File Nos. 33-7172
811-4748
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. 27 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 27 [X]
(Check appropriate box or boxes.)
DREYFUS DEBT AND EQUITY FUNDS
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
X 60 days after filing pursuant to paragraph (a)(i)
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on (date) pursuant to paragraph (a)(i)
----
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.
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<PAGE>
Dreyfus Premier Core Bond Fund
Investing in fixed-income securities to maximize total return
PROSPECTUS March 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Fund
Dreyfus Premier Core Bond Fund
--------------------
Ticker Symbols Class A: DSINX
Class B: n/a
Class C: n/a
Class R: n/a
Contents
The Fund
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Goal/Approach INSIDE COVER
Main Risks 1
Past Performance 2
Expenses 3
Management 4
Financial Highlights 5
Your Investment
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Account Policies 7
Distributions and Taxes 9
Services for Fund Investors 10
Instructions for Regular Accounts 11
Instructions for IRAs 12
For More Information
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INFORMATION ON THE FUND'S RECENT STRATEGIES AND HOLDINGS CAN BE FOUND IN THE
CURRENT ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
GOAL/APPROACH
The fund seeks to maximize total return, through capital appreciation and
current income. To pursue this goal, it invests at least 65% of its assets in
fixed-income securities, such as: U.S. government bonds and notes, corporate
bonds, convertible securities, preferred stocks, asset-backed securities,
mortgage-related securities, and foreign bonds.
Generally, the fund seeks to maintain a portfolio with an investment grade
(BBB/Baa) average credit quality. However, the fund may invest up to 35% of
its assets in lower-rated securities ("high yield" or "junk" bonds). The fund
has the flexibility to shift its investment focus among different fixed-income
securities, based on market conditions and other factors. In choosing market
sectors and securities for investment, the issuer's financial strength, and the
current state and long-term outlook of the industry or sector are reviewed.
Current and forecasted interest rate and liquidity conditions also are important
factors in this regard.
Typically, the fund can be expected to have an average effective maturity of
between 5 and 10 years and an average effective duration between 3.5 and 6
years. While the fund's duration and maturity usually will stay within these
ranges, if the maturity or duration of the fund's benchmark index moves outside
these ranges, so may the fund's.
Concepts to understand
AVERAGE EFFECTIVE MATURITY: an average of the stated maturity of bonds, adjusted
to reflect provisions that may cause a bond's principal to be repaid earlier
than at maturity.
DURATION: an indication of an investment's "interest rate risk," or how
sensitive a bond or mutual fund portfolio may be to changes in interest rates.
Generally speaking, the longer a fund's duration, the more it is likely to react
to interest rate fluctuations and the greater its long-term risk/return
potential.
MAIN RISKS
Prices of bonds tend to move inversely with changes in interest rates. A rise in
rates usually causes a drop in bond prices and therefore in the fund's share
price as well.
The longer the fund's maturity and duration, the more its share price is likely
to react to interest rate movements. The value of your investment in the fund
could go up and down, which means that you could lose money.
Mortgage-related securities may react differently to interest rate changes than
other bonds, because of prepayments and other factors. When rates fall,
mortgage pass-through securities may be paid off earlier than expected, and the
fund may reinvest those assets at lower rates. This lessens price-appreciation
potential from rate declines. When rates rise, prices may decline less, given
their generally higher coupon, and it may effectively lengthen a mortgage
security's expected maturity and cause its value to fluctuate more widely as
rates change.
High yield bonds involve greater credit risk than investment grade bonds, and
are considered speculative. The prices of high yield bonds can fall in response
to bad news about the issuer or its industry, or the economy in general, or if
an issuer fails to make timely interest or principal payments.
Other risk factors that could have an effect on the fund's performance:
o the prices of foreign bonds can be affected by political and economic
instability or changes in currency exchange rates
o if the fund holds securities that are traded in a market that becomes
"illiquid," typically when there are many more sellers than buyers for the
securities, the value of such securities and the fund's share price, may
fall dramatically.
Other potential risks
Most mortgage- and asset-backed securities are a form of derivative. The fund,
at times, may also invest in other derivative securities, such as options and
futures. Derivatives are used primarily to hedge the fund's portfolio, but may
be used to increase returns; however, such practices may lower returns or
increase volatility. Derivatives can be illiquid, and a small investment in
certain derivatives could have a potentially large impact on the fund's
performance.
The fund may buy securities on a forward-commitment basis, and enter into
reverse repurchase agreements, which are forms of borrowing that can increase
the fund's overall price volatility.
The Fund
PAST PERFORMANCE
The tables below show some of the risks of investing in the fund. The first
table shows the changes in the fund's Class A performance from year to year. The
performance figures do not reflect sales loads, and would be lower if they did.
The second table compares the fund's Class A performance over time to that of
the Merrill Lynch Domestic Master Index, an unmanaged bond performance
benchmark. These returns include applicable sales loads. Both tables assume
reinvestment of dividends. Of course, past performance is no guarantee of future
results. Since Class B, C and R shares are new, past performance information is
not available for those classes as of the date of this prospectus. Performance
for each share class will vary from the performance of the fund's other share
classes due to differences in charges and expenses.
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Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
[Exhibit A]
BEST QUARTER: Q2 '95 +17.44%
WORST QUARTER: Q1 '94 - 4.34%
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Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
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CLASS A -1.12% 8.12% 8.11%
MERRILL LYNCH
DOMESTIC
MASTER INDEX -0.96% 7.74% 7.75%
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the tables below.
<TABLE>
<CAPTION>
Fee table
CLASS A CLASS B CLASS C CLASS R
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SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum front-end sales charge on purchases
<S> <C> <C> <C> <C>
AS A % OF OFFERING PRICE 4.50 NONE NONE NONE
Maximum contingent deferred sales charge (CDSC)
AS A % OF PURCHASE OR SALE PRICE, WHICHEVER IS LESS NONE* 4.00 1.00 NONE
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ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees .60 .60 .60 .60
Rule 12b-1 fee NONE .50 .75 NONE
Shareholder services fee .25 .25 .25 NONE
Other expenses** .33 .33 .33 .33
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TOTAL ANNUAL FUND OPERATING EXPENSES 1.18 1.68 1.93 .93
* SHARES BOUGHT WITHOUT AN INITIAL SALES CHARGE AS PART OF AN INVESTMENT OF
$1 MILLION OR MORE MAY BE CHARGED A CDSC OF 1.00% IF REDEEMED WITHIN ONE YEAR.
** "OTHER EXPENSES" FOR CLASSES B, C AND R ARE BASED ON AMOUNTS FOR CLASS A FOR
THE PAST FISCAL YEAR. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THE AMOUNTS INDICATED ABOVE.
</TABLE>
<TABLE>
<CAPTION>
Expense example
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
CLASS A $___ $ $ $
CLASS B
WITH REDEMPTION $___ $ $ $
WITHOUT REDEMPTION $___ $ $ $
CLASS C
WITH REDEMPTION $___ $ $ $
WITHOUT REDEMPTION $___ $ $ $
CLASS R $___ $ $ $
</TABLE>
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of its operation.
RULE 12B-1 FEE: the fee paid to the fund's distributor to finance the sale and
distribution of Class B and Class C shares. Because this fee is paid out of the
fund's assets on an ongoing basis, over time it will increase the cost of your
investment and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: a fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
The Fund
MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $120
billion in over 160 mutual fund portfolios. For the past fiscal year, the fund
paid Dreyfus a management fee at the annual rate of 0.60% of the fund's average
daily net assets. Dreyfus is the primary mutual fund business of Mellon
Financial Corporation, a global financial services company with approximately
$2.5 trillion of assets under management, administration or custody, including
approximately $450 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
The Dreyfus Taxable Fixed Income team makes investment decisions for the fund.
No individual team member is primarily responsible for making these investment
decisions. The portfolio managers comprising the team are identified in the
Statement of Additional Information.
Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy's preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.
Concepts to understand
YEAR 2000 ISSUES: the fund could be adversely affected if the computer systems
used by Dreyfus and the fund's other service providers do not properly process
and calculate date-related information from and after January 1, 2000.
Dreyfus has taken steps to avoid year 2000-related problems in its systems and
to monitor the readiness of other service providers. In addition, issuers of
securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
FINANCIAL HIGHLIGHTS
The following table describe the performance of the fund's Class A shares for
the fiscal periods indicated. "Total return" shows how much your investment in
the fund would have increased (or decreased) during each period, assuming you
had reinvested all dividends and distributions. These figures have been
independently audited by _________________, whose report, along with the fund's
financial statements, is included in the annual report. No information is
provided for the fund's Class B, C or R shares, which were not offered as of the
date of the financials.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS A 1999 1998 1997 1996 1995
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PER-SHARE DATA ($)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 14.40 14.86 14.24 14.22 12.95
Investment operations:
Investment income -- net .98 1.01 1.05 .98 .93
Net realized and unrealized gain (loss)
on investments (.09) (.45) .59 .02 1.27
Total from investment operations .89 .56 1.64 1.00 2.20
Distributions:
Dividends from investment income -- net (.98) (1.02) (1.02) (.98) (.93)
Net asset value, end of period 14.31 14.40 14.86 14.24 14.22
Total return (%)* 6.38 3.74 11.94 7.27 17.57
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses
to average net assets (%) 1.04 1.02 1.03 1.04 1.04
Ratio of interest expenses
to average net assets (%) .14 .03 .06 .02 -
Ratio of net investment income
to average net assets (%) 6.80 6.76 7.25 6.89 6.87
Portfolio turnover rate (%) 284.63 313.40 347.68 214.55 176.59
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 275,116 283,336 275,518 294,911 320,345
* EXCLUSIVE OF SALES CHARGE.
</TABLE>
<PAGE>
Your Investment
ACCOUNT POLICIES
THE DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from
those described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it can be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a CDSC.
* CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares, want to
take advantage of the reduced sales charges available on larger investments
and/or have a longer-term investment horizon
* CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a longer-term investment horizon
* CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a shorter-term investment horizon
* CLASS R shares are designed for eligible institutions on behalf of their
clients. Individuals may not purchase these shares directly.
Your financial representative can help you choose the share class that is
appropriate for you.
Share class charges
EACH SHARE CLASS has its own fee structure. In some cases, you may not have to
pay a sales charge to buy or sell shares. Consult your financial representative
or the SAI to see if this may apply to you. Shareholders beneficially owning
Class A shares on February 29, 2000, may purchase Class A shares without a sales
load.
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<TABLE>
<CAPTION>
Sales charges
CLASS A -- CHARGED WHEN YOU BUY SHARES
Sales charge Sales charge
deducted as a % as a % of your
Your investment of offering price net investment
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 4.50% 4.70%
$50,000 -- $99,999 4.00% 4.20%
$100,000 -- $249,999 3.00% 3.10%
$250,000 -- $499,999 2.50% 2.60%
$500,000 -- $999,999 2.00% 2.00%
$1 million or more* 0.00% 0.00%
* A 1.00% CDSC may be charged on any shares sold within
one year of purchase (except shares bought through dividend reinvestment).
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CLASS B -- CHARGED WHEN YOU SELL SHARES
CDSC as a % of your initial
Years Since Purchase investment or your redemption
Was Made (whichever is less)
- --------------------------------------------------------------------------------
Up to 2 years 4.00%
2 -- 4 years 3.00%
4 -- 5 years 2.00%
5 -- 6 years 1.00%
More than 6 years Shares will automatically
convert to Class A
</TABLE>
Class B shares also carry an annual Rule 12b-1 fee of 0.50% of the class's
average daily net assets.
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CLASS C -- CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
CLASS R -- NO SALES LOAD OR RULE 12B-1 FEES
Reduced Class A sales charge
LETTER OF INTENT: lets you purchase Class A shares over a 13-month period and
receive the same sales charge as if all shares had been purchased at once.
RIGHT OF ACCUMULATION: lets you add the value of any shares you own in this
fund, any other Dreyfus Premier fund, or any other fund that is advised by
Founders Asset Management LLC ("Founders"), an affiliate of Dreyfus, sold with a
sales load, to the amount of your next Class A investment for purposes of
calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
Your Investment
<PAGE>
ACCOUNT POLICIES (CONTINUED)
Buying shares
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange (NYSE) (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the NAV next
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. The fund's investments generally 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 fund's board.
ORDERS TO BUY AND SELL SHARES received by dealers by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
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Minimum investments
Initial Additional
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REGULAR ACCOUNTS $1,000 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding. The fund's Class
A shares are offered to the public at NAV plus a sales charge. Classes B, C and
R are offered at NAV, but Class B and C generally are subject to higher annual
operating expenses and a CDSC.
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult your financial
representative or the SAI for details.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
* amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
* requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
* refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group who, in the
fund's view, is likely to engage in excessive trading (usually defined as more
than four exchanges out of the fund within a calendar year)
* refuse any purchase or exchange request in excess of 1% of the fund's
total assets
* change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
* change its minimum investment amounts
* delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or during
unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; accounts opened through a financial institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 30 days, the fund may close your account and
send you the proceeds.
DISTRIBUTIONS AND TAXES
THE FUND GENERALLY PAYS ITS SHAREHOLDERS dividends from its net investment
income once a month, and distributes any net capital gains it has realized once
a year. Each share class will generate a different dividend because each has
different expenses. Your distributions will be reinvested in the fund unless you
instruct the fund otherwise. There are no fees or sales charges on
reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE in the year received to most
investors (unless your investment is in an IRA or other tax-deferred account
where taxation may be deferred). The tax status of any distribution is the same
regardless of how long you have been in the fund and whether you reinvest your
distributions or take them in cash. In general, distributions are federally
taxable as follows:
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Taxability of distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket or above
- --------------------------------------------------------------------------------
INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE
SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE
LONG-TERM
CAPITAL GAINS 10% 20%
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Taxes on transactions
Except for tax-deferred accounts, any sale or exchange of fund shares may
generate a tax liability. Of course, withdrawals or distributions from
tax-deferred accounts are taxable when received.
The table above also can provide a guide for your potential tax liability when
selling or exchanging fund shares. "Short-term capital gains" applies to fund
shares sold or exchanged up to 12 months after buying them. "Long-term capital
gains" applies to shares sold or exchanged after 12 months.
Your Investment
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-554-4611.
- --------------------------------------------------------------------------------
For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
the fund into another Dreyfus fund
or certain Founders-advised funds
(not available for IRAs).
- --------------------------------------------------------------------------------
For exchanging shares
DREYFUS AUTO- For making regular exchanges from
EXCHANGE PRIVILEGE the fund into another Dreyfus fund
or certain Founders-advised funds.
- --------------------------------------------------------------------------------
For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds. There will be no CDSC
on Class B shares, as long as the amounts
withdrawn do not exceed 12% annually
of the account value at the time the
shareholder elects to participate in the plan.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class of another Dreyfus Premier fund
or Founders-advised fund. You can request your exchange by contacting your
financial representative. Be sure to read the current prospectus for any fund
into which you are exchanging before investing. Any new account established
through an exchange will generally have the same privileges as your original
account (as long as they are available). There is currently no fee for
exchanges, although you may be charged a sales load when exchanging into any
fund that has a higher one.
TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contact your financial representative.
Reinvestment privilege
UPON WRITTEN REQUEST, YOU CAN REINVEST up to the number of Class A or Class B
shares you redeemed within 45 days of selling them at the current share price
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
Account statements
EVERY FUND INVESTOR automatically receives regular account statements. You'll
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587 Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to: Name of Fund P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* DDA# 8900119330
* the fund name
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900119330
* the fund name
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate
on your application which automatic service(s) you want. Return your application
with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 8).
Mail your request to: The Dreyfus Family of Funds P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611. Make checks payable to: THE DREYFUS FAMILY OF FUNDS.
Concepts to understand
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
Your Investment
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail in the slip and the check to: The Dreyfus Trust Company, Custodian P.O. Box
6427, Providence, RI 02940-6427
Attn: Institutional Processing
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900119330
* the fund name
* the share class * your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 8).
Mail in your request to: The Dreyfus Trust Company P.O. Box 6427, Providence,
RI 02940-6427
Attn: Institutional Processing
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
For information and assistance, contact your financial representative or call
toll free in the U.S. 1-800-554-4611. Make checks payable to: THE DREYFUS TRUST
COMPANY, CUSTODIAN.
[Application p1]
<PAGE>
[Application p2]
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
For More Information
Dreyfus Premier Core Bond Fund
A series of Dreyfus Debt and Equity Funds
- --------------------------------------
SEC file number: 811-4748
More information on this fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance, lists portfolio holdings and contains a letter
from the fund's manager discussing recent market conditions, economic trends
and fund strategies that significantly affected the fund's performance during
the last fiscal year.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
(c) 2000 Dreyfus Service Corporation
046P0300
<PAGE>
- ------------------------------------------------------------------------------
DREYFUS DEBT AND EQUITY FUNDS
DREYFUS PREMIER CORE BOND FUND
(Class A, Class B, Class C and Class R)
DREYFUS EQUITY INCOME FUND
DREYFUS PREMIER HIGH YIELD SECURITIES FUND
(Class A, Class B, Class C and Class T Shares)
DREYFUS PREMIER HIGH YIELD DEBT PLUS EQUITY FUND
(Class A, Class B, Class C and Class T Shares)
DREYFUS PREMIER REAL ESTATE MORTGAGE FUND
(Class A, Class B, Class C, Class R and Class T Shares)
DREYFUS SHORT TERM HIGH YIELD FUND
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 2000
- ------------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in conjunction with the current Prospectus of Dreyfus Premier
Core Bond Fund, Dreyfus Equity Income Fund, Dreyfus Premier High Yield
Securities Fund, Dreyfus Premier High Yield Debt Plus Equity Fund, Dreyfus
Premier Real Estate Mortgage Fund and Dreyfus Short Term High Yield Fund, each
dated March 1, 2000 (each, a "Fund," and collectively, the "Funds") of Dreyfus
Debt and Equity Funds (the "Company"), as each may be revised from time to time.
To obtain a copy of the Prospectus of Dreyfus Equity Income Fund or Dreyfus
Short Term High Yield Fund, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call toll free 1-800-645-6561. In
New York City, call 1-718-895-1206; and outside the U.S. call 516-794-5452.
Also, you can call your financial adviser.
For a copy of the Prospectus of Dreyfus Premier Core Bond Fund,
Dreyfus Premier High Yield Debt Plus Equity Fund, Dreyfus Premier High Yield
Securities Fund or Dreyfus Premier Real Estate Mortgage Fund (collectively, the
"Dreyfus Premier Funds"), please call your financial adviser, or you can write
to the address above, or call 1-800-554-4611.
The most recent Annual Report to Shareholders for each Fund is a
separate document supplied with this Statement of Additional Information, and
the financial statements. accompanying notes and report of independent auditors
appearing in the Annual Report are incorporated by reference into this Statement
of Additional Information.
<PAGE>
TABLE OF CONTENTS
PAGE
Description of the Company and Funds......................................B-3
Management of the Company................................................B-31
Management Arrangements..................................................B-36
How to Buy Shares........................................................B-40
Distribution Plan and Shareholder Services Plan..........................B-49
How to Redeem Shares.....................................................B-51
Shareholder Services.....................................................B-55
Determination of Net Asset Value.........................................B-60
Dividends, Distributions and Taxes.......................................B-61
Portfolio Transactions...................................................B-64
Performance Information..................................................B-67
Information About the Company and Funds..................................B-71
Counsel and Independent Auditors.........................................B-73
Appendix.................................................................B-74
<PAGE>
DESCRIPTION OF THE COMPANY AND FUNDS
The Company is a Massachusetts business trust that commenced
operations on October 1, 1986. Each Fund is a separate portfolio of the Company,
an open-end management investment company, known as a mutual fund. Each of
Dreyfus Premier Core Bond Fund, Dreyfus Equity Income Fund, Dreyfus Premier High
Yield Securities Fund and Dreyfus Short Term High Yield Fund is a diversified
fund, which means that, with respect to 75% of the Fund's total assets, the Fund
will not invest more than 5% of its assets in the securities of any single
issuer nor hold more than 10% of the outstanding voting securities of any single
issuer. Each of Dreyfus Premier High Yield Debt Plus Equity Fund and Dreyfus
Premier Real Estate Mortgage Fund is a non-diversified fund, which means that
the proportion of the Fund's assets that may be invested in the securities of a
single issuer is not limited by the Investment Company Act of 1940, as amended
(the "1940 Act").
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
CERTAIN PORTFOLIO SECURITIES
The following information supplements and should be read in
conjunction with each Fund's Prospectus.
CORPORATE DEBT SECURITIES. (All Funds) Corporate debt securities
include corporate bonds, debentures, notes and other similar instruments,
including certain convertible securities. Debt securities may be acquired with
warrants attached. Corporate income-producing securities also may include forms
of preferred or preference stock. The rate of interest on a corporate debt
security may be fixed, floating or variable, and may vary inversely with respect
to a reference rate. The rate of return or return of principal on some debt
obligations may be linked or indexed to the level of exchange rates between the
U.S. dollar and a foreign currency or currencies.
CONVERTIBLE SECURITIES. (All Funds) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy seniority in
right of payment to all equity securities, and convertible preferred stock is
senior to common stock of the same issuer. Because of the subordination feature,
however, convertible securities typically have lower ratings than similar
non-convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
Convertible securities provide for a stable stream of income with
generally higher yields than common stocks, but there can be no assurance of
current income because the issuers of the convertible securities may default on
their obligations. A convertible security, in addition to providing fixed
income, offers the potential for capital appreciation through the conversion
feature, which enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.
WARRANTS. (All Funds, except Dreyfus Premier Real Estate Mortgage
Fund) A warrant is an instrument issued by a corporation which gives the holder
the right to subscribe to a specified amount of the corporation's capital stock
at a set price for a specified period of time. A Fund may invest up to 5% of its
net assets in warrants, except that this limitation does not apply to warrants
purchased by the Fund that are sold in units with, or attached to, other
securities.
COMMON STOCK. (All Funds) From time to time, a Fund may hold common
stock sold in units with, or attached to, debt securities purchased by the Fund.
A Fund also may hold common stock received upon the conversion of convertible
securities. Dreyfus Premier Real Estate Mortgage Fund may invest directly in the
common stocks of issuers that primarily invest or deal in real estate. Dreyfus
Premier High Yield Debt Plus Equity Fund and Dreyfus Equity Dividend Fund are
not restricted in the kinds of common stock each may purchase.
PARTICIPATION INTERESTS. (All Funds, except Dreyfus Equity Income
Fund) Each of these Funds may invest in short-term corporate obligations
denominated in U.S. and foreign currencies that are originated, negotiated and
structured by a syndicate of lenders ("Co-Lenders"), consisting of commercial
banks, thrift institutions, insurance companies, financial companies or other
financial institutions one or more of which administers the security on behalf
of the syndicate (the "Agent Bank"). Co-Lenders may sell such securities to
third parties called "Participants." The Fund may invest in such securities
either by participating as a Co-Lender at origination or by acquiring an
interest in the security from a Co-Lender or a Participant (collectively,
"participation interests"). Co-Lenders and Participants interposed between the
Fund and the corporate borrower (the "Borrower"), together with Agent Banks, are
referred herein as "Intermediate Participants."
The Fund also may purchase a participation interest in a portion of
the rights of an Intermediate Participant, which would not establish any direct
relationship between the Fund and the Borrower. A participation interest gives
the Fund an undivided interest in the security in the proportion that the Fund's
participation interest bears to the total principal amount of the security.
These instruments may have fixed, floating or variable rates of interest. The
Fund would be required to rely on the Intermediate Participant that sold the
participation interest not only for the enforcement of the Fund's rights against
the Borrower but also for the receipt and processing of payments due to the Fund
under the security. Because it may be necessary to assert through an
Intermediate Participant such rights as may exist against the Borrower, in the
event the Borrower fails to pay principal and interest when due, the Fund may be
subject to delays, expenses and risks that are greater than those that would be
involved if the Fund would enforce its rights directly against the Borrower.
Moreover, under the terms of a participation interest, the Fund may be regarded
as a creditor of the Intermediate Participant (rather than of the Borrower), so
that the Fund may also be subject to the risk that the Intermediate Participant
may become insolvent. Similar risks may arise with respect to the Agent Bank if,
for example, assets held by the Agent Bank for the benefit of the Fund were
determined by the appropriate regulatory authority or court to be subject to the
claims of the Agent Bank's creditors. In such case, the Fund might incur certain
costs and delays in realizing payment in connection with the participation
interest or suffer a loss of principal and/or interest. Further, in the event of
the bankruptcy or insolvency of the Borrower, the obligation of the Borrower to
repay the loan may be subject to certain defenses that can be asserted by such
Borrower as a result of improper conduct by the Agent Bank or Intermediate
Participant.
MUNICIPAL OBLIGATIONS. (All Funds, except Dreyfus Equity Income Fund
and Dreyfus Premier Real Estate Mortgage Fund) Municipal obligations are debt
obligations issued by states, territories and possessions of the United States
and the District of Columbia and their political subdivisions, agencies and
instrumentalities, or multistate agencies or authorities, the interest from
which, in the opinion of bond counsel to the issuer, is exempt from Federal
income tax. Municipal obligations generally include debt obligations issued to
obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
obligations are classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith, credit
and taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Industrial
development bonds, in most cases, are revenue bonds that do not carry the pledge
of the credit of the issuing municipality, but generally are guaranteed by the
corporate entity on whose behalf they are issued. Notes are short-term
instruments which are obligations of the issuing municipalities or agencies and
are sold in anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or equipment
issued by municipalities. Municipal obligations bear fixed, floating or variable
rates of interest, which are determined in some instances by formulas under
which the Municipal obligation's interest rate will change directly or inversely
to changes in interest rates or an index, or multiples thereof, in many cases
subject to a maximum and minimum. Certain Municipal obligations are subject to
redemption at a date earlier than their stated maturity pursuant to call
options, which may be separated from the related Municipal obligation and
purchased and sold separately. The Fund also may acquire call options on
specific Municipal obligations. The Fund generally would purchase these call
options to protect the Fund from the issuer of the related Municipal obligation
redeeming, or other holder of the call option from calling away, the Municipal
obligation before maturity.
While, in general, Municipal obligations are tax exempt securities
having relatively low yields as compared to taxable, non-Municipal obligations
of similar quality, certain Municipal obligations are taxable obligations,
offering yields comparable to, and in some cases greater than, the yields
available on other permissible Fund investments. Dividends received by
shareholders on Fund shares which are attributable to interest income received
by the Fund from Municipal obligations generally will be subject to Federal
income tax. The Fund may invest in Municipal obligations, the ratings of which
correspond with the ratings of other permissible Fund investments. The Fund
currently intends to invest no more than 25% of its assets in Municipal
obligations. However, this percentage may be varied from time to time without
shareholder approval.
VARIABLE AND FLOATING RATE SECURITIES. (All Funds) Variable and
floating rate securities provide for a periodic adjustment in the interest rate
paid on the obligations. The terms of such obligations must provide that
interest rates are adjusted periodically based upon an interest rate adjustment
index as provided in the respective obligations. The adjustment intervals may be
regular, and range from daily up to annually, or may be event based, such as
based on a change in the prime rate.
A Fund may invest in floating rate debt instruments ("floaters"). The
interest rate on a floater is a variable rate which is tied to another interest
rate, such as a money-market index or Treasury bill rate. The interest rate on a
floater resets periodically, typically every six months. Because of the interest
rate reset feature, floaters provide the Fund with a certain degree of
protection against rises in interest rates, although the Fund will participate
in any declines in interest rates as well.
A Fund also may invest in inverse floating rate debt instruments
("inverse floaters"). The interest rate on an inverse floater resets in the
opposite direction from the market rate of interest to which the inverse floater
is indexed or inversely to a multiple of the applicable index. An inverse
floating rate security may exhibit greater price volatility than a fixed rate
obligation of similar credit quality.
MORTGAGE-RELATED SECURITIES. (All Funds, except Dreyfus Equity Income
Fund) Mortgage-related securities are a form of derivative collateralized by
pools of commercial or residential mortgages. Pools of mortgage loans are
assembled as securities for sale to investors by various governmental,
government-related and private organizations. These securities may include
complex instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities, mortgage pass-through securities, interests in real
estate mortgage investment conduits ("REMICs"), adjustable rate mortgages, real
estate investment trusts ("REITs"), or other kinds of mortgage-backed
securities, including those with fixed, floating and variable interest rates,
those with interest rates based on multiples of changes in a specified index of
interest rates and those with interest rates that change inversely to changes in
interest rates, as well as those that do not bear interest.
RESIDENTIAL MORTGAGE-RELATED SECURITIES--A Fund may invest in mortgage-related
securities representing participation interests in pools of one- to four-family
residential mortgage loans issued or guaranteed by governmental agencies or
instrumentalities, such as the Government National Mortgage Association
("GNMA"), the Federal National Mortgage Association ("FNMA") and the Federal
Home Loan Mortgage Corporation ("FHLMC"), or issued by private entities. Similar
to commercial mortgage-related securities, residential mortgage-related
securities have been issued using a variety of structures, including multi-class
structures featuring senior and subordinated classes.
Mortgage-related securities issued by GNMA include GNMA Mortgage
Pass-Through Certificates (also know as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee is
backed by the full faith and credit of the United States. GNMA certificates also
are supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-related securities issued by FNMA
include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as
"Fannie Maes") which are solely the obligations of FNMA and are not backed by or
entitled to the full faith and credit of the United States. Fannie Maes are
guaranteed as to timely payment of principal and interest by FNMA.
Mortgage-related securities issued by FHLMC include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs" or "PCs"). Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Bank and do not
constitute a debt or obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. When FHLMC
does not guarantee timely payment of principal, FHLMC may remit the amount due
on account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after it
becomes payable.
COMMERCIAL MORTGAGE-RELATED SECURITIES--Commercial mortgage-related securities
generally are multi-class debt or pass-through certificates secured by mortgage
loans on commercial properties. These mortgage-related securities generally are
constructed to provide protection to the senior classes investors against
potential losses on the underlying mortgage loans. This protection generally is
provided by having the holders of subordinated classes of securities
("Subordinated Securities") take the first loss if there are defaults on the
underlying commercial mortgage loans. Other protection, which may benefit all of
the classes or particular classes, may include issuer guarantees, reserve funds,
additional Subordinated Securities, cross-collateralization and
over-collateralization.
SUBORDINATED SECURITIES--A Fund may invest in Subordinated Securities issued or
sponsored by commercial banks, savings and loan institutions, mortgage bankers,
private mortgage insurance companies and other non-governmental issuers.
Subordinated Securities have no governmental guarantee, and are subordinated in
some manner as to the payment of principal and/or interest to the holders of
more senior mortgage-related securities arising out of the same pool of
mortgages. The holders of Subordinated Securities typically are compensated with
a higher stated yield than are the holders of more senior mortgage-related
securities. On the other hand, Subordinated Securities typically subject the
holder to greater risk than senior mortgage-related securities and tend to be
rated in a lower rating category, and frequently a substantially lower rating
category, than the senior mortgage-related securities issued in respect of the
same pool of mortgage. Subordinated Securities generally are likely to be more
sensitive to changes in prepayment and interest rates and the market for such
securities may be less liquid than is the case for traditional fixed-income
securities and senior mortgage-related securities.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS") AND MULTI-CLASS
PASS-THROUGH-SECURITIES--A CMO is a multiclass bond backed by a pool of mortgage
pass-through certificates or mortgage loans. CMOs may be collateralized by (a)
Ginnie Mae, Fannie Mae, or Freddie Mac pass-through certificates, (b)
unsecuritized mortgage loans insured by the Federal Housing Administration or
guaranteed by the Department of Veterans' Affairs, (c) unsecuritized
conventional mortgages, (d) other mortgage-related securities, or (e) any
combination thereof.
Each class of CMOs, often referred to as a "tranche," is issued at a
specific coupon rate and has a stated maturity or final distribution date.
Principal prepayments on collateral underlying a CMO may cause it to be retired
substantially earlier than the stated maturities or final distribution dates.
The principal and interest on the underlying mortgages may be allocated among
the several classes of a series of a CMO in many ways. One or more tranches of a
CMO may have coupon rates which reset periodically at a specified increment over
an index, such as the London Interbank Offered Rate ("LIBOR") (or sometimes more
than one index). These floating rate CMOs typically are issued with lifetime
caps on the coupon rate thereon. The Fund also may invest in inverse floating
rate CMOs. Inverse floating rate CMOs constitute a tranche of a CMO with a
coupon rate that moves in the reverse direction to an applicable index such a
LIBOR. Accordingly, the coupon rate thereon will increase as interest rates
decrease. Inverse floating rate CMOs are typically more volatile than fixed or
floating rate tranches of CMOs.
Many inverse floating rate CMOs have coupons that move inversely to a
multiple of the applicable indexes. The effect of the coupon varying inversely
to a multiple of an applicable index creates a leverage factor. Inverse floaters
based on multiples of a stated index are designed to be highly sensitive to
changes in interest rates and can subject the holders thereof to extreme
reductions of yield and loss of principal. The markets for inverse floating rate
CMOs with highly leveraged characteristics at times may be very thin. The Fund's
ability to dispose of its positions in such securities will depend on the degree
of liquidity in the markets for such securities. It is impossible to predict the
amount of trading interest that may exist in such securities, and therefore the
future degree of liquidity.
STRIPPED MORTGAGE-BACKED SECURITIES--A Fund also may invest in stripped
mortgage-backed securities which are created by segregating the cash flows from
underlying mortgage loans or mortgage securities to create two or more new
securities, each with a specified percentage of the underlying Security's
principal or interest payments. Mortgage securities may be partially stripped so
that each investor class receives some interest and some principal. When
securities are completely stripped, however, all of the interest is distributed
to holders of one type of security, known as an interest-only security, or IO,
and all of the principal is distributed to holders of another type of security
known as a principal-only security, or PO. Strips can be created in a
pass-through structure or as tranches of a CMO. The yields to maturity on IO and
POs are very sensitive to the rate of principal payments (including prepayments)
on the related underlying mortgage assets. If the underlying mortgage assets
experience greater than anticipated prepayments of principal, the Fund may not
fully recoup its initial investment in IOs. Conversely, if the underlying
mortgage assets experience less than anticipated prepayments of principal, the
yield on POs could be materially and adversely affected.
REAL ESTATE INVESTMENT TRUSTS--A REIT is a corporation, or a business trust that
would otherwise be taxed as a corporation, which meets the definitional
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The
Code permits a qualifying REIT to deduct dividends paid, thereby effectively
eliminating corporate level Federal income tax and making the REIT a
pass-through vehicle for Federal income tax purposes. To meet the definitional
requirements of the Code, a REIT must, among other things, invest substantially
all of its assets in interests in real estate (including mortgages and other
REITs) or cash and government securities, derive most of its income from rents
from real property or interest on loans secured by mortgages on real property,
and distribute to shareholders annually a substantial portion of its otherwise
taxable income.
REITs are characterized as equity REITs, mortgage REITs and hybrid
REITs. Equity REITs, which may include operating or finance companies, own real
estate directly and the value of, and income earned by, the REITs depends upon
the income of the underlying properties and the rental income they earn. Equity
REITs also can realize capital gains (or losses) by selling properties that have
appreciated (or depreciated) in value. Mortgage REITs can make construction,
development or long-term mortgage loans and are sensitive to the credit quality
of the borrower. Mortgage REITs derive their income from interest payments on
such loans. Hybrid REITs combine the characteristics of both equity and mortgage
REITs, generally by holding both ownership interests and mortgage interests in
real estate. The value of securities issued by REITs are affected by tax and
regulatory requirements and by perceptions of management skill. They also are
subject to heavy cash flow dependency, defaults by borrowers or tenants,
self-liquidation and the possibility of failing to qualify for tax-free status
under the Code or to maintain exemption from the 1940 Act.
ADJUSTABLE-RATE MORTGAGE LOANS ("ARMS")--ARMs eligible for inclusion in a
mortgage pool will generally provide for a fixed initial mortgage interest rate
for a specified period of time, generally for either the first three, six,
twelve, thirteen, thirty-six, or sixty scheduled monthly payments. Thereafter,
the interest rates are subject to periodic adjustment based on changes in an
index. ARMs typically have minimum and maximum rates beyond which the mortgage
interest rate may not vary over the lifetime of the loans. Certain ARMs provide
for additional limitations on the maximum amount by which the mortgage interest
rate may adjust for any single adjustment period. Negatively amortizing ARMs may
provide limitations on changes in the required monthly payment. Limitations on
monthly payments can result in monthly payments that are greater or less than
the amount necessary to amortize a negatively amortizing ARM by its maturity at
the interest rate in effect during any particular month.
PRIVATE ENTITY SECURITIES--These mortgage-related securities are issued by
commercial banks, savings and loan institutions, mortgage bankers, private
mortgage insurance companies and other nongovernmental issuers. Timely payment
of principal and interest on mortgage-related securities backed by pools created
by non-governmental issuers often is supported partially by various forms of
insurance or guarantees, including individual loan, title, pool and hazard
insurance. The insurance and guarantees are issued by government entities,
private insurers and the mortgage poolers. There can be no assurance that the
private insurers or mortgage poolers can meet their obligations under the
policies, so that if the issuers default on their obligations the holders of the
security could sustain a loss. No insurance or guarantee covers the Fund or the
price of the Fund's shares. Mortgage-related securities issued by
non-governmental issuers generally offer a higher rate of interest than
government-agency and government-related securities because there are no direct
or indirect government guarantees of payment.
OTHER MORTGAGE-RELATED SECURITIES--Other mortgage-related securities include
securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
on real property, including CMO residuals. Other mortgage-related securities may
be equity or debt securities issued by agencies or instrumentalities of the U.S.
Government or by private originators of, or investors in, mortgage loans,
including savings and loan associations, homebuilders, mortgage banks,
commercial banks, investment banks, partnerships, trusts and special purpose
entities of the foregoing.
ASSET-BACKED SECURITIES. (All Funds, except Dreyfus Equity Income
Fund) Asset-backed securities are a form of derivative. The securitization
techniques used for asset-backed securities are similar to those used for
mortgage-related securities. These securities include debt securities and
securities with debt-like characteristics. The collateral for these securities
has included home equity loans, automobile and credit card receivables, boat
loans, computer leases, airplane leases, mobile home loans, recreational vehicle
loans and hospital account receivables. A Fund may invest in these and other
types of asset-backed securities that may be developed in the future.
Asset-backed securities present certain risks that are not presented
by mortgage-backed securities. Primarily, these securities may provide a Fund
with a less effective security interest in the related collateral than do
mortgage-backed securities. Therefore, there is the possibility that recoveries
on the underlying collateral may not, in some cases, be available to support
payments on these securities.
ZERO COUPON SECURITIES. (All Funds, except Dreyfus Equity Income Fund)
A Fund may invest in zero coupon U.S. Treasury securities, which are Treasury
Notes and Bonds that have been stripped of their unmatured interest coupons, the
coupons themselves and receipts or certificates representing interests in such
stripped debt obligations and coupons. Zero coupon securities also are issued by
corporations and financial institutions which constitute a proportionate
ownership of the issuer's pool of underlying U.S. Treasury securities. A zero
coupon security pays no interest to its holders during its life and is sold at a
discount to its face value at maturity. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically and are likely to respond to a greater degree to
changes in interest rates than non-zero coupon securities having similar
maturities and credit qualities.
Zero coupon securities issued by private entities include bonds,
notes, and debentures that do not pay current interest and are issued at
substantial discounts from par value or, in some cases, that pay no current
interest until a stated date one or more years in the future, after which the
issuer is obligated to pay interest until maturity (in which case the interest
rate is usually higher than if interest were payable from the issuance date).
Zero coupon securities, including issued by private entities are subject to the
risk of the issuer's failure to pay interest and repay the principal value of
the security, which risk is enhanced in the case of below investment grade rated
(or of comparable quality, if unrated) zero coupon securities. Private entities
also may issue zero coupon securities which constitute a proportionate interest
of the issuer's pool of underlying U.S. Treasury securities. Zero coupon
securities issued directly by the U.S. Treasury include notes and bonds which
have been stripped of their interest coupons and receipts. While U.S.
Treasury-related zero coupon securities are not subject to the same credit risk
as a security issued directly by a private entity, they are subject to interest
rate risk to the same extent.
The Fund is required to accrue taxable income on zero coupon
securities and is required to distribute it to shareholders. Such distributions
may require the Fund to sell other securities and incur a gain or loss at a time
it may otherwise not want to in order to obtain the cash needed for these
distributions.
HIGH YIELD-LOWER RATED SECURITIES. (All Funds, except Dreyfus Equity
Income Fund) A Fund may invest in higher yielding (and, therefore higher risk)
debt securities, including mortgage-related securities. These securities include
those rated below Baa by Moody's Investors Service, Inc. ("Moody's") and below
BBB by Standard & Poor's Ratings Group ("S&P"), Fitch IBCA, Inc. ("Fitch") and
Duff & Phelps Credit Rating Co. ("Duff," and with the other rating agencies, the
"Rating Agencies") and as low as the lowest rating assigned by the Rating
Agencies. Securities rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Securities
rated BB by S&P, Fitch or Duff are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term vulnerability to
default than other speculative grade debt, they face major ongoing uncertainties
or exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
Securities rated C by Moody's are regarded as having extremely poor prospects of
ever attaining any real investment standing. Securities rated D by S&P, Fitch
and Duff are in default and the payment of interest and/or repayment of
principal is in arrears. Such securities, though high yielding, are
characterized by great risk. See "Appendix" for a general description of
securities ratings.
The ratings of Moody's, S&P, Fitch and Duff represent their opinions
as to the quality of the obligations which they undertake to rate. Ratings are
relative and subjective and, although ratings may be useful in evaluating the
safety or interest and principal payments, they do not evaluate the market value
risk of such obligations. Although these ratings may be an initial criterion for
selection of portfolio investments, the Manager also will evaluate these
securities and the ability of the issuers of such securities to pay interest and
principal. The Fund's ability to achieve its investment objective may be more
dependent on the Manager's credit analysis than might be the case for a fund
that invested in higher rated securities.
With respect to each of Dreyfus Premier High Yield Securities Fund,
Dreyfus Premier High Yield Debt Plus Equity Fund and Dreyfus Short Term High
Yield Fund, the average distribution of investments of the Fund in corporate
bonds (excluding preferred stock, convertible preferred stock and convertible
bonds) by ratings for the fiscal year ended October 31, 1999, calculated monthly
on a dollar-weighted basis, was as follows:
DREYFUS PREMIER HIGH MOODY'S or S&P, FITCH OR DUFF PERCENTAGE
YIELD SECURITIES FUND
Aaa AAA 0.4%
Ba BB 4.0%
B B 43.7%
Caa CCC 6.5%
NR NR 25.2%*
---------
79.8%**
* These unrated securities have been determined by the Manager to be of
comparable quality to securities rated as follows: BB (.2%), CCC (22.2%), and CC
(.1%).
** The Fund also owns equity securities (1.1%), convertible preferred stocks
rated CCC (1.4%), preferred stocks rated AAA (.6%), preferred stocks rated BB
(0.1%), preferred stocks rated B (6.0%), preferred stock rated CCC (11.5%) and
convertible bonds rated B (1.5%). Approximately 2.0% of the Fund's assets were
invested in cash or cash equivalents.
DREYFUS PREMIER HIGH YIELD MOODY'S or S&P, FITCH OR DUFF PERCENTAGE
DEBT PLUS EQUITY FUND
Aaa AAA 36.4%
Ba BB 0.6%
B B 21.6%
Caa CCC 3.0%
NR NR 7.4%*
--------
69.0%**
* These unrated securities have been determined by the Manager to be of
comparable quality to securities rated as follows: B (3.4%) and CCC (4.0%).
** The Fund also owns equity securities (17.6%), convertible preferred stocks
rated CCC (8.2%), preferred stocks rated CCC (2.7%) and convertible bonds rated
B (3.7%). Approximately 1.2% of the Fund's assets were invested in cash or cash
equivalents.
DREYFUS SHORT TERM MOODY'S or S&P, FITCH OR DUFF PERCENTAGE
HIGH YIELD FUND
Aaa AAA 0.2%
Ba BB 7.3%
B B 66.8%
Caa CCC 10.7%
NR NR 8.0%*
--------
93.0%**
* These unrated securities have been determined by the Manager to be of
comparable quality to securities rated as follows: BB (0.4%), B (5.0%), CCC
(2.6%).
** The Fund also owns equity securities (0.1%), convertible preferred stocks
rated B (0.2%), preferred stocks rated CCC (1.9%), convertible bonds A (1.0%),
convertible bonds rated BB (0.1%), and convertible bonds rated B (5.0%).
Approximately 1.3% of the Fund's assets were invested in cash or cash
equivalents.
DREYFUS PREMIER REAL ESTATE MOODY'S or S&P, FITCH OR DUFF PERCENTAGE
MORTGAGE FUND
Aaa AAA 33.9%
A A 5.2%
Baa BBB 22.5%
Ba BB 14.6%
B B 3.4%
NR NR 34.2%*
---------
113.8%**
* These unrated securities have been determined by the Manager to be comparable
quality to securities rated as follows: A (1.2%), BBB (6.2%), BB (2.2%), B
(18.9%), and CCC (5.9%).
** The Fund also owns equity securities (22.1%). Approximately 35.9% of the
Fund's assets were invested in cash or cash equivalents.
DREYFUS PREMIER MOODY'S or S&P, FITCH OR DUFF PERCENTAGE
CORE BOND FUND
Aaa AAA 36.4%
Aa AA 1.5%
A A 6.9%
Baa BBB 21.3%
Ba BB 16.8%
B B 6.3%
NR NR 3.9%*
----------
93.1%**
===========
* These unrated securities have been determined by the Manager to be of
comparable quality to securities rated as follows: BBB (2.9%), BB (0.9%), and B
(0.1%).
** The Fund also owns equity securities (0.5%), convertible preferred stocks
rated AAA (0.4%), convertible preferred stocks rated BBB (0.1%), convertible
preferred stocks rated A (0.4%), convertible preferred stocks rated BB (1.6%),
preferred stocks rated CCC (6.5%), convertible bonds rated A (0.7%), convertible
bonds rated BBB (2.3%), and convertible bonds rated B (2.7%). Approximately 8.3%
of the Fund's assets were invested in cash or cash equivalents.
The actual distribution of each of these Funds' corporate bond
investments by ratings on any given date will vary, and the distribution of the
Fund's investments by ratings as set forth above should not be considered as
representative of the Fund's future portfolio composition.
AMERICAN DEPOSITARY RECEIPTS. (Dreyfus Equity Income Fund and Dreyfus
Premier High Yield Debt Plus Equity Fund only) Each of these Funds may invest in
American Depositary Receipts ("ADRs"). These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. Generally, ADRs in registered form are designed for use in the
United States securities markets. ADRs may be purchased through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depositary. A depositary may establish
an unsponsored facility without participation by the issuer of the deposited
security. Holders of unsponsored depositary receipts generally bear all the
costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES.
(All Funds, except Dreyfus Equity Income Fund) A Fund may invest in obligations
issued or guaranteed by one or more foreign governments or any of their
political subdivisions, agencies or instrumentalities that are determined by the
Manager to be of comparable quality to the other obligations in which the Fund
may invest. Such securities also include debt obligations of supranational
entities. Supranational entities include international organizations designated
or supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.
ILLIQUID SECURITIES. (All Funds) A 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. These securities may include securities that are not readily
marketable, such as 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 privately negotiated, non-exchange
traded options 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.
MONEY MARKET INSTRUMENTS. (All Funds) When the Manager determines that
adverse market conditions exist, a Fund may adopt a temporary defensive position
and invest some or all of its assets in money market instruments, including U.S.
Government securities, repurchase agreements, bank obligations and commercial
paper. A Fund also may purchase money market instruments when it has cash
reserves or in anticipation of taking a market position.
INVESTMENT TECHNIQUES
The following information supplements and should be read in
conjunction with each Fund's Prospectus.
DURATION. (All Funds, except Dreyfus Equity Income Fund) As a measure
of a fixed- income security's cash flow, duration is an alternative to the
concept of "term to maturity" in assessing the price volatility associated with
changes in interest rates. Generally, the longer the duration, the more
volatility an investor should expect. For example, the market price of a bond
with a duration of three years would be expected to decline 3% if interest rates
rose 1%. Conversely, the market price of the same bond would be expected to
increase 3% if interest rates fell 1%. The market price of a bond with a
duration of six years would be expected to increase or decline twice as much as
the market price of a bond with a three-year duration. Duration is a way of
measuring a security's maturity in terms of the average time required to receive
the present value of all interest and principal payments as opposed to its term
to maturity. The maturity of a security measures only the time until final
payment is due; it does not take account of the pattern of a security's cash
flows over time, which would include how cash flow is affected by prepayments
and by changes in interest rates. Incorporating a security's yield, coupon
interest payments, final maturity and option features into one measure, duration
is computed by determining the weighted average maturity of a bond's cash flows,
where the present values of the cash flows serve as weights. In computing the
duration of the Fund, the Manager will estimate the duration of obligations that
are subject to features such as prepayment or redemption by the issuer, put
options retained by the investor or other imbedded options, taking into account
the influence of interest rates on prepayments and coupon flows.
PORTFOLIO MATURITY. (Dreyfus Premier Core Bond Fund and Dreyfus Short
Term High Yield Fund only) Dreyfus Premier Core Bond Fund typically will
maintain an average effective maturity ranging between five and ten years.
However, to the extent the maturity of the Fund's benchmark index is outside
this range at a particular time (generally, this may occur during other than
usual market conditions), the Fund's average effective maturity also may fall
outside such range. Under normal market conditions, the average effective
portfolio maturity of Dreyfus Short Term High Yield Fund is expected to be three
years or less. For purposes of calculating average effective portfolio maturity,
a security that is subject to redemption at the option of the issuer on a
particular date (the "call date") which is prior to the security's stated
maturity may be deemed to mature on the call date rather than on its stated
maturity date. The call date of a security will be used to calculate average
effective portfolio maturity when the Manager reasonably anticipates, based upon
information available to it, that the issuer will exercise its right to redeem
the security. The Manager may base its conclusion on such factors as the
interest-rate paid on the security compared to prevailing market rates, the
amount of cash available to the issuer of the security, events affecting the
issuer of the security, and other factors that may compel or make it
advantageous for the issuer to redeem a security prior to its stated maturity.
LEVERAGE. (All Funds) Leveraging (that is, buying securities using
borrowed money) exaggerates the effect on net asset value of any increase or
decrease in the market value of a Fund's portfolio. These borrowings will be
subject to interest costs which may or may not be recovered by appreciation of
the securities purchased; in certain cases, interest costs may exceed the return
received on the securities purchased. For borrowings for investment purposes,
the 1940 Act requires a Fund to maintain continuous asset coverage (total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of the
amount borrowed. If the required coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell some of its
portfolio holdings within three days to reduce the amount of its borrowings and
restore the 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time. The Fund also may be
required to maintain minimum average balances in connection with such borrowing
or pay a commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
A Fund may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the Fund of
an underlying debt instrument in return for cash proceeds based on a percentage
of the value of the security. The Fund retains the right to receive interest and
principal payments on the security. At an agreed upon future date, the Fund
repurchases the security at principal plus accrued interest. Except for these
transactions, a Fund's borrowings generally will be unsecured.
Although Dreyfus Equity Income Fund may borrow money for leveraging as
described above, it currently intends to borrow money 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 such borrowings exceed 5% of its total assets, Dreyfus
Equity Income Fund will not make any additional investments.
SHORT-SELLING. (All Funds) In these transactions, a Fund sells a
security it does not own anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently 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, which would result in a loss or gain, respectively.
Securities will not 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 a Fund's net assets. In the case of Dreyfus Premier
Core Bond Fund, Dreyfus Equity Income Fund, Dreyfus Premier High Yield
Securities Fund, and Dreyfus Short Term High Yield Fund, the Fund may not make a
short sale which results in the Fund having sold short in the aggregate more
than 5% of the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns.
Until the Fund closes its short position or replaces the borrowed
security, it will: (a) segregate permissible liquid assets in an amount that,
together with the amount deposited with the broker as collateral, always equals
the current value of the security sold short; or (b) otherwise cover its short
position.
LENDING PORTFOLIO SECURITIES. (All Funds) A Fund may lend securities
from its portfolio to brokers, dealers and other financial institutions needing
to borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities, which affords the Fund an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 33-1/3% of
the value of the Fund's total assets, and 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. Such loans are terminable by the
Fund 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. In connection with its securities lending
transactions, a 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.
DERIVATIVES. (All Funds) A Fund may invest in, or enter into,
derivatives, such as options and futures, swaps (as to swaps, with respect to
all Funds, except Dreyfus Premier Core Bond Fund and Dreyfus Equity Income
Fund), mortgage-related securities and asset-backed securities (except to
Dreyfus Equity Income Fund), for a variety of reasons, including to hedge
certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities. However, derivatives may entail investment
exposures that are greater than their cost would suggest, meaning that a small
investment in derivatives could have a large potential impact on a Fund's
performance.
If a Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or result
in a loss. A Fund also could experience losses if its derivatives were poorly
correlated with its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market for many
derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.
Although neither the Company nor any Fund will be a commodity pool,
certain derivatives subject the Funds to the rules of the Commodity Futures
Trading Commission which limit the extent to which a Fund can invest in such
derivatives. A Fund may invest in futures contracts and options with respect
thereto for hedging purposes without limit. However, no Fund may invest in such
contracts and options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; provided, however,
that in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5% limitation.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily variation margin system operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
derivatives purchased on an exchange. By contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly, the
Manager will consider the creditworthiness of Counterparties to over-the-counter
derivatives in the same manner as it would review the credit quality of a
security to be purchased by the Fund. Over-the-counter derivatives are less
liquid than exchange-traded derivatives since the other party to the transaction
may be the only investor with sufficient understanding of the derivative to be
interested in bidding for it.
FUTURES TRANSACTIONS--IN GENERAL. (All Funds) A Fund may enter into futures
contracts in U.S. domestic markets, or on exchanges located outside the United
States. Foreign markets may offer advantages such as trading opportunities or
arbitrage possibilities not available in the United States. Foreign markets,
however, may have greater risk potential than domestic markets. For example,
some foreign exchanges are principal markets so that no common clearing facility
exists and an investor may look only to the broker for performance of the
contract. In addition, any profits that a Fund might realize in trading could be
eliminated by adverse changes in the currency exchange rate, or the Fund could
incur losses as a result of those changes. Transactions on foreign exchanges may
include commodities which are traded on domestic exchanges or those which are
not. Unlike trading on domestic commodity exchanges, trading on foreign
commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Fund's net assets. Although each Fund
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant market
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the position being hedged and the
price movements of the futures contract. For example, if a Fund uses futures to
hedge against the possibility of a decline in the market value of securities
held in its portfolio and the prices of such securities instead increase, the
Fund will lose part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in its futures
positions. Furthermore, if in such circumstances the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin requirements. A
Fund may have to sell such securities at a time when it may be disadvantageous
to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Fund may be required to segregate permissible liquid
assets to cover its obligations relating to its transactions in derivatives. To
maintain this required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
derivative position at a reasonable price. In addition, the segregation of such
assets will have the effect of limiting a Fund's ability otherwise to invest
those assets.
SPECIFIC FUTURES TRANSACTIONS. A Fund may purchase and sell interest rate
futures contracts. An interest rate future obligates the Fund to purchase or
sell an amount of a specific debt security at a future date at a specific price.
Each Fund, except Dreyfus Premier Real Estate Mortgage Fund, may
purchase and sell currency futures. A foreign currency future obligates the Fund
to purchase or sell an amount of a specific currency at a future date at a
specific price.
A Fund may purchase and sell stock index futures contracts. A stock
index future obligates the Fund to pay or receive an amount of cash equal to a
fixed dollar amount specified in the futures contract multiplied by the
difference between the settlement price of the contract on the contract's last
trading day and the value of the index based on the stock prices of the
securities that comprise it at the opening of trading in such securities on the
next business day.
INTEREST RATE SWAPS. (All Funds, except Dreyfus Premier Core Bond Fund
and Dreyfus Equity Income Fund) Interest rate swaps involve the exchange by the
Fund with another party of their respective commitments to pay or receive
interest (for example, an exchange of floating rate payments for fixed-rate
payments). The exchange commitments can involve payments to be made in the same
currency or in different currencies. The use of interest rate swaps is a highly
specialized activity which involves investment techniques and risks different
from those associated with ordinary portfolio security transactions. If the
Manager is incorrect in its forecasts of market values, interest rates and other
applicable factors, the investment performance of the Fund would diminish
compared with what it would have been if these investment techniques were not
used. Moreover, even if the Manager is correct in its forecasts, there is a risk
that the swap position may correlate imperfectly with the price of the asset or
liability being hedged. There is no limit on the amount of interest rate swap
transactions that may be entered into by the Fund. These transactions do not
involve the delivery of securities or other underlying assets or principal.
Accordingly, the risk of loss with respect to interest rate swaps is limited to
the net amount of interest payments that the Fund is contractually obligated to
make. If the other party to an interest rate swap defaults, the Fund's risk of
loss consists of the net amount of interest payments that the Fund contractually
is entitled to receive.
CREDIT DERIVATIVES. (Dreyfus Premier High Yield Securities Fund, Dreyfus Premier
High Yield Debt Plus Equity Fund and Dreyfus Short Term High Yield Fund only)
Each of these Funds may engage in credit derivative transactions. There are two
broad categories of credit derivatives: default price risk derivatives and
market spread derivatives. Default price risk derivatives are linked to the
price of reference securities or loans after a default by the issuer or
borrower, respectively. Market spread derivatives are based on the risk that
changes in market factors, such as credit spreads, can cause a decline in the
value of a security, loan or index. There are three basic transactional forms
for credit derivatives: swaps, options and structured instruments. The use of
credit derivatives is a highly specialized activity which involves strategies
and risks different from those associated with ordinary portfolio security
transactions. If the Manager is incorrect in its forecasts of default risks,
market spreads or other applicable factors, the investment performance of the
Fund would diminish compared with what it would have been if these techniques
were not used. Moreover, even if the Manager is correct in its forecasts, there
is a risk that a credit derivative position may correlate imperfectly with the
price of the asset or liability being hedged. There is no limit on the amount of
credit derivative transactions that may be entered into by the Fund. The Fund's
risk of loss in a credit derivative transaction varies with the form of the
transaction. For example, if the Fund purchases a default option on a security,
and if no default occurs with respect to the security, the Fund's loss is
limited to the premium it paid for the default option. In contrast, if there is
a default by the grantor of a default option, the Fund's loss will include both
the premium that it paid for the option and the decline in value of the
underlying security that the default option hedged.
OPTIONS--IN GENERAL. (All Funds) A Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and put options. A Fund
may write (i.e., sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option contracts are
written. A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to sell,
and obligates the writer to buy, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
A covered call option written by a Fund is a call option with respect
to which a Fund owns the underlying security or otherwise covers the transaction
by segregating permissible liquid assets. A put option written by a Fund is
covered when, among other things, the Fund segregates permissible liquid assets
having a value equal to or greater than the exercise price of the option to
fulfill the obligation undertaken. The principal reason for writing covered call
and put options is to realize, through the receipt of premiums, a greater return
than would be realized on the underlying securities alone. A Fund receives a
premium from writing covered call or put options which it retains whether or not
the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
SPECIFIC OPTIONS TRANSACTIONS. Each Fund, except Dreyfus Premier Real Estate
Mortgage Fund, may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a price
which is expected to be lower or higher than the spot price of the currency at
the time the option is exercised or expires.
Dreyfus Equity Income Fund and Dreyfus Premier High Yield Debt Plus
Equity Fund may purchase and sell call and put options in respect of specific
securities (or groups or "baskets" of specific securities) or stock indices
listed on national securities exchanges or traded in the over-the-counter
market. An option on a stock index is similar to an option in respect of
specific securities, except that settlement does not occur by delivery of the
securities comprising the index. Instead, the option holder receives an amount
of cash if the closing level of the stock index upon which the option is based
is greater than in the case of a call, or less than in the case of a put, the
exercise price of the option. Thus, the effectiveness of purchasing or writing
stock index options will depend upon price movements in the level of the index
rather than the price of a particular stock.
Each Fund, except Dreyfus Premier Core Bond Fund, may purchase
cash-settled options on swaps in pursuit of their respective investment
objective. Equity index swaps in which Dreyfus Equity Income Fund and Dreyfus
Premier High Yield Debt Plus Equity Fund may invest, involve the exchange by the
Fund with another party of cash flows based upon the performance of an index or
a portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by a Fund of options will be subject to the ability of
the Manager to predict correctly movements in the prices of individual stocks,
the stock market generally, foreign currencies or interest rates. To the extent
such predictions are incorrect, a Fund may incur losses.
FUTURE DEVELOPMENTS. (All Funds) A Fund may take advantage of
opportunities in the area of options and futures contracts and options on
futures contracts and any other derivatives which are not presently contemplated
for use by the Fund or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before entering into
such transactions or making any such investment, the Fund will provide
appropriate disclosure in its Prospectus or Statement of Additional Information.
FORWARD ROLL TRANSACTIONS. (Dreyfus Premier Core Bond Fund and Dreyfus
Premier Real Estate Mortgage Fund only) To enhance current income, each of these
Funds may enter into forward roll transactions with respect to mortgage-related
securities. In a forward roll transaction, the Fund sells a mortgage-related
security to a financial institution, such as a bank or broker-dealer, and
simultaneously agrees to purchase a similar security from the institution at a
later date at an agreed upon price. The securities that are purchased will bear
the same interest rate as those sold, but generally will be collateralized by
different pools of mortgages with different pre-payment histories than those
sold. During the period between the sale and purchase, the Fund will not be
entitled to receive interest and principal payments on the securities sold.
Proceeds of the sale typically will be invested in short-term instruments,
particularly repurchase agreements, and the income from these investments,
together with any additional fee income received on the sale will be expected to
generate income for the Fund exceeding the yield on the securities sold. Forward
roll transactions involve the risk that the market value of the securities sold
by the Fund may decline below the purchase price of those securities. The Fund
will segregate permissible liquid assets at least equal to the amount of the
repurchase price (including accrued interest).
FORWARD COMMITMENTS. (All Funds) A Fund may purchase or sell
securities on a forward commitment, when-issued or delayed delivery basis, which
means delivery and payment take place a number of days after the date of the
commitment to purchase or sell the securities at a predetermined price and/or
yield. Typically, no interest accrues to the purchaser until the security is
delivered. When purchasing a security on a forward commitment basis, the Fund
assumes the rights and risks of ownership of the security, including the risk of
price and yield fluctuations, and takes such fluctuations into account when
determining its net asset value. Because the Fund is not required to pay for
these securities until the delivery date, these risks are in addition to the
risks associated with the Fund's other investments. If the Fund is fully or
almost fully invested when forward commitment purchases are outstanding, such
purchases may result in a form of leverage. The Fund intends to engage in
forward commitments to increase its portfolio's financial exposure to the types
of securities in which it invests. Leveraging the portfolio in this manner will
increase the Fund's exposure to changes in interest rates and will increase the
volatility of its returns. The Fund will segregate permissible liquid assets at
least equal at all times to the amount of the Fund's purchase commitments. At no
time will the Fund have more than 33-1/3% of its assets committed to purchase
securities on a forward commitment basis.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment or when-issued basis may expose a Fund to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued basis when a Fund
is fully or almost fully invested may result in greater potential fluctuation in
the value of the Fund's net assets and its net asset value per share.
FOREIGN CURRENCY TRANSACTIONS. (All Funds, except Dreyfus Premier Real
Estate Mortgage Fund) A Fund may enter into foreign currency transactions for a
variety of purposes, including: to fix in U.S. dollars, between trade and
settlement date, the value of a security the Fund has agreed to buy or sell; to
hedge the U.S. dollar value of securities the Fund already owns, particularly if
it expects a decrease in the value of the currency in which the foreign security
is denominated; or to gain exposure to the foreign currency in an attempt to
realize gains.
Foreign currency transactions may involve, for example, a Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies. A short position would involve the Fund
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency the Fund contracted to receive. A
Fund's success in these transactions will depend principally on the ability of
the Manager to predict accurately the future exchange rates between foreign
currencies and the U.S. dollar.
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.
INVESTMENT CONSIDERATIONS AND RISKS
HIGH YIELD-LOWER RATED SECURITIES. (All Funds, except Dreyfus Equity
Income Fund) Each of these Funds may invest in securities rated below investment
grade such as those rated Ba by Moody's BB by S&P, Fitch and Duff, including in
securities with the lowest rating assigned by the Rating Agencies. They may be
subject to certain risks with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated securities. The
retail secondary market for these securities may be less liquid than that of
higher rated securities; adverse conditions could make it difficult at times for
the Fund to sell certain securities or could result in lower prices than those
used in calculating the Fund's net asset value.
Bond prices are inversely related to interest rate changes; however,
bond price volatility also is inversely related to coupon. Accordingly, below
investment grade securities may be relatively less sensitive to interest rate
changes than higher quality securities of comparable maturity, because of their
higher coupon. This higher coupon is what the investor receives in return for
bearing greater credit risk. The higher credit risk associated with below
investment grade securities potentially can have a greater effect on the value
of such securities than may be the case with higher quality issues of comparable
maturity, and will be a substantial factor in the Fund's relative share price
volatility. Although ratings may be useful in evaluating the safety of interest
and principal payments, they do not evaluate the market value risk of these
securities. These Funds will rely on the Manager's judgment, analysis and
experience in evaluating the creditworthiness of an issuer.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of such
issuers generally is greater than is the case with the higher rated securities.
For example, during an economic downturn or a sustained period of rising
interest rates, highly leveraged issuers of these securities may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations also may be affected adversely by
specific corporate developments, forecasts, or the unavailability of additional
financing. The risk of loss because of default by the issuer is significantly
greater for the holders of these securities because such securities generally
are unsecured and often are subordinated to other creditors of the Issuer.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold only
to a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is not as
liquid as the secondary market for higher rated securities. The lack of a liquid
secondary market may have an adverse impact on market price and yield and the
Fund's ability to dispose of particular issues when necessary to meet the Fund's
liquidity needs or in response to a specific economic event such as a
deterioration in the creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for the
Fund to obtain accurate market quotations for purposes of valuing the Fund's
portfolio and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play a
greater role in valuation because less reliable, objective data may be
available.
These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
A Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. No Fund has an
arrangement with any person concerning the acquisition of such securities, and
the Manager will review carefully the credit and other characteristics pertinent
to such new issues.
MORTGAGE-RELATED SECURITIES. (All Funds, except Dreyfus Equity Income
Fund) Mortgage-related securities are complex derivative instruments, subject to
both credit and prepayment risk. Although they may provide opportunities for
enhanced total return, you should be aware that the lower rated mortgage-related
securities in which the Fund may invest are likely to be more volatile and less
liquid, and more difficult to price accurately, than more traditional debt
securities. These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities.
Mortgage-related securities generally are subject to credit risks
associated with the performance of the underlying mortgage properties and to
prepayment risk. In certain instances, the credit risk associated with
mortgage-related securities can be reduced by third party guarantees or other
forms of credit support. Improved credit risk does not reduce prepayment risk
which is unrelated to the rating assigned to the mortgage-related security.
Prepayment risk can lead to fluctuations in value of the mortgage-related
security which may be pronounced. If a mortgage-related security is purchased at
a premium, all or part of the premium may be lost if there is a decline in the
market value of the security, whether resulting from changes in interest rates
or prepayments on the underlying mortgage collateral. Certain mortgage-related
securities that may be purchased by a Fund, such as inverse floating rate
collateralized mortgage obligations, have coupons that move inversely to a
multiple of a specific index which may result in a form of leverage. As with
other interest-bearing securities, the prices of certain mortgage-related
securities are inversely affected by changes in interest rates. However,
although the value of a mortgage-related security may decline when interest
rates rise, the converse is not necessarily true, since in periods of declining
interest rates the mortgages underlying the security are more likely to be
prepaid. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying
mortgages, and, therefore, it is not possible to predict accurately the
security's return to the Fund. Moreover, with respect to certain stripped
mortgage-backed securities, if the underlying mortgage securities experience
greater than anticipated prepayments of principal, the Fund may fail to fully
recoup its initial investment even if the securities are rated in the highest
rating category by a nationally recognized statistical rating organization.
During periods of rapidly rising interest rates, prepayments of mortgage-related
securities may occur at slower than expected rates. Slower prepayments
effectively may lengthen a mortgage-related security's expected maturity which
generally would cause the value of such security to fluctuate more widely in
response to changes in interest rates. Were the prepayments on a Fund's
mortgage-related securities to decrease broadly, the Fund's effective duration,
and thus sensitivity to interest rate fluctuations, would increase. Commercial
real property loans, however, often contain provisions that reduce the
likelihood that such securities will be prepaid. The provisions generally impose
significant prepayment penalties on loans and in some cases there may be
prohibitions on principal prepayments for several years following origination.
REAL ESTATE-RELATED EQUITY SECURITIES. (Dreyfus Premier Real Estate
Mortgage Fund only) Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such fluctuations
can be pronounced. Changes in the value of the Fund's investments will result in
changes in the value of its shares and thus the Fund's total return to
investors.
An investment in the Fund will generally be subject to the risks
associated with real estate. These risks include declines in the value of real
estate, risks related to general and local economic conditions, overbuilding and
increased competition, increases in property taxes and operating expenses,
changes in zoning laws, casualty or condemnation losses, variations in rental
income, changes in neighborhood values, the appeal of properties to tenants and
increases in interest rates. The value of securities of companies that service
the real estate industry will also be affected by these risks.
The Fund's use of leverage may increase fluctuations in its net asset
value and increase the gain or loss on your investment.
FOREIGN SECURITIES. (All Funds) 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.
Because evidences of ownership of foreign securities usually are held
outside the United States, a Fund investing in such securities will be subject
to additional risks which include possible adverse political and economic
developments, seizure or nationalization of foreign deposits and adoption of
governmental restrictions which might adversely affect or restrict the payment
of principal and interest on the foreign securities to investors located outside
the country of the issuer, whether from currency blockage or otherwise.
Moreover, foreign securities held by a Fund may trade on days when the Fund does
not calculate its net asset value and thus affect the Fund's net asset value on
days when investors have no access to the Fund.
Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable, than those of
developed countries. The markets of developing countries may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many developing countries providing
investment opportunities for the Funds have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.
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.
SIMULTANEOUS INVESTMENTS. (All Funds) Investment decisions for each
Fund are made independently from those of the other investment companies advised
by the Manager. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a 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.
INVESTMENT RESTRICTIONS
Each Fund's investment objective is a fundamental policy, which cannot
be changed without approval by the holders of a majority (as defined in the 1940
Act) of the Fund's outstanding voting shares. In addition, the Funds have
adopted certain investment restrictions as fundamental policies and certain
other investment restrictions as non-fundamental policies, as described below.
DREYFUS EQUITY INCOME FUND, DREYFUS PREMIER HIGH YIELD SECURITIES FUND
AND DREYFUS SHORT TERM HIGH YIELD FUND ONLY. Each of these Funds has adopted
investment restrictions numbered 1 through 10 as fundamental policies, which
cannot be changed, as to a Fund, without approval by the holders of a majority
(as defined in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 11 through 16 are not fundamental policies and may be
changed by vote of a majority of the Company's Board members at any time. None
of these Funds may:
1. Invest more than 5% of its assets in the obligations of any single
issuer, 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, its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding voting securities of any
single issuer. This Investment Restriction applies only with respect to 75% of
the Fund's total assets.
3. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this Investment Restriction, the entry
into options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not constitute
borrowing.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may lend
its portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Company's Board.
8. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6, 13 and 14 may be deemed to give rise to a senior
security.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, and options on futures contracts.
11. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) 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.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it owns
in its portfolio as a shareholder in accordance with its views.
13. Pledge, mortgage or hypothecate 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, forward contracts, futures contracts, and options on futures
contracts.
14. Purchase, sell or write puts, calls or combinations thereof,
except as described in the relevant Fund's Prospectus and Statement of
Additional Information.
15. 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.
16. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
***
DREYFUS PREMIER CORE BOND FUND ONLY. The Fund has adopted investment
restrictions numbered 1 through 10 as fundamental policies, which cannot be
changed without approval by the holders of a majority (as defined in the 1940
Act) of the Fund's outstanding voting shares. Investment restrictions numbered
11 through 14 are not fundamental policies and may be changed by vote of a
majority of the Company's Board members 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. Notwithstanding the foregoing, based on rules of the
Securities and Exchange Commission, the Fund will not invest more than 5% of its
assets in the obligations of any one bank, except as otherwise provided in such
rules.
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. Invest more than 25% of its assets in investments in any particular
industry or industries (including banking), 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.
4. Purchase, hold or deal in real estate, or oil and gas interests,
but the Fund may purchase and sell securities that are secured by real estate
and may purchase and sell securities issued by companies that invest or deal in
real estate.
5. Invest in commodities, except that the Fund may purchase and sell
futures contracts, including those relating to indices, and options on futures
contracts or indices.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this investment restriction, the entry
into options, futures contracts, including those relating to indices, and
options on futures contracts or indices shall not constitute borrowing.
7. Make loans to others except through the purchase of debt
obligations or the entry into repurchase agreements. However, the Fund may lend
its portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the Fund's
Board members.
8. Act as an underwriter of securities of other issuers except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent permitted under the 1940 Act.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those relating to indices, and options on futures contracts
or indices.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when- issued or delayed delivery
basis and collateral and initial or variation margin arrangements with respect
to options, futures contracts, including those relating to indices and options
on futures contracts or indices.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it owns
in its portfolio as a shareholder in accordance with its views.
13. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
14. 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.
***
DREYFUS PREMIER HIGH YIELD DEBT PLUS EQUITY FUND AND DREYFUS PREMIER
REAL ESTATE MORTGAGE FUND ONLY. Each of these Funds has adopted investment
restrictions numbered 1 through 8 as fundamental policies, which cannot be
changed, as to a Fund, without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 9 through 11 are not fundamental policies and may be
changed by vote of a majority of the Company's Board members at any time.
Neither of these Funds may:
1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. As to Dreyfus Premier Real Estate
Mortgage Fund, for purposes of this Investment Restriction, securities and
instruments backed directly or indirectly by real estate and real estate
mortgages and securities of companies engaged in the real estate business,
including interests in real estate investment trusts, are not considered an
industry.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Purchase, hold or deal in real estate, but the Fund may purchase
and sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts or, as to Dreyfus
Premier Real Estate Mortgage Fund only, acquire and sell real estate as a result
of ownership of such securities or instruments.
4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this Investment Restriction, the entry
into options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not constitute
borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may tend
its portfolio securities in an amount not to exceed 33-1/3 % of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Company's Board.
6. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 2, 4, 8 and 9 may be deemed to give rise to a senior Security.
8. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those relating to indices, and options on futures contracts
or indices.
9. Pledge, mortgage or hypothecate 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, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
10. 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.
11. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
***
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision
of each Fund. The Board approves all significant agreements with those companies
that furnish services to the Fund. These companies are as follows:
The Dreyfus Corporation................. Investment Adviser
Premier Mutual Fund Services, Inc....... Distributor
Dreyfus Transfer, Inc................... Transfer Agent
Mellon Bank, N.A........................ Custodian
Board members and officers of the Company, together with information
as to their principal business occupations during at least the last five years,
are shown below.
BOARD MEMBERS OF THE COMPANY
JOSEPH S. DiMARTINO, CHAIRMAN OF THE BOARD. Since January 1995, Chairman of the
Board of various funds in the Dreyfus Family of Funds. He also is a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk management
services to health and other benefit programs, Carlyle Industries, Inc.
(formerly, Belding Heminway Company, Inc.), a button packager and
distributor, Century Business Services, Inc. (formerly, International
Alliance Services, Inc.), a provider of various outsourcing functions for
small and medium sized companies, and Career Blazers, Inc. (formerly,
Staffing Resources, Inc.), a temporary placement agency. For more than five
years prior to January 1995, he was President, a director and, until August
1994, Chief Operating Officer of the Manager and Executive Vice President
and a director of Dreyfus Service Corporation, a wholly-owned subsidiary of
the Manager and, until August 24, 1994, the Company's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Financial
Corporation. He is 56 years old and his address is 200 Park Avenue, New
York, New York 10166.
DAVID W. BURKE, BOARD MEMBER. Board member of various funds in the Dreyfus
Family of Funds. Chairman of the Broadcasting Board of Governors, an
independent board within the United States Information Agency, from August
1995 to November 1998. From August 1994 to December 31, 1994, he was a
Consultant to the Manager, and from October 1990 to August 1994, he was
Vice President and Chief Administrative Officer of the Manager. From 1977
to 1990, he 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. He is 63 years old and his address is Box 654,
Eastham, Massachusetts 02642.
DIANE DUNST, BOARD MEMBER. Since January 1992, President of Diane Dunst
Promotion, Inc., a full service promotion agency. From January 1989 to
January 1992, Director of Promotion Services, Lear's Magazine. From 1985 to
January 1989, she was Sales Promotion Manager of Wile Magazine. She is 60
years old and her address is 1172 Park Avenue, New York, New York 10128.
ROSALIND GERSTEN JACOBS, BOARD MEMBER. Marketing and Merchandising Consultant.
From 1977 to 1998, she was a director of Merchandise and Marketing for
Corporate Property Investors, a real estate investment company. From
1974 to 1976, she was owner and manager of a merchandise and marketing
consulting firm. Prior to 1974, she was a Vice President of Macy's, New
York. She is 74 years old and her address is 19 East 72nd Street, New
York, New York 10021.
JAY I. MELTZER, BOARD MEMBER. Physician engaged in private practice
specializing in internal medicine. He is also a member of the Advisory
Board of the Section of Society and Medicine, College of Physicians and
Surgeons, Columbia University and a Clinical Professor of Medicine,
Department of Medicine, Columbia University College of Physicians and
Surgeons. He is 71 years old and his address is 903 Park Avenue, New York,
New York 10021.
DANIEL ROSE, BOARD MEMBER. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and management
firm. Pursuant to a Presidential appointment received in July 1994, Mr.
Rose serves as a Director of the Baltic-American Enterprise Fund, which
makes equity investments and loans and provides technical business
assistance to new business concerns in the Baltic states. He is also
Chairman of the Housing Committee of The Real Estate Board of New York,
Inc., and a Board Member of Corporate Property Investors, a real estate
investment company. He is 70 years old and his address is c/o Rose
Associates, Inc., 200 Madison Avenue, New York, New York 10016.
WARREN B. RUDMAN, BOARD MEMBER. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. Mr. Rudman also serves as a
director of Prime Succession, Inc., Collins & Aikman Corporation, Chubb
Corporation and the Raytheon Company, and as a trustee of Boston College.
He also serves as Chairman of the President's Foreign Intelligence Advisory
Board (from January 1994 to February 1998, as Vice Chairman) and, as a
member of the Senior Advisory Board of the Institute of Politics of the
Kennedy School of Government at Harvard University. From January 1981 to
January 1993, Mr. Rudman served as a United States Senator from the State
of New Hampshire. From January 1993 to December 1994, Mr. Rudman served as
Chairman of the Federal Reserve Bank of Boston. He is 69 years old and his
address is c/o Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L Street,
N.W., Suite 1300, Washington, D.C. 20036.
SANDER VANOCUR, BOARD MEMBER. Since January 1992, Mr. Vanocur has been the
President of Old Owl Communications, a full-service communications firm.
From May 1995 to June 1996, he was a Professional in Residence at the
Freedom Forum in Arlington, VA, and, from January 1994 to May 1997, he
served as a Visiting Professional Scholar at the Freedom Forum First
Amendment Center at Vanderbilt University. From November 1989 to November
1995, he was a Director of the Damon Runyon-Walter Winchell Cancer Research
Fund. From June 1986 to December 1991, he was a Senior Correspondent of ABC
News and, from October 1977 to December 1991, he was Anchor of the ABC News
program "Business World," a weekly business program on the ABC television
network. Mr. Vanocur joined ABC News in 1977. He is 71 years old and his
address is 2626 Sycamore Canyon, Santa Barbara, California 93108.
The Company has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Company, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Company for election to the
Company's Board.
The Company typically pays its Board members 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. Emeritus Board members
are entitled to receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of compensation paid
to each Board member by the Company for the fiscal year ended October 31, 1999,
and by all funds in the Dreyfus Family of Funds for which such person is a Board
member (the number of which is set forth in parenthesis next to each Board
member's total compensation)* for the year ended December 31, 1999, were as
follows:
Total Compensation From
Aggregate Compensation Company and Fund
Name of Board Member From Company** Complex Paid to Board Member
Joseph S. DiMartino $6,250 $642,177 (162)
David W. Burke $5,000 $228,500 (57)
Rosalind Gersten Jacobs $5,000 $ 92,250 (44)
Diane Dunst $4,500 $ 37,750 (16)
Jay I. Meltzer $4,500 $ 37,750 (16)
Daniel Rose $4,500 $ 78,625 (29)
Warren B. Rudman $4,500 $ 68,000 (25)
Sander Vanocur $5,000 $ 78,625 (29)
- ------------------------------------------------------------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund Complex, including the Funds, for which the Board
member serves.
** Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $887 (Dreyfus Premier Core Bond Fund), $193
(Dreyfus Equity Income Fund), $573 (Dreyfus Premier High Yield
Securities Fund), $21 (Dreyfus Premier High Yield Debt Plus Equity
Fund), $228 (Dreyfus Premier Real Estate Mortgage Fund) and $2,791
(Dreyfus Short Term High Yield Fund) for all Board members as a group.
OFFICERS OF THE COMPANY
MARIE E. CONNOLLY, PRESIDENT AND TREASURER. President, Chief Executive Officer,
Chief Compliance Officer and a director of the Distributor and Funds
Distributor, Inc., the ultimate parent of which is Boston Institutional
Group, Inc., and an officer of other investment companies advised or
administered by the Manager. She is 41 years old.
MARGARET W. CHAMBERS, VICE PRESIDENT AND SECRETARY. Senior Vice President and
General Counsel of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From August
1996 to March 1998, she was Vice President and Assistant General Counsel
for Loomis, Sayles & Company, L.P. From January 1986 to July 1996, she was
an associate with the law firm of Ropes & Gray. She is 38 years old.
*FREDERICK C. DEY, VICE PRESIDENT AND ASSISTANT TREASURER AND ASSISTANT
SECRETARY. Vice President, New Business Development of Funds Distributor,
Inc., since September 1994, and an officer of other investment companies
advised or administered by the Manager. He is 37 years old.
STEPHANIE D. PIERCE, VICE PRESIDENT, ASSISTANT SECRETARY AND ASSISTANT
TREASURER. Vice President of the Distributor and Funds Distributor, Inc.,
and an officer of other investment companies advised or administered by the
Manager. From April 1997 to March 1998, she was employed as a Relationship
Manager with Citibank, N.A. From August 1995 to April 1997, she was an
Assistant Vice President with Hudson Valley Bank, and from September 1990
to August 1995, she was Second Vice President with Chase Manhattan Bank.
She is 30 years old.
MARY A. NELSON, VICE PRESIDENT AND ASSISTANT TREASURER. Vice President of the
Distributor and Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. From September 1989 to
July 1994, she was an Assistant Vice President and Client Manager for The
Boston Company, Inc. She is 34 years old.
*GEORGE A. RIO, VICE PRESIDENT AND ASSISTANT TREASURER. Executive Vice President
and Client Service Director of Funds Distributor, Inc., and an officer of
other investment companies advised or administered by the Manager. From
June 1995 to March 1998, he was Senior Vice President and Senior Key
Account Manager for Putnam Mutual Funds. From May 1994 to June 1995, he was
Director of Business Development for First Data Corporation. He is 43 years
old.
JOSEPH F. TOWER, III, VICE PRESIDENT AND ASSISTANT TREASURER. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. He is 36 years old.
DOUGLAS C. CONROY, VICE PRESIDENT AND ASSISTANT SECRETARY. Assistant Vice
President of Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. He is 29 years old.
CHRISTOPHER J. KELLEY, VICE PRESIDENT AND ASSISTANT SECRETARY. Vice President
and Senior Associate General Counsel of the Distributor and Funds
Distributor, Inc., and an officer of other investment companies advised or
administered by the Manager. From April 1994 to July 1996, he was Assistant
Counsel at Forum Financial Group. He is 34 years old.
KATHLEEN K. MORRISEY, VICE PRESIDENT AND ASSISTANT SECRETARY. Manager of
Treasury Services Administration of Funds Distributor, Inc., and an officer
of other investment companies advised or administered by the Manager. From
July 1994 to November 1995, she was a Fund Accountant for Investors Bank &
Trust Company. She is 26 years old.
ELBA VASQUEZ, VICE PRESIDENT AND ASSISTANT SECRETARY. Assistant Vice President
of Funds Distributor, Inc., and an officer of other investment companies
advised or administered by the Manager. From March 1990 to May 1996, she
was employed by U.S. Trust Company of New York where she held various sales
and marketing positions. She is 37 years old.
*KAREN JACOPPO-WOOD, VICE PRESIDENT AND ASSISTANT SECRETARY. Vice President and
Senior Counsel of Funds Distributor, Inc., since February 1997, and an
officer of other investment companies advised or administered by the
Manager. From June 1994 to January 1996, she was Manager of SEC
Registration at Scudder, Stevens & Clark, Inc. Prior to June 1994, she was
a senior paralegal at The Boston Company Advisors, Inc. She is 32 years
old.
The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166, except those officers indicated by (*), whose address is
60 State Street, Boston, Massachusetts 02109.
The Company's Board members and officers, as a group, owned less than
1% of each Fund's voting securities outstanding on February 8, 1999.
As of February 8, 1999, the following shareholders were known by the
Company to own 5% or more of the outstanding voting securities of the indicated
Fund: Dreyfus Equity Income Fund: APT Holdings Corporation, Wilmington, DE
(69.44%); Mark N. Jacobs and Susan R. Jacobs, Short Hills, NJ (6.62%); Dreyfus
Premier High Yield Securities Fund: Class A: Charles Schwab & Co. Inc. Reinvest
Account, San Francisco, CA (18.45%); Charles Schwab & Co. Inc. Cash Account, San
Francisco, CA (10.57%); Richard Family Trust, Calabasas, CA (6.83%); Dreyfus
Short Term High Yield Fund: Charles Schwab & Co. Inc. Reinvest Account, San
Francisco, CA (12.31%); Dreyfus Premier Real Estate Mortgage Fund: Class A -
MBCIC, c/o Mellon Bank, Wilmington, DE (82.14%); Class B, Class C, Class T, and
Class R - Premier Mutual Fund Services Inc., Boston, MA (100.00%) each; Dreyfus
Premier High Yield Debt Plus Equity Fund: Class A - MBCIC, c/o Mellon Bank,
Wilmington, DE (98.94%); Class B - MBCIC, c/o Mellon Bank, Wilmington, DE
(90.64%); Class C - MBCIC, c/o Mellon Bank, Wilmington, DE (98.77%); Class T -
MBCIC, c/o Mellon Bank, Wilmington, DE (100.00%). A shareholder who beneficially
owns, directly or indirectly, more than 25% of a Fund's voting securities may be
deemed a "control person" (as defined in the 1940 Act) of the Fund.
MANAGEMENT ARRANGEMENTS
INVESTMENT ADVISER. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). 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.
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") between the Company and the Manager. As to each
Fund, the Agreement is subject to annual approval by (i) the Company's Board or
(ii) vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the continuance also is
approved by a majority of the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Company or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. As to each Fund,
the Agreement is terminable without penalty, on 60 days' notice, by the
Company's Board or by vote of the holders of a majority of such Fund's shares,
or, on not less than 90 days' notice, by the Manager. The Agreement will
terminate automatically, as to the relevant Fund, in the event of its assignment
(as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment Officer
and a director; Thomas F. Eggers, Vice-Chairman - Institutional and a director;
Lawrence S. Kash, Vice Chairman; Ronald P. O'Hanley III, Vice Chairman; J. David
Officer, Vice Chairman and a director; William T. Sandalls, Jr., Executive Vice
President; Stephen R. Byers, Senior Vice President; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Diane P. Durnin, Vice President--New
Products; Patrice M. Kozlowski, Vice President--Corporate Communications; Mary
Beth Leibig, Vice President--Human Resources; Ray Van Cott, Vice
President--Information Systems; Theodore A. Schachar, Vice President--Tax; Wendy
Strutt, Vice President; William H. Maresca, Controller; James Bitetto, Assistant
Secretary; Steven F. Newman, Assistant Secretary; and Mandell L. Berman, Burton
Borgelt, Steven G. Elliott, Martin C. McGuinn, Richard W. Sabo, and Richard F.
Syron, directors.
The Manager manages each Fund's investments in accordance with the
stated policies of such Fund, subject to the approval of the Company's Board.
The Manager is responsible for investment decisions, and provides the Funds with
portfolio managers who are authorized by the Board to execute purchases and
sales of securities. The portfolio managers for Dreyfus Equity Income Fund are
Timothy Ghriskey and Douglas Ramos. Michael Hoeh, Roger King, John Koerber, and
Gerald E. Thunelius each are portfolio managers for Dreyfus Premier Core Bond
Fund, Dreyfus Premier High Yield Securities Fund, Dreyfus Premier High Yield
Debt Plus Equity Fund, Dreyfus Premier Real Estate Mortgage Fund, and Dreyfus
Short Term High Yield Fund. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts who
provide research services for each Fund as well as for other funds advised by
the Manager.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan and commercial banking or other relationships with the issuers of
securities purchased by a Fund. The Manager has informed the Company that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager has a personal securities trading policy (the "Policy")
which restricts the personal securities transactions of its employees. Its
primary purpose is to ensure that personal trading by the Manager's employees
does not disadvantage any fund managed by the Manager. Under the Policy, the
Manager's employees must preclear personal transactions in securities not exempt
under the Policy. In addition, the Manager's employees must report their
personal securities transactions and holdings, which are reviewed for compliance
with the Policy. In that regard, the Manager's portfolio managers and other
investment personnel also are subject to the oversight of Mellon's Investment
Ethics Committee. Portfolio managers and other investment personnel of the
Manager who comply with the Policy's preclearance and disclosure procedures and
the requirements of the Committee may be permitted to purchase, sell or hold
securities which also may be or are held in fund(s) they manage or for which
they otherwise provide investment advice.
The Manager maintains office facilities on behalf of the Funds, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Company. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fees paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. 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 Company are borne by the
Company, except to the extent specifically assumed by the Manager. The expenses
borne by the Company include: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager or any of its affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Company's existence, costs of independent
pricing services, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders, costs of shareholders' reports
and meetings, and any extraordinary expenses. Also, Class B, Class C and Class T
shares of each of the Dreyfus Premier Funds are subject to an annual
distribution fee, and Class A, Class B, Class C and Class T shares of each of
the Dreyfus Premier Funds and shares of each other Fund are subject to an annual
service fee. See "Distribution Plan and Shareholder Services Plan." Expenses
attributable to a particular Fund are charged against the assets of that Fund;
other expenses of the Company are allocated among the Funds on the basis
determined by the Board, including, but not limited to, proportionately in
relation to the net assets of each Fund.
As compensation for the Manager's services to the Company, the Company
has agreed to pay the Manager a monthly management fee at the annual rate of
0.75% of the value of the average daily net assets of each of Dreyfus Equity
Income Fund and Dreyfus Premier High Yield Debt Plus Equity Fund, 0.65% of the
value of the average daily net assets of each of Dreyfus Premier Real Estate
Mortgage Fund, Dreyfus Premier High Yield Securities Fund and Dreyfus Short Term
High Yield Fund, and 0.60% of the value of Dreyfus Premier Core Bond Fund's
average daily net assets. For the fiscal years and/or periods ended October 31,
1997, 1998 and 1999, the management fees payable by each indicated Fund, the
amounts waived by the Manager, and the actual net fees paid by each Fund, were
as follows:
<TABLE>
<CAPTION>
Name of Fund Management Fee Payable Reduction in Fee Net Fee Paid
- ----------------- -------------------------------------- ---------------------------- --------------------------------
1997 1998 1999 1997 1998 1999 1997 1998 1999
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus Premier $1,670,431 $1,726,911 $1,658,341 $0 $0 $0 $1,670,431 $1,726,911 $1,658
Core Bond Fund
Dreyfus Equity $27,673 $35,187 $36,753 $27,673 $35,187 $36,753 $0 $0 $0
Income Fund
Dreyfus Premier $425,180 $1,188,069 $999,216 $279,698 $0 $0 $145,492 $1,188,069 $999,216
High Yield
Securities Fund
Dreyfus Premier N/A $23,351(2) $81,082 N/A $23,351 $81,082 N/A $0 $0
High Yield Debt
Plus Equity Fund
Dreyfus Premier $ 5,784(1) $82,802 $86,712 $ 5,784 $82,802 $86,712 $0 $0 $0
Real Estate
Mortgage Fund
Dreyfus Short $527,739 $1,289,838 $1,115,088 $ 15,583 $0 $0 $511,886 $1,289,838 $1,115,088
Term High Yield
Fund
- ---------------------------
(1) For the period September 30, 1997 (commencement of operations) through October 31, 1997.
(2) For the period June 29, 1998 (commencement of operations) through October 31, 1998.
</TABLE>
As to each Fund, 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
the expense limitation of any state having jurisdiction over the Fund, 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, and 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 a Fund's net assets increases.
DISTRIBUTOR. Premier Mutual Fund Services, Inc., located at 60 State
Street, Boston, Massachusetts 02109, serves as each Fund's distributor on a best
efforts basis pursuant to an agreement with the Company which is renewable
annually.
With respect to Dreyfus Premier High Yield Debt Plus Equity Fund, for
the fiscal years ended October 31, 1998 and 1999, no amounts were retained by
the Distributor from sales loads on Class A and Class T shares and $0 and
$1,137, respectively, was retained from contingent deferred sales charges
("CDSC") on Class B shares and $645 and $218, respectively, was retained from
the CDSC on Class C shares. With respect to Dreyfus Premier Real Estate Mortgage
Fund for such periods, no amounts were retained by the Distributor from sales
loads on Class A and Class T shares or the CDSC on Class B and Class C shares.
The Distributor may pay dealers a fee based on 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 $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and 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 a Fund, including past profits or
any other source available to it.
The Distributor, at its expense, may provide promotional incentives to
dealers that sell shares of funds advised by the Manager which are sold with a
sales load, such as the Dreyfus Premier Funds. In some instances, those
incentives may be offered only to certain dealers who have sold or may sell
significant amounts of shares.
Pursuant to an agreement between Dreyfus Service Corporation and the
Distributor, Dreyfus Service Corporation assumed the Distributor's
responsibility for paying commissions to Service Agents for selling Fund shares.
The proceeds of the CDSC and the Distribution Plan fees, in part, are paid to
Dreyfus Service Corporation to defray these expenses.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN. Dreyfus
Transfer, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Company's transfer
and dividend disbursing agent. Under a transfer agency agreement with the
Company, the Transfer Agent arranges for the maintenance of shareholder account
records for each Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions payable
by the Fund. For these services, the Transfer Agent receives a monthly fee
computed on the basis of the number of shareholder accounts it maintains for
each Fund during the month, and is reimbursed for certain out-of-pocket
expenses.
Mellon Bank, N.A. (the "Custodian"), the Manager's parent, One Mellon
Bank Center, Pittsburgh, Pennsylvania 15258, acts as custodian of the
investments of each Fund. Under a custody agreement with the Company, the
Custodian holds each Fund's securities and keeps all necessary accounts and
records. For its custody services, the Custodian receives a monthly fee based on
the market value of the Funds' assets held in custody and receives certain
securities transactions charges.
HOW TO BUY SHARES
APPLICABLE TO ALL FUNDS, EXCEPT THE DREYFUS PREMIER FUNDS
GENERAL. Fund shares are sold without a sales charge. You may be
charged a fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued only
upon your written request. No certificates are issued for fractional shares. The
Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which
maintains an omnibus account in the Fund and has made an aggregate minimum
initial purchase for its customers of $2,500. Subsequent investments must be at
least $100. However, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, IRAs set up under a Simplified Employee Pension
Plan ("SEP-IRAs"), and rollover IRAs) and 403(b)(7) Plans with only one
participant and $500 for Dreyfus-sponsored Education IRAs, with no minimum for
subsequent purchases. The initial investment must be accompanied by the Account
Application. For full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company'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 Manager or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, 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 or non-qualified
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Fund. The
Fund reserves the right to vary further the initial and subsequent investment
minimum requirements at any time.
Fund shares also are offered without regard to the minimum initial
investment requirements through Dreyfus-AUTOMATIC Asset Builder(R), Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to
the Dreyfus Step Program described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
Shares are sold on a continuous basis at the net asset value per share
next determined after an order in proper form is received by the Transfer Agent
or other entity authorized to receive orders on behalf of the Fund. 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 or the Transfer Agent is open for business. For purposes of
computing net asset value per share, options will be valued 15 minutes after the
close of trading on the floor of the New York Stock Exchange. Net asset value
per share is computed by dividing the 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 market value as determined
in good faith by the Fund's Board. For further information regarding the methods
employed in valuing the Fund's investments, see "Determination of Net Asset
Value."
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be canceled and the institution could
be held liable for resulting fees and/or losses.
APPLICABLE TO THE DREYFUS PREMIER FUNDS ONLY
GENERAL. Class A shares, Class B shares, Class C shares, and Class T
(except for Dreyfus Premier Core Bond Fund which does not offer Class T) shares
of each Dreyfus Premier Fund may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers ("Selected
Dealers") and other industry professionals (collectively, "Service Agents"),
except that full-time or part-time employees the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing may purchase Class A shares directly
through the Distributor. Subsequent purchases may be sent directly to the
Transfer Agent or your Service Agent.
Dreyfus Premier Real Estate Mortgage Fund and Dreyfus Premier Core
Bond Fund offer Class R shares to institutional investors acting for themselves
or in a fiduciary, advisory, agency, custodial or similar capacity for qualified
or non-qualified employee benefit plans, including pension, profit-sharing,
SEP-IRAs and other deferred compensation plans, whether established by
corporations, partnerships, non-profit entities or state and local governments
("Retirement Plans"). The term "Retirement Plans" does not include IRAs or IRA
"Rollover Accounts." Class R shares may be purchased for a Retirement Plan only
by a custodian, trustee, investment manager or other entity authorized to act on
behalf of such Retirement Plan. Institutions effecting transactions in Class R
shares for the accounts of their clients may charge their clients direct fees in
connection with such transactions.
When purchasing Dreyfus Premier Fund shares, you must specify which
Class is being purchased. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Company reserves
the right to reject any purchase order.
Service Agents may receive different levels of compensation for selling
different Classes of shares. Management understands that some Service Agents may
impose certain conditions on their clients which are different from those
described in the relevant Fund's Prospectus and this Statement of Additional
Information, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees. You should consult your Service Agent in
this regard.
The minimum initial investment is $1,000. Subsequent investments must
be at least $100. However, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans
with only one participant and $500 for Dreyfus-sponsored Education IRAs, with no
minimum for subsequent purchases. The initial investment must be accompanied by
the Account Application. The Company reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Company. The Company reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Code imposes various limitations on the amount that may be
contributed to certain Retirement Plans. These limitations apply with respect to
participants at the plan level and, therefore, do not directly affect the amount
that may be invested in a Fund by a Retirement Plan. Participants and plan
sponsors should consult their tax advisers for details.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
Builder(R), Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll
Savings Plan described under "Shareholder Services." These services enable you
to make regularly scheduled investments and may provide you with a convenient
way to invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
Fund shares are sold on a continuous basis. Net asset value per share
is determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York Stock
Exchange is open for business. For purposes of determining net asset value,
options and futures contracts will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net asset value per share
of each Class is computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of its assets less liabilities) by
the total number of shares of such Class outstanding. Each 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 Company's
Board. For further information regarding the methods employed in valuing the
Funds' investments, see "Determination of Net Asset Value."
If an order is received in proper form by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund 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 public
offering price determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, Fund shares will be purchased at the
public offering price determined as of the close of trading on the floor of the
New York Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on any business day
and transmitted to 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 public offering
price per share determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, the orders will be based on the next
determined public offering price. It is the dealer's responsibility to transmit
orders so that they will be received by the Distributor or its designee before
the close of its business day. For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of Fund shares may be
transmitted, and must be received by the Transfer Agent, within three business
days after the order is placed. If such payment is not received within three
business days after the order is placed, the order may be canceled and the
institution could be held liable for resulting fees and/or losses.
CLASS A SHARES. The public offering price for Class A shares of
Dreyfus Premier High Yield Securities Fund, Dreyfus Premier High Yield Debt Plus
Equity Fund and Dreyfus Premier Real Estate Mortgage Fund is the net asset value
per share of that Class plus, except for shareholders beneficially owning Class
A shares of Dreyfus Premier Real Estate Mortgage Fund or Dreyfus Premier High
Yield Securities Fund on December 24, 1998 or February 29, 2000, respectively, a
sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD CLASS A SHARES
----------------------------------------- -----------------
DEALERS'
AMOUNT OF TRANSACTION AS A % OF AS A % OF REALLOWANCE AS A %
OFFERING PRICE NET ASSET VALUE OF
PER SHARE PER SHARE OFFERING PRICE
------------------- ------------------ --------------------
<S> <C> <C> <C>
Less than $50,000........................... 5.75 6.10 5.00
$50,000 to less than $100,000............... 4.50 4.70 3.75
$100,000 to less than $250,000.............. 3.50 3.60 2.75
$250,000 to less than $500,000.............. 2.50 2.60 2.25
$500,000 to less than $1,000,000............ 2.00 2.00 1.75
$1,000,000 or more.......................... -0- -0- -0-
</TABLE>
The public offering price for Class a shares of Dreyfus Premier Core Bond Fund
is the net asset value per share of that Class plus, except for shareholders
beneficially owning Class A shares of Dreyfus Premier Core Bond Fund on February
29, 2000, a sales load as shown below:
FRONT-END SALES CHARGE--CLASS A SHARES OF DREYFUS PREMIER CORE BOND FUND ONLY--
The public offering price of Class A shares of Dryefus Premier Core Bond Fund,
except as set forth below, shall be the net asset value per share of Class A
plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load
-------------------------------------
As a % of As a % of Dealer's
offering price net asset value reallowance as a %
Amount of Transaction per share per share of Offering Price
<S> <C> <C> <C> <C>
Less than $50,000............... 4.50 4.70 4.25
$50,000 to less than $100,000... 4.00 4.20 3.75
$100,000 to less than $250,000.. 3.00 3.10 2.75
$250,000 to less than $500,000.. 2.50 2.60 2.25
$500,000 to less than $1,000,000. 2.00 2.00 1.75
$1,000,000 or more............... -0- -0- -0-
</TABLE>
For shareholders of Dreyfus Premier Real Estate Mortgage Fund, Dreyfus
Premier core Bond Fund or Dreyfus Premier High Yield Securities Fund who
beneficially owned Class A shares of the Fund on December 24, 1998, February 29,
2000 or February 29, 2000, respectively, the public offering price for Class A
shares of Dreyfus Premier Real Estate Mortgage Fund, Dreyfus premier core Bond
Fund or Dreyfus Premier High Yield Securities Fund, respectively, is the net
asset value per share of that Class.
A CDSC of 1% will be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of an investment of at
least $1,000,000 and redeemed within one year of purchase. This provision does
not apply to a shareholder of Dreyfus Premier Real Estate Mortgage Fund or
Dreyfus Premier High Yield Securities Fund who owned Class A shares of the Fund
on December 24, 1998 or February 29, 2000, respectively. Pursuant to an
agreement with the Distributor, Dreyfus Service Corporation may pay Service
Agents an amount up to 1% of the net asset value of Class A shares purchased by
their clients that are subject to a CDSC.
The scale of sales loads applies to purchases of Class A shares made
by any "purchaser," which term includes an individual and/or spouse purchasing
securities for his, her or their own account or for the account of any minor
children, or a trustee or other fiduciary purchasing securities for a single
trust estate or a single fiduciary account trust estate or a single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Code) although
more than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established pursuant
to Sections 403(b), 408(k), and 457 of the Code); or an organized group which
has been in existence for more than six months, provided that it is not
organized for the purpose of buying redeemable securities of a registered
investment company and provided that the purchases are made through a central
administration or a single dealer, or by other means which result in economy of
sales effort or expense.
Set forth below is an example of the method of computing the offering
price of Class A shares of the Dreyfus Premier Funds. The example assumes a
purchase of Class A shares of the relevant Dreyfus Premier Fund aggregating less
than $50,000, subject to the schedule of sales charges set forth above at a
price based upon the net asset value of the Fund's Class A shares as of October
31, 1999:
<TABLE>
<CAPTION>
Dreyfus Premier Dreyfus Premier Dreyfus Premier Dreyfus
High Yield Real Estate High Yield Premier Core
Debt Plus Mortgage Fund Securities Fund Bond Fund
Equity Fund
<S> <C> <C> <C> <C>
Net Asset Value per Share.............................. $12.77 $11.25 $11.52 $14.31
Per Share Sales Charge
Class A--5.75% of offering price
(6.10% of net asset value per share).............. $ 0.78 $ 0.69 $ 0.70 --
Class A--4.50% of offering price
(4.70% of net asset value per share).............. -- -- -- $0.67
------- ------- ------- --------
Per Share Offering Price to the Public................. $13.55 $11.94 $12.22 $14.98
</TABLE>
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or which otherwise have a
brokerage related or clearing arrangement with an NASD member firm or financial
institution with respect to the sale of such shares) may purchase Class A shares
for themselves directly or pursuant to an employee benefit plan or other
program, or for their spouses or minor children, at net asset value, provided
they have furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This privilege
also applies to full-time employees of financial institutions affiliated with
NASD member firms whose full-time employees are eligible to purchase Class A
shares at net asset value. In addition, Class A shares are offered at net asset
value to full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing.
Class A shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds, the Dreyfus Family of Funds, or certain funds
advised by Founders Asset Management LLC ("Founders"), an affiliate of the
Manager, or certain other products made available by the Distributor to such
plans, or (b) invested all of its assets in certain funds in the Dreyfus Premier
Family of Funds, or, certain funds in the Dreyfus Family of Funds certain funds
advised by Founders, or certain other products made available by the Distributor
to such plans.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares be
sold for the benefit of clients participating in a "wrap account" or a similar
program under which such clients pay a fee to such broker-dealer or other
financial institution.
Class A shares of Dreyfus Premier High Yield Debt Plus Equity Fund and
Dreyfus Premier Real Estate Mortgage Fund also may be purchased at net asset
value, subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of a
registered open-end management investment company not managed by the Manager or
its affiliates. The purchase of Class A shares of such Fund must be made within
R60 days of such redemption and the shares redeemed must have been subject to an
initial sales charge or a contingent deferred sales charge.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by an
insurance company pursuant to the laws of any State or territory of the United
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501(c)(3) of the Code) investing
$50,000 or more in Fund shares, and (iv) a charitable remainder trust (as
defined in Section 501(c)(3) of the Code).
CLASS B SHARES. The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions of
Class B shares as described in the relevant Dreyfus Premier Fund's Prospectus
and in this Statement of Additional Information under "How to Redeem
Shares--Contingent Deferred Sales Charge--Class B Shares." Pursuant to an
agreement with the Distributor, Dreyfus Service Corporation compensates certain
Service Agents for selling Class B shares at the time of purchase from Dreyfus
Service Corporation's own assets. The proceeds of the CDSC and the Distribution
Plan fee, in part, are used to defray these expenses.
Approximately six years after the date of purchase, Class B shares
automatically will convert to Class A shares, based on the relative net asset
values for shares of each such Class. Class B shares that have been acquired
through the reinvestment of dividends and distributions will be converted on a
pro rata basis together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the total
Class B shares not acquired through the reinvestment of dividends and
distributions.
CLASS C SHARES. The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on redemptions of Class C
shares made within the first year of purchase. See "Class B Shares" above and
"How to Redeem Shares."
CLASS R SHARES. The public offering for Class R shares is the net
asset value per share of that Class.
CLASS T SHARES. The public offering price for Class T shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD CLASS T SHARES
---------------------------------- -------------------
AS A % OF AS A % OF DEALERS'
AMOUNT OF TRANSACTION OFFERING NET ASSET VALUE REALLOWANCE
PRICE PER PER SHARE AS A % OF
SHARE OFFERING PRICE
--------------- ----------------- -------------------
<S> <C> <C> <C>
Less than $50,000........................... 4.50 4.70 4.00
$50,000 to less than $100,000............... 4.00 4.20 3.50
$100,000 to less than $250,000.............. 3.00 3.10 2.50
$250,000 to less than $500,000.............. 2.00 2.00 1.75
$500,000 to less than $1,000,000............ 1.50 1.50 1.25
$1,000,000 or more.......................... -0- -0- -0-
</TABLE>
There is no initial sales charge on purchases of $1,000,000 or more of
Class T shares. However, if you purchase Class T shares without an initial sales
charge as part of an investment of at least $1,000,000 and redeem all or a
portion of those shares within one year of purchase, a CDSC of 1% will be
assessed at the time of redemption. Pursuant to an agreement with the
Distributor, Dreyfus Service Corporation may pay Service Agents an amount up to
1% of the net asset value of Class T shares purchased by their clients that are
subject to a CDSC. Because the expenses associated with Class A shares will be
lower than those associated with Class T shares, purchasers investing $1,000,000
or more in a Dreyfus Premier Fund (assuming ineligibility to purchase Class R
shares with respect to Dreyfus Premier Real Estate Mortgage Fund) generally will
find it beneficial to purchase Class A shares rather than Class T shares.
The scale of sales loads applies to purchases of Class T shares made
by any "purchaser," as defined above under "Class A Shares."
Set forth below is an example of the method of computing the offering
price of Class T shares of the Dreyfus Premier Funds. The example assumes a
purchase of Class T shares of the relevant Dreyfus Premier Fund aggregating less
than $50,000, subject to the schedule of sales charges set forth above at a
price based upon the net asset value of the Fund's Class T shares as of October
31, 1999:
<TABLE>
<CAPTION>
Dreyfus Premier Dreyfus Premier
Dreyfus Premier High Real Estate High Yield
Yield Debt Plus Mortgage Fund Securities
Equity Fund Fund
<S> <C> <C> <C>
Net Asset Value per Share.............................. $12.79 $11.24 $11.52
Per Share Sales Charge
Class T--4.50% of offering price
(4.70% of net asset value per share).............. $ 0.60 $ 0.53 $ 0.55
------- ------- -------
Per Share Offering Price to the Public................. $13.39 $11.77 $12.07
</TABLE>
Class T shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class T shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds or certain other
products made available by the Distributor to such plans, or (b) invested all of
its assets in certain funds in the Dreyfus Premier Family of Funds or the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans.
Class T shares of Dreyfus Premier High Yield Securities Fund also may
be purchased at net asset value, subject to appropriate documentation, through a
broker-dealer or other financial institution with the proceeds from the
redemption of shares of a registered open-end management investment company not
managed by the Manager or its affiliates. The purchase of Class T shares of
Dreyfus Premier High Yield Securities Fund must be made within 60 days of such
redemption and the shares redeemed must have been subject to an initial sales
charge or a contingent deferred sales charge.
RIGHT OF ACCUMULATION--CLASS A OR CLASS T SHARES. Reduced sales loads
apply to any purchase of Class A and Class T shares, shares of other funds in
the Dreyfus Premier Family of Funds, shares of certain other funds advised by
the Manager or Founders which are sold with a sales load and shares acquired by
a previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined above, where the
aggregate investment, including such purchase, is $50,000 or more. If, for
example, you previously purchased and still hold Class A or Class T shares of a
Dreyfus Premier Fund, or shares of any other Eligible Fund, or combination
thereof, with an aggregate current market value of $40,000 and subsequently
purchase Class A or Class T shares of such Fund having a current value of
$20,000, the sales load applicable to the subsequent purchase would be reduced
to 4.50% of the offering price in the case of Class A shares, or 4.00% of the
offering price in the case of Class T shares. All present holdings of Eligible
Funds may be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase. Class A Shares of Dreyfus Premier Core Bond Fund are subject to a
different sales load schedule as described above.
To qualify at the time of purchase you or your Service Agent must
notify the Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to confirmation of
your holdings through a check of appropriate records.
APPLICABLE TO ALL FUNDS
DREYFUS TELETRANSFER PRIVILEGE. You may purchase shares by telephone
if you have checked the appropriate box and supplied the necessary information
on the Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The 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 ("ACH") member may be so designated.
Dreyfus TELETRANSFER purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day that the Transfer Agent
and the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the Dreyfus TELETRANSFER Privilege, the initial payment for
purchase of 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 "How to Redeem Shares--Dreyfus TELETRANSFER
Privilege."
REOPENING AN ACCOUNT. You may reopen an account with a minimum
investment of $100 without filing a new Account Application during the calendar
year the account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class B, Class C and Class T shares of each Dreyfus Premier Fund are
subject to a Distribution Plan, and Class A, Class B, Class C and Class T shares
of each Dreyfus Premier Fund and the shares of each other Fund are subject to a
Shareholder Services Plan.
DISTRIBUTION PLAN. (Dreyfus Premier Funds only) Rule 12b-1 (the
"Rule") adopted by the Securities and Exchange Commission under the 1940 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 Company's Board has adopted such a plan (the "Distribution Plan") with
respect to Class B, Class C and Class T shares of each Dreyfus Premier Fund
pursuant to which the Fund pays the Distributor for distributing such shares at
an annual rate of 0.50% of the value of the average daily net assets of Class B
shares of Dreyfus Premier Core Bond Fund and 0.75% of the value of the average
daily net assets of Class B shares of each other Dreyfus Premier Fund and of
Class C shares of each Dreyfus Premier Fund, and 0.25% of the value of the
average daily net assets of Class T shares. The Company's Board believes that
there is a reasonable likelihood that the Distribution Plan will benefit the
Fund and the holders of its Class B, Class C and Class T shares.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be made
to the Board for its review. In addition, the Distribution Plan provides that it
may not be amended to increase materially the costs which holders of Class B,
Class C, or Class T shares may bear pursuant to the Distribution Plan without
the approval of the holders of such shares and that other material amendments of
the Distribution Plan must be approved by the Board, and by the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Company and
have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with the
Distribution Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Distribution Plan is subject to annual approval
by such vote of the Board cast in person at a meeting called for the purpose of
voting on the Distribution Plan. As to the relevant Class of shares of the Fund,
the Distribution Plan may be terminated at any time by vote of a majority of the
Board members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution Plan or by vote of
the holders of a majority of such Class of shares.
For the fiscal year ended October 31, 1999, Class B, Class C and Class
T shares of Dreyfus Premier High Yield Debt Plus Equity Fund paid $35,076,
$7,996 and $2,483, respectively, and Class B, Class C and Class T shares of
Dreyfus Premier Real Estate Mortgage Fund paid $216, $11 and $2, respectively,
pursuant to the Distribution Plan. All of these amounts were paid to Service
Agents for distribution. The Distribution Plan was not in effect with respect to
Dreyfus Premier Core Bond Fund or Dreyfus Premier High Yield Securities Fund as
of October 31, 1999.
SHAREHOLDER SERVICES PLAN. (All Funds) The Company has adopted a
Shareholder Services Plan as to Class A, Class B, Class C and Class T shares of
each of the Dreyfus Premier Funds, and as to the shares of each other Fund.
Under the Plan, the Company pays the Distributor for the provision of certain
services to the holders of such shares a fee at the annual rate of 0.25% of the
value of the average daily net assets of the shares. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding a Fund, and providing reports and other
information, and services related to the maintenance of such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make payments
to Service Agents in respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan (including as to each relevant Class of a Dreyfus Premier Fund),
and the purposes for which such expenditures were incurred, must be made to the
Board for its review. In addition, the Shareholder Services Plan provides that
material amendments must be approved by the Company's Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Company and have no direct or indirect financial interest in the operation of
the Shareholder Services Plan or in any agreements entered into in connection
with the Shareholder Services Plan, by vote cast in person at a meeting called
for the purpose of considering such amendments. As to each Fund, the Shareholder
Services Plan is subject to annual approval by such vote of the Board members
cast in person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan is terminable with respect to each
Fund at any time by vote of a majority of the Board members who are not
"interested persons" and who have no direct or indirect financial interest in
the operation of the Shareholder Services Plan or in any agreements entered into
in connection with the Shareholder Services Plan.
For the fiscal year ended October 31, 1999, Dreyfus Premier Core Bond
Fund (Class A) was charged $690,976, Dreyfus Equity Income Fund was charged
$12,251, Dreyfus Premier High Yield Securities Fund (Class A) was charged
$384,314 and Dreyfus Short Term High Yield Fund was charged $428,880, pursuant
to the Shareholder Services Plan. For the fiscal year ended October 31, 1999,
Dreyfus Premier High Yield Debt Plus Equity Fund was charged $10,187 for Class
A, $11,692 for Class B, $2,655 for Class C, and $2,483 for Class T, and Dreyfus
Premier Real Estate Mortgage Fund was charged $32,877 for Class A, $72 for Class
B, $4 for Class C, and $2 for Class T, pursuant to the Shareholder Services
Plan.
HOW TO REDEEM SHARES
REDEMPTION FEE. (Dreyfus Premier High Yield Securities Fund only)
Prior to March 1, 2000, Dreyfus Premier High Yield Securities Fund deducted a
redemption fee equal to 1% of the net asset value of Fund shares redeemed
(including redemptions through use of the Fund Exchanges service) where the
redemption or exchange occurred less than six months following the issuance of
such shares. For purposes of computing the six-month period, any issuance of
Fund shares during a month was deemed to occur on the first day of such month.
The redemption fee was deducted from redemption proceeds and retained by the
Fund. For the fiscal year ended October 31, 1999, redemption fees retained by
Dreyfus Premier High Yield Securities Fund amounted to $84,838.
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES. (Dreyfus Premier
Funds only) A CDSC is imposed on any redemption of Class B shares which reduces
the current net asset value of your Class B shares to an amount which is lower
than the dollar amount of all payments by you for the purchase of Class B shares
of the Fund held by you at the time of redemption. No CDSC will be imposed to
the extent that the net asset value of the Class B shares redeemed does not
exceed (i) the current net asset value of Class B shares acquired through
reinvestment of dividends or capital gain distributions, plus (ii) increases in
the net asset value of your Class B shares above the dollar amount of all your
payments for the purchase of Class B shares held by you at the time of
redemption.
If the aggregate value of Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be applied
to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years for the time you purchased the Class B shares
until the time of redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase of Class B
shares, all payments during a month will be aggregated and deemed to have been
made on the first day of the month. Pursuant to an agreement with the
Distributor, Dreyfus Service Corporation receives the proceeds from the CDSC
imposed on the redemption of Class B shares.
The following table sets forth the rates of the CDSC for Class B
shares:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
was Made Proceeds
First....................... 4.00
Second...................... 4.00
Third....................... 3.00
Fourth...................... 3.00
Fifth....................... 2.00
Sixth....................... 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amount of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of shares
purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired five additional
shares through dividend reinvestment. During the second year after the purchase
the investor decided to redeem $500 of the investment. Assuming at the time of
the redemption the net asset value had appreciated to $12 per share, the value
of the investor's shares would be $1,260 (105 shares at $12 per share). The CDSC
would not be applied to the value of the reinvested dividend shares and the
amount which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of $9.60.
CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES. (Dreyfus Premier
Funds only) A CDSC of 1% is imposed on any redemption of Class C shares within
one year of the date of purchase. The basis for calculating the payment of any
such CDSC will be the method used in calculating the CDSC for Class B shares.
See "Contingent Deferred Sales Charge--Class B Shares" above. Pursuant to an
agreement with the Distributor, Dreyfus Service Corporation receives the
proceeds from the CDSC imposed on the redemption of Class C shares.
WAIVER OF CDSC. (Dreyfus Premier Funds only) The CDSC may be waived in
connection with (a) redemptions made within one year after the death or
disability, as defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by employees participating in Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with the Fund
by merger, acquisition of assets or otherwise, (d) a distribution following
retirement under a tax-deferred retirement plan or upon attaining age 70 1/2 in
the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b)
of the Code, and (e) redemptions pursuant to the Automatic Withdrawal Plan, as
described below. If the Company's Board determines to discontinue the waiver of
the CDSC, the disclosure herein will be revised appropriately. Any Fund shares
subject to a CDSC which were purchased prior to the termination of such waiver
will have the CDSC waived as provided in the Fund's Prospectus or this Statement
of Additional Information at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
entitlement.
REDEMPTION THROUGH A SELECTED DEALER. (Dreyfus Premier Funds only) If
you are a customer of a Selected Dealer, you may make redemption requests to
your Selected Dealer. If the Selected Dealer transmits the redemption request so
that it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York time), the
redemption request will be effective on that day. If a redemption request is
received by the Transfer Agent after the close of trading on the floor of the
New York Stock Exchange, the redemption request will be effective on the next
business day. It is the responsibility of the Selected Dealer to transmit a
request so that it is received in a timely manner. The proceeds of the
redemption are credited to your account with the Selected Dealer. See "How to
Buy Shares" for a discussion of additional conditions or fees that may be
imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by dealers
by the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee prior to the
close of its business day (normally 5:15 p.m., New York time) are effected at
the price determined as of the close of trading on the floor of the New York
Stock Exchange on that day. Otherwise, the shares will be redeemed at the next
determined net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE. (Dreyfus Premier Funds only) Upon written
request, you may reinvest up to the number of Class A, Class B or Class T shares
you have redeemed, within 45 days of redemption, at the then-prevailing net
asset value without a sales load, or reinstate your account for the purpose of
exercising Fund Exchanges. Upon reinstatement, with respect to Class B shares,
or Class A or Class T shares if such shares were subject to a CDSC, your account
will be credited with an amount equal to the CDSC previously paid upon
redemption of the shares reinvested. The Reinvestment Privilege may be exercised
only once.
WIRE REDEMPTION PRIVILEGE. (All Funds, except Dreyfus Premier Funds)
By using this Privilege, you authorize the Transfer Agent to act on wire,
telephone or letter redemption 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. Ordinarily, the Company will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt by the Transfer Agent of the redemption request in
proper form. Redemption proceeds ($1,000 minimum) will be transferred by Federal
Reserve wire only to the commercial bank account you have specified on the
Account Application or Shareholder Services Form, or to a correspondent bank if
your bank is not a member of the Federal Reserve System. Fees ordinarily are
imposed by such bank and borne by the investor. Immediate notification by the
correspondent bank to your bank is necessary to avoid a delay in crediting the
funds to your bank account.
If you have access to telegraphic equipment you 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
If you do not have direct access to telegraphic equipment you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171, toll
free. You should advise the operator that the above transmittal code must be
used and you 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 "Share Certificates; Signatures."
DREYFUS TELETRANSFER PRIVILEGE. (All Funds) You may request by
telephone that redemption proceeds be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House ("ACH") member may be
designated. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank account
not more than $500,000 within any 30-day period. You should be aware that if you
have selected the Dreyfus TELETRANSFER Privilege, any request for a wire
redemption will be effected as a Dreyfus TELETRANSFER transaction through the
ACH system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "How to Buy
Shares--Dreyfus TELETRANSFER Privilege."
SHARE CERTIFICATES; SIGNATURES. (All Funds) Any 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 holder 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.
REDEMPTION COMMITMENT. (All Funds) The Company has committed itself to
pay in cash all redemption requests by any shareholder of record of a Fund,
limited in amount during any 90-day period to the lesser of $250,000 or 1% of
such value of such 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 reserves the right to make payments in whole or in part in
securities or other assets 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 securities are valued. If the recipient sold such
securities, brokerage charges would be incurred.
SUSPENSION OF REDEMPTIONS. (All Funds) 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 relevant 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.
SMALL ACCOUNT FEE. (All Funds) To offset the relatively higher costs
of servicing smaller accounts, a Fund will charge regular accounts with balances
below $2,000 an annual fee of $12. The valuation of accounts and the deductions
are expected to take place during the last four months of each year. The fee
will be waived for any investor whose aggregate Dreyfus mutual fund investments
total at least $24,000, and will not apply to IRA accounts or to accounts
participating in automatic investment programs or opened through a securities
dealer, bank or other financial institution, or to other fiduciary accounts.
SHAREHOLDER SERVICES
FUND EXCHANGES. (All Funds) You may purchase, in exchange for shares
of a Fund, shares of certain other funds managed or administered by the Manager
or Founders, to the extent such shares are offered for sale in your state of
residence. Shares of a Dreyfus Premier Fund may be exchanged only for shares of
the same Class of such other funds, except that Class T shares of a Dreyfus
Premier Fund may be exchanged for Class A shares of certain fixed-income funds
in the Dreyfus Premier Family of Funds. Shares of other funds (including the
same Class of other funds, or Class A shares of such funds in the case of Class
T shares of a Dreyfus Premier Fund) purchased by exchange will be purchased on
the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds 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"), but 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.
E. Shares of funds subject to a CDSC exchanged for shares of another
fund will be subject to the higher applicable CDSC of the two
funds and, for purposes of calculating CDSC rates and conversion
periods, if any, will be deemed to have been held since the date
the shares being exchanged initially purchased.
To accomplish an exchange under item D above, you or, with respect to
the Dreyfus Premier Funds, your Service Agent acting on your behalf, must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
With respect to each of the Dreyfus Premier Funds, you also may
exchange your Fund shares that are subject to a CDSC for shares of Dreyfus
Worldwide Dollar Money Market Fund, Inc. The shares so purchased will be held in
a special account created solely for this purpose ("Exchange Account").
Exchanges of shares from an Exchange Account only can be made into certain other
funds managed or administered by the Manager. No CDSC is charged when an
investor exchanges into an Exchange Account; however, the applicable CDSC will
be imposed when shares are redeemed from an Exchange Account or other applicable
Fund account. Upon redemption, the applicable CDSC will be calculated without
regard to the time such shares were held in an Exchange Account. See "How to
Redeem Shares." Redemption proceeds for Exchange Account shares are paid by
Federal wire or check only. Exchange Account shares also are eligible for the
Dreyfus Auto-Exchange Privilege, Dreyfus Dividend Sweep and the Automatic
Withdrawal Plan.
To request an exchange, you or, with respect to the Dreyfus Premier
Funds, your Service Agent acting on your behalf, must give exchange instructions
to the Transfer Agent in writing or by telephone. If you did not purchase your
Dreyfus Premier Fund shares through a Service Agent, you may give exchange
instructions directly to the Transfer Agent. The Fund automatically gives you
the ability to issue exchange instructions by telephone, unless you check the
applicable "No" box on the Account Application, indicating that you specifically
refuse this Privilege. By using the Telephone Exchange Privilege, you authorize
the Transfer Agent to act on telephonic 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. 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. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserve the right, upon
not less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission.
Exchanges of Class R Shares of Dreyfus Premier Real Estate Mortgage
Fund held by a Retirement Plan may be made only between the investor's
Retirement Plan account in one fund and such investor's Retirement Plan account
in another fund.
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.
DREYFUS AUTO-EXCHANGE PRIVILEGE. (All Funds) Dreyfus Auto-Exchange
Privilege permits you to purchase, in exchange for shares of the Fund, shares of
another fund in the Dreyfus Premier Family of Funds or the Dreyfus Family of
Funds of which you are a shareholder. Shares of a Dreyfus Premier Fund may be
exchanged only for shares of the same Class of such other fund, except that
Class T shares of a Dreyfus Premier Fund may be exchanged for Class A shares of
certain fixed-income funds in the Dreyfus Premier 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. You will be notified
if your account falls below the amount designated to be exchanged under this
Privilege. In this case, your 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.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. Shares may be exchanged only between
accounts having identical names and other identifying designations. The Fund
reserves the right to reject any exchange request in whole or in part. The Fund
Exchanges service or Dreyfus Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
DREYFUS-AUTOMATIC ASSET BUILDER(R). (All Funds) DREYFUS-AUTOMATIC
Asset Builder permits you to purchase Fund shares (minimum of $100 and maximum
of $150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE. (All Funds) 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 U.S.
Government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect.
DREYFUS PAYROLL SAVINGS PLAN. (All Funds) 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. It is the
sole responsibility of your employer to arrange for transactions under the
Dreyfus Payroll Savings Plan.
DREYFUS STEP PROGRAM. (All Funds, except the Dreyfus Premier Funds)
The Dreyfus Step Program enables you to purchase Fund shares without regard to
the Fund's minimum initial investment requirements through DREYFUS-AUTOMATIC
Asset Builder(R), 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 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 may modify or terminate this Program at any time.
DREYFUS DIVIDEND OPTIONS. (All Funds) Dreyfus Dividend Sweep allows
you to invest automatically your dividends or dividends and capital gain
distributions, if any, from a Fund in shares of another fund in the Dreyfus
Family of Funds, or shares of the same Class (or Class A in the case of Class T
shares) of certain other funds in the Dreyfus Premier Family of Funds, of which
you are 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
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 that chRarges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), but 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.
Dreyfus Dividend ACH permits you to transfer electronically 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.
AUTOMATIC WITHDRAWAL PLAN. (All Funds) 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.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield on
the shares. If withdrawal payments exceed reinvested dividends and
distributions, your shares will be reduced and eventually may be depleted. The
Automatic Withdrawal Plan may be terminated at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Certain Retirement Plans, including Dreyfus-sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal plan
from such Retirement Plans. Participants should consult their Retirement Plan
sponsor and tax adviser for details. Such a withdrawal plan is different than
the Automatic Withdrawal Plan.
No CDSC with respect to Class B shares will be imposed on withdrawals
made under the Automatic Withdrawal Plan, provided that the amounts withdrawn
under the plan do not exceed on an annual basis 12% of the account value at the
time the shareholder elects to participate in the Automatic Withdrawal Plan.
Withdrawals with respect to Class B shares under the Automatic Withdrawal Plan
that exceed on an annual basis 12% of the value of the shareholders account will
be subject to a CDSC on the amounts exceeding 12% of the initial account value.
Withdrawals of Class A or Class T shares subject to a CDSC and Class C shares
under the Automatic Withdrawal Plan will be subject to any applicable CDSC.
Purchases of additional Class A or Class T shares where the sales load is
imposed concurrently with withdrawals of Class A or Class T shares generally are
undesirable.
LETTER OF INTENT--CLASS A AND CLASS T SHARES. (Dreyfus Premier Funds
only) By signing a Letter of Intent form, which can be obtained by calling
1-800-554-4611, you become eligible for the reduced sales load applicable to the
total number of Eligible Fund shares purchased in a 13-month period pursuant to
the terms and conditions set forth in the Letter of Intent. A minimum initial
purchase of $5,000 is required. To compute the applicable sales load, the
offering price of shares you hold (on the date of submission of the Letter of
Intent) in any Eligible Fund that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward completion of the Letter
of Intent. However, the reduced sales load will be applied only to new
purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not purchase
the full amount indicated in the Letter of Intent. The escrow will be released
when you fulfill the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load reduction, the sales
load will be adjusted to reflect your total purchase at the end of 13 months. If
total purchases are less than the amount specified, you will be requested to
remit an amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If such
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of Class A or Class T shares of the Fund held in escrow to
realize the difference. Signing a Letter of Intent does not bind you to
purchase, or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended purchase to
obtain the reduced sales load. At the time you purchase Class A or Class T
shares, you must indicate your intention to do so under a Letter of Intent.
Purchases pursuant to a Letter of Intent will be made at the then-current net
asset value plus the applicable sales load in effect at the time such Letter of
Intent was executed.
CORPORATE PENSION/PROFIT-SHARING AND RETIREMENT PLANS. (All Funds) The
Company makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs
for a non-working spouse, Roth IRAs, SEP-IRAs, Rollover IRAs and Education
IRAs), and 403(b)(7) Plans. Plan support services also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan,
a 403(b)(7) Plan or an IRA, including a SEP-IRA, you 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 for subsequent purchases. The minimum initial investment is $750
for Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs
for a non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7)
Plans with only one participant and $500 for Dreyfus-sponsored Education IRAs,
with no minimum for subsequent purchases.
You should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
VALUATION OF PORTFOLIO SECURITIES. Each Fund's investments are valued
Reach business day using available market quotations or at fair value.
Substantially all of a Fund's fixed-income investments (excluding short-term
investments) are valued by one or more independent pricing services (the
"Service") approved by the Board. Securities valued by the Service for which
quoted bid prices in the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in such securities)
and asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments valued by the Service are carried
at fair value as determined by the Service, based on methods which include
consideration of yields or prices of securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Short-term investments are not valued by the Service and are valued
at the mean price or yield equivalent for such securities or for securities of
comparable maturity, quality and type as obtained from market makers. Other
investments that are not valued by the Service (including the equity securities
purchased by Dreyfus Equity Income Fund, Dreyfus Premier High Yield Debt Plus
Equity Fund and Dreyfus Premier Real Estate Mortgage Fund) are valued at the
last sales price for securities traded primarily on an exchange or the national
securities market or otherwise at the average of the most recent bid and asked
prices. Bid-price is used when no asked price is available. Any assets or
liabilities initially expressed in terms of foreign currency will be translated
into U.S. dollars at the midpoint of the New York interbank market spot exchange
rate as quoted on the day of such translation by the Federal Reserve Bank of New
York or, if no such rate is quoted on such date, at the exchange rate previously
quoted by the Federal Reserve Bank of New York or at such other quoted market
exchange rate as may be determined to be appropriate by the Manager. Forward
currency contracts will be valued at the current cost of offsetting the
contract. Because of the need to obtain prices as of the close of trading on
various exchanges throughout the world, the calculation of net asset value does
not take place contemporaneously with the determination of prices of a majority
of each Fund's portfolio securities. Short-term investments are carried at
amortized cost, which approximates value. Expenses and fees, including the
management fee paid by each Fund and the distribution and shareholder services
fees, as applicable (reduced by the expense limitation, if any), are accrued
daily and taken into account for the purpose of determining the net asset value
of a Fund's shares, or Class of shares, as the case may be. Because of the
differences in operating expenses incurred by each Class of shares of a Dreyfus
Premier Fund, the per share net asset value of each Class of shares of these
Funds will differ.
Restricted Securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by the
Service, are valued at fair value as determined in good faith by the Board. The
Board will review the method of valuation on a current basis. In making their
good faith-valuation of restricted securities, the Board members generally will
take the following factors into consideration: restricted securities which are,
or are convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board if it believes that the discount no longer reflects
the value of the restricted securities. Restricted securities not of the same
class as securities for which a public market exists usually will be valued
initially at cost. Any subsequent adjustment from cost will be based upon
considerations deemed relevant by the Board.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management believes that each Fund has qualified as a "regulated
investment company" under the Code for the fiscal year ended October 31, 1999.
Each Fund intends to continue to so qualify if such qualification is in the best
interests of its shareholders. As a regulated investment company, each Fund will
pay no Federal income tax on net investment income and net realized securities
gains to the extent that such income and gains are distributed to shareholders
in accordance with applicable provisions of the Code. 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 and meet certain asset diversification and other requirements. If a
Fund did not qualify as a regulated investment company, it would be treated for
tax purposes as an ordinary corporation subject to Federal income tax. The term
"regulated investment company" does not imply the supervision of management or
investment practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the aggregate net asset value of the shares
below the cost of the investment. Such a dividend or distribution would be a
return of investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of a 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 upon the composition of a Fund's income, the entire amount
or a portion of the dividends paid by such Fund from net investment income may
qualify for the dividends received deduction allowable to qualifying U.S.
corporate shareholders ("dividends received deduction"). In general, dividend
income of a Fund distributed to qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that such
Fund's income consists of dividends paid by U.S. corporations. However, Section
246(c) of the Code provides that if a qualifying corporate shareholder has
disposed of Fund shares held for less than 46 days, which 46 days generally must
be during the 90-day period commencing 45 days before the shares become
ex-dividend, and has received a dividend from net investment income with respect
to such shares, the portion designated by the Fund as qualifying for the
dividends received deduction will not be eligible for such shareholder's
dividends received deduction. In addition, the Code provides other limitations
with respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares. The Company
anticipates that no dividend paid by a Fund will qualify for the
dividends-received deduction.
A Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a credit
or deduction on their Federal income tax returns for, and will be required to
treat as part of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the Fund to foreign countries (which taxes
relate primarily to investment income). A Fund may make an election under
Section 853 of the Code, provided that more than 50% of the value of the Fund's
total assets at the close of the taxable year consists of securities in foreign
corporations, and the Fund satisfies the applicable distribution provisions of
the Code. The foreign tax credit available to shareholders is subject to certain
limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies (including foreign currency
denominated bank deposits) and non-U.S. dollar denominated securities (including
debt instruments and certain forward contracts and options) may be treated as
ordinary income or loss under Section 988 of the Code. In addition, all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds will be treated as ordinary income under Section 1276 of
the Code. Finally, all or a portion of the gain realized from engaging in
"conversion transactions" may be treated as ordinary income under Section 1258
of the Code. "Conversion transactions" are defined to include certain forward,
futures, option and straddle transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to be
issued in the future.
Under Section 1256 of the Code, any gain or loss realized by a Fund
from certain forward contracts and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss. Gain or
loss will arise upon exercise or lapse of such contracts and options as well as
from closing transactions. In addition, any such contracts or options remaining
unexercised at the end of a Fund's taxable year will be treated as sold for
their then fair market value, resulting in additional gain or loss to such Fund
characterized in the manner described above.
Offsetting positions held by a Fund involving certain futures or
forward contracts or options transactions 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, override or modify the provisions of Sections 988 and 1256 of the
Code. As such, all or a portion of any short or long-term capital gain from
certain straddle transactions may be recharacterized to ordinary income.
If a Fund were treated as entering into straddles by reason of its
engaging in financial futures or forward contracts or options transactions, such
straddles would be characterized as "mixed straddles" if the futures or forward
contracts or options transactions comprising a part of such straddles were
governed by Section 1256 of the Code. The Fund may make one or more elections
with respect to "mixed straddles." Depending upon which election is made, if
any, the results to the Fund may differ. If no election is made, to the extent
the straddle and conversion transaction rules apply to positions established by
a Fund, losses realized by the Fund will be deferred to the extent of unrealized
gain in the offsetting position. Moreover, as a result of the straddle and
conversion transaction rules, short-term capital loss on "straddle" positions
may be recharacterized as long-term capital loss, and long-term capital gains or
straddle positions may be treated as short-term capital gains or ordinary
income.
The Taxpayer Relief Act of 1997 included constructive sale provisions
that generally apply if the Fund either (1) holds an appreciated financial
position with respect to stock, certain debt obligations, or partnership
interests ("appreciated financial position") and then enters into a short sale,
futures, forward, or offsetting notional principal contract (collectively, a
"Contract") respecting the same or substantially identical property or (2) holds
an appreciated financial position that is a Contract and then acquires property
that is the same as, or substantially identical to, the underlying property. In
each instance, with certain exceptions, the Fund generally will be taxed as if
the appreciated financial position were sold at its fair market value on the
date the Fund enters into the financial position or acquires the property,
respectively. Transactions that are identified hedging or straddle transactions
under other provisions of the Code can be subject to the constructive sale
provisions.
Investment by a Fund in securities issued or acquired at a discount,
or providing for deferred interest or for payment of interest in the form of
additional obligations could under special tax rules affect the amount, timing
and character of distributions to shareholders by causing a Fund to recognize
income prior to the receipt of cash payments. For example, a Fund could be
required to accrue a portion of the discount (or deemed discount) at which the
securities were issued each year and to distribute such income in order to
maintain its qualification as a regulated investment company. In such case, a
Fund may have to dispose of securities which it might otherwise have continued
to hold in order to generate cash to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Company for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of the Manager and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable net
price. Subject to this consideration, the brokers selected will include those
that supplement the Manager's research facilities with statistical data,
investment information, economic facts and opinions. Information so received is
in addition to and not in lieu of services required to be performed by the
Manager and the Manager's fees are not reduced as consequence of the receipt of
such supplemental information. Such information may be useful to the Manager in
serving both the Company and other funds which it advises and, conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Manager in carrying out its obligations to the Company.
Sales by a broker of shares of a Fund or other funds advised by the
Manager or its affiliates may be taken into consideration, and 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 advised or administered by the Manager being engaged
simultaneously in the purchase or sale of the same security. Certain of a Fund's
transactions in securities of foreign issuers may not benefit from the
negotiated commission rates available to a Fund for transactions in securities
of domestic issuers. When transactions are executed in the over-the-counter
market, each Fund will deal with the primary market makers unless a more
favorable price or execution otherwise is obtainable. Foreign exchange
transactions are made with banks or institutions in the interbank market at
prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as within a
year. In periods in which extraordinary market conditions prevail, the Manager
will not be deterred from changing a Fund's investment strategy as rapidly as
needed, in which case higher turnover rates can be anticipated which would
result in greater brokerage expenses. 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.
The aggregate amount of transactions during the last fiscal year in
securities effected on an agency basis through a broker for, among other things,
research services, and the commissions and concessions related to such
transactions were as follows:
TRANSACTION AMOUNT COMMISSIONS & CONCESSIONS
Dreyfus Equity Income Fund $2,747,369 $3,353
Dreyfus Premier High Yield $267,144 $ 870
Debt Plus Equity Fund
The Company contemplates that, consistent with the policy of obtaining
the most favorable net price, brokerage transactions may be conducted through
the Manager or its affiliates, including Dreyfus Brokerage Services, Inc.
("DBS") At a meeting held on November 4, 1998, the Company's Board adopted
procedures in conformity with Rule 17e-1 under the 1940 Act to ensure that all
brokerage commissions paid to the Manager or its affiliates are reasonable and
fair. Because procedures had not been adopted during such time, no amounts were
paid to DBS (or any other such entity) for the fiscal year ended October 31,
1998.
The following table summarizes the brokerage commissions, and gross
spreads and concessions on principal transaction amounts, for each Fund for the
past three fiscal years ended October 31, 1999 (as applicable). None of the
foregoing amounts were paid to the DISTRIBUTOR.
<TABLE>
<CAPTION>
Brokerage Commissions Gross Spreads and Concessions
----------------------------------- -----------------------------
1997 1998 1999 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dreyfus Premier Core Bond Fund $41,764 $274,824 $88,425 $217,238 $0 $3,120
Dreyfus Equity Income Fund $11,048 $16,945 $17,120 $1,637 $2,501 $298
Dreyfus Premier High Yield $17,136 $172,013 $0 $266,750 $0 $0
Securities Fund
Dreyfus Premier High Yield Debt Plus N/A $0(1) $8,360 N/A $0(1) $0
Equity Fund
Dreyfus Premier Real Estate Mortgage $3,000(2) $28,985 $56,928 $0 $15,063 $0
Fund
Dreyfus Short Term High Yield Fund $80 $0 $0 $52,200 $0 $0
- ----------------------
(1) For the period June 29, 1998 (commencement of operations) through October 31, 1998.
(2) For the period September 30, 1997 (commencement of operations) through October 31, 1997.
</TABLE>
<PAGE>
PERFORMANCE INFORMATION
The 30-day yield for the Funds set forth below, as of October 31, 1999, was as
follows:
NAME OF FUND 30-DAY YIELD
Dreyfus Premier Core Bond Fund (Class A) 7.31%
Dreyfus Premier High Yield Securities Fund (Class A)
12.57%
Dreyfus Short Term High Yield Fund 10.97%
The 30-day yield for each Class of shares (as applicable) of the
indicated Dreyfus Premier Funds, as of October 31, 1999, is set forth below.
During the period, the Manager waived a portion of the management fee and/or
absorbed a portion of each such Fund's expenses. Absent such arrangements, each
yield would have been lower, as reflected in the column entitled "30-day Net
Yield."
NAME OF FUND 30-DAY YIELD 30-DAY NET YIELD
Dreyfus Premier High Yield
Debt Plus Equity Fund
Class A 10.09% 9.16%
Class B 9.89% 8.90%
Class C 9.92% 8.93%
Class T 9.99% 9.04%
Dreyfus Premier Real
Estate Mortgage Fund
Class A 10.98% 10.09%
Class B 10.71% 9.77%
Class C 10.79% 9.85%
Class R 11.85% 10.91%
Class T 10.88% 9.99%
Current yield for a Fund is computed pursuant to a formula which
operates as follows: the amount of the Fund's expenses accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the dividends
and interest earned (computed in accordance with regulatory requirements) by the
Fund during the period. That result is then divided by the product of: (a) the
average daily number of shares outstanding during the period that were entitled
to receive dividends, and (b) the net asset value per share on the last day of
the period less any undistributed earned income per share reasonably expected to
be declared as a dividend shortly thereafter. The quotient is then added to 1,
and that sum is raised to the 6th power, after which 1 is subtracted. The
current yield is then arrived at by multiplying the result by 2.
The average annual total return for the one-, five-, and ten-year
periods ended October 31, 1999, or since the Fund's commencement of operations
(as indicated), for each Fund (and Class of shares), was as follows:
<TABLE>
<CAPTION>
Average Annual Total Return
NAME OF FUND
- ------------ SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Dreyfus Premier Core Bond Fund
Class A --% --% --% N/A
Dreyfus Equity Income Fund 9.87% N/A N/A 17.17%(1)
Dreyfus Premier High Yield
Securities Fund
Class A 12.78% N/A N/A 7.96%(2)
Dreyfus Premier High Yield Debt
Plus Equity Fund
Class A 34.50% N/A N/A 9.21%
Class B 37.82% N/A N/A 10.43%
Class C 40.70% N/A N/A 13.24%
Class T 36.04% N/A N/A 10.01%
Dreyfus Premier Real Estate
Mortgage Fund -0.66% N/A N/A 2.24%(5)
Class A
Class B N/A N/A N/A 0.97%(4)
Class C N/A N/A N/A 4.07%(4)
Class R N/A N/A N/A 6.02%(4)
Class T N/A N/A N/A 0.75%(4)
Dreyfus Short Term High Yield Fund 3.06% N/A N/A 5.40%(5)
- ----------------------
(1) For the period December 29, 1995 (commencement of operations) through October 31, 1998.
(2) For the period March 25, 1996 (commencement of operations) through October 31, 1998.
(3) For the period September 30, 1997 (commencement of operations) through October 31, 1998.
(4) For the period December 24, 1998 (commencement of operations of Class) to October 31, 1999.
(5) For the period August 16, 1996 (commencement of operations) through October 31, 1998.
</TABLE>
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000 payment
made at the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result. A Class's average annual total return figures
calculated in accordance with such formula assume that in the case of Class A or
Class T the maximum applicable sales load has been deducted from the
hypothetical initial investment at the time of purchase or, in the case of Class
B or Class C, the maximum applicable CDSC has been paid upon redemption at the
end of the period.
The total return for each Fund indicated below for the period since
the Fund's commencement of operations through October 31, 1999 was as follows:
NAME OF FUND TOTAL RETURN
Dreyfus Equity Income Fund(1) 72.00%
Dreyfus Short Term High Yield Fund(2) 18.40%
- ----------------------
(1) For the period December 29, 1995 (commencement of operations) through
October 31, 1999.
(2) For the period August 16, 1996 (commencement of operations) through
October 31, 1999.
The total return for each Dreyfus Premier Fund indicated below for the
period since the Fund's commencement of operations through October 31, 1999 was
as follows:
<TABLE>
<CAPTION>
Aggregate Total Return Since Aggregate Total Return Since
Inception Based on Net Asset Inception Based on Maximum
Value (without deduction of Offering Price for Class A and
maximum Sales Load or Class T or Deduction of
Name of Fund Applicable) Maximum CDSC for Class B
and Class C
<S> <C> <C>
Dreyfus Premier Core Bond Fund
Class A(1) --% --%
Dreyfus Premier High Yield
Securities Fund
Class A(2) 39.76% 31.75%
Dreyfus Premier High Yield Debt
Plus Equity Fund
Class A(3) 19.37% 12.53%
Class B(3) 18.22% 14.22%
Class C(3) 18.13% 18.13%
Class T(3) 19.00% 13.63%
Dreyfus Premier Real Estate
Mortgage Fund
- --------------------------------------- 11.10% 4.74%
Class A(4)
Class B(5) 4.88% 0.97%
Class C(5) 5.05% 4.07%
Class R(5) 6.02% 6.02%
Class T(5) 5.51% 0.75%
(1) For the period October 3, 1986 (commencement of operations) through
October 31, 1999.
(2) For the period March 25, 1996 (commencement of operations) through October 31, 1999.
(3) For the period June 29, 1998 (commencement of operations) through October 31, 1998.
(4) For the period September 30, 1997 (commencement of operations) through October 31, 1998.
(5) For the period December 24, 1998 (commencement of operations of Class) to October 31, 1999.
</TABLE>
During these periods, with respect to each Fund, other than Dreyfus
Premier Core Bond Fund, certain fees were waived, and/or certain expenses were
borne, by the Manager, without which the returns would have been lower.
Class B, Class C and Class R shares of Dreyfus Premier Core Bond Fund
and Class B, Class C and Class T shares of Dreyfus Premier High Yield Securities
Fund were not being offered as of October 31, 1999, so performance information
is not provided for such Classes.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A or Class T shares of
each of the Dreyfus Premier Funds) 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, as to
each of the Dreyfus Premier Funds, any applicable CDSC), and dividing the result
by the net asset value (maximum offering price in the case of Class A or Class
T) per share at the beginning of the period. Total return also may be calculated
based on the net asset value per share at the beginning of the period instead of
the maximum offering price per share at the beginning of the period for Class A
or Class T shares or without giving effect to any applicable CDSC at the end of
the period for Class B or Class C shares of each of the Dreyfus Premier Funds.
In such cases, the calculation would not reflect the deduction of the sales
charge with respect to Class A or Class T shares, or any applicable CDSC with
respect to Class B or Class C shares, which, if reflected, would reduce the
performance quoted.
On November 5, 1998, shareholders of Dreyfus Premier Core Bond Fund
approved a proposal for the Fund to pursue an investment objective of maximizing
total return. Prior to the implementation date of these changes on November 15,
1998, the Fund's investment objective was to maximize current income.
Accordingly, performance for periods prior to November 15, 1998 reflects the
Fund being managed pursuant to its prior investment objective.
Advertising materials for each Fund may include reference to the role
played by the Manager or Jack J. Dreyfus, Jr. in popularizing the concept of
mutual funds as an investment vehicle and may refer to the role The Dreyfus
Corporation and the Dreyfus Family of Funds play or have played in the mutual
fund industry, and the fact that the mutual fund industry, which includes
Dreyfus and the Dreyfus funds, has, through the wide variety of innovative and
democratic mutual fund products it has made available, brought to the public
investment opportunities once reserved for the few. Advertising materials for
each Fund also may include (i) biographical information relating to its
portfolio manager, including honors or awards received, and may refer to or
include commentary by the Fund's portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors; (ii)
information concerning retirement and investing for retirement, including
statistical data or general discussions about the growth and development of
Dreyfus Retirement Services (in terms of new customers, assets under management,
market share, etc.) and its presence in the defined contribution plan market;
(iii) the approximate number of then-current Fund shareholders, (iv) Lipper,
Morningstar and Value Line rankings or ratings and related analysis supporting
the rankings or ratings; (v) discussions of the risk and reward potential of the
high yield securities markets, and the mortgage- and real estate-related
markets, and the comparative performance of each against other securities
markets and relevant indices; (vi) comparative performance of a Fund with a
relevant broad-based securities market index, or with a "customized index"
created by the Manger, or against inflation, short-term Treasury Bills (which
are direct obligations of the U.S. Government), bonds, stocks, or FDIC-insured
bank money market accounts; and (vii) as to Dreyfus Short Term High Yield Fund,
that at its inception the Fund was the first short-term, high yield fund in the
mutual fund industry.
INFORMATION ABOUT THE COMPANY AND FUNDS
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares are of one class, except in the case of the Dreyfus Premier Funds,
and have equal rights as to dividends and in liquidation. Shares have no
preemptive or subscription rights and are freely transferable.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for a Fund to hold annual meetings of shareholders. As a result, Fund
shareholders may not consider each year the election of Board members or the
appointment of auditors. However, 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 Board member from office. Fund
shareholders may remove a Board member by the affirmative vote of two-thirds of
the Fund's outstanding voting shares. In addition, the Board will call a meeting
of shareholders for the purpose of electing Board members if, at any time, less
than a majority of the Board members then holding office have been elected by
shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholders of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of six series of
shares. All consideration received by the Company for shares of one of the
series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of the Company) and will be
subject to the liabilities related thereto. The income attributable to, and the
expenses of, one series are treated separately from those of the other series.
The Company has the ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. However, the Rule exempts the selection of
independent accountants and the election of Board members from the separate
voting requirements of the Rule.
Each Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculating on short-term market
movements. A pattern of frequent purchases and exchanges can be disruptive to
efficient portfolio management and, consequently, can be detrimental to the
Fund's performance and its shareholders. Accordingly, if the Fund's management
determines that an investor is following a market-timing strategy or is
otherwise engaging in excessive trading, the Fund, with or without prior notice,
may temporarily or permanently terminate the availability of Fund Exchanges, or
reject in whole or part any purchase or exchange request, with respect to such
investor's account. Such investors also may be barred from purchasing other
funds in the Dreyfus Family of Funds or the Dreyfus Premier Family of Funds.
Generally, an investor who makes more than four exchanges out of the Fund during
any calendar year or who makes exchanges that appear to coincide with a
market-timing strategy may be deemed to be engaged in excessive trading.
Accounts under common ownership or control will be considered as one account for
purposes of determining a pattern of excessive trading. In addition, the Fund
may refuse or restrict purchase or exchange requests by any person or group if ,
in the judgment of the Fund's management, the Fund would be unable to invest the
money effectively in accordance with its investment objective and policies or
could otherwise be adversely affected or if the Fund receives or anticipates
receiving simultaneous orders that may significantly affect the Fund (e.g.,
amounts equal to 1% or more of the Fund's total assets). If any exchange request
is refused, the Fund will take no other action with respect to the shares until
it receives further instructions from the investor. The Fund may delay
forwarding redemption proceeds for up to seven days if the investor redeeming
shares is engaged in excessive trading or if the amount of the redemption
request otherwise would be disruptive to efficient portfolio management or would
adversely affect the Fund. The Fund's policy on excessive trading applies to
investors who invest in the Fund directly or through financial intermediaries,
but does not apply to the Dreyfus Auto-Exchange Privilege, to any automatic
investment or withdrawal privilege described herein, or to participants in
employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Fund may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components -- redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but the
purchase order would be effective only at the net asset value next determined
after the fund being purchased receives the proceeds of the redemption, which
may result in the purchase being delayed.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of a Massachusetts
business trust. However, the Company's Agreement and Declaration of Trust
disclaims shareholder liability for acts or obligations of the Company and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Company or a Trustee. The
Agreement and Declaration of Trust provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations, a possibility
which management believes is remote. Upon payment of any liability incurred by
the Fund, the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Company intends to
conduct its operations in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund.
Each Fund will send annual and semi-annual financial statements to all
its shareholders.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to each Fund's Prospectus.
_____________________________________________, independent auditors,
have been selected as independent auditors of the Company.
<PAGE>
APPENDIX
Description of S&P, Moody's, Fitch and Duff ratings:
S&P
BOND RATINGS
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal an from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than bonds in higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus (+) or
a minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
COMMERCIAL PAPER RATING
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
B
Issues carrying this designation are regarded as having only
speculative capacity for timely payment.
C
This designation is assigned to short-term obligations with doubtful
capacity for payment.
D
Issues carrying this designation are in default, and payment of
interest and/or repayment of principal is in arrears.
Moody's
BOND RATINGS
Aaa
Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and generally are referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa
Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what generally are known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A
Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa
Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba
Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and, therefore, not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa
Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Ca
Bonds rated Ca present obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C
Bonds rated C are the lowest rated class of bonds, and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
COMMERCIAL PAPER RATING
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirements for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Not Prime do not
fall within any of the Prime rating categories.
Fitch
BOND RATING
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default in payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual default of interest and/or
principal payments. Such bonds are extremely speculative and should be valued on
the basis of their ultimate recovery value in liquidation or reorganization of
the obligor. DDD represents the highest potential for recovery on these bonds
and D represents the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. Plus and minus
signs, however, are not used in the AAA category covering 12-36 months.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
F-3
Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate; however,
near-term adverse changes could cause these securities to be rated below
investment grade.
F-S
Weak Credit Quality. Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are vulnerable
to near-term adverse changes in financial and economic conditions.
D
Default. Issues assigned this rating are in actual or imminent payment
default.
Duff
BOND RATINGS
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, factors are more variable and greater in periods of economic stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. There may be
considerable variability in risk for bonds in this category during economic
cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are narrow
and risk can be substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
DD
Defaulted debt obligations. Issuer has failed to meet scheduled
principal and/or interest payments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.
COMMERCIAL PAPER RATING
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor. Paper rated Duff-2 is regarded as having
good certainty of timely payment, good access to capital markets and sound
liquidity factors and company fundamentals. Risk factors are small. Paper rated
Duff-3 is regarded as having satisfactory liquidity and other protection
factors. Risk factors are larger and subject to more variation. Nevertheless,
timely payment is expected. Paper rated Duff-4 is regarded as having speculative
investment characteristics. Liquidity is not sufficient to insure against
disruption in debt service. Operating factors and market access may be subject
to a high degree of variation. Paper rated Duff-5 is in default. The issuer has
failed to meet scheduled principal and/or interest payments.
<PAGE>
DREYFUS DEBT AND EQUITY FUNDS
PART C. OTHER INFORMATION
-------------------------
Item 23. Exhibits
- ------- --------
(a) Registrant's Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit (1) of Post-Effective
Amendment No. 13 to the Registration Statement on Form N-1A, filed on
December 29, 1995.
(b) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (b) of Post-Effective Amendment No. 26 to the Registration
Statement on Form N-1A, filed on February 2, 2000.
(d)(1) Revised Management Agreement.
(e) Revised Distribution Agreement.
(g) Amended and Restated Custody Agreement is incorporated by reference to
Exhibit 8 of Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed on December 29, 1995.
(h) Revised Shareholder Services Plan.
(i) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (i) of Post-Effective Amendment No. 26 to the
Registration Statement filed February 2, 2000.
(j) Consent of Independent Auditors.*
(m) Revised Rule 12b-1 Plan.
(n) Revised Rule 18f-3 Plan.
Other Exhibits
--------------
(a) Power of Attorney is incorporated by reference to Other
Exhibits of Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A, filed on February 23,
1999.
(b) Certificate of Assistant Secretary is incorporated by
reference to Other Exhibits of Post-Effective Amendment
No. 25 to the Registration Statement on Form N-1A, filed on
February 23, 1999.
- --------------------
* To be filed by amendment.
Item 24. Persons Controlled by or under Common Control with Registrant.
- ------- --------------------------------------------------------------
Not Applicable
Item 25. Indemnification
- ------- ---------------
Reference is made to Article VIII of the Registrant's Amended and
Restated Declaration of Trust incorporated by reference to Exhibit (1)
of Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on December 29, 1995. The application of these
provisions is limited by Article 10 of the Registrant's By-Laws, as
amended, filed herewith, and by the following undertaking set forth in
the rules promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been adivsed that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification is against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
trustee, officer or controlling person of the registrant in the
successful defense of any such action, suit or proceeding) is
asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference also is made to the Distribution Agreement filed herewith.
Item 26. Business and Other Connections of Investment Adviser.
- ------- ----------------------------------------------------
The Dreyfus Corporation ("Dreyfus") and subsidiary companies comprise
a financial service organization whose business consists primarily of
providing investment management services as the investment adviser and
manager for sponsored investment companies registered under the
Investment Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other investment
companies for which Dreyfus acts as investment adviser, sub-investment
adviser or administrator. Dreyfus Investment Advisers, Inc., another
wholly-owned subsidiary, provides investment management services to
various pension plans, institutions and individuals.
<PAGE>
Item 26. Business and Other Connections of Investment Adviser (Continued)
Officers and Directors of Investment Adviser
<TABLE>
<CAPTION>
Name and Position
WITH DREYFUS OTHER BUSINESSES POSITION HELD DATES
<S> <C> <C> <C>
CHRISTOPHER M. CONDRON Franklin Portfolio Associates, LLC* Director 1/97 - Present
Chairman of the Board and
Chief Executive Officer TBCAM Holdings, Inc.* Director 10/97 - Present
President 10/97 - 6/98
Chairman 10/97 - 6/98
The Boston Company Director 1/98 - Present
Asset Management, LLC* Chairman 1/98 - 6/98
President 1/98 - 6/98
The Boston Company President 9/95 - 1/98
Asset Management, Inc.* Chairman 4/95 - 1/98
Franklin Portfolio Holdings, Inc.* Director 1/97 - Present
Certus Asset Advisors Corp.** Director 6/95 -Present
Mellon Capital Management Director 5/95 -Present
Corporation***
Mellon Bond Associates, LLP+ Executive Committee 1/98 - Present
Member
Mellon Bond Associates+ Trustee 5/95 -1/98
Mellon Equity Associates, LLP+ Executive Committee 1/98 - Present
Member
Mellon Equity Associates+ Trustee 5/95 - 1/98
Boston Safe Advisors, Inc. * Director 5/95 - Present
President 5/95 - Present
Mellon Bank, N.A.+ Director 1/99 - Present
Chief Operating Officer 3/98 - Present
President 3/98 - Present
Vice Chairman 11/94 - 3/98
Mellon Bank Corporation+ Chief Operating Officer 1/99 - Present
President 1/99 - Present
Director 1/98 - Present
Vice Chairman 11/94 - 1/99
The Boston Company, Inc.* Vice Chairman 1/94 - Present
Director 5/93 - Present
Laurel Capital Advisors, LLP+ Exec. Committee 1/98 - 8/98
Member
Laurel Capital Advisors+ Trustee 10/93 - 1/98
Boston Safe Deposit and Trust Director 5/93 -Present
Company*
The Boston Company Financial President 6/89 - Present
Strategies, Inc.* Director 6/89 - Present
MANDELL L. BERMAN Self-Employed Real Estate Consultant, 11/74 - Present
Director 29100 Northwestern Highway Residential Builder and
Suite 370 Private Investor
Southfield, MI 48034
BURTON C. BORGELT DeVlieg Bullard, Inc. Director 1/93 - Present
Director 1 Gorham Island
Westport, CT 06880
Mellon Bank Corporation+ Director 6/91 - Present
Mellon Bank, N.A.+ Director 6/91 - Present
Dentsply International, Inc. Director 2/81 - Present
570 West College Avenue
York, PA
Quill Corporation Director 3/93 - Present
Lincolnshire, IL
STEPHEN E. CANTER Dreyfus Investment Chairman of the Board 1/97 - Present
President, Chief Operating Advisors, Inc.++ Director 5/95 - Present
Officer, Chief Investment President 5/95 - Present
Officer, and Director
Newton Management Limited Director 2/99 - Present
London, England
Mellon Bond Associates, LLP+ Executive Committee 1/99 - Present
Member
Mellon Equity Associates, LLP+ Executive Committee 1/99 - Present
Member
Franklin Portfolio Associates, LLC* Director 2/99 - Present
Franklin Portfolio Holdings, Inc.* Director 2/99 - Present
The Boston Company Asset Director 2/99 - Present
Management, LLC*
TBCAM Holdings, Inc.* Director 2/99 - Present
Mellon Capital Management Director 1/99 - Present
Corporation***
Founders Asset Management, LLC**** Member, Board of 12/97 - Present
Managers
Acting Chief Executive 7/98 - 12/98
Officer
The Dreyfus Trust Company+++
Director 6/95 - Present
Chairman 1/99 - Present
President 1/99 - Present
Chief Executive Officer 1/99 - Present
THOMAS F. EGGERS Dreyfus Service Corporation++ Executive Vice President 4/96 - Present
Vice Chairman - Institutional Director 9/96 - Present
and Director
Founders Asset Management, LLC**** Member, Board of Managers 2/99 - Present
Dreyfus Service Organization++ Director 3/99 - Present
Dreyfus Insurance Agency of Director 3/99 - Present
Massachusetts, Inc.+++
Dreyfus Brokerage Services, Inc. Director 11/97 - 6/98
401 North Maple Avenue
Beverly Hills, CA.
STEVEN G. ELLIOTT Mellon Bank Corporation+ Senior Vice Chairman 1/99 - Present
Director Chief Financial Officer 1/90 - Present
Vice Chairman 6/92 - 1/99
Treasurer 1/90 - 5/98
Mellon Bank, N.A.+ Senior Vice Chairman 3/98 - Present
Vice Chairman 6/92 - 3/98
Chief Financial Officer 1/90 - Present
Mellon EFT Services Corporation Director 10/98 - Present
Mellon Bank Center, 8th Floor
1735 Market Street
Philadelphia, PA 19103
Mellon Financial Services Director 1/96 - Present
Corporation #1 Vice President 1/96 - Present
Mellon Bank Center, 8th Floor
1735 Market Street
Philadelphia, PA 19103
Boston Group Holdings, Inc.* Vice President 5/93 - Present
APT Holdings Corporation Treasurer 12/87 - Present
Pike Creek Operations Center
4500 New Linden Hill Road
Wilmington, DE 19808
Allomon Corporation Director 12/87 - Present
Two Mellon Bank Center
Pittsburgh, PA 15259
Collection Services Corporation Controller 10/90 - 2/99
500 Grant Street Director 9/88 - 2/99
Pittsburgh, PA 15258 Vice President 9/88 - 2/99
Treasurer 9/88 - 2/99
Mellon Financial Company+ Principal Exec. Officer 1/88 - Present
Chief Financial Officer 8/87 - Present
Mellon Overseas Investments Director 8/87 - Present
Corporation+ President 8/87 - Present
Director 4/88 - Present
Chairman 7/89 - 11/97
Mellon International Investment President 4/88 - 11/97
Corporation+ Chief Executive Officer 4/88 - 11/97
Director 9/89 - 8/97
Mellon Financial Services Treasurer 12/87 - Present
Corporation #5+
Mellon Financial Markets, Inc.+ Director 1/99 - Present
Mellon Financial Services Director 1/99 - Present
Corporation #17
Fort Lee, NJ
Mellon Mortgage Company Director 1/99 - Present
Houston, TX
Mellon Ventures, Inc.+ Director 1/99 - Present
LAWRENCE S. KASH Dreyfus Investment Director 4/97 - Present
Vice Chairman Advisors, Inc.++
Dreyfus Brokerage Services, Inc. Chairman 11/97 - 2/99
401 North Maple Ave. Chief Executive Officer 11/97 - 2/98
Beverly Hills, CA
Dreyfus Service Corporation++ Director 1/95 - 2/99
President 9/96 - 3/99
Dreyfus Precious Metals, Inc.+++ Director 3/96 - 12/98
President 10/96 - 12/98
Dreyfus Service Director 12/94 - 3/99
Organization, Inc.++ President 1/97 - 3/99
Seven Six Seven Agency, Inc.++ Director 1/97 - 4/99
Dreyfus Insurance Agency of Chairman 5/97 - 3/99
Massachusetts, Inc.++++ President 5/97 - 3/99
Director 5/97 - 3/99
The Dreyfus Trust Company+++ Chairman 1/97 - 1/99
President 2/97 - 1/99
Chief Executive Officer 2/97 - 1/99
Director 12/94 - Present
The Dreyfus Consumer Credit Chairman 5/97 - 6/99
Corporation++ President 5/97 - 6/99
Director 12/94 - 6/99
Founders Asset Management, LLC**** Member, Board of Managers 12/97 - Present
The Boston Company Advisors, Chairman 12/95 - Present
Inc. Chief Executive Officer 12/95 - Present
Wilmington, DE President 12/95 - Present
The Boston Company, Inc.* Director 5/93 - Present
President 5/93 - Present
Mellon Bank, N.A.+ Executive Vice President 6/92 - Present
Laurel Capital Advisors, LLP+ Chairman 1/98 - 8/98
Executive Committee 1/98 - 8/98
Member
Chief Executive Officer 1/98 - 8/98
President 1/98 - 8/98
Laurel Capital Advisors, Inc.+ Trustee 12/91 - 1/98
Chairman 9/93 - 1/98
President and CEO 12/91 - 1/98
Boston Group Holdings, Inc.* Director 5/93 - Present
President 5/93 - Present
MARTIN G. MCGUINN Mellon Bank Corporation+ Chairman 1/99 - Present
Director Chief Executive Officer 1/99 - Present
Director 1/98 - Present
Vice Chairman 1/90 - 1/99
Mellon Bank, N. A. + Chairman 3/98 - Present
Chief Executive Officer 3/98 - Present
Director 1/98 - Present
Vice Chairman 1/90 - 3/98
Mellon Leasing Corporation+ Vice Chairman 12/96 - Present
Mellon Bank (DE) National Director 4/89 - 12/98
Association
Wilmington, DE
Mellon Bank (MD) National Director 1/96 - 4/98
Association
Rockville, Maryland
Mellon Financial Vice President 9/86 - 10/97
Corporation (MD)
Rockville, Maryland
J. DAVID OFFICER Dreyfus Service Corporation++ Executive Vice President 5/98 - Present
Vice Chairman Director 3/99 - Present
And Director
Dreyfus Service Organization++ Director 3/99 - Present
Dreyfus Insurance Agency of Director 5/98 - Present
Massachusetts, Inc.++++
Dreyfus Brokerage Services, Inc. Chairman 3/99 - Present
401 North Maple Avenue
Beverly Hills, CA
Seven Six Seven Agency, Inc.++ Director 10/98 - Present
Mellon Residential Funding Corp.+ Director 4/97 - Present
Mellon Trust of Florida, N.A. Director 8/97 - Present
2875 Northeast 191st Street
North Miami Beach, FL 33180
Mellon Bank, NA+ Executive Vice President 7/96 - Present
The Boston Company, Inc.* Vice Chairman 1/97 - Present
Director 7/96 - Present
Mellon Preferred Capital Director 11/96 - Present
Corporation*
RECO, Inc.* President 11/96 - Present
Director 11/96 - Present
The Boston Company Financial President 8/96 - Present
Services, Inc.* Director 8/96 - Present
Boston Safe Deposit and Trust Director 7/96 - Present
Company* President 7/96 - 1/99
Mellon Trust of New York Director 6/96 - Present
1301 Avenue of the Americas
New York, NY 10019
Mellon Trust of California Director 6/96 - Present
400 South Hope Street
Suite 400
Los Angeles, CA 90071
Mellon Bank, N.A.+ Executive Vice President 2/94 - Present
Mellon United National Bank Director 3/98 - Present
1399 SW 1st Ave., Suite 400
Miami, Florida
Boston Group Holdings, Inc.* Director 12/97 - Present
Dreyfus Financial Services Corp.+ Director 9/96 - Present
Dreyfus Investment Services Director 4/96 - Present
Corporation+
RICHARD W. SABO Founders Asset Management LLC**** President 12/98 - Present
Director Chief Executive Officer 12/98 - Present
Prudential Securities
New York, NY Senior Vice President 07/91 - 11/98
Regional Director 07/91 - 11/98
RICHARD F. SYRON Thermo Electron President 6/99 - Present
Director 81 Wyman Street Chief Executive Officer 6/99 - Present
Waltham, MA 02454-9046
American Stock Exchange Chairman 4/94 -6/99
86 Trinity Place Chief Executive Officer 4/94 - 6/99
New York, NY 10006
RONALD P. O'HANLEY Franklin Portfolio Holdings, Inc.* Director 3/97 - Present
Vice Chairman
TBCAM Holdings, Inc.* Chairman 6/98 - Present
Director 10/97 - Present
The Boston Company Asset Chairman 6/98 - Present
Management, LLC* Director 1/98 - 6/98
The Boston Company Asset Director 2/97 - 12/97
Management, Inc.*
Boston Safe Advisors, Inc.* Chairman 6/97 - Present
Director 2/97 - Present
Pareto Partners Partner Representative 5/97 - Present
271 Regent Street
London, England W1R 8PP
Mellon Capital Management Director 5/97 -Present
Corporation***
Certus Asset Advisors Corp.** Director 2/97 - Present
Mellon Bond Associates+ Trustee 2/97 - Present
Chairman 2/97 - Present
Mellon Equity Associates+ Trustee 2/97 - Present
Chairman 2/97 - Present
Mellon-France Corporation+ Director 3/97 - Present
Laurel Capital Advisors+ Trustee 3/97 - Present
MARK N. JACOBS Dreyfus Investment Director 4/97 - Present
General Counsel, Advisors, Inc.++ Secretary 10/77 - 7/98
Vice President, and
Secretary The Dreyfus Trust Company+++ Director 3/96 - Present
The TruePenny Corporation++ President 10/98 - Present
Director 3/96 - Present
Dreyfus Service Director 3/97 - 3/99
Organization, Inc.++
WILLIAM H. MARESCA The Dreyfus Trust Company+++ Chief Financial Officer 3/99 - Present
Controller Treasurer 9/98 - Present
Director 3/97 - Present
Dreyfus Service Corporation++ Chief Financial Officer 12/98 - Present
Dreyfus Consumer Credit Corp. ++ Treasurer 10/98 -Present
Dreyfus Investment Treasurer 10/98 - Present
Advisors, Inc. ++
Dreyfus-Lincoln, Inc. Vice President 10/98 - Present
4500 New Linden Hill Road
Wilmington, DE 19808
The TruePenny Corporation++ Vice President 10/98 - Present
Dreyfus Precious Metals, Inc.+++ Treasurer 10/98 - 12/98
The Trotwood Corporation++ Vice President 10/98 - Present
Trotwood Hunters Corporation++ Vice President 10/98 - Present
Trotwood Hunters Site A Corp.++ Vice President 10/98 - Present
Dreyfus Transfer, Inc. Chief Financial Officer 5/98 - Present
One American Express Plaza,
Providence, RI 02903
Dreyfus Service Treasurer 3/99 - Present
Organization, Inc.++ Assistant Treasurer 3/93 - 3/99
Dreyfus Insurance Agency of
Massachusetts, Inc.++++ Assistant Treasurer 5/98 - Present
WILLIAM T. SANDALLS, JR. Dreyfus Transfer, Inc. Chairman 2/97 - Present
Executive Vice President One American Express Plaza,
Providence, RI 02903
Dreyfus Service Corporation++ Director 1/96 - Present
Executive Vice President 2/97 - Present
Chief Financial Officer 2/97-12/98
Dreyfus Investment Director 1/96 - Present
Advisors, Inc.++ Treasurer 1/96 - 10/98
Dreyfus-Lincoln, Inc. Director 12/96 - Present
4500 New Linden Hill Road President 1/97 - Present
Wilmington, DE 19808
Seven Six Seven Agency, Inc.++ Director 1/96 - 10/98
Treasurer 10/96 - 10/98
The Dreyfus Consumer Director 1/96 - Present
Credit Corp.++ Vice President 1/96 - Present
Treasurer 1/97 - 10/98
The Dreyfus Trust Company +++ Director 1/96 - Present
Dreyfus Service Organization, Treasurer 10/96- 3/99
Inc.++
Dreyfus Insurance Agency of Director 5/97 - 3/99
Massachusetts, Inc.++++ Treasurer 5/97- 3/99
Executive Vice President 5/97 - 3/99
DIANE P. DURNIN Dreyfus Service Corporation++ Senior Vice President - 5/95 - 3/99
Vice President - Product Marketing and
Development Advertising Division
PATRICE M. KOZLOWSKI NONE
Vice President - Corporate
Communications
MARY BETH LEIBIG NONE
Vice President -
Human Resources
THEODORE A. SCHACHAR Dreyfus Service Corporation++ Vice President -Tax 10/96 - Present
Vice President - Tax
The Dreyfus Consumer Credit Chairman 6/99 - Present
Corporation++ President 6/99 - Present
Dreyfus Investment Advisors, Inc.++ Vice President - Tax 10/96 - Present
Dreyfus Precious Metals, Inc.+++ Vice President - Tax 10/96 - 12/98
Dreyfus Service Organization, Inc.++ Vice President - Tax 10/96 - Present
WENDY STRUTT None
Vice President
RICHARD TERRES None
Vice President
ANDREW S. WASSER Mellon Bank Corporation+ Vice President 1/95 - Present
Vice-President -
Information Systems
JAMES BITETTO The TruePenny Corporation++ Secretary 9/98 - Present
Assistant Secretary
Dreyfus Service Corporation++ Assistant Secretary 8/98 - Present
Dreyfus Investment Assistant Secretary 7/98 - Present
Advisors, Inc.++
Dreyfus Service Assistant Secretary 7/98 - Present
Organization, Inc.++
STEVEN F. NEWMAN Dreyfus Transfer, Inc. Vice President 2/97 - Present
Assistant Secretary One American Express Plaza Director 2/97 - Present
Providence, RI 02903 Secretary 2/97 - Present
Dreyfus Service Secretary 7/98 - Present
Organization, Inc.++ Assistant Secretary 5/98 - 7/98
- --------
* The address of the business so indicated is One Boston Place, Boston, Massachusetts, 02108.
** The address of the business so indicated is One Bush Street, Suite 450, San Francisco, California 94104.
*** The address of the business so indicated is 595 Market Street, Suite 3000, San Francisco, California 94105.
**** The address of the business so indicated is 2930 East Third Avenue, Denver, Colorado 80206.
+ The address of the business so indicated is One Mellon Bank Center, Pittsburgh, Pennsylvania 15258.
++ The address of the business so indicated is 200 Park Avenue, New York, New York 10166.
+++ The address of the business so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
++++ The address of the business so indicated is 53 State Street, Boston, Massachusetts 02109
**** The address of the business so indicated is 2930 East Third Avenue, Denver, Colorado 80206.
</TABLE>
<PAGE>
Item 27. Principal Underwriters
- -------- ----------------------
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management Funds
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Debt and Equity Funds
28) Dreyfus Index Funds, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Preferred Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Funds, Inc.
35) Dreyfus Investment Grade Bond Funds, Inc.
36) Dreyfus Investment Portfolios
37) The Dreyfus/Laurel Funds, Inc.
38) The Dreyfus/Laurel Funds Trust
39) The Dreyfus/Laurel Tax-Free Municipal Funds
40) Dreyfus LifeTime Portfolios, Inc.
41) Dreyfus Liquid Assets, Inc.
42) Dreyfus Massachusetts Intermediate Municipal Bond Fund
43) Dreyfus Massachusetts Municipal Money Market Fund
44) Dreyfus Massachusetts Tax Exempt Bond Fund
45) Dreyfus MidCap Index Fund
46) Dreyfus Money Market Instruments, Inc.
47) Dreyfus Municipal Bond Fund, Inc.
48) Dreyfus Municipal Cash Management Plus
49) Dreyfus Municipal Money Market Fund, Inc.
50) Dreyfus New Jersey Intermediate Municipal Bond Fund
51) Dreyfus New Jersey Municipal Bond Fund, Inc.
52) Dreyfus New Jersey Municipal Money Market Fund, Inc.
53) Dreyfus New Leaders Fund, Inc.
54) Dreyfus New York Insured Tax Exempt Bond Fund
55) Dreyfus New York Municipal Cash Management
56) Dreyfus New York Tax Exempt Bond Fund, Inc.
57) Dreyfus New York Tax Exempt Intermediate Bond Fund
58) Dreyfus New York Tax Exempt Money Market Fund
59) Dreyfus U.S. Treasury Intermediate Term Fund
60) Dreyfus U.S. Treasury Long Term Fund
61) Dreyfus 100% U.S. Treasury Money Market Fund
62) Dreyfus U.S. Treasury Short Term Fund
63) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
64) Dreyfus Pennsylvania Municipal Money Market Fund
65) Dreyfus Premier California Municipal Bond Fund
66) Dreyfus Premier Equity Funds, Inc.
67) Dreyfus Premier International Funds, Inc.
68) Dreyfus Premier GNMA Fund
69) Dreyfus Premier Worldwide Growth Fund, Inc.
70) Dreyfus Premier Municipal Bond Fund
71) Dreyfus Premier New York Municipal Bond Fund
72) Dreyfus Premier State Municipal Bond Fund
73) Dreyfus Premier Value Fund
74) Dreyfus Short-Intermediate Government Fund
75) Dreyfus Short-Intermediate Municipal Bond Fund
76) The Dreyfus Socially Responsible Growth Fund, Inc.
77) Dreyfus Stock Index Fund, Inc.
78) Dreyfus Tax Exempt Cash Management
79) The Dreyfus Third Century Fund, Inc.
80) Dreyfus Treasury Cash Management
81) Dreyfus Treasury Prime Cash Management
82) Dreyfus Variable Investment Fund
83) Dreyfus Worldwide Dollar Money Market Fund, Inc.
84) Founders Funds, Inc.
85) General California Municipal Bond Fund, Inc.
86) General California Municipal Money Market Fund
87) General Government Securities Money Market Fund, Inc.
88) General Money Market Fund, Inc.
89) General Municipal Bond Fund, Inc.
90) General Municipal Money Market Funds, Inc.
91) General New York Municipal Bond Fund, Inc.
92) General New York Municipal Money Market Fund
<PAGE>
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
- ------------------ --------------------------- -------------
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Chief Treasurer
Compliance Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Treasurer and Chief Financial and Assistant
Officer Treasurer
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Jean M. O'Leary+ Assistant Vice President, None
Assistant Secretary and
Assistant Clerk
William J. Nutt+ Chairman of the Board None
Patrick W. McKeon+ Vice President None
Joseph A. Vignone+ Vice President None
- --------------------------------
+ Principal business address is 60 State Street, Boston, Massachusetts 02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
<PAGE>
Item 28. Location of Accounts and Records
- ------- --------------------------------
1. First Data Investor Services Group, Inc.
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 29. Management Services
- ------- -------------------
Not Applicable
Item 30. Undertakings
- ------- ------------
None
<PAGE>
SIGNATURES
--------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York on the 4th day of
February, 2000.
DREYFUS DEBT AND EQUITY FUNDS
BY: /S/MARIE E. CONNOLLY*
----------------------------
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Signatures Title Date
- --------------------------- ----------- --------
/s/Marie E. Connolly* President and Treasurer 2/4/00
- ---------------------------- (Principal Executive Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer 2/4/00
- ---------------------------- (Principal Accounting
Joseph F. Tower, III and Financial Officer)
/s/Joseph S. DiMartino* Chairman of the Board 2/4/00
- ----------------------------
Joseph S. DiMartino
/s/David W. Burke* Board Member 2/4/00
- -----------------------------
David W. Burke
/s/Diane Dunst* Board Member 2/4/00
- ----------------------------
Diane Dunst
/s/Rosalind Gersten Jacobs* Board Member 2/4/00
- ----------------------------
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Board Member 2/4/00
- ----------------------------
Jay I. Meltzer
/s/Daniel Rose* Board Member 2/4/00
- ----------------------------
Daniel Rose
/s/ Sander Vanocur* Board Member 2/4/00
- ----------------------------
Sander Vanocur
/s/ Warren B. Rudman* Board Member 2/4/00
- ----------------------------
Warren B. Rudman
*BY: /s/Stephanie Pierce
-----------------------
Stephanie Pierce,
Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
(d)(1) Revised Management Agreement.
(e) Revised Distribution Agreement.
(h) Revised Shareholder Services Plan.
(m) Revised Rule 12b-1 Plan.
(n) Revised Rule 18f-3 Plan.
Exhibit (d)(1)
MANAGEMENT AGREEMENT
DREYFUS DEBT AND EQUITY FUNDS
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, December 6, 1995
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund") consisting of the
series named on Schedule 1 hereto, as such Schedule may be revised from time to
time (each, a "Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting
the same in investments of the type and in accordance with the limitations
specified in its charter documents and in its Prospectus and Statement of
Additional Information as from time to time in effect, copies of which have been
or will be submitted to you, and in such manner and to such extent as from time
to time may be approved by the Fund's Board. The Fund desires to employ you to
act as its investment adviser.
In this connection it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe to
be particularly fitted to assist you in the performance of this Agreement. Such
person or persons may be officers or employees who are employed by both you and
the Fund. The compensation of such person or persons shall be paid by you and no
obligation may be incurred on the Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's Board, you will
provide investment management of each Series' portfolio in accordance with such
Series' investment objectives and policies as stated in the Fund's Prospectus
and Statement of Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment research and will
supervise each Series' investments and conduct a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of such
Series' assets. You will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or contemplate purchasing, as
the Fund may reasonably request. The Fund wishes to be informed of important
developments materially affecting any Series' portfolio and shall expect you, on
your own initiative, to furnish to the Fund from time to time such information
as you may believe appropriate for this purpose.
In addition, you will supply office facilities (which may be in your
own offices), data processing services, clerical, accounting and bookkeeping
services, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; prepare reports to
each Series' stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; calculate the
net asset value of each Series' shares; and generally assist in all aspects of
the Fund's operations. You shall have the right, at your expense, to engage
other entities to assist you in performing some or all of the obligations set
forth in this paragraph, provided each such entity enters into an agreement with
you in form and substance reasonably satisfactory to the Fund. You agree to be
liable for the acts or omissions of each such entity to the same extent as if
you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the services to be
provided to the Fund hereunder and the Fund agrees as an inducement to your
undertaking the same that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or purport to protect
you against any liability to the Fund or a Series or to its security holders to
which you would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to this Agreement, the
Fund will pay you on the first business day of each month a fee at the rate set
forth opposite each Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described in the Fund's
then-current Prospectus and Statement of Additional Information. The fee for the
period from the date of the commencement of the public sale of a Series' shares
to the end of the month during which such sale shall have been commenced shall
be pro-rated according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of each
Series' net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of each Series' net assets.
You will bear all expenses in connection with the performance of your
services under this Agreement. All other expenses to be incurred in the
operation of the Fund will be borne by the Fund, except to the extent
specifically assumed by you. The expenses to be borne by the Fund include,
without limitation, the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not your
officers, directors or employees or holders of 5% or more of your outstanding
voting securities, Securities and Exchange Commission fees and 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 independent pricing services,
costs of maintaining the Fund's existence, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and any extraordinary
expenses.
As to each Series, if in any fiscal year the aggregate expenses of the
Fund (including fees pursuant to this Agreement, but excluding interest, taxes,
brokerage and, with the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense limitation of any state
having jurisdiction over the Series, the Fund may deduct from the fees to be
paid hereunder, or you will bear, such excess expense to the extent required by
state law. Your obligation pursuant hereto will be limited to the amount of your
fees hereunder. Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly basis.
The Fund understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Fund has no objection
to your so acting, provided that when the purchase or sale of securities of the
same issuer is suitable for the investment objectives of two or more companies
or accounts managed by you which have available funds for investment, the
available securities will be allocated in a manner believed by you to be
equitable to each company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by one or more Series
or the size of the position obtainable for or disposed of by one or more Series.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict your right or the right of any of your affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or gross negligence on your part in the performance of your duties or from
reckless disregard by you of your obligations and duties under this Agreement.
Any person, even though also your officer, director, partner, employee or agent,
who may be or become an officer, Board member, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting on any business
of the Fund, to be rendering such services to or acting solely for the Fund and
not as your officer, director, partner, employee or agent or one under your
control or direction even though paid by you.
As to each Series, this Agreement shall continue until the date set
forth opposite such Series' name on Schedule 1 hereto (the "Reapproval Date")
and thereafter shall continue automatically for successive annual periods ending
on the day of each year set forth opposite the Series' name on Schedule 1 hereto
(the "Reapproval Day"), provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of such Series' outstanding voting
securities, provided that in either event its continuance also is approved by a
majority of the Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. As to each Series,
this Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series' shares or, upon not
less than 90 days' notice, by you. This Agreement also will terminate
automatically, as to the relevant Series, in the event of its assignment (as
defined in said Act).
The Fund recognizes that from time to time your directors, officers
and employees may serve as directors, trustees, partners, officers and employees
of other corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other entities may include
the name "Dreyfus" as part of their name, and that your corporation or its
affiliates may enter into investment advisory or other agreements with such
other entities. If you cease to act as the Fund's investment adviser, the Fund
agrees that, at your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Dreyfus" in any form or
combination of words.
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall only be binding upon the assets and property
of the Fund and shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS DEBT AND EQUITY FUNDS
By:
--------------------------------
Accepted:
THE DREYFUS CORPORATION
By:
-------------------------------
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual Fee as a
Percentage of
Average Daily Net
Name of Series Assets Reapproval Date Reapproval Day
<S> <C> <C> <C>
Dreyfus Equity
Income Fund .75% September 11, 2000 September 11
Dreyfus Premier High
Yield Securities Fund .65% September 11, 2000 September 11
Dreyfus Premier
High Yield Debt
Plus Equity Fund .75% September 11, 2000 September 11
Dreyfus Premier Real
Estate Mortgage Fund .65% September 11, 2000 September 11
Dreyfus Short Term
High Yield Fund .65% September 11, 2000 September 11
Dreyfus Premier Core
Bond Fund .60% September 11, 2000 September 11
</TABLE>
Revised: February 9, 2000
EXHIBIT (e)
DISTRIBUTION AGREEMENT
DREYFUS DEBT AND EQUITY FUNDS
200 Park Avenue
New York, New York 10166
August 24, 1994
As Amended, February 9, 2000
Premier Mutual Fund Services, Inc.
60 State Street
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the above-named investment company (the "Fund") has
agreed that you shall be, for the period of this agreement, the distributor of
(a) shares of each Series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes of this
agreement the term "Shares" shall mean the authorized shares of the relevant
Series, if any, and otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by,
and in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended, and will transmit promptly any
orders received by you for purchase or redemption of Shares to the Transfer and
Dividend Disbursing Agent for the Fund of which the Fund has notified you in
writing.
1.2 You agree to use your best efforts to solicit orders for the sale
of Shares. It is contemplated that you will enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by abnormal circumstances of any kind, the
Fund's officers may decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such orders and to
make such sales and the Fund shall advise you promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Fund hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders; provided, however,
that nothing contained herein shall be deemed to require the Fund to pay any of
the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of the Fund's officers in connection with
the qualification of Shares for sale in such states as you may designate to the
Fund and the Fund may approve, and the Fund agrees to pay all expenses which may
be incurred in connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this agreement, all other
expenses incurred by you in connection with the sale of Shares as contemplated
in this agreement.
1.7 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to the Fund or
any relevant Series and the Shares as you may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such information, when so
signed by the Fund's officers, shall be true and correct. The Fund also shall
furnish you upon request with: (a) semi-annual reports and annual audited
reports of the Fund's books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings statements prepared by
the Fund, (c) a monthly itemized list of the securities in the Fund's or, if
applicable, each Series' portfolio, (d) monthly balance sheets as soon as
practicable after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition as you may
reasonably request.
1.8 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been carefully prepared in
conformity with the requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this agreement the
terms "registration statement" and "prospectus" shall mean any registration
statement and prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and Exchange
Commission and any amendments and supplements thereto which at any time shall
have been filed with said Commission. The Fund represents and warrants to you
that any registration statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said Commission; that
all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes effective will include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Fund may
but shall not be obligated to propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus as, in the light of future developments, may, in the opinion of
the Fund's counsel, be necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from you to do so, you may,
at your option, terminate this agreement or decline to make offers of the Fund's
securities until such amendments are made. The Fund shall not file any amendment
to any registration statement or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
1.9 The Fund authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of Shares. The
Fund agrees to indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon any
untrue statement, or alleged untrue statement, of a material fact contained in
any registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Fund's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or prospectus in reliance
upon and in conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being notified of any action
brought against you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed to the Fund at
its address set forth above within ten days after the summons or other first
legal process shall have been served. The failure so to notify the Fund of any
such action shall not relieve the Fund from any liability which the Fund may
have to the person against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or alleged omission, otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
1.9. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by you. In the event the Fund elects to assume the defense of any such suit and
retain counsel of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Fund does not elect to assume the defense of any
such suit, or in case you do not approve of counsel chosen by the Fund, the Fund
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. The Fund's indemnification agreement
contained in this paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of you, your officers and directors, or
any controlling person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to your benefit, to the benefit of
your several officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors. The Fund agrees
promptly to notify you of the commencement of any litigation or proceedings
against the Fund or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Fund, its officers or Board members, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting from such claims
or demands, shall arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished in writing by
you to the Fund specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its officers and Board
members, and any such controlling person, as aforesaid, is expressly conditioned
upon your being notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification to be given by
letter or telegram addressed to you at your address set forth above within ten
days after the summons or other first legal process shall have been served. You
shall have the right to control the defense of such action, with counsel of your
own choosing, satisfactory to the Fund, if such action is based solely upon such
alleged misstatement or omission on your part, and in any other event the Fund,
its officers or Board members, or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Fund, its officers or Board
members, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10. This agreement of
indemnity will inure exclusively to the Fund's benefit, to the benefit of the
Fund's officers and Board members, and their respective estates, and to the
benefit of any controlling persons and their successors. You agree promptly to
notify the Fund of the commencement of any litigation or proceedings against you
or any of your officers or directors in connection with the issue and sale of
Shares.
1.11 No Shares shall be offered by either you or the Fund under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Fund's obligation to repurchase any Shares from any shareholder
in accordance with the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect
or for additional information;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the
registration statement or prospectus then in effect or the initiation
of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any
statement of a material fact made in the registration statement or
prospectus then in effect or which requires the making of a change in
such registration statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus
which may from time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you shall be
offered for sale at a price per share (the "offering price") approximately equal
to (a) their net asset value (determined in the manner set forth in the Fund's
charter documents) plus (b) a sales charge, if any and except to those persons
set forth in the then-current prospectus, which shall be the percentage of the
offering price of such Shares as set forth in the Fund's then-current
prospectus. The offering price, if not an exact multiple of one cent, shall be
adjusted to the nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred sales charge as
set forth in the Fund's then-current prospectus. You shall be entitled to
receive any sales charge or contingent deferred sales charge in respect of the
Shares. Any payments to dealers shall be governed by a separate agreement
between you and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the "Reapproval Date")
set forth on Exhibit A hereto (and, if the Fund has Series, a separate
Reapproval Date shall be specified on Exhibit A for each Series), and thereafter
shall continue automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A hereto, provided such
continuance is specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may be, provided that
in either event its continuance also is approved by a majority of the Board
members who are not "interested persons" (as defined in said Act) of any party
to this agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This agreement is terminable without penalty, on 60
days' notice, by vote of holders of a majority of the Fund's or, as to any
relevant Series, such Series' outstanding voting securities or by the Fund's
Board as to the Fund or the relevant Series, as the case may be. This agreement
is terminable by you, upon 270 days' notice, effective on or after the fifth
anniversary of the date hereof. This agreement also will terminate
automatically, as to the Fund or relevant Series, as the case may be, in the
event of its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you shall not perform
any services for any entity other than a "Mellon Entity," such term being
defined as any entity that is advised or administered by a direct or indirect
subsidiary of the Mellon Financial Corporation. The Fund acknowledges that the
persons employed by you to assist in the performance of your duties under this
agreement may not devote their full time to such service and, subject to the
preceding sentence, nothing contained in this agreement shall be deemed to limit
or restrict your or any of your affiliates right to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this agreement shall only be binding upon the assets and property
of the Fund and shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
<PAGE>
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.
Very truly yours,
DREYFUS DEBT AND EQUITY FUNDS
By:
----------------------------
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:
-------------------------
<PAGE>
EXHIBIT A
NAME OF SERIES REAPPROVAL DATE REAPPROVAL DAY
Dreyfus Equity Income
Fund September 11, 2000 September 11
Dreyfus Premier High Yield
Securities Fund September 11, 2000 September 11
Dreyfus Premier High
Yield Debt Plus Equity Fund September 11, 2000 September 11
Dreyfus Premier Real Estate
Mortgage Fund September 11, 2000 September 11
Dreyfus Short Term High
Yield Fund September 11, 2000 September 11
Dreyfus Premier Core Bond
Fund September 11, 2000 September 11
Revised: February 9, 2000
EXHIBIT (h)
DREYFUS DEBT AND EQUITY FUNDS
SHAREHOLDER SERVICES PLAN
INTRODUCTION: It has been proposed that the above-captioned investment
company (the "Fund") adopt a Shareholder Services Plan under which the Fund
would pay the Fund's distributor (the "Distributor") for providing services to
(a) shareholders of each series of the Fund or class of Fund shares set forth on
Exhibit A hereto, as such Exhibit may be revised from time to time (each, a
"Class"), or (b) if no series or classes are set forth on such Exhibit,
shareholders of the Fund. The Distributor would be permitted to pay certain
financial institutions, securities dealers and other industry professionals
(collectively, "Service Agents") in respect of these services. The Plan is not
to be adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "Act"), and the fee under the Plan is intended to be a "service
fee" as defined under the Conduct Rules of the National Association of
Securities Dealers, Inc.
The Fund's Board, in considering whether the Fund should implement a
written plan, has requested and evaluated such information as it deemed
necessary to an informed determination as to whether a written plan should be
implemented and has considered such pertinent factors as it deemed necessary to
form the basis for a decision to use Fund assets attributable to each Class for
such purposes.
In voting to approve the implementation of such a plan, the Board has
concluded, in the exercise of its reasonable business judgment and in light of
applicable fiduciary duties, that there is a reasonable likelihood that the plan
set forth below will benefit the Fund and shareholders of each Class.
THE PLAN: The material aspects of this Plan are as follows:
1. The Fund shall pay to the Distributor a fee at the annual rate set
forth on Exhibit A in respect of the provision of personal services to
shareholders and/or the maintenance of shareholder accounts. The Distributor
shall determine the amounts to be paid to Service Agents and the basis on which
such payments will be made. Payments to a Service Agent are subject to
compliance by the Service Agent with the terms of any related Plan agreement
between the Service Agent and the Distributor.
2. For the purpose of determining the fees payable under this Plan,
the value of the Fund's net assets attributable to each Class shall be computed
in the manner specified in the Fund's charter documents for the computation of
net asset value.
3. The Board shall be provided, at least quarterly, with a written
report of all amounts expended pursuant to this Plan. The report shall state the
purpose for which the amounts were expended.
4. As to each Class, this Plan will become effective immediately upon
approval by a majority of the Board members, including a majority of the Board
members who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of this Plan or
in any agreements entered into in connection with this Plan, pursuant to a vote
cast in person at a meeting called for the purpose of voting on the approval of
this Plan.
5. As to each Class, this Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance with its terms,
and thereafter shall continue automatically for successive annual periods,
provided such continuance is approved at least annually in the manner provided
in paragraph 4 hereof.
6. As to each Class, this Plan may be amended at any time by the
Board, provided that any material amendments of the terms of this Plan shall
become effective only upon approval as provided in paragraph 4 hereof.
7. As to each Class, this Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into in
connection with this Plan.
8. The obligations hereunder and under any related Plan agreement
shall only be binding upon the assets and property of the Fund or the affected
Class, as the case may be, and shall not be binding upon any Board member,
officer or shareholder of the Fund individually.
Dated: July 19, 1995
Revised: February 9, 2000
<PAGE>
EXHIBIT A
NAME OF SERIES OR CLASS FEE AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS
Dreyfus Equity Income Fund .25%
Dreyfus Premier High Yield Securities Fund
Class A .25%
Class B .25%
Class C .25%
Class T .25%
Dreyfus Premier High Yield Debt and Equity Fund
Class A .25%
Class B .25%
Class C .25%
Class T .25%
Dreyfus Premier Real Estate Mortgage Fund
Class A .25%
Class B .25%
Class C .25%
Class T .25%
Dreyfus Short Term High Yield Fund .25%
Dreyfus Premier Core Bond Fund
Class A .25%
Class B .25%
Class C .25%
EXHIBIT (m)
DREYFUS DEBT AND EQUITY FUNDS
DISTRIBUTION PLAN
INTRODUCTION: It has been proposed that the above-captioned investment
company (the "Fund") adopt a Distribution Plan (the "Plan") in accordance with
Rule 12b-1, promulgated under the Investment Company Act of 1940, as amended
(the "Act"). The Plan would pertain to each series of the Fund, and each class
of shares of each series, set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Class"). Under the Plan, the Fund would pay
the Fund's distributor (the "Distributor") for distributing shares of each
Class. If this proposal is to be implemented, the Act and said Rule 12b-1
require that a written plan describing all material aspects of the proposed
financing be adopted by the Fund.
The Fund's Board, in considering whether the Fund should implement a
written plan, has requested and evaluated such information as it deemed
necessary to an informed determination as to whether a written plan should be
implemented and has considered such pertinent factors as it deemed necessary to
form the basis for a decision to use assets attributable to each Class for such
purposes.
In voting to approve the implementation of such a plan, the Board
members have concluded, in the exercise of their reasonable business judgment
and in light of their respective fiduciary duties, that there is a reasonable
likelihood that the plan set forth below will benefit the Fund and shareholders
of each Class.
THE PLAN: The material aspects of this Plan are as follows:
1. The Fund shall pay to the Distributor for distribution a fee in
respect of each Class at the annual rate set forth on Exhibit A.
2. For the purposes of determining the fees payable under this Plan,
the value of the Fund's net assets attributable to each Class shall be computed
in the manner specified in the Fund's charter documents as then in effect for
the computation of the value of the Fund's net assets attributable to such
Class.
3. The Fund's Board shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to this Plan. The report shall
state the purpose for which the amounts were expended.
4. As to each Class, this Plan will become effective at such time as
is specified by the Fund's Board, provided the Plan is approved by a majority of
the Board members, including a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of this Plan or in any agreements
entered into in connection with this Plan, pursuant to a vote cast in person at
a meeting called for the purpose of voting on the approval of this Plan.
5. As to each Class, this Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance with its terms,
and thereafter shall continue automatically for successive annual periods,
provided such continuance is approved at least annually in the manner provided
in paragraph 4 hereof.
6. As to each Class, this Plan may be amended at any time by the
Fund's Board, provided that (a) any amendment to increase materially the costs
which such Class may bear pursuant to this Plan shall be effective only upon
approval by a vote of the holders of a majority of the outstanding shares of
such Class, and (b) any material amendments of the terms of this Plan shall
become effective only upon approval as provided in paragraph 4 hereof.
7. As to each Class, this Plan is terminable without penalty at any
time by (a) vote of a majority of the Board members who are not "interested
persons" (as defined in the Act) of the Fund and have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, or (b) vote of the holders of a majority of
the outstanding shares of such Class.
8. The obligations hereunder and under any related Plan agreement
shall only be binding upon the assets and property of the Fund or the affected
Class, as the case may be, and shall not be binding upon any Board member,
officer or shareholder of the Fund individually.
Dated: May 6, 1998
Revised: February 9, 2000
<PAGE>
EXHIBIT A
FEE AS A PERCENTAGE OF
NAME OF SERIES AND CLASS AVERAGE DAILY NET ASSETS*
- ------------------------ -------------------------
Dreyfus Premier High Yield Debt
Plus Equity Fund
Class B .75%
Class C .75%
Class T .25%
Dreyfus Premier High Yield
Securities Fund
Class B .75%
Class C .75%
Class T .25%
Dreyfus Premier Real Estate
Mortgage Fund
Class B .75%
Class C .75%
Class T .25%
Dreyfus Premier Core Bond fund
Class B .50%
Class C .75%
* Fees shall be for distribution-related services, and the Distributor may use
part or all of such fees to pay banks, broker/dealers or other financial
institutions in respect of such services.
EXHIBIT (n)
THE DREYFUS FAMILY OF FUNDS
(DREYFUS PREMIER FAMILY OF EQUITY FUNDS)
RULE 18F-3 PLAN
Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"1940 Act"), requires that the Board of an investment company desiring to offer
multiple classes pursuant to said Rule adopt a plan setting forth the separate
arrangement and expense allocation of each class, and any related conversion
features or exchange privileges.
The Board, including a majority of the non-interested Board members,
of each of the investment companies, or series thereof, listed on Schedule A
attached hereto (each, a "Fund") which desires to offer multiple classes has
determined that the following plan is in the best interests of each class
individually and each Fund as a whole:
1. CLASS DESIGNATION: Fund shares shall be divided, except as
otherwise noted on Schedule A, into Class A, Class B, Class C, Class R and Class
T.
2. DIFFERENCES IN SERVICES: The services offered to shareholders of
each Class shall be substantially the same, except that Right of Accumulation
and Letter of Intent shall be available only to holders of Class A and Class T
shares.
3. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS: Class A shares shall be
offered with a front-end sales charge, as such term is defined under the Conduct
Rules of the National Association of Securities Dealers, Inc. (the "NASD Conduct
Rules"), and a deferred sales charge (a "CDSC"), as such term is defined under
the NASD Conduct Rules, may be assessed on certain redemptions of Class A shares
purchased without an initial sales charge as part of an investment of $1 million
or more. The amount of the sales charge and the amount of and provisions
relating to the CDSC pertaining to the Class A shares are set forth on Schedule
B hereto.
Class B shares shall not be subject to a front-end sales charge, but
shall be subject to a CDSC and shall be charged an annual distribution fee under
a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act. The
amount of and provisions relating to the CDSC, and the amount of the fees under
the Distribution Plan pertaining to the Class B shares, are set forth on
Schedule C hereto.
Class C shares shall not be subject to a front-end sales charge, but
shall be subject to a CDSC and shall be charged an annual distribution fee under
a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act. The
amount of and provisions relating to the CDSC, and the amount of the fees under
the Distribution Plan pertaining to the Class C shares, are set forth on
Schedule D hereto.
Class R shares shall be offered at net asset value only to
institutional investors acting for themselves or in a fiduciary, advisory,
agency, custodial or similar capacity for qualified or non-qualified employee
benefit plans, including pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments, but not including IRAs or
IRA "Rollover Accounts."
Class T shares shall be offered with a front-end sales charge, and a
CDSC may be assessed on certain redemptions of Class T shares purchased without
an initial sales charge as part of an investment of $1 million or more. Class T
shares also shall be charged an annual distribution fee under a Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act. The amount of the sales
charge, the amount of and provisions relating to the CDSC, and the amount of the
fees under the Distribution Plan pertaining to the Class T shares are set forth
on Schedule E hereto.
Class A, Class B, Class C and Class T shares shall be subject to an
annual service fee at the rate of .25% of the value of the average daily net
assets of such Class pursuant to a Shareholder Services Plan.
4. EXPENSE ALLOCATION: The following expenses shall be allocated, to
the extent practicable, on a Class-by-Class basis: (a) fees under a Distribution
Plan and Shareholder Services Plan; (b) printing and postage expenses related to
preparing and distributing materials, such as shareholder reports, prospectuses
and proxies, to current shareholders of a specific Class; (c) Securities and
Exchange Commission and Blue Sky registration fees incurred by a specific Class;
(d) the expense of administrative personnel and services as required to support
the shareholders of a specific Class; (e) litigation or other legal expenses
relating solely to a specific Class; (f) transfer agent fees identified by the
Fund's transfer agent as being attributable to a specific Class; and (g) Board
members' fees incurred as a result of issues relating to a specific Class.
5. CONVERSION FEATURES: Class B shares shall automatically convert to
Class A shares after a specified period of time after the date of purchase,
based on the relative net asset value of each such Class without the imposition
of any sales charge, fee or other charge, as set forth on Schedule F hereto. No
other Class shall be subject to any automatic conversion feature.
6. EXCHANGE PRIVILEGES: Shares of a Class shall be exchangeable only
for (a) shares of the same Class of other investment companies managed or
administered by The Dreyfus Corporation or its affiliates as specified from time
to time and (b) shares of certain other Classes of such investment companies or
shares of certain other investment companies specified from time to time.
<PAGE>
SCHEDULE A
NAME OF FUND DATE PLAN ADOPTED
Dreyfus Premier Equity Funds, Inc. September 11, 1995
(Revised as of December 6, 1999)
- --Dreyfus Premier Aggressive Growth Fund
- --Dreyfus Premier Growth and Income Fund
- --Dreyfus Premier Emerging Markets Fund
- --Dreyfus Premier Market Neutral Fund
Dreyfus Premier International Funds, Inc. April 24, 1995
(Revised as of November 11, 1999)
- --Dreyfus Premier European Equity Fund
- --Dreyfus Premier Global Allocation Fund
- --Dreyfus Premier Greater China Fund
- --Dreyfus Premier International Growth Fund
- --Dreyfus Premier Japan Fund
Dreyfus Premier Worldwide Growth April 12, 1995
Fund, Inc. (Revised as of November 15, 1999)
Dreyfus Premier Value Equity Funds July 19, 1995
(Revised as of November 3, 1999)
- --Dreyfus Premier Value Fund
- --Dreyfus Premier International Value Fund
Dreyfus Growth and Value Funds, Inc. February 25, 1999
(Revised as of November 10, 1999)
- --Dreyfus Premier Technology Growth Fund
Dreyfus Debt and Equity Funds May 6, 1998
(Revised as of February 9, 2000)
- --Dreyfus Premier High Yield Debt Plus
Equity Fund*
- --Dreyfus Premier Real Estate Mortgage Fund
- --Dreyfus Premier High Yield Securities
Fund*
- --Dreyfus Premier Core Bond Fund**
* Class A, Class B, Class C and Class T only.
** Class A, Class B, Class C and Class R only.
<PAGE>
SCHEDULE B
FRONT-END SALES CHARGE--CLASS A SHARES--Effective December 1, 1996, the public
offering price for Class A shares, except as set forth below, shall be the net
asset value per share of Class A plus a sales load as shown below:
TOTAL SALES LOAD
--------------------------------
AS A % OF AS A % OF
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE
- --------------------- PER SHARE PER SHARE
----------------- ---------------
Less than $50,000..................... 5.75 6.10
$50,000 to less than $100,000......... 4.50 4.70
$100,000 to less than $250,000........ 3.50 3.60
$250,000 to less than $500,000........ 2.50 2.60
$500,000 to less than $1,000,000...... 2.00 2.00
$1,000,000 or more.................... -0- -0-
FRONT-END SALES CHARGE--CLASS A SHARES--SHAREHOLDERS BENEFICIALLY OWNING CLASS A
SHARES ON NOVEMBER 30, 1996--For shareholders who beneficially owned Class A
shares of a Fund on November 30, 1996, the public offering price for Class A
shares of such Fund, except as set forth below, shall be the net asset value per
share of Class A plus a sales load as shown below:
TOTAL SALES LOAD
------------------------------
AS A % OF AS A % OF
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE
- --------------------- PER SHARE PER SHARE
---------------- ---------------
Less than $50,000..................... 4.50 4.70
$50,000 to less than $100,000......... 4.00 4.20
$100,000 to less than $250,000........ 3.00 3.10
$250,000 to less than $500,000........ 2.50 2.60
$500,000 to less than $1,000,000...... 2.00 2.00
$1,000,000 or more.................... -0- -0-
<PAGE>
FRONT-END SALES CHARGE--CLASS A SHARES OF DREYFUS PREMIER AGGRESSIVE GROWTH FUND
ONLY--SHAREHOLDERS BENEFICIALLY OWNING CLASS A SHARES ON DECEMBER 31, 1995*
- --For shareholders who beneficially owned Class A shares of Dreyfus Premier
Aggressive Growth Fund on December 31, 1995, the public offering price for Class
A shares of Dreyfus Premier Aggressive Growth Fund shall be the net asset value
per share of Class A plus a sales load as shown below:
TOTAL SALES LOAD
--------------------------------
AS A % OF AS A % OF
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE
- --------------------- PER SHARE PER SHARE
--------------- --------------
Less than $100,000.................... 3.00 3.10
$100,000 to less than $250,000........ 2.75 2.80
$250,000 to less than $500,000........ 2.25 2.30
$500,000 to less than $1,000,000...... 2.00 2.00
$1,000,000 or more.................... 1.00 1.00
TOTAL SALES LOAD
--------------------------------
AS A % OF AS A % OF
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE
- --------------------- PER SHARE PER SHARE
--------------- --------------
Less than $50,000..................... 4.50 4,70
$50,000 to less than $100,000......... 4.00 4.20
$100,000 to less than $250,000........ 3.00 3,10
$250,000 to less than $500,000........ 2.50 2.60
$500,000 to less than $1,000,000...... 2.00 2.00
$1,000,000 or more.................... -0- -0-
CLASS A SHARES OF DREYFUS PREMIER REAL ESTATE MORTGAGE FUND, DREYFUS PREMIER
TECHNOLOGY GROWTH FUND, DREYFUS PREMIER HIGH YIELD SECURITIES FUND DREYFUS
PREMIER CORE BOND FUND ONLY--Shareholders beneficially owning Class A shares of
Dreyfus Premier Real Estate Mortgage Fund on December 24, 1998 or Dreyfus
Premier Technology Growth Fund on April 15, 1999 or Dreyfus Premier High Yield
Securities Fund on February 29, 2000 or Dreyfus Premier Core Bond Fund on
February 29, 2000 may purchase Class A shares of such Fund at net asset value
without a front-end sales charge.
- -------------------
* At a meeting held on December 16, 1996, shareholders of Premier
Strategic Growth Fund voted to merge such Fund into Premier Aggressive
Growth Fund. Shareholders of Dreyfus Premier Strategic Growth Fund who
received Class A shares of Dreyfus Premier Aggressive Growth Fund in
the merger are deemed to have beneficially owned such shares as of the
date they beneficially owned Class A shares of Premier Strategic Growth
Fund for purposes of the front-end sales charge applicable to purchases
of Class A shares of Dreyfus Premier Aggressive Growth Fund.
<PAGE>
CONTINGENT DEFERRED SALES CHARGE--CLASS A SHARES--A CDSC of 1.00% shall be
assessed at the time of redemption of Class A shares purchased without an
initial sales charge as part of an investment of at least $1,000,000 and
redeemed within one year of purchase. The terms contained in Schedule C
pertaining to the CDSC assessed on redemptions of Class B shares (other than the
amount of the CDSC and its time periods), including the provisions for waiving
the CDSC, shall be applicable to the Class A shares subject to a CDSC. Letter of
Intent and Right of Accumulation shall apply to purchases of Class A shares
subject to a CDSC.
<PAGE>
SCHEDULE C
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES--A CDSC payable to the Fund's
Distributor shall be imposed on any redemption of Class B shares which reduces
the current net asset value of such Class B shares to an amount which is lower
than the dollar amount of all payments by the redeeming shareholder for the
purchase of Class B shares of the Fund held by such shareholder at the time of
redemption. No CDSC shall be imposed to the extent that the net asset value of
the Class B shares redeemed does not exceed (i) the current net asset value of
Class B shares acquired through reinvestment of dividends or capital gain
distributions, plus (ii) increases in the net asset value of the shareholder's
Class B shares above the dollar amount of all payments for the purchase of Class
B shares of the Fund held by such shareholder at the time of redemption.
If the aggregate value of the Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC may be
applied to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
shall depend on the number of years from the time the shareholder purchased the
Class B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the purchase
of Class B shares, all payments during a month shall be aggregated and deemed to
have been made on the first day of the month. The following table sets forth the
rates of the CDSC:
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
- ----------- -----------------------
First............................. 4.00
Second............................ 4.00
Third............................. 3.00
Fourth............................ 3.00
Fifth............................. 2.00
Sixth............................. 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation shall be made in a manner that results in the lowest possible rate.
Therefore, it shall be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net asset value of
Class B shares above the total amount of payments for the purchase of Class B
shares made during the preceding six years; then of amounts representing the
cost of shares purchased six years prior to the redemption; and finally, of
amounts representing the cost of shares held for the longest period of time
within the applicable six-year period.
WAIVER OF CDSC--The CDSC shall be waived in connection with (a) redemptions made
within one year after the death or disability, as defined in Section 72(m)(7) of
the Internal Revenue Code of 1986, as amended (the "Code"), of the shareholder,
(b) redemptions by 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 Fund's Distributor exceeds one million dollars,
(c) redemptions as a result of a combination of any investment company with the
Fund by merger, acquisition of assets or otherwise, (d) a distribution following
retirement under a tax-deferred retirement plan or upon attaining age 70-1/2 in
the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b)
of the Code, and (e) redemptions pursuant to any systematic withdrawal plan as
described in the Fund's prospectus. Any Fund shares subject to a CDSC which were
purchased prior to the termination of such waiver shall have the CDSC waived as
provided in the Fund's prospectus at the time of the purchase of such shares.
AMOUNT OF DISTRIBUTION PLAN FEES--CLASS B SHARES--Except as otherwise noted, .75
of 1% of the value of the average daily net assets of Class B. For Dreyfus
Premier Core Bond Fund, .50% of the value of the average daily net assets of
Class B
<PAGE>
SCHEDULE D
CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES--A CDSC of 1.00% payable to the
Fund's Distributor shall be imposed on any redemption of Class C shares within
one year of the date of purchase. The basis for calculating the payment of any
such CDSC shall be the method used in calculating the CDSC for Class B shares.
In addition, the provisions for waiving the CDSC shall be those set forth for
Class B shares.
AMOUNT OF DISTRIBUTION PLAN FEES--CLASS C SHARES--.75 of 1% of the value of the
average daily net assets of Class C.
<PAGE>
SCHEDULE E
FRONT-END SALES CHARGE--CLASS T SHARES--The public offering price for Class T
shares shall be the net asset value per share of Class T plus a sales load as
shown below:
TOTAL SALES LOAD
--------------------------------
AS A % OF AS A % OF
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE
PER SHARE PER SHARE
--------------- --------------
Less than $50,000..................... 4.50 4.70
$50,000 to less than $100,000......... 4.00 4.20
$100,000 to less than $250,000........ 3.00 3.10
$250,000 to less than $500,000........ 2.00 2.00
$500,000 to less than $1,000,000...... 1.50 1.50
$1,000,000 or more.................... -0- -0-
CONTINGENT DEFERRED SALES CHARGE--CLASS T SHARES--A CDSC of 1.00% shall be
assessed at the time of redemption of Class T shares purchased without an
initial sales charge as part of an investment of at least $1,000,000 and
redeemed within one year of purchase. The terms contained in Schedule C
pertaining to the CDSC assessed on redemptions of Class B shares (other than the
amount of the CDSC and its time periods), including the provisions for waiving
the CDSC, shall be applicable to the Class T shares subject to a CDSC. Letter of
Intent and Right of Accumulation shall apply to purchases of Class T shares
subject to a CDSC.
AMOUNT OF DISTRIBUTION PLAN FEES--CLASS T SHARES--.25 of 1% of the value of the
average daily net assets of Class T.
<PAGE>
SCHEDULE F
CONVERSION OF CLASS B SHARES--Approximately six years after the date of
purchase, Class B shares automatically shall convert to Class A shares, based on
the relative net asset values for shares of each such Class, and shall no longer
be subject to the distribution fee. At that time, Class B shares that have been
acquired through the reinvestment of dividends and distributions ("Dividend
Shares") shall be converted in the proportion that a shareholder's Class B
shares (other than Dividend Shares) converting to Class A shares bears to the
total Class B shares then held by the shareholder which were not acquired
through the reinvestment of dividends and distributions.
