
qualify are as follows:
Hodding Carter, III Robert B. Rivel
Lawrence M. Greene Donald B. Smiley
Richard C. Leone Howard Stein
Hans C. Mautner John E. Zuccotti
(3) The power to make, alter, and repeal the by-laws
of the corporation shall be vested in the Board of Directors of
the corporation.
(4) Any determination made in good faith by or
pursuant to the direction of the Board of Directors, as to: the
amount of the assets, debts, obligations, or liabilities of the
corporation; the amount of any reserves or charges set up and
the propriety thereof; the time of or purpose for creating such
reserves or charges; the use, alteration or cancellation of any
reserves or charges (whether or not any debt, obligation or
liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or
thereafter required to be paid or discharged); the value of any
investment or fair value of any other asset of the corporation;
the amount of net investment income; the number of shares of
stock outstanding; the estimated expense in connection with
purchases or redemptions of the corporation's stock; the ability
to liquidate investments in orderly fashion; the extent to which
it is practicable to deliver a cross-section of the portfolio of
the corporation in payment for any such shares, or as to any
other matters relating to the issue, sale, purchase, redemption
and/or other acquisition or disposition of investments or shares
of the corporation, or the determination of the net asset value
of shares of the corporation shall be final and conclusive, and
shall be binding upon the corporation and all holders of its
shares, past, present and future, and shares of the corporation
are issued and sold on the condition and understanding that any
and all such determinations shall be binding as aforesaid.
SEVENTH: (1) To the fullest extent that limitations
on the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of the
corporation shall have any liability to the corporation or its
stockholders for damages. This limitation on liability applies
to events occurring at the time a person serves as a director or
officer of the corporation whether or not such person is a
director or officer at the time of any proceeding in which
liability is asserted.
(2) The corporation shall indemnify and advance
expenses to its currently acting and its former directors to the
fullest extent that indemnification of directors is permitted by
the Maryland General Corporation Law. The corporation shall
indemnify and advance expenses to its officers to the same
extent as its directors and to such further extent as is
consistent with law. The Board of Directors may, through a by-
law, resolution or agreement, make further provisions for
indemnification of directors, officers, employees and agents to
the fullest extent permitted by the Maryland General Corporation
Law.
(3) No provision of this Article SEVENTH shall be
effective to protect or purport to protect any director or
officer of the corporation against any liability to the
corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
(4) References to the Maryland General Corporation
Law in this Article SEVENTH are to the law as from time to time
amended. No amendment to the Articles of Incorporation of the
corporation shall affect any right of any person under this
Article SEVENTH based on any event, omission or proceeding prior
to such amendment.
EIGHTH: Any holder of shares of stock of the
corporation may require the corporation to redeem and the
corporation shall be obligated to redeem at the option of such
holder all or any part of the shares of the corporation owned by
said holder, at the redemption price, pursuant to the method,
upon the terms and subject to the conditions hereinafter set
forth:
(a) The redemption price per share shall be the
net asset value per share determined at such time or
times as the Board of Directors of the corporation
shall designate in accordance with any provision of
the Investment Company Act of 1940, any rule or
regulation thereunder or exemption or exception
therefrom, or any rule or regulation made or adopted
by any securities association registered under the
Securities Exchange Act of 1934.
(b) Net asset value per share of a class shall
be determined by dividing:
(i) The total value of the assets of
such class determined as provided in Subsec-
tion (c) below less, to the extent
determined by or pursuant to the direction
of the Board of Directors, all debts,
obligations and liabilities of such class
(which debts, obligations and liabilities
shall include, without limitation of the
generality of the foregoing, any and all
debts, obligations, liabilities, or claims,
of any and every kind and nature, fixed,
accrued and otherwise, including the
estimated accrued expenses of management and
supervision, administration and distribution
and any reserves or charges for any or all
of the foregoing, whether for taxes,
expenses or otherwise) but excluding such
class' liability upon its shares and its
surplus, by
(ii) The total number of shares of
such class outstanding.
The Board of Directors is empowered, in its
absolute discretion, to establish other methods for
determining such net asset value whenever such other
methods are deemed by it to be necessary in order to
enable the corporation to comply with, or are deemed
by it to be desirable provided they are not
inconsistent with, any provision of the Investment
Company Act of 1940 or any rule or regulation
thereunder.
(c) In determining for the purposes of these
Articles of Incorporation the total value of the
assets of the corporation at any time, investments and
any other assets of the corporation shall be valued in
such manner as may be determined from time to time by
the Board of Directors.
(d) Payment of the redemption price by the
corporation may be made either in cash or in
securities or other assets at the time owned by the
corporation or partly in cash and partly in securities
or other assets at the time owned by the corporation.
The value of any part of such payment to be made in
securities or other assets of the corporation shall be
the value employed in determining the redemption
price. Payment of the redemption price shall be made
on or before the seventh day following the day on
which the shares are properly presented for redemption
hereunder, except that delivery of any securities
included in any such payment shall be made as promptly
as any necessary transfers on the books of the issuers
whose securities are to be delivered may be made.
The corporation, pursuant to resolution of the
Board of Directors, may deduct from the payment made
for any shares redeemed a liquidating charge not in
excess of one percent (1%) of the redemption price of
the shares so redeemed, and the Board of Directors may
alter or suspend any such liquidating charge from time
to time.
(e) Redemption of shares of stock by the
corporation is conditional upon the corporation having
funds or property legally available therefor.
(f) The corporation, either directly or through
an agent, may repurchase its shares, out of funds
legally available therefor, upon such terms and
conditions and for such consideration as the Board of
Directors shall deem advisable, by agreement with the
owner at a price not exceeding the net asset value per
share as determined by the corporation at such time or
times as the Board of Directors of the corporation
shall designate, less a charge not to exceed one
percent (1%) of such net asset value, if and as fixed
by resolution of the Board of Directors of the
corporation from time to time, and take all other
steps deemed necessary or advisable in connection
therewith.
(g) The obligations set forth in this Article
EIGHTH may be suspended or postponed as may be
permissible under the Investment Company Act of 1940
and the rules and regulations thereunder.
(h) The Board of Directors may establish other
terms and conditions and procedures for redemption,
including requirements as to delivery of certificates
evidencing shares, if issued.
NINTH: All persons who shall acquire stock or other
securities of the corporation shall acquire the same subject to
the provisions of the corporation's Charter, as from time to
time amended.
TENTH: From time to time any of the provisions of the
Charter of the corporation may be amended, altered or repealed,
including amendments which alter the contract rights of any
class of stock outstanding, and other provisions authorized by
the Maryland General Corporation Law at the time in force may be
added or inserted in the manner and at the time prescribed by
said Law, and all rights at any time conferred upon the
stockholders of the corporation by its Charter are granted
subject to the provisions of this Article.
ELEVENTH: The Board of Directors of the Corporation
approved this Amended and Restated Charter, and declared that it
was advisable. This Amended and Restated Charter was approved
by the holders of at least a majority of the Corporation's
outstanding voting securities at a meeting held on June 26,
1992.
The Vice President acknowledges this Amended and
Restated Charter to be the corporate act of the Corporation and
states that to the best of his knowledge, information and belief
the matters and facts set forth herein with respect to the
authorization and approval of the Corporation's Amended and
Restated Charter are true in all material respects, and that
this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, Dreyfus Capital Value Fund, Inc.
has caused this instrument to be filed in its name and on its
behalf by its Vice President, Daniel C. Maclean, and witnessed
by its Assistant Secretary, Robert I. Frenkel, on the 23rd of
October, 1992.
DREYFUS CAPITAL VALUE FUND, INC.
BY: /s/ Daniel C. Maclean
Daniel C. Maclean, Vice
President
ATTEST:
/s/ Robert I. Frenkel
Robert I. Frenkel,
Assistant Secretary
ARTICLES SUPPLEMENTARY
DREYFUS CAPITAL VALUE FUND, INC., a Maryland
corporation having its principal office in the State of Maryland
at 32 South Street, Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of
Assessments and Taxation that:
FIRST: The aggregate number of shares of Common Stock
that the Corporation has authority to issue is increased by one
hundred million (100,000,000) shares, all of which one hundred
million (100,000,000) shares shall be classified as shares of
Class B Common Stock.
SECOND: The shares of Class B Common Stock classified
hereby shall have the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption as set
forth in Article FIFTH, Section (5) of the Corporation's Amended
and Restated Charter.
THIRD: Immediately before the increase in the
aggregate number of shares as set forth in Article FIRST hereof,
the Corporation was authorized to issue one hundred million
(100,000,000) shares of stock, all of which were shares of
Common Stock, having a par value of one cent ($.01) each, and an
aggregate par value of one million dollars ($1,000,000).
FOURTH: As hereby increased and classified, the total
number of shares of stock which the Corporation has authority to
issue is two hundred million (200,000,000) shares, all of which
are shares of Common Stock, with a par value of one cent ($.01)
per share, having an aggregate par value of two million dollars
($2,000,000), of which one hundred million (100,000,000) shares
are classified as shares of Class B Common Stock and one hundred
million (100,000,000) shares remain shares of unclassified
Common Stock, all having a par value of one cent ($.01) each.
FIFTH: The Corporation is registered as an open-end
investment company under the Investment Company Act of 1940, as
amended.
SIXTH: The Board of Directors of the Corporation
increased the total number of shares of capital stock that the
Corporation has authority to issue pursuant to Section 2-105(c)
of the Maryland General Corporation Law and classified the
increased shares pursuant to authority provided in the
Corporation's Charter.
The undersigned Vice President acknowledges these
Articles Supplementary to be the corporate act of the
Corporation and states that to the best of his knowledge,
information and belief, the matters and facts with respect to
authorization and approval set forth in these Articles are true
in all material respects and that this statement is made under
penalties of perjury.
IN WITNESS WHEREOF, DREYFUS CAPITAL VALUE FUND, INC.
has caused these Articles Supplementary to be signed in its name
and on its behalf by its Vice President and witnessed by its
Assistant Secretary on October 23, 1992.
DREYFUS CAPITAL VALUE FUND, INC.
By: /s/ Daniel C. Maclean
Daniel C. Maclean, Vice
President
Witness:
/s/ Robert I. Frenkel
Robert I. Frenkel,
Assistant Secretary
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
November 8, 1993, in this Registration Statement (Form N-1A 2-88822) of
Dreyfus Capital Value Fund, Inc.
ERNST & YOUNG
New York, New York
January 25, 1994
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 9/30/92 through 9/30/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 9/30/93 of a $1,000
hypothetical investment made on 9/30/92
1.00
1000( 1 + T ) = 929.59
T = -7.04%
============
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 9/30/88 through 9/30/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 9/30/93 of a $1,000
hypothetical investment made on 9/30/88
5.00
1000( 1 + T ) = 1,233.45
T = 4.29%
============
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from effectiveness of the
Fund's current investment objective, fundamental investment
policies and investment restrictions through 9/30/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 9/30/93 of a $1,000
hypothetical investment made on 4/28/87 (effectiveness
of the Fund's current investment objective, fundamental
investment policies and investment restrictions)
6.427
1000( 1 + T ) = 1,476.45
T = 6.25%
==========
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from commencement of
operations through 9/30/93 based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 9/30/93 of a $1,000
hypothetical investment made on 10/10/85 (commencement
of operations)
7.975
1000( 1 + T ) = 2,342.56
T = 11.26%
==========
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from effectiveness of the Fund's current
investment objective, fundamental investment policies
and investment restrictions through 9/30/93
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 11.42 + ( 11.42 x 0.49973 ) ] - 11.075 *
---------------------------------------------
11.075 *
T = 54.64%
========
*Adjusted to reflect the distribution to shareholders
of one additional share for each share held of record on
February 16, 1990
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from effectiveness of the Fund's current
investment objective, fundamental investment policies
and investment restrictions through 9/30/93
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = Maximum Offering Price at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 11.42 + ( 11.42 x 0.49973 ) ] - 11.60 *
---------------------------------------------
11.60 *
T = 47.65%
========
*Adjusted to reflect the distribution to shareholders
of one additional share for each share held of record on
February 16, 1990
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from commencement of operations through
9/30/93 based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 11.42 + ( 11.42 x 0.55693 ) ] - 7.25 *
--------------------------------------------
7.25 *
T = 145.24%
========
*Adjusted to reflect the distribution to shareholders
of one additional share for each share held of record on
February 16, 1990
DREYFUS CAPITAL VALUE FUND, INC. - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from commencement of operations through
9/30/93 based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = Maximum Offering Price at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 11.42 + ( 11.42 x 0.55693 ) ] - 7.59 *
--------------------------------------------
7.59 *
T = 134.26%
========
*Adjusted to reflect the distribution to shareholders
of one additional share for each share held of record on
February 16, 1990
DREYFUS CAPITAL VALUE FUND, INC. - CLASS B
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 9/30/93
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 9/30/93 of a $1,000
hypothetical investment made on 1/15/93 (inception)
0.710
1000( 1 + T ) = 1,029.94
T = 4.24%
==========
DREYFUS CAPITAL VALUE FUND, INC. - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 9/30/93
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 11.32 + ( 11.32 x 0.0000 ) ] - 10.58
--------------------------------------------
10.58
T = 6.99%
========
DREYFUS CAPITAL VALUE FUND, INC. - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 9/30/93
based upon the following formula:
[ C + ( C x B ) ] - A D x ( E x F )
--------------------- --- -------------
T = A G
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
D = Applicable CDSC
E = Lower of A or C
F = Original shares
G = Original investment
T = Total return
T = [ 11.32 + (11.32 x 0.0000 ) ] - 10.58 -- 0.04 x ( 10.58 x 94.518 )
----------------------------------------- ------------------------
10.58 1000
T = 2.99%
======
