<PAGE>
As filed with the Securities and Exchange Commission on January 5, 1995
Registration No. 33-16338
811-5270
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_/
Pre-Effective Amendment No. _____ /_/
Post-Effective Amendment No. 33 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 34
THE DREYFUS/LAUREL FUNDS, INC.
-------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
200 Park Avenue - 55th floor
New York, New York 10166
------------------------
(Address of Principal Executive Office) (ZIP Code)
Registrant's Telephone Number, including area code: (800) 225-5267
-------------------------------------------------------------------
John E. Pelletier Clifford J. Alexander, Esq.
Secretary Thomas M. Leahey, Esq.
The Dreyfus/Laurel Funds, Inc. Kirkpatrick & Lockhart
200 Park Avenue - 55th floor 1800 M Street, N.W.
New York, New York 10166 Washington, D.C. 20036
(Name and Address of Agent for Service) (202) 778-9000
Approximate Date of Proposed Public Offering:
--------------------------------------------
As soon as possible after this Post-Effective Amendment becomes effective.
It is proposed that this filing will become effective (check
appropriate box):
/X/ Immediately upon filing /_/ on (date) pursuant to paragraph
pursuant to paragraph (b) (b)
/_/ 60 days after filing pursuant /_/ on (date) pursuant to
to paragraph (a)(1) paragraph (a)(1)
/_/ 75 days after filing pursuant /_/ on (date) pursuant to
to paragraph (a)(2) paragraph (a)(2)
If appropriate, check the following box:
/_/ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
The Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f) under the
Investment Company Act of 1940, accordingly no fee is payable herewith. A
Rule 24f-2 Notice for the Registrant's most recent fiscal year ended
October 31, 1994 was filed with the Commission on December 30, 1994.
<PAGE>
Dreyfus/Laurel Short Term Government Securities Fund
Cross-Reference Sheet Pursuant to Rule 495(a)
----------------------------------------------------
Items in
Part A of
Form N-1A Caption Prospectus Caption
------ ------- ------------------
1. Cover Page Cover Page
2. Synopsis Expense Summary
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Objective and
Registrant Policies; Further
Information About The
Fund
5. Management of the Fund Further Information About
The Fund; Management
6. Capital Stock and Other Cover Page; Investor
Securities Line; Distributions;
Taxes;
7. Purchase of Securities Expense Summary;
Being Offered Alternative Purchase
Methods; Special
Shareholder Services; How
to Invest in The Fund;
Distribution and Service
Plans; How to Exchange
Your Investment From One
Fund to Another;
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings N.A.
<PAGE>
Items in
Part B of Statement of Additional
Form N-1A Information Caption
------- -----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and General Information
History
13. Investment Objectives and Investment Information
Policies and Risk Factors;
Investment Limitations
14. Management of the Fund Directors and Officers
15. Control Persons and Controlling Shareholders;
Principal Holders of Principal Shareholders;
Securities Directors and Officers;
Investment Management and
Other Services
16. Investment Advisory and Investment Management and
Other Services Other Services
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other See Prospectus -- "Cover
Securities Page"; "How to Redeem
Fund Shares"; "Further
Information About The
Funds; The Dreyfus/Laurel
Funds, Inc."
19. Purchase, Redemption and Investment Management and
Pricing of Securities Other Services; Net Asset
Being Offered Value
20. Tax Status Dividends, Other
Distributions and Taxes
21. Underwriters Investment Management and
Other Services
Calculation of Performance Calculations
Performance Data
22. Financial Statements Financial Statements
- 2 -
<PAGE>
Dreyfus International Equity Allocation Fund
Cross-Reference Sheet Pursuant to Rule 495(a)
---------------------------------------------
Items in
Part A of
Form N-1A
Caption Prospectus Caption
------ ------- ------------------
1. Cover Page Cover Page
2. Synopsis Expense Summary
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Objective and
Registrant Policies; Further
Information About The
Fund
5. Management of the Fund Further Information About
The Fund; Management
6. Capital Stock and Other Cover Page; Investor
Securities Line; Distributions;
Taxes;
7. Purchase of Securities Expense Summary;
Being Offered Alternative Purchase
Methods; Special
Shareholder Services; How
to Invest in The Fund;
Distribution Plan; How to
Exchange Your Investment
From One Fund to Another;
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings N.A.
<PAGE>
Items in
Part B of Statement of Additional
Form N-1A Information Caption
------ -----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and General Information
History
13. Investment Objectives and Investment Information
Policies and Risk Factors;
Investment Limitations
14. Management of the Fund Directors and Officers
15. Control Persons and Controlling Shareholders;
Principal Holders of Principal Shareholders;
Securities Directors and Officers;
Investment Management and
Other Services
16. Investment Advisory and Investment Management and
Other Services Other Services
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other See Prospectus -- "Cover
Securities Page"; "How to Redeem
Fund Shares"; "Further
Information About The
Funds; The Dreyfus/Laurel
Funds, Inc."
19. Purchase, Redemption and Investment Management and
Pricing of Securities Other Services; Net Asset
Being Offered Value
20. Tax Status Dividends, Other
Distributions and Taxes
21. Underwriters Investment Management and
Other Services
Calculation of Performance Calculations
Performance Data
22. Financial Statements Financial Statements
- 2 -
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
CONTENTS OF POST-EFFECTIVE AMENDMENT
This post-effective amendment to the registration statement of The
Dreyfus/Laurel Funds, Inc.* contains the following documents:
Facing Sheet
Cross-Reference Sheet
Contents of Post-Effective Amendment
Part A - Prospectus
- Dreyfus/Laurel Short Term Government Securities Fund
- Dreyfus International Equity Allocation Fund
Part B - Statement of Additional Information
- Dreyfus/Laurel Short Term Government Securities Fund
- Dreyfus International Equity Allocation Fund
Part C - Other Information
Signature Page - The Dreyfus/Laurel Funds, Inc.
Exhibits
____________
*The currently effective prospectuses and statements of additional
information for each of the following series of the Registrant are not
affected by this Amendment: Premier Small Company Stock Fund, Dreyfus
Equity Income Fund, Dreyfus Disciplined Stock Fund, Dreyfus Disciplined
Midcap Stock Fund, Dreyfus S&P 500 Stock Index Fund, Dreyfus European
Fund, Dreyfus Bond Market Index Fund, Premier Balanced Fund, Premier
Limited Term Income Fund, Dreyfus/Laurel Prime Money Market Fund,
Dreyfus/Laurel U.S. Treasury Money Market Fund, Dreyfus/Laurel Tax-Exempt
Money Market Fund, Dreyfus/Laurel Institutional Prime Money Market Fund,
Dreyfus/Laurel Institutional Government Money Market Fund, Dreyfus/Laurel
Institutional U.S. Treasury Money Market Fund, Dreyfus/Laurel
Institutional Short-Term Bond Fund and Dreyfus/Laurel Institutional U.S.
Treasury Only Money Market Fund.
<PAGE>
PROSPECTUS
Dreyfus/Laurel Short-Term
Government Securities Fund
Investor and Class R Shares
January 5, 1995
THE DREYFUS/LAUREL SHORT TERM GOVERNMENT SECURITIES FUND seeks a high
level of current income by investing in U.S. Government and agency obliga-
tions with remaining maturities of five years or less.
THIS PROSPECTUS describes the Dreyfus/Laurel Short Term Government Securi-
ties Fund (the "Fund"), an open-end diversified management investment com-
pany of The Dreyfus/Laurel Funds, Inc., (formerly The Laurel Funds, Inc.),
that is part of The Dreyfus Family of Funds. This Prospectus describes two
classes of shares--Investor Shares and Class R Shares (collectively, the
"Shares")--of the Fund.
This Prospectus sets forth concisely the information about the Fund that a
prospective purchaser should consider before investing. Investors should
read this Prospectus and retain it for future reference. Additional infor-
mation about the Fund is contained in a Statement of Additional Informa-
tion (the "SAI"), which has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request without charge by
calling or writing to The Dreyfus Family of Funds. The SAI bears the same
date as the Prospectus and is incorporated by reference in its entirety
into this Prospectus.
In addition to the Fund, The Dreyfus Family of Funds also offer other
funds that provide investment opportunities for you in the equity, fixed
income and money markets. For more information about these additional in-
vestment opportunities, call 1-800-548-2868.
The Dreyfus Family of Funds
P.O. Box 9692
Providence, Rhode Island 02940-9830
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DE-
POSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. ALL MUTUAL FUND SHARES INVOLVE CERTAIN RISKS, INCLUDING THE POSSI-
BLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE SUM-
MARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS MELLON BANK, N.A.
("MELLON BANK") OR ITS AFFILIATES TO BE ITS INVESTMENT MANAGER. MELLON
BANK OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE
FUND, SUCH AS CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES. THE
FUND IS DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SE-
CURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Expense Summary 5
Financial Highlights 6
Investment Objective and Policies 8
Other Investment Policies and Risk Factors 8
HOW TO DO BUSINESS WITH US
Special Shareholder Services 13
Investor Line 13
How to Invest in The Fund 13
By Mail 14
By Telephone 14
By Wire 14
By Automatic Monthly Investments 15
By Direct Deposit 15
By In-Kind Purchases 15
When Share Price is Determined 16
Additional Information About Investments 16
How to Exchange Your Investment From One Fund to Another 17
By Telephone 17
By Mail 17
Additional Information About Exchanges 17
How to Redeem Shares 18
By Telephone 18
By Mail 18
By Automated Withdrawal Program 19
Redemption Proceeds 19
Additional Information About Redemptions 20
How To Use The Dreyfus Family of Funds in a Tax-Qualified
Retirement Plan 20
How to Transfer an Investment to a Dreyfus Family of Funds'
Retirement Plan 20
OTHER INFORMATION
Share Price 21
Performance Advertising 21
Distributions 22
Taxes 24
Other Services 25
Further Information About The Fund 26
The Dreyfus/Laurel Funds, Inc. 26
Management 26
Distribution Plan (Investor Class Only) 28
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REP-
RESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S SAI INCOR-
PORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR THE DISTRIBU-
TOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR BY THE
DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY
MADE.
EXPENSE SUMMARY
The purpose of the following table is to help you understand the various
costs and expenses that you, as a Shareholder, will bear directly or indi-
rectly in connection with an investment in the Investor or Class R Shares
of the Fund (See "Management.") Long-term shareholders of Investor Shares
could pay more in Rule 12b-1 fees than the economic equivalent of the max-
imum front-end sales charges applicable to mutual funds sold by members of
the National Association of Securities Dealers, Inc.
<TABLE>
<CAPTION>
Investor Class R
Shares Shares
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases none none
Maximum Sales Load Imposed on Reinvestments none none
Deferred Sales Load none none
Redemption Fee none none
Exchange Fee none none
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
Management Fee 0.55% 0.55%
12b-1 Fees* 0.25% none
Other Expenses** 0.00% 0.00%
Total Fund Operating Expenses 0.80% 0.55%
EXAMPLES
You would pay the following on 1 year $ 8 $ 6
a $1,000 investment, assuming (1) a 3 years 26 18
5% annual return and (2) redemption 5 years
at the end of each time period: 10 years
<FN>
* See "Distribution Plan (Investor Class Only)" for a description of the
Fund's Plan of Distribution for the Investor Class.
** Does not include fees and expenses of the non-interested Directors (in-
cluding counsel). The Manager is contractually required to reduce its
Management Fee in an amount equal to the Fund's allocable portion of
such fees and expenses, which are estimated to be 0.02% of the Fund's
net assets (See "Management.")
</TABLE>
THE INFORMATION CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A REPRE-
SENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS
THAN THOSE SHOWN.
The Fund understands that banks, brokers, dealers or other financial in-
stitutions (including The Dreyfus Corporation (the "Manager") and its af-
filiates) (collectively "Agents") may charge fees to their clients who are
owners of the Fund's Investor Shares for various services provided in con-
nection with a client's account. These fees would be in addition to any
amounts received by an Agent under its Shareholder Servicing and Sales
Support Agreements ("Agreements") with Premier Mutual Fund Services Inc.
("Premier"). The Agreement requires each Agent to disclose to its clients
any compensation payable to such Agent by Premier and any other compensa-
tion payable by the client for various services provided in connection
with its account.
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Investor Share and Class R Share
of the Fund outstanding for the period ending October 31, 1994 and should
be read in conjunction with the financial statements and related notes
that appear in the Fund's Annual Report dated October 31, 1994. The finan-
cial statements included in the Fund's Annual Report are incorporated by
reference to the SAI and have been audited by KPMG Peat Marwick LLP, inde-
pendent auditors whose report appears in the Fund's Annual Report.
DREYFUS/LAUREL SHORT TERM GOVERNMENT SECURITIES FUND
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
Period
Ended
10/31/94*
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income 0.18
Less distribution:
Distributions from net investment income (0.18)
Net asset value, end of period $10.00
Total return++ 1.84%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 38
Ratio of operating expenses to average net assets 0.80%+
Ratio of net income to average net assets 3.30%+
<FN>
* The Fund commenced selling Investor Shares on April 12, 1994.
+ Annualized.
++ Total return represents aggregate total return for the period indicated.
</TABLE>
DREYFUS/LAUREL SHORT TERM GOVERNMENT SECURITIES FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
Period
Ended
10/31/94*
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income 0.20
Less distribution:
Distributions from net investment income (0.20)
Net asset value, end of period $10.00
Total return++ 2.04%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 805
Ratio of operating expenses to average net assets 0.55%+
Ratio of net investment income to average net assets 3.55%+
<FN>
* The Fund commenced operations on April 6, 1994. Effective October 17,
1994, the Trust Class of shares were reclassified as Class R Shares.
+ Annualized.
++ Total return represents aggregate total return for the period indi-
cated.
</TABLE>
DREYFUS/LAUREL SHORT TERM
GOVERNMENT SECURITIES FUND
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks a high level of current income by investing in U.S. Govern-
ment and agency obligations with remaining maturities of five years or
less. There can be no assurance that the Fund will meet its investment ob-
jective. See "OTHER INVESTMENT POLICIES AND RISK FACTORS" for a detailed
description of risks and other Fund investment policies. See "OTHER IN-
VESTMENT POLICIES AND RISK FACTORS -- Limiting Investment Risks" for a
discussion of the Fund's investment limitations.
The Fund will invest 65% or more of its total assets in U.S. Government
and agency obligations. Generally, the Fund's securities will have a total
dollar-weighted average maturity of eighteen months to three years. The
Fund's investments may also include securities which are not guaranteed by
the U.S. Government, its agencies or instrumentalities. For purposes of
maintaining liquidity, the Fund may also invest in: (1) repurchase agree-
ments, (2) reverse repurchase agreements, (3) commercial paper and (4)
when-issued transactions. The Fund may lend securities in an amount not to
exceed 33 1/3 % of total assets. (See "OTHER INVESTMENT POLICIES AND RISK
FACTORS.")
OTHER INVESTMENT POLICIES AND RISK FACTORS
BORROWING. The Fund is authorized, within specified limits, to borrow
money for temporary administrative purposes and to pledge its assets in
connection with such borrowings.
COMMERCIAL PAPER. The Fund may invest in commercial paper. These instru-
ments are short- term obligations issued by banks and corporations that
have maturities ranging from 2 to 270 days. Each instrument may be backed
only by the credit of the issuer or may be backed by some form of credit
enhancement, typically in the form of a guarantee by a commercial bank.
Commercial paper backed by guarantees of foreign banks may involve addi-
tional risk due to the difficulty of obtaining and enforcing judgments
against such banks and the generally less restrictive regulations to which
such banks are subject. The Fund will only invest in commercial paper of
U.S. and foreign companies rated A-1 at the time of purchase by Standard &
Poor's Ratings Group, Prime-1 by Moody's, Investors Services, Inc., F-1 by
Fitch Investors Services, Inc., Duff 1 by Duff & Phelps, Inc. or A1 by
IBCA, Inc.
GNMA CERTIFICATES. The Fund may invest in Government National Mortgage
Association ("GNMA") securities ("GNMA Certificates"). GNMA Certificates
are mortgage-backed securities representing part ownership of a pool of
mortgage loans. These loans are made by mortgage bankers, commercial
banks, savings and loan associations, and other lenders and are either in-
sured by the Federal Housing Administration or guaranteed by the Veterans
Administration. A "pool" or group of such mortgages is assembled and,
after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and princi-
pal on each mortgage is guaranteed by the full faith and credit of the
U.S. Government. Although the mortgage loans in a pool underlying a GNMA
Certificate will have maturities of up to 30 years, the average life of a
GNMA Certificate will be substantially less because the mortgages will be
subject to normal principal amortization and also may be prepaid prior to
maturity. Prepayment rates vary widely and may be affected by changes in
mortgage interest rates. In periods of falling interest rates, the rate of
prepayment on higher interest mortgage rates tends to increase, thereby
shortening the actual average life of the GNMA Certificate. Conversely,
when interest rates are rising, the rate of prepayment tends to decrease,
thereby lengthening the average life of the GNMA Certificate. Reinvestment
of prepayments may occur at higher or lower rates than the original yield
on the Certificates. Due to the prepayment feature and the need to rein-
vest prepayments of principal at current rates, GNMA Certificates with un-
derlying mortgages bearing higher interest rates can be less effective
than typical non-callable bonds of similar maturities at locking in yields
during periods of declining interest rates, although they may have compa-
rable risks of decline in value during periods of rising interest rates.
ILLIQUID SECURITIES. The Fund will not knowingly invest more than 15% of
the value of its net assets in illiquid securities, including time depos-
its and repurchase agreements having maturities longer than seven days.
Securities that have readily available market quotations are not deemed
illiquid for purposes of this limitation (irrespective of any legal or
contractual restrictions on resale). The Fund may invest in commercial ob-
ligations issued in reliance on the so-called "private placement" exemp-
tion from registration afforded by Section 4(2) of the Securities Act of
1933, as amended ("Section 4(2) paper"). The Fund may also purchase secu-
rities that are not registered under the Securities Act of 1933, as
amended, but which can be sold to qualified institutional buyers in accor-
dance with Rule 144A under that Act ("Rule 144A securities"). Liquidity
determinations with respect to Section 4(2) paper and Rule 144A Securities
will be made by the Board of Directors as required. The Board will con-
sider availability of reliable price information and other relevant infor-
mation in making such determinations. Section 4(2) paper is restricted as
to disposition under the federal securities laws, and generally is sold to
institutional investors such as the Fund that agree that they are purchas-
ing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2)
paper normally is resold to other institutional investors like the Fund
through or with the assistance of the issuer or investment dealers who
make a market in the Section 4(2) paper, thus providing liquidity. Rule
144A securities generally must be sold to other qualified institutional
buyers. If a particular investment in Section 4(2) paper or Rule 144A se-
curities is not determined to be liquid, that investment will be included
within the percentage limitation on investment in illiquid securities. The
ability to sell Rule 144A securities to qualified institutional buyers is
a recent development and it is not possible to predict how this market
will mature. Investing in Rule 144A securities could have the effect of
increasing the level of fund illiquidity to the extent that qualified in-
stitutional buyers become, for a time, uninterested in purchasing these
securities.
MORTGAGE PASS-THROUGH CERTIFICATES. The Fund may invest in Mortgage Pass-
Through Certificates. Mortgage pass-through certificates are issued by
governmental, government-related and private organizations and are backed
by pools of mortgage loans. These mortgage loans are made by lenders such
as savings and loan associations, mortgage bankers, commercial banks and
others to residential home buyers throughout the United States. The secu-
rities are "pass-through" securities because they provide investors with
monthly payments of principal and interest which in effect are a "pass-
through" of the monthly payments made by the individual borrowers on the
underlying mortgage loans. The principal governmental issuer of such secu-
rities is the GNMA, which is a wholly-owned U.S. government corporation
within the Department of Housing and Urban Development. Government-related
issuers include the Federal Home Loan Mortgage Corporation ("FHLMC") and
the Federal National Mortgage Association ("FNMA"), both of which are
government-sponsored corporations owned entirely by private stockholders.
Certificates created by Government-related issuers may not be guaranteed
by the U.S. government, its agencies, or instrumentalities. Commercial
banks, savings and loan institutions, private mortgage insurance compa-
nies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issu-
ers may be the originators of the underlying mortgage loans as well as the
guarantors of the mortgage-related securities. The market value of
mortgage-related securities depends on, among other things, the level of
interest rates, the certificates' coupon rates and the payment history of
underlying mortgage loans. For further information, see the SAI.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued by
other investment companies to the extent that such investments are consis-
tent with the Fund's investment objective and policies and permissible
under the Investment Company Act of 1940, as amended (the "1940 Act"). As
a shareholder of another investment company, the Fund would bear, along
with other shareholders, its pro rata portion of the other investment com-
pany's expenses, including advisory fees. These expenses would be in addi-
tion to the advisory and other expenses that the Fund bears directly in
connection with its own operations.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. A
repurchase agreement involves the purchase of a security by the Fund and a
simultaneous agreement (generally with a bank or broker-dealer) to repur-
chase that security from the Fund at a specified price and date or upon
demand. This technique offers a method of earning income on idle cash. A
risk associated with repurchase agreements is the failure of the seller to
repurchase the securities as agreed, which may cause the Fund to suffer a
loss if the market value of such securities declines before they can be
liquidated on the open market. Repurchase agreements with a duration of
more than seven days are considered illiquid securities and are subject to
the limit stated above.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements to meet redemption requests where the liquidation of fund secu-
rities is deemed by the Manager to be disadvantageous. Under a reverse re-
purchase agreement, the Fund: (i) transfers possession of fund securities
to a bank or broker-dealer in return for cash in an amount equal to a per-
centage of the securities' market value; and (ii) agrees to repurchase the
securities at a future date by repaying the cash with interest. Cash or
liquid high-grade debt securities held by the Fund equal in value to the
repurchase price including any accrued interest will be maintained in a
segregated account while a reverse repurchase agreement is in effect.
SECURITIES LENDING. To increase return on fund securities, the Fund may
lend its portfolio securities to broker-dealers and other institutional
investors pursuant to agreements requiring that the loans be continuously
secured by collateral equal at all times in value to at least the market
value of the securities loaned. There may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a
loss of rights to the collateral should the borrower of the securities
fail financially. However, loans are made only to borrowers deemed by the
Manager to be of good standing and when, in its judgment, the income to be
earned from the loan justifies the attendant risks.
U.S. GOVERNMENT SECURITIES. The Fund may invest in obligations issued or
guaranteed as to both principal and interest by the U.S. Government or
backed by the full faith and credit of the United States. In addition to
direct obligations of the U.S. Treasury, these include securities issued
or guaranteed by the Federal Housing Administration, Farmers Home Adminis-
tration, Export-Import Bank of the United States, Small Business Adminis-
tration, GNMA, General Services Administration and Maritime Administra-
tion. Investments may also be made in U.S. Government obligations that do
not carry the full faith and credit guarantee, such as those issued by
FNMA, FHLMC or other instrumentalities.
WHEN ISSUED SECURITIES AND DELAYED DELIVERY TRANSACTIONS. To secure ad-
vantageous prices or yields, the Fund may purchase U.S. Government securi-
ties on a when-issued basis or may purchase or sell securities for delayed
delivery. In such transactions, delivery of the securities occurs beyond
the normal settlement periods, but no payment or delivery is made by the
Fund prior to the actual delivery or payment by the other party to the
transaction. The purchase of securities on a when-issued or delayed deliv-
ery basis involves the risk that, as a result of an increase in yields
available in the market place, the value of the securities purchased will
decline prior to the settlement date. The sale of securities for delayed
delivery involves the risk that the prices available in the market on the
delivery date may be greater than those obtained in the sale transactions.
The Fund will establish a segregated account consisting of cash, U.S. Gov-
ernment securities or other high-grade debt obligations in an amount equal
to the amounts of its when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Dreyfus/Laurel Funds, Inc. may in the future
seek to achieve the Fund's investment objective by investing all of the
Fund's assets in another investment company having the same investment ob-
jective and substantially the same investment policies and restrictions as
those applicable to the Fund. Shareholders of the Fund will be given at
least 30 days' prior notice of any such investment. Such investment would
be made only if the Directors determine it to be in the best interest of
the Fund and its shareholders. In making that determination, the Directors
will consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies. Although
the Fund believes that the Directors will not approve an arrangement that
is likely to result in higher costs, no assurance is given that costs will
be materially reduced if this option is implemented.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on the
basis of potential for capital appreciation and not for short-term trading
profits, the Fund's turnover rate may exceed 100%. A portfolio turnover
rate of 100% would occur, for example, if all the securities held by the
Fund were replaced once in a period of one year. A higher rate of portfo-
lio turnover involves correspondingly greater brokerage commissions and
other expenses which must be borne directly by the Fund and, thus, indi-
rectly by its shareholders. In addition, a high rate of portfolio turnover
may result in the realization of larger amounts of short-term capital
gains which, when distributed to the Fund's shareholders, are taxable to
them as ordinary income. (See "Distributions" and "Taxes.") Nevertheless,
security transactions for each Fund will be based only upon investment
considerations and will not be limited by any other considerations when
the Manager deems it appropriate to make changes in the Fund's assets.
LIMITING INVESTMENT RISKS. The Fund is subject to a number of investment
limitations. Certain limitations are matters of fundamental policy and may
not be changed without the affirmative vote of the holders of a majority
of the Fund's outstanding Shares. The SAI describes all of the Fund's fun-
damental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices and procedures
of the Fund, unless otherwise specified, may be changed without share-
holder approval. If the Fund's investment objective, policies, restric-
tions, practices or procedures change, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current position and needs.
In order to permit the sale of the Fund's Shares in certain states, the
Fund may make commitments more restrictive than the investment policies
and restrictions described in this Prospectus and the SAI. Should the Fund
determine that any such commitment is no longer in the best interests of
the Fund, it may consider terminating sales of its Shares in the states
involved.
HOW TO DO BUSINESS WITH US
SPECIAL SHAREHOLDER SERVICES
You may establish one or more special services designed to provide an easy
way to do business with the Fund. By electing these services on your ap-
plication or by completing the appropriate forms, you may authorize:
* Investment by phone.
* Automatic monthly investments.
* Exchanges or redemptions by phone.
By electing the service which enables you to exchange and redeem by phone,
you agree to indemnify the Fund, its transfer agent and its investment
manager from any loss, claim or expense you may incur as a result of their
acting on such instructions. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These in-
clude personal identification procedures, recording of telephone conversa-
tions and providing written confirmation of each transaction. A failure on
the part of the Fund to employ such procedures may subject it to liability
for any loss due to unauthorized or fraudulent instructions.
INVESTOR LINE
You may reach the Fund by calling our Investor Line at 1-800-548-2868. If
you call on a rotary phone during normal business hours (9 a.m. to 5 p.m.,
Eastern time), you will reach a Dreyfus Family of Funds operator. If you
call on a Touch-Tone phone, you will receive instructions on how to: (1)
request a current prospectus or information booklets about The Dreyfus
Family of Funds' investment portfolios and services, (2) listen to net
asset values, yields and total return figures, and (3) talk with a cus-
tomer service representative during normal business hours. For more infor-
mation about direct access using a Touch-Tone phone, please contact The
Dreyfus Family of Funds.
HOW TO INVEST IN THE FUND
Premier serves as the Fund's distributor. Premier is a wholly owned sub-
sidiary of Institutional Administration Services, Inc., a provider of mu-
tual fund administration services, the parent company of which is Boston
Institutional Group, Inc. Premier also serves as the Fund's sub-
administrator and, pursuant to a Sub-Administration Agreement, provides
various administrative and corporate secretarial services to the Fund.
Premier has established various procedures for purchasing Class R and In-
vestor Shares of the Fund. Class R Shares are sold primarily to bank trust
departments and other financial service providers (including Mellon Bank
and its affiliates) ("Banks") acting on behalf of customers having a qual-
ified trust or investment account or relationship at such institution. In-
vestor Shares are primarily sold to retail investors by Premier and by
banks, securities brokers or dealers and other financial institutions (in-
cluding Mellon Bank and its affiliates) ("Agents") that have entered into
a Shareholder Servicing and Sales Support Agreement with Premier. Once an
investor has established an account, additional purchases may, in certain
cases, be made directly through the Fund's transfer agent. If Shares of
the Fund are held in an account at a Bank or with an Agent, such Bank or
Agent may require you to place all Fund purchase, exchange and redemption
orders through them. All Banks and Agents have agreed to transmit your
transaction requests to the Fund's transfer agent or to Premier. You may
diversify your investments by choosing a combination of investment portfo-
lios offered by The Dreyfus Family of Funds.
You may invest in the following ways:
BY MAIL.
Send your application and check or money order to The Dreyfus Family of
Funds, P.O. Box 9692, Providence, Rhode Island 02940-9830. Checks must be
payable in U.S. dollars and drawn on U.S. banks. When making subsequent
investments, enclose your check with the return remittance portion of the
confirmation of your previous investment. If the remittance portion is not
available, indicate on your check or a separate piece of paper your name,
address, the Fund and class of Shares of the Fund that you are buying and
the account number. Orders to purchase Shares are effective on the day the
Fund receives your check or money order. (See "When Share Price is Deter-
mined.")
BY TELEPHONE.
Once your account is open, you may make investments by telephone by call-
ing 1-800-548-2868 if you have elected the service authorizing the Fund to
draw on your bank account by check when you call with instructions. In-
vestments made by phone in any one account must be in an amount of at
least $100 and are effective two days after your call. (See "When Share
Price is Determined.")
BY WIRE.
You may make your initial or subsequent investments in the Fund by wiring
funds. To do so:
(1) Instruct your bank to wire funds to MELLON BANK (ABA routing number
0430-0026-1.)
(2) Be sure to specify on the wire:
(A) The Dreyfus Funds.
(B) The Fund name and the class of Shares of the Fund you are buying and
account number (if you have one).
(C) Your name.
(D) Your city and state.
In order for a wire purchase to be effective on the same day it is re-
ceived both the trading instructions and the wire must be received before
4 p.m., Eastern time. (See "When Share Price is Determined.")
BY AUTOMATIC MONTHLY INVESTMENTS.
Once your account is open, you may make investments automatically by
electing the Automatic Investment Program, the service authorizing the
Fund to draw on your bank account regularly by paper or electronic draft.
Such investments must be in amounts of not less than $100 in any one ac-
count. You should inquire at your bank whether it will honor a preautho-
rized paper or electronic draft. Contact the Fund if your bank requires
additional documentation. Call 1-800-548-2868 or write The Dreyfus Family
of Funds at One Exchange Place, Boston, Massachusetts 02109 for more in-
formation about the Automatic Investment Program.
BY DIRECT DEPOSIT.
If your employer offers Direct Deposit, you may arrange to automatically
purchase Shares of the Fund (minimum $100) each pay period. Direct Deposit
investing may also be available to persons receiving regular payments from
other sources (including government pension or social security payments).
Note that it may not be appropriate to Direct Deposit your entire paycheck
to the Fund because it has a fluctuating net asset value ("NAV"). Call
1-800-548-2868 or write The Dreyfus Family of Funds at One Exchange Place,
Boston, Massachusetts 02109 for more information or a Direct Deposit au-
thorization form.
BY IN-KIND PURCHASES.
If the following conditions are satisfied, the Fund may, at its discre-
tion, permit you to purchase Shares through an "in-kind" exchange of secu-
rities you hold. Any securities exchanged must meet the investment objec-
tive, policies and limitations of the Fund, must have a readily ascertain-
able market value, must be liquid and must not be subject to restrictions
on resale. The market value of any securities exchanged, plus any cash,
must be at least equal to $25,000. Shares purchased in exchange for secu-
rities generally cannot be redeemed for fifteen days following the ex-
change in order to allow time for the transfer to settle.
The basis of the exchange will depend upon the relative NAV of the Shares
purchased and securities exchanged. Securities accepted by the Fund will
be valued in the same manner as the Fund values its assets. Any interest
earned on the securities following their delivery to the Fund and prior to
the exchange will be considered in valuing the securities. All interest,
dividends, subscription or other rights attached to the securities becomes
the property of the Fund, along with the securities. Call 1-800- 548-2868
or write The Dreyfus Family of Funds at One Exchange Place, Boston, Massa-
chusetts 02109 for more information about "in-kind" purchases.
WHEN SHARE PRICE IS DETERMINED.
The price of your Shares is their NAV. NAV is determined at the close of
the New York Stock Exchange ("NYSE") on each day that the NYSE is open (a
"business day"). Investments and requests to exchange or redeem Shares re-
ceived by the Fund before the close of business on the New York Stock Ex-
change (usually 4 p.m., Eastern time) are effective on, and will receive
the price determined on, that day (except investments made by electronic
funds transfer which are effective two business days after your call). In-
vestment, exchange or redemption requests received after the close of the
New York Stock Exchange, are effective on, and receive the Share price de-
termined on the next business day.
ADDITIONAL INFORMATION ABOUT INVESTMENTS.
Once you have mailed or otherwise transmitted your investment instructions
to the Fund, they may not be modified or canceled. The Fund reserves the
right to reject any application or investment. The Fund reserves the right
to make exceptions to the minimum initial investment and account minimum
amount from time to time.
The minimum initial investment to establish a new account in the Fund is
$1,000, except for Individual Retirement Accounts ("IRAs"), retirement
plans, and Uniform Transfers (Gifts) to Minors Act accounts, for which the
minimum initial investment is $500. 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 account, the
minimum initial investment is $50. The Fund may suspend the offering of
Shares of any class of the Fund and reserves the right to vary initial and
subsequent investment minimums. Subsequent investments to purchase addi-
tional Shares in the Fund must be in an amount of $100 or more.
The Fund intends, upon 60 days' prior notice, to involuntarily redeem
Shares in any account if the total value of the Shares is less than a
specified minimum unless you have established an automatic monthly invest-
ment to purchase additional Shares. The Fund reserves the right to change
such minimum from time to time. Any time the Shares of the Fund held in an
account have a value of less than $1,000 ($500 for Uniform Gifts/Transfers
to Minors Acts accounts), unless the deficiency amount is the result of a
decrease in the NAV per Share, a notification may be sent advising you of
the need to either make an investment to bring the value of the Shares
held in the account up to $1,000 ($500) or to establish an automatic
monthly investment to purchase additional Shares. If the investment is not
made or the automatic monthly investment is not established within 60 days
from the date of notification, the Shares held in the account will be re-
deemed and the proceeds from the redemption will be sent by check to your
address of record.
The automatic redemption of Shares will not apply to IRAs, custodial ac-
counts under Section 403(b) of the Internal Revenue Code of 1986, as
amended ("Code") ("403(b) accounts") and other types of tax-deferred re-
tirement plan accounts.
HOW TO EXCHANGE YOUR INVESTMENT
FROM ONE FUND TO ANOTHER
You may exchange your Fund shares for shares of the same class of certain
other funds advised by the Manager and that were previously advised by
Mellon Bank. As noted below, exchanges from any one fund account may be
limited in any one calendar year. In addition, the Shares being exchanged
and the Shares of the fund being acquired must have a current value of at
least $100 and otherwise meet the minimum investment requirement of the
fund being acquired. Call the Investor Line for additional information and
a prospectus describing other investment portfolios offered by The Dreyfus
Family of Funds.
BY TELEPHONE.
You may exchange your Shares by calling 1-800-548-2868 if you have autho-
rized the Fund to accept telephone instructions.
BY MAIL.
You may direct the Fund to exchange your Shares by writing to The Dreyfus
Family of Funds, P.O. Box 9692, Providence, Rhode Island 02940-9830. The
request should be signed by each person in whose name the Shares are reg-
istered. All signatures should be exactly as the name appears in the reg-
istration; for example, if an owner's name is registered as John Robert
Jones, he should sign that way and not as John R. Jones.
ADDITIONAL INFORMATION ABOUT EXCHANGES.
(1) In an exchange from one account to another account, the Shares being
sold and the new Shares being purchased must have a current value of
at least $100.
(2) Exchanges from any one fund account may be limited in any one calendar
year. The Fund reserves the right to make exceptions to an exchange
limitation from time to time. An exchange limitation will not apply to
the exchange of the Shares of any of the funds exchanged pursuant to
an Automatic Withdrawal Program, and to Shares held in 403(b) ac-
counts.
(3) The Shares being acquired must be qualified for sale in your state of
residence.
(4) If the Shares are represented by a negotiable stock certificate, the
certificate must be returned before the exchange can be effected.
(5) Once you have telephoned or mailed your exchange request, it is irre-
vocable and may not be modified or canceled.
(6) An exchange is based on the next calculated NAV per Share of each fund
after receipt of your exchange order.
(7) Shares may not be exchanged unless you have furnished the Fund with
your taxpayer identification number, certified as prescribed by the
Code and regulations thereunder. (See "Taxes.")
(8) Exchange of Fund Shares is, for federal income tax purposes, a sale of
the Shares on which you may realize a taxable gain or loss.
(9) If the request is made by a corporation, partnership, trust, fidu-
ciary, agent, estate, guardian, pension plan, profit sharing plan or
unincorporated association, the Fund may require evidence satisfactory
to it of the authority of the individual signing the request.
Shareholders will be given sixty days' notice prior to any material
changes in the exchange privilege.
HOW TO REDEEM SHARES
The Fund will redeem or "buy back" your Shares at any time at their NAV.
(Before redeeming, please read "Additional Information About Redemp-
tions.") Your redemption proceeds may be delayed if you have owned your
Shares less than 10 days. (See "Redemption Proceeds.") The Fund imposes no
charges when Shares are redeemed. Agents or other institutions may charge
their clients a nominal fee for effecting redemptions of Fund Shares.
BY TELEPHONE.
If you have authorized the Fund to accept telephone instructions, you may
redeem your Shares by calling 1-800-548-2868. Once made, your telephone
request may not be modified or canceled. (Before calling, read "Additional
Information About Redemptions" and "When Share Price is Determined.")
BY MAIL.
Your written instructions to redeem Shares may be in any one of the fol-
lowing forms:
* A letter to The Dreyfus Family of Funds.
* An assignment form or stock power.
* An endorsement on the back of your negotiable stock certificate, if you
have one.
Once mailed to The Dreyfus Family of Funds at P.O. Box 9692, Providence,
Rhode Island 02940- 9830, the redemption request is irrevocable and may
not be modified or canceled. A letter of instruction should state the num-
ber of Shares or the dollar amount to be redeemed. The letter must include
your account number, and, for redemptions in an amount in excess of
$25,000, a signature guarantee of each owner. The redemption request must
be signed by each person in whose name the Shares are registered; for ex-
ample, in the case of joint ownership, each owner must sign. All signa-
tures should be exactly as the name appears in the registration. If the
owner's name appears in the registration as John Robert Jones, he should
sign that way and not as John R. Jones. Signature guarantees can be ob-
tained from commercial banks, credit unions if authorized by state laws,
savings and loans institutions, trust companies, members of a recognized
stock exchange, or from other eligible guarantors who are members of the
Securities Transfer Agents Medallion Program ("STAMP") or any other indus-
try recognized program approved by the Securities Transfer Association.
(Before writing, see "Additional Information About Redemptions.")
BY AUTOMATED WITHDRAWAL PROGRAM.
The Fund's Automated Withdrawal Program automatically redeems enough
Shares each month to provide you with a check for an amount which you
specify (with a minimum of $100). To set up an Automated Withdrawal Pro-
gram, call the Fund at 1-800-548-2868 for instructions. Only shareholders
with an account balance of $10,000 or more may participate in this pro-
gram. Shares will be redeemed on the 15th day or 30th day of each month or
the next business day, and your check will be mailed the next day. If your
monthly checks exceed the dividends, interest and capital appreciation on
your Shares, the payments will deplete your investment. Amounts paid to
you by Automated Withdrawals are not a return on your investment. They are
derived from the redemption of Shares in your account, and you must report
on your income tax return any gains or losses that you realize.
You may specify an Automated Withdrawal Program when you make your first
investment. If you would like to establish an Automated Withdrawal Program
thereafter, the request for the Automated Withdrawal Program must be
signed by all owners, with their signatures guaranteed.
When you make your first investment you may request that Automated With-
drawals be sent to an address other than the address of record. Thereaf-
ter, a request to send Automated Withdrawals to an address other than the
address of record must be signed by all owners, with their signatures
guaranteed.
The Fund may terminate the Automated Withdrawal Program at any time, upon
notice to you, and you likewise may terminate it or change the amount of
the Automated Withdrawal Program, by notice to the Fund in writing or by
telephone. Termination or change will become effective within five days
following receipt of your instructions. Your Automated Withdrawal Program
plan may begin any time after you have owned your Shares for 10 days.
REDEMPTION PROCEEDS.
Redemption proceeds may be sent to you:
BY MAIL. If your redemption check is mailed, it is usually mailed by the
second business day after receipt of your redemption request, but not
later than seven days afterwards. When a redemption occurs shortly after a
recent purchase, the Fund may hold the redemption proceeds beyond seven
days but only until the purchase check clears, which may take up to 10
days or more. No dividend is paid on the redemption proceeds after the re-
demption and before the check is mailed. If you anticipate redemptions
soon after you purchase your Shares, you are advised to wire funds to
avoid delay.
BY WIRE AND ELECTRONIC FUNDS TRANSFER. You may authorize the Fund to
transmit redemption proceeds by wire or electronic funds transfer. Pro-
ceeds from the redemption of Fund Shares will normally be transmitted on
the first business day, but not later than the seventh day, following the
date of redemption. Your bank usually will receive wired funds the day
they are transmitted. Electronically transferred funds will ordinarily be
received within two business days after transmission. Once the funds are
transmitted, the time of receipt and the availability of the funds are not
within the Fund's control. If your bank account changes, you must send a
new "voided" check preprinted with the bank registration with written in-
structions signed by all owners (with their signatures guaranteed), in-
cluding tax identification number.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
(1) Redemptions specifying a certain date or price cannot be accepted and
will be returned.
(2) If the Shares being redeemed are represented by a negotiable stock
certificate, the certificate must be returned before the redemption
can be effected.
(3) All redemptions are made and the price is determined on the day when
all documentation is received in good order.
(4) If the request to redeem is made by a corporation, partnership, trust,
fiduciary, agent, estate, guardian, pension plan, profit sharing plan,
or unincorporated association, the Fund may require evidence satisfac-
tory to it of the authority of the individual signing the request.
Please call or write the Fund for further information.
(5) A request to redeem Shares from an IRA or 403(b) account must be ac-
companied by an IRS Form W4-P and a reason for withdrawal as specified
by the Internal Revenue Service.
HOW TO USE THE DREYFUS FAMILY OF FUNDS
IN A TAX-QUALIFIED RETIREMENT PLAN
The Dreyfus Family of Funds' investment portfolios are available for your
tax-deferred retirement plan. Call 1-800-548-2868 or write The Dreyfus
Family of Funds at P.O. Box 9692, Providence, Rhode Island 02940-9830 and
request the appropriate forms for:
* IRAs.
* 403(b) accounts for employees of public school systems and non-profit
organizations.
* Profit-sharing plans and pension plans for corporations and other em-
ployers.
HOW TO TRANSFER AN INVESTMENT TO A DREYFUS FAMILY OF FUNDS'
RETIREMENT PLAN.
It is easy to transfer your tax-deferred plan to The Dreyfus Family of
Funds from another custodian. Call 1-800-548-2868 or write The Dreyfus
Family of Funds at P.O. Box 9692, Providence, Rhode Island 02940-9830 for
a request to transfer form. If you direct The Dreyfus Family of Funds to
transfer funds from an existing non-retirement Dreyfus Family of Funds ac-
count into a retirement account, the Shares in your non-retirement account
will be redeemed. The redemption proceeds will be invested in your Dreyfus
Family of Funds IRA or other tax-qualified retirement plan. The redemption
is a taxable event resulting in a taxable gain or loss.
OTHER INFORMATION
SHARE PRICE
An investment portfolio's NAV refers to the worth of one Share. The NAV
for Investor and Class R Shares of the Fund is computed by adding, with
respect to each class of Shares, the value of all the class' investments,
cash, and other assets, deducting liabilities and dividing the result by
number of Shares of that class outstanding. The valuation of assets for
determining NAV for the Fund may be summarized as follows:
The portfolio securities of the Fund, except as otherwise noted, listed or
traded on a stock exchange, are valued at the latest sale price. If no
sale is reported, the mean of the latest bid and asked prices is used. Se-
curities traded over-the-counter are priced at the mean of the latest bid
and asked prices but will be valued at the last sale price if required by
regulations of the SEC. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in good
faith in accordance with procedures established by the Board of Directors.
Bonds are valued through valuations obtained from a commercial pricing
service or at the most recent mean of the bid and asked prices provided by
investment dealers in accordance with procedures established by the Board
of Directors.
Pursuant to a determination by The Dreyfus/Laurel Funds, Inc.'s Board of
Directors that such value represents fair value, the debt securities with
maturities of 60 days or less held by the Fund are valued at amortized
cost. When a security is valued at amortized cost, it is valued at its
cost when purchased, and thereafter by assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuat-
ing interest rates on the market value of the instrument.
The NAV of each class of Shares of most of The Dreyfus Family of Funds'
investment portfolios (other than money market funds) is published in
leading newspapers daily. The yield of each class of Shares of most of The
Dreyfus Family of Funds' money market funds is published weekly in leading
financial publications and in many local newspapers. The NAV of the Fund
may also be obtained by calling The Dreyfus Family of Funds.
PERFORMANCE ADVERTISING
From time to time, the Fund may advertise the yield and total return on a
class of Shares. Total return and yield figures are based on historical
earnings and are not intended to indicate future performance. The "total
return" of a class of Shares of the Fund may be calculated on an average
annual total return basis or a cumulative total return basis. Average an-
nual total return refers to the average annual compounded rates of return
on a class of Shares over one-, five-, and ten-year periods or the life of
the Fund (as stated in the advertisement) that would equate an initial
amount invested at the beginning of a stated period to the ending redeem-
able value of the investment, assuming the reinvestment of all dividends
and capital gains distributions. Cumulative total return reflects the
total percentage change in the value of the investment over the measuring
period, again assuming the reinvestment of all dividends and capital gains
distributions.
The Fund's "yield" is calculated by dividing a class of Shares' annualized
net investment income per Share during a recent 30-day (or one month) pe-
riod by the maximum public offering price per class of such Share on the
last day of that period. Since yields fluctuate, yield data cannot neces-
sarily be used to compare an investment in a class of Shares with bank de-
posits, savings accounts, and similar investment alternatives which often
provide an agreed-upon or guaranteed fixed yield for a stated period of
time.
Total return and yield quotations will be computed separately for each
class of the Fund's Shares. Because of the difference in the fees and ex-
penses borne by Class R and Investor Shares of the Fund, the return and
yield on Class R Shares will generally be higher than the return and yield
on Investor Shares. Any fees charged by a Bank or Agent directly to its
customers' account in connection with investments in the Fund will not be
included in calculations of total return or yield. The Fund's annual re-
port contains additional performance information and is available upon re-
quest without charge from the Fund's distributor or your Bank or Agent.
The Fund may compare the performance of its Investor and Class R Shares
with various industry standards of performance including Lipper Analytical
Services, Inc. ratings, CDA Technologies indexes, indexes created by Leh-
man Brothers, the Consumer Price Index, and the Dow Jones Industrial Aver-
age. Performance rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, IBC/Donoghue's Money Fund
Report, Mutual Fund Forecaster, No Load Investor, Money Magazine, Morning-
star Mutual Fund Values, U.S. News and World Report, Forbes, Fortune, Bar-
ron's and similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its Investor and Class R
Shares' total returns and yields in advertisements or in shareholder re-
ports. The Fund may also advertise non-standardized performance informa-
tion, such as total return for periods other than those required to be
shown or cumulative performance data. The Fund may advertise a quotation
of yield or other similar quotation demonstrating the income earned or
distributions made by the Fund.
DISTRIBUTIONS
The Fund declares daily and pays monthly (on the first business day of the
following month) dividends from its net investment income, if any and dis-
tributes any net long-term capital gains on an annual basis. The Board of
Directors may elect not to distribute capital gains in whole or in part to
take advantage of capital loss carryovers.
Unless you choose to receive dividend and/or capital gain distributions in
cash, your distributions will be automatically reinvested in additional
Shares of the Fund at the NAV. You may change the method of receiving dis-
tributions at any time by writing to the Fund. Checks which are sent to
shareholders who have requested distributions to be paid in cash and which
are subsequently returned by the United States Postal Service as not de-
liverable or which remain uncashed for six months or more will be rein-
vested in additional Fund Shares in the shareholder's account at the then
current NAV. Subsequent Fund distributions will be automatically rein-
vested in additional Fund Shares in the shareholder's account.
Distributions paid by the Fund with respect to one class of Shares may be
greater or less per Share than those paid with respect to another class of
Shares due to the different expenses of the different classes.
Shares purchased on a day on which the Fund calculates its NAV will not
begin to accrue dividends until the following day. Redemption orders ef-
fected on any particular day will receive all dividends declared through
the day of redemption.
You may elect to have distributions on Shares held in an IRA and 403(b)
account paid in cash only if you are at least 59 1/2 years old or are per-
manently and totally disabled. Distribution checks normally are mailed
within seven days after the record date.
Any dividend and/or capital gain distribution paid by the Fund will reduce
each Share's NAV by the amount of the distribution. Shareholders are sub-
ject to taxes with respect to any such distribution. At any given time,
the value of the Fund's Shares includes the undistributed net gains, if
any, realized by the Fund on the sale of portfolio securities, and undis-
tributed dividends and interest received, less the Fund's expenses. Be-
cause such gains and income are included in the value of your Shares, when
they are distributed the value of your Shares is reduced by the amount of
the distribution. Accordingly, if your distribution is reinvested in addi-
tional Shares, the distribution has no effect on the value of your invest-
ment; while you own more Shares, the value of each Share has been reduced
by the amount of the distribution. Likewise, if you take your distribution
in cash, the value of your Shares immediately after the distribution plus
the cash received is equal to the value of the Shares immediately before
the distribution. For example, if you own a Fund Share that immediately
before a distribution has a value of $10, including $2 in undistributed
dividends and capital gains realized by the Fund during the year, and if
the $2 is distributed, the value of the Share will decline to $8. If the
$2 is reinvested at $8 per Share, you will receive .250 Shares, so that,
after the distribution, you will have 1.250 Shares at $8 per Share, or
$10, the same as before.
TAXES
The Fund intends to qualify for treatment as a regulated investment com-
pany under the Code so that it will be relieved of federal income tax on
that part of its investment company taxable income (consisting generally
of taxable net investment income, net short-term capital gain) and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) that is distributed to its shareholders.
Dividends from the Fund's investment company taxable income are taxable to
you as ordinary income to the extent of the Fund's earnings and profits.
Distributions by the Fund of net capital gain, when designated as such,
are taxable to you as long-term capital gains, regardless of the length of
time you have owned your Shares.
Dividends and other distributions are taxable to you regardless of whether
they are received in cash or reinvested in additional Fund Shares, even if
the value of your Shares is below your cost. If you purchase Shares
shortly before a taxable distribution, you must pay income taxes on the
distribution even though the value of your investment (plus cash received,
if any) remains the same. In addition, the Share price at the time you
purchase Shares may include unrealized gains in the securities held in the
Fund. If these portfolio securities are subsequently sold and the gains
are realized, they will, to the extent not offset by capital losses, be
paid to you as a capital gain distribution and will be taxable to you.
Dividends paid by the Fund to qualified retirement plans ordinarily will
not be subject to taxation until the proceeds are distributed from the re-
tirement plans. The Fund will not report to the IRS dividends paid to such
plans. Generally, distributions from qualified retirement plans, except
those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the partici-
pant reaches age 59 1/2 , generally will be subject to an additional tax
equal to 10% of the taxable portion of the distribution. If the distribu-
tion from such a retirement plan (other than certain governmental or
church plans) for any taxable year following the year in which the partic-
ipant reaches age 70 1/2 is less than the "minimum required distribution"
for that taxable year, an excise tax equal to 50% of the deficiency may be
imposed by the IRS. The administrator, trustee or custodian of such a re-
tirement plan will be responsible for reporting such distributions from
such plans to the IRS. Moreover, certain contributions to a qualified re-
tirement plan in excess of the amounts permitted by law may be subject to
an excise tax.
In January of each year, the Fund will send you a Form 1099-DIV notifying
you of the status for federal income tax purposes of your distributions
for the preceding year.
You must furnish the Fund with your taxpayer identification number ("TIN")
and state whether you are subject to withholding for prior under-
reporting, certified under penalties of perjury as prescribed by the Code
and the regulations thereunder. Unless previously furnished, investments
received without such a certification will be returned. The Fund is re-
quired to withhold a portion of all dividends, capital gain distributions
and redemption proceeds payable to any individuals and certain other non-
corporate shareholders who do not provide the Fund with a correct TIN;
withholding from dividends and capital gain distributions also is required
for such shareholders who otherwise are subject to backup withholding.
The Fund will be subject to a 4% nondeductible excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of
its taxable ordinary income for that year and capital gain net income for
the one-year period ending on October 31 of that year, plus certain other
amounts. The Fund expects to make such distributions as are necessary to
avoid the imposition of this tax.
The foregoing is only a summary of some of the important tax consider-
ations generally affecting the Fund and its shareholders; see the SAI for
a further discussion. There may be other federal, state or local tax con-
siderations applicable to a particular investor. You therefore are urged
to consult your own tax adviser.
OTHER SERVICES
At least twice a year you will receive the financial statements of the
Fund with a summary of its investments and performance. The Fund will send
you a confirmation statement after every transaction (except with regard
to the reinvestment of dividends and other distributions) that affect the
Fund accounts. In addition, an account statement will be mailed to you
quarterly or monthly depending on the Fund's reporting schedule. You may
also request a statement of your account activity at any time. Carefully
review such confirmation statements and account statements and notify the
Fund immediately if there is an error. From time to time, to reduce ex-
penses, only one copy of the Fund's shareholder reports (such as the
Fund's annual report) may be mailed to your household. Please call The
Dreyfus Family of Funds if you need additional copies.
No later than January 31 of each year, The Dreyfus Family of Funds will
send you the following reports, which you may use in completing your fed-
eral income tax return:
Form 1099-DIV Reports taxable distributions (and returns of capital, if
any) during the preceding year.
Form 1099-B Reports proceeds paid on redemptions during the preceding
year.
Form 1099-R Reports distributions from IRAs and 403(b) accounts during
the preceding year.
At such time as prescribed by law, the Fund will send you a Form 5498,
which reports contributions to your IRA for the previous calendar year. In
addition, the Fund may send you other relevant tax-related forms.
FURTHER INFORMATION ABOUT THE FUND
THE DREYFUS/LAUREL FUNDS, INC.
The Laurel Funds, Inc. was incorporated in Maryland on August 6, 1987 and
changed its name to The Dreyfus/Laurel Funds, Inc. on October 17, 1994.
The Dreyfus/Laurel Funds, Inc. is registered with the SEC under the 1940
Act as a diversified, open-end management investment company. The Dreyfu-
s/Laurel Funds, Inc. has an authorized capitalization of 25 billion Shares
of $0.001 par value stock with equal voting rights. The Articles of Incor-
poration permit the Directors to create an unlimited number of investment
portfolios (each a "fund"). The Fund offered by this Prospectus currently
issues two classes of shares designated "Investor" and "Class R" Shares.
Each Share (regardless of class) has one vote. All Shares of a fund (and
classes thereof) vote together as a single class, except as to any matter
for which a separate vote of any fund or class is required by the 1940
Act, and except as to any matter which affects the interests of one or
more particular funds or classes, in which case only the shareholders of
the affected fund or classes are entitled to vote, each as a separate
class. At your written request, the Fund will issue negotiable stock cer-
tificates.
At December 6, 1994, Mellon Bank Corporation, the Manager's parent, owned
of record through its direct and indirect subsidiaries more than 25% of
The Dreyfus/Laurel Fund, Inc.'s outstanding voting shares, and is deemed,
under the 1940 Act, to be a controlling shareholder.
MANAGEMENT.
THE BOARD OF DIRECTORS. The business affairs of The Dreyfus/Laurel Funds,
Inc. are managed under the direction of its Directors. The SAI contains
the names and general background information concerning the Directors and
officers of The Dreyfus/Laurel Funds, Inc.
INVESTMENT MANAGER. The Dreyfus Corporation, the Fund's Manager, is lo-
cated at 200 Park Avenue, New York, New York 10166. As of August 31, 1994,
the Manager managed or administered approximately $70 billion in assets
for more than 1.9 million investor accounts nationwide. The Manager is a
wholly-owned subsidiary of Mellon Bank, (One Mellon Bank Center, Pitts-
burgh, Pennsylvania 15258), the Fund's prior investment manager. Pursuant
to an Investment Management Agreement, transferred from Mellon Bank to the
Manager effective as of October 17, 1994, the Manager provides, or ar-
ranges for one or more third parties to provide, investment advisory, ad-
ministrative, custody, fund accounting and transfer agency services to the
Fund. As investment manager, the Manager manages the Fund by making in-
vestment decisions based on the Fund's investment objective, policies and
restrictions.
Under the Investment Management Agreement, the Fund pays a fee, computed
daily and paid monthly, at the annual rate of .55% of the Fund's average
daily net assets less certain expenses. The Manager pays all of the ex-
penses of the Fund except taxes, interest, fees, expenses of the non-
interested Directors (including counsel fees) and extraordinary expenses.
Although the Manager does not pay for the fees and expenses of the non-
interested Directors (including counsel fees), the Manager is contractu-
ally required to reduce its investment management fee in an amount equal
to the Fund's allocable share of such expenses. In order to compensate the
Manager for paying virtually all of the Fund's expenses, the Fund's in-
vestment management fee is higher than the investment advisory fees paid
by most investment companies. Most if not all, such companies also pay for
additional non-investment advisory expenses that are not paid by such com-
panies' investment adviser. From time to time, the Manager may waive (ei-
ther voluntarily or pursuant to applicable state limitations) additional
investment management fees payable by the Fund.
The Manager is authorized to allocate purchase and sale orders for portfo-
lio securities to certain financial institutions, including, in the case
of agency transactions, financial institutions which are affiliated with
the Manager or which have sold Shares of the Fund, if the Manager believes
that the quality of the transaction and the commission are comparable to
what they would be with other qualified brokerage firms. From time to
time, to the extent consistent with its investment objective policies and
restrictions, the Fund may invest in securities of companies with which
Mellon Bank has a lending relationship.
Mellon Bank is a subsidiary of Mellon Bank Corporation. At June 30, 1994,
Mellon Bank Corporation was the 24th largest bank holding company in the
United States in terms of total assets. Through its bank subsidiaries, it
operates 631 domestic retail banking locations including 432 branch of-
fices. Mellon Bank Corporation has 25 domestic representative offices.
There are international branches in Grand Cayman, British West Indies, and
London, England, and two international representative office in Tokyo,
Japan, and Hong Kong. Mellon Bank has a banking subsidiary, Mellon Bank
Canada, in Toronto. Mellon Bank is a registered municipal securities
dealer.
The Glass-Steagall Act of 1933 prohibits a national bank from engaging in
the business of issuing, underwriting, selling or distributing certain se-
curities. The activities of Mellon Bank and the Manager may raise issues
under these provisions. However, Mellon Bank has been advised by its coun-
sel that these activities are consistent with these statutory and regula-
tory obligations. For more information on the Glass-Steagall Act of 1933,
see "Federal Law Affecting Mellon Bank" in the SAI.
The Fund is managed by Laurie Carroll. Ms. Carroll is a Senior Vice Presi-
dent and portfolio manager at Mellon Bank. Ms. Carroll has been employed
by Mellon Bank since 1986. Ms. Carroll is also a portfolio manager at the
Manager and has been employed by the Manager since October 17, 1994.
OTHER SERVICE PROVIDERS. Under a Custody and Fund Accounting Agreement,
Mellon Bank acts as custodian and fund accountant, maintaining possession
of the Fund's investment securities and providing certain accounting and
related services.
The Shareholder Services Group, Inc., a subsidiary of First Data Corpora-
tion, serves as transfer agent ("Transfer Agent") for the Fund's shares.
The Transfer Agent is located at One American Express Plaza, Providence,
Rhode Island 02903.
Shares of the Fund are sold on a continuous basis by Premier as the Fund's
sponsor and distributor. Premier is a registered broker-dealer with prin-
cipal offices at One Exchange Place, Boston, Massachusetts 02109. The
Dreyfus/Laurel Funds, Inc. has entered into a distribution agreement with
Premier which provides that Premier has the exclusive right to distribute
Shares of the Fund. Premier may pay service and/or distribution fees to
Agents that assist customers in purchasing and servicing of Shares of the
Funds. (See "Distribution Plan (Investor Class Only.")
DISTRIBUTION PLAN (INVESTOR CLASS ONLY).
Investor Class shares are subject to a Distribution Plan ("Plan") adopted
pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1"). The Investor
Class shares of the Fund may bear some of the cost of selling those Shares
under the Plan. The Plan allows the Fund to spend annually up to 0.25% of
its average daily net assets attributable to Investor Class Shares to com-
pensate Dreyfus Service Corporation, an affiliate of the Manager, for
shareholder servicing activities and Premier for shareholder servicing ac-
tivities and for activities or expenses primarily intended to result in
the sale of Investor Class Shares of the Fund. The Plan allows Premier to
make payments from the Rule 12b-1 fees it collects from the Fund to com-
pensate Agents that have entered into Selling Agreements ("Agreements")
with Premier. Under the Agreements, the Agents are obligated to provide
distribution related services with regard to the Fund and/or shareholder
services to the Agent's clients that own Investor Class Shares of the
Fund.
The Fund and Premier may suspend or reduce payments under the Plan at any
time, and payments are subject to the continuation of the Fund's Plan and
the Agreements described above. From time to time, the Agents, Premier and
the Fund may agree to voluntarily reduce the maximum fees payable under
the Plan. See the SAI for more details on the Plan.
Potential investors should read this Prospectus in light of the terms gov-
erning Agreements with their Agents. An Agent entitled to receive compen-
sation for selling and servicing the Fund's Shares may receive different
compensation with respect to one class of Shares over another.
FOR MORE INFORMATION
FUND INFORMATION AND PROSPECTUSES
Call 1-800-548-2868
Please read the prospectus before you invest or send money
TO INVEST, REDEEM AND EXCHANGE
Call 1-800-548-2868 (for overseas, call collect (401) 455-3476)
9:00 a.m. to 5:00 p.m., Eastern time
Monday through Friday
Or Write: The Dreyfus Family of Funds
P.O. Box 9692
Providence, Rhode Island 02940-9830
YIELD AND SHARE PRICE INFORMATION
1-800-548-2868
24 hours a day, 7 days a week
The Dreyfus Family of Funds
One Exchange Place
Boston, Massachusetts 02109
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dreyfus International
Equity Allocation Fund
Investor and Class R Shares
January 5, 1995
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND'S objective is to exceed the
total return of the Morgan Stanley Capital International--Europe Australia Far
East (MSCI EAFE) Index benchmark through active stock selection, country
allocation and currency allocation.
THIS PROSPECTUS describes the Dreyfus International Equity Allocation Fund
(the "Fund"), an open-end diversified management investment company of The
Dreyfus/Laurel Funds, Inc. (formerly The Laurel Funds, Inc.), that is part of
The Dreyfus Family of Funds. This Prospectus describes two classes of
shares--Investor Shares and Class R Shares (collectively, the "Shares")-- of the
Fund.
This Prospectus sets forth concisely the information about the Fund that a
prospective purchaser should consider before investing. Investors should read
this Prospectus and retain it for future reference. Additional information about
the Fund is contained in a Statement of Additional
.....................................
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ALL MUTUAL
FUND SHARES INVOLVE CERTAIN RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS MELLON BANK, N.A.
("MELLON BANK") OR ITS AFFILIATES TO BE ITS INVESTMENT MANAGER. MELLON BANK OR
AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE FUND, SUCH AS
CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES. THE FUND IS DISTRIBUTED
BY PREMIER MUTUAL FUND SERVICES, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
....................... 1 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Information (the "SAI"), which has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request without charge by calling
or writing to The Dreyfus Family of Funds. The SAI bears the same date as the
Prospectus and is incorporated by reference in its entirety into this
Prospectus.
In addition to the Fund, The Dreyfus Family of Funds also offer other funds
that provide investment opportunities for you in the equity, fixed income and
money markets. For more information about these additional investment
opportunities, call 1-800-548-2868.
.....................................
The Dreyfus Family of Funds
P.O. Box 9692
Providence, Rhode Island 02940-9830
....................... 2 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Expense Summary......................................................... 5
Financial Highlights.................................................... 6
Investment Objective and Policies....................................... 8
Other Investment Policies and Risk Factors.............................. 9
HOW TO DO BUSINESS WITH US
Special Shareholder Services............................................ 15
Investor Line........................................................... 16
How to Invest in The Fund............................................... 16
BY MAIL............................................................... 17
BY TELEPHONE.......................................................... 17
BY WIRE............................................................... 17
BY AUTOMATIC MONTHLY INVESTMENTS...................................... 17
BY DIRECT DEPOSIT..................................................... 18
BY IN-KIND PURCHASES.................................................. 18
WHEN SHARE PRICE IS DETERMINED........................................ 18
ADDITIONAL INFORMATION ABOUT INVESTMENTS.............................. 19
How to Exchange Your Investment From One Fund to Another................ 19
BY TELEPHONE.......................................................... 20
BY MAIL............................................................... 20
ADDITIONAL INFORMATION ABOUT EXCHANGES................................ 20
How to Redeem Shares.................................................... 21
BY TELEPHONE.......................................................... 21
BY MAIL............................................................... 21
BY AUTOMATED WITHDRAWAL PROGRAM....................................... 22
REDEMPTION PROCEEDS................................................... 22
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.............................. 23
How To Use The Dreyfus Family of Funds in a Tax-Qualified
Retirement Plan........................................................ 23
HOW TO TRANSFER AN INVESTMENT TO A DREYFUS FAMILY OF FUNDS'
RETIREMENT PLAN....................................................... 24
</TABLE>
....................... 3 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------
TABLE OF CONTENTS (CONTINUED)
<TABLE>
<S> <C>
OTHER INFORMATION
Share Price............................................................. 24
Performance Advertising................................................. 25
Distributions........................................................... 26
Taxes................................................................... 27
Other Services.......................................................... 29
Further Information About The Fund...................................... 29
THE DREYFUS/LAUREL FUNDS, INC......................................... 29
MANAGEMENT............................................................ 30
DISTRIBUTION PLAN (INVESTOR SHARES ONLY).............................. 32
</TABLE>
.....................................
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S SAI
INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR BY THE DISTRIBUTOR IN
ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE.
....................... 4 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPENSE SUMMARY
The purpose of the following table is to help you understand the various costs
and expenses that you, as a Shareholder, will bear directly or indirectly in
connection with an investment in the Investor or Class R Shares of the Fund.
(SEE "MANAGEMENT.")
<TABLE>
<S> <C> <C> <C>
INVESTOR CLASS R
SHARES SHARES
SHAREHOLDER TRANSACTION EXPENSES
MAXIMUM SALES LOAD IMPOSED ON PURCHASES NONE NONE
MAXIMUM SALES LOAD IMPOSED ON REINVESTMENTS NONE NONE
DEFERRED SALES LOAD NONE NONE
REDEMPTION FEE NONE NONE
EXCHANGE FEE NONE NONE
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
MANAGEMENT FEE 1.50% 1.50%
12B-1 FEE* 0.25% NONE
OTHER EXPENSES** 0.00% 0.00%
-------- -------
TOTAL FUND OPERATING EXPENSES 1.75% 1.50%
EXAMPLES
YOU WOULD PAY THE FOLLOWING ON A $1,000 1 YEAR $18 $15
INVESTMENT, ASSUMING (1) A 5% ANNUAL 3 YEARS 55 47
RETURN AND (2) REDEMPTION AT THE END OF 5 YEARS N/A N/A
EACH TIME PERIOD: 10 YEARS N/A N/A
<FN>
* SEE "DISTRIBUTION PLAN (INVESTOR SHARES ONLY)" FOR A DESCRIPTION OF THE
FUND'S PLAN OF DISTRIBUTION FOR THE INVESTOR SHARES.
** DOES NOT INCLUDE FEES AND EXPENSES OF THE NON-INTERESTED DIRECTORS
(INCLUDING COUNSEL). THE INVESTMENT MANAGER IS CONTRACTUALLY REQUIRED TO
REDUCE ITS MANAGEMENT FEE IN AN AMOUNT EQUAL TO THE FUND'S ALLOCABLE
PORTION OF SUCH FEES AND EXPENSES, WHICH ARE ESTIMATED TO BE 0.02% OF
AVERAGE NET ASSETS. (See "MANAGEMENT.")
</TABLE>
.....................................
THE INFORMATION CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS
THAN THOSE SHOWN.
.....................................
The Fund understands that banks, brokers, dealers or other financial
institutions (including Mellon Bank and its affiliates) (collectively "Agents")
may charge fees to their clients who are owners of the Fund's Investor Shares
for various services provided in connection with a client's account. These fees
would be in addition to any amounts received by an Agent under its Shareholder
Servicing and Sales Support Agreements ("Agreements") with Premier Mutual Fund
Services, Inc. ("Premier"). The Agreement requires each Agent to disclose to its
clients any compensation payable to such Agent by Premier and any other
compensation payable by the client for various services provided in connection
with its account.
Long-term shareholders of Investor Shares could pay more in Rule 12b-1 fees
than the economic equivalent of the maximum front-end sales charges applicable
to mutual funds sold by members of the National Association of Securities
Dealers, Inc.
....................... 5 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Investor Share or Class R Share
outstanding through the fiscal period ended October 31, 1994, and should be read
in conjunction with the financial statements and related notes that appear in
the Fund's Annual Report dated October 31, 1994, which is incorporated by
reference in the SAI. The financial statements included in the Fund's Annual
Report for the period ended October 31, 1994 have been audited by KPMG Peat
Marwick LLP, independent accountants, whose report appears in the Fund's Annual
Report.
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
For an Investor Share outstanding throughout the period.
Period
Ended
10/31/94*
---------
<S> <C>
Net Asset Value, beginning of period $10.00
---------
Income from investment operations:
Net investment income 0.01
Net realized and unrealized gain on investments 0.05
---------
Total from investment options 0.06
---------
Net Asset Value, end of period $10.06
---------
---------
Total Return++ 0.60%
---------
Ratios to average net assets/Supplemental data:
Net Assets, end of period (in 000's) $71
Ratio of expenses to average net assets 1.74%+
Ratio of net investment income to average net assets 1.98%+
<FN>
* THE FUND COMMENCED SELLING INVESTOR SHARES ON AUGUST 12, 1994.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD
INDICATED.
</TABLE>
....................... 6 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
For a Class R Share outstanding throughout the period.
Period
Ended
10/31/94*
---------
<S> <C>
Net Asset Value, beginning of period $10.00
---------
Income from investment operations:
Net investment income 0.02
Net realized and unrealized gain on investments 0.04
---------
Total from investment operations 0.06
---------
Net Asset Value, end of period $10.06
---------
---------
Total Return++ 0.60%
---------
Ratios to average net assets/Supplemental data:
Net Assets, end of period (in 000's) $11,841
Ratio of expenses to average net assets 1.50%+
Ratio of net investment income to average net assets 2.22%+
<FN>
* THE FUND COMMENCED SELLING TRUST SHARES ON AUGUST 12, 1994.
EFFECTIVE OCTOBER 17, 1994, THE FUND'S TRUST SHARES WERE
REDESIGNATED AS CLASS R SHARES.
+ ANNUALIZED.
++ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD
INDICATED.
</TABLE>
....................... 7 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
INVESTMENT OBJECTIVE AND POLICIES
The Fund's objective is to exceed the total return of the Morgan Stanley Capital
International-- Europe Australia Far East (MSCI EAFE) Index benchmark (the
"Benchmark") through active stock selection, country allocation and currency
allocation. The Fund is not an index fund and its investments are not
representative of the proportions or weightings of the Benchmark. In addition to
investing in securities in countries represented in the Index, the Fund may
invest up to 20% of its assets in securities in emerging market countries. (SEE
"OTHER INVESTMENT POLICIES AND RISK FACTORS--FOREIGN SECURITIES.") There can be
no assurance that the Fund will meet its investment objective. See "OTHER
INVESTMENT POLICIES AND RISK FACTORS" for a discussion of the Fund's investment
limitations. Under normal circumstances the Fund will invest at least 65% of its
assets in equity securities of issuers in at least three countries outside of
the United States.
The Benchmark is a diversified, capitalization-weighted index of equity
securities of companies located in Australia and 13 countries of Europe and 5
countries of the Far East. The countries represented in the Index are:
Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong,
Italy, Japan, the Netherlands, New Zealand, Norway, Singapore/Malaysia, Spain,
Sweden, Switzerland, and the United Kingdom. The Fund may also invest in
securities of other countries added to the Index from time to time. Stocks in
the Benchmark are selected to represent proportionally each country and each
major industrial sector within each country. Each stock in the Benchmark is
weighted according to its market value as a percentage of the total market value
of all stock in the Benchmark.
The investment process utilized by the Fund's investment manager in
structuring the Fund has four basic components: (1) country allocation, (2)
stock selection, (3) currency allocation and (4) portfolio construction and risk
control. These components employ a combination of quantitative research using
proprietary financial models and fundamental research from specialists in Paris,
Tokyo and San Francisco.
Under normal circumstances, the Fund expects to be fully invested in
securities of issuers in countries included in the Benchmark, securities of
emerging market countries, and foreign currency exchange contracts, futures
contracts, options on securities and on foreign currencies, currency indices,
and securities indices, except for such amounts as are needed to meet short-term
cash needs and redemptions and amounts pending investment. These amounts may be
held as cash or temporarily invested in high quality short-term debt instruments
of the U.S. or foreign governments, their agencies and instrumentalities and
repurchase agreements. No more than 20% of the total assets of the Fund will be
invested in the securities of emerging market countries,
....................... 8 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
including Argentina, Brazil, Chile, People's Republic of China, Colombia, Czech
Republic, Greece, Korea, Hungary, India, Indonesia, Israel, Jordan, Mexico,
Pakistan, Peru, Philippines, Poland, Portugal, Sri Lanka, Taiwan, Thailand,
Turkey, and Venezuela, subject to the satisfaction of regulatory standards for
the custody of assets and securities clearance systems. The Fund may also invest
in securities of other emerging markets added to the Index from time to time.
Each emerging market country is analyzed from a macroeconomic and financial
perspective giving equal consideration to four factors: (1) the relative and
historical market valuation, (2) the currency risk, (3) the outlook for economic
growth, and (4) the country political risk.
The Fund may invest in forward foreign currency exchange contracts, options
on securities and on foreign currencies, currency indices, futures contracts,
and securities indices to adjust its risk exposure relative to the Benchmark and
to its investment in emerging countries. See "OTHER INVESTMENT POLICIES AND RISK
FACTORS--FOREIGN SECURITIES" for a discussion of the risks associated with
foreign securities. The Dreyfus Corporation, the Fund's investment manager (the
"Manager"), will manage currency exposure for the Fund utilizing its proprietary
currency allocation model and will determine the Fund's under-or-over weighting
relative to the Benchmark utilizing its international country allocation model.
The Manager will control and monitor the total risk of the portfolio, including
the country and currency exposure resulting from the implementation of its
country and currency models. CCF S.A.M., sub-adviser to the Fund, selects
specific securities for purchase or sale by the Fund.
In no event will the Fund purchase securities which would cause 25% or more
of the market value of the Fund's total assets to be invested in securities of
one or more issuers having their principal business activities in the same
industry. This limit does not apply with respect to the Fund's investments in
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. The Fund has a non-fundamental investment limitation which
provides that in no event will it purchase securities which would cause more
than 25% of the market value of its total assets to be invested in securities
issued or guaranteed by a single government or its agencies and
instrumentalities. The Fund may also invest in commercial paper and may lend
portfolio securities. (See "OTHER INVESTMENT POLICIES AND RISK FACTORS" for a
description of the Fund's investments.) Under unusual circumstances, such as
drastic political or economic changes, severe social unrest or acts of war, the
Fund may be primarily invested in securities of U.S. companies, and securities
of the U.S. Government, its agencies, instrumentalities and municipalities.
OTHER INVESTMENT POLICIES AND RISK FACTORS
BORROWING. The Fund is authorized, within specified limits, to borrow money
for temporary administrative purposes and to pledge its assets in connection
with such borrowings.
....................... 9 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER. The Fund may invest in commercial paper. These instruments
are short-term obligations issued by banks and corporations that have maturities
ranging from 2 to 270 days. Each instrument may be backed only by the credit of
the issuer or may be backed by some form of credit enhancement, typically in the
form of a guarantee by a commercial bank. Commercial paper backed by guarantees
of foreign banks may involve additional risk due to the difficulty of obtaining
and enforcing judgments against such banks and the generally less restrictive
regulations to which such banks are subject. The Fund will only invest in
commercial paper of U.S. and foreign companies rated A-1 at the time of purchase
by Standard & Poor's Ratings Group, Prime-1 by Moody's Investors Service, Inc.,
F-1 by Fitch Investors Service, Inc., Duff 1 by Duff & Phelps, Inc. or A1 by
IBCA, Inc.
CURRENCY EXCHANGE TRANSACTIONS. The Fund may engage in currency exchange
transactions. Generally, the Fund's foreign currency exchange transactions will
be conducted on a spot basis at the spot rate then prevailing for purchasing or
selling currencies in the foreign exchange market. The Fund may, to a limited
extent, deal in forward foreign currency exchange contracts involving currencies
of the different countries in which it will invest as a hedge against possible
variations in the foreign exchange rates between these currencies. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date (up to one year) and price set at the time
of the contract. The Fund's dealings in forward foreign currency exchange
contracts are limited to hedging involving either specific transactions or
portfolio positions. Transaction hedging is the purchase or sale of forward
foreign currency exchange contracts with respect to specific receivables
(including dividends) or payables of the Fund accruing in connection with the
ownership, purchase and sale of its portfolio securities and the sale and
redemption of shares of the Fund. Position hedging is the sale of forward
foreign currency exchange contracts with respect to portfolio security positions
denominated or quoted in such foreign currency. The Fund will not enter into or
maintain a position in such contracts if their consummation would obligate the
Fund to deliver an amount of foreign currency greater than the value of the
Fund's assets denominated or quoted in, or currency convertible into, such
currency.
Forward contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security or securities index
or currency at a specified future time and at a specified price. Forward
contracts differ from futures contracts as the terms of the contract are not
standardized and forward contracts are not traded on regulated exchanges.
Transactions are executed over the counter. If the counterparty defaults, the
Fund might incur a loss. The Manager seeks to minimize the risk of loss through
forward contracts by analyzing the creditworthiness of the counterparty under
forward contract agreements.
....................... 10 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's use of forward contracts will be restricted to the purchase or
sale of foreign currency. The Fund will selectively employ currency forward
contracts in order to hedge currency risk associated with investments in foreign
equity securities.
FOREIGN SECURITIES. The Fund will purchase securities of foreign issuers and
may invest in obligations of foreign branches of domestic banks and domestic
branches of foreign banks. Investment in foreign securities presents certain
risks, including those resulting from fluctuations in currency exchange rates,
revaluation of currencies, future political and economic developments and the
possible imposition of currency exchange blockages or other foreign governmental
laws or restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to domestic issuers.
Moreover, securities of many foreign issuers may be less liquid and their prices
more volatile than those of comparable domestic issuers. The net asset value
("NAV") of the Fund's Shares generally will fluctuate. In addition, with respect
to certain foreign countries, there is the possibility of expropriation,
confiscatory taxation and limitations on the use or removal of funds or other
assets of the Fund, including withholding of dividends. Foreign securities may
be subject to foreign government taxes that would reduce the yield on such
securities.
Among the foreign securities in which the Fund may invest are those issued
by companies located in developing countries, which are countries in the initial
stages of their industrialization cycles. Investing in the equity and debt
markets of developing countries involves exposure to economic structures that
are generally less diverse and less mature, and to political systems that can be
expected to have less stability, than those of developed countries. The markets
of developing countries historically have been more volatile than the markets of
the more mature economies of developed countries, but often have provided higher
rates of return to investors.
FUTURES AND OPTIONS. The Fund may attempt to reduce the overall level of
investment risk of particular securities and attempt to protect the Fund against
adverse market movements by investing in futures and options. This includes the
purchase and writing of options on securities (including index options) and
options on foreign currencies and investing in futures contracts for the
purchase or sale of instruments based on financial indices, including interest
rate indices or indices of U.S. or foreign governments, equity or fixed income
securities ("futures contracts"), options on futures contracts, and forward
contracts.
The use of futures, options and forward contracts and swaps exposes the Fund
to additional investment risks and transaction costs. If the Manager or CCF
S.A.M., sub-advisor to the Fund, incorrectly analyzes market conditions or does
not employ the appropriate strategy with respect to these instruments, the Fund
could be left in a less favorable position. Additional risks inherent in the use
of futures, options, and forward contracts include: imperfect correlation
....................... 11 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
between the price of futures, options and forward contracts and movements in the
prices of the securities or currencies being hedged; the possible absence of a
liquid secondary market for any particular instrument at any time; and the
possible need to defer closing out certain hedged positions to avoid adverse tax
consequences. The Fund may not purchase put and call options which are traded on
a national stock exchange in an amount exceeding 5% of its net assets. Further
information on the use of futures and options and the associated risks is
contained in the SAI.
The Fund may purchase and write call and put options on foreign currencies
for the purpose of hedging against changes in future currency exchange rates.
Call options convey the right to buy the underlying currency at a predetermined
price which may be lower than the spot price of the currency at the time the
option expires. Put options convey the right to sell the underlying currency at
a price which may be higher than the spot price of the currency at the time the
option expires. Currency options traded on U.S. or other exchanges may be
subject to position limits which may limit the ability of the Fund to reduce
foreign currency risk using such options. Further, there may be an imperfect
correlation between the change in a spot price of a foreign currency and the
prices of futures and options contracts. Over-the-counter options differ from
exchange-traded options in that they are two-party contracts with price and
other terms negotiated between buyer and seller and generally do not have as
much market liquidity as exchange-traded options.
ILLIQUID SECURITIES. The Fund will not knowingly invest more than 15% of the
value of its total net assets in illiquid securities, including time deposits
and repurchase agreements having maturities longer than seven days. Securities
that have readily available market quotations are not deemed illiquid for
purposes of this limitation (irrespective of any legal or contractual
restrictions on resale). The Fund may invest in commercial obligations issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended ("Section
4(2) paper"). The Fund may also purchase securities that are not registered
under the Securities Act of 1933, as amended, but which can be sold to qualified
institutional buyers in accordance with Rule 144A under that Act ("Rule 144A
securities"). Liquidity determinations with respect to Section 4(2) paper and
Rule 144A securities will be made by the Board of Directors as required. The
Board will consider availability of reliable price information and other
relevant information in making such determinations. Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors such as the Fund that agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the Fund through or
....................... 12 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
with the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold to other qualified institutional buyers. If a particular investment
in Section 4(2) paper or Rule 144A securities is not determined to be liquid,
that investment will be included within the percentage limitation on investment
in illiquid securities. The ability to sell Rule 144A securities to qualified
institutional buyers is a recent development and it is not possible to predict
how this market will mature. Investing in Rule 144A securities could have the
effect of increasing the level of Fund illiquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing these
securities.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued by
other investment companies to the extent that such investments are consistent
with the Fund's investment objective and policies and permissible under the
Investment Company Act of 1940, as amended (the "1940 Act"). As a shareholder of
another investment company, the Fund would bear, along with other shareholders,
its pro rata portion of the other investment company's expenses, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that the Fund bears directly in connection with its own operations.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. A
repurchase agreement involves the purchase of a security by the Fund and a
simultaneous agreement (generally with a bank or broker-dealer) to repurchase
that security from the Fund at a specified price and date or upon demand. This
technique offers a method of earning income on idle cash. A risk associated with
repurchase agreements is the failure of the seller to repurchase the securities
as agreed, which may cause the Fund to suffer a loss if the market value of such
securities declines before they can be liquidated on the open market. Repurchase
agreements with a duration of more than seven days are considered illiquid
securities and are subject to the limit stated above.
SECURITIES LENDING. To increase return on Fund securities, the Fund may lend
its portfolio securities to broker-dealers and other institutional investors
pursuant to agreements requiring that the loans be continuously secured by
collateral equal at all times in value to at least the market value of the
securities loaned. There may be risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights to
the collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the Manager or CCF S.A.M. to be of
good standing and when, in their judgment, the income to be earned from the loan
justifies the attendant risks.
U.S. GOVERNMENT SECURITIES. The Fund may invest in obligations issued or
guaranteed as to both principal and interest by the U.S. Government or backed by
the full faith and credit of
....................... 13 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the United States. In addition to direct obligations of the U.S. Treasury, these
include securities issued or guaranteed by the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States, Small
Business Administration, Government National Mortgage Association, General
Services Administration and Maritime Administration. Investments may also be
made in U.S. Government obligations that do not carry the full faith and credit
guarantee, such as those issued by the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation, or other instrumentalities.
WHEN-ISSUED TRANSACTIONS. To secure advantageous prices or yields, the Fund
may purchase U.S. Government Securities on a when-issued basis or may purchase
or sell securities for delayed delivery. In such transactions, delivery of the
securities occurs beyond the normal settlement periods, but no payment or
delivery is made by the Fund prior to the actual delivery or payment by the
other party to the transaction. The purchase of securities on a when-issued or
delayed delivery basis involves the risk that, as a result of an increase in
yields available in the marketplace, the value of the securities purchased will
decline prior to the settlement date. The sale of securities for delayed
delivery involves the risk that the prices available in the market on the
delivery date may be greater than those obtained in the sale transaction. The
Fund will establish a segregated account consisting of cash, U.S. Government
Securities or other high-grade debt obligations in an amount equal to the
amounts of its when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Dreyfus/Laurel Funds, Inc. may in the future seek
to achieve the Fund's investment objective by investing all of the Fund's assets
in another investment company having the same investment objective and
substantially the same investment policies and restrictions as those applicable
to the Fund. Shareholders of the Fund will be given at least 30 days' prior
notice of any such investment. Such investment would be made only if the
Directors determine it to be in the best interest of the Fund and its
shareholders. In making that determination, the Directors will consider, among
other things, the benefits to shareholders and/ or the opportunity to reduce
costs and achieve operational efficiencies. Although the Fund believes that the
Directors will not approve an arrangement that is likely to result in higher
costs, no assurance is given that costs will be materially reduced if this
option is implemented.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on the basis
of potential for capital appreciation and not for short-term trading profits,
the Fund's turnover rate may exceed 100%. A portfolio turnover rate of 100%
would occur, for example, if all the securities held by the Fund were replaced
once in a period of one year. A higher rate of portfolio turnover (100% or more)
involves correspondingly greater brokerage commissions and other expenses which
must be borne directly by the Fund and, thus, indirectly by its shareholders. In
addition, a
....................... 14 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
high rate of portfolio turnover may result in the realization of larger amounts
of short-term capital gains which, when distributed to the Fund's shareholders,
are taxable to them as ordinary income. (See "DISTRIBUTIONS" AND "TAXES.") It is
estimated that portfolio turnover will not exceed 200% in the Fund's first year
of operation. Nevertheless, security transactions for the Fund will be based
only upon investment considerations and will not be limited by any other
considerations when the Manager or CCF S.A.M. deems it appropriate to make
changes in the Fund's assets.
LIMITING INVESTMENT RISKS. The Fund is subject to a number of investment
limitations. Certain limitations are matters of fundamental policy and may not
be changed without the affirmative vote of the holders of a majority of the
Fund's outstanding Shares. The SAI describes all of the Fund's fundamental and
non-fundamental restrictions.
The investment objective, policies, restrictions, practices and procedures
of the Fund, unless otherwise specified, may be changed without shareholder
approval. If the Fund's investment objective, policies, restrictions, practices
or procedures change, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current position and needs.
In order to permit the sale of the Fund's Shares in certain states, the Fund
may make commitments more restrictive than the investment policies and
restrictions described in this Prospectus and the SAI. Should the Fund determine
that any such commitment is no longer in the best interests of the Fund, it may
consider terminating sales of its Shares in the states involved.
- ------------------------------------------------
HOW TO DO BUSINESS WITH US
SPECIAL SHAREHOLDER SERVICES
You may establish one or more special services designed to provide an easy way
to do business with the Fund. By electing these services on your application or
by completing the appropriate forms, you may authorize:
-INVESTMENT BY PHONE.
-AUTOMATIC MONTHLY INVESTMENTS.
-EXCHANGES OR REDEMPTIONS BY PHONE.
By electing the service which enables you to exchange and redeem by phone,
you agree to indemnify the Fund, its transfer agent and its investment manager
from any loss, claim or expense you may incur as a result of their acting on
such instruction. The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine.
....................... 15 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
These include personal identification procedures, recording of telephone
conversations and providing written confirmation of each transaction. A failure
on the part of The Dreyfus Family of Funds to employ such procedures may subject
it to liability for any loss due to unauthorized or fraudulent instructions.
INVESTOR LINE
You may reach The Dreyfus Family of Funds by calling our Investor Line at
1-800-548-2868. If you call on a rotary phone during normal business hours (9
a.m. to 5 p.m., Eastern time), you will reach a Dreyfus Family of Funds
operator. If you call on a Touch-Tone phone, you will receive instructions on
how to: (1) request a current prospectus or information booklets about The
Dreyfus Family of Funds' investment portfolios and services, (2) listen to NAVs,
yields and total return figures, and (3) talk with a customer service
representative during normal business hours. For more information about direct
access using a Touch-Tone phone, please contact The Dreyfus Family of Funds.
HOW TO INVEST IN THE FUND
Premier serves as the Fund's distributor. Premier is a wholly-owned subsidiary
of Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc. Premier also serves as the Fund's sub-administrator and, pursuant to
a Sub-Administration Agreement, provides various administrative and corporate
secretarial services to the Fund. Premier has established various procedures for
purchasing Class R and Investor Shares of the Fund. Class R Shares are sold
primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) ("Banks") acting on behalf of
customers having a qualified trust or investment account or relationship at such
institution. Holders of Class R Shares who have held their Shares since April 4,
1994 may continue to purchase Class R Shares of the Fund whether or not they
would otherwise be eligible to do so. Investor Shares are primarily sold to
retail investors by Premier and by banks, securities brokers or dealers and
other financial institutions (including Mellon Bank and its affiliates)
("Agents") that have entered into a Shareholder Servicing and Sales Support
Agreement with Premier. Once an investor has established an account, additional
purchases may, in certain cases, be made directly through the Fund's transfer
agent. If Shares of the Fund are held in an account at a Bank or with an Agent,
such Bank or Agent may require you to place all Fund purchase, exchange and
redemption orders through them. All Banks and
....................... 16 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agents have agreed to transmit your transaction requests to the Fund's transfer
agent or to Premier. You may diversify your investments by choosing a
combination of investment portfolios offered by The Dreyfus Family of Funds.
You may invest in the following ways:
BY MAIL.
Send your application and check or money order to The Dreyfus Family of
Funds, P.O. Box 9692, Providence, Rhode Island 02940-9830. Checks must be
payable in U.S. dollars and drawn on U.S. banks. When making subsequent
investments, enclose your check with the return remittance portion of the
confirmation of your previous investment. If the remittance portion is not
available, indicate on your check or a separate piece of paper your name,
address, the Fund and class of Shares of the Fund that you are buying and the
account number. Orders to purchase Shares are effective on the day the Fund
receives your check or money order. (See "WHEN SHARE PRICE IS DETERMINED.")
BY TELEPHONE.
Once your account is open, you may make investments by telephone by calling
1-800-548-2868 if you have elected the service authorizing the Fund to draw on
your bank account by check when you call with instructions. Investments made by
phone in any one account must be in an amount of at least $100 and are effective
two days after your call. (See "WHEN SHARE PRICE IS DETERMINED.")
BY WIRE.
You may make your initial or subsequent investments in the Fund by wiring
funds.
To do so:
(1) Instruct your bank to wire funds to MELLON BANK (ABA routing number
0430-0026-1.)
(2) Be sure to specify on the wire:
(A) The Dreyfus Funds.
(B) The Fund name and the class of Shares of the Fund you are buying and
account number (if you have one).
(C) Your name.
(D) Your city and state.
In order for a wire purchase to be effective on the same day it is received
both the trading instructions and the wire must be received before 4 p.m.,
Eastern time. (See "WHEN SHARE PRICE IS DETERMINED.")
BY AUTOMATIC MONTHLY INVESTMENTS.
Once your account is open, you may make investments automatically by
electing the Automatic Investment Program, the service authorizing the Fund to
draw on your bank account
....................... 17 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
regularly by paper or electronic draft. Such investments must be in amounts of
not less than $100 in any one account. You should inquire at your bank whether
it will honor a preauthorized paper or electronic draft. Contact the Fund if
your bank requires additional documentation. Call 1-800-548-2868 or write The
Dreyfus Family of Funds, One Exchange Place, Boston, Massachusetts 02109 for
more information about the Automatic Investment Program.
BY DIRECT DEPOSIT.
If your employer offers Direct Deposit, you may arrange to automatically
purchase Shares of the Fund (minimum $100) each pay period. Direct Deposit
investing may also be available to persons receiving regular payments from other
sources (including government pension or social security payments). Note that it
may not be appropriate to Direct Deposit your entire paycheck into the Fund
because it has a fluctuating NAV. Call 1-800-548-2868 or write The Dreyfus
Family of Funds, One Exchange Place, Boston, Massachusetts 02109 for more
information or a Direct Deposit authorization form.
BY IN-KIND PURCHASES.
If the following conditions are satisfied, the Fund may at its discretion,
permit you to purchase Shares through an "in-kind" exchange of securities you
hold. Any securities exchanged must meet the investment objective, policies and
limitations of the Fund, must have a readily ascertainable market value, must be
liquid and must not be subject to restrictions on resale. The market value of
any securities exchanged, plus any cash, must be at least equal to $25,000.
Shares purchased in exchange for securities generally cannot be redeemed for
fifteen days following the exchange in order to allow time for the transfer to
settle.
The basis of the exchange will depend upon the relative NAV of the Shares
purchased and securities exchanged. Securities accepted by the Fund will be
valued in the same manner as the Fund values its assets. Any interest earned on
the securities following their delivery to the Fund and prior to the exchange
will be considered in valuing the securities. All interest, dividends,
subscription or other rights attached to the securities become the property of
the Fund, along with the securities. Call 1-800-548-2868 or write The Dreyfus
Family of Funds, One Exchange Place, Boston, Massachusetts 02109 for more
information about "in-kind" purchases.
WHEN SHARE PRICE IS DETERMINED.
The price of your Shares is their NAV. NAV is determined at the close of the
New York Stock Exchange ("NYSE") on each day that the NYSE is open (a "business
day"). Investments and requests to exchange or redeem Shares received by the
Fund before the close of business on the NYSE (usually 4 p.m., Eastern time) are
effective on, and will receive the price determined
....................... 18 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
on, that day (except investments made by electronic funds transfer which are
effective two business days after your call). Investment, exchange and
redemption requests received after the close of the NYSE, are effective on, and
receive the Share price determined the next business day.
ADDITIONAL INFORMATION ABOUT INVESTMENTS.
Once you have mailed or otherwise transmitted your investment instruction to
the Fund, it may not be modified or canceled. The Fund reserves the right to
reject any application or investment. The Fund reserves the right to make
exceptions to the minimum initial investment and account minimum amount from
time to time.
The minimum initial investment to establish a new account in the Fund is
$1,000, except for Individual Retirement Accounts ("IRAs"), retirement plans,
and Uniform Transfers (Gifts) to Minors Act accounts, for which the minimum
initial investment is $500. 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 account, the minimum initial investment
is $50. The Fund may suspend the offering of Shares of any class of the Fund and
reserves the right to vary initial and subsequent investment minimums.
Subsequent investments to purchase additional Shares in the Fund must be in an
amount of $100 or more.
The Fund intends, upon 60 days' prior notice, to involuntarily redeem Shares
in any account if the total value of the Shares is less than a specified minimum
unless you have established an automatic monthly investment to purchase
additional Shares. The Fund reserves the right to change such minimum from time
to time. Any time the Shares of the Fund held in an account have a value of less
than $1,000 ($500 for Uniform Gifts/Transfers to Minors Acts accounts), unless
the deficiency amount is the result of a decrease in net asset value per share,
a notification may be sent advising you of the need to either make an investment
to bring the value of the Shares held in the account up to $1,000 ($500) or to
establish an automatic monthly investment to purchase additional Shares. If the
investment is not made or the automatic monthly investment is not established
within 60 days from the date of notification, the Shares held in the account
will be redeemed and the proceeds from the redemption will be sent by check to
your address of record.
The automatic redemption of Shares will not apply to IRAs, custodial
accounts under Section 403(b) of the Internal Revenue Code of 1986, as amended
(the "Code") ("403(b) accounts") and other types of tax-deferred retirement plan
accounts.
HOW TO EXCHANGE YOUR INVESTMENT
FROM ONE FUND TO ANOTHER
You may exchange your Fund Shares for shares of the same class of certain other
funds advised by the Manager and that were previously advised by Mellon Bank. As
noted below, exchanges from
....................... 19 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
any one fund account may be limited in any one calendar year. In addition, the
Shares being exchanged and the Shares of the fund being acquired must have a
current value of at least $100 and otherwise meet the minimum investment
requirement of the fund being acquired. Call the Investor Line for additional
information and a prospectus describing other investment portfolios offered by
The Dreyfus Family of Funds.
BY TELEPHONE.
You may exchange your Shares by calling 1-800-548-2868 if you have
authorized the Fund to accept telephone instructions.
BY MAIL.
You may direct the Fund to exchange your Shares by writing to The Dreyfus
Family of Funds, P.O. Box 9692, Providence, Rhode Island 02940-9830. The request
should be signed by each person in whose name the Shares are registered. All
signatures should be exactly as the name appears in the registration; for
example, if an owner's name is registered as John Robert Jones, he should sign
that way and not as John R. Jones.
ADDITIONAL INFORMATION ABOUT EXCHANGES.
(1) In an exchange from one account to another account, the Shares being
sold and the new Shares being purchased must have a current value of at
least $100.
(2) Exchanges from any one fund account may be limited in any one calendar
year. The Fund reserves the right to make exceptions to an exchange
limitation from time to time. An exchange limitation will not apply to
the exchange of Shares of any of the funds exchanged pursuant to an
Automatic Withdrawal Program, and to Shares held in 403(b) accounts.
(3) The Shares being acquired must be qualified for sale in your state of
residence.
(4) If the Shares are represented by a negotiable stock certificate, the
certificate must be returned before the exchange can be effected.
(5) Once you have telephoned or mailed your exchange request, it is
irrevocable and may not be modified or canceled.
(6) An exchange is based on the next calculated net asset value per Share of
each fund after receipt of your exchange order.
(7) Shares may not be exchanged unless you have furnished the Fund with your
tax identification number, certified as prescribed by the Code and
Regulations thereunder. (See "TAXES.")
(8) Exchange of Fund Shares is, for federal income tax purposes, a sale of
the Shares, on which you may realize a taxable gain or loss.
....................... 20 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(9) If the request is made by a corporation, partnership, trust, fiduciary,
agent, estate, guardian, pension plan, profit sharing plan or
unincorporated association, the Fund may require evidence satisfactory
to it of the authority of the individual signing the request.
Shareholders will be given 60 days' notice prior to any material changes in
the exchange privilege.
HOW TO REDEEM SHARES
The Fund will redeem or "buy back" your Shares at any time at their NAV. (BEFORE
REDEEMING, PLEASE READ "ADDITIONAL INFORMATION ABOUT REDEMPTIONS.") Your
redemption proceeds may be delayed if you have owned your Shares less than 10
days. (SEE "REDEMPTION PROCEEDS.") The Fund imposes no charges when Shares are
redeemed. Agents or other institutions may charge their clients a nominal fee
for effecting redemptions of Fund Shares.
BY TELEPHONE.
If you have authorized the Fund to accept telephone instructions, you may
redeem your Shares by calling 1-800-548-2868. Once made, your telephone request
may not be modified or canceled. (BEFORE CALLING, READ "ADDITIONAL INFORMATION
ABOUT REDEMPTIONS" AND "WHEN SHARE PRICE IS DETERMINED.")
BY MAIL.
Your written instructions to redeem Shares may be in any one of the
following forms:
-A LETTER TO THE DREYFUS FAMILY OF FUNDS.
-AN ASSIGNMENT FORM OR STOCK POWER.
-AN ENDORSEMENT ON THE BACK OF YOUR NEGOTIABLE STOCK CERTIFICATE, IF YOU
HAVE ONE.
Once mailed to The Dreyfus Family of Funds at P.O. Box 9692, Providence,
Rhode Island 02940-9830, the redemption request is irrevocable and may not be
modified or canceled. A letter of instruction should state the number of Shares
or the dollar amount to be redeemed. The letter must include your account
number, and for redemptions in an amount in excess of $25,000, a signature
guarantee of each owner. The redemption request must be signed by each person in
whose name the Shares are registered; for example, in the case of joint
ownership, each owner must sign. All signatures should be exactly as the name
appears in the registration. If the owner's name appears in the registration as
John Robert Jones, he should sign that way and not as John R. Jones. Signature
guarantees can be obtained from commercial banks, credit unions if authorized by
state laws, savings and loans institutions, trust companies, members of a
recognized stock exchange, or from other eligible guarantors who are members of
the Securities
....................... 21 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Transfer Agents Medallion Program ("STAMP") or any other industry recognized
program approved by the Securities Transfer Association. (BEFORE WRITING, SEE
"ADDITIONAL INFORMATION ABOUT REDEMPTIONS.")
BY AUTOMATED WITHDRAWAL PROGRAM.
The Fund's Automated Withdrawal Program automatically redeems enough Shares
each month to provide you with a check for an amount which you specify (with a
minimum of $100). To set up an Automated Withdrawal Program, call the Fund at
1-800-548-2868 for instructions. Only shareholders with an account balance of
$10,000 or more may participate in this program. Shares will be redeemed on the
15th day or 30th day of each month or the next business day, and your check will
be mailed the next day. If your monthly checks exceed the dividends, interest
and capital appreciation on your Shares, the payments will deplete your
investment. Amounts paid to you by Automated Withdrawals are not a return on
your investment. They are derived from the redemption of Shares in your account,
and you must report on your income tax return any gains or losses that you
realize.
You may specify an Automated Withdrawal Program when you make your first
investment. If you would like to establish an Automated Withdrawal Program
thereafter, the request for the Automated Withdrawal Program must be signed by
all owners, with their signatures guaranteed.
When you make your first investment you may request that Automated
Withdrawals be sent to an address other than the address of record. Thereafter,
a request to send Automated Withdrawals to an address other than the address of
record must be signed by all owners, with their signatures guaranteed.
The Fund may terminate the Automated Withdrawal Program at any time, upon
notice to you, and you likewise may terminate it or change the amount of the
Automated Withdrawal Program, by notice to the Fund in writing or by telephone.
Termination or change will become effective within five days following receipt
of your instructions. Your Automated Withdrawal Program plan may begin any time
after you have owned your Shares for 10 days.
REDEMPTION PROCEEDS.
Redemption proceeds may be sent to you:
BY MAIL. If your redemption check is mailed, it is usually mailed by the
second business day after receipt of your redemption request, but not later than
seven days afterwards. When a redemption occurs shortly after a recent purchase,
the Fund may hold the redemption proceeds beyond seven days but only until the
purchase check clears, which may take up to 10 days or more. No dividend is paid
on the redemption proceeds after the redemption and before the check is mailed.
If you anticipate redemptions soon after you purchase your Shares, you are
advised to wire funds to avoid delay.
....................... 22 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BY WIRE AND ELECTRONIC FUNDS TRANSFER. You may authorize the Fund to
transmit redemption proceeds by wire or electronic funds transfer. Proceeds from
the redemption of Fund Shares will normally be transmitted on the first business
day, but not later than the seventh day, following the date of redemption. Your
bank usually will receive wired funds the day they are transmitted.
Electronically transferred funds will ordinarily be received within two business
days after transmission. Once the funds are transmitted, the time of receipt and
the availability of the funds are not within the Fund's control. If your bank
account changes, you must send a new "voided" check preprinted with the bank
registration with written instructions signed by all owners (with their
signatures guaranteed), including tax identification number.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
(1) Redemptions specifying a certain date or price cannot be accepted and
will be returned.
(2) If the Shares being redeemed are represented by a negotiable stock
certificate, the certificate must be returned before the redemption can
be effected.
(3) All redemptions are made and the price is determined on the day when all
documentation is received in good order.
(4) If the request to redeem is made by a corporation, partnership, trust,
fiduciary, agent, estate, guardian, pension plan, profit sharing plan,
or unincorporated association, the Fund may require evidence
satisfactory to it of the authority of the individual signing the
request. Please call or write the Fund for further information.
(5) A request to redeem Shares in an IRA or 403(b) account must be
accompanied by an IRS Form W4-P and a reason for withdrawal as specified
by the Internal Revenue Service.
HOW TO USE THE DREYFUS FAMILY OF FUNDS
IN A TAX-QUALIFIED RETIREMENT PLAN
The Dreyfus Family of Funds' investment portfolios are available for your
tax-deferred retirement plan. Call 1-800-548-2868 or write The Dreyfus Family of
Funds, P.O. Box 9692, Providence, Rhode Island 02940-9830 and request the
appropriate forms for:
-IRAS.
-403(B) ACCOUNTS FOR EMPLOYEES OF PUBLIC SCHOOL SYSTEMS AND NON-PROFIT
ORGANIZATIONS.
-PROFIT-SHARING PLANS AND PENSION PLANS FOR CORPORATIONS AND OTHER
EMPLOYERS.
....................... 23 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW TO TRANSFER AN INVESTMENT TO A DREYFUS FAMILY OF FUNDS' RETIREMENT PLAN.
It is easy to transfer your tax-deferred plan to The Dreyfus Family of Funds
from another custodian. Call 1-800-548-2868 or write The Dreyfus Family of Funds
at P.O. Box 9692, Providence, Rhode Island 02940-9830 for a request to transfer
form. If you direct The Dreyfus Family of Funds to transfer funds from an
existing non-retirement Dreyfus Family of Funds account into a retirement
account, the Shares in your non-retirement account will be redeemed. The
redemption proceeds will be invested in your Dreyfus Family of Funds IRA or
other tax-qualified retirement plan. The redemption is a taxable event resulting
in a taxable gain or loss.
- ------------------------------------------------
OTHER INFORMATION
SHARE PRICE
An investment portfolio's NAV refers to the worth of one Share. The NAV for
Investor and Class R Shares of the Fund is computed by adding, with respect to
each class of Shares, the value of all of the class's investments, cash, and
other assets, deducting liabilities and dividing the result by number of Shares
of that class outstanding. The valuation of assets for determining NAV for the
Fund may be summarized as follows:
Equity securities which are traded on a securities exchange are valued at
the last sale price on that exchange or, if there is no recent last sale price
available, at the last current bid quotation. An equity security which is listed
or traded on more than one exchange is valued at the quotation on the exchange
determined to be the primary market for such security by CCF S.A.M.
International securities traded principally over-the-counter are valued on the
basis of the last sale price.
For purposes of determining the Fund's NAV, all assets and liabilities
initially expressed in foreign currency values will be converted into U.S.
dollar values at the mean between the bid and offered quotations of such
currencies against U.S. dollars as last quoted by any recognized dealer. If an
event were to occur after the value of a portfolio instrument was so established
but before the net asset value per share is determined which is likely to
materially change the NAV, then the Fund instrument would be valued using fair
value considerations established by the Board of Directors. Because of the need
to obtain prices as of the close of trading on the Western European, Far East
and other exchanges, the calculation of NAV does not take place
contemporaneously with the determination of the prices of the majority of the
Fund's securities.
....................... 24 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Pursuant to a determination by The Dreyfus/Laurel Funds, Inc.'s Board of
Directors that such value represents fair value, the debt securities with
maturities of 60 days or less held by the Fund are valued at amortized cost.
When a security is valued at amortized cost, it is valued at its cost when
purchased, and thereafter by assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument.
The NAV of each class of Shares of most of The Dreyfus Family of Funds'
investment portfolios (other than money market funds) is published in leading
newspapers daily. The yield of each class of Shares of most of The Dreyfus
Family of Funds' money market funds is published weekly in leading financial
publications and in many local newspapers. The NAV of the Fund may also be
obtained by calling The Dreyfus Family of Funds.
PERFORMANCE ADVERTISING
From time to time, the Fund may advertise the yield and total return on a class
of Shares. TOTAL RETURN AND YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND
ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" of a class
of Shares of the Fund may be calculated on an average annual total return basis
or a cumulative total return basis. Average annual total return refers to the
average annual compounded rates of return on a class of Shares over one-, five-,
and ten-year periods or the life of the Fund (as stated in the advertisement)
that would equate an initial amount invested at the beginning of a stated period
to the ending redeemable value of the investment, assuming the reinvestment of
all dividends and capital gains distributions. Cumulative total return reflects
the total percentage change in the value of the investment over the measuring
period, again assuming the reinvestment of all dividends and capital gains
distributions.
The Fund's "yield" is calculated by dividing a class of Shares' annualized
net investment income per Share during a recent 30-day (or one month) period by
the maximum public offering price per class of such Share on the last day of
that period. Since yields fluctuate, yield data cannot necessarily be used to
compare an investment in a class of Shares with bank deposits, savings accounts,
and similar investment alternatives which often provide an agreed-upon or
guaranteed fixed yield for a stated period of time.
Total return and yield quotations will be computed separately for each class
of the Fund's Shares. Because of the difference in the fees and expenses borne
by Class R and Investor Shares of the Fund, the return and yield on Class R
Shares will generally be higher than the return and yield on Investor Shares.
Any fees charged by a Bank or Agent directly to its customers' accounts
....................... 25 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
in connection with investments in the Fund will not be included in calculations
of total return or yield. The Fund's annual report contains additional
performance information and is available upon request without charge from the
Fund's distributor or your Bank or Agent.
The Fund may compare the performance of its Investor and Class R Shares with
various industry standards of performance including MSCI EAFE, Lipper Analytical
Services, Inc. ratings, Morgan Stanley Capital International Europe Index, CDA
Technologies Indexes, the Consumer Price Index, and the Dow Jones Industrial
Average. Performance rankings as reported in CHANGING TIMES, BUSINESS WEEK,
INSTITUTIONAL INVESTOR, THE WALL STREET JOURNAL, IBC/DONOGHUE'S MONEY FUND
REPORT, MUTUAL FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR
MUTUAL FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE, BARRON'S and
similar publications may also be used in comparing the Fund's performance.
Furthermore, the Fund may quote its Investor and Class R Shares' total returns
and yields in advertisements or in shareholder reports. The Fund may also
advertise non-standardized performance information, such as total return for
periods other than those required to be shown or cumulative performance data.
The Fund may advertise a quotation of yield or other similar quotation
demonstrating the income earned or distributions made by the Fund.
DISTRIBUTIONS
The Fund declares and pays dividends from its net investment income, if any,
annually and distributes any net long-term capital gains on an annual basis. The
Board of Directors may elect not to distribute capital gains in whole or in part
to take advantage of capital loss carryovers.
Unless you choose to receive dividend and/or capital gain distributions in
cash, your distributions will be automatically reinvested in additional Shares
of the Fund at the NAV. You may change the method of receiving distributions at
any time by writing to the Fund. Checks which are sent to shareholders who have
requested distributions to be paid in cash and which are subsequently returned
by the United States Postal Service as not deliverable or which remain uncashed
for six months or more will be reinvested in additional Fund Shares in the
shareholder's account at the then current NAV. Subsequent Fund distributions
will be automatically reinvested in additional Fund Shares in the shareholder's
account.
Distributions paid by the Fund with respect to one class of Shares may be
greater or less per Share than those paid with respect to another class of
Shares due to the different expenses of the different classes.
Shares purchased on a day on which the Fund calculates its NAV will not
begin to accrue dividends until the following day. Redemption orders effected on
any particular day will receive all dividends declared through the day of
redemption.
....................... 26 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
You may elect to have distributions on Shares held in IRAs and 403(b)
accounts paid in cash only if you are at least 59 1/2 years old or are
permanently and totally disabled. Distribution checks normally are mailed within
seven days after the record date.
Any dividend and/or capital gain distribution paid by the Fund will reduce
each Share's NAV by the amount of the distribution. Shareholders are subject to
taxes with respect to any such distribution. At any given time, the value of the
Fund's Shares includes the undistributed net gains, if any, realized by the Fund
on the sale of portfolio securities, and undistributed dividends and interest
received, less the Fund's expenses. Because such gains and income are included
in the value of your Shares, when they are distributed the value of your Shares
is reduced by the amount of the distribution. Accordingly, if your distribution
is reinvested in additional Shares, the distribution has no effect on the value
of your investment; while you own more Shares, the value of each Share has been
reduced by the amount of the distribution. Likewise, if you take your
distribution in cash, the value of your Shares immediately after the
distribution plus the cash received is equal to the value of the Shares
immediately before the distribution. For example, if you own a Fund Share that
immediately before a distribution has a value of $10, including $2 in
undistributed dividends and capital gains realized by the Fund during the year,
and if the $2 is distributed, the value of the Share will decline to $8. If the
$2 is reinvested at $8 per Share, you will receive .250 Shares, so that, after
the distribution, you will have 1.250 Shares at $8 per Share, or $10, the same
as before.
TAXES
The Fund intends to qualify for treatment as a regulated investment company
under the Code so that it will be relieved of federal income tax on that part of
its investment company taxable income (consisting generally of taxable net
investment income, net short-term capital gain and, net gains from certain
foreign currency transactions) and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) that is distributed to its
shareholders.
Dividends from the Fund's investment company taxable income are taxable to
you as ordinary income, to the extent of the Fund's earnings and profits.
Distributions by the Fund of net capital gain, when designated as such, are
taxable to you as long-term capital gains, regardless of the length of time you
have owned your Shares.
Dividends and other distributions are taxable to you regardless of whether
they are received in cash or reinvested in additional Fund Shares, even if the
value of your Shares is below your cost. If you purchase Shares shortly before a
taxable distribution you must pay income taxes on the distribution, even though
the value of your investment (plus cash received, if any) remains the same. In
addition, the Share price at the time you purchase Shares may include unrealized
gains in the securities held in the Fund. If these portfolio securities are
subsequently sold and
....................... 27 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the gains are realized, they will, to the extent not offset by capital losses,
be paid to you as a capital gain distribution and will be taxable to you.
Dividends paid by the Fund to qualified retirement plans ordinarily will not be
subject to taxation until the proceeds are distributed from the retirement
plans. The Fund will not report to the IRS dividends paid to such plans.
Generally, distributions from qualified retirement plans, except those
representing returns of non-deductible contributions thereto, will be taxable as
ordinary income and, if made prior to the time the participant reaches 59 1/2,
generally will be subject to an additional tax equal to 10% of the taxable
portion of the distribution. If the distribution from such a retirement plan
(other than certain governmental or church plans) for any taxable year following
the year in which the participant reaches age 70 1/2 is less than the "minimum
required distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or custodian of
such a retirement plan will be responsible for reporting such distributions from
such plans to the IRS. Moreover, certain contributions to a qualified retirement
plan in excess of the amounts permitted by law may be subject to an excise tax.
In January of each year, the Fund will send you a Form 1099-DIV notifying
you of the status for federal income tax purposes of your distributions for the
preceding year.
You must furnish the Fund with your tax identification number ("TIN") and
state whether you are subject to withholding for prior under-reporting,
certified under penalties of perjury as prescribed by the Code and the
regulations thereunder. Unless previously furnished, investments received
without such a certification will be returned. The Fund is required to withhold
a portion of all dividends, capital gain distributions and redemption proceeds
payable to any individuals and certain other non-corporate shareholders who do
not provide the Fund with a correct TIN; withholding from dividends and capital
gain distributions also is required for such shareholders who otherwise are
subject to backup withholding.
The Fund will be subject to a 4% nondeductible excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
taxable ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
The Fund expects to make such distributions as are necessary to avoid the
imposition of this tax.
The foregoing is only a summary of some of the important tax considerations
generally affecting the Fund and its shareholders. See the SAI for a further
discussion. There may be other federal, state or local tax considerations
applicable to a particular investor. You therefore are urged to consult your own
tax adviser.
....................... 28 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER SERVICES
At least twice a year you will receive the financial statement of the Fund with
a summary of its investments and performance. The Fund will send you a
confirmation statement after every transaction (except with regard to the
reinvestment of dividends and other distributions) that affect your Fund
account. In addition, an account statement will be mailed to you quarterly or
monthly depending on the Fund's reporting schedule. You may also request a
statement of your account activity at any time. Carefully review such
confirmation statements and account statements and notify the Fund immediately
if there is an error. From time to time, to reduce expenses, only one copy of
the Fund's shareholder reports (such as the Fund's annual report) may be mailed
to your household. Please call The Dreyfus Family of Funds if you need
additional copies.
No later than January 31 of each year, the Fund will send you the following
reports, which you may use in completing your federal income tax return:
Form 1099-DIV Reports taxable distributions (and returns of capital, if any)
during the preceding year.
Form 1099-B Reports proceeds paid on redemptions during the preceding year.
Form 1099-R Reports distributions from IRAs and 403(b) accounts during the
preceding year.
At such time as prescribed by law, the Fund will send you a Form 5498, which
reports contributions to your IRA for the previous calendar year. In addition,
the Fund may send you other relevant tax-related forms.
FURTHER INFORMATION ABOUT THE FUND
THE DREYFUS/LAUREL FUNDS, INC.
The Laurel Funds, Inc. was incorporated in Maryland on August 6, 1987 and
changed its name to The Dreyfus/Laurel Funds, Inc. on October 17, 1994. The
Dreyfus/Laurel Funds, Inc. is registered with the SEC under the 1940 Act as a
diversified, open-end management investment company. The Dreyfus/Laurel Funds,
Inc. has an authorized capitalization of 25 billion Shares of $0.001 par value
stock with equal voting rights. The Articles of Incorporation permit the
Directors to create an unlimited number of investment portfolios (each a
"fund"). The Fund offered by this Prospectus currently issues two classes of
Shares designated "Investor" and "Class R" Shares.
Each Share (regardless of class) has one vote. All Shares of a fund (and
classes thereof) vote together as a single class, except as to any matter for
which a separate vote of any fund or class is required by the 1940 Act, and
except as to any matter which affects the interests of one
....................... 29 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
or more particular funds or classes, in which case only the shareholders of the
affected fund or classes are entitled to vote, each as a separate class. At your
written request, The Dreyfus/Laurel Funds, Inc. will issue negotiable stock
certificates.
At December 6, 1994, Mellon Bank Corporation, the parent of Mellon Bank, the
investment manager, owned of record through its direct and indirect subsidiaries
more than 25% of The Dreyfus/Laurel Funds, Inc.'s outstanding voting shares, and
is deemed, under the 1940 Act, to be a controlling shareholder.
MANAGEMENT.
THE BOARD OF DIRECTORS. The business affairs of The Dreyfus/Laurel Funds,
Inc. are managed under the direction of its Directors. The SAI contains the
names and general background information concerning the Directors and officers
of The Dreyfus/Laurel Funds, Inc.
INVESTMENT MANAGER. The Manager is located at 200 Park Avenue, New York, New
York 10166. As of November 30, 1994, the Manager managed or administered
approximately $71 billion in assets for more than 1.9 million investor accounts
nationwide. The Manager is a wholly-owned subsidiary of Mellon Bank (One Mellon
Bank Center, Pittsburgh, Pennsylvania 15258), the Fund's prior investment
manager. Pursuant to an Investment Management Agreement, transferred from Mellon
Bank to the Manager effective as of October 17, 1994, the Manager provides, or
arranges for one or more third parties to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. S.A.M. Finance, S.A. ("CCF SAM") continues as the Fund's sub-adviser
pursuant to the Sub-Advisory Agreement. The Manager and CCF SAM manage the Fund
by making investment decisions based on the Fund's investment objective,
policies and restrictions, and are paid a fee.
The Manager is authorized to allocate purchase and sale orders for portfolio
securities to certain financial institutions, including, in the case of agency
transactions, financial institutions which are affiliated with the Manager or
which have sold Shares of the Fund, if the Manager believes that the quality of
the transaction and the commission are comparable to what they would be with
other qualified brokerage firms. From time to time, to the extent consistent
with its investment objective, policies and restrictions, the Fund may invest in
securities of companies with which Mellon Bank has a lending relationship.
Under the Investment Management Agreement, the Fund pays a fee computed
daily, and paid monthly, at the annual rate of 1.50% of the Fund's average daily
net assets less certain expenses. The Manager pays all of the expenses of the
Fund except brokerage fees, taxes, interest, fees, expenses of the
non-interested Directors (including counsel fees) and extraordinary expenses.
Although the Manager does not pay for the fees and expenses of the
non-interested Directors (including counsel fees), the Manager is contractually
required to reduce its investment
....................... 30 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
management fee in an amount equal to the Fund's allocable share of such
expenses. In order to compensate the Manager for paying virtually all of the
Fund's expenses, the Fund's investment management fee is higher than the
investment advisory fees paid by most investment companies. Most if not all,
such companies also pay for additional non-investment advisory expenses that are
not paid by such companies' investment advisers. From time to time, the Manager
may waive (either voluntarily or pursuant to applicable state limitations)
additional investment management fees payable by the Fund.
It is anticipated that the current total operating expenses of the Fund
(excluding Rule 12b-1 Fees) will be 1.50% of the average daily net assets.
Mellon Bank is a subsidiary of Mellon Bank Corporation. At June 30, 1994,
Mellon Bank Corporation was the 24th largest bank holding company in the United
States in terms of total assets. Through its bank subsidiaries, it operates 631
domestic retail banking locations including 432 branch offices. Mellon Bank
Corporation has 25 domestic representative offices. There are international
branches in Grand Cayman, British West Indies, and London, England, and two
international representative offices in Tokyo, Japan and Hong Kong. Mellon Bank
has a banking subsidiary, Mellon Bank Canada, in Toronto. Mellon Bank is a
registered municipal securities dealer.
The Glass-Steagall Act of 1933 prohibits a national bank from engaging in
the business of issuing, underwriting, selling or distributing certain
securities. The activities of Mellon Bank and the Manager may raise issues under
these provisions. However, Mellon Bank has been advised by its counsel that
these activities are consistent with these statutory and regulatory obligations.
For more information on the Glass-Steagall Act of 1933, see "Federal Law
Affecting Mellon Bank" in the SAI.
SUB-ADVISOR. CCF S.A.M. (115 Avenue des Champs-Elysees, Paris, France 75008)
provides investment advice and portfolio management services to the Fund. A
wholly-owned subsidiary of Credit Commercial de France ("CCF"), the sub-adviser
is a French corporation organized in 1989, and has been a registered investment
advisor since February, 1993. CCF was founded nearly a century ago in 1894, and
is one of Europe's largest commercial banks with 370 offices in France as well
as 40 others around the world of which 10 are located in European countries.
CCF's European investment management business dates back to 1945 and it
currently manages over $30 billion divided among 210 open-end mutual funds and
over 100 commingled investment portfolios out of offices in Paris, London,
Geneva, Milan and Tokyo. CCF S.A.M. specializes in active quantitative asset
management based on a structured investment process. CCF S.A.M.'s offices are
located in Paris, France and it currently advises $2 billion of assets
worldwide.
....................... 31 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Pursuant to the sub-advisory agreement among The Dreyfus/Laurel Funds, Inc.,
CCF S.A.M. and the Manager, CCF S.A.M. will receive .25% of the Fund's average
daily net assets. Payment of this fee to CCF S.A.M. is the obligation of the
Manager and not of the Fund.
The Fund's manager is Patrice Conxicoeur of CCF S.A.M. Patrice Conxicoeur
has been a portfolio manager with CCF S.A.M. since April 1992. He specializes in
international equities and fixed income instruments. He joined CCF in 1990 as a
trainee in quantitative fund management.
Between 1991-1992, Mr. Conxicoeur was at Japan Gamma Asset Management (a
joint venture between CCF, Taiyo Life and New York Life) in Tokyo, Japan where
he managed Japanese-based mutual funds as well as stand-alone equity and fixed
income institutional accounts. He is currently the primary fund manager for
other funds managed by CCF S.A.M. investing in international equity securities,
including those issued in emerging markets.
Mr. Conxicoeur studied Economics at St. Andrews University in the U.K. from
1986-87 and graduated with an MBA in Finance from the Lyon Graduate School of
Business in 1990.
OTHER SERVICE PROVIDERS. Under a Custody and Fund Accounting Agreement,
Mellon Bank acts as custodian and fund accountant, maintaining possession of the
Fund's investment securities and providing certain accounting and related
services.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, serves as transfer agent ("Transfer Agent") for the Fund's shares.
The Transfer Agent is located at One American Express Plaza, Providence, Rhode
Island 02903.
Shares of the Fund are sold on a continuous basis by Premier, as the Fund's
sponsor and distributor. Premier is a registered broker-dealer with principal
offices at One Exchange Place, Boston, Massachusetts 02109. The Fund has entered
into a distribution agreement with Premier which provides that Premier has the
exclusive right to distribute Shares of the Fund. Premier may pay service and/or
distribution fees to Agents that assist customers in purchasing and servicing of
Shares of the Fund. (SEE "DISTRIBUTION PLAN (INVESTOR SHARES ONLY).")
DISTRIBUTION PLAN (INVESTOR SHARES ONLY).
Investor Shares are subject to a Distribution Plan ("Plan") adopted pursuant
to Rule 12b-1 under the 1940 Act ("Rule 12b-1"). The Investor Shares of the Fund
bear some of the cost of selling those Shares under the Plan. The Plan allows
the Fund to spend annually up to 0.25% of its average daily net assets
attributable to Investor Shares to compensate Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and Premier for
shareholder servicing activities and for activities or expenses primarily
intended to result in the sale of Investor Shares of the Fund. The Plan allows
Premier to make payments from the Rule 12b-1 fees it collects from the Fund to
compensate Agents that have entered into Selling
....................... 32 .......................
- --------------------------------------------------------------------------------
<PAGE>
P R O S P E C T U S
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Agreements ("Agreements") with Premier. Under the Agreements, the Agents are
obligated to provide distribution related services with regard to the Fund
and/or shareholder services to the Agent's clients that own Investor Shares of
the Fund.
The Fund and Premier may suspend or reduce payments under the Plan at any
time, and payments are subject to the continuation of the Fund's Plan and the
Agreements described above. From time to time, the Agents, Premier and the Fund
may agree to voluntarily reduce the maximum fees payable under the Plan. See the
SAI for more details on the Plan.
Potential investors should read this Prospectus in light of the terms
governing Agreements with their Agents. An Agent entitled to receive
compensation for selling and servicing the Fund's Shares may receive different
compensation with respect to one class of shares over another.
....................... 33 .......................
- --------------------------------------------------------------------------------
<PAGE>
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------
FOR MORE INFORMATION
FUND INFORMATION AND PROSPECTUSES
Call 1-800-548-2868
Please read the prospectus before you invest or send money.
TO INVEST, REDEEM AND EXCHANGE
Call 1-800-548-2868 (for overseas, call collect (401) 455-3476)
9:00 a.m. to 5:00 p.m., Eastern time
Monday through Friday
Or Write: The Dreyfus Family of Funds
P.O. Box 9692
Providence, Rhode Island 02940-9830.
YIELD AND SHARE PRICE INFORMATION
1-800-548-2868
24 hours a day, 7 days a week
The Dreyfus Family of Funds
One Exchange Place
Boston, Massachusetts 02109
....................... 34 .......................
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
January 5, 1995
THE DREYFUS/LAUREL FUNDS, INC.
200 Park Avenue
New York, New York 10166
For information call 1-800-548-2868
The Dreyfus/Laurel Funds Short Term Government Securities Fund
(the "Fund") is a portfolio of The Dreyfus/Laurel Funds, Inc.
("Dreyfus/Laurel"), an open-end diversified investment company that offers
shares of common stock of the Fund. Shares of the Fund are offered without
sales commissions.
This Statement of Additional Information is not a prospectus and
should be read only in conjunction with the Fund's current prospectus,
dated January 5, 1995. A copy of the Prospectus is available from Premier
Mutual Fund Services, Inc., ("Premier"), the Fund's distributor, One
Exchange Place, Boston, MA 02109.
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT INFORMATION AND RISK FACTORS . . . . . . . . . . 3
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . 7
CONTROLLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . 10
DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . 10
INVESTMENT MANAGEMENT AND OTHER SERVICES . . . . . . . . . . 14
FEDERAL LAW AFFECTING MELLON BANK . . . . . . . . . . . . . 16
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . 16
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 18
PERFORMANCE CALCULATIONS . . . . . . . . . . . . . . . . . . 19
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES . . . . . . . . . . 20
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 22
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 23
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . 24
- 2 -
<PAGE>
INVESTMENT INFORMATION AND RISK FACTORS
Government Obligations. The Fund may invest in a variety of U.S.
Treasury obligations, which differ only in their interest rates,
maturities and times of issuance: (a) U.S. Treasury bills have a maturity
of one year or less, (b) U.S. Treasury notes have maturities of one to ten
years, and (c) U.S. Treasury bonds generally have maturities of greater
than ten years.
In addition to U.S. Treasury obligations, the Fund may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the
full faith and credit of the U.S. Treasury (such as Government National
Mortgage Association ("GNMA") participation certificates), (b) the right
of the issuer to borrow an amount limited to a specific line of credit
from the U.S. Treasury, (c) discretionary authority of the U.S. Government
agency or instrumentality, or (d) the credit of the instrumentality.
(Examples of agencies and instrumentalities are: Federal Land Banks,
Federal Housing Administration, Farmers Home Administration, Export-Import
Bank of the United States, Central Bank for Cooperatives, Federal
Intermediate Credit Banks, Federal Home Loan Banks, General Services
Administration, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Inter-American Development Bank, Asian-
American Development Bank, Student Loan Marketing Association,
International Bank for Reconstruction and Development and Federal National
Mortgage Association ("FNMA").) No assurance can be given that the U.S.
Government will provide financial support to such U.S. Government agencies
or instrumentalities described in (b), (c) and (d) in the future, other
than as set forth above, since it is not obligated to do so by law.
Mortgage Pass-Through Certificates. Mortgage pass-through
certificates are issued by governmental, government-related and private
organizations and are backed by pools of mortgage loans. These mortgage
loans are made by lenders such as savings and loan institutions, mortgage
bankers, commercial banks and others to residential home buyers throughout
the United States. The securities are "pass-through" securities because
they provide investors with monthly payments of principal and interest
which in effect are a "pass-through" of the monthly payments made by the
individual borrowers on the underlying mortgages, net of any fees paid to
the issuer or guarantor of the pass-through certificates. The principal
governmental issuer of such securities is the GNMA, which is a
wholly-owned U.S. Government corporation within the Department of Housing
and Urban Development. Government-related issuers include the Federal
Home Loan Mortgage Corporation ("FHLMC") and the FNMA, both government-
sponsored corporations owned entirely by private stockholders. Commercial
banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such
issuers may be the originators of the underlying mortgage loans as well as
the guarantors of the mortgage-related securities.
- 3 -
<PAGE>
(1) GNMA Mortgage Pass-Through Certificates ("Ginnie Maes").
Ginnie Maes represent an undivided interest in a pool of mortgages that
are insured by the Federal Housing Administration or the Farmers Home
Administration or guaranteed by the Veterans Administration. Ginnie Maes
entitle the holder to receive all payments (including prepayments) of
principal and interest owed by the individual mortgagors, net of fees paid
to GNMA and to the issuer which assembles the mortgage pool and passes
through the monthly mortgage payments to the certificate holders
(typically, a mortgage banking firm), regardless of whether the individual
mortgagor actually makes the payment. Because payments are made to
certificate holders regardless of whether payments are actually received
on the underlying mortgages, Ginnie Maes are of the "modified
pass-through" mortgage certificate type. The GNMA is authorized to
guarantee the timely payment of principal and interest on the Ginnie Maes
as securities backed by an eligible pool of mortgages. The GNMA guarantee
is backed by the full faith and credit of the United States, and the GNMA
has unlimited authority to borrow funds from the U.S. Treasury to make
payments under the guarantee. The market for Ginnie Maes is highly liquid
because of the size of the market and the active participation in the
secondary market of securities dealers and a variety of investors.
(2) FHLMC Mortgage Participation Certificates ("Freddie
Macs"). Freddie Macs represent interests in groups of specified first lien
residential conventional mortgages underwritten and owned by the FHLMC.
Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by the FHLMC. The FHLMC guarantees either ultimate collection
or timely payment of all principal payments on the underlying mortgage
loans. In cases where the FHLMC has not guaranteed timely payment of
principal, the 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. Freddie Macs are not guaranteed by the United States or by any
of the Federal Home Loan Banks and do not constitute a debt or obligation
of the United States or of any Federal Home Loan Bank. The secondary
market for Freddie Macs is highly liquid because of the size of the market
and the active participation in the secondary market of the FHLMC,
securities dealers and a variety of investors.
(3) FNMA Guaranteed Mortgage Pass-Through Certificates
("Fannie Maes"). Fannie Maes represent an undivided interest in a pool of
conventional mortgage loans secured by first mortgages or deeds of trust,
on one family, or two to four family, residential properties. The FNMA is
obligated to distribute scheduled monthly installments of principal and
interest on the mortgages in the pool, whether or not received, plus full
principal of any foreclosed or otherwise liquidated mortgages. The
obligation of the FNMA under its guaranty is solely the obligation of the
FNMA and is not backed by, nor entitled to, the full faith and credit of
the United States.
The market value of mortgage-related securities depends on, among
other things, the level of interest rates, the certificates' coupon rates
- 4 -
<PAGE>
and the payment history of the mortgagors of the mortgages in the
underlying mortgages.
Repurchase Agreements. The Fund may enter into repurchase
agreements with U.S. Government securities dealers recognized by the
Federal Reserve Board, with member banks of the Federal Reserve System, or
with such other brokers or dealers that meet the credit guidelines of the
Board of Directors. In a repurchase agreement, the Fund buys a security
from a seller that has agreed to repurchase the same security at a
mutually agreed upon date and price. The Fund's resale price will be in
excess of the purchase price, reflecting an agreed upon interest rate.
This interest rate is effective for the period of time the Fund is
invested in the agreement and is not related to the coupon rate on the
underlying security. Repurchase agreements may also be viewed as a fully
collateralized loan of money by the Fund to the seller. The period of
these repurchase agreements will usually be short, from overnight to one
week, and at no time will the Fund invest in repurchase agreements for
more than one year. The Fund will always receive as collateral securities
whose market value including accrued interest is, and during the entire
term of the agreement remains, at least equal to 100% of the dollar amount
invested by the Fund in each agreement, and the Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer to the account of the Custodian. If the seller defaults, the Fund
might incur a loss if the value of the collateral securing the repurchase
agreement declines and might incur disposition costs in connection with
liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of a security which is the subject of
a repurchase agreement, realization upon the collateral by the Fund may be
delayed or limited. The Manager seeks to minimize the risk of loss
through repurchase agreements by analyzing the creditworthiness of the
obligors under repurchase agreements, in accordance with the credit
guidelines of Dreyfus/Laurel's Board of Directors.
Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
portfolio securities is deemed by the Manager to be inconvenient or
disadvantageous. A reverse repurchase agreement is a transaction whereby
the Fund transfers possession of a portfolio security to a bank or
broker-dealer in return for a percentage of the portfolio security's
market value. The Fund retains record ownership of the security involved
including the right to receive interest and principal payments. At an
agreed upon future date, the Fund repurchases the security by paying an
agreed upon purchase price plus interest. Cash or liquid high-grade debt
obligations of the Fund equal in value to the repurchase price including
any accrued interest will be maintained in a segregated account while a
reverse repurchase agreement is in effect.
When-Issued Securities. New issues of U.S. Treasury and
Government securities are often offered on a when-issued basis. This means
that delivery and payment for the securities normally will take place
approximately 7 to 15 days after the date the buyer commits to purchase
them. The payment obligation and the interest rate that will be received
- 5 -
<PAGE>
on securities purchased on a when-issued basis are each fixed at the time
the buyer enters into the commitment. The Fund will make commitments to
purchase such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities or dispose of the
commitment before the settlement date if it is deemed advisable as a
matter of investment strategy. Cash or marketable high-grade debt
securities equal to the amount of the above commitments will be segregated
on the Fund's records. For the purpose of determining the adequacy of
these securities the segregated securities will be valued at market. If
the market value of such securities declines, additional cash or
securities will be segregated on the Fund's records on a daily basis so
that the market value of the account will equal the amount of such
commitments by the Fund.
Securities purchased on a when-issued basis and the securities
held by the Fund are subject to changes in market value based upon the
public's perception of changes in the level of interest rates. Generally,
the value of such securities will fluctuate inversely to changes in
interest rates -- i.e., they will appreciate in value when interest rates
decline and decrease in value when interest rates rise. Therefore, if in
order to achieve higher interest income the Fund remains substantially
fully invested at the same time that it has purchased securities on a
"when-issued" basis, there will be a greater possibility of fluctuation in
the Fund's net asset value.
When payment for when-issued securities is due, the Fund will
meet its obligations from then-available cash flow, the sale of segregated
securities, the sale of other securities or, and although it would not
normally expect to do so, from the sale of the when-issued securities
themselves (which may have a market value greater or less than the Fund's
payment obligation). The sale of securities to meet such obligations
carries with it a greater potential for the realization of capital gains,
which are subject to federal income taxes.
Loans of Fund Securities. The Fund has authority to lend its
portfolio securities provided (1) the loan is secured continuously by
collateral consisting of U.S. Government securities or cash or cash
equivalents adjusted daily to make a market value at least equal to the
current market value of these securities loaned; (2) the Fund may at any
time call the loan and regain the securities loaned; (3) the Fund will
receive any interest or dividends paid on the loaned securities; and (4)
the aggregate market value of securities loaned will not at any time
exceed one-third of the total assets of the Fund. In addition, it is
anticipated that the Fund may share with the borrower some of the income
received on the collateral for the loan or that it will be paid a premium
for the loan. In determining whether to lend securities, the Manager
considers all relevant factors and circumstances including the
creditworthiness of the borrower.
Commercial Paper. The Fund may invest in commercial paper issued
in reliance on the so-called "private placement" exemption from
registration afforded by Section 4(2) of the Securities Act of 1933
- 6 -
<PAGE>
("Section 4(2) paper"). Section 4(2) paper is restricted as to
disposition under the federal securities laws and generally is sold to
investors who agree that they are purchasing the paper for an investment
and not with a view to public distribution. Any resale by the purchaser
must be in an exempt transaction. Section 4(2) paper is normally resold to
other investors through or with the assistance of the issuer or investment
dealers who make a market in Section 4(2) paper, thus providing liquidity.
Pursuant to guidelines established by Dreyfus/Laurel's Board of Directors,
the Manager may determine that Section 4(2) paper is liquid for the
purposes of complying with the Fund's investment restriction relating to
investments in illiquid securities.
INVESTMENT LIMITATIONS
The following limitations have been adopted by the Fund. The Fund
may not change any of these fundamental investment limitations or its
investment objective without the consent of: (a) 67% or more of the shares
present at a meeting of shareholders duly called if the holders of more
than 50% of the outstanding shares of the Fund are present or represented
by proxy; or (b) more than 50% of the outstanding shares of the Fund,
whichever is less. The Fund may not:
1. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of such purchase to
be invested in the securities of one or more issuers conducting
their principal activities in the same industry. (For purposes of
this limitation, U.S. Government securities, and state or
municipal governments and their political subdivisions are not
considered members of any industry. ln addition, this limitation
does not apply to investments in domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks).
2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")
except that (a) the Fund may borrow money in an amount not
exceeding one-third of the Fund's total assets at the time of
such borrowings, and (b) the Fund may issue multiple classes of
shares. The purchase or sale of futures contracts and related
options shall not be considered to involve the borrowing of money
or issuance of senior securities.
3. Purchase with respect to 75% of the Fund's total assets
securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities) if, as a result, (a) more than 5% of the
Fund's total assets would be invested in the securities of that
issuer, or (b) the Fund would hold more than 10% of the
outstanding voting securities of that issuer.
4. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such
- 7 -
<PAGE>
loans. For purposes of this limitation debt instruments and
repurchase agreements shall not be treated as loans.
5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the Fund from investing in securities or other
instruments backed by real estate, including mortgage loans, or
securities of companies that engage in real estate business or
invest or deal in real estate or interests therein).
6. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and later disposition of
such securities in accordance with the Fund's investment program
may be deemed an underwriting.
7. Purchase or sell commodities except that the Fund may enter into
futures contracts and related options, forward currency contacts
and other similar instruments.
The Fund may:
Notwithstanding any other fundamental investment policy or
limitation, invest all of its investable assets in securities of
a single open-end management investment company with
substantially the same investment objectives, policies and
limitations as the Fund.
The Fund has adopted the following additional non-fundamental
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.
1. The Fund shall not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amounts to
the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute selling short.
2. The Fund shall not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
3. The Fund shall not purchase oil, gas or mineral leases.
4. The Fund will not purchase or retain the securities of any issuer
if the officers, Directors of the Fund, its advisers, or
managers, owning beneficially more than one half of one percent
of the security of such issuer, together own beneficially more
than 5% of such securities.
- 8 -
<PAGE>
5. The Fund will not purchase securities of issuers (other than
securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof), including their
predecessors, that have been in operation for less than three
years, if by reason thereof, the value of the Fund's investment
in such securities would exceed 5% of the Fund's total assets.
For purposes of this limitation, sponsors, general partners,
guarantors and originators of underlying assets may be treated as
the issuer of a security.
6. The Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements
with remaining maturities in excess of seven days, time deposits
with maturities in excess of seven days and other securities
which are not readily marketable. For purposes of this
limitation, illiquid securities shall not include Section 4(2)
paper and securities which may be resold under Rule 144A under
the Securities Act of 1933, provided that the Board of Directors,
or its delegate, determines that such securities are liquid based
upon the trading markets for the specific security.
7. The Fund may not invest in securities of other investment
companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets and except to the extent
otherwise permitted by the 1940 Act.
8. The Fund shall not purchase any security while borrowings
representing more than 5% of the Fund's total assets are
outstanding.
9. The Fund will not purchase warrants if at the time of such
purchase: (a) more than 5% of the value of the Fund's assets
would be invested in warrants, or (b) more than 2% of the value
of the Fund's assets would be invested in warrants that are not
listed on the New York Stock Exchange ("NYSE") or American Stock
Exchange (for purposes of this limitation, warrants acquired by
the Fund in units or attached to securities will be deemed to
have no value).
10. The Fund will not purchase puts, calls, straddles, spreads and
any combination thereof if by reason thereof the value of its
aggregate investment in such classes of securities would exceed
5% of its total assets except that: (a) this limitation shall not
apply to standby commitments, and (b) this limitation shall not
apply to the Fund's transactions in futures contracts and related
options.
As an operating policy, the Fund will not invest more than 25% of the
value of the Fund's total assets, at the time of such purchase in domestic
banks, including U.S. branches of foreign banks and foreign branches of
U.S. banks. The Board of Directors may change this policy without
- 9 -
<PAGE>
shareholder approval. Notice will be given to shareholders if this policy
is changed by the Board.
CONTROLLING SHAREHOLDERS
The Dreyfus/Laurel Funds. Inc.
------------------------------
Mellon Bank Corporation, a Pennsylvania corporation registered as
a bank holding company under the Bank Holding Company Act of 1956, as
amended, owned of record, through its direct and indirect subsidiaries,
79% of the issued and outstanding voting shares of Dreyfus/Laurel as of
November 30,1994, and is, as a consequence, deemed to be a controlling
shareholder of Dreyfus/Laurel as that term is defined under the 1940 Act.
The address of Mellon Bank Corporation is: Mellon Bank Corporation, Mutual
Fund Department, 3 Mellon Bank Center, Pittsburgh, PA 15259.
DIRECTORS AND OFFICERS
Dreyfus/Laurel has a Board composed of twelve Directors which
supervises Dreyfus/Laurel's investment activities and reviews contractual
arrangements with companies that provide the Fund with services. The
following lists the Directors and officers and their positions with
Dreyfus/Laurel and their present and principal occupations during the past
five years. Each Director who is an "interested person" of
Dreyfus/Laurel, as defined in the 1940 Act, is indicated by an asterisk.
Each of the Directors also serves as a Trustee of The Dreyfus/Laurel Funds
Trust, The Dreyfus/Laurel Investment Series and The Dreyfus/Laurel Tax-
Free Municipal Funds (collectively, The Dreyfus/Laurel Family of Funds").
o + RUTH MARIE ADAMS. Director of The Dreyfus/Laurel Funds, Inc.;
Professor of English and Vice President Emeritus, Dartmouth
College; Senator, United Chapters of Phi Beta Kappa; Trustee,
Woods Hole Oceanographic Institution. Address: 1026 Kendal Lyme
Road, Hanover, New Hampshire 03755.
o + FRANCIS P. BRENNAN. Chairman of the Board of Directors and
Assistant Treasurer of The Dreyfus/Laurel Funds, Inc.; Director
and Chairman, Massachusetts Business Development Corp.; Director,
Boston Mutual Insurance Company; Director and Vice Chairman of
the Board, Home Owners Federal Savings and Loan (prior to May
1990). Address: Massachusetts Business Development Corp., One
Liberty Square, Boston, Massachusetts 02109.
o + JAMES M. FITZGIBBONS. Director of The Dreyfus/Laurel Funds,
Inc.; President and Director, Amoskeag Company; Chairman, Howes
Leather Company, Inc.; Director, Fiduciary Trust Company;
Chairman, CEO and Director, Fieldcrest-Cannon Inc.; Director,
Lumber Mutual Insurance Company; Director, Barrett Resources,
Inc. Address: 40 Norfolk Road, Brookline, Massachusetts 02167.
- 10 -
<PAGE>
o * J. TOMLINSON FORT. Director of The Dreyfus/Laurel Funds, Inc.;
Partner, Reed, Smith, Shaw & McClay (law firm). Address: 204
Woodcock Drive, Pittsburgh, Pennsylvania 15215.
o + ARTHUR L. GOESCHEL. Director of The Dreyfus/Laurel Funds, Inc.;
Director, Chairman of the Board and Director, Rexene Corporation;
Director, Calgon Carbon Corporation; Director, National Picture
Frame Corporation; Chairman of the Board and Director, Tetra
Corporation 1991-1993; Director, Medalist Corporation 1992-1993;
From 1988-1989 Director, Rexene Corporation. Address: Way
Hallow Road and Woodland Road, Sewickley, Pennsylvania 15143.
o + KENNETH A. HIMMEL. Director of The Dreyfus/Laurel Funds, Inc.;
Director, The Boston Company, Inc. and Boston Safe Deposit and
Trust Company; President and Chief Executive Officer, Himmel &
Co., Inc.; Vice Chairman, Sutton Place Gourmet, Inc. and Florida
Hospitality Group; Managing Partner, Himmel/MKDG, Franklin
Federal Partners, Reston Town Center Associates and Grill 23 &
Bar. Address: Himmel and Company, Inc., 101 Federal Street, 22nd
Floor, Boston, Massachusetts 02110.
o + ARCH S. JEFFERY. Director of The Dreyfus/Laurel Funds, Inc.;
Financial Consultant. Address: 1817 Foxcroft Lane, Allison
Park, Pennsylvania 15101.
o + STEPHEN J. LOCKWOOD. Director of The Dreyfus/Laurel Funds, Inc.;
President and CEO, LDG Management Company Inc.; CEO, LDG
Reinsurance Underwriters, SRRF Management Inc. and Medical
Reinsurance Underwriters Inc. Address: 401 Edgewater Place,
Wakefield, Massachusetts 01880.
o + ROBERT D. MCBRIDE. Director of The Dreyfus/Laurel Funds, Inc.;
Director, Chairman and CEO, McLouth Steel; Director, Salem
Corporation. Director, SMS/Concast, Inc. (1983-1991). Address:
15 Waverly Lane, Grosse Pointe Farms, Michigan 48236.
o + JOHN L. PROPST. Director of The Dreyfus/Laurel Funds, Inc.; Of
Counsel, Reed, Smith, Shaw & McClay (law firm). Address: 5521
Dunmoyle Street, Pittsburgh, Pennsylvania 15217.
o + JOHN J. SCIULLO. Director of The Dreyfus/Laurel Funds, Inc.;
Dean Emeritus and Professor of Law, Duquesne University Law
School; Director, Urban Redevelopment Authority of Pittsburgh.
Address: 321 Gross Street, Pittsburgh, Pennsylvania 15224
o + ROSLYN M. WATSON. Director of The Dreyfus/Laurel Funds, Inc.;
Principal, Watson Ventures, Inc., prior to February, 1993; Real
Estate Development Project Manager and Vice President, The Gunwyn
Company. Address: 25 Braddock Park, Boston, Massachusetts 02116-
5816.
- 11 -
<PAGE>
# MARIE E. CONNOLLY. President and Treasurer of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Investment Series, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free
Municipal Funds (since September 1994); Vice President of The
Dreyfus/Laurel Funds, Inc. (March 1994 to September 1994);
President, Funds Distributor, Inc. (since 1992); Treasurer, Funds
Distributor, Inc. (July 1993 to April 1994); COO, Funds
Distributor, Inc. (since April 1994); Director, Funds
Distributor, Inc. (since July 1992); President, COO and Director,
Premier Mutual Fund Services, Inc. (since April 1994); Senior
Vice President and Director of Financial Administration, The
Boston Company Advisors, Inc. (December 1988 to May 1993).
Address: One Exchange Place, Boston, Massachusetts 02109.
# FREDERICK C. DEY. Vice President of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Funds Trust and The Dreyfus/Laurel Tax-Free Municipal Funds
(since September 1994); Senior Vice President, Premier Mutual
Fund Services, Inc. (since August 1994); Vice President, Funds
Distributor, Inc. (since August 1994); Fundraising Manager, Swim
Across America (October 1993 to August 1994); General Manager,
Spring Industries (August 1988 to October 1993). Address: Premier
Mutual Fund Services, Inc., 200 Park Avenue New York, New York
10166.
# ERIC B. FISCHMAN. Vice President of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Funds Trust and The Dreyfus/Laurel Tax-Free Municipal Funds
(since September 1994); Vice President and Associate General
Counsel, Premier Mutual Fund Services, Inc. (Since August 1994);
Vice President and Associate General Counsel, Funds Distributor,
Inc. (since August 1994); Staff Attorney, Federal Reserve Board
(September 1992 to June 1994); Summer Associate, Venture
Economics (May 1991 to September 1991); Summer Associate, Suffolk
County District Attorney (June 1990 to August 1990). Address:
Premier Mutual Fund Services, Inc., 200 Park Avenue, New York,
New York 10166.
RICHARD W. HEALEY. Vice President of The Dreyfus/Laurel Funds
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Tax-Free Municipal Funds Trust and The Dreyfus/Laurel Funds Trust
(since March 1994); Senior Vice President, Funds Distributor,
Inc. (since March 1993); Vice President, The Boston Company Inc.,
(March 1993 to May 1993); Vice President of Marketing, Calvert
Group (1989 to March 1993); Fidelity Investments (prior to 1989).
Address: One Exchange Place, Boston, Massachusetts 02109.
# JOHN E. PELLETIER. Vice President and Secretary of The
Dreyfus/Laurel Funds, Inc.; The Dreyfus/Laurel Investment Series,
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free
Municipal Funds (since September 1994); Senior Vice President,
General Counsel and Secretary, Funds Distributor, Inc. (since
- 12 -
<PAGE>
April 1994); Senior Vice President, General Counsel and
Secretary, Premier Mutual Fund Services, Inc. (since August
1994); Counsel, The Boston Company Advisors, Inc. (February 1992
to March 1994); Associate, Ropes & Gray (August 1990 to February
1992); Associate, Sidley & Austin (June 1989 to August 1990).
Address: One Exchange Place, Boston, Massachusetts 02109.
_________________________
* "Interested person" of The Dreyfus/Laurel Funds, Inc., as defined
in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
# Officer also serves as an officer for other investment companies
advised by The Dreyfus Corporation.
The officers and Directors of Dreyfus/Laurel as a group owned
beneficially less than 1% of the total shares of the Fund outstanding as
of December 1, 1994.
No officer or employee of Premier (or of any parent or subsidiary
thereof) receives any compensation from Dreyfus/Laurel for serving as an
officer or Director of Dreyfus/Laurel. In addition, no officer or employee
of The Dreyfus Corporation (or of any parent or subsidiary thereof) serves
as an officer or Director of Dreyfus/Laurel. The Dreyfus/Laurel Family of
Funds pays each Trustee/Director who is not an officer or employee of
Premier or any of its affiliates, $27,000 per annum (and an additional
$75,000 for the Chairman of the Board of Directors/Trustees of The
Dreyfus/Laurel Family of Funds). In addition, The Dreyfus/Laurel Family
of Funds pays each Trustee/Director $ 1,000 per joint Dreyfus/Laurel
Family of Funds meeting attended, plus $750 per joint Dreyfus/Laurel
Family of Funds Audit Committee meeting attended, and reimburses each
Trustee/Director for travel and out-of-pocket expenses. For the year
ended December 31, 1993 the fees for meetings and expenses totaled
$79,598.
INVESTMENT MANAGEMENT AND OTHER SERVICES
Advisory Services. The Dreyfus Corporation ("Dreyfus") serves as
the investment manager (the "Manager") for the Funds pursuant to an
Investment Management Agreement with Dreyfus/Laurel dated April 4, 1994
("Management Agreement"), transferred from Mellon Bank, N.A. (One Mellon
Bank Center, Pittsburgh, PA 15258) ("Mellon Bank"), to Dreyfus effective
October 17, 1994. Dreyfus is a wholly-owned subsidiary of Mellon Bank.
Pursuant to the Investment Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide investment advisory,
administrative, custody, fund accounting and transfer agency service to
the Fund. As Manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objective, policies and
restrictions. For these services, the Fund pays a fee to Dreyfus at the
rates stated in the Prospectus.
- 13 -
<PAGE>
The Fund commenced operations on April 6, 1994. For the fiscal
period ended October 31, 1994, the Fund paid total management fees of
$2,415.
Distribution and Shareholder Services Plan. The SEC has adopted Rule
12b-1 under the 1940 Act (the "Rule") regulating the circumstances under
which investment companies such as Dreyfus/Laurel may, directly or
indirectly, bear the expenses of distributing their shares. The Rule
defines distribution expenses to include expenditures for "any activity
which is primarily intended to result in the sale of fund shares." The
Rule, among other things, provides that an investment company may bear
such expenses only pursuant to a plan adopted in accordance with the Rule.
With respect to the Investor Class shares of the Fund, Dreyfus/Laurel has
adopted a Distribution Plan ("Plan"), and may enter into Selling
Agreements with Service Agents pursuant to the Plan.
Under the Plan, Investor Class shares of the Fund may spend
annually up to 0.25% of the average of its net asset values for costs and
expenses incurred in connection with the distribution of, and shareholder
servicing with respect to, the Fund's Investor Class shares.
The Plan provides that a report of the amounts expended under the
Plan, and the purposes for which such expenditures were incurred, must be
made to Dreyfus/Laurel Directors for their review at least quarterly. In
addition, the Plan provides that it may not be amended to increase
materially the costs which the Fund may bear for distribution pursuant to
the Plan without approval of the Fund's shareholders, and that other
material amendments of the Plan must be approved by the vote of a majority
of the Directors and of the Directors who are not "interested persons" of
Dreyfus/Laurel (as defined in the 1940 Act) and who do not have any direct
or indirect financial interest in the operation of the Plan, cast in
person at a meeting called for the purpose of considering such amendments.
The Plan is subject to annual approval by the entire Board of Directors
and by the Directors who are neither interested persons nor have any
direct or indirect financial interest in the operation of the Plan, by
vote cast in person at a meeting called for the purpose of voting on the
Plan. The Plan is terminable, as to a class of shares, at any time by
vote of a majority of the Directors who are not interested persons and
have no direct or indirect financial interest in the operation of the Plan
or by vote of the holders of a majority of the outstanding shares of such
class of the Fund.
The Distributor; Sub-Administrator. Premier Mutual Fund
Services, Inc., One Exchange Place, Boston, Massachusetts 02109, a wholly-
owned subsidiary of Institutional Administration Services, Inc., serves as
the Fund's distributor pursuant to an agreement with Dreyfus effective
October 17, 1994. Premier also acts as distributor for other funds in The
Dreyfus/Laurel Family of Funds and for certain other investment companies.
Premier also serves as Sub-Administrator ("Sub-Administrator") to the
Funds pursuant to a Sub-Administration Agreement effective October, 17,
1994.
- 14 -
<PAGE>
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period when the
NYSE is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the SEC 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 SEC by order
may permit to protect the Fund's shareholders.
Redemption Commitment. The Fund has committed itself to pay in
cash all redemption requests by any shareholder of record of the Fund,
limited in amount during any 90-day period to the lesser of $250,000 or 1%
of the value of the Fund's net assets at the beginning of such period.
Such commitment is irrevocable without the prior approval of the SEC. In
the case of requests for redemption in excess of such amount, the Board of
Directors reserves the right to make payments in whole or in part in
securities or other assets 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 this event, the securities would be valued
in the same manner as the Fund's portfolio is valued. If the recipient
sold such securities, brokerage charges would be incurred.
Custodian, Fund Accountant. Mellon Bank serves as Custodian and
Fund Accountant with respect to the Fund. Mellon Bank provides portfolio
and shareholder recordkeeping required for regulatory and financial
reporting purposes. Mellon Bank, as Custodian and Fund Accountant, has no
part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Prior to the effectiveness of the Management Agreement, for its
services as custodian and fund accountant Mellon Bank was paid an annual
fee of $30,000 per portfolio and, for all portfolios, an annual
administrative account maintenance fee of $ 10,000, an annual on-line fee
of $3,600, an asset-based fee of .02% of the first $500 million of
Dreyfus/Laurel's net assets and .01% of net assets over $500 million, plus
a specified transaction fee for each transaction.
Transfer and Dividend Disbursing Agent. The Shareholder Services
Group, Inc. ("TSSG"), a subsidiary of First Data Corporation, is the
Fund's transfer and dividend disbursing agent. TSSG has no part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
FEDERAL LAW AFFECTING MELLON BANK
The Glass-Steagall Act of 1933 prohibits national banks from
engaging in the business of underwriting, selling or distributing
securities and prohibits a member bank of the Federal Reserve System from
having certain affiliations with an entity engaged principally in the
business. The activities of Mellon Bank in informing its customers of,
and performing, investment and redemption services in connection with the
Fund, and in providing services to the Fund as custodian and fund
- 15 -
<PAGE>
accountant, as well as Dreyfus' investment advisory activities, may raise
issues under these provisions. Mellon Bank has been advised by counsel
that its activities contemplated under this arrangement are consistent
with Mellon Bank's statutory and regulatory obligations.
Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of such future statutes and regulations could prevent
Mellon Bank or Dreyfus from continuing to perform all or a part of the
above services for its customers and/or the Fund. If Mellon Bank or
Dreyfus were prohibited from serving the Fund in any of its present
capacities the Directors would seek an alternative provider(s) of such
services.
PORTFOLIO TRANSACTIONS
All portfolio transactions of the Fund are placed on behalf of
the Fund by the Manager. Debt securities purchased and sold by the Fund
are generally traded on a net basis (i.e., without commission) through
dealers acting for their own account and not as brokers, or otherwise
involve transactions directly with the issuer of the instrument. This
means that a dealer (the securities firm or bank dealing with the Fund)
makes a market for securities by offering to buy at one price and sell at
a slightly higher price. The difference between the prices is known as a
spread. Other portfolio transactions may be executed through brokers
acting as agent. The Fund will pay a spread or commissions in connection
with such transactions. The Manager uses its best efforts to obtain
execution of portfolio transactions at prices which are advantageous to
the Fund and at spreads and commission rates, if any, which are reasonable
in relation to the benefits received. The Manager also places
transactions for other accounts that it provides with investment advice.
Brokers and dealers involved in the execution of portfolio
transactions on behalf of the Fund are selected on the basis of their
professional capability and the value and quality of their services. In
selecting brokers or dealers, the Manager will consider various relevant
factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to
be purchased or sold; the execution efficiency, settlement capability, and
financial condition of the broker-dealer; the broker-dealer's execution
services rendered on a continuing basis; and the reasonableness of any
spreads (or commissions, if any). Any spread, commission, fee or other
remuneration paid to an affiliated broker-dealer is paid pursuant to
Dreyfus/Laurel's procedures adopted in accordance with Rule 17e-1 of the
1940 Act.
Brokers or dealers may be selected who provide brokerage and/or
research services to the Fund and/or other accounts over which the Manager
or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; the availability of
- 16 -
<PAGE>
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement).
The receipt of research services from broker-dealers may be
useful to the Manager in rendering investment management services to the
Fund and/or its other clients; and, conversely, such information provided
by brokers or dealers who have executed transaction orders on behalf of
other clients of the Manager may be useful to these organizations in
carrying out their obligations to the Fund. The receipt of such research
services does not reduce these organizations' normal independent research
activities; however, it enables these organizations to avoid the
additional expenses which might otherwise be incurred if these
organizations were to attempt to develop comparable information through
their own staffs.
The Directors periodically review the Manager's performance of
its responsibilities in connection with the placement of portfolio
transactions on behalf of the Fund and review the prices paid by the Fund
over representative periods of time to determine if they are reasonable in
relation to the benefits to the Fund.
Although the Manager manages other accounts in addition to the
Fund, investment decisions for the Fund are made independently from
decisions made for these other accounts. It sometimes happens that the
same security is held by more than one of the accounts managed by the
Manager. Simultaneous transactions may occur when several accounts are
managed by the same investment adviser, particularly when the same
investment instrument is suitable for the investment objective of more
than one account.
When more than one account is simultaneously engaged in the
purchase or sale of the same investment instrument, the prices and amounts
are allocated in accordance with a formula considered by the Manager to be
equitable to each account. In some cases this system could have a
detrimental effect on the price or volume of the investment instrument as
far as the Fund is concerned. In other cases, however, the ability of the
Fund to participate in volume transactions will produce better executions
for the Fund. While the Directors will continue to review simultaneous
transactions, it is their present opinion that the desirability of
retaining the Manager as investment adviser to the Fund outweighs any
disadvantages that may be said to exist from exposure to simultaneous
transactions.
For the period ended October 31, 1994, the Fund paid no brokerage
commissions.
Portfolio Turnover. The portfolio turnover rate for the Fund is
calculated by dividing the lesser of the Fund's annual sales or purchases
of portfolio securities (exclusive of purchases and sales of securities
- 17 -
<PAGE>
whose maturities at the time of acquisition were one year or less) by the
monthly average value of securities in the Fund during the year. The Fund
commenced operations on April 6, 1994, and its portfolio turnover rate for
the period ended October 31, 1994 was 0%.
NET ASSET VALUE
The Fund's net asset value per share is calculated on each
business day. A business day is any day on which the NYSE is open for
business. The Fund determines net asset value as of the close of business
of the regular session of the NYSE (currently 4:00 p.m. Eastern time).
Securities listed or traded on a stock exchange are valued at the
latest sale price. If no sale is reported, the mean of the latest bid and
asked prices is used. Securities traded over-the-counter are priced at the
mean of the latest bid and asked prices but will be valued at the last
sale price if required by regulations of the SEC. When market quotations
are not readily available, securities and other assets are valued at fair
value as determined in good faith in accordance with procedures
established by the Board of Directors.
Bonds are valued through valuations obtained from a commercial
pricing service or at the most recent mean of the bid and asked prices
provided by investment dealers in accordance with procedures established
by the Board of Directors.
PERFORMANCE CALCULATIONS
The Fund computes average annual total return by using a
standardized method required by the SEC Average annual total return is
computed by finding the average annual compounded rates of return on a
hypothetical initial investment of $1,000 over the periods that would
equate the initial amount invested to the ending redeemable value,
according to the following formula:
n
P(1+T) = ERV
Where: P = $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value of a $1,000 payment made
at the beginning of the 1, 5 or 10 year periods
at the end of the year or period.
The calculation assumes (1) the deduction of the maximum sales
load (and any other charges deducted, if any, from payment) and all
recurring fees that are charged to all shareholder accounts, and (2) the
reinvestment of all dividends and other distributions by the Fund at the
price stated in the Prospectus on the reinvestment dates during the
period.
- 18 -
<PAGE>
The Fund may also advertise yields from time to time. Yields are
computed by using standardized methods of calculation required by the SEC.
Yields are calculated by dividing the net investment income per share
earned during a 30-day (or one month) period by the maximum offering price
per share on the last day of the period, according to the following
formula:
6
YIELD = 2[(a-b+1) -1]
cd
Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of
reimbursements);
c = average daily number of shares outstanding during
the period that were entitled to receive
dividends; and
d = the maximum offering price per share on the last
day of the period.
Performance information for the Fund may be compared, in reports
and promotional literature, to indexes including, but not limited to: (i)
the Morgan Stanley European Index; (ii) the Standard & Poor's 500
Composite Stock Price Index ("S&P 500"), the Dow Jones Industrial Average
("DJIA"), or other appropriate unmanaged domestic or foreign indices of
performance of various types of investments so that investors may compare
the Fund's results with those of indices widely regarded by investors as
representative of the securities markets in general; (iii) other groups of
mutual funds tracked by Lipper Analytical Services, a widely used
independent research Firm which ranks mutual funds by overall performance,
investment objectives and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or
other criteria; (iv) the Consumer Price Index (a measure of inflation) to
assess the real rate of return from an investment in the Fund; and (v)
products managed by a universe of money managers with similar country
allocation and performance objectives. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions or
administrative and management costs and expenses.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by a
government agency.
General. To qualify for treatment as a regulated investment
company ("RIC") under the Internal Revenue Code of 1986, as amended
("Code"), the Fund -- which is treated as a separate corporation for
federal tax purposes-- must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income
(generally consisting of net investment income, net short-term capital
gain and net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional
- 19 -
<PAGE>
requirements. These requirements include the following: (1) the Fund
must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of securities or foreign currencies, or
other income (including gains from options, futures, or forward contracts)
derived with respect to its business of investing in securities or those
currencies ("Income Requirement"); (2) the Fund must derive less than 30%
of its gross income each taxable year from the sale or other disposition
of securities, or any of the following, that were held for less than three
months - options or futures (other than those on foreign currencies), or
foreign currencies (or options, futures or forward contacts thereon) that
are not directly related to the Fund's principal business of investing in
securities (or options and futures with respect thereto) ("Short-Short
Limitation"); (3) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash
and cash items, U.S. government securities, securities of other RICs and
other securities, with those other securities limited, in respect of any
one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets and that does not represent more than 10% of the
issuer's outstanding voting securities; and (4) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value its
total assets may be invested in securities (other than U.S. government
securities or securities of other RICs) of any one issuer.
Dividends and other distributions declared by the Fund in
October, November or December of any year and payable to shareholders of
record on a date in any of those months are deemed to have been paid by
the Fund and received by the shareholders on December 31 of that year if
the distributions are paid by the Fund during the following January.
Accordingly, those distributions will be taxed to the shareholders for the
year in which that December 31 falls.
If Fund shares are sold at a loss after being held six months or
less, the loss will be treated as a long-term, instead of short-term,
capital loss to the extent of capital gain distributions on those shares.
Investors also should be aware that if shares are purchased shortly before
the record date for any dividend or other distribution, the shareholder
will pay full price for the shares and receive some portion of the price
back as a taxable distribution.
If the Fund retains net capital gain (the excess of net long-term
capital gain over net short-term capital loss) for reinvestment, although
it has no plans to do so, it may elect to treat such amounts as having
been distributed to its shareholders. As a result, the shareholders would
be subject to tax on the undistributed net capital gain, would be able to
claim their proportionate share of the federal income tax paid by the Fund
on that gain as a credit against their own federal income tax liabilities,
and would be entitled to an increase in their basis for their Fund shares.
Foreign Shareholders - U.S. Federal Income Taxation. U.S.
federal income taxation of a shareholder who, as to the United States, is
a non-resident alien individual, a foreign trust or estate, a foreign
- 20 -
<PAGE>
corporation or a foreign partnership (a "foreign shareholder") depends on
whether the income from the Fund is "effectively connected" with a U.S.
trade or business carried on by the shareholder, as discussed generally
below. Special U.S. federal income tax rules that differ from those
described below may apply to certain foreign persons who invest in the
Fund. For example, the tax consequences to a foreign shareholder entitled
to claim the benefits of an applicable tax treaty may be different from
those described below. Foreign shareholders are advised to consult their
own tax advisers with respect to the particular tax consequences to them
of an investment in the Fund.
Foreign Shareholders - Income Not Effectively Connected. If a
foreign shareholder's income from the Fund is not effectively connected
with a U.S. trade or business carried on by the foreign shareholder,
distributions of the Fund's investment company taxable income generally
will be subject to U.S. federal withholding tax of 30% (or lower treaty
rate) on the gross amount of the distribution. Foreign shareholders also
may be subject to U.S. federal withholding tax on deemed income resulting
from any Election made by the Fund regarding foreign taxes paid by it as
paid by its shareholders (see discussion above), but foreign shareholders
will not be able to claim a credit or deduction for the foreign taxes
treated as having been paid by them.
Capital gains realized by foreign shareholders on the sale of
Fund shares and distributions to them of net capital gain, as well as
amounts retained by the Fund that are designated as undistributed capital
gains, generally will not be subject to federal income tax unless the
foreign shareholder is a non-resident alien individual and is physically
present in the United States for more than 182 days during the taxable
year. However, this rule only applies in exceptional cases, because any
individual present in the United States for more than 182 days during the
taxable year generally is treated as a resident for federal income tax
purposes on his worldwide income at the graduated rates applicable to U.S.
citizens, rather than the 30% federal withholding tax rate. In the case
of certain foreign shareholders, the Fund may be required to withhold
federal income tax at a rate of 31% from capital gain distributions and
the gross proceeds from a redemption of Fund shares unless the shareholder
furnishes the Fund with a certificate regarding the shareholder's foreign
status.
Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's income from the Fund is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that
shareholder on the disposition of Fund shares will be subject to federal
income tax at the graduated rates applicable to U.S. citizens or domestic
corporations, as the case may be. Foreign shareholders also may be
subject to the branch profits tax.
Foreign Shareholders - Estate Tax. Foreign individuals generally
are subject to U.S. federal estate tax on their U.S. situs property, such
as shares of the Fund, that they own at the time of their death. Certain
- 21 -
<PAGE>
credits against that tax and relief under applicable tax treaties may be
available.
State and Local Taxes. Depending upon the extent of the Fund's
activities in states and localities in which its offices are maintained,
in which its agents or independent contractors are located or in which it
is otherwise deemed to be conducting business, the Fund may be subject to
the tax laws of such states or localities. Shareholders are advised to
consult their tax advisers concerning the application of state and local
taxes.
Pennsylvania Personal Property Tax Exemption. Dreyfus/Laurel has
obtained a Certificate of Authority to do business as a foreign
corporation in Pennsylvania. In the opinion of counsel, shares of the
Fund are exempt from Pennsylvania personal property taxes.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended October 31,
1994, including notes to the financial statements and supplementary
information and the Report of Independent Auditors, are included in the
Annual Report to shareholders. A copy of the Annual Report accompanies
this Statement of Additional Information. The financial statements from
the Annual Report, including the notes thereto and report of independent
auditors, are incorporated herein by reference.
OTHER INFORMATION
Auditor. KPMG Peat Marwick LLP was appointed by the Directors to
serve as the Fund's independent auditors for the year ending October 31,
1994, providing audit services including (1) examination of the annual
financial statements, (2) assistance, review and consultation in
connection with the SEC and (3) review of the annual federal income tax
return and the Pennsylvania excise tax return filed on behalf of The
Dreyfus/Laurel Funds, Inc.
Legal Counsel. Kirkpatrick & Lockhart, 1800 M Street, N.W., South
Lobby - 9th Floor, Washington, D.C. 20036, has passed upon the legality of
the shares offered by the Prospectus and this Statement of Additional
Information.
- 22 -
<PAGE>
APPENDIX
DESCRIPTION OF SECURITIES RATINGS
Debt Instruments Ratings
------------------------
Moody's Investors Service. Inc. (Moody's):
-----------------------------------------
Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt-edge." Interest payments are protected by a
large or exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what are
generally 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 considered "upper medium grade obligations."
Those Bonds in the Aa and A group which Moody's believes possess
the strongest investment attributes are designated by the symbols Aa 1 and
A 1.
Standard & Poor's Ratings Group ("S&P"):
---------------------------------------
AAA -- This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA -- Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and in
the majority of instances they differ from AAA issues only in small
degree.
A -- Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions.
Plus (+) or Minus (-): The AA rating may be modified by the
addition of a plus or minus sign to show relative standing within the AA
rating category.
- 23 -
<PAGE>
Commercial Paper Ratings
------------------------
Moody's:
--------
Commercial paper rated Prime by Moody's is based upon its
evaluation of many factors, including: (1) management of the issuer; (2)
the issuer's industry or industries and the speculative-type risks which
may be inherent in certain areas; (3) the issuer's products in relation to
competition and customer acceptance; (4) liquidity; (5) amount and quality
of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which exist
with the issue; and (8) recognition by the management of obligations which
may be present or may arise as a result of public interest questions and
preparations to meet such obligations. Relative differences in these
factors determine whether the issuer's commercial paper is rated Prime-l,
Prime-2, or Prime-3.
Prime-1 indicates a superior capacity for repayment of short-term
promissory obligations. Prime-l repayment capacity will normally be
evidenced by the following characteristics: (1) leading market positions
in well established industries; (2) high rates of return on funds
employed; (3) conservative capitalization structures with moderate
reliance on debt and ample asset protection; (4) broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
(5) well established access to a range of financial markets and assured
sources of alternative liquidity.
Prime-2 indicates a strong capacity for repayment of short-term
promissory obligations. This will normally 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 alternative liquidity is
maintained.
S&P:
----
Commercial paper rated by S&P has the following characteristics:
liquidity ratios are adequate to meet cash requirements. Long-term senior
debt is rated A or better. The issuer has access to at least two
additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is rated A-l, A-2, or A-3.
A-1 -- This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
- 24 -
<PAGE>
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign 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.
Fitch's Investors Service. Inc. ("Fitch"):
-----------------------------------------
Commercial paper rated by Fitch reflects Fitch's current
appraisal of the degree of assurance of timely payment of such debt. An
appraisal results in the rating of an issuer's paper as F-l, F-2, F-3, or
F-4.
F-1 -- This designation indicates that the commercial paper is
regarded as having the strongest degree of assurance for timely payment.
F-2 -- Commercial paper issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than those issues
rated F-l.
Duff and Phelps, Inc.:
---------------------
Duff & Phelps' short-term ratings are consistent with the rating
criteria utilized by money market participants. The ratings apply to all
obligations with maturities of under one year, including commercial paper,
the uninsured portion of certificates of deposit, unsecured bank loans,
master notes, bankers' acceptances, irrevocable letters of credit, and
current maturities of long-term debt. Asset-backed commercial paper is
also rated according to this scale.
Emphasis is placed on liquidity which is defined as not only cash
from operations, but also access to alternative sources of funds including
trade credit, bank lines, and the capital markets. An important
consideration is the level of an obligor's reliance on short-term funds on
an ongoing basis.
The distinguishing feature of Duff & Phelps' short-term ratings
is the refinement of the traditional '1' category. The majority of
short-term debt issuers carry the highest rating, yet quality differences
exist within that tier. As a consequence, Duff & Phelps has incorporated
gradations of '1+' (one plus) and '1-' (one minus) to assist investors in
recognizing those differences.
Duff 1+ --Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just below
risk-free U.S. Treasury short-term obligations.
- 25 -
<PAGE>
Duff 1 --Very high certainty of timely payment. Liquidity factors
are excellent and supported by good fundamental protection factors. Risk
factors are minor.
Duff 1- --High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors. Risk factors
are very small.
Good Grade
Duff 2--Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk
factors are small.
Satisfactory Grade
Duff 3--Satisfactory liquidity and other protection factors
qualify issue as to investment grade. Risk factors are larger and subject
to more variation. Nevertheless, timely payment is expected.
Non-Investment Grade
Duff 4--Speculative investment characteristics. Liquidity is not
sufficient to ensure against disruption in debt service. Operating factors
and market access may be subject to a high degree of variation.
Default
Duff 5--Issuer failed to meet scheduled principal and/or interest
payments.
IBCA, Inc.:
----------
In addition to conducting a careful review of an institution's
reports and published figures, IBCA's analysts regularly visit the
companies for discussions with senior management. These meetings are
fundamental to the preparation of individual reports and ratings. To keep
abreast of any changes that may affect assessments, analysts maintain
contact throughout the year with the management of the companies they
cover.
IBCA's analysts speak the languages of the countries they cover,
which is essential to maximize the value of their meetings with management
and to properly analyze a company's written materials. They also have a
thorough knowledge of the laws and accounting practices that govern the
operations and reporting of companies within the various countries.
Often, in order to ensure a full understanding of their position,
companies entrust IBCA with confidential data. While these data cannot be
disclosed in reports, they are taken into account when assigning our
- 26 -
<PAGE>
ratings. Before dispatch to subscribers, a draft of the report is
submitted to each company to permit correction of any factual errors and
to enable clarification of issues raised.
IBCA's Rating Committees meet at regular intervals to review all
ratings and to ensure that individual ratings are assigned consistently
for institutions in all the countries covered. Following the Committee
meetings, ratings are issued directly to subscribers. At the same time,
the company is informed of the ratings as a matter of courtesy, but not
for discussion.
A1+--Obligations supported by the highest capacity for timely
repayment.
A1--Obligations supported by a very strong capacity for timely
repayment.
A2--Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
B1--Obligations supported by an adequate capacity for timely
repayment. Such capacity is more susceptible to adverse changes in
business, economic, or financial conditions than for obligations in higher
categories.
B2--Obligations for which the capacity for timely repayment is
susceptible to adverse changes in business, economic or financial
conditions.
C1--Obligations for which there is an inadequate capacity to
ensure timely repayment.
D1--Obligations which have a high risk of default or which are
currently in default.
- 27 -
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
January 5, 1995
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
THE DREYFUS/LAUREL FUNDS, INC.
200 Park Avenue
New York, NY 10166
For information call 1-800-548-2868
Dreyfus International Equity Allocation Fund (the "Fund") is a
portfolio of The Dreyfus/Laurel Funds, Inc. (formerly The Laurel Funds,
Inc.) ("Dreyfus/Laurel"), an open-end diversified management company that
offers shares of common stock of the Fund. Shares of the Fund are offered
without sales commissions.
This Statement of Additional Information is not a prospectus and
should be read only in conjunction with the Fund's current prospectus,
dated January 5, 1995. A copy of the Prospectus is available from Premier
Mutual Fund Services, Inc. ("Premier"), One Exchange Place, Boston, MA
02109.
<PAGE>
TABLE OF CONTENTS
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . 3
INVESTMENT INFORMATION AND RISK FACTORS . . . . . . . . . . 3
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . 8
CONTROLLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . 11
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . 11
DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . 11
INVESTMENT MANAGEMENT AND OTHER SERVICES . . . . . . . . . . 15
FEDERAL LAW AFFECTING MELLON BANK . . . . . . . . . . . . . 17
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . 18
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 20
PERFORMANCE CALCULATIONS . . . . . . . . . . . . . . . . . . 21
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES . . . . . . . . . . 22
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 27
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 27
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2
<PAGE>
GENERAL INFORMATION
Dreyfus/Laurel's name was changed from The Laurel Funds, Inc. to
The Dreyfus/Laurel Funds, Inc. effective October 17, 1994. The name of
the Fund also was changed from Laurel International Equity Allocation Fund
to Dreyfus International Equity Allocation Fund effective October 17,
1994.
INVESTMENT INFORMATION AND RISK FACTORS
Government Obligations. The Fund may invest in a variety of U.S.
Treasury obligations, which differ only in their interest rates,
maturities and times of issuance: (a) U.S. Treasury bills have a maturity
of one year or less, (b) U.S. Treasury notes that have maturities of one
to ten years, and (c) U.S. Treasury bonds generally have maturities of
greater than ten years.
In addition to U.S. Treasury obligations, the Fund may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the
full faith and credit of the U.S. Treasury (such as Government National
Mortgage Association ("GNMA") participation certificates), (b) the right
of the issuer to borrow an amount limited to a specific line of credit
from the U.S. Treasury, (c) discretionary authority of the U.S. Government
agency or instrumentality, or (d) the credit of the instrumentality.
(Examples of agencies and instrumentalities are: Federal Land Banks,
Federal Housing Administration, Farmers Home Administration, Export-Import
Bank of the United States, Central Bank for Cooperatives, Federal
Intermediate Credit Banks, Federal Home Loan Banks, General Services
Administration, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Inter-American Development Bank, Asian-
American Development Bank, Student Loan Marketing Association,
International Bank of Reconstruction and Development and Federal National
Mortgage Association ("FNMA")). No assurance can be given that the U.S.
Government will provide financial support to such U.S. Government agencies
or instrumentalities described in (b), (c) and (d) in the future, other
than set forth above, since it is not obligated to do so by law.
Repurchase Agreements. The Fund may enter into repurchase
agreements with U.S. Government securities dealers recognized by the
Federal Reserve Board, with member banks of the Federal Reserve System, or
with such other brokers or dealers that meet the credit guidelines of the
Board of Directors. In a repurchase agreement, the Fund buys a security
from a seller that has agreed to repurchase the same security at a
mutually agreed upon date and price. The Fund's resale price will be in
excess of the purchase price, reflecting an agreed upon interest rate.
This interest rate is effective for the period of time the Fund is
invested in the agreement and is not related to the coupon rate of the
underlying security. Repurchase agreements may also be viewed as a fully
collateralized loan of money by the Fund to the seller. The period of
these repurchase agreements will usually be short, from overnight to one
week, and at no time will the Fund invest in repurchase agreements for
3
<PAGE>
more than one year. The Fund will always receive as collateral securities
whose market value including accrued interest is, and during the entire
term of the agreement remains, at least equal to 100% of the dollar amount
invested by the Fund in each agreement, and the Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer to the account of the Custodian. If the seller defaults, the
Fund might incur a loss if the value of the collateral securing the
repurchase agreement declines and might incur disposition costs in
connection with liquidating the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of a security which
is the subject of a repurchase agreement, realization upon the collateral
by the Fund may be delayed or limited. The Manager seeks to minimize the
risk of loss through repurchase agreements by analyzing the
creditworthiness of the obligors under repurchase agreements, in
accordance with the credit guidelines of the Board of Directors. No more
than 5% of the Fund's net assets will be invested in repurchase agreements
at any one time.
When-Issued Securities. New issues of U.S. Treasury and
Government securities are often offered on a when-issued basis. This
means that delivery and payment for the securities normally will take
place approximately 7 to 15 days after the date the buyer commits to
purchase them. The payment obligation and the interest rate that will be
received on securities purchased on a when-issued basis are each fixed at
the time the buyer enters into the commitment. The Fund will make
commitments to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
or dispose of the commitment before the settlement date if it is deemed
advisable as matter of investment strategy. Cash or marketable high grade
debt securities equal to the amount of the above commitments will be
segregated on the Fund's records. For the purpose of determining the
adequacy of these securities the segregated securities will be valued at
market. If the market value of such securities declines, additional cash
or securities will be segregated on the Fund's records on a daily basis so
that the market value of the account will equal the amount of such
commitments by the Fund.
Securities purchased on a when-issued basis and the securities
held by the Fund are subject to changes in market value based upon the
public's perception of changes in the level interest rates. Generally,
the value of such securities will fluctuate inversely to changes in
interest rates -- i.e., they will appreciate in value when interest rates
decline and decrease in value when interest rates rise. Therefore, if in
order to achieve higher interest income the Fund remains substantially
fully invested at the same time that it has purchased securities on a
"when issued" basis, there will be a greater possibility of fluctuation in
the Fund's net asset value.
When payment for when-issued securities is due, the Fund will
meet its obligation from then-available cash flow, the sale of segregated
securities, the sale of other securities, or and although it would not
normally expect to do so, from the sale of the when-issued securities
themselves (which may have a market value greater or less than the Fund's
4
<PAGE>
payment obligation). The sale of securities to meet such obligations
carries with it a greater potential for the realization of capital gains,
which are subject to federal income taxes.
Loans of Fund Securities. The Fund has authority to lend its
portfolio securities provided (1) the loan is secured continuously by
collateral consisting of U.S Government securities or cash or cash
equivalents adjusted daily to make a market value at least equal to the
current market value of these securities loaned; (2) the Fund may at any
time call the loan and regain the securities loaned; (3) the Fund will
receive any interest or dividends paid on the loaned securities; and (4)
the aggregate market value of securities loaned will not at any time
exceed one-third of the total assets of the Fund. In addition, it is
anticipated that the Fund may share with the borrower some of the income
received on the collateral for the loan or that it will be paid a premium
for the loan. In determining whether to lend securities, the Manager and
the sub-adviser consider all relevant factors and circumstances including
the creditworthiness of the borrower.
Futures Contracts and Options. For the purpose of creating
market exposure for uncommitted cash balances, reducing transaction costs
associated with rebalancing the Fund, facilitating trading or seeking
higher investment returns when a futures contract is priced more
attractively than the underlying security or index, the Fund may enter
into futures contracts, options, and options on futures contracts with
respect to securities in which the Fund may invest and indices comprised
of such securities.
Futures contracts provide for the future sale by one party and
purchase by another party of a specified amount of a specific security or
securities index at a specified future time and at a specified price.
Where the underlying security is an index, no physical transfer of
securities takes place; rather, upon expiration of the contract, the
parties settle by exchanging cash in an amount equal to the difference
between the contract price and the closing value of the index at
expiration, net of variation margin previously paid. Futures contracts
that are standardized as to maturity date and underlying interest are
traded on national futures exchanges.
Futures traders are required to make a good faith margin deposit
in cash or government securities with a broker or custodian to initiate
and maintain open positions in futures contracts. A margin deposit is
intended to assure completion of the contract (delivery or acceptance of
the underlying security) if it is not terminated prior to the specified
delivery date. Minimal initial margin requirements are established by the
futures exchange and may be changed. Brokers may establish deposit
requirements which are higher than the exchange minimums.
After a futures contract position is opened, the value of the
contract is marked to market daily. If the futures contract price changes
to the extent that the margin on deposit does not satisfy margin
requirements, payment of additional "variation" margin will be required.
5
<PAGE>
Conversely, change in the contract value may reduce the required margin,
resulting in a repayment of excess margin to the contract holder.
Variation margin payments are made to and from the futures broker for as
long as the contract remains open. The Fund expects to earn interest
income on its margin deposits.
Options are of two basic types, either call or put options, and
may relate to a single security, a securities index or a futures contract.
A call option on a security permits the holder of the option to purchase
the underlying security at a specified price ("strike price") at any time
during the term of the option. Thus, in exchange for the premium paid to
the writer, the purchaser obtains the right to profit from any
appreciation in the value of the underlying security above the strike
price. A put option permits the holder to sell the underlying security to
the writer at the strike price at any time during the term of the
contract. Thus, in exchange for the premium paid to the writer, the
purchaser is relieved of the risk of a decline in the value of the
underlying security below the strike price. An option on a securities
index gives the holder the right to receive cash from the writer in an
amount equal to the difference between the strike price of the option and
the value of the underlying index multiplied by a factor established by
the exchange upon which the option is traded. An option on a futures
contract gives the holder, in return for the premium paid to the writer,
the right to assume a position in the underlying futures contract a
specified price at any time during the term of the option.
Although futures and options contracts by their terms call for
actual delivery or acceptance of the underlying securities, in most cases
the contracts are closed out before the settlement date without the making
or taking of delivery. Closing out an open futures position is done by
taking an opposite position ("buying" a contract which has previously been
"sold," or "selling" a contract previously purchased) in an identical
contract to terminate the position. An option purchased may be closed out
by selling the option. An option written is closed out by purchasing an
option identical to that written. Brokerage commissions are incurred when
future and options contracts are bought and sold.
Restrictions on the Use of Futures Contracts and Options. The
Fund will not enter into futures contracts to the extent that its
outstanding obligations under these contracts would exceed 25% of the
Fund's total assets. To the extent that the Fund enters into futures
contracts and options on futures positions that are not for bona fide
hedging purposes (as defined by the Commodity Futures Trading Commission),
the aggregate initial margin and premiums on these positions (excluding
the amount by which options are "in-the-money") may not exceed 5% of the
Fund's net assets.
Transactions using options and futures contracts (other than
options that the Fund has purchased) expose the Fund to an obligation to
another party. The Fund will not enter into any such transactions unless
it owns either (1) an offsetting ("covered") position in securities or
other options or futures contracts or (2) cash, receivables and short-term
6
<PAGE>
debt securities with a value sufficient at all times to cover its
potential obligations not covered as provided in (1) above. The Fund will
comply with SEC guidelines regarding cover for these instruments and, if
the guidelines so require, set aside cash, U.S. Government securities or
other liquid, high-grade debt securities a segregated account with its
custodian in the prescribed amount.
All options purchased or written by the Fund must be listed on a
national securities or futures exchange or traded in the over-the-counter
("OTC") market. The Fund will not purchase or write OTC options if, as a
result of such transaction, the sum of (i) the market value of outstanding
OTC options purchased by the Fund, (ii) the market value of the underlying
securities covered by outstanding OTC call options written by the Fund,
and (iii) the market value of other assets of the Fund that are illiquid
or are not otherwise readily marketable, would exceed 15% of the net
assets of the Fund, taken at market value. However, if an OTC option is
sold by the Fund to a primary U.S. Government securities dealer recognized
by the Federal Reserve Bank of New York and the Fund has the unconditional
contractual right to repurchase such OTC option from the dealer at a
predetermined price, then the Fund will treat as illiquid such amount of
the underlying securities as is equal to the repurchase price less the
amount by which the option is "in-the-money" (the difference between
current market value of the underlying security and the option's strike
price). The repurchase price with primary dealers is typically a formula
price which is generally based on a multiple of the premium received for
the option plus the amount by which the option is "in-the-money."
The Fund may write only covered options. A call option is
covered if the Fund owns the underlying security or a call option on the
same security with a lower strike price. A put option is covered if the
Fund segregates cash and/or short-term debt securities in an amount
necessary to pay the strike price of the option or purchases a put option
on the same underlying security with a higher strike price.
The Fund will not purchase puts, calls, straddles, spreads or any
combination thereof, if as a result of such purchase the value of the
Fund's aggregate investment in such securities would exceed 5% of the
Fund's total assets.
Risk Factors in Futures and Options Transactions. There can be
no assurance that a liquid secondary market will exist for any particular
futures or option contract at any specific time. Thus, it may not be
possible to close a futures or option position. In the event of adverse
price movements, the Fund would continue to be required to make daily cash
payments to maintain its required margin with respect to open futures or
written options positions. In such a situation, if the Fund has
insufficient cash, it may have to sell portfolio securities to meet daily
margin requirements at a time when it may be disadvantageous to do so. In
addition, the Fund may required to make or take delivery of the securities
underlying futures contracts that it holds and options contracts that it
has written.
7
<PAGE>
The Fund will seek to minimize the risk that it will be unable to
close out a futures contract by entering into only those futures contracts
that are listed on a national futures exchange and for which there appears
to be a liquid secondary market. Likewise, the Fund will enter into only
those option contracts that are listed on a national securities exchange
or traded in the OTC market for which there appears to be a liquid
secondary market.
The risk of loss in trading futures contracts in some strategies
can be substantial, due both to the low margin deposits required, and the
extremely high degree of leverage involved in futures pricing. As a
result, a relatively small price movement in a futures contract may result
in immediate and substantial loss (as well as gain) to the investor. For
example, if at the time of purchase, 10% of the value of the futures
contract is deposited as margin, a subsequent 10% decrease in the value of
the futures contract would result in a total loss of margin deposit,
before any deduction for the transaction costs, if the account were then
closed out. A 15% decrease would result in a loss equal to 150% if the
original margin deposit for the contract were closed out. Thus, a
purchase or sale of a futures contract may result in losses in excess of
the amount invested in the contract. Options transactions are subject to
similar risks. However, because the Fund will not engage in futures or
options transactions for speculative purposes, the Manager believes that
the Fund's risk of loss is less than the risk of loss associated with
speculative transactions. Moreover, in the foregoing example, the Fund
would presumably have sustain comparable losses if, instead of the futures
contract, it had invested in the underlying security and sold it after the
decline.
Utilization of futures contracts and options transactions by the
Fund does involve the risk of imperfect or no correlation where the
securities underlying futures and options contract are different from the
portfolio securities being hedged. It is also possible that the Fund
could both lose money on futures and options contracts and also experience
a decline in value of its portfolio securities. There is also the risk of
loss by the Fund of margin deposits in the event of bankruptcy of a broker
with whom the Fund has an open position in a futures contract or option
thereon.
Most futures exchanges limit the amount of fluctuation permitted
in futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may
vary either up or down from the previous day's settlement price at the end
of a trading session. Once the daily limit has been reached in a
particular type of contract, no trade may be made on that day at a price
beyond that limit. The daily limit governs only price movement during a
particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions.
Futures contract prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading thereby
preventing prompt liquidation of future positions and subjecting some
futures traders to substantial losses.
8
<PAGE>
Futures and options contracts involve special tax considerations.
See "Dividends, Other Distributions and Taxes" for further information.
Commercial Paper. The Fund may invest in commercial paper issued
in reliance on the so called "private placement" exemption from
registration afforded by Section 4(2) of the Securities Act of 1933
("Section 4(2) paper"). Section 4(2) paper is restricted as to
disposition under the federal securities laws and generally is sold to
investors who agree that they are purchasing the paper for an investment
and not with a view to public distribution. Any resale by the purchase
must be in an exempt transaction. Section 4(2) paper is normally resold
to other investors through or with the assistance of the issuer or
investment dealers who make a market in Section 4(2) paper, thus providing
liquidity. Pursuant to guidelines established by Dreyfus/Laurel's Board
of Directors, the Manager or the sub-adviser may determine that Section
4(2) paper is liquid for the purposes of complying with the Fund's
investment restriction relating to investments in illiquid securities.
INVESTMENT LIMITATIONS
The following limitations have been adopted by the Fund. The
Fund may not change any of these fundamental investment limitations
without the consent of: (a) 67% or more of the shares present at a meeting
of shareholders duly called if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy; or (b)
more than 50% of the outstanding shares of the Fund, whichever is less.
The Fund may not:
1. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of such purchase to
be invested in the securities of one or more issuers conducting
their principal activities in the same industry. (For purposes
of this limitation, U.S. Government securities, and state or
municipal governments and their political subdivisions are not
considered members of any industry. In addition, this limitation
does not apply to investments in domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks).
2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")
except that (a) the Fund may borrow money in an amount not
exceeding one-third of the Fund's total assets at the time of
such borrowings, and (b) the Fund may issue multiple classes of
shares. The purchase or sale of futures contracts and related
options shall not be considered to involve the borrowing of money
or issuance of senior securities.
3. Purchase with respect to 75% of the Fund's total assets
securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities) if, as a result, (a) more than 5% of the
Fund's total assets would be invested in the securities of that
9
<PAGE>
issuer, or (b) the Fund would hold more than 10% of the
outstanding voting securities of that issuer.
4. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such
loans. For purposes of this limitation debt instruments and
repurchase agreements shall not be treated as loans.
5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the Fund from investing in securities or other
instruments backed by real estate, including mortgage loans, or
securities of companies that engage in real estate business or
invest or deal in real estate or interests therein).
6. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and later disposition of
such securities in accordance with the Fund's investment program
may be deemed an underwriting.
7. Purchase or sell commodities except that the Fund may enter into
futures contracts and related options, forward currency contacts
and other similar instruments.
The Fund may:
Notwithstanding any other fundamental investment policy or
limitation, invest all of its investable assets in securities of
a single open-end management investment company with
substantially the same investment objectives, policies and
limitations as the Fund.
The Fund has adopted the following additional non-fundamental
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.
1. The Fund shall not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amounts to
the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute selling short.
2. The Fund shall not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
3. The Fund shall not purchase oil, gas or mineral leases.
4. The Fund will not purchase or retain the securities of any issuer
if the officers, Directors of the Fund, its advisers, or
10
<PAGE>
managers, owning beneficially more than one half of one percent
of the securities of such issuer, together own beneficially more
than five percent of such securities.
5. The Fund will not purchase securities of issuers (other than
securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof), including their
predecessors, that have been in operation for less than three
years, if by reason thereof, the value of the Fund's investment
in securities would exceed 5% of the Fund's total assets. For
purposes of this limitation, sponsors, general partners,
guarantors and originators of underlying assets may be treated as
the issuer of a security.
6. The Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements
with remaining maturities in excess of seven days, time deposits
with maturities in excess of seven days and other securities
which are not readily marketable. For purposes of this limitation
illiquid securities shall not include Section 4(2) paper and
securities which may be resold under Rule 144A under the
Securities Act of 1933, provided that the Board of Directors, or
its delegate, determines that such securities are liquid based
upon trading markets for the specific security.
7. The Fund may not invest in securities of other investment
companies, except as they may acquired as part of a merger,
consolidation or acquisition of assets and except to extent
otherwise permitted by the 1940 Act.
8. The Fund shall not purchase any security while borrowings
representing more than 5% of Fund's total assets are outstanding.
9. The Fund will not purchase warrants if at the time of such
purchase: (a) more than 5% of value of the Fund's assets would be
invested in warrants, or (b) more than 2% of the value of the
Fund's assets would be invested in warrants that are not listed
on the New York Stock Exchange ("NYSE") or American Stock
Exchange (for purposes of this limitation, warrants acquired by
the Fund in units or attached to securities will be deemed to
have no value).
10. The Fund will not purchase puts, calls, straddles, spreads and
any combination thereof if by reason thereof the value of its
aggregate investment in such classes of securities will exceed 5%
of its total assets except that: (a) this limitation shall not
apply to standby commitments, and (b) this limitation shall not
apply to the Fund's transactions in future contracts and related
options.
11. The Fund will not invest more than 25% of the market value of the
Fund's total assets in securities issued or guaranteed by a
11
<PAGE>
single Western European government or its agencies and
instrumentalities.
As an operating policy, the Fund will not invest more the 25% of the value
of the Fund's total assets, at the time of such purchase, in domestic
banks, including U.S. branches of foreign banks and foreign branches of
U.S. banks. The Board of Directors may change this operating policy
without shareholder approval. Notice will be given to shareholders if
this policy is changed by the Board of Directors.
CONTROLLING SHAREHOLDERS
Mellon Bank Corporation, a Pennsylvania corporation registered as
a bank holding company under the Bank Holding Company Act of 1956, as
amended, owned of record, through its direct and indirect subsidiaries,
79% of the issued and outstanding voting shares of Dreyfus/Laurel as of
November 30, 1994, and is, as a consequence, deemed to be a controlling
shareholder of Dreyfus/Laurel as that term is defined under the 1940 Act.
The address of Mellon Bank Corporation is: Mellon Bank Corporation, Mutual
Funds Department, 2 Mellon Bank Center, Pittsburgh, PA 15259.
PRINCIPAL SHAREHOLDERS
The following shareholder(s) owned 5% or more of the outstanding
voting shares of the Fund at November 30, 1994: Mac & Co. 019-556, Mellon
Bank, N.A., as Nominee for Trust Custodian, Mutual Funds, P.O. Box 320,
Pittsburgh, PA 15230-0320, 47% record; MBC Investments Corp., 4500 New
Linden Hill Road, Wilmington, DE 19808, 39% record.
DIRECTORS AND OFFICERS
Dreyfus/Laurel has a Board composed of twelve Directors which
supervises Dreyfus/Laurel's investment activities and reviews contractual
arrangements with companies that provide the Fund with services. The
following lists the Directors and officers and their positions with
Dreyfus/Laurel and their present and principal occupations during the past
five years. Each Director who is an "interested person" of Dreyfus/Laurel
Funds, Inc., as defined in the 1940 Act, is indicated by an asterisk.
Each of the Directors also serves as a Trustee of The Dreyfus/Laurel Funds
Trust, The Dreyfus/Laurel Investment Series and The Dreyfus/Laurel Tax-
Free Municipal Funds (collectively "The Dreyfus Family of Funds").
o + RUTH MARIE ADAMS. Director of The Dreyfus/Laurel Funds, Inc.;
Professor of English and Vice President Emeritus, Dartmouth
College; Senator, United Chapters of Phi Beta Kappa; Trustee,
Woods Hole Oceanographic Institution. Address: 1026 Kendal Lyme
Road, Hanover, New Hampshire 03755.
o + FRANCIS P. BRENNAN. Chairman of the Board of Directors and
Assistant Treasurer of The Dreyfus/Laurel Funds, Inc.; Director
and Chairman, Massachusetts Business Development Corp.; Director,
12
<PAGE>
Boston Mutual Insurance Company; Director and Vice Chairman of
the Board, Home Owners Federal Savings and Loan (prior to May
1990). Address: Massachusetts Business Development Corp., One
Liberty Square, Boston, Massachusetts 02109.
o + JAMES M. FITZGIBBONS. Director of The Dreyfus/Laurel Funds,
Inc.; President and Director, Amoskeag Company; Chairman, Howes
Leather Company, Inc.; Director, Fiduciary Trust Company;
Chairman, CEO and Director, Fieldcrest-Cannon Inc.; Director,
Lumber Mutual Insurance Company; Director, Barrett Resources,
Inc. Address: 40 Norfolk Road, Brookline, Massachusetts 02167.
o * J. TOMLINSON FORT. Director of The Dreyfus/Laurel Funds, Inc.;
Partner, Reed, Smith, Shaw & McClay (law firm). Address: 204
Woodcock Drive, Pittsburgh, Pennsylvania 15215.
o + ARTHUR L. GOESCHEL. Director of The Dreyfus/Laurel Funds, Inc.;
Director, Chairman of the Board and Director, Rexene Corporation;
Director, Calgon Carbon Corporation; Director, National Picture
Frame Corporation; Chairman of the Board and Director, Tetra
Corporation 1991-1993; Director, Medalist Corporation 1992-1993;
From 1988-1989 Director, Rexene Corporation. Address: Way
Hallow Road and Woodland Road, Sewickley, Pennsylvania 15143.
o + KENNETH A. HIMMEL. Director of The Dreyfus/Laurel Funds, Inc.;
Director, The Boston Company, Inc. and Boston Safe Deposit and
Trust Company; President and Chief Executive Officer, Himmel &
Co., Inc.; Vice Chairman, Sutton Place Gourmet, Inc. and Florida
Hospitality Group; Managing Partner, Himmel/MKDG, Franklin
Federal Partners, Reston Town Center Associates and Grill 23 &
Bar. Address: Himmel and Company, Inc., 101 Federal Street, 22nd
Floor, Boston, Massachusetts 02110.
o + ARCH S. JEFFERY. Director of The Dreyfus/Laurel Funds, Inc.;
Financial Consultant. Address: 1817 Foxcroft Lane, Allison
Park, Pennsylvania 15101.
o + STEPHEN J. LOCKWOOD. Director of The Dreyfus/Laurel Funds, Inc.;
President and CEO, LDG Management Company Inc.; CEO, LDG
Reinsurance Underwriters, SRRF Management Inc. and Medical
Reinsurance Underwriters Inc. Address: 401 Edgewater Place,
Wakefield, Massachusetts 01880.
o + ROBERT D. MCBRIDE. Director of The Dreyfus/Laurel Funds, Inc.;
Director, Chairman and CEO, McLouth Steel; Director, Salem
Corporation. Director, SMS/Concast, Inc. (1983-1991). Address:
15 Waverly Lane, Grosse Pointe Farms, Michigan 48236.
o + JOHN L. PROPST. Director of The Dreyfus/Laurel Funds, Inc.; Of
Counsel, Reed, Smith, Shaw & McClay (law firm). Address: 5521
Dunmoyle Street, Pittsburgh, Pennsylvania 15217.
13
<PAGE>
o + JOHN J. SCIULLO. Director of The Dreyfus/Laurel Funds, Inc.;
Dean Emeritus and Professor of Law, Duquesne University Law
School; Director, Urban Redevelopment Authority of Pittsburgh.
Address: 321 Gross Street, Pittsburgh, Pennsylvania 15224
o + ROSLYN M. WATSON. Director of The Dreyfus/Laurel Funds, Inc.;
Principal, Watson Ventures, Inc., prior to February, 1993; Real
Estate Development Project Manager and Vice President, The Gunwyn
Company. Address: 25 Braddock Park, Boston, Massachusetts 02116-
5816.
# MARIE E. CONNOLLY. President and Treasurer of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Investment Series, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free
Municipal Funds (since September 1994); Vice President of The
Dreyfus/Laurel Funds, Inc. (March 1994 to September 1994);
President, Funds Distributor, Inc. (since 1992); Treasurer, Funds
Distributor, Inc. (July 1993 to April 1994); COO, Funds
Distributor, Inc. (since April 1994); Director, Funds
Distributor, Inc. (since July 1992); President, COO and Director,
Premier Mutual Fund Services, Inc. (since April 1994); Senior
Vice President and Director of Financial Administration, The
Boston Company Advisors, Inc. (December 1988 to May 1993).
Address: One Exchange Place, Boston, Massachusetts 02109.
# FREDERICK C. DEY. Vice President of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Funds Trust and The Dreyfus/Laurel Tax-Free Municipal Funds
(since September 1994); Senior Vice President, Premier Mutual
Fund Services, Inc. (since August 1994); Vice President, Funds
Distributor, Inc. (since August 1994); Fundraising Manager, Swim
Across America (October 1993 to August 1994); General Manager,
Spring Industries (August 1988 to October 1993). Address: Premier
Mutual Fund Services, Inc., 200 Park Avenue New York, New York
10166.
# ERIC B. FISCHMAN. Vice President of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Funds Trust and The Dreyfus/Laurel Tax-Free Municipal Funds
(since September 1994); Vice President and Associate General
Counsel, Premier Mutual Fund Services, Inc. (Since August 1994);
Vice President and Associate General Counsel, Funds Distributor,
Inc. (since August 1994); Staff Attorney, Federal Reserve Board
(September 1992 to June 1994); Summer Associate, Venture
Economics (May 1991 to September 1991); Summer Associate, Suffolk
County District Attorney (June 1990 to August 1990). Address:
Premier Mutual Fund Services, Inc., 200 Park Avenue, New York,
New York 10166.
RICHARD W. HEALEY. Vice President of The Dreyfus/Laurel Funds
Inc., The Dreyfus/Laurel Investment Series, The Dreyfus/Laurel
Tax-Free Municipal Funds Trust and The Dreyfus/Laurel Funds Trust
14
<PAGE>
(since March 1994); Senior Vice President, Funds Distributor,
Inc. (since March 1993); Vice President, The Boston Company Inc.,
(March 1993 to May 1993); Vice President of Marketing, Calvert
Group (1989 to March 1993); Fidelity Investments (prior to 1989).
Address: One Exchange Place, Boston, Massachusetts 02109.
# JOHN E. PELLETIER. Vice President and Secretary of The
Dreyfus/Laurel Funds, Inc.; The Dreyfus/Laurel Investment Series,
The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free
Municipal Funds (since September 1994); Senior Vice President,
General Counsel and Secretary, Funds Distributor, Inc. (since
April 1994); Senior Vice President, General Counsel and
Secretary, Premier Mutual Fund Services, Inc. (since August
1994); Counsel, The Boston Company Advisors, Inc. (February 1992
to March 1994); Associate, Ropes & Gray (August 1990 to February
1992); Associate, Sidley & Austin (June 1989 to August 1990).
Address: One Exchange Place, Boston, Massachusetts 02109.
_________________________
* "Interested person" of The Dreyfus/Laurel Funds, Inc., as defined
in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
# Officer also serves as an officer for other investment companies
advised by The Dreyfus Corporation.
The officers and Directors of Dreyfus/Laurel as a group owned
beneficially less than 1% of the total shares of the Fund outstanding as
of December 1, 1994.
No officer or employee of Premier (or of any parent or subsidiary
thereof) receives any compensation from Dreyfus/Laurel for serving as an
officer or Director of Dreyfus/Laurel. In addition, no officer or employee
of The Dreyfus Corporation (or of any parent or subsidiary thereof) serves
as an officer or Director of Dreyfus/Laurel. The Dreyfus/Laurel Fund
Family pays each Trustee/Director who is not an officer or employee of
Premier or any of its affiliates, $27,000 per annum (and an additional
$75,000 for the Chairman of the Board of Directors/Trustees of the
Dreyfus/Laurel Fund Family). In addition, the Dreyfus/Laurel Fund Family
pays each Trustee/Director $ 1,000 per joint Dreyfus/Laurel Fund Family
meeting attended, plus $750 per joint Dreyfus/Laurel Fund Family Audit
Committee meeting attended, and reimburses each Trustee/Director for
travel and out-of-pocket expenses. For the fiscal year ended December 31,
1993 the fees for meetings and expenses totaled $79,598.
INVESTMENT MANAGEMENT AND OTHER SERVICES
Advisory Services. The Dreyfus Corporation ("Dreyfus") serves as
the investment manager (the "Manager") for the Fund pursuant to an
Investment Management Agreement with Dreyfus/Laurel dated April 4, 1994
("Management Agreement"), transferred from Mellon Bank, N.A. (One Mellon
15
<PAGE>
Bank Center, Pittsburgh, PA 15258) ("Mellon Bank"), to the Manager
effective October 17, 1994. The Manager is a wholly-owned subsidiary of
Mellon Bank. Pursuant to the Investment Management Agreement, Dreyfus
provides, or arranges for one or more third parties to provide investment
advisory, administrative, custody, fund accounting and transfer agency
service to the Fund. As manager, Dreyfus manages the fund by making
investment decisions based on the Fund's investment objective, policies
and restrictions. For these services, the Fund pays a fee to the Manager
at the rates stated in the Prospectus.
S.A.M. Finance, S.A. ("CCF SAM") 115 Avenue des Champs-Elysees,
Paris, France 75008, serves as an investment sub-adviser. CCF SAM serves
as adviser for the Fund pursuant to a Sub-Advisory Agreement among
Dreyfus/Laurel, CCF SAM and Mellon Bank dated August 31, 1993 (the "Sub-
Advisory Agreement"), transferred to the Manager effective as of October
17, 1994. CCF SAM is a wholly-owned subsidiary of Credit Commercial de
France ("CCF"), a French bank. Under the Management and Sub-Advisory
Agreements, CCF SAM directs the investments of substantially all of the
Fund's assets in accordance with its investment objective, policies and
limitations. The Manager has overall responsibility for general management
of the Fund, and for compliance with applicable law and the Fund's
investment objective, policies and limitations. The Manager also directs
investments of all assets not assigned to CCF SAM. For these services,
the Fund pays a fee to the Manager, and the Manager pays a portion thereof
to CCF SAM, at the rates stated in the Prospectus.
The Management and Sub-Advisory Agreements will continue from
year to year provided that a majority of the Directors who are not
interested persons of Dreyfus/Laurel and either a majority of all
Directors or a majority of the shareholders of the Fund approve the
continuance. Dreyfus/Laurel may terminate the Agreements, without prior
notice to the Manager or CCF SAM, upon the vote of a majority of the Board
of Directors or upon the vote of a majority of the outstanding voting
securities of the Fund on 60 days' written notice to the Manager or CCF
SAM. The Manager may terminate the Management Agreement upon written
notice to Dreyfus/Laurel; the Manager or CCF SAM may terminate the Sub-
Advisory Agreement upon 60 days' notice to the other parties. The
Management Agreement and the Sub-Advisory Agreement each will terminate
immediately and automatically upon its assignment.
The Fund commenced operations on August 12, 1994. For the period
ended October 31, 1994 the total management fees paid by the Fund were
$29,370.
Distribution Plan--Investor Shares. The Securities and Exchange
Commission ("SEC") has adopted Rule 12b-l under the 1940 Act ("Rule")
regulating the circumstances under which investment companies such as
Dreyfus/Laurel may, directly or indirectly, bear the expenses of
distributing their shares. The Rule defines distribution expenses to
include expenditures for "any activity which is primarily intended to
result in the sale of fund shares." The Rule, among other things,
provides that an investment company may bear such expenses only pursuant
16
<PAGE>
to a plan adopted in accordance with the Rule. With respect to the
Investor Class shares of the Fund, Dreyfus/Laurel has adopted a
Distribution Plan ("Plan"), and may enter into Selling Agreements with
Service Agents pursuant to the Plan.
Under the Plan, Investor Class shares of the Fund may spend
annually up to 0.25% of the average of its net asset values for costs and
expenses incurred in connection with the distribution of, and shareholder
servicing with respect to, the Fund's Investor Class shares.
The Plan provides that a report of the amounts expended under the
Plan, and the purposes for which such expenditures were incurred, must be
made to Dreyfus/Laurel's Directors for their review at least quarterly.
In addition, the Plan provides that it may not be amended to increase
materially the costs which the Fund may bear for distribution pursuant to
the Plan without approval of the Fund's shareholders, and that other
material amendments of the Plan must be approved by the vote of a majority
of the Directors and of the Directors who are not "interested persons" of
Dreyfus/Laurel (as defined in the 1940 Act) and who do not have any direct
or indirect financial interest in the operation the Plan, cast in person
at a meeting called for the purpose of considering such amendments. The
Plan is subject to annual approval by the entire Board of Directors and by
the Directors who are neither interested persons nor have any direct or
indirect financial interest in the operation of the Plan, by vote cast in
person at a meeting called for the purpose of voting on the Plan. The
Plan is terminable, as to the Fund's Investor Class shares, at any time by
vote of a majority of the Directors who are not interested persons and
have no direct or indirect financial interest in the operation of the Plan
or by vote of the holders of a majority of the outstanding shares of the
such class of the Fund.
The Distributor; Sub-Administrator. Premier Mutual Fund
Services, Inc., One Exchange Place, Boston, Massachusetts 02109)
("Premier"), a wholly-owned subsidiary of Institutional Administration
Services, Inc., serves as the Fund's distributor pursuant to an agreement
with Dreyfus effective October 17, 1994. Premier also acts as distributor
for other funds in the Dreyfus Family of Funds and for certain other
investment companies. Premier also serves as Sub-Administrator ("Sub-
Administrator") to the Fund pursuant to a Sub-Administration Agreement
effective October, 17, 1994.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period when the
NYSE is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the SEC 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 SEC by order
may permit to protect the Fund's shareholders.
Redemption Commitment. The Fund has committed itself to pay in
cash all redemption requests by any shareholder of record of the Fund,
17
<PAGE>
limited in amount during any 90-day period to the lesser of $250,000 or 1%
of the value of the Fund's net assets at the beginning of such period.
Such commitment is irrevocable without the prior approval of the SEC. In
the case of requests for redemption in excess of such amount, the Board of
Directors reserves the right to make payments in whole or in part in
securities or other assets 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 this event, the securities would be valued
in the same manner as the Fund's portfolio is valued. If the recipient
sold such securities, brokerage charges would be incurred.
Custodian, Fund Accountant. Mellon Bank serves as the Fund's
custodian and fund accountant. Mellon Bank provides portfolio and
shareholder recordkeeping required for regulatory and financial reporting
purposes. Mellon Bank, as Custodian and Fund Accountant, has no part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
Prior to the effectiveness of the Management Agreement, for its
services as custodian and fund accountant Mellon Bank was paid an annual
fee of $30,000 per portfolio and, for all portfolios, an annual
administrative account maintenance fee of $ 10,000, an annual on-line fee
of $3,600, an asset-based fee of .02% of the first $500 million of
Dreyfus/Laurel's net assets and .01% of net assets over $500 million, plus
a specified transaction fee for each transaction.
Transfer and Dividend Disbursing Agent. The Shareholder
Services Group, Inc. ("TSSG"), a subsidiary of First Data Corporation, is
the Fund's transfer and dividend disbursing agent. TSSG has no part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
FEDERAL LAW AFFECTING MELLON BANK
The Glass-Steagall Act of 1933 prohibits national banks from
engaging in the business of underwriting, selling or distributing
securities and prohibits a member bank of the Federal Reserve System from
having certain affiliations with an entity engaged principally in the
business. The activities of Mellon Bank in informing its customers of,
and performing, investment and redemption services in connection with the
Fund, and in providing services to the Fund as custodian and fund
accountant, as well as the Manager's investment advisory activities, may
raise issues under these provisions. Mellon Bank has been advised by
counsel that its activities contemplated under this arrangement are
consistent with Mellon Bank's statutory and regulatory obligations.
Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of such future statutes and regulations could prevent
Mellon Bank or the Manager from continuing to perform all or a part of the
above services for its customers and/or the Fund. If Mellon Bank or
18
<PAGE>
Dreyfus were prohibited from serving the Fund in any of its present
capacities the Directors would seek an alternative provider(s) of such
services.
PORTFOLIO TRANSACTIONS
All portfolio transactions of the Fund are placed on behalf of
the Fund by the Manager or CCF SAM. Debt securities purchased and sold by
the Fund are generally traded on a net basis (i.e., without commission)
through dealers acting for their own account and not as brokers, or
otherwise involve transactions directly with the issuer of the instrument.
This means that a dealer (the securities firm or bank dealing with the
Fund) makes a market for securities by offering to buy at one price and
sell at a slightly higher price. The difference between the prices is
known as a spread. Other portfolio transactions may be executed through
brokers acting as agent. The Fund will pay a spread or commissions in
connection with such transactions. The Manager or CCF SAM uses its best
efforts to obtain execution of portfolio transactions at prices which are
advantageous to the Fund and at spreads and commission rates, if any,
which are reasonable in relation to the benefits received. The Manager or
CCF SAM also places transactions for other accounts that it provides with
investment advice.
Brokers and dealers involved in the execution of portfolio
transactions on behalf of the Fund are selected on the basis of their
professional capability and the value and quality of their services. In
selecting brokers or dealers, the Manager or CCF SAM each will consider
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer; the broker-
dealer's execution services rendered on a continuing basis; and the
reasonableness of any spreads (or commissions, if any). Any spread,
commission, fee or other remuneration paid to an affiliated broker-dealer
is paid pursuant to Dreyfus/Laurel's procedures adopted in accordance with
Rule 17e-1 of the 1940 Act.
Brokers or dealers may be selected who provide brokerage and/or
research services to the Fund and/or other accounts over which the Manager
or CCF SAM or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and
performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and
settlement).
The receipt of research services from broker-dealers may be
useful to the Manager or CCF SAM in rendering investment management
services to the Fund and/or its other clients; and, conversely, such
19
<PAGE>
information provided by brokers or dealers who have executed transaction
orders on behalf of other clients of the Manager or CCF SAM may be useful
to these organizations in carrying out their obligations to the Fund. The
receipt of such research services does not reduce these organizations'
normal independent research activities; however, it enables these
organizations to avoid the addition expenses which might otherwise be
incurred if these organizations were to attempt to develop comparable
information through their own staffs.
The Directors periodically review the Manager's and CCF SAM's
performance of responsibilities in connection with the placement of
portfolio transactions on behalf of the Fund and review the prices paid by
the Fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the Fund.
Although the Manager and CCF SAM manage other accounts in
addition to the Fund, investment decisions for the Fund are made
independently from decisions made for these other accounts. It sometimes
happens that the same security is held by more than one of the accounts
managed by the Manager or CCF SAM. Simultaneous transactions may occur
when several accounts are managed by the same investment adviser,
particularly when the same investment instrument is suitable for the
investment objective of more than one account.
When more than one account is simultaneously engaged in the
purchase or sale of the same investment instrument, the prices and amounts
are allocated in accordance with a formula considered by the Manager or
CCF SAM to be equitable to each account. In some cases this system could
have a detrimental effect on the price or volume of the investment
instrument as far as the Fund is concerned. In other cases, however, the
ability of the Fund to participate in volume transactions will produce
better executions for the Fund. While the Directors will continue to
review simultaneous transactions, it is their present opinion that the
desirability of retaining the Manager or CCF SAM as investment advisers to
the Fund outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.
For the fiscal period ended October 31, 1994 the Fund paid
brokerage commissions of $29,972.
Portfolio Turnover. The portfolio turnover rate for the Fund is
calculated by dividing the lesser of the Fund's annual sales or purchases
of portfolio securities (exclusive of purchases and sales of securities
whose maturities at the time of acquisition were one year or less) by the
monthly average value of securities in the Fund during the year. The Fund
commenced operations August 12, 1994, and its portfolio turnover rate for
the period ended October 31, 1994 was 0%.
NET ASSET VALUE
The Fund's net asset value ("NAV") per share is calculated on
each business day. A business day is any day on which the NYSE is open
20
<PAGE>
for business. The Fund determines NAV as of the close of business of the
regular session of NYSE (currently 4:00 p.m. Eastern time). The holidays
(as observed) on which the NYSE is closed currently are: New Years Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
Equity securities listed or traded on a stock exchange, are
valued at the latest sale price. If no sale is reported, the mean of the
latest bid and asked prices is used. Securities traded over-the-counter
are priced at the mean of the latest bid and asked prices but will be
valued at the last sale price if required by regulations of the SEC. When
market quotations are not readily available, securities and other assets
are valued at fair value as determined in good faith in accordance
procedures established by the Board of Directors.
Bonds are valued through valuations obtained from a commercial
pricing service or the most recent mean of the bid and asked prices
provided by investment dealers in accordance with procedures established
by the Board of Directors. Pursuant to a determination by
Dreyfus/Laurel's Board of Directors that such value represents fair value,
debt securities with maturities of 60 days or less are valued at amortized
cost.
For purposes of determining the Fund's NAV, all assets and
liabilities initially expressed in foreign currency values will be
converted into U.S. dollar values at the mean between the bid and offered
quotations of such currencies against U.S. dollars as last quoted by any
recognized dealer. If an event were to occur after the value of a
portfolio instrument was so established but before the NAV per share is
determined which is likely to materially change the NAV, then the
portfolio instrument would be valued using fair value considerations
established by Dreyfus/Laurel's Board of Directors.
Securities for which market quotations are not readily available
are valued at fair value as determined in good faith and pursuant to
procedures approved by Dreyfus/Laurel's Board of Directors. Because of
the need to obtain prices as of the close of trading on the exchanges on
which portfolio securities are most frequently traded, the calculation of
NAV may not take place contemporaneously with the determination of the
prices of the majority of the Fund's portfolio securities.
Equity securities which are traded on a Western European
securities exchange are valued at the last sale price on that exchange or,
if there is no recent last sale price available, at the last current bid
quotation. An equity security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security by CCF SAM. All other equity securities
not so traded are valued at the last sale price prior to the time of
valuation.
PERFORMANCE CALCULATIONS
21
<PAGE>
The Fund computes average annual total return by using a
standardized method required by the SEC. Average annual total return is
computed by finding the average annual compounded rates of return on
hypothetical initial investment of $1,000 over the periods that would
equate the initial amount invested to the ending redeemable value,
according to the following formula:
n
P(1+T) = ERV
Where: P = $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end
of the year or period
The calculation assumes (1) the deduction of the maximum sales
load (and any other charges deducted, if any, from payment) and all
recurring fees that are charged to all shareholder accounts, and (2) the
reinvestment of all dividends and other distributions by the Fund at the
price stated in the Prospectus on the reinvestment dates during the
period.
The Fund commenced operations on August 12, 1994. For the period
ended October 31, 1994 the aggregate total return (not annualized) was
0.60%.
Certain funds may also advertise yield from time to time. Yields
are computed by using standardized methods of calculation required by the
SEC. Yields are calculated by dividing the net investment income per
share earn during a 30-day (or one month) period by the maximum offering
price per share on the last day of the period, according to the following
formula:
6
YIELD = 2[(a-b/cd+1) -1]
Where: a = dividends and interest earned during
the period;
b = expenses accrued for the period (net of
reimbursements);
c = average daily number of shares outstanding during
the period that were entitled to receive
dividends; and
d = the maximum offering price per share
on the last day of the period.
Performance information for the Fund may be compared, in reports
and promotional literature, to indexes including, but not limited to: (i)
the Morgan Stanley European Index; (ii) the Standard & Poor's 500
Composite Stock Price Index ("S&P 500"), the Dow Jones Industrial Average
("DJIA"), or other appropriate unmanaged domestic or foreign indices of
22
<PAGE>
performance of various types of investments so that investors may compare
the Fund's results with those of indices widely regarded by investors as
representative of the securities markets in general; (iii) other groups of
mutual funds tracked by Lipper Analytical Services, a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or
other criteria; (iv) the Consumer Price Index (a measure of inflation) to
assess the real rate of return from an investment in the Fund; and (v)
products managed by a universe of money managers with similar country
allocation and performance objectives. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions or
administrative and management costs and expenses.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The term "regulated investment company" does not imply the supervision of
management or investment practices or policies by a government agency.
General. To qualify for treatment as a regulated investment
company ("RIC") under the Internal Revenue Code of 1986, as amended
("Code"), the Fund -- which is treated as a separate corporation for
federal tax purposes-- must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income
(generally consisting of net investment income, net short-term capital
gain and net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional
requirements. These requirements include the following: (1) the Fund
must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of securities or foreign currencies, or
other income (including gains from options, futures, or forward contracts)
derived with respect to its business of investing in securities or those
currencies ("Income Requirement"); (2) the Fund must derive less than 30%
of its gross income each taxable year from the sale or other disposition
of securities, or any of the following, that were held for less than three
months - options or futures (other than those on foreign currencies), or
foreign currencies (or options, futures or forward contacts thereon) that
are not directly related to the Fund's principal business of investing in
securities (or options and futures with respect thereto) ("Short-Short
Limitation"); (3) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash
and cash items, U.S. government securities, securities of other RICs and
other securities, with those other securities limited, in respect of any
one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets and that does not represent more than 10% of the
issuer's outstanding voting securities; and (4) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value its
total assets may be invested in securities (other than U.S. government
securities or securities of other RICs) of any one issuer.
23
<PAGE>
Dividends and other distributions declared by the Fund in
October, November or December of any year and payable to shareholders of
record on a date in any of those months are deemed to have been paid by
the Fund and received by the shareholders on December 31 of that year if
the distributions are paid by the Fund during the following January.
Accordingly, those distributions will be taxed to the shareholders for the
year in which that December 31 falls.
If Fund shares are sold at a loss after being held six months or
less, the loss will be treated as a long-term, instead of short-term,
capital loss to the extent of capital gain distributions on those shares.
Investors also should be aware that if shares are purchased shortly before
the record date for any dividend or other distribution, the shareholder
will pay full price for the shares and receive some portion of the price
back as a taxable distribution.
If the Fund retains net capital gain (the excess of net long-term
capital gain over net short-term capital loss) for reinvestment, although
it has no plans to do so, it may elect to treat such amounts as having
been distributed to its shareholders. As a result, the shareholders would
be subject to tax on the undistributed net capital gain, would be able to
claim their proportionate share of the federal income tax paid by the Fund
on that gain as a credit against their own federal income tax liabilities,
and would be entitled to an increase in their basis for their Fund shares.
Hedging Transactions. The Fund may employ hedging strategies,
such as writing (selling) and purchasing options and futures contracts and
entering into forward contracts. The use of these strategies involves
complex rules that will determine for income tax purposes the character
and timing of recognition of the gains and losses the Fund realizes in
connection therewith. Income from foreign currencies (except certain
gains therefrom may be excluded by future regulations), and income from
transactions in options, futures and forward contracts derived by the Fund
with respect to its business of investing in securities or foreign
currencies, will qualify as permissible income under the Income
Requirement. However, income from the disposition of options and futures
contracts, other than those on foreign currencies, will be subject to the
Short-Short Limitation if they are held for less than three months.
Income from the disposition of foreign currencies, and options, futures
and forward contracts thereon, that are not directly related to the Fund's
principal business of investing in securities (or options and futures with
respect thereto) also will be subject to the Short-Short Limitation if
they are held for less than three months.
If the Fund satisfies certain requirements, any increase in value
of a position that is part of a "designated hedge" will be offset by any
decrease in value (whether realized or not) of the offsetting hedging
position during the period of the hedge for purposes of determining
whether the Fund satisfies the Short-Short Limitation. Thus, only the net
gain (if any) from the designated hedge will be included in gross income
for purposes of that limitation. The Fund will consider, when it engages
in hedging strategies, whether it should seek to qualify for this
24
<PAGE>
treatment. To the extent the Fund does not qualify therefor, it may be
forced to defer the closing out of certain options, futures and forward
contracts beyond the time when it otherwise would be advantageous to do
so, in order for the Fund to qualify as a RIC.
Certain futures contracts in which the Fund may invest are
"section 1256 contracts." Section 1256 contracts held by the Fund at the
end of each taxable year are "marked-to-market" (that is, treated as sold
for their fair market value) for federal income tax purposes, with the
result that unrealized gains or losses are treated as though they were
realized. Sixty percent of any net gain or loss recognized on these
deemed sales, and 60% of any net realized gain or loss from any actual
sales of section 1256 contracts, are treated as long-term capital gain or
loss, and the balance is treated as short-term capital gain or loss.
Section 1256 contracts also may be marked-to-market for purposes of the 4%
excise tax described in the Prospectus ("Excise Tax").
Certain futures contracts entered into by the Fund may result in
"straddles" for federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. In addition, losses realized by the Fund on straddle positions
may be deferred under the straddle rules. If the Fund makes certain
elections, the amount, character and timing of the recognition of gains
and losses from the affected straddle positions will be determined under
rules that vary according to the elections made.
Passive Foreign Investment Companies. The Fund may invest in the
stock of foreign corporations that are classified as "passive foreign
investment companies" ("PFICs"). In general, a foreign corporation is
classified as a PFIC if at least one-half of its assets constitute
investment-type assets or 75% or more of its gross income is passive
income. If the Fund holds stock of a PFIC, an "excess distribution"
received with respect to the stock and gain from the disposition of the
stock (collectively "PFIC income") will be treated as having been realized
ratably over the entire period during which the Fund held the stock. The
Fund itself will be subject to tax on the portion, if any, of the PFIC
income that is allocated to the part of that holding period in prior
taxable years (and an interest factor will be added to the tax, as if the
tax had actually been payable in those prior taxable years), even if the
Fund distributes the corresponding income to shareholders. All PFIC
income is taxable as ordinary income.
The Fund may elect alternative tax treatment with respect to any
PFIC stock holds. Under such an election, the Fund generally would be
required to include in its gross income each year its share of the PFIC's
earnings and capital gains for the year, regardless of whether any
distributions are received from the PFIC, and the special rules in the
preceding paragraph would not apply; the amount so included in the Fund's
income would have to be distributed to its shareholders to satisfy the
Distribution Requirement and to avoid imposition of the Excise Tax. In
most instances it will be very difficult, if not impossible, to make this
election because of certain requirements thereof.
25
<PAGE>
Pursuant to proposed regulations, open-end RICs, such as the
Fund, would be entitled to elect to "mark-to-market" their stock in
certain PFICs. "Marking-to-market," in this context, means recognizing as
gain for each taxable year the excess, as of the end of that year, of the
fair market value of such a PFIC's stock over the adjusted basis in that
stock (including mark-to-market gain for each prior year for which an
election was in effect).
Foreign Currency Gains and Losses. Gains and losses attributable
to fluctuations in foreign currency exchange rates that occur between the
time the Fund accrues dividends, interest or other receivables, or
expenses or other liabilities, denominated in a foreign currency and the
time the Fund actually collects the receivables or pays the liabilities
generally are treated as ordinary income or ordinary loss. Similarly, on
the disposition of a debt security denominated in a foreign currency, or
of an option or forward contract on a foreign currency, gains or losses
attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security, option or contract and the date
of disposition also are treated as ordinary income or loss. These gains
or losses may increase or decrease the amount of the Fund's investment
company taxable income to be distributed to its shareholders.
Foreign Taxes. Dividends and interest received by the Fund may
be subject to income, withholding or other taxes imposed by foreign
countries and U.S. possessions that would reduce the yield on its
securities. Tax conventions between certain countries and the United
States may reduce or eliminate these foreign taxes, however, and many
foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors. If more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of
securities of foreign corporations, it will be eligible to, and may, file
an election ("Election") with the Internal Revenue Service that will
enable its shareholders, in effect, to receive the benefit of the foreign
tax credit with respect to any foreign or U.S. possessions' income taxes
paid by it. Pursuant to the Election, the Fund would treat those taxes as
dividends paid to its shareholders and each shareholder would be required
to (1) include in gross income, and treat as paid by him or her, his or
her proportionate share of those taxes, (2) treat his or her share of
those taxes and of any dividend paid by the Fund that represents income
from foreign or U.S. possession sources as his or her own income from
those sources and (3) either deduct the taxes deemed paid by him or her in
computing his or her taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit against his or her
federal income tax. No deduction for foreign taxes may be claimed by a
shareholder who does not itemize deductions. Generally, a credit for
foreign taxes may not exceed the shareholder's federal income tax
attributable to his total foreign source taxable income. The Fund will
report to its shareholders shortly after each taxable year their
respective shares of the income from sources within, and taxes paid to,
foreign countries and U.S. possessions if it makes the Election.
26
<PAGE>
Foreign Shareholders - U.S. Federal Income Taxation. U.S.
federal income taxation of a shareholder who, as to the United States, is
a non-resident alien individual, a foreign trust or estate, a foreign
corporation or a foreign partnership (a "foreign shareholder") depends on
whether the income from the Fund is "effectively connected" with a U.S.
trade or business carried on by the shareholder, as discussed generally
below. Special U.S. federal income tax rules that differ from those
described below may apply to certain foreign persons who invest in the
Fund. For example, the tax consequences to a foreign shareholder entitled
to claim the benefits of an applicable tax treaty may be different from
those described below. Foreign shareholders are advised to consult their
own tax advisers with respect to the particular tax consequences to them
of an investment in the Fund.
Foreign Shareholders - Income Not Effectively Connected. If a
foreign shareholder's income from the Fund is not effectively connected
with a U.S. trade or business carried on by the foreign shareholder,
distributions of the Fund's investment company taxable income generally
will be subject to U.S. federal withholding tax of 30% (or lower treaty
rate) on the gross amount of the distribution. Foreign shareholders also
may be subject to U.S. federal withholding tax on deemed income resulting
from any Election made by the Fund regarding foreign taxes paid by it as
paid by its shareholders (see discussion above), but foreign shareholders
will not be able to claim a credit or deduction for the foreign taxes
treated as having been paid by them.
Capital gains realized by foreign shareholders on the sale of
Fund shares and distributions to them of net capital gain, as well as
amounts retained by the Fund that are designated as undistributed capital
gains, generally will not be subject to federal income tax unless the
foreign shareholder is a non-resident alien individual and is physically
present in the United States for more than 182 days during the taxable
year. However, this rule only applies in exceptional cases, because any
individual present in the United States for more than 182 days during the
taxable year generally is treated as a resident for federal income tax
purposes on his worldwide income at the graduated rates applicable to U.S.
citizens, rather than the 30% federal withholding tax rate. In the case
of certain foreign shareholders, the Fund may be required to withhold
federal income tax at a rate of 31% from capital gain distributions and
the gross proceeds from a redemption of Fund shares unless the shareholder
furnishes the Fund with a certificate regarding the shareholder's foreign
status.
Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's income from the Fund is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that
shareholder on the disposition of Fund shares will be subject to federal
income tax at the graduated rates applicable to U.S. citizens or domestic
corporations, as the case may be. Foreign shareholders also may be
subject to the branch profits tax.
27
<PAGE>
Foreign Shareholders - Estate Tax. Foreign individuals generally
are subject to federal estate tax on their U.S. situs property, such as
shares of the Fund, that they own at the time of their death. Certain
credits against that tax and relief under applicable tax treaties may be
available.
State and Local Taxes. Depending on the Fund's activities in
states and localities in which its offices are maintained, in which its
agents or independent contractors are located or in which it is otherwise
deemed to be conducting business, the Fund may be subject to the tax laws
of such states or localities. Shareholders are advised to consult their
tax advisers concerning the application of state and local taxes.
Pennsylvania Personal Property Tax Exemption. Dreyfus/Laurel has
obtained a Certificate of Authority to do business as a foreign
corporation in Pennsylvania. In the opinion of counsel, shares of the
Fund are exempt from Pennsylvania personal property taxes.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended October 31,
1994, including notes to the financial statements and supplementary
information and the Report of Independent Auditors, are included in the
Annual Report to shareholders. A copy of the Annual Report accompanies
this Statement of Additional Information. The financial statements from
the Annual Report, including the notes thereto and report of independent
auditors, are incorporated herein by reference.
OTHER INFORMATION
Auditor. KPMG Peat Marwick LLP was appointed by the Directors to
serve as the Fund's independent auditors for the year ending October 31,
1994, providing audit services including (1) examination of the annual
financial statements, (2) assistance, review and consultation in
connection with the SEC and (3) review of the annual federal income tax
return and the Pennsylvania excise tax return filed on behalf of
Dreyfus/Laurel Funds, Inc.
Legal Counsel. Kirkpatrick & Lockhart, 1800 M Street, N.W., South
Lobby - 9th Floor, Washington, D.C. 20036, has passed upon the legality of
the shares offered by the Prospectus and this Statement of Additional
Information.
28
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
(formerly The Laurel Funds, Inc.)
PART C
-------
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Included in Part A.
Financial Highlights for each of the periods
indicated therein.
Included in Part B: The following are incorporated by
reference to the Registrant's Annual Reports to Shareholders for the period
ended October 31, 1994 filed on January 4, 1995 in the case of Dreyfus
International Equity Allocation Fund and January 5, 1995 in the case of
Dreyfus/Laurel Short Term Government Securities Fund:
- Reports of Independent Accountants.
- Portfolio of Investments.
- Statements of Assets and Liabilities.
- Statements of Operations.
- Statements of Changes in Net Assets.
- Notes to Financial Statements.
(b) Exhibits:
1(a) Articles of Incorporation. (Incorporated by
reference to Post-Effective Amendment No. 29
("Post-Effective Amendment No. 29") to the
Registrant's Registration Statement on Form N-1A
filed May 19, 1994 -- Registration No. 33-16338
("Registration Statement").
1(b) Articles Supplementary increasing number of
shares registered. Incorporated by reference to
Post-Effective Amendment No. 29.
1(c) Articles of Amendment. Incorporated by reference
to Post-Effective Amendment No. 31 Filed on
December 13, 1994.
1(d) Articles Supplementary designating classes.
Incorporated by reference to Post-Effective
Amendment No. 32 Filed on December 19, 1994.
- 1 -
<PAGE>
2 Bylaws. Incorporated by reference to the
Registration Statement.
3 Not applicable.
4 Specimen security. To be filed by amendment.
5(a) Investment Sub-Advisory Agreement among Mellon
Bank, N.A., S.A.M. Finance S.A. and the
Registrant for the European Fund. Incorporated
by reference to Post-Effective Amendment No. 22
filed 9/3/93.
5(b) Investment Management Agreement between Mellon
Bank, N.A. and the Registrant. Incorporated by
reference to Post-Effective Amendment No. 29.
5(c) Investment Sub-Advisory Agreement among Mellon
Bank, N.A., S.A.M. Finance S.A. and the
Registrant for the International Equity
Allocation Fund. Incorporated by reference to
Post-Effective Amendment No. 31 filed on December
13, 1994.
5(d) Assignment and Assumption Agreement among Mellon
Bank, N.A., The Dreyfus Corporation and the
Registrant (relating to Investment Management
Agreement). Incorporated by reference to Post-
Effective Amendment No. 31 filed on December 13,
1994.
5(e) Assignment Agreement among Mellon Bank, N.A., The
Dreyfus Corporation, S.A.M. Finance S.A. and the
Registrant (relating to Investment Sub-Advisory
Agreement for the European Fund). To be filed by
amendment.
5(f) Assignment Agreement among Mellon Bank, N.A., The
Dreyfus Corporation, S.A.M. Finance S.A. and the
Registrant (relating to Investment Sub-Advisory
Agreement for the International Equity Allocation
Fund). To be filed by amendment.
6 Distribution Agreement between Premier Mutual
Fund Services, Inc. and the Registrant.
Incorporated by reference to Post-Effective
Amendment No. 31 filed on December 13, 1994.
7 Not applicable.
8(a) Custody Agreement with Boston Safe Deposit and
Trust Company with respect to the European Fund.
- 2 -
<PAGE>
Incorporated by reference to Post-Effective
Amendment No. 23 filed 12/30/93.
8(b) Custody and Fund Accounting Agreement between the
Registrant and Mellon Bank, N.A. Incorporated by
reference to Post-Effective Amendment No. 29.
8(c) Supplement to Custody Agreement with Boston Safe
Deposit and Trust Company with respect to the
European Fund. Incorporated by reference to
Post-Effective Amendment No. 29.
9(a) Fund Accounting Services Agreement. Incorporated
by reference to the Registration Statement.
9(b) Fund Accounting Services Agreement with Boston
Safe Deposit and Trust Company with respect to
the European Fund. Incorporated by reference to
Post-Effective Amendment No. 23 filed 12/30/93.
9(c) Supplement to Fund Accounting Services Agreement
with Boston Safe Deposit and Trust Company with
respect to the European Fund. Incorporated by
reference to Post-Effective Amendment No. 29.
10 Opinion and consent of counsel. Filed herewith.
11 Consent of KPMG Peat Marwick LLP. Filed herewith.
12 Not applicable.
13 Letter of Investment Intent. Incorporated by
reference to the Registration Statement.
- 3 -
<PAGE>
14 Not applicable.
15(a) Restated Distribution Plan (relating to Investor
Shares and Class A Shares). Incorporated by
reference to Post-Effective Amendment No. 31
filed on December 13, 1994.
15(b) Form of Distribution and Service Plans (relating
to Class B Shares and Class C Shares).
Incorporated by reference to Post-Effective
Amendment No. 32 Filed on December 19, 1994.
16 Schedule for Computation of Performance
Calculation. Incorporated by reference to
Post-Effective Amendment No. 26 filed 3/1/94.
Item 25. Persons Controlled by or Under Common Control with
Registrant
--------------------------------------------------
Not Applicable.
Item 26. Number of Holders of Securities
-------------------------------
Set forth below are the number of recordholders of
securities of each series of the Registrant as of
December 8, 1994:
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class
Investor
Class A Class Class R Class I Class II Class III
<S> <S>
<S> <C> <C> <C> <C>
Dreyfus/Laurel
Prime N/A 18,637 1,581 N/A N/A N/A
Money Market Fund
Dreyfus/Laurel U.S.
Treasury Money N/A 2,672 114 N/A N/A N/A
Market Fund
Dreyfus/Laurel
Tax-Exempt Money N/A 1,372 769 N/A N/A N/A
Market Fund
Dreyfus/Laurel
Institutional Prime N/A N/A N/A 266 2 N/A
Money Market Fund
- 4 -
<PAGE>
Number of Record Holders
Title of Class
Dreyfus/Laurel
Institutional N/A N/A N/A 46 N/A N/A
Government Money
Market Fund
Dreyfus/Laurel
Institutional U.S.
N/A N/A N/A 63 N/A N/A
Treasury Money
Market Fund
Dreyfus/Laurel
Institutional N/A 12* N/A 12 N/A N/A
Short-Term Bond Fund
Dreyfus/Laurel
Institutional U.S. N/A N/A N/A 4 6 1
Treasury Only Money
Market Fund
Dreyfus/Laurel
Short-Term
N/A 6 3 N/A N/A N/A
Government
Securities Fund
Dreyfus Disciplined N/A 306 3,789 N/A N/A N/A
Stock Fund
Dreyfus Disciplined
N/A 15 152 N/A N/A N/A
Midcap Stock Fund
Dreyfus Bond Market
N/A 6 26 N/A N/A N/A
Index Fund
Dreyfus S&P 500 N/A 36 38 N/A N/A N/A
Stock Index Fund
Dreyfus European
Fund N/A 16 152 N/A N/A N/A
Dreyfus Equity N/A 2 3 N/A N/A N/A
Income Fund
Dreyfus
International Equity N/A 13 38 N/A N/A N/A
Allocation Fund
Premier Limited Term
Income Fund 49 N/A 993 N/A N/A N/A
Premier Balanced 38 N/A 82 N/A N/A N/A
Fund
Premier Small
Company Stock Fund 17 N/A 94 N/A N/A N/A
</TABLE>
- 5 -
<PAGE>
Item 27.
Indemnification
Incorporated by reference to Registration Statement.
Item 28.
Business and Other Connections of Investment Adviser
----------------------------------------------------
Investment Adviser -- The Dreyfus Corporation
------------------
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the investment
adviser, manager and distributor for sponsored investment companies
registered under the Investment Company Act of 1940 and as an investment
adviser to institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as 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 Management, Inc., another wholly-owned
subsidiary, provides investment management services to various pension
plans, institutions and individuals.
Officers and Directors of Investment Adviser
---------------------------------------------
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
MANDELL L. BERMAN Real estate consultant and private investor
Director
29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and Chief
Director Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
- 6 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 9103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director
535 Madison Avenue
New York, New York 10022;
Director and member of the Executive Committee of
Avnet, Inc.**
DAVID B. TRUMAN Educational consultant;
Director
Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the
Board and Chief Dreyfus Acquisition Corporation*;
Executive Officer
The Dreyfus Consumer Credit Corporation*;
Dreyfus Land Development Corporation*;
- 7 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
Dreyfus Management, Inc.*;
Dreyfus Service Corporation;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++
The Dreyfus Fund International Limited+++++
World Balanced Fund+++
Dreyfus Partnership Management, Inc.*;
Dreyfus Personal Management, Inc. *;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
The Dreyfus Trust Company++;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of
the Board of Dreyfus Service Corporation*;
Directors
Director and Vice President:
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
- 8 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, and
Director The Dreyfus Trust Company++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837
Vice President and former Treasurer and Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
President, Chief Operating Officer and Director:
Major Trading Corporation*
W. KEITH SMITH Chairman and Chief Executive Officer:
Chief Operating
Officer The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
- 9 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
PAUL H. SNYDER Director:
Vice President and
Chief Financial Pennsylvania Economy League
Officer Philadelphia, Pennsylvania;
Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Director and Vice President:
Financial Executives Institute
Philadelphia Chapter
Philadelphia, Pennsylvania;
LAWRENCE S. KASH Chairman, President and Chief Executive Officer:
Vice Chairman,
Distribution The Boston Advisers, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
- 10 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
JAY R. DEMARTINE Chairman of the Board and President:
Vice President,
Marketing The Woodbury Society
16 Woodbury lane
Ogunquit, ME 03907;
Former Managing Director:
Bankers Trust Company
280 Park Avenue
New York, NY 10017;
BARBARA E. CASEY President:
Vice President,
Retirement Services Dreyfus Retirement Services;
Executive Vice President:
Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President,
Corporate
Communications
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant
and Director The Dreyfus Security Savings Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
- 11 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
The Dreyfus Trust Company (N.J.)++
Seven Six Seven Agency, Inc.*;
ROBERT F. DUBUSS Director and Treasurer:
Vice President
Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ELIE M. GENADRY President:
Vice President,
Wholesale Institutional Services Division of Dreyfus
Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*:
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation *:
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
- 12 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and
General Counsel Dreyfus Previous Metals, Inc.*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation *;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President,
Fund Administration
PHILIP L. TOIA Chairman of the Board and Vice President;
Vice Chairman,
Operations and Dreyfus Thrift & Commerce****;
Administration
Director:
The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
- 13 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
The Chase Manhattan Bank, N.A. and The Chase
Manhattan Capital Markets Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. Formerly, Assistant Commissioner:
WICKHAM Department of Parks and Recreation of the City of
Vice President, New York
Human Resources 830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Controller
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Secretary:
Vice President,
Fund Legal and The Dreyfus Consumer Credit Corporation*;
Compliance
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
- 14 -
<PAGE>
Name and Position
with Dreyfus Other Businesses
----------------- ----------------
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
The Truepenny Corporation*
___________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New
York, New York 10006.
**** The address of the business so indicated is Five Triad Center,
Salt Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80
Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller
Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama
Islands.
Item 29. Principal Underwriter
---------------------
(a) Premier Mutual Fund Services, Inc. ("Premier") currently serves as
the exclusive distributor for The Dreyfus/Laurel Funds, Inc. Premier is
registered with the Securities and Exchange Commission as a broker-dealer
and is a member of the National Association of Securities Dealers, Inc.
Premier is a wholly-owned subsidiary of Institutional Administration
Services, Inc., the parent company of which is Boston Institutional Group,
Inc.
Premier also currently serves as the exclusive distributor or principal
underwriter for the following investment companies:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
- 15 -
<PAGE>
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
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) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional 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 Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus Ohio Municipal Money Market Fund, Inc.
- 16 -
<PAGE>
57) Dreyfus 100% U.S. Treasury Intermediate Term Fund
58) Dreyfus 100% U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus 100% U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) Dreyfus Short-Term Income Fund, Inc.
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Strategic Growth, L.P.
67) Dreyfus Strategic Income
68) Dreyfus Strategic Investing
69) Dreyfus Tax Exempt Cash Management
70) Dreyfus Treasury Cash Management
71) Dreyfus Treasury Prime Cash Management
72) Dreyfus Variable Investment Fund
73) Dreyfus-Wilshire Target Funds, Inc.
74) Dreyfus Worldwide Dollar Money Market Fund, Inc.
75) First Prairie Cash Management
76) First Prairie Diversified Asset Fund
77) First Prairie Money Market Fund
78) First Prairie Municipal Money Market Fund
79) First Prairie Tax Exempt Bond Fund, Inc.
80) First Prairie U.S. Government Income Fund
81) First Prairie U.S. Treasury Securities Cash Management
82) General California Municipal Bond Fund, Inc.
83) General California Municipal Money Market Fund
84) General Government Securities Money Market Fund, Inc.
85) General Money Market Fund, Inc.
86) General Municipal Bond Fund, Inc.
87) General Municipal Money Market Fund, Inc.
88) General New York Municipal Bond Fund, Inc.
89) General New York Municipal Money Market Fund
90) Pacific American Fund
91) Peoples Index Fund, Inc.
92) Peoples S&P MidCap Index Fund, Inc.
93) Premier Insured Municipal Bond Fund
94) Premier California Municipal Bond Fund
95) Premier GNMA Fund
96) Premier Growth Fund, Inc.
97) Premier Municipal Bond Fund
98) Premier New York Municipal Bond Fund
99) Premier State Municipal Bond Fund
100) The Dreyfus/Laurel Funds Trust
101) The Dreyfus/Laurel Tax-Free Municipal Funds
102) The Dreyfus/Laurel Investment Series
(b) The names of the principal executive officers of Premier together
with their respective positions with Premier and their positions and
offices with the Registrant, are set forth below.
<TABLE>
- 17 -
<PAGE>
<CAPTION>
<S> <C> <C>
Position and Position and
Name Office(s) with Office(s)
and Address Premier with Registrant
----------- ----------------- ----------------
Marie E. Connolly* Director, President & President & Treasurer
Chief Operating Officer
John E. Pelletier* Senior Vice President Vice President &
& General Counsel Secretary
Joseph F. Tower, III* Senior Vice President & Assistant Treasurer
Chief Financial Officer
John J. Pyburn** Vice President Assistant Treasurer
Jean M. O'Leary* Assistant Secretary N/A
Eric B. Fischman** Vice President & Vice President &
Associate General Assistant Secretary
Counsel
Frederic C. Dey** Senior Vice President Vice President &
Assistant Treasurer
Ruth D. Leibert** Assistant Vice President Assistant Secretary
Paul D. Furcinito** Assistant Vice President Assistant Secretary
</TABLE>
*Address: Funds Distributor, Inc., Exchange Place, Boston, MA 02109.
**Address: Premier Mutual Fund Services, Inc., 200 Park Avenue, New York,
NY 10166.
Item 30. Location of Accounts and Records
(1) The Dreyfus/Laurel Funds, Inc.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(2) Mellon Bank, N.A.
c/o The Boston Company Advisers, Inc.
4th Floor
One Exchange Place
Boston, MA 02109
(3) Mellon Bank, N.A.
c/o The Boston Company, Inc.
5th Floor
- 18 -
<PAGE>
One Boston Place
Boston, MA 02108
(4) Mellon Bank,
The Park Square Building
31 St. James Avenue
Boston, MA 02116
(5) The Shareholder Services Group, Inc.
1 American Express Plaza
Providence, RI 02903
(6) Mellon Bank, N.A.
One Mellon Bank Center
39th Floor
Pittsburgh, PA 15258
(7) The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
------------
(a) Not Applicable.
(b) Registrant has elected to include its Management's discussion of
fund performance required under Form N-1A, Item 5A in its annual
report. Registrant therefore undertakes to provide annual reports
without charge to any recipient of a Prospectus who requests the
information.
- 19 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant, The Dreyfus/Laurel Funds, Inc. (formerly The Laurel Funds,
Inc.), certifies that it meets all of the requirements for effectiveness
of this Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Pittsburgh, the Commonwealth
of Pennsylvania on the 5th day of January, 1995.
THE DREYFUS/LAUREL FUNDS, INC.
/s/ Marie E. Connolly
____________________________
Marie E. Connolly
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ Marie E. Connolly
__________________ President, Treasurer 1/5/95
Marie E. Connolly
Signature Title Date
-------- ----- -----
/s/ Francis P. Brennan
_______________________ Director,
Francis P. Brennan Chairman of the Board 1/5/95
/s/ Ruth Marie Adams
_____________________ Director 1/5/95
Ruth Marie Adams
________________________ Director
- 20 -
<PAGE>
James M. Fitzgibbons
________________________ Director
Kenneth A. Himmel
________________________ Director
Stephen J. Lockwood
/s/ Roslyn M. Watson
________________________ Director 1/5/95
Roslyn M. Watson
/s/ J. Tomlinson Fort
________________________ Director 1/5/95
J. Tomlinson Fort
/s/ Arthur L. Goeschel
________________________ Director 1/5/95
Arthur L. Goeschel
/s/ Arch S. Jeffery
________________________ Director 1/5/95
Arch S. Jeffery
/s/ Robert D. McBride
________________________ Director 1/5/95
Robert D. McBride
/s/ John L. Propst
________________________ Director 1/5/95
John L. Propst
/s/ John J. Sciullo
________________________ Director 1/5/95
John J. Sciullo
- 21 -
<PAGE>
- 22 -
<PAGE>
January 5, 1995
The Dreyfus/Laurel Funds, Inc.
200 Park Avenue
New York, New York 10166
Dear Sir or Madam:
You have requested our opinion regarding certain matters in
connection with the issuance by The Dreyfus/Laurel Funds, Inc. ("Company")
of shares of common stock of the Company in the following designated
series: Dreyfus/Laurel Short Term Government Securities Fund and Dreyfus
International Equity Allocation Fund (each, a "Series"). We have examined
the Company's Articles of Incorporation and other corporate documents
relating to the authorization and issuance of the common stock of the
Company. Based upon this examination, we are of the opinion that:
1. All legal requirements for the organization of the
Company under the laws of the State of Maryland have been
satisfied, and the Company is now a validly existing
corporation in good standing under the laws of the State
of Maryland.
2. The authorized capitalization of the Company consists of
twenty-five billion shares of common stock having a par
value of $.001 each.
3. The issuance of those shares of the Company's common
stock, which have been registered under the Securities
Act of 1933 ("1933 Act"), has been duly authorized by the
Company, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state laws
regulating the sale of securities.
4. When so issued, the Company's shares will be legally and
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion in connection
with Post-Effective Amendment No. 33 to the Registration Statement on Form
N-1A (File No. 33-16338) which you are about to file with the Securities
and Exchange Commission. We also consent to the reference to our firm
under the heading "Other Information" in the Statements of Additional
Information incorporated by reference into the Series' Prospectuses.
Very truly yours,
/s/ KIRKPATRICK & LOCKHART
KIRKPATRICK & LOCKHART
<PAGE>
Independent Auditors' Consent
-----------------------------
To the Board of Directors and Shareholders of
The Dreyfus/Laurel Funds, Inc.:
We consent to the use of our reports dated December 9, 1994, included
herein and to the references to our firm under the headings "Financial
Highlights" and "Other Information" in the Prospectus and Statement of
Additional Information filed with the Securities and Exchange Commission
in this Post-Effective Amendment No. 33 to the Registration Statement
under the Securities Act of 1933 and in this Amendment No. 34 to the
Registration Statement under the Investment Company Act of 1940.
/s/ KPMG Peat Marwick LLP
_________________________
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
January 3, 1995
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 25
<NAME> DREYFUS INTERNATIONAL EQUITY ALLOC. INVESTOR
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 11,802,968
<INVESTMENTS-AT-VALUE> 11,840,747
<RECEIVABLES> 23,438
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 109,546
<TOTAL-ASSETS> 11,973,731
<PAYABLE-FOR-SECURITIES> 29,205
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29,769
<TOTAL-LIABILITIES> 58,974
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,848,952
<SHARES-COMMON-STOCK> 7,035
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 27,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38,721
<NET-ASSETS> 11,914,757
<DIVIDEND-INCOME> 38,636
<INTEREST-INCOME> 35,101
<OTHER-INCOME> 0
<EXPENSES-NET> 29,777
<NET-INVESTMENT-INCOME> 43,960
<REALIZED-GAINS-CURRENT> (16,876)
<APPREC-INCREASE-CURRENT> 38,721
<NET-CHANGE-FROM-OPS> 65,805
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,045
<NUMBER-OF-SHARES-REDEEMED> 10
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,914,757
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 29,370
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,777
<AVERAGE-NET-ASSETS> 8,941,974
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.06
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<ARTICLE> 6
<SERIES>
[NUMBER] 25
<NAME> DREYFUS INTERNATIONAL EQUITY ALLOC. R
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
[INVESTMENTS-AT-COST] 11,802,968
[INVESTMENTS-AT-VALUE] 11,840,747
[RECEIVABLES] 23,438
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 109,546
[TOTAL-ASSETS] 11,973,731
[PAYABLE-FOR-SECURITIES] 29,205
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 29,769
[TOTAL-LIABILITIES] 58,974
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 11,848,952
[SHARES-COMMON-STOCK] 1,177,712
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 27,084
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 38,721
[NET-ASSETS] 11,914,757
[DIVIDEND-INCOME] 38,636
[INTEREST-INCOME] 35,101
[OTHER-INCOME] 0
[EXPENSES-NET] 29,777
[NET-INVESTMENT-INCOME] 43,960
[REALIZED-GAINS-CURRENT] (16,876)
[APPREC-INCREASE-CURRENT] 38,721
[NET-CHANGE-FROM-OPS] 65,805
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,181,714
[NUMBER-OF-SHARES-REDEEMED] 4,002
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 11,914,757
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 29,370
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 29,777
[AVERAGE-NET-ASSETS] 8,941,974
[PER-SHARE-NAV-BEGIN] 10.00
[PER-SHARE-NII] 0.02
[PER-SHARE-GAIN-APPREC] 0.04
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.06
[EXPENSE-RATIO] 1.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 22
<NAME> DREYFUS SHORT TERM GOVT INVESTOR
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 838,392
<INVESTMENTS-AT-VALUE> 838,300
<RECEIVABLES> 6,255
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1
<TOTAL-ASSETS> 844,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,207
<TOTAL-LIABILITIES> 1,207
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 843,448
<SHARES-COMMON-STOCK> 3,786
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (7)
<ACCUM-APPREC-OR-DEPREC> (92)
<NET-ASSETS> 843,349
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18,673
<OTHER-INCOME> 0
<EXPENSES-NET> 2,555
<NET-INVESTMENT-INCOME> 16,118
<REALIZED-GAINS-CURRENT> (7)
<APPREC-INCREASE-CURRENT> (92)
<NET-CHANGE-FROM-OPS> 16,019
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 648
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,091
<NUMBER-OF-SHARES-REDEEMED> 367
<SHARES-REINVESTED> 62
<NET-CHANGE-IN-ASSETS> 843,349
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,555
<AVERAGE-NET-ASSETS> 796,071
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> (0.02)
<PER-SHARE-DIVIDEND> 0.18
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<ARTICLE> 6
<SERIES>
[NUMBER] 22
<NAME> DREYFUS SHORT TERM GOVT R
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
[INVESTMENTS-AT-COST] 838,392
[INVESTMENTS-AT-VALUE] 838,300
[RECEIVABLES] 6,255
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 1
[TOTAL-ASSETS] 844,556
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,207
[TOTAL-LIABILITIES] 1,207
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 843,448
[SHARES-COMMON-STOCK] 80,559
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] (7)
[ACCUM-APPREC-OR-DEPREC] (92)
[NET-ASSETS] 843,349
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 18,673
[OTHER-INCOME] 0
[EXPENSES-NET] 2,555
[NET-INVESTMENT-INCOME] 16,118
[REALIZED-GAINS-CURRENT] (7)
[APPREC-INCREASE-CURRENT] (92)
[NET-CHANGE-FROM-OPS] 16,019
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 15,470
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 96,520
[NUMBER-OF-SHARES-REDEEMED] 17,506
[SHARES-REINVESTED] 1,545
[NET-CHANGE-IN-ASSETS] 843,349
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 2,415
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 2,555
[AVERAGE-NET-ASSETS] 796,071
[PER-SHARE-NAV-BEGIN] 10.00
[PER-SHARE-NII] 0.20
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.20
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.00
[EXPENSE-RATIO] 0.55
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
