PROSPECTUS MARCH 1, 1997
DREYFUS DISCIPLINED MIDCAP STOCK FUND
DREYFUS DISCIPLINED MIDCAP STOCK FUND (THE "FUND") IS A SEPARATE,
DIVERSIFIED PORTFOLIO OF THE DREYFUS/LAUREL FUNDS, INC.,
AN OPEN-END MANAGEMENT INVESTMENT COMPANY (THE "COMPANY"), KNOWN AS A MUTUAL
FUND. THE FUND SEEKS TOTAL INVESTMENT RETURNS (INCLUDING CAPITAL APPRECIATION
AND INCOME) WHICH CONSISTENTLY OUTPERFORM THE
STANDARD & POOR'S 400 MIDCAP INDEX.
BY THIS PROSPECTUS, THE FUND IS OFFERING INSTITUTIONAL SHARES AND
RETAIL SHARES. (INSTITUTIONAL AND RETAIL SHARES OF THE
FUND WERE FORMERLY CALLED INVESTOR AND CLASS R SHARES, RESPECTIVELY.)
INSTITUTIONAL SHARES AND RETAIL SHARES ARE IDENTICAL, EXCEPT
AS TO THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. RETAIL
SHARES ARE OFFERED TO ANY INVESTOR. INSTITUTIONAL SHARES ARE OFFERED ONLY
TO CLIENTS OF BANKS, SECURITIES BROKERS OR DEALERS
("SELECTED DEALERS") AND OTHER FINANCIAL INSTITUTIONS (COLLECTIVELY, "AGENTS")
THAT HAVE ENTERED INTO A SELLING AGREEMENT ("AGREEMENT")
WITH PREMIER MUTUAL FUND SERVICES, INC. (THE "DISTRIBUTOR") AND OMNIBUS
ACCOUNTS HELD BY INSTITUTIONS THAT PROVIDE SUB-ACCOUNTING
OR RECORDKEEPING SERVICES TO THEIR CLIENTS.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER.
THE DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ CAREFULLY BEFORE YOU
INVEST AND RETAINED FOR FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED MARCH 1, 1997,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ("SEC") AND IS INCORPORATED HEREIN BY REFERENCE. THE SEC MAINTAINS
A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE SAI, MATERIAL INCORPORATED
BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE
SAI, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN AFFILIATE OF
MELLON BANK, N.A. ("MELLON BANK") 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.
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.
[Page 1]
TABLE OF CONTENTS
Page
Expense Summary........................ 4
Financial Highlights................... 5
Description of the Fund................ 7
Management of the Fund................. 12
How to Buy Fund Shares................. 14
Shareholder Services................... 16
How to Redeem Fund Shares.............. 20
Distribution Plan (Institutional Shares Only) 23
Dividends, Other Distributions and Taxes 23
Performance Information................ 25
General Information.................... 26
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
EXPENSE SUMMARY
INSTITUTIONAL SHARES RETAIL SHARES
__________________ _________________
<S> <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.......................................... 1.10% 1.10%
12b-1 Fee(1)............................................ .25% none
Other Expenses(2)....................................... .00% .00%
______ ______
Total Fund Operating Expenses........................... 1.35% 1.10%
EXAMPLE:
You would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual
return and (2) redemption at the end of each
time period: Institutional Shares Retail Shares
____________________ _______________
1 Year $ 14 $ 11
3 Years $ 43 $ 35
5 Years $ 74 $ 61
10 Years $ 162 $ 134
(1) See "Distribution Plan (Institutional Shares Only)" for a description of
the Fund's Distribution Plan for the Institutional Class.
(2) 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 .01% of the Fund's net
assets. (See "Management of the Fund.")
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses that investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an annual
basis. Long-term investors in Institutional shares could pay more in 12b-1
fees than the economic equivalent of paying the maximum front-end sales
charges applicable to mutual funds sold by members of the National
Association of Securities Dealers, Inc. The information in the foregoing
table does not reflect any fee waivers or expense reimbursement arrangements
that may be in effect. Certain Agents may charge their clients direct fees
for effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares" and
"Distribution Plan (Institutional Shares Only)."
The Company understands that Agents (including Mellon Bank and its
affiliates) may charge fees to their clients who are owners of Fund 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
Agreement with the Distributor. The Agreement requires each Agent to disclose
to its clients any compensation payable to such Agent by the Distributor and
any other compensation payable by the clients for various services provided
in connection with their accounts.
[Page 4]
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Institutional share or
Retail share outstanding throughout each year or period and should be read in
conjunction with the financial statements, related notes and report of
independent auditors that appear in the Fund's Annual Report dated October
31, 1996 and that are incorporated by reference in the SAI. The financial
statements included in the Fund's Annual Report for the year ended October
31, 1996 have been audited by KPMG Peat Marwick LLP, independent auditors.
Further information about, and management's discussion of, the Fund's
performance is contained in the Fund's Annual Report which may be obtained
without charge by writing to the address or calling the number set forth on
the cover page of this Prospectus.
<TABLE>
DREYFUS DISCIPLINED MIDCAP STOCK FUND
FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR ENDED YEAR ENDED PERIOD ENDED
10/31/96 10/31/95 10/31/94*
_____ _____ ______
<S> <C> <C> <C>
Net asset value, beginning of period.................... $11.92 $ 9.75 $10.00
____ ____ ____
Income from investment operations:
Net investment income................................. 0.04 0.09 0.05
Net realized and unrealized gain (loss) on investments 2.98 2.17 (0.26)
____ ____ ____
Total from investment operations...................... 3.02 2.26 (0.21)
____ ____ ____
Less distributions
Distributions from net investment income.............. (0.05) (0.09) (0.04)
Distributions from net realized gain on investments..... (0.53) .- .-
Total Distributions..................................... (0.58) (0.09) (0.04)
____ ____ ____
Net asset value, end of period.......................... $14.36 $11.92 $ 9.75
==== ==== ====
Total return++.......................................... 26.29% 23.39% (2.06)%+
==== ==== ====
Ratios to average net assets/supplemental data:
Net assets, end of period (000's)..................... $3,205 $1,417 $54
Ratio of operating expenses to average net assets..... 1.35% 1.35% 0.80%+**
Ratio of net investment income to average net assets.. 0.28% 0.86% 0.42%+**
Portfolio turnover rate................................. 90.93% 71% 83%
Average Commission rate paid##.......................... $.0390 - -
* The Fund commenced selling Investor shares on April 6, 1994.
Effective July 15, 1996, the Fund's Investor shares were redesignated
as Institutional shares.
** These ratios have been restated to reflect current year's presentation.
+ Not annualized.
++ Total return represents aggregate total return for the periods indicated.
# Prior to October 17, 1994, Mellon Bank served as the
Fund's investment manager. Effective October 17, 1994, Dreyfus began
serving as the Fund's investment manager.
## For fiscal years beginning November 1, 1995, the Fund is required to disclose
its average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
[Page 5]
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
DREYFUS DISCIPLINED MIDCAP STOCK FUND
FOR A RETAIL SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
YEAR ENDED YEAR ENDED PERIOD ENDED
10/31/96 10/31/95 10/31/94*
_____ _____ ______
<S> <C> <C> <C>
Net asset value, beginning of period.................... $11.92 $ 9.76 $10.00
____ ____ ____
Income from investment operations:
Net investment income................................. 0.07 0.12 0.09**
Net realized and unrealized gain (loss) on investments 2.98 2.16 (0.27)
____ ____ ____
Total from investment operations...................... 3.05 2.28 (0.18)
Less distributions:
Distributions from net investment income.............. (0.08) (0.12) (0.06)
Distributions from net investment income................ (0.53) .- .-
____ ____ ____
Total Distributions..................................... (0.61) (0.12) (0.06)
____ ____ ____
Net asset value, end of period.......................... $14.36 $11.92 $ 9.76
==== ==== ====
Total return++.......................................... 26.61% 23.57% (1.77)%+
==== ==== ====
Ratios to average net assets/supplemental data:
Net assets, end of period (000's)..................... $15,644 $12,129 $18,169
Ratio of expenses to average net assets............... 1.10% 1.10% 1.13%+***(1)
Ratio of net investment income to average net assets.. 0.57% 1.11% 0.95%+(1)
Portfolio turnover rate............................... 90.93% 71% 83%
Average Commission rate paid##........................ $.0390 - -
* The Fund commenced operations on November 12, 1993.
Any shares outstanding prior to April 4, 1994 were designated as Trust
Shares. Effective October 17, 1994, the Fund's Trust Shares were
redesignated as Class R shares. Effective July 15, 1996, Class R shares
were redesignated as Retail shares.
** Net investment income before reimbursement of expenses by the
investment adviser for the period ended October 31, 1994 was $0.06.
*** Annualized expense ratio before voluntary reimbursement of expenses by
the investment adviser for the period ended October 31, 1994 was 1.48%.
+ Not Annualized.
Total return represents aggregate total return for the periods indicated.
# Prior to October 17, 1994, Mellon Bank served as the
Fund's investment manager. Effective October 17, 1994, Dreyfus began
serving as the Fund's investment manger.
## For fiscal years beginning November 1, 1995, the Fund is required to disclose
its average commission rate paid per share for purchases and sales of
investment securities.
(1) These ratios have been restated to reflect current year's presentation.
</TABLE>
[Page 6]
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, the Fund is offering Institutional shares and
Retail shares. (Institutional and Retail shares of the Fund were formerly
called Investor and Class R shares, respectively.) Institutional shares and
Retail shares are identical, except as to the services offered to and the
expenses borne by each Class. Retail shares are offered to any investor.
Institutional shares are offered only to clients of Agents that have entered
into an Agreement with the Distributor and omnibus accounts held by
institutions that provide sub-accounting or recordkeeping services to their
clients. You should consult your Agent to determine which Class of shares is
offered by the Agent. Unless the Fund is otherwise instructed, new purchases
or exchanges by existing shareholders will be in the same Class of shares
that the shareholder then holds. All Agents have agreed to transmit
transaction requests to the Fund's transfer agent or to the Distributor.
Distribution and shareholder servicing fees paid by Institutional shares will
cause Institutional shares to have a higher expense ratio and pay lower
dividends than Retail shares.
INVESTMENT OBJECTIVE
The Fund seeks total investment returns (including capital
appreciation and income) which consistently outperform the Standard & Poor's
400 MidCap Index ("S&P MidCap"). The objective is not fundamental. There can
be no assurance that the Fund will meet its stated investment objective.
MANAGEMENT POLICIES
The Fund attempts to maintain a diversified holding in common stocks
of medium capitalization companies, firms with a market value between $200
million and $5 billion. In the view of Dreyfus, many medium-sized companies
are in fast-growing industries, offer superior earnings growth potential, and
are characterized by strong balance sheets and high returns on equity.
However, because the companies in this market are smaller, prices of their
stocks tend to be more volatile than stocks of companies with large
capitalizations. The Fund may also hold investments in large and small
capitalization companies, including emerging and cyclical growth companies.
Emerging and cyclical growth companies are firms which, while they may not
have a history of stable long-term growth, are nonetheless expected to
represent attractive investments.
Common stocks are selected for the Fund so that, in the aggregate,
the investment characteristics and risk profile of the Fund are similar to
the S&P MidCap. While it may maintain aggregate investment characteristics
similar to the S&P MidCap, however, the Fund seeks to invest in common stocks
of companies which in the aggregate will provide a higher total return than
the S&P MidCap. The Fund is not an index fund and its investments are not
limited to securities of issuers included in the S&P MidCap.
Dreyfus utilizes computer techniques to track, and, if possible,
outperform the S&P MidCap. To construct the Fund, Dreyfus employs valuation
models designed to identify common stocks of companies that are undervalued
and should be purchased and retained by the Fund. Undervalued securities are
normally characterized by a relatively low price to earnings ratio (using
normalized earnings), a low ratio of market price to book value, or
underlying asset values that Dreyfus feels are not fully reflected in the
current market price. Once undervalued common stocks are identified, Dreyfus'
experienced investment analysts construct a fund, using the valuation models,
that in the aggregate resembles the S&P MidCap, but is weighted toward the
most attractive stocks. The computerized ranking system incorporates
information about the relevant criteria as of the most recent period for
which data are available to the system. Once ranked, the securities are
categorized by the system under the headings "buy," "sell" or "hold." Dreyfus
decides whether to buy, sell, or hold the security based principally on the
system's categorization, subject to modification based on subsequently
available or other specific relevant information about the security.
[Page 7]
Under normal circumstances, at least 65% of the Fund's total assets
will be invested in common stocks. The Fund may also
invest in: (1) obligations issued or guaranteed as to interest and principal
by the U.S. Government, its agencies and instrumentalities; (2) instruments
of U.S. and foreign banks, including certificates of deposit, banker's
acceptances and time deposits, and may include Eurodollar Certificates of
Deposit ("ECDs"), Yankee Certificates of Deposit ("Yankee CDs") and
Eurodollar Time Deposits ("ETDs"); (3) corporate obligations rated at least
Baa by Moody's Investors Service, Inc. ("Moody's"), or BBB by Standard &
Poor's rating services, or if unrated, of comparable quality as determined by
Dreyfus; (4) Eurodollar bonds and notes; (5) securities of foreign companies
evidenced by American Depository Receipts ("ADRs"); (6) repurchase
agreements; (7) when-issued transactions; and (8) commercial paper. The Fund
may also utilize securities lending and reverse repurchase agreements, and
may enter into options and futures contracts for hedging purposes, subject to
certain limitations.
Securities rated BBB by Standard & Poor's or Baa by Moody's are
considered by those rating agencies to be "investment grade" securities,
although Moody's considers securities rated Baa to have speculative
characteristics. Further, while bonds rated BBB by Standard & Poor's exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and principal for debt in this category than debt in higher rated categories.
The Fund will dispose in a prudent and orderly fashion of bonds whose ratings
drop below these minimum ratings.
The S&P MidCap is composed of 400 domestic common stocks chosen by
Standard & Poor's for market size, liquidity and industry group
representation. It is a market-weighted index (stock price times shares
outstanding), with each stock affecting the S&P MidCap in proportion to its
market value. The inclusion of a stock in the S&P MidCap does not imply that
Standard & Poor's believes the stock to be an attractive or appropriate
investment, nor is Standard & Poor's in any way affiliated with the Fund. The
S&P MidCap was created by Standard & Poor's to capture the performance of the
stocks that fall in the medium capitalization range. The medium
capitalization range of stocks was defined, at the original time of
screening, as between $200 million and $5 billion in market value. Any
middle-capitalization stocks already included in the Standard & Poor's 500
Composite Stock Price Index ("S&P 500") were excluded from candidacy for the
S&P MidCap. After removal of the 500 stocks, the S&P MidCap candidate
population was reduced to 1,200 stocks. Standard & Poor's then subjected this
smaller population to a variety of screens and eventually the sample size was
reduced to the final 400 stocks. Standard & Poor's screened the candidate
population using the following criteria: level of trading activity, or
liquidity; market value; industry group representation; and the level of
controlling interest. A limited percentage of the S&P MidCap may include
Canadian securities. No other foreign securities are eligible for inclusion.
INVESTMENT TECHNIQUES
In connection with its investment objective and policies, the Fund
may employ, among others, the following investment techniques:
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.
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. Securities loans, however, are made only to borrowers deemed by
Dreyfus to be of good standing and when, in its judgment, the income to be
earned from the loan justifies the attendant risks.
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
[Page 8]
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 associated limits discussed under "Certain Portfolio
Securities - Illiquid Securities."
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
fund securities is deemed by Dreyfus to be disadvantageous. Under a reverse
repurchase 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
percentage 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.
WHEN-ISSUED SECURITIES AND DELAYED DELIVERY 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 at least equal at all times to the
amounts of its when-issued and delayed delivery commitments.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS. The Fund may
purchase and sell various financial instruments, including financial futures
contracts (such as index futures contracts) and options (such as options on
U.S. or foreign securities or indices of such securities). These instruments
may be used, for example, to preserve a return or spread or to facilitate or
substitute for the sale or purchase of securities. The Fund's ability to use
these instruments may be limited by market conditions, regulatory limits and
tax considerations. The Fund might not use any of these strategies and there
can be no assurance that any strategy that is used will succeed. See the SAI
for more information regarding these instruments and the risks relating
thereto. The Fund may not purchase put or call options that are traded on a
national stock exchange in an amount exceeding 5% of its net assets.
The use of futures and options involves special risks, including: (1)
possible imperfect or no correlation between price movements of the portfolio
investments (held or intended to be purchased) involved in the transaction
and price movements of the instruments involved in the transaction; (2)
possible lack of a liquid secondary market for any particular instrument at a
particular time; (3) the need for additional portfolio management skills and
techniques; (4) losses due to unanticipated market price movements; (5) the
fact that, while such strategies can reduce the risk of loss, they can also
reduce the opportunity for gain, or even result in losses, by offsetting
favorable price movements in portfolio investments; (6) incorrect forecasts
by Dreyfus concerning direction of price fluctuations of the investment
involved in the transaction, which may result in the strategy being
ineffective; (7) loss of premiums paid by the Fund on options it purchases;
and (8) the possible inability of the Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or
the need to sell a portfolio security at a disadvantageous time, due to the
need for the Fund to maintain "cover" or to segregate securities in connection
with such transactions and the possible inability of the Fund to close out
or liquidate its positions.
[Page 9]
Dreyfus may use futures and options for hedging purposes (to adjust
the risk characteristics of the Fund's portfolio) and
may use these instruments to adjust the return characteristics of the Fund's
portfolio of investments. This can increase investment risk. If Dreyfus
judges market conditions incorrectly or employs a strategy that does not
correlate well with the Fund's investments, these techniques could result in
a loss , regardless of whether the intent was to reduce risk or increase
return. These techniques may increase the volatility of the Fund and may
involve a small investment of cash relative to the magnitude of the risk
assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised or if there is
not a liquid secondary market to close out a position that the Fund has
entered into.
CERTAIN PORTFOLIO SECURITIES
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in U.S.
dollar-denominated ADRs. ADRs typically are issued by an American bank or
trust company and evidence ownership of underlying securities issued by
foreign companies. ADRs are traded in the United States on national
securities exchanges or in the over-the-counter market.
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 at the time of purchase at least A-1 by Standard & Poor's,
Prime-1 by Moody's, F-1 by Fitch Investors Service LLP, Duff 1 by Duff &
Phelps, Inc., or A1 by IBCA, Inc.
ECDS, ETDS AND YANKEE CDS. The Fund may invest in ECDs, ETDs and
Yankee CDs. ECDs are U.S. dollar-denominated certificates of deposit issued
by foreign branches of domestic banks. ETDs are U.S. dollar-denominated time
deposits in a foreign branch of a U.S. bank or a foreign bank. Yankee CDs are
certificates of deposit issued by a U.S. branch of a foreign bank denominated
in U.S. dollars and held in the United States. ECDs, ETDs and Yankee CDs are
subject to somewhat different risks than are the obligations of domestic
banks. See "Foreign Securities."
EURODOLLAR BONDS AND NOTES. The Fund may invest in Eurodollar bonds
and notes. Eurodollar bonds and notes are obligations which pay principal and
interest in U.S. dollars held in banks outside the United States, primarily
in Europe. Investments in Eurodollar bonds and notes involve risks that
differ from investments in securities of domestic issuers. See "Foreign
Securities."
FOREIGN SECURITIES. The Fund may 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, adverse 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. 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.
[Page 10]
ILLIQUID SECURITIES. The Fund will not knowingly invest more than 15%
of the value of its 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 that 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 or
by Dreyfus pursuant to guidelines established by the Board of Directors. The
Board or Dreyfus 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 pursuant to
registration or an exemption therefrom. 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 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 from the Fund or other holder.
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 ("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.
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
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.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on
the basis of potential for capital appreciation and income 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 involves correspondingly greater brokerage
commissions and other expenses that must be borne directly by the Fund and,
thus, indirectly by its shareholders. In addition, a high rate of portfolio
turnover may result in the realization of larger amounts of short-term
capital gains that, when distributed to the Fund's shareholders, are taxable
to them as ordinary income. Nevertheless, securities transactions for the
Fund will be based only upon
[Page 11]
investment considerations and will not be limited by any other considerations
when Dreyfus 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. As a fundamental policy, the Fund
may not (i) borrow money in an amount exceeding 331/3% of the Fund's total
assets at the time of borrowing; (ii) make loans or lend securities in excess
of 331/3% of the Fund's total assets; (iii) purchase, with respect to 75% of
the Fund's total assets, securities of any one issuer representing more than
5% of the Fund's total assets (other than securities issued or guaranteed by
the U.S. Government, its agencies and instrumentalities) or more than 10% of
that issuer's outstanding voting securities; and (iv) invest more than 25% of
the value of the Fund's total assets in the securities of one or more issuers
conducting their principal activities in the same industry; provided that
there shall be no such limitation on investments, in obligations of the U.S.
Government, state and municipal governments and their political subdivisions
or investments in domestic banks, including U.S. branches of foreign banks
and foreign branches of U.S. banks. 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 the
shareholder's 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 interest of the
Fund, it may consider terminating sales of its shares in the states involved.
MANAGEMENT OF THE FUND
INVESTMENT MANAGER - Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of January 31, 1997, Dreyfus managed or administered
approximately $85 billion in assets for more than 1.7 million investor
accounts nationwide.
Dreyfus serves as the Fund's investment manager. Dreyfus supervises
and assists in the overall management of the Fund's affairs under an
Investment Management Agreement with the Fund, subject to the overall
authority of the Company's Board of Directors in accordance with Maryland
law. 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 services to the
Fund. As the Fund's investment manager, Dreyfus manages the Fund by making
investment decisions based on the Fund's investment objective, policies and
restrictions.
The Fund is managed by John O'Toole. Mr. O'Toole has managed the Fund
since its commencement of operations in November, 1993, and has been employed
by Dreyfus as portfolio manager of the Fund since October 17, 1994. Mr.
O'Toole is a Senior Vice President and a Portfolio Manager for Mellon Equity
Associates. He has been with Mellon Bank since 1979.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon
is among the twenty-five largest bank holding companies in the United States
based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number
[Page 12]
of companies known as Mellon Financial Services Corporations. Through its
subsidiaries, including Dreyfus, Mellon managed approximately $233 billion in
assets as of December 31, 1996, including $86 billion in mutual fund assets.
As of December 31, 1996, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $1,046 billion in assets, including approximately $57 billion in
mutual fund assets.
Under the Investment Management Agreement, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of 1.10% of the value of the Fund's
daily net assets. Dreyfus pays all of the Fund's expenses, except brokerage
fees, taxes, interest, fees and expenses of the non-interested Directors
(including counsel fees), Rule 12b-1 fees (if applicable) and extraordinary
expenses. In order to compensate Dreyfus 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. Although Dreyfus is not
obligated to pay the fees and expenses of the non-interested Directors
(including counsel fees), Dreyfus is contractually required to reduce its
management fee in an amount equal to the Fund's allocable share of such fees
and expenses. From time to time, Dreyfus may waive (either voluntarily or
pursuant to applicable state limitations) a portion of the investment
management fees payable by the Fund. For the fiscal year ended October 31,
1996, the Fund paid Dreyfus 1.10% of its average daily net assets in
investment management fees, less fees and expenses of the non-interested
Directors (including counsel fees).
For the fiscal year ended October 31, 1996, total operating expenses
(excluding Rule 12b-1 fees) of the Fund were 1.10% of the average daily net
assets of each class for the Institutional and Retail shares, respectively.
In addition, Institutional shares may be subject to certain
distribution and shareholder servicing fees. See "Distribution Plan
(Institutional Shares Only)."
Dreyfus may pay the Fund's distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Fund. The Fund's distributor may use part or all of such
payments to pay Agents in respect of these services.
In allocating brokerage transactions for the Fund, Dreyfus seeks to
obtain the best execution of orders at the most favorable net price. Subject
to this determination, Dreyfus may consider, among other things, the receipt
of research services and/or the sale of shares of the Fund or other funds
managed, advised or administrated by Dreyfus as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the SAI.
Dreyfus is authorized to allocate purchase and sale orders for
portfolio securities to certain financial institutions, including, in the
case of agency transactions, financial institutions that are affiliated with
Dreyfus or Mellon Bank or that have sold shares of the Fund, if Dreyfus
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.
DISTRIBUTOR. The Fund's distributor is Premier Mutual Fund Services,
Inc. The Distributor is located at 60 State Street, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDI Distribution
Services, Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company
of which is Boston Institutional Group, Inc.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND SUB-
ADMINISTRATOR. Mellon Bank (One Mellon Bank Center, Pittsburgh, Pennsylvania
15258) is the Fund's custodian. The Fund's Transfer and Dividend Disbursing
Agent is Dreyfus Transfer, Inc. (the "Transfer Agent"), a wholly-owned
subsidiary of Dreyfus, located at One American Express Plaza, Providence, Rhode
Island 02903. Premier
[Page 13]
Mutual Fund Services, Inc. is the Fund's sub-administrator and, pursuant to a
Sub-Administration Agreement, provides various administrative and corporate
secretarial services to the Fund.
HOW TO BUY FUND SHARES
GENERAL - Retail shares are offered to any investor. Institutional
shares are offered only to clients of Agents that have entered into an
Agreement with the Distributor and omnibus accounts held by institutions that
provide sub-accounting or recordkeeping services to their clients. You may be
charged a fee if you effect transactions in Fund shares through an Agent.
Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Fund reserves the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of an Agent which maintains an omnibus account in the Fund and has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant is $750, with no minimum on subsequent
purchases. Individuals who open an IRA also may open a non-working spousal IRA
with a minimum initial investment of $250. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of Dreyfus or any of its affiliates or subsidiaries, directors of
Dreyfus, Board members of a fund advised by Dreyfus including members of the
Company's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment for Retail shares is $1,000. For full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries who
elect to have a portion of their pay directly deposited into their Fund
account, the minimum initial investment for Retail shares is $50. The Fund
reserves the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified or non-qualified
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Fund.
The Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time.
Retail shares are also offered without regard to the minimum initial
investment requirements, through Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant
to the Dreyfus Step Program (described under "Shareholder Services"). These
services enable you to make regularly scheduled investments and may provide
you with a convenient way to invest for long-term financial goals. You should
be aware, however, that periodic investment plans do not guarantee a profit
and will not protect an investor against loss in a declining market.
A "Retirement Plan" is a qualified or non-qualified employee benefit
plan or other program, including pension, profit-sharing and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments. The Internal Revenue Code
of 1986, as amended (the "Code"), imposes various limitations on the amount
that may be contributed to Retirement Plans. These limitations apply with
respect to participants at the plan level and, therefore, do not directly
affect the amount that may be invested in the Fund by a Retirement Plan.
Participants and plan sponsors should consult their tax advisers for details.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds" or, if for Dreyfus Retirement Plan accounts, to "The
Dreyfus Trust Company, Custodian." For accounts other than Dreyfus Retirement
Plan accounts, payments which are mailed should be sent to Dreyfus
Disciplined Midcap Stock Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. If you are opening a new account, please include your Account
Application indicating which Class of shares is being purchased. For
subsequent investments, your Fund account number should appear on the check
and an invest-
[Page 14]
ment slip should be enclosed. For Dreyfus Retirement Plan accounts, payments
which are mailed should be sent to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check. Purchase orders for Retail
shares may be delivered in person only to a Dreyfus Financial Center. THESE
ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please call
the telephone number listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit and Trust Company, together with
the Fund's DDA # 044210/Dreyfus Disciplined Midcap Stock Fund and applicable
Class for purchase of Fund shares in your name. The wire must indicate which
Class of shares is being purchased and it must include your Fund account
number (for new accounts, your Taxpayer Identification Number ("TIN") should
be included instead), account registration and dealer number, if applicable.
If your initial purchase of Fund shares is by wire, you should call
1-800-645-6561 after completing your wire payment in order to obtain your
Fund account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available funds through the
ACH System to Boston Safe Deposit and Trust Company with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS "4040" for
Institutional shares and "4030" for Retail shares.
The Distributor may pay dealers a fee of up to 0.5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs or (ii) such plan's or program's aggregate investment in the Dreyfus
Family of Funds or certain other products made available by the Distributor
to such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date Fund shares are
first purchased by or on behalf of employees participating in such plan or
program and on each subsequent January 1st. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each purchase of Fund
shares. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Other Distributions and
Taxes" and the Fund's Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
[Page 15]
NET ASSET VALUE PER SHARE ("NAV") - An investment portfolio's NAV
refers to the worth of one share. The NAV for Institutional shares and Retail
shares is computed by adding, with respect to such Class of shares, the value
of the Fund's investments, cash, and other assets attributable to that Class,
deducting liabilities of the Class and dividing the result by the 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 listed or traded on a stock
exchange, except as otherwise noted, 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 a 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.
NAV is determined on each day that the New York Stock Exchange
("NYSE") is open (a "business day"), as of the close of business of the
regular session of the NYSE (usually 4 p.m. Eastern Time). Orders received by
the Fund in proper form before such close of business 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). Orders received after such close of business are effective on, and
receive the share price determined on, the next business day, except where
shares are purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the NYSE on any business day and transmitted
to the Distributor or its designee by the close of its business day (normally
5:15 p.m., New York time) will be based on the NAV determined as of the close
of trading on the floor of the NYSE on that day. Otherwise, the orders will
be based on the next determined NAV. It is the dealers' responsibility to
transmit orders so that they will be received by the Distributor or its
designee before the close of its business day.
The public offering price of Institutional shares and Retail shares,
both of which are offered on a continuous basis, is the NAV of that Class.
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500 and maximum $150,000 per day) by telephone if you have checked
the appropriate box and supplied the necessary information on the Fund's
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an ACH member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Agents and some Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus. You should consult your Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares of
certain other eligible funds managed or administered by Dreyfus, to the
extent such shares are offered for sale in your state of residence. These
[Page 16]
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use. WITH
RESPECT TO FUND SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE ONLY
BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, you or your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing or by telephone.
Before any exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the case of personal
retirement plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the relevant "No" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate Shareholder Services Form available by calling 1-800-645-6561 or, by
oral request from any of the authorized signatories on the account, also by
calling 1-800-645-6561. If you previously have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark Automated Telephone System) by calling
1-800-645-6561.If calling from overseas, call 516-794-5452. See "How to
Redeem Fund Shares-Procedures." Upon an exchange, the following shareholder
services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividends and distributions
payment option (except for Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Fund shares into funds sold
with a sales load. If you are exchanging Fund shares into a fund that charges
a sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or other distributions paid with
respect to the foregoing categories of shares. To qualify, at the time of the
exchange you must notify the Transfer Agent or your Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the SAI. No fees currently are charged shareholders directly in connection
with exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal fee in accordance with
rules promulgated by the SEC. The Fund reserves the right to reject any
exchange request in whole or in part. The availability of Fund Exchanges may
be modified or terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize, or an
exchange on behalf of a Retirement Plan which is not tax exempt may result
in, a taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of certain other eligible funds in the Dreyfus Family of
Funds of which you are currently an investor. WITH RESPECT TO FUND SHARES HELD
BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS AUTO-EXCHANGE
PRIVILEGE MAY BE MADE
[Page 17]
ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The amount you
designate, which can be expressed either in terms of a specific dollar or share
amount ($100 minimum), will be exchanged automatically on the first and/or
fifteenth day of the month according to the schedule you have selected. Shares
will be exchanged at the then-current net asset value; however a sales load may
be charged with respect to exchanges of Fund shares into funds sold with a sales
load. The right to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your exercise of this
Privilege at any time by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax exempt
may result in, a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an ACH member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427 and the notification will be effective three business
days following receipt. The Fund may modify or terminate this Privilege at
any time or charge a service fee. No such fee currently is contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and other distributions, if any, paid by the Fund in shares of
certain other eligible funds in the Dreyfus Family of Funds of which you are
an investor. Shares of the other fund will be purchased at the then-current
NAV; however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund that
charges a sales load, you may qualify for share prices which do not include
the sales load or which reflect a reduced sales load. See "Shareholder
Services" in the SAI. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends and other
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an ACH member
may be so designated. Banks may charge a fee for this service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these Privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in
or cancellation of these Privileges is effective three business days
following receipt. These Privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent investments do
not apply for Dreyfus Dividend Sweep. The Fund may modify or terminate these
Privileges at
[Page 18]
any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. You
should consider whether Direct Deposit of your entire payment into a fund
with fluctuating NAV, such as the Fund, may be appropriate for you. To enroll
in Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of the your employer, not the
Distributor, Dreyfus, the Fund, the Transfer Agent or any other person, to
arrange for transactions under the Dreyfus Payroll Savings Plan. The Fund may
modify or terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Retail shares without
regard to the Fund's minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Fund's Account Application
and file the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing your
participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be, as
provided under the terms of such Privilege(s). The Fund reserves the right to
redeem your account if you have terminated your participation in the Program
and your account's net asset value is $500 or less. See "How to Redeem Fund
Shares." The Fund may modify or terminate this Program at any time. Investors
who wish to purchase Retail shares through Dreyfus Step Program in conjunction
with a Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs
and IRA "Rollover Accounts."
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal
plan from such Retirement Plans. Participants should consult their Retirement
Plan sponsor and tax adviser for details. Such a withdrawal plan is different
from
[Page 19]
the Automatic Withdrawal Plan. An application for the Automatic Withdrawal
Plan can be obtained by calling 1-800-645-6561. The Automatic Withdrawal Plan
may be ended at any time by the shareholder, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined NAV as described below. If you hold Fund shares of more than
one Class, any request for redemption must specify the Class of shares being
redeemed. If you fail to specify the Class of shares to be redeemed or if you
own fewer shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further instructions
from you or your Agent.
The Fund imposes no charges when shares are redeemed directly through
the Distributor. Agents or other institutions may charge their clients a fee
for effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current NAV.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE
TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC AS SET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHER WISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE
ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will
not be redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the NAV of your account is $500 or
less and remains so during the notice period.
PROCEDURES - You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Wire Redemption Privilege, the
Telephone Redemption Privilege or the Dreyfus TELETRANSFER Privilege, or if
you are a client of a Selected Dealer, through the Selected Dealer. If you
have given your Agent authority to instruct the Transfer Agent to redeem Fund
shares and to credit the pro-
[Page 20]
ceeds of such redemptions to a designated account at your Agent, you may
redeem shares only in this manner and in accordance with the regular
redemption procedure described below. If you wish to use the other redemption
methods described below, you must arrange with your Agent for delivery of the
required application(s) to the Transfer Agent. Other redemption procedures
may be in effect for clients of certain Agents and institutions. The Fund
makes available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege, which is granted automatically
unless you refuse it, you authorize the Transfer Agent to act on telephone
instructions (including over the Dreyfus TouchRegistration Mark Automated
Telephone System) from any person representing himself or herself to be you,
or a representative of your Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or an exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's NAV may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for Dreyfus
retirement plan accounts to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Redemption requests may be delivered
in person only to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED
TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest financial center, please call the telephone number listed under
"General Information." Redemption requests must be signed by each shareholder,
including each owner of a joint account, and each signature must be guaranteed.
The Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock Exchanges Medallion Program. For more information with respect to
signature-guarantees, please call the telephone number listed under "General
Information."Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of joint-
[Page 21]
ly registered Fund or bank accounts may have redemption proceeds of only up
to $250,000 wired within any 30-day period. You may telephone redemption
requests by calling 1-800-645-6561 or, if calling from overseas,
516-794-5452. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's SAI sets forth instructions for transmitting redemption requests by
wire. Shares held under Keogh Plans, IRAs or other retirement plans, and
shares for which certificates have been issued, are not eligible for this
Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem Fund shares (maximum
$150,000 per day) by telephone if you checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. The Fund reserves
the right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or the
number of such requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER. If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected Dealer. If
the Selected Dealer transmits the redemption request so that it is received
by the Transfer Agent prior to the close of trading on the floor of the NYSE
(currently 4:00 p.m., New York time), the redemption request will be
effective on that day. If a redemption request is received by the Transfer
Agent after the close of trading on the floor of the NYSE, the redemption
request will be effective on the next business day. It is the responsibility
of the Selected Dealer to transmit a request so that it is received in a
timely manner. The proceeds of the redemption are credited to your account
with the Selected Dealer.
In addition, the Distributor will accept orders from Selected Dealers
with which it has sales agreements for the repurchase of Fund shares held by
shareholders. Repurchase orders received by dealers by the close of trading
on the floor of the NYSE on any business day and transmitted to the
Distributor or its designee prior to the close of its business day (normally
5:15 p.m., New York time) are effected at the price determined as of the
close of trading on the floor of the NYSE on that day. Otherwise, Fund shares
will be redeemed at the next determined NAV. It is the responsibility of the
Selected Dealer to transmit orders on a timely basis. The Selected Dealer may
charge the shareholder a fee for executing the order. This repurchase
arrangement is discretionary and may be withdrawn at any time.
DREYFUS TELETRANSFER PRIVILEGE. You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus
TELETRANSFER Privilege for transfer to their bank account only up to $250,000
within any 30-day period. The Fund reserves the right to refuse any request
made by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The Fund
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
[Page 22]
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares
by calling 1-800-645-6561 or, if calling from overseas, 516-794-5452. Shares
held under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
DISTRIBUTION PLAN
(INSTITUTIONAL SHARES ONLY)
Institutional shares are subject to a Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule 12b-1").
Institutional 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 Institutional shares to
compensate Dreyfus Service Corporation, an affiliate of Dreyfus, for
shareholder servicing activities and the Distributor for shareholder
servicing activities and for activities or expenses primarily intended to
result in the sale of Institutional shares of the Fund. The Plan allows the
Distributor to make payments from the Rule 12b-1 fees it collects from the
Fund to compensate Agents that have entered into Agreements with the
Distributor. 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 Institutional shares of the Fund.
The Fund and the Distributor 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, the
Distributor 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.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends from its net investment income,
if any, four times a year and distributes net realized capital gains, if any,
once a year, but it may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized capital gains unless capital loss carryovers,
if any, have been utilized or have expired. All expenses are accrued daily
and deducted before declaration of dividends to investors. Dividends paid by
each Class are calculated at the same time and in the same manner and will be
in the same amount, except that the expenses attributable solely to a
particular Class will be borne exclusively by that Class. Institutional
shares will receive lower per share dividends than Retail shares because of
the higher expenses borne by the Institutional shares.
Investors other than qualified Retirement Plans may choose whether to
receive dividends and other distributions in cash, to receive dividends in
cash and reinvest other distributions in additional Fund shares at NAV, or to
reinvest both dividends and other distributions in additional Fund shares.
Dividends and other distributions paid to qualified Retirement Plans are
reinvested automatically in additional Fund shares at NAV.
It is expected that the Fund will continue to qualify for treatment
as a "regulated investment company" under the Code so long as such
qualification is in the best interests of its shareholders. Such
qualification will relieve the Fund of any liability for federal income tax
to the extent its earnings and realized gains are distributed in accordance
with applicable provisions of the Code.
Dividends derived from net investment income, together with
distributions from net realized short-term capital gains and all or a portion
of any gains realized from the sale or other disposition of certain market
discount bonds (collectively, "dividend distributions"), paid by the Fund are
taxable to U.S. share
[Page 23]
holders, including certain non-qualified Retirement Plans, as ordinary income
to the extent of the Fund's earnings and profits whether received in cash or
reinvested in additional Fund shares. Distributions from the Fund's net
capital gain (the excess of net long-term capital gain over short-term
capital loss) are taxable to such shareholders as long-term capital gains,
regardless of how long the shareholders have held their Fund shares and
whether such distributions are received in cash or reinvested in additional
Fund shares. The net capital gain of an individual generally will not be
subject to federal income tax at a rate in excess of 28%. Dividends and other
distributions also may be subject to state and local taxes.
Dividend distributions paid by the Fund to a non-resident foreign
investor generally are subject to U.S. withholding tax at the rate of 30%,
unless the non-resident foreign investor claims the benefit of a lower rate
specified in a tax treaty. Capital gain distributions paid by the Fund to a
non-resident foreign investor, as well as the proceeds of any redemptions by
such an investor, regardless of the extent to which gain or loss may be
realized, generally are not subject to U.S. withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and other distributions
will be mailed to you annually. You also will receive periodic summaries of
your account which will include information as to dividends and capital gain
distributions, if any, paid during the year.
Dividends and other distributions 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 distributions 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 age 591/2, 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 701/2 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 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. If a distributee of an "eligible rollover distribution" from a
qualified Retirement Plan does not elect to have the eligible rollover
distribution paid directly from the plan to an eligible retirement plan in a
"direct rollover," the eligible rollover distribution is subject to a 20%
income tax withholding.
With respect to individual investors and certain non-qualified
Retirement Plans, federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
capital gain distributions and of any redemption proceeds, regardless of the
extent to which gain or loss may be realized, paid to such a shareholder if
such shareholder fails to certify that the TIN furnished in connection with
opening an account is correct and that such shareholder has not received
notice from the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines that a shareholder's TIN is
incorrect or if that a shareholder has failed to properly report taxable
dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account and may be claimed as a credit on the record
owner's Federal income tax return.
[Page 24]
The Fund may be subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of
taxable investment income and capital gains.
You should consult your tax advisers regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by
the Fund during the measuring period were reinvested in shares of the same
Class. These figures also take into account any applicable distribution and
shareholder servicing fees. As a result, at any given time, the performance
of the Institutional shares should be expected to be lower than that of
Retail shares. Performance for each Class will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a stated
period of time, after giving effect to the reinvestment of dividends and
other distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis, would result
in the redeemable value of the investment at the end of the period.
Advertisements of the Fund's performance will include the Fund's average
annual total return for one, five and ten year periods, or for shorter periods
depending upon the length of time during which the Fund has operated.
Computations of average annual total return for periods of less than one year
represent an annualization of the Fund's actual total return for the applicable
period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the NAV per
share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a hypothetical
investment at the end of the period which assumes the application of the
percentage rate of total return.
The Fund may also advertise the yield on a Class of shares. 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 share of such Class 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.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
The Fund may compare the performance of its shares with various
industry standards of performance including Lipper Analytical Services, Inc.
ratings, the S&P MidCap, S&P 500, CDA Technologies Indexes, indexes created
by Lehman Brothers, 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 shares' total returns and yields in
advertisements or in shareholder reports. The Fund may also
[Page 25]
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.
GENERAL INFORMATION
The Company was incorporated in Maryland on August 6, 1987 under the
name The Laurel Funds, Inc., and changed its name to The Dreyfus/Laurel
Funds, Inc. on October 17, 1994. The Company is registered with the SEC under
the 1940 Act as an open-end management investment company. The Company has an
authorized capitalization of 25 billion shares of $0.001 par value stock with
equal voting rights. The Fund is one of sixteen investment portfolios
authorized by the Company's Board of Directors. The Fund's shares are
classified into two classes-Institutional shares and Retail shares. The
Company's Articles of Incorporation permit the Board of Directors to create
an unlimited number of investment portfolios (each a "fund"). The Company 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.
Each share (regardless of Class) has one vote. All shares of all
funds (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. Only
holders of Institutional shares will be entitled to vote on matters submitted
to shareholders pertaining to the Distribution Plan relating to that Class.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Director from office and
for any other purpose. Company shareholders may remove a Director by the
affirmative vote of a majority of the Company's outstanding voting shares. In
addition, the Board of Directors will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Directors then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
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[Page 27]
Disciplined
Midcap
Stock Fund
Prospectus
Copy Rights 1997 Dreyfus Service Corporation
330/730p030197
Registration Mark
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