File No. 2-88816
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. 13 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 13 [X]
(Check appropriate box or boxes.)
DREYFUS NEW LEADERS 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)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a) (i)
----
on May 1, 1995 pursuant to paragraph (a) (i)
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75 days after filing pursuant to paragraph (a) (ii)
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on (date) pursuant to paragraph (a) (ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
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 December 31, 1994 will be filed on February
28, 1995.
DREYFUS NEW LEADERS FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 5
5 Management of the Fund 10
5 (a) Management's Discussion of Fund's
Performance *
6 Capital Stock and Other Securities 21
7 Purchase of Securities Being Offered 11
8 Redemption or Repurchase 16
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
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10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-23
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-11
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS NEW LEADERS 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-9
18 Capital Stock and Other Securities B-20
19 Purchase, Redemption and Pricing B-12, B-14,
of Securities Being Offered B-19
20 Tax Status *
21 Underwriters B-11
22 Calculations of Performance Data B-22
23 Financial Statements B-24
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-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS MAY 1, 1995
DREYFUS NEW LEADERS FUND, INC.
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DREYFUS NEW LEADERS FUND, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. ITS GOAL
IS TO MAXIMIZE CAPITAL APPRECIATION. THE FUND INVESTS PRINCIPALLY IN THE
COMMON STOCKS OF DOMESTIC AND FOREIGN ISSUERS.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS TELETRA
NSFER.
IN SOME CASES, SHAREHOLDERS WILL BE CHARGED A 1% REDEMPTION FEE
WHICH WILL BE DEDUCTED FROM REDEMPTION PROCEEDS.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
THE FUND BEARS CERTAIN COSTS PURSUANT TO A PLAN ADOPTED IN
ACCORDANCE WITH RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
PAGE
FEE TABLE ........................................ 3
CONDENSED FINANCIAL INFORMATION .................. 4
DESCRIPTION OF THE FUND .......................... 5
MANAGEMENT OF THE FUND ........................... 10
HOW TO BUY FUND SHARES ........................... 11
SHAREHOLDER SERVICES ............................. 13
HOW TO REDEEM FUND SHARES ........................ 16
SERVICE PLAN ..................................... 19
DIVIDENDS, DISTRIBUTIONS AND TAXES ............... 19
PERFORMANCE INFORMATION .......................... 21
GENERAL INFORMATION .............................. 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
FEE TABLE
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee (as a percentage of amount redeemed)..................................... 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees ........................................................................ .75%
12b-1 Fees (distribution and servicing)................................................. .26%
Other Expenses.......................................................................... .20%
Total Fund Operating Expenses........................................................... 1.21%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Example 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $12 $38 $66 $147
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in
understanding the various costs and expenses that investors will bear
directly or indirectly, the payment of which will reduce investors' return on
an annual basis. The redemption fee is charged upon any redemption or
exchange of Fund shares occurring within a six-month period following the
issuance of such shares. Long-term investors could pay more in 12b-1 fees
than the economic equivalent of paying a front-end sales charge. The
information in the foregoing table does not reflect any fee waivers or
expense reimbursement arrangements that may be in effect or the proceeds from
any redemption fee retained by the Fund. Certain Service Agents (as defined
below) may charge their clients direct fees for effecting transactions in
Fund shares; such fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Fund Shares," "Service Plan" and "How
to Redeem Fund Shares."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available on
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDEDDECEMBER 31,
-------------------------------------------------------------------------------------------
1985(1) 1986 1987 1988 1989 1990 1991 1992 1993 1994
----- ----- ----- ----- ----- ----- ------ ------ ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year... $13.50 $18.11 $20.36 $19.16 $23.41 $29.27 $24.25 $32.29 $32.17 $34.13
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net(2)... .03 .08 .07 .22 .35 .45 .23 .14 .07 .10
Net realized and unrealized gain
(loss) on investments(2)... 4.58 2.19 (1.10) 4.25 6.98 (3.92) 10.78 2.81 5.30 (.21)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT OPERATIONS.... 4.61 2.27 (1.03) 4.47 7.33 (3.47) 11.01 2.95 5.37 (.11)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net........... -- (.01) (.17) (.22) (.34) (.48) (.23) (.14) (.07) (.08)
Dividends in excess of
investment income-net... -- -- -- -- -- -- -- -- -- --
Dividends from net realized
gain on investments.... -- (.01) -- -- (1.01) (1.07) (2.74) (2.93) (3.34) (2.61)
Dividends from paid-in
capital......... -- -- -- -- (.12) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.. -- (.02) (.17) (.22) (1.47) (1.55) (2.97) (3.07) (3.41) (2.69)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of year........ $18.11 $20.36 $19.16 $23.41 $29.27 $24.25 $32.29 $32.17 $34.13 $31.33
======= ====== ====== ======= ====== ====== ====== ======= ====== =======
TOTALINVESTMENTRETURN.. 34.15%(3) 12.51% (5.12%) 23.35% 31.29% (11.85%) 45.39% 9.43% 17.07% (.15%)
RATIOS / SUPPLEMENTALDATA:
Ratio of expenses to
average net assets... 1.46%(3) 1.30% 1.41% 1.50%(4) 1.37% 1.42% 1.29% 1.21% 1.22% 1.16%
Ratio of net investment income
to average net assets..... 1.55%(3) .66% .35% .90% 1.60% 1.31% .76% .43% .19% .30%
Decrease in above expense ratios due to
undertaking by The Dreyfus Corporation
and redemption fee... -- -- -- -- -- -- .06% .04% .04% .05%
Portfolio Turnover Rate... 80.85%(3) 195.42% 176.85% 120.02% 114.31% 129.11% 107.64% 119.45% 127.97% 94.21%
Net Assets, end of year
(000's Omitted)...... $5,066 $65,038 $79,763 $112,361 $195,971 $102,281 $194,007 $233,619 $338,967 $391,625
</TABLE>
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(1) From January 29, 1985 (commencement of operations) to December 31, 1985.
(2) Per share data for 1985, 1986 and 1987 has been restated for comparative
purposes.
(3) Not annualized.
(4) Net of expenses reimbursed.
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
Page 4
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE _ The Fund's goal is to maximize capital appreciation.
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 out companies that The Dreyfus
Corporation believes have the potential for significant growth. The Fund is
particularly alert to companies which The Dreyfus Corporation considers to be
new leaders_that is, emerging smaller-sized companies (typically with market
capitalizations of less than $750,000,000), both domestic and foreign, which
the Fund's management believes to be characterized by new or innovative
products, services or processes which should enhance prospects for growth in
future earnings. The Fund also will make investments based on prospective
economic or political changes. Further, the Fund will invest in special
situations such as corporate restructurings thereby seeking out under-valued
securities. During periods The Dreyfus Corporation judges to be of market
strength, the Fund acts aggressively to increase shareholders' capital by
investing principally in common stocks (some of which may be dividend paying)
of domestic and foreign issuers. In periods of market weakness, the Fund may
adopt a temporary defensive posture to preserve shareholders' capital by
investing the Fund's assets in money market instruments such as U.S.
Government securities, certificates of deposit (including those of London
branches and Canadian subsidiaries of domestic banks), time deposits,
bankers' acceptances and other short-term debt instruments, or investment
grade corporate bonds, and by entering into repurchase agreements. When the
Fund has adopted a temporary defensive posture, the entire portfolio can be
so invested.
The Fund may invest up to 25% of the value of its assets in the
securities of foreign companies which are not publicly traded in the United
States and the debt securities of foreign governments. By investing in
foreign securities, including foreign government securities sold at a
discount, the Fund seeks to further its objective of capital growth.
INVESTMENT TECHNIQUES
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. 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.
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.
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.
Page 5
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 Fund at no time will have
more than 15% of the value of its net assets in deposits on short sales
against the box. It currently is anticipated that the Fund will make short
sales against the box for purposes of protecting the value of the Fund's net
assets.
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). The Fund may write covered call 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 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 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,
exposes the Fund during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
security or to possible continued holding of a security which might otherwise
have been sold to protect against depreciation in its market price. 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.
To close out a position when writing covered options, the Fund may
make a "closing purchase transaction" by purchasing an option on the same
security with the same exercise price and expiration date as the option 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 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 call and put options and write
covered call options on stock indices listed on national securities exchanges
or traded in the over-the-counter market. A stock index fluctuates with
changes in the market values of the stocks included in the index.
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 indices, 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 indices will be subject to The Dreyfus
Corporation's 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.
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
Page 6
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.
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 10% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, U.S. Government securities or irrevocable letters of credit 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.
BORROWING MONEY _ The Fund may borrow to the extent permitted under the
Investment Company Act of 1940. However, the Fund currently intends to borrow
money from banks, but only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of its total assets (including
the amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Fund's total assets, the Fund will
not make any additional investments.
CERTAIN PORTFOLIO SECURITIES
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.
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. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those issued
by the Federal National Mortgage Association, by discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student Loan
Marketing Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of interest.
Principal and interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so since
it is not so obligated by law. The Fund will invest in such securities only
when it is satisfied that the credit risk with respect to the issuer is
minimal.
Page 7
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. 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.
BANK OBLIGATIONS _ The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and of the drawer to pay
the face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed, floating
or variable interest rates.
CERTAIN FUNDAMENTAL POLICIES _ The Fund may (i) borrow money to the extent
permitted under the Investment Company Act of 1940, which currently limits
borrowings to no more than 331/3% of the value of the Fund's total assets;
(ii) 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 (iii) invest up to 25% of its total assets in the securities
of issuers in any industry, provided that, when the Fund has adopted a
temporary defensive posture, there shall be no such limitation on investments
in obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, bankers' acceptances of domestic issuers, time deposits
and certificates of deposit. The policies described in this paragraph are
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.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES _ The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 15% of 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
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
Page 8
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 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. Dividends paid by the Fund to corporate
investors do not qualify for the dividends received deduction to the extent
that the dividends are attributed to amounts received by the Fund as
dividends on foreign securities.
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 United States or abroad.
The foreign currency market offers less protection against defaults
in the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract would
deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
OTHER INVESTMENT CONSIDERATIONS _ The securities of the smaller companies in
which the Fund invests may be subject to more abrupt or erratic market
movements than larger, more-established companies, both because the
securities typically are traded in lower volume and because the issuers
typically are subject to a greater degree to changes in earnings and
prospects. As a result, the Fund may be subject to greater investment risks
than those assumed by some other investment companies.
The Fund's investment policies may result in a high portfolio
turnover rate which usually generates additional brokerage commissions and
transaction costs for the Fund. In addition, short-term gains realized from
portfolio transactions are taxable to shareholders as ordinary income. See
"Portfolio Transactions" in the Statement of Additional Information.
The Fund's ability to engage in certain short-term transactions may
be limited by the requirement that, to qualify as a regulated investment
company, it must earn less than 30% of its gross income from the dispo-
Page 9
sition of securities held for less than three months. This 30% test limits the
extent to which the Fund may sell securities held for less than three months,
effect short sales of securities held for less than three months, and write
options expiring in less than three months, among other strategies. However,
portfolio turnover will not otherwise be a limiting factor in making
investment decisions.
Investment decisions for the Fund are made independently from those
of the other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, securities of the type in which the Fund invests at the
same time as the Fund, available investments or opportunities for sales will
be allocated equitably to each investment company. In some cases, this
procedure may adversely affect the size of the position obtained for or
disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary ofMellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of March 31, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for more than 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's portfolio manager is Thomas A.
Frank. He has held that position and has been employed by The Dreyfus
Corporation since 1985. The Fund's other portfolio managers are identified
under "Management of the Fund" in the Fund's Statement of Additional
Information. The Dreyfus Corporation also provides research services for the
Fund as well as for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $76
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
$74 billion in mutual fund assets.
For the fiscal year ended December 31, 1994, the Fund paid The
Dreyfus Corporation a monthly management fee at the annual rate of .75 of 1%
of the value of the Fund's average daily net assets. This fee is higher than
that paid by most other investment companies. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts which may be waived, nor
will the Fund reimburse The Dreyfus Corporation for any amounts which may be
assumed.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund.
Page 10
The Fund's distributor may use part or all of such payments to pay Service
Agents (as defined below) in respect of these services.
The Fund bears certain costs of distributing Fund shares in
accordance with a plan (the "Service Plan") adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940. See "Fee Table" and "Service Plan."
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares can be purchased through the Distributor or certain
financial institutions (which may include banks), securities dealers and
other industry professionals (collectively, "Service Agents") that have
entered into service agreements with the Distributor. Stock certificates are
issued only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing, the minimum initial investment is $1,000. For full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. The Fund reserves
the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and nonqualified
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Fund.
In addition, Fund shares are offered without regard to the minimum initial
investment requirements through the Dreyfus Step Program described under
"Shareholder Services." The Fund reserves the right to vary further the
initial and subsequent 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. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to The
Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For
Dreyfus retirement plan accounts, both initial and subsequent investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
Page 11
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900051876/Dreyfus New
Leaders Fund, Inc., for purchase of Fund shares in your name. The wire must
include your Fund account number (for new accounts your Taxpayer
Identification Number ("TIN") should be included instead), account registratio
n 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 purcha
se instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for Servicing (as defined under "Service
Plan"). These fees would be in addition to any amounts which might be
received under the Service 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.
If an order is received by the Transfer Agent or other agent by the
close of trading on the floor of the New York Stock Exchange (currently 4:00
p.m., New York time) on a business day, Fund shares will be purchased at the
net asset value per share determined as of such close of trading on that day.
Otherwise, Fund shares will be purchased at the net asset value per share
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
dealers as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on a business
day and transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the net
asset value 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 net asset value. It is the dealers' responsibility to
transmit orders so that they will be received by the Distributor or its
designee before the close of its business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of
Page 12
shares of funds in the Dreyfus Family of Funds by such employee benefit plans
or programs will be aggregated to determine the fee payable with respect to
each such purchase of Fund shares. The Distributor reserves the right to cease
paying these fees at any time. The Distributor will pay such fees from its own
funds, other than amounts received from the Fund, including past profits or
any other source available to it.
Fund shares are sold on a continuous basis. Net asset value per
share is determined as of the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), on each day the New York
Stock Exchange is open for business. Net asset value per share is computed by
dividing the value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The Fund's
investments are valued based on market value, or where market quotations are
not readily available, based on fair value as determined in good faith by the
Board of Directors. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by 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.
FUND EXCHANGES _ You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, you should consult your
Service Agent or call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
Personal Retirement Plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically refuse this
Privilege.
Page 13
The Telephone Exchange Privilege may be established for an existing account by
written request, signed by all shareholders on the account, or by a separate
signed Shareholder Services Form also available by calling 1-800-645-6561. If
you have established the Telephone Exchange Privilege, you may telephone
exchange instructions by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares_Procedures."
Upon an exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Telephone Redemption Privilege, Wire Redemption Privilege, Dreyfus
TELETRANSFER Privilege and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
A 1% redemption fee will be charged upon an exchange of Fund shares
where the exchange occurs within a six-month period following the issuance of
such shares. See "How to Redeem Fund Shares." Otherwise, shares will be
exchanged at the next determined net asset value; however, a sales load may
be charged with respect to exchanges into funds sold with a sales load. If
you are exchanging into a fund that charges a sales load, you may qualify for
share prices which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous exchange from shares
purchased with a sales load, or (c) acquired through reinvestment of
dividends or distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of an exchange you must notify the Transfer
Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in
part. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of certain other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged automatically on the
first and/or fifteenth of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder, and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER Registration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected
Page 14
by you. Fund shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will be
debited in the specified amount, and Fund shares will be purchased, once a
month, on either the first or fifteenth day, or twice a month, on both days.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-Automatic Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form by
calling 1-800-645-6561. You may cancel your participation in this Privilege or
change the amount of purchase at any time by mailing written notification to
The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671, or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427, and
the notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account.You may deposit as
much of such payments as you elect.To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by notify
ing in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN _ The Dreyfus Payroll Savings Plan permits you
to purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your Employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value, however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced sales
load. If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject to the contingent deferred sales
charge, if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer
Page 15
electronically on the payment date dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for this
service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for these privileges.
DREYFUS STEP PROGRAM _ Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-Automatic Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Fund's
Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-Automatic Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund
reserves the right to redeem your account if you have terminated your
participation in the Program and your account's net asset value is $500 or
less. See "How to Redeem Fund Shares." The Fund may modify or terminate this
Program at any time. Investors who wish to purchase Fund shares through the
Dreyfus Step Program in conjunction with a Dreyfus-sponsored retirement plan
may do so only for IRAs, SEP-IRAs and IRA "Rollover Accounts." You should
consider your financial condition and the possibility of having to redeem
your Fund shares in times of rising prices or declining Fund share prices.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. No redemption fee will be charged upon the redemption of Fund shares
through the Plan. See "How to Redeem Fund Shares." The Automatic Withdrawal
Plan may be ended at any time by you, the Fund or the Transfer Agent. Shares
for which certificates have been issued may not be redeemed through the Plan.
RETIREMENT PLANS _ The Fund offers a variety of pension and profit sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
following numbers toll free: For Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; and for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL _ You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value as described below.
You will be charged a 1% redemption fee upon the redemption of Fund
shares (including redemptions through use of the Exchange Privilege) where
the redemption or exchange occurs within a six-
Page 16
month period following the issuance of such shares. For purposes of computing
the six-month period, any issuance of Fund shares during a month will be
deemed to occur on the first day of such month. The redemption fee will be
deducted from redemption proceeds and retained by the Fund. No redemption fee
will be charged upon the redemption of shares through the Fund's Automatic
Withdrawal Plan, or Dreyfus Auto-Exchange Privilege or through omnibus
accounts for various retirement plans. Furthermore, no redemption fee will be
charged upon the redemption of Fund shares acquired through reinvestment of
dividends or distributions, nor will the redemption fee be used to pay fees
imposed for various Fund services or shares. This redemption fee may be
waived, modified or discontinued at any time or from time to time. In
addition, 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
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE
OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY
IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST.
PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS
OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES _ You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Wire Redemption Privilege, the
Telephone Redemption Privilege, or the Dreyfus TELETRANSFER Privilege. Other
redemption procedures may be in effect for clients of certain Service Agents.
The Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select the telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your Service Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
Page 17
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of not more than $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the right
to refuse any redemption request, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. This Privilege may be modified or terminated at any time by the
Transfer Agent or the Fund. The Fund's Statement of Additional Information
sets forth instructions for transmitting redemption requests by wire. Shares
held under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or the Fund.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares for
which certificates have been issued, are not eligible for this Privilege.
Page 18
DREYFUS TELETRANSFER PRIVILEGE _ You may redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in one
of these documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
issued in certificate form, are not eligible for this Privilege.
SERVICE PLAN
Under the Service Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts ("Servicing") and (b) pays The Dreyfus
Corporation, Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation, and any affiliate of either of them (collectively,
"Dreyfus") for advertising and marketing relating to the Fund and for
Servicing, at an aggregate annual rate of .25 of 1% of the value of the Fund's
average daily net assets. Each of the Distributor and Dreyfus may pay one or
more Service Agents a fee in respect of the Fund's shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. Each of the
Distributor and Dreyfus determine the amounts, if any, to be paid to Service
Agents under the Service Plan and the basis on which such payments are made.
The fees payable under the Service Plan are payable without regard to actual
expenses incurred.
The Fund also bears the costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders. Under the Service Plan, the Fund bears
(a) the costs of preparing, printing and distributing prospectuses and
statements of additional information used for other purposes and (b) the
costs associated with implementing and operating the Service Plan, the
aggregate of such amounts not to exceed in any fiscal year of the Fund the
greater of $100,000 or .005 of 1% of the value of the Fund's average daily
net assets for such fiscal year.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares and 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 Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
Investment Company Act of 1940. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive dividends and
distri-
Page 19
butions in cash or to reinvest in additional Fund shares at net asset
value. All expenses are accrued daily and deducted before declaration of
dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional Fund
shares. Depending on the composition of the Fund's income, a portion of the
dividends from net investment income may qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of the Fund will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
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 and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes 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 income dividends and
distributions from securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder 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 wi
thholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended December 31, 1994 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes 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 and local taxes.
Page 20
PERFORMANCE INFORMATION
For purposes of advertising, performance will be calculated on the
basis of average annual total return. Advertisements also may include
performance calculated on the basis of total return.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods, 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 net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Standard & Poor's 500 Composite Stock Price Index,
the Russell 2000 Index, the Dow Jones Industrial Average, the NASDAQ Index of
Over-The-Counter Stocks, Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on December 9, 1983,
and commenced operations on January 29, 1985. The Fund is authorized to issue
100 million shares of Common Stock, par value $.01 per share. Each share has
one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for 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.
Page 21
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S.
and outside of Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 22
(This Page Intentionally Left Blank)
Page 23
DREYFUS
New
Leaders
Fund, Inc.
Prospectus
Registration Mark
Copy Rights 1995 Dreyfus Service Corporation
085p12050195
__________________________________________________________________________
DREYFUS NEW LEADERS FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus New Leaders Fund, Inc. (the "Fund"), dated May 1, 1995, as it
may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and outside of Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services. Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . .B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . .B-7
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . .B-11
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . .B-12
Service Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-13
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . .B-14
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . .B-16
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . .B-19
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . .B-20
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . .B-21
Performance Information. . . . . . . . . . . . . . . . . . . . . . . .B-22
Information About the Fund . . . . . . . . . . . . . . . . . . . . . .B-23
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . . .B-23
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .B-24
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . .B-35
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."
Repurchase Agreements. 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 Manager will monitor on an ongoing basis the
value of the collateral to assure that it always equals or exceeds the
repurchase price. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Short-Selling. The Fund may engage in short-selling. Until the Fund
replaces a borrowed security in connection with a short sale, the Fund
will: (a) maintain daily a segregated account, containing cash or U.S.
Government securities, at such a level that (i) the amount deposited in
the account plus the amount deposited with the broker as collateral will
equal the current value of the security sold short and (ii) the amount
deposited in the segregated account plus the amount deposited with the
broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position.
Writing Options. To earn additional income on its portfolio, the
Fund, to a limited extent, may write covered call options on securities
owned by the Fund ("covered options" or "options") and purchase call
options in order to close option transactions, as described below.
A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the exercise
price at any time during the option period, regardless of the market price
of the security. The premium paid to the writer is the consideration for
undertaking the obligations under the option contract. When a covered
call option is written by the Fund, the Fund will make arrangements with
its custodian to segregate the underlying securities until the option is
exercised, expires or the Fund closes out the option as described below.
A covered call option sold by the Fund exposes the Fund during the term of
the option to possible loss of opportunity to realize appreciation in the
market price of the underlying security or to possible continued holding
of a security which might otherwise have been sold to protect against
depreciation in the market price of the security. To limit this exposure,
the value of the portfolio securities underlying covered call options
written by the Fund will be limited to an amount not in excess of 20% of
the value of the Fund's net assets at the time such options are written.
To close out a position, the Fund may make a "closing purchase
transaction," which involves purchasing a call option on the same security
with the same exercise price and expiration date as the option which it
has previously written on a particular security. The Fund will realize a
profit (or loss) from a closing purchase transaction if the amount paid to
purchase a call option is less (or more) than the amount received from the
sale thereof.
Purchasing Put and Call Options. The Fund may invest up to 5% of its
total assets, represented by the premium paid, in the purchase of put and
call options. The Fund may purchase put and call options for the purpose
of increasing its current return or avoiding adverse tax consequences that
could reduce its current return. The Fund also may purchase call options
to acquire the underlying security. The Fund may enter into closing sale
transactions with respect to such options or may permit them to expire.
The Fund will not purchase options for leveraging purposes.
The Fund will purchase put and call 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. These authorities
may impose further limitations on the Fund's ability to purchase options.
Stock Index Options. The Fund may purchase put and call options and
write covered call options on stock indices listed on national securities
exchanges or traded in the over-the-counter market. A stock index
fluctuates with changes in the market values of the stocks included in the
index.
Options on stock indices 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.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's decision to sell any such security and
the registration of the security permitting sale. During any such period,
the price of the securities will be subject to market fluctuations.
However, if a substantial market of qualified institutional buyers
develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain 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. Because it is not possible to
predict with assurance how the market for restricted securities pursuant
to Rule 144A will develop, the Fund's Board has directed the Manager to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. Such loans may not exceed 10% of the value of the
Fund's total assets. From time to time, the Fund may return to the
borrower or a third party which is unaffiliated with the Fund, and which
is acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Directors must
terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. These
conditions are subject to modification.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 15 as
fundamental policies. These restrictions cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940 (the "Act")) of the Fund's outstanding voting shares.
Investment restrictions numbered 16 and 17 are not fundamental policies
and may be changed by a vote of 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 or of the Manager 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. Purchase, hold or deal in commodities or commodity contracts or
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
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets).
8. Lend any funds or other assets except through the purchase of a
portion of an issue of publicly distributed bonds, debentures or other
debt securities, or the purchase of bankers' acceptances and commercial
paper of corporations. However, the Fund may lend its portfolio
securities in any amount not to exceed 10% 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.
9. Act as an underwriter of securities of other issuers.
10. 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.
11. 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.
12. Engage in the purchase and sale of put, call, straddle or spread
options or in writing such options, except that the Fund (a) may purchase
put and call options to the extent that the premiums paid by it on all
outstanding options at any one time do not exceed 5% of its total assets
and may enter into closing sale transactions with respect to such options
and (b) may write and sell covered call option contracts on securities
owned by the Fund not exceeding 20% of the value of its net assets at the
time such option contracts are written. The Fund also may purchase call
options without regard to the 5% limitation set forth above to enter into
closing purchase transactions. In connection with the writing of covered
call options, the Fund may pledge assets to an extent not greater than 20%
of the value of its total assets at the time such options are written.
13. Invest more than 25% of its assets in investments in any
particular industry or industries, provided that, when the Fund has
adopted a temporary defensive posture, there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, bankers' acceptances of domestic issuers,
time deposits and certificates of deposit.
14. 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.
15. Invest in interests in oil, gas or mineral exploration or
development programs.
16. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the purchase of securities on a when-issued or forward
commitment basis and the deposit of assets in escrow in connection with
writing covered put and call options and collateral and initial or
variation margin arrangements with respect to options and forward
contracts including those relating to indices, and options on indices.
17. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid if, in the aggregate, more than 15% of the value of the Fund's
net assets would be so invested.
While not a fundamental policy, the Fund will not invest in oil, gas,
and other mineral leases, or real estate limited partnerships.
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
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
*DAVID W. BURKE, Director. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Vice President and Chief
Administrative Officer of the Manager. From 1977 to 1990, Mr. Burke
was involved in the management of national television news, as Vice-
President and Executive Vice President of ABC News, and subsequently
as President of CBS News. Mr. Burke is also a Board member of 52
other funds in the Dreyfus Family of Funds. He is 58 years old and
his address is 200 Park Avenue, New York, New York 10166.
HODDING CARTER, III, Director. President of Main Street, a television
production company. Since 1991, a syndicated columnist for United
Media - 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 1, 1980, Mr. Carter served as Assistant Secretary of
State for Public Affairs and as Department of State spokesman. Mr.
Carter is also a Board member of seven other funds in the Dreyfus
Family of Funds. He is 59 years old and his address is Main Street,
918 Sixteenth Street, N.W., Washington, D.C. 20006.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Mr.
DiMartino has served as Chairman of the Board of various funds in the
Dreyfus Family of Funds. For more than five years prior thereto, he
was President, a director and, until August 1994, Chief Operating
Officer of the Manager and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager
and until August 1994, the Fund's distributor. From August 1994 to
December 31, 1994, he was a director of Mellon Bank Corporation. Mr.
DiMartino is a director and former Treasurer of the Muscular
Dystrophy Association; a trustee of Bucknell University; and Chairman
of the Board of Directors of Noel Group, Inc.; a director of
HealthPlan Corporation; a director of Belding Hemingway Company,
Inc.; and a director of Curtis Indistries, Inc. Mr. DiMartino is
also a Board member of 93 other funds in the Dreyfus Family of Funds.
He is 51 years old and his address is 200 Park Avenue, New York, New
York 10166.
EMUD HOUMINER, Director. Since July 1991, Professor and Executive-in-
Residence at the Columbia Business School, Columbia University and,
since February 1992, a Consultant to Bear, Stearns & Co. Inc.,
investment bankers. He was President and Chief Executive Officer of
Philip Morris USA, manufacturers of consumer products, from December
1988 until September 1990. He also is a Director of Avnet Inc. Mr.
Houminer is also a Board member of 11 other funds in the Dreyfus
Family of Funds. He is 54 years old and his address is c/o Columbia
Business School, Columbia University, Uris Hall, Room 526, New York,
New York 10027.
RICHARD C. LEONE, Director. President of The Twentieth Century Fund,
Inc., a tax exempt research foundation engaged in economic, political
and social policy studies. From April 1990 to March 1994, Chairman,
and from April 1988 to March 1994, 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. Mr. Leone is also a director of Resource Mortgage Capital,
Inc. Mr. Leone is also a Board member of seven other funds in the
Dreyfus Family of Funds. He is 54 years old and 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. Mr.
Mautner is also a Board member of seven other funds in the Dreyfus
Family of Funds. He is 57 years old and his address is 305 East 47th
Street, New York, New York 10017.
ROBIN A. SMITH, Director. Since 1993, Vice President, and from March 1992
to October 1993, Executive Directors, of One to One Partnership,
Inc., a national non-profit organization that seeks to promote
mentoring and economic empowerment for at-risk youths. From June
1986 to February 1992, she was an investment banker with Goldman,
Sachs & Co. She is also a Trustee of Westover School and a Board
member of the Jacobs A. Riis Settlement House and the High/Slop
Education Research Foundation. Miss Smith is also a Board member of
seven other Funds in the Dreyfus Family of Funds. She is 31 years
old and her address is 280 Park Avenue, New York, New York 10010.
JOHN E. ZUCCOTTI, Director. President and Chief Executive Officer of
Olympia & York Companies (U.S.A.), and a member of its Board of
Directors since the inception of a Board on July 27, 1993. 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 Empire Blue
Cross & Blue Shield, Catellus Development Corporation, a real estate
development corporation, and Starrett Housing Corporation, a
construction development and real estate management corporation. Mr
Zuccotti is also a Board member of seven other Funds in the Dreyfus
Family of Funds. He is 57 years old and his address is 237 Park
Avenue, New York, New York 10017.
For so long as the Fund's plan described in the section captioned
"Service Plan" remains in effect, the Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be selected
and nominated by the Directors who are not "interested persons" of the
Fund.
The Fund typically pays its Directors an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. For the fiscal
year ended December 31, 1994, the aggregate amount of compensation paid to
each Director by the Fund and all other funds in The Dreyfus Family of
Funds for which such person is a Board member were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund(1) Fund's Expenses Retirement Board Member
------------- ------------------ -------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
David W. Burke $ 884 none none $27,898
Hodding Carter, III $4,250 none none $33,625
Joseph S. DiMartino (2) - none none -
Ehud Houminer $1,521 none none $25,701
Richard C. Leone $4,250 none none $33,125
Hans C. Mautner $3,750 none none $33,625
Robin A. Smith (2) - none none -
John E. Zuccotti $4,250 none none $33,625
</TABLE>
_______________________
1 Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $410 for all Directors as a group.
2 Estimated amounts for the current fiscal year ending December
31, 1995.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., a wholly-owned subsidiary of The Boston Company,
Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. From August 1990 to February 1992, he was
employed as an Associate at Ropes & Gray, and prior to August 1990,
he was employed as an Associate at Sidley & Austin. He is 30 years
old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was Manager of the High Performance Fabric Division
of Springs Industries Inc. He is 33 years old.
JOSEPH S. TOWER,III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in
the Corporate Finance and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor
and an officer of other investment companies advised or administered
by the Manager. From 1984 to July 1994, he was Assistant Vice
President in the Mutual Fund Accounting Department of the Manager.
He is 59 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was
a Senior Legal Product Manager and, from January 1990 to January
1992, he was mutual fund accountant, for The Boston Company Advisors,
Inc. He is 28 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Manager's Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
She is 50 years old.
The address of all officers of the Fund is 200 Park Avenue, New York,
New York 10166.
The following persons are known by the Fund to own of record or
beneficially 5% or more of the Fund's outstanding voting securities as of
February 7, 1995: Charles Schwab & Co Inc. was the beneficial owner of
8.90% of the Fund's outstanding shares. A shareholder who beneficially
owns, directly or indirectly, more than 25% of the Fund's voting
securities may be deemed a "control person" (as defined in the Act) of the
Fund.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of common stock outstanding on February 7, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board 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 its continuance also
is approved by a majority of the Directors who are not "interested
persons" (as defined in the Act) of the Fund or the Manager, by vote cast
in person at a meeting called for the purpose of voting on such approval.
The Agreement was approved by shareholders on August 4, 1994, and was last
approved by the Fund's Board of Directors, including a majority of the
Directors who are not "interested persons" of any party to the Agreement,
at a meeting held on October 24, 1994. The 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, on not less than 90 days' notice, by the
Manager. The Agreement will terminate automatically in the event of its
assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Lawrence S. Kash, Vice Chairman--
Distribution; Paul H. Snyder, Vice President and Chief Financial Officer;
Daniel C. Maclean, Vice President and General Counsel; Elie M. Genadry,
Vice President--Wholesale; Henry D. Gottmann, Vice President--Retail;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Diane Coffey,
Vice President--Corporate Communications; Barbara E. Casey, Vice
President--Retirement Services; Katherine C. Wickham, Vice President--
Human Resources; Mark N. Jacobs, Secretary and Vice President--Fund Legal
and Compliance; Maurice Bendrihem, Controller; and Mandell L. Berman,
Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M.
Smerling and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Directors. The Manager is responsible for investment
decisions, and provides the Fund with portfolio managers who are
authorized by the Board of Directors to execute purchases and sales of
securities. The Fund's portfolio managers are Thomas A. Frank, Elaine
Rees and Howard Stein. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts
who provide research services for the Fund as well as for other funds
advised by the Manager. All purchases and sales are reported for the
Board's review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, 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 shareholder reports and
corporate meetings and any extraordinary expenses. Pursuant to the Fund's
Service Plan, the Fund bears expenses for advertising, marketing and
distributing the Fund's shares and Servicing shareholder accounts, and
also bears the cost of preparing and printing prospectuses and statements
of additional information and costs associated with implementing and
operating such plan. See "Service Plan."
As compensation for the Manager's services, the Fund pays the Manager
a monthly management fee at the annual rate of .75 of 1% of the value of
the Fund's average daily net assets. For the fiscal years ended December
31, 1992, 1993 and 1994, the management fees payable to the Manager
amounted to $1,545,132, $2,115,726 and $2,798,513, respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% the average value of the Fund's net assets for
the fiscal year, the Fund may deduct from the payment to be made to the
Manager under the Agreement, or the Manager will bear, such excess
expense. Such deduction or payment, if any, will be estimated daily,
reconciled and effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time,
on any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of Fund
Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year in which the account is closed or during the following
calendar year, provided the information on the old Account Application is
still applicable.
SERVICE PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
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 "Plan"), pursuant to which the Fund (a)
reimburses the Distributor for payments to certain financial institutions
(which may include banks), securities dealers and other financial industry
professionals (collectively, "Service Agents") for distributing the Fund's
shares and servicing shareholder accounts ("Servicing") and (b) pays the
Manager, Dreyfus Service Corporation and any affiliates of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the
Fund and for Servicing. The Fund's Board of Directors believes that there
is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. In some states, banks or other 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 Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board of Directors for its review. In addition, the Plan provides that it
may not be amended to increase materially the costs which the Fund may
bear for distribution pursuant to the Plan without shareholder approval
and that other material amendments of the Plan must be approved by the
Board of Directors, and by the Directors who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or indirect finan-
cial interest in the operation of the Plan or in the related service
agreements, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan and the related service agreements
are subject to annual approval by such vote of the Directors cast in
person at a meeting called for the purpose of voting on the Plan. The
Plan was last approved by the Board of Directors at a meeting held on
October 24, 1994. The 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 Plan or in
any of the related service agreements or by vote of a majority of the
Fund's shares. Any service agreement may be terminated without penalty,
at any time, by such vote of the Directors or, upon not more than 60 days'
written notice to the Service Agent, by vote of the holders of a majority
of the Fund's shares, or, upon 15 days' written notice, by the Distrib-
utor. Each service agreement will terminate automatically in the event of
its assignment (as defined in the Act).
Under the Plan, for the period ended August 24, 1994 through December
31, 1994, the total amount payable by the Fund was $368,767 of which
$326,042 was payable to Dreyfus Service Corporation for advertising and
marketing and for servicing shareholder accounts, $26,646 was reimbursed
to the Distributor for payments made to Service Agents and $16,079 was
payable by the Fund for preparing, printing and distributing prospectuses
and statements of additional information and for costs associated with
implementing and operating the Plan.
Prior Service Plan. As of August 24, 1994 the Fund terminated its
then existing Service Plan, which provided for payments to be made to
Dreyfus service Corporation, a wholly-owned subsidiary of the Manager and
the Fund's distributor prior to such date, for advertising, marketing and
distributing Fund shares at an annual rate of .25%. For the period
January 1, 1994 through August 23, 1994, the total amount charged to the
Fund under such Plan was $610,176 of which $580,149 was charged for
advertising, marketing and servicing the Fund's shares, $40,023 of this
amount was paid to Service Agents by the Dreyfus Service Corporation and
$30,027 was charged for preparing, printing and distributing prospectuses
and statements of additional information and operating the Plan, of which
$30,027 was reimbursed pursuant to an undertaking by the Manger in effect
during the period.
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."
Redemption Fee. A 1% redemption fee will be charged upon the
redemption of Fund shares (including redemptions through use of the
Exchange Privilege) where the redemption or exchange occurs within a six-
month period following the issuance of such shares. For purposes of
computing the six-month period, any issuance of Fund shares during a month
will be deemed to occur on the first day of such month. The redemption
fee will be deducted from redemption proceeds and retained by the Fund.
For the fiscal year ended December 31, 1994, the Fund received $158,124 in
redemption fees.
No redemption fee will be charged upon the redemption of shares
through the Fund's Automatic Withdrawal Plan or Dreyfus Auto-Exchange
Privilege or through omnibus accounts for various retirement plans.
Further, no redemption fee will be charged upon the redemption of Fund
shares acquired through reinvestment of dividends or distributions, nor
will a redemption fee be charged to pay fees imposed for various Fund
services. This redemption fee may be waived, modified or discontinued at
any time or from time to time.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent acting on
the investor's behalf, and reasonably believed by the Transfer Agent to be
genuine. Ordinarily, the Fund will initiate payment for shares redeemed
pursuant to the Privilege on the next business day after receipt by the
Transfer Agent of a redemption request in proper form. Redemption
proceeds will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds, if wired,
must be in the amount of $1,000 or more and will be wired to the
investor's account at the bank of record designated in the investor's file
at the Transfer Agent, if the investor's bank is a member of the Federal
Reserve System, or to a correspondent bank if the investor's bank is not a
member. Fees ordinarily are imposed by such bank and usually borne by the
investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to
the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have also selected the Dreyfus TeleTransfer Privilege, any request
for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the Automated Clearing House ("ACH") system unless
more prompt transmittal specifically is requested. Redemption proceeds
will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any stock certificates representing
Fund shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
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.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. A 1% redemption fee will be charged upon an exchange
of Fund shares where the exchange occurs within a six-month period
following the issuance of such shares. Shares of other funds purchased by
exchange, will be purchased on the basis of relative net asset value per
share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be
deducted.
To accomplish an exchange under item D above, shareholders must
notify the Transfer Agent of their prior ownership of fund shares and
their account number.
To request an exchange, an investor or the investor's Service Agent
acting on the investor's behalf must give exchange instructions to the
Transfer Agent in writing, or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "NO" box on the Account
Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor 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 the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRA's set up under a
Simplified Employee Pension Plan ("SEP-IRAs") with only one participant,
the minimum initial investment is $750. To exchange shares held in
Corporate Plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the minimum initial investment is $100 if the plan has at
least $2,500 invested among the funds in the Dreyfus Family of Funds. To
exchange shares held in Personal Retirement Plans, the shares exchanged
must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An Investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Dreyfus Auto-Exchange Privilege may be modified or terminated at any
time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. There is a service charge of $.50 for each
withdrawal check. Automatic Withdrawal may be terminated at any time by
the investor, the Fund or the Transfer Agent. Shares for which stock
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on their payment date the dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, including SEP-IRAs,
and IRA "Rollover Accounts," and 403(b)(7) Plans. Plan support services
are also available. Investors can obtain details, on the various plans by
calling toll free the following numbers: for Keogh Plans, please call 1-
800-358-5566; for IRAs and IRA "Rollover Accounts," please call 1-800-645-
6561; and for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans,
please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a
Keogh Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request
from the Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
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, including
covered call options written, are valued at the last sale price on the
securities exchange or national securities market on which such securities
primarily are 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. 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 the management fee and fees under
the Service Plan, are accrued daily and taken into account for the purpose
of determining the net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the fiscal year ended December 31, 1994 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 not be subject to 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) 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 distribution with respect to such shares, any loss
incurred on the sale of such shares will be treated as long-term capital
loss to the extent of the capital gain distribution received.
Depending on the composition of the Fund's income, all or a portion
of the dividends paid by the Fund from net investment income may qualify
for the dividends received deduction allowable to certain U.S. corporate
shareholders ("dividends received deduction"). In general, dividend
income of the Fund distributed to qualifying corporate shareholders will
be eligible for the dividends received deduction only to the extent that
(i) the Fund's income consists of dividends paid by U.S. corporations and
(ii) the Fund would have been entitled to the dividends received deduction
with respect to such dividend income if the Fund were not a regulated
investment company. The dividends received deduction for qualifying
corporate shareholders may be further reduced if the shares of the Fund
held by them with respect to which dividends are received are treated as
debt-financed or deemed to have been held for less than 46 days. In
addition, the Code provides other limitations with respect to the ability
of a qualifying corporate shareholder to claim the dividends received
deduction in connection with holding Fund shares.
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 forward currency exchange
contracts and options, 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 any gain realized from the sale or other disposition of
certain market discount bonds will be treated as ordinary income under
Section 1276. Finally, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income
under Section 1258. "Conversion transactions" are defined to include
certain forward, futures, 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 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 forward currency exchange contracts or options as well as
from closing transactions. In addition, any such forwards 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 forwards 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
may be 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" 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" and conversion
transactions positions may be recharacterized as long-term capital loss, and
long-term capital gain may be treated as short-term capital gain or ordinary
income.
PORTFOLIO TRANSACTIONS
The Manager supervises the placing 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 Manager and in a manner deemed fair and reasonable to shareholders.
The primary consideration is prompt execution of orders at the most favor-
able net price. Subject to this consideration, the brokers selected will
include those that supplement the Manager's research facilities with
statistical data, investment information, economic facts and opinions.
Information so received is in addition to and not in lieu of services
required to be performed by the Manager and the Manager's fee is not
reduced as a consequence of the receipt of such supplemental information.
Such information may be useful to the Manager in serving both the Fund and
other funds which it manages and, conversely, supplemental information
obtained by the placement of business of other clients may be useful to
the Manager in carrying out its obligations to the Fund. Brokers also
will be selected because of their ability to handle special executions
such as are involved in large block trades or broad distributions,
provided the primary consideration is met. Large block trades may, in
certain cases, result from two or more funds in the Dreyfus Family of
Funds being engaged simultaneously in the purchase or sale of the same
security. 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. When
transactions are executed in the over-the-counter market, the Fund will
deal with the primary market makers unless a more favorable price or
execution otherwise is obtainable.
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 may
exceed 100%. Higher turnover rates are likely to result in comparatively
greater brokerage commissions. The overall reasonableness of brokerage
commissions paid is evaluated by the Manager based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. In connection with its
portfolio securities transactions for the fiscal years ending 1992, 1993
and 1994, the Fund paid brokerage commissions of $641,934, $967,496 and
$1,060,625, respectively, none of which was paid to the Distributor. The
increase in commissions paid by the Fund from 1992 to 1994 is due to an
increase in the Fund's assets and in the volume of trading. The above
figures for brokerage commissions paid do not include gross spreads and
concessions on principal transactions, which, where determinable, amounted
to $2,683,993, $5,062,441 and $2,322,853 in 1992, 1993 and 1994,
respectively, none of which was paid to the Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Fund's average annual total return for the 1, 5 and 9.923 year
periods ended December 31, 1994, was -.15%, 10.39% and 14.40%,
respectively. Average annual total return is calculated by determining
the ending redeemable value of an investment purchased with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from the result.
The Fund's total return for the period January 29, 1985 to December
31, 1994 was 280.13%. Total return is calculated by subtracting the
amount of the Fund's net asset value per share at the beginning of a
stated period from the net asset value per share at the end of the period
(after giving effect to the reinvestment of dividends and distributions
during the period), and dividing the result by the net asset value per
share at the beginning of the period. From time to time, advertising
materials for the Fund may refer to Morningstar ratings and related
analysis 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 are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, 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 LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
COMMON STOCKS--85.5% SHARES VALUE
-------------- -------------
<S> <C> <C> <C>
CONSUMER
NON-DURABLE--6.6% Bush Boake Allen......................... 260,000 $ 7,020,000
Canandaigua Wine, Cl. A ............. (a) 165,000 6,270,000
Dr. Pepper/Seven-Up Cos.............. (a) 125,000 3,203,125
Eskimo Pie........................... (b) 185,000 3,468,750
IBP.................................. 90,000 2,722,500
Norton McNaughton...................... 200,000 3,050,000
--------------
25,734,375
--------------
CONSUMER SERVICES--1.3% Individual Investor Group............... (a,b,c) 307,692 874,999
Goldwyn (Samuel)..................... (a) 125,000 812,500
Hammons (John Q.) Hotels, Cl. A ....... 175,000 2,450,000
Savoy Pictures Entertainment......... (a) 150,000 975,000
--------------
5,112,499
--------------
ENERGY--8.7% Arakis Energy................... (a) 50,000 200,000
Cairn Energy USA..................... (a) 347,500 2,823,438
Coda Energy.......................... (a) 650,000 3,900,000
Dreco Energy Services, Cl. A....... (a,b) 430,000 3,278,750
Dual Drilling........................ (a) 300,000 2,550,000
Energy Ventures...................... (a) 70,000 848,750
Foreland............................. (a) 450,000 900,000
Global Industries.................... (a) 170,000 3,888,750
ICO.................................... 280,000 1,050,000
International Colin Energy........... (a) 500,000 3,437,500
Maverick Tube........................ (a) 175,000 1,618,750
Parker & Parsley Petroleum............. 165,000 3,382,500
Trident NGL Holdings................... 425,000 4,462,500
Unit................................. (a) 602,500 1,807,500
--------------
34,148,438
--------------
FINANCIAL--14.5% American Eagle Group................... 245,000 2,051,875
Baldwin & Lyons, Cl. B (non voting).... 275,000 4,056,250
Chittenden............................. 110,000 2,282,500
City National.......................... 66,000 701,250
Colonial BancGroup, Cl. A.............. 125,000 2,468,750
Commercial Net Lease Realty............ 90,000 1,102,500
Crescent Real Estate Equities.......... 150,000 4,068,750
Dime Bancorp......................... (a) 300,000 2,325,000
Equitable of Iowa...................... 135,000 3,813,750
Executive Risk......................... 230,000 3,277,500
FirstFed Michigan...................... 100,000 2,050,000
Fremont General........................ 150,000 3,506,250
Guaranty National...................... 135,000 2,480,625
Hibernia, Cl. A ....................... 375,000 2,906,250
Merchants Group........................ 109,500 1,656,188
Midland Financial Group................ 60,000 885,000
National Re............................ 123,500 3,241,875
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
FINANCIAL (CONTINUED) Presidential Life...................... 500,000 $ 2,625,000
Sizeler Property Investors............. 220,000 2,310,000
Synovus Financial...................... 150,000 2,718,750
Trenwick Group......................... 67,500 2,860,312
Wellsford Residential Property Trust... 75,000 1,575,000
Western National....................... 150,000 1,931,250
--------------
56,894,625
--------------
HEALTH CARE--13.6% Advantage Health........................ (a) 111,500 3,540,125
Apogee Enterprises..................... 125,000 2,187,500
Coastal Healthcare Group............. (a) 100,000 2,737,500
Community Psychiatric Centers.......... 300,000 3,300,000
Coram Healthcare..................... (a) 237,740 3,922,710
CorVel............................... (a) 170,000 4,717,500
Genesis Health Ventures.............. (a) 70,000 2,213,750
Homedco Group........................ (a) 80,000 3,010,000
Horizon Healthcare................... (a) 192,500 5,390,000
Lincare Holdings..................... (a) 95,000 2,755,000
National Health Laboratories Holdings.. 200,000 2,650,000
Noven Pharmaceuticals................ (a) 75,000 928,125
Physician Sales & Service.............. 125,000 1,984,375
Ramsay Health Care................... (a) 290,000 1,885,000
Scherer (R.P.)....................... (a) 100,000 4,537,500
Sterile Concepts Holdings.............. 220,000 3,520,000
Universal Health Services, Cl. B .... (a) 170,000 4,165,000
--------------
53,444,085
--------------
INDUSTRIAL SERVICES--2.0% CBI Industries....................... 100,000 2,562,500
EnSys Environmental Products......... (a) 250,000 1,000,000
Jacobs Engineering Group............. (a) 175,000 3,237,500
Kaiser Resources..................... (a) 164,500 1,028,125
--------------
7,828,125
--------------
NON-ENERGY MINERALS--2.2% Cleveland-Cliffs...................... 100,000 3,700,000
Huntco, Cl. A ......................... 120,000 2,640,000
IMCO Recycling......................... 157,500 2,382,188
--------------
8,722,188
--------------
PROCESS INDUSTRIES--10.4% Airgas................................ (a) 105,000 2,231,250
Albany International, Cl. A............ 225,000 4,331,250
Cominco Fertilizers.................... 110,000 2,491,084
Crompton & Knowles..................... 120,000 1,980,000
Cytec Industries..................... (a) 65,000 2,535,000
Ferro.................................. 250,000 5,968,750
Lilly Industries, Cl. A................ 135,000 1,890,000
Longview Fibre......................... 210,000 3,307,500
Mosinee Paper.......................... 135,000 3,493,125
OM Group............................... 150,000 3,600,000
Precision Castparts.................... 190,000 3,847,500
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
PROCESS INDUSTRIES (CONTINUED) Schulman (A.).......................... 190,000 $ 5,225,000
--------------
40,900,459
--------------
PRODUCER
MANUFACTURING--9.1% Applied Power, Cl. A .................... 150,000 3,806,250
BW/IP.................................. 190,000 3,253,750
Cascade................................ 105,000 2,493,750
Flair.................................. 182,500 3,467,500
Greenfield Industries.................. 100,000 2,400,000
Littelfuse........................... (a) 95,000 2,778,750
Manitowoc.............................. 135,000 2,919,375
Moorco International................... 190,000 2,802,500
Newcor................................. 117,000 877,500
Nordson................................ 50,000 3,000,000
Rohr Industries...................... (a) 350,000 3,631,250
Roper Industries....................... 165,000 4,166,250
--------------
35,596,875
--------------
RETAIL TRADE--2.4% Au Bon Pain, Cl. A ..................... (a) 275,000 4,400,000
Talbots................................ 135,000 4,218,750
Vons Cos............................. (a) 50,000 900,000
--------------
9,518,750
--------------
TECHNOLOGY--11.8% CIDCO.............................. 135,000 3,915,000
Gerber Scientific...................... 125,000 1,625,000
Glenayre Technologies................ (a) 90,000 5,197,500
Informix............................. (a) 125,000 4,015,625
IntelCom Group....................... (a) 142,000 1,881,500
International Rectifier.............. (a) 225,000 5,456,250
LSI Logic............................ (a) 60,000 2,422,500
Maxim Integrated Products............ (a) 65,000 2,275,000
Medicus Systems........................ 110,000 1,732,500
Sierra On-Line....................... (a) 77,500 2,654,375
Spectrum Holobyte.................... (a) 132,500 1,788,750
Stratus Computer..................... (a) 95,000 3,610,000
Sybase............................... (a) 75,000 3,900,000
Thermotrex........................... (a) 155,600 2,100,600
3Com................................. (a) 15,000 773,437
Xilinx............................... (a) 45,000 2,666,250
--------------
46,014,287
--------------
TRANSPORTATION--2.9% Kirby........................... (a) 180,000 3,555,000
TNT Freightways........................ 110,000 2,818,750
U.S. Delivery Systems.................. 125,000 1,718,750
Werner Enterprises..................... 130,000 3,087,500
--------------
11,180,000
--------------
TOTAL COMMON STOCKS
(cost $307,027,637).................. $335,094,706
===============
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PREFERRED STOCKS--.1% SHARES VALUE
-------------- --------------
INDUSTRIAL SERVICES--.1%Separation Technologies,
Ser. A, 6%, Cum. Conv.
(cost $493,000).................. (a,c) 128,000 $ 493,000
===============
PRINCIPAL
SHORT-TERM INVESTMENTS--14.3% AMOUNT
--------------
U.S. TREASURY BILLS:
4.90%, 1/12/95 ........................ $ 1,558,000 $ 1,555,667
5.02%, 1/19/95......................... 8,038,000 8,017,825
5.08%, 1/26/95......................... 1,944,000 1,937,142
5.13%, 2/2/95.......................... 13,106,000 13,046,294
5.27%, 2/9/95.......................... 3,211,000 3,192,668
5.23%, 2/16/95......................... 805,000 799,620
5.38%, 3/16/95......................... 27,674,000 27,367,988
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $55,917,204)................... $ 55,917,204
===============
TOTAL INVESTMENTS (cost $363,437,841)...... 99.9% $391,504,910
===== =============
CASH AND RECEIVABLES (NET) ............................................ .1% $ 120,528
===== =============
NET ASSETS.................................................................. 100.0% $391,625,438
===== =============
</TABLE>
<TABLE>
<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $8,141,109)_see Note 1
(d).
(c) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $1,367,999, represents
approximately .3% of net assets.
ACQUISITON PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ ------------ ---------- --------------- ------------
<S> <C> <C> <C> <C>
Individual Investor Group............... 12/15/93 $3.25 .22% 30% discount
to market value
Separation Technologies,
Ser. A, 6% Cum. Conv. ......... 7/12/93, 5/10/94 3.60, 4.75 .13 Cost
</TABLE>
* 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>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $363,437,841)_see statement..................................... $391,504,910
Cash.................................................................... 1,476,635
Receivable for investment securities sold............................... 5,980,443
Dividends and interest receivable....................................... 296,399
Receivable for subscriptions to Common Stock............................ 17,500
Prepaid expenses........................................................ 48,365
--------------
399,324,252
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 237,901
Due to Distributor...................................................... 81,673
Payable for investment securities purchased............................. 5,537,806
Payable for Common Stock redeemed....................................... 1,631,674
Accrued expenses........................................................ 209,760 7,698,814
------------ ------------
NET ASSETS ................................................................ $391,625,438
=============
REPRESENTED BY:
Paid-in capital......................................................... $362,679,169
Accumulated undistributed investment income_net......................... 131,224
Accumulated undistributed net realized gain on investments
and foreign currency transactions..................................... 748,265
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 28,066,780
--------------
NET ASSETS at value applicable to 12,498,767 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $391,625,438
=============
NET ASSET VALUE, offering and redemption price per share
($391,625,438 / 12,498,767 shares)...................................... $31.33
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends:
Unaffiliated issuers (net of $3,207 foreign taxes withheld at source) $ 2,803,004
Affiliated issuers................................................ 20,662 $2,823,666
--------------
Interest.............................................................. 2,629,366
--------------
TOTAL INCOME.................................................... 5,453,032
EXPENSES:
Management fee_Note 2(a).............................................. 2,798,513
Shareholder servicing costs_Note 2(b)................................. 1,459,622
Prospectus and shareholders' reports_Note 2(b)........................ 85,979
Registration fees..................................................... 64,863
Custodian fees........................................................ 61,604
Professional fees..................................................... 39,680
Directors' fees and expenses_Note 2(c)................................ 20,686
Miscellaneous......................................................... 8,253
--------------
4,539,200
Less_reimbursement of prospectus costs due to an undertaking
and reduction in expenses due to redemption fee_Note 2(b,d)....... 204,230
--------------
TOTAL EXPENSES.................................................. 4,334,970
--------------
INVESTMENT INCOME--NET.......................................... 1,118,062
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions_Note 3(a):
Long transactions:
Unaffiliated issuers............................................ $ 22,763,809
Affiliated issuers.............................................. 46,344
Short sale transactions........................................... 3,510
--------------
NET REALIZED GAIN................................................. 22,813,663
Net unrealized (depreciation) on investments, securities sold
short and foreign currency transactions:
Unaffiliated issuers.............................................. (25,164,245)
Affiliated issuers................................................ (742,012) (25,906,257)
-------------- -------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (3,092,594)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (1,974,532)
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
--------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 549,763 $ 1,118,062
Net realized gain on investments........................................ 37,898,357 22,813,663
Net unrealized appreciation (depreciation) on investments for the year.. 5,748,297 (25,906,257)
-------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 44,196,417 (1,974,532)
-------------- -----------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net.............................................. (527,722) (890,468)
In excess of investment income_net...................................... (96,370) --
From net realized gain on investments................................... (29,700,807) (30,527,977)
-------------- -----------
TOTAL DIVIDENDS....................................................... (30,324,899) (31,418,445)
-------------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 131,623,999 172,304,714
Dividends reinvested.................................................... 30,068,902 30,524,402
Cost of shares redeemed................................................. (70,216,637) (116,777,211)
-------------- -----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 91,476,264 86,051,905
-------------- -----------
TOTAL INCREASE IN NET ASSETS...................................... 105,347,782 52,658,928
NET ASSETS:
Beginning of year....................................................... 233,618,728 338,966,510
-------------- -----------
End of year [including distributions in excess of investment income_net;
($96,370)
in 1993 and undistributed investment income_net; $131,224 in 1994].... $338,966,510 $391,625,438
============= ============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 3,775,179 5,091,995
Shares issued for dividends reinvested.................................. 909,723 984,236
Shares redeemed......................................................... (2,014,715) (3,509,729)
-------------- --------------
NET INCREASE IN SHARES OUTSTANDING.................................... 2,670,187 2,566,502
============= ============
</TABLE>
See notes to financial statements.
DREYFUS NEW LEADERS FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Prospectus dated May 1, 1995.
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices, 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 denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities, resulting from changes in exchange rates.
(C) 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.
(D) AFFILIATED ISSUERS: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act.
(E) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. 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, if any, it is the policy of the Fund not to
distribute such gain.
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(F) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings (which, in the
view of Stroock & Stroock & Lavan, counsel to the Fund, also contemplates
dividends on securities sold short), brokerage and extraordinary expenses,
exceed 1 1/2% of the average value of the Fund's net assets for any full
year. There was no expense reimbursement for the year ended December 31,
1994.
(B) On August 4, 1994, Fund shareholders approved a revised Service Plan
(the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts and (b) pays the Manager, Dreyfus Service
Corporation or any affiliate (collectively "Dreyfus") for advertising and
marketing relating to the Fund and servicing shareholder accounts, at an aggre
gate annual rate of .25 of 1% of the value of the Fund's average daily net
assets. Each of the Distributor and Dreyfus may pay Service Agents (a
securities dealer, financial institution or other industry professional) a
fee in respect of the Fund's shares owned by shareholders with whom the
Service Agent has a servicing relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and Dreyfus determine
the amounts to be paid to Service Agents to which it will make payments and
the basis on which such payments are made. The Plan also separately provides
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 year.
Prior to August 24, 1994, the Fund's Service Plan ("prior Service Plan")
provided that the Fund pay Dreyfus Service Corporation 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. Dreyfus Service
Corporation 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 separately 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 prior Service Plan, not to exceed the greater of $100,000 or
.005 of 1% of the Fund's average daily net assets for any full year.
During the year ended December 31, 1994, $368,767 was charged to the Fund
pursuant to the Plan of which $16,079 was waived by the Manager and $610,176
was charged to the Fund pursuant to the prior Service Plan of which $30,027
was waived by the Manager.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500 per meeting.
Prior to April 4, 1994, the attendance fee was $250.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through use of the Exchange Privilege) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs within a six-month period following the
date of issuance. During the year ended December 31, 1994, redemption fees
amounted to $158,124.
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, during the year ended December 31, 1994:
PURCHASES SALES
----------------------------------
<S> <C> <C>
Long transactions:
Unaffiliated issuers........................................... $333,552,195 $293,838,457
Affiliated issuers............................................. 1,247,815 383,193
----------------------------------
334,800,010 294,221,650
Short sale transactions.......................................... 1,187,800 1,191,310
----------------------------------
TOTAL...................................................... $335,987,810 $295,412,960
----------------------------------
----------------------------------
</TABLE>
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. At December 31, 1994, there were no
securities sold short outstanding.
(B) At December 31, 1994, accumulated net unrealized appreciation on
investments was $28,067,069, consisting of $45,765,306 gross unrealized
appreciation and $17,698,237 gross unrealized depreciation, excluding foreign
currency transactions.
At December 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS NEW LEADERS FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS NEW LEADERS FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus New Leaders Fund, Inc., including the statement of investments, as of
December 31, 1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1994 by correspondence with the custodian
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 New Leaders Fund, Inc. at December 31, 1994, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
(Logo Signature)
New York, New York
February 1, 1995
