File No. 811-5270
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 62 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 62 [ X ]
(Check appropriate box or boxes.)
THE DREYFUS/LAUREL FUNDS, INC.
___________________________________________________
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
The Dreyfus/Laurel Funds, Inc.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
X immediately upon filing pursuant to paragraph (b)
----
on March 31, 1998 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
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on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940, Registrant's Rule 24f-2 Notice for fiscal year
ended October 31, 1997 was filed on January 26, 1998.
The following post-effective amendment to the Registrant's Registration
Statement on Form N-1A relates only to Dreyfus Premier Small Cap Value Fund and
does not affect the Registration Statement of the following series of the
Registrant:
DREYFUS BOND MARKET INDEX FUND
DREYFUS DISCIPLINED STOCK FUND
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
DREYFUS MONEY MARKET RESERVES
DREYFUS MUNICIPAL RESERVES
DREYFUS BASIC S&P 500 STOCK INDEX FUND
DREYFUS U.S. TREASURY RESERVES
DREYFUS PREMIER BALANCED FUND
DREYFUS PREMIER LIMITED TERM INCOME FUND
DREYFUS PREMIER SMALL COMPANY STOCK FUND
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
DREYFUS DISCIPLINED MIDCAP STOCK FUND
DREYFUS DISCIPLINED EQUITY INCOME FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of Prospectus
Form N-1A Caption Caption
________ _______ __________
1 Cover Page Cover Page
Expense Summary
2 Synopsis Expense Summary
3 Condensed Financial Financial Highlights
Information
4 General Description of Investment Objective and
Registrant Policies; Further Information
About The Fund
5 Management of the Fund Further Information About The
Funds; Management
5(a) Management's Discussion Management's Discussion
of Fund's Performance of Fund's Performance
6 Capital Stock and Cover Page; Investor
Other Securities Line; Distribution; Taxes;
7 Purchase of Securities Expense Summary;
Being Offered Alternative Purchase Methods;
Special Shareholder Services; How
to invest in The Dreyfus/Laurel
Funds; Distribution and Service
Plans; How to Exchange your
Investment From One Fund to
Another;
8 Redemption or How to Redeem Shares
Repurchase
DREYFUS PREMIER SMALL CAP VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (Continued)
Items in
Part B of Statement of Additional
Form N-1A Information Caption
- ---------
9 Pending Legal N.A.
Proceedings
10 Cover Page Cover
11 Table of Contents Table of Contents
12 General Information Management of the Trust
and History
13 Investment Objectives Investment Policies
and Policies
14 Management of the Fund Management of the Trust;
and Officers of the Trust Trustees
15 Control Persons and Management of the Trust;
Holders of Securities Principal
16 Investment Advisory Management of the Trust;
and Other Services Investment Manager;
Shareholder Services
17 Investment Allocation Investment Policies
and Other Services Portfolio Transactions
DREYFUS PREMIER SMALL CAP VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (Continued)
Items in
Part B of Statement of Additional
Form N-1A Information Caption
- ---------
18 Capital Stock and Description of the Trust;
Other Securities See Prospectus -- "Cover Page";
"How to Redeem Fund Shares";
"Further Information About The Funds;
The Dreyfus/Laurel Tax Free
Municipal Funds"
19 Purchase, Redemption Purchase of Shares;
and Pricing of Distribution and Service Plans;
Securities Being Offered Redemption of Shares; Valuation of
Shares
20 Tax Status Taxes
21 Underwriters Purchase of Shares;
Distribution and Service Plans;
Amounts Expended
22 Calculation of Performance Data
Performance Data
23 Financial Statements Financial Statements
24 Financial Statements
and Exhibits C-1
25 Persons Controlled by
or Under Common C-4
Control with Registrant
26 Number of Holders
of Securities C-4
DREYFUS PREMIER SMALL CAP VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (Continued)
Items in
Part B of Statement of Additional
Form N-1A Information Caption
27 Indemnification C-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-12
30 Location of Accounts and Records C-15
31 Management Services C-15
32 Undertakings C-15
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PROSPECTUS MARCH 31, 1998
DREYFUS PREMIER SMALL CAP VALUE FUND
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DREYFUS PREMIER SMALL CAP VALUE 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 THAT CONSISTENTLY OUTPERFORM THE RUSSELL
2000Registration Mark VALUE INDEX. THE FUND SEEKS TO ACHIEVE ITS INVESTMENT
OBJECTIVE BY INVESTING PRIMARILY IN COMMON STOCKS OF SMALL CAPITALIZATION
COMPANIES WHILE MAINTAINING INVESTMENT CHARACTERISTICS AND A RISK PROFILE
THAT, IN THE AGGREGATE, ARE SIMILAR TO THAT OF THE RUSSELL 2000 VALUE INDEX.
BY THIS PROSPECTUS, THE FUND IS OFFERING FOUR CLASSES OF SHARES _
CLASS A, CLASS B, CLASS C AND CLASS R _ WHICH ARE DESCRIBED HEREIN. SEE
"ALTERNATIVE PURCHASE METHODS."
EACH CLASS OF SHARES MAY BE PURCHASED OR REDEEMED BY TELEPHONE USING
THE TELETRANSFER PRIVILEGE.
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, DATED MARCH 31, 1998,
WHICH MAY BE REVISED FROM TIME TO TIME ("SAI"), 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 1-800-554-4611. 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. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS 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. THE FUND IS
DISTRIBUTED BY PREMIER MUTUAL FUND SERVICES, INC. (THE "DISTRIBUTOR").
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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Table of Contents
Expense Summary................................................. 4
Alternative Purchase Methods.................................... 4
Description of the Fund......................................... 5
Management of the Fund.......................................... 9
How to Buy Shares............................................... 10
Shareholder Services............................................ 13
How to Redeem Shares............................................ 16
Additional Information About Purchases,
Exchanges and Redemptions................................... 19
Distribution Plans (Class A Plan and Class B and C Plans)....... 19
Dividends, Other Distributions and Taxes........................ 20
Performance Information......................................... 21
General Information............................................. 23
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Expense Summary
Shareholder Transaction Expenses CLASS A CLASS B CLASS C CLASS R
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............. 5.75% None None None
Maximum Deferred Sales Charge Imposed on
Redemptions (as a percentage of the amount
subject to charge).............................. None* 4.00% 1.00% None
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fees.................................. 1.25% 1.25% 1.25% 1.25%
12b-1 Fees(1).................................... .25% 1.00% 1.00% None
Other Expenses(2)................................ .00% .00% .00% .00%
______ ______ ______ ______
Total Fund Operating Expenses.................... 1.50% 2.25% 2.25% 1.25%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) except where noted,
redemption at the end of each time period: CLASS A CLASS B CLASS C CLASS R
1 YEAR.................................... $ 72 $63/$23** $33/$23** $13
3 YEARS................................... $102 $100/$70** $70 $40
</TABLE>
* A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more.
** Assuming no redemption of shares.
(1)See "Distribution Plans (Class A Plan and Class B and C Plans)" for a
description of the Fund's Distribution Plans and Service
Plan for Class A, Class B and Class C shares.
(2)Does not include fees and expenses of the non-interested Directors. The
investment adviser 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 less than .01% of the Fund's net
assets. See "Management of the Fund."
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 costs and expenses that investors will bear, directly or indirectly, the
payment of which will reduce investors' return on an annual basis. Other
expenses are based on estimated amounts for the current fiscal year. The
information in the foregoing table does not reflect any fee waivers or
expense reimbursement arrangements that may be in effect. Long-term investors
in Class A, Class B or Class C 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. ("NASD"). Certain banks, securities dealers and brokers
("Selected Dealers") or other financial institutions (including Mellon Bank
and its affiliates) (collectively, "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 Shares,"
"How to Redeem Shares" and "Distribution Plans (Class A Plan and Class B and
C Plans)."
The Company understands that Agents may charge fees to their clients
who are owners of the Fund's Class A, Class B, or Class C 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 Selling Agreement
("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.
Alternative Purchase Methods
The Fund offers you four methods of purchasing Fund shares; you may
choose the Class of shares that best suits your needs, given the amount of
your purchase, the length of time you expect to hold your shares and any
other relevant circumstances. Each Fund share represents an identical pro
rata interest in the Fund's investment portfolio. All Fund shares are sold on
a continuous basis. Class A, Class B and Class C shares are sold primarily to
clients of Agents that have entered into Agreements with the Distributor.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 5.75% of the public offering price imposed at the
time of purchase. The initial sales charge may be reduced or waived for
certain purchases. See "How to Buy Shares _ Class A Shares." These shares are
subject to an annual 12b-1 fee at the rate of .25 of 1% of the value of the
average daily net assets of Class A. See "Distribution Plans _ Distribution
Plan _ Class A Shares."
[Page 4]
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a maximum
4% contingent deferred sales charge ("CDSC"), which is assessed only if you
redeem Class B shares within the first six years of their purchase. See "How
to Buy Shares _ Class B Shares" and "How to Redeem Shares _ Contingent
Deferred Sales Charge _ Class B Shares." These shares also are subject to an
annual distribution fee at the rate of .75 of 1%, and an annual service fee
at the rate of .25 of 1%, of the value of the average daily net assets of
Class B. See "Distribution Plans _ Distribution and Service Plans _ Class B
and C Shares." The distribution and service fees paid by Class B will cause
such Class to have a higher expense ratio and to pay lower dividends than
Class A. Approximately six years after the date of purchase (or, in the case
of Class B shares of the Fund acquired through exchange of Class B shares of
another fund advised by Dreyfus, the date of purchase of the original Class B
shares of the fund exchanged), Class B shares will automatically convert to
Class A shares, based on the relative net asset values for shares of each
such Class. The converted shares will no longer be subject to the service
plan fee for Class B shares and will be subject to the lower distribution fee
of Class A shares. (Such conversion is subject to suspension by the Board of
Directors if adverse tax consequences might result.) Class B shares that have
been acquired through the reinvestment of dividends and other distributions
will be converted on a pro rata basis together with other Class B shares, in
the proportion that a shareholder's Class B shares converting to Class A
shares bears to the total Class B shares not acquired through the
reinvestment of dividends and other distributions.
Class C shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class C shares are subject to a 1% CDSC,
which is assessed only if you redeem Class C shares within one year of their
purchase. See "How to Redeem Shares _ Contingent Deferred Sales Charge _
Class C Shares." These shares also are subject to an annual distribution fee
at the rate of .75 of 1%, and an annual service fee at the rate of .25 of 1%,
of the value of the average daily net assets of Class C. See "Distribution
Plans _ Distribution and Service Plans _ Class B and C Shares." The
distribution and service fees paid by Class C will cause such Class to have a
higher expense ratio and to pay lower dividends than Class A.
Class R shares generally may not be purchased directly by
individuals, although eligible institutions may purchase Class R shares for
accounts maintained by individuals. Class R shares are sold at net asset
value per share to bank trust departments and other financial service
providers (including Mellon Bank and its affiliates) ("Banks") acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received or hold
shares of the Fund distributed to them by virtue of such an account or
relationship.
The decision as to which Class of shares is most beneficial to you
depends on the amount and the intended length of your investment. You should
consider whether, during the anticipated life of your investment in the Fund,
the accumulated distribution fees, service fees and CDSC, if any, on Class B
or Class C shares would be less than the accumulated distribution fees and
initial sales charge on Class A shares purchased at the same time, and to
what extent, if any, such differential would be offset by the return of Class
A. Additionally, investors qualifying for reduced initial sales charges who
expect to maintain their investment for an extended period of time might
consider purchasing Class A shares because the accumulated continuing
distribution and service fees on Class B or Class C shares may exceed the
accumulated distribution fees and initial sales charge on Class A shares
during the life of the investment. Finally, you should consider the effect of
the CDSC period and any conversion rights of the Classes in the context of
your own investment time frame. For example, while Class C shares have a
shorter CDSC period than Class B shares, Class C shares do not have a
conversion feature and, therefore, are subject to ongoing distribution and
service fees. Thus, Class B shares may be more attractive than Class C shares
to investors with longer term investment outlooks. Generally, Class A shares
may be more appropriate for investors who invest $1,000,000 or more in Fund
shares, but will not be appropriate for investors who invest less than
$50,000 in Fund shares.
Description of the Fund
Investment Objective
The Fund's investment objective is to seek total investment returns
that consistently outperform the Russell 2000 Value Index. The Fund is not an
index fund and its investments are not limited to securities in the Russell
2000 Value Index. The Fund's investment objective is not fundamental. There
can be no assurance that the Fund's investment objective will be achieved.
Management Policies
The Fund invests in a diversified portfolio of common stocks of small
capitalization companies that Dreyfus believes offer above average potential
for appreciation in market value. The Fund's portfolio seeks to have
investment characteristics and a risk profile that, in the aggregate, are
similar to the Russell 2000 Value Index but that will provide a higher total
return than the Russell 2000 Value Index. Under normal market conditions,
the Fund will invest at least 80% of its total assets in common stocks of
companies that have total market capitalizations of between $100 million and
$3 billion and are publicly traded in the United States. Because small
capitalization companies are generally less
[Page 5]
established companies, they are likely to experience greater
volatility (and greater potential for growth or decline) as compared to
medium and large capitalization companies.
Dreyfus utilizes computer techniques to construct and track the
Fund's portfolio. Dreyfus employs statistical models designed to identify
stocks of companies that are undervalued and should be purchased and retained
by the Fund. Undervalued securities are normally characterized by relatively
low price to earnings ratios, low ratios of market price to book value, or
underlying asset values that Dreyfus feels are not fully reflected in the
securities' current market price. The models analyze how a stock is priced
relative to both its current and longer-term intrinsic worth. In each
economic sector, Dreyfus identifies stocks that have the best relative
undervaluation. Through this extensive quantitative system, each stock is
then ranked according to its relative attractiveness. Once undervalued common
stocks are identified, Dreyfus' experienced investment analysts construct the
Fund's portfolio so that, in the aggregate, it resembles the Russell 2000
Value Index, but is weighted toward the stocks Dreyfus deems most attractive.
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, time deposits, Eurodollar
Certificates of Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs"), and
Yankee Certificates of Deposit ("Yankee CDs"); (3) commercial paper; (4)
corporate obligations rated at least Baa by Moody's Investors Service, Inc.
("Moody's"), or BBB by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("Standard & Poor's") or, if unrated, of comparable quality
as determined by Dreyfus; (5) preferred stocks and convertible securities;
(6) Eurodollar bonds and notes; (7) securities of foreign companies evidenced
by American Depository Receipts ("ADRs"); (8) repurchase agreements; and (9) w
hen-issued transactions. The Fund also may 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 paramet
ers, 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. A description of these ratings
is contained in the SAI. The Fund will dispose in a prudent and orderly
fashion of bonds whose ratings drop below these minimum ratings.
Under normal market conditions, the Fund does not expect to have a
substantial portion of its assets invested in instruments other than common
stocks. However, when Dreyfus determines that adverse market conditions
exist, the Fund may adopt a temporary defensive posture and invest a
substantial portion or all of its assets in high quality money market
instruments.
The Russell 2000 Value Index is an unmanaged index of those companies
in the Russell 2000Registration Mark Index with lower price-to-book ratios
and lower forecasted growth values. The Russell 2000 Index measures the
performance of the 2,000 smallest companies in the Russell 3000Registration
Mark Index, which in turn measures the performance of the 3,000 largest
publicly traded U.S. companies based on total market capitalization.
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 addit
ional 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.
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: (1) 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 (2) 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 pur
[Page 6]
chase 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, options and other derivatives 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 and changes in liquidity; (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 interest rates or 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.
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
ADRS AND NEW YORK SHARES. The Fund may invest in U.S.
dollar-denominated ADRs and "New York Shares." ADRs typically are issued by
an American bank or trust company and evidence ownership of underlying
securities issued by foreign companies. New York Shares are securities of fore
ign companies that are issued for trading in the United States. ADRs and New
York Shares are traded in the United States on national securities exchanges
or in the over-the-counter market. Investment in securities of foreign
issuers presents certain risks, including those resulting from adverse
political and economic developments and the imposition of foreign
governmental laws or restrictions. See "Foreign Securities."
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, YANKEE CDS AND EURODOLLAR BONDS AND NOTES. The Fund may
invest in ECDs, ETDs, Yankee CDs, and Eurodollar bonds and notes. 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. 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. All of these obligations are subject to
somewhat different risks than are the obligations of domestic banks or
issuers in the United States. See "Foreign Securities."
[Page 7]
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.
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 holders.
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.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements.
A repurchase agreement involves the purchase of a security by the Fund and a
simultaneous agreement (generally with a bank or broker-dealer) to repurchase
that security from the Fund at a specified price and date or upon demand.
This technique offers a method of earning income on idle cash. A risk
associated with repurchase agreements is the failure of the seller to
repurchase the securities as agreed, which may cause the Fund to suffer a
loss if the market value of such securities declines before they can be
liquidated on the open market. Repurchase agreements with a duration of more
than seven days are considered illiquid securities and are subject to the
associated limits discussed under "Illiquid Securities."
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 Fannie Mae, Freddie Mac, or other
instrumentalities.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on
the basis of potential for capital appreciation and not for short-term
trading profits, the Fund's turnover rate may exceed 100%. A portfolio
turnover rate of 100% would occur, for example, if all the securities held by
the Fund were replaced once in a period of one year. A higher rate of
portfolio turnover 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
[Page 8]
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 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. 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.
Year 2000 Risks. Like other mutual funds, financial and business
organizations and individuals around the world, the Fund could be adversely
affected if the computer systems used by Dreyfus and the Fund's other service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." Dreyfus is taking steps to address the Year 2000 Problem with
respect to the computer systems that it uses and to obtain assurances that
comparable steps are being taken by the Fund's other major service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Fund.
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 February 28, 1998, Dreyfus managed or administered
approximately $99 billion in assets for approximately 1.7 million investor
accounts nationwide.
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 Company, 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 William Rydell. Mr. Rydell has managed the
Fund since its commencement of operations in March, 1998. He is a portfolio
manager of Dreyfus and is also President and Chief Executive Officer of, and
a Portfolio Manager for, Mellon Equity Associates. He has been with the
Mellon Bank organization since 1973.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, Mellon Bank (DE) National Association, Mellon
Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a number of
companies known as Mellon Financial Services Corporations. Through its
subsidiaries, including Dreyfus, Mellon managed more than $305 billion in
assets as of December 31, 1997, including approximately $104 billion in
mutual fund assets. As of December 31, 1997, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.532 trillion in assets, including
approximately $60 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 1.25 of 1% of the value of the
Fund's average daily net assets. Dreyfus pays all of the Fund's expenses,
except brokerage fees, taxes, interest, fees and expenses of non-interested
Directors (including counsel fees), Rule 12b-1 fees (if applicable) and
extraordinary expenses. Although Dreyfus does not pay for the fees and
expenses of the non-interested Directors (including counsel fees), Dreyfus is
contractually required to reduce its investment management fee by an amount
equal to the Fund's allocable share of such fees and expenses. From time to
time, Dreyfus may voluntarily waive a portion of the investment management
fees payable by the Fund, which would have the effect of lowering the expense
ratio of the Fund and increasing return to investors.
In addition, Class A, Class B and Class C shares are subject to
certain Rule 12b-1 distribution and shareholder servicing fees. See
"Distribution Plans (Class A Plan and Class B and C Plans).
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.
[Page 9]
In allocating brokerage transactions, 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 administered 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 commissions are
comparable to what they would be with other qualified brokerage firms. From
time to time, to the extent consistent with its investment objective, polices
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.,
located at 60 State Street, Boston, Massachusetts 02109. The Distributor's
ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). Mellon Bank, located at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, serves as the Fund's custodian.
How to Buy Shares
GENERAL _ Class A shares, Class B shares and Class C shares may be purchased
only by clients of Agents, except that 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 may purchase
Class A shares directly through the Distributor. Subsequent purchases may be
sent directly to the Transfer Agent or your Agent.
Class R shares are sold primarily to Banks acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution, or to customers who have received or hold shares of the
Fund distributed to them by virtue of such an account or relationship. Class
R shares may be purchased for a retirement plan only by a custodian, trustee,
investment manager or other entity authorized to act on behalf of such a
plan. Institutions effecting transactions in Class R shares for the accounts
of their clients may charge their clients direct fees in connection with such
transactions.
When purchasing Fund shares, you must specify which Class is being
purchased. Share 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.
Agents may receive different levels of compensation for selling
different Classes of shares. Management understands that some Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees which would be in
addition to any amounts which might be received under the Distribution and
Service Plans. Each Agent has agreed to transmit to its clients a schedule of
such fees. You should consult your Agent in this regard.
The minimum initial investment is $1,000. Subsequent investments must
be at least $100. The minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for
a non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7)
Plans with only one participant and $500 for Dreyfus-sponsored Education
IRAs, with no minimum on subsequent purchases. The initial investment must be
accompanied by the Fund's Account Application. 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.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed annually to certain
qualified employee benefit plans or other programs, including pension,
profit-sharing and certain other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state and
local governments ("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
TELETRANSFER Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds," or if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian." Payments which are mailed should be
sent to Dreyfus Premier Small Cap Value Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. If you are opening a new account, please enclose your
Account Application indicating which Class of shares is being purchased. For
subsequent investments, your Fund account num
[Page 10]
ber should appear on the check and an investment 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.
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 #044350/Dreyfus Premier Small Cap Value Fund and applicable
Class, for purchase of Fund shares in your name. The wire must include your
Fund account number (for new accounts, your taxpayer identification number
("TIN") should be included instead), account registration and dealer number,
if applicable, and must indicate the Class of shares being purchased. If your
initial purchase of Fund shares is by wire, please call 1-800-554-4611 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the 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.
Fund shares also may be purchased through Dreyfus-Automatic Asset
BuilderRegistration Mark and the Government Direct Deposit Privilege
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.
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 to Boston Safe Deposit and Trust Company with instructions to credit your
Fund account. The instructions must specify your Fund account registration
and your Fund account number preceded by the digits "4620" for Class A
shares, "4630" for Class B shares, "4650" for Class C shares, and "4660" for
Class R 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
Premier Family of Funds or the Dreyfus Family of Funds or certain other
products made available by the Distributor to such plans or programs exceeds
$1,000,000 ("Eligible Benefit Plans"). Shares of funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds then held by Eligible Benefit
Plans will be aggregated to determine the fee payable. 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").
NET ASSET VALUE PER SHARE ("NAV") _ An investment portfolio's NAV refers to
the worth of one share. The NAV for shares of each Class of the Fund is
computed by dividing the value of the net assets attributable to each Class
by the number of shares of that Class outstanding. Shares of each Class of
the Fund are offered on a continuous basis. The valuation of assets for
determining NAV for the Fund may be summarized as follows:
The portfolio securities of the Fund, except as otherwise noted,
listed or traded on a stock exchange, are valued at the latest sale price. If
no sale is reported, the mean of the latest bid and asked prices is used.
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 as of the close of trading on the floor of the New
York Stock Exchange ("NYSE") (normally 4:00 p.m., New York time) on each day
that the NYSE is open for business. For purposes of determining NAV, options
and futures contracts will be valued 15 minutes after the close of trading on
the floor of the NYSE. Orders received in proper form by the Transfer Agent
or other entity authorized to receive orders on behalf of the Fund before
such close
[Page 11]
of trading are effective on, and will receive the public offering
price determined on, that day. Except in the case of certain orders
transmitted by dealers as described in the following paragraph, orders
received after such close of trading are effective on, and receive the public
offering price determined on, the next business day.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the NYSE on a business day and transmitted
to the Distributor or its designee by the close of its business day (normally
5:15 p.m., New York time) will be based on the public offering price per
share 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 public
offering price. 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. For certain institutions that have entered into Agreements
with the Distributor, payment for the purchase of Fund shares may be
transmitted, and must be received by the Transfer Agent, within three
business days after the order is placed. If such payment is not received
within three business days after the order is placed, the order may be
cancelled and the institution could be held liable for resulting fees and/or
losses.
CLASS A SHARES _ The public offering price for Class A shares is the NAV of
that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load
____________________________________
As a % of As a % of Dealers' Reallowance
Offering Price Net Asset Value as a % of
Amount of Transaction Per Share Per Share Offering Price
______________ _____________ _____________ ____________________
<S> <C> <C> <C>
Less than $50,000...................................... 5.75 6.10 5.00
$50,000 to less than $100,000.......................... 4.50 4.70 3.75
$100,000 to less than $250,000......................... 3.50 3.60 2.75
$250,000 to less than $500,000......................... 2.50 2.60 2.25
$500,000 to less than $1,000,000....................... 2.00 2.00 1.75
$1,000,000 or more..................................... -0- -0- -0-
</TABLE>
There is no initial sale charge on purchases of $1,000,000 or more of
Class A shares. However, if you purchase Class A
shares without an initial sales charge as part of an investment of at least
$1,000,000 and redeem all or a portion of those shares within one year of
purchase, a CDSC of 1.00% will be assessed at the time of redemption. The
Distributor may pay Agents an amount up to 1% of the NAV of Class A shares
purchased by their clients that are subject to a CDSC. The terms contained in
the section of the Prospectus entitled "How to Redeem Shares_Contingent
Deferred Sales Charge_Class B Shares" (other than the amount of the CDSC and
time periods) and "How to Redeem Shares_Waiver of CDSC" are applicable to
Class A shares subject to a CDSC. Letter of Intent and Right of Accumulation
also apply to such purchases of Class A shares.
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or which otherwise have a
brokerage related or clearing arrangement with an NASD member firm or
financial institution with respect to sales of Fund shares) may purchase
Class A shares for themselves directly or pursuant to an employee benefit
plan or other program, or for their spouses or minor children at NAV, provided
that they have furnished the Distributor with such information as it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible to
purchase Class A shares at NAV. In addition, Class A shares are offered at
NAV to 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.
Class A shares are offered at NAV without a sales load to employees
participating in Eligible Benefit Plans. Class A shares also may be purchased
(including by exchange) at NAV without a sales load for Dreyfus-sponsored IRA
"Rollover Accounts" with the distribution proceeds from a qualified
retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided that, at the
time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible
Benefit Plan and all or a portion of such plan's assets were invested in
funds in the Dreyfus Premier Family of Funds or the Dreyfus Family of Funds
or certain other products made available by the Distributor to such plans, or
(b) invested all of its assets in certain funds in the Dreyfus Premier Family
of Funds or the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans.
Class A shares may be purchased at NAV through certain broker-dealers
and other financial institutions which have entered into an agreement with
the Distributor, which includes a requirement that such shares be sold for
the benefit of clients participating in a "wrap account" or a similar program
under which such clients pay a fee to such broker-dealer or other financial
institution.
Class A shares also may be purchased at NAV, subject to appropriate
documentation, through a broker-dealer or other financial institution with
the proceeds from the redemption of shares of a registered open-end
management investment company not managed by Dreyfus or its affiliates. The
purchase of Class A shares of the Fund must be made
[Page 12]
within 60 days of such redemption and the shareholder must have
either (i) paid an initial sales charge or a CDSC or (ii) been obligated to
pay at any time during the holding period, but did not actually pay on
redemption, a deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at NAV, subject to appropriate
documentation, by (i) qualified separate accounts maintained by an insurance
company pursuant to the laws of any State or territory of the United States,
(ii) a State, county or city or instrumentality thereof, (iii) a charitable
organization (as described in Section 501(c)(3) of the Code) investing
$50,000 or more in Fund shares, and (iv) a charitable remainder trust (as
defined in Section 664 of the Code).
The dealer reallowance may be changed from time to time but will
remain the same for all dealers. The Distributor, at its own expense, may
provide additional promotional incentives to dealers that sell shares of
funds advised by Dreyfus which are sold with a sales load, such as Class A
shares. In some instances, these incentives may be offered only to certain
dealers who have sold or may sell significant amounts of such shares. Dealers
receive a larger percentage of the sales load from the Distributor than they
receive for selling most other funds.
CLASS B SHARES _ The public offering price for Class B shares is the NAV of
that Class. No initial sales charge is imposed at the time of purchase. A
CDSC is imposed, however, on certain redemptions of Class B shares as
described under "How to Redeem Shares." The Distributor compensates certain
Agents for selling Class B and Class C shares at the time of purchase from
the Distributor's own assets. The proceeds of the CDSC and the distribution
fee, in part, are used to defray these expenses.
CLASS C SHARES _ The public offering price for Class C shares is the NAV of
that Class. No initial sales charge is imposed at the time of purchase. A
CDSC is imposed, however, on redemptions of Class C shares made within the
first year of purchase. See "Class B Shares" above and "How to Redeem
Shares."
CLASS R SHARES _ The public offering price for Class R shares is the NAV of
that Class.
Right of Accumulation _ Class A Shares _ Reduced sales loads apply to any
purchase of Class A shares, shares of other funds in the Dreyfus Premier
Family of Funds, shares of certain other funds advised by Dreyfus which are
sold with a sales load and shares acquired by a previous exchange of such
shares (hereinafter referred to as "Eligible Funds"), by you and any related
"purchaser" as defined in the SAI, where the aggregate investment, including
such purchase, is $50,000 or more. If, for example, you have previously
purchased and still hold Class A shares of the Fund, or shares of any other
Eligible Fund or combination thereof, with an aggregate current market value
of $40,000 and subsequently purchase Class A shares of the Fund or shares of
an Eligible Fund having a current value of $20,000, the sales load applicable
to the subsequent purchase would be reduced to 4.50% of the offering price.
All present holdings of Eligible Funds may be combined to determine the
current offering price of the aggregate investment in ascertaining the sales
load applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of purchase you or
your Agent must notify the Distributor if orders are made by wire, or the
Transfer Agent if orders are made by mail. The reduced sales load is subject
to confirmation of your holdings through a check of appropriate records.
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 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 that 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 TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of shares by calling 1-800-554-4611 or, if you are
calling from overseas, call 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 the
same Class of certain other funds managed by Dreyfus, to the extent such
shares are offered for sale in your state of residence. These funds have
different investment objectives which may be of interest to you. You also may
exchange your Fund shares that are subject to a CDSC for shares of Dreyfus
Worldwide Dollar Money Market Fund, Inc. The shares so purchased will be held
in a special account created solely for this purpose ("Exchange Account").
Exchanges of shares from an Exchange Account only can be made into certain
other funds managed or administered by Dreyfus. No CDSC is charged when an
investor exchanges into an Exchange Account; however, the applicable CDSC
will be imposed when shares are redeemed from an Exchange Account or other
applicable Fund account. Upon redemption, the applicable CDSC will be
calculated with
[Page 13]
out regard to the time such shares were held in an Exchange Account.
See "How to Redeem Shares." Redemption proceeds for Exchange Account shares
are paid by Federal wire or check only. Exchange Account shares also are
eligible for the Auto-Exchange Privilege, Dividend Sweep and the Automatic
Withdrawal Plan. To use this service, you should consult your Agent or call
1-800-554-4611 to determine if it is available and whether any conditions are
imposed on its use. WITH RESPECT TO CLASS R 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 1-800-554-4611. Except in the case of personal
retirement plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the applicable "No" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, by a separate
signed Shareholder Services Form, available by calling 1-800-554-4611, or by
oral request from any of the authorized signatories on the account, by
calling 1-800-554-4611. 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
1-800-554-4611. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares - Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, TELETRANSFER Privilege and
the dividend and distributions payment option (except for 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 Class A shares into funds
sold with a sales load. No CDSC will be imposed on Class B or Class C shares
at the time of an exchange; however, Class B or Class C shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B or Class C shares will be calculated from
the date of the initial purchase of the Class B or Class C shares exchanged.
If you are exchanging Class A shares into a fund that charges a sales load,
you may qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares 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 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 the 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 that is not tax-exempt may result in,
a taxable gain or loss.
Auto-Exchange Privilege
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 the same Class of other funds in the Dreyfus Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. WITH RESPECT TO CLASS R SHARES HELD BY
RETIREMENT PLANS, EXCHANGES PURSUANT TO THE AUTO-EXCHANGE PRIVILEGE MAY BE
MADE 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 NAV; however, a sales
load may be charged with respect to exchanges of Class A shares into funds
sold with a sales load. No CDSC will be imposed on Class B or Class C shares
at the time of an exchange; however, Class B or Class C shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B or Class C shares will be calculated from
the date of the initial purchase of the Class B or Class C shares exchanged.
See "Shareholder Services" in the SAI. 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
[Page 14]
mailing written notification to Dreyfus Premier Small Cap Value Fund,
P.O. Box 6587, Providence, Rhode Island 02940-6587. 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 that is not tax-exempt
may result in, a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Premier Family of Funds or the Dreyfus
Family of Funds eligible to participate in this Privilege, or to obtain an
Auto-Exchange Authorization Form, please call toll free 1-800-554-4611.
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. 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 1-800-554-4611. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to Dreyfus Premier Small Cap Value Fund, P.O.
Box 6587, Providence, Rhode Island 02940-6587, 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.
Dividend Options
Dividend Sweep enables you to invest automatically dividends or
dividends and capital gain distributions, if any, paid by the Fund in shares
of the same Class of another fund in the Dreyfus Premier Family of Funds or
certain other funds in the Dreyfus Family of Funds of which you are a
shareholder. 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. If you are investing in
a fund that charges a CDSC, the shares purchased will be subject on
redemption to the CDSC, if any, applicable to the purchased shares. See
"Shareholder Services" in the SAI. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from the Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an ACH member may be so designated.
Banks may charge a fee for this service.
For more information concerning these privileges, or to request a
Dividend Options Form, please call toll free 1-800-554-4611. You may cancel
these privileges by mailing written notification to Dreyfus Premier Small Cap
Value Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. To select a
new fund after cancellation, you must submit a new Dividend Options Form.
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 Dividend Sweep. The Fund may modify or terminate
these privileges at any time or charge a service fee. No such fee currently
is contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans are not eligible for Dividend Sweep.
Government Direct Deposit Privilege
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
Government Direct Deposit, you must file with the Transfer Agent a completed
Direct Deposit Sign-Up Form for each type of payment that you desire to
include in this Privilege. The appropriate form may be obtained from your
Agent or by calling 1-800-554-4611. 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.
Automatic Withdrawal Plan
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An Automatic Withdrawal Plan may
be established by filing an Automatic Withdrawal Plan application with the
Transfer Agent or by oral request from any authorized signatures on the
account or by calling 1-800-554-4611.
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 the Automatic Withdrawal Plan. 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.
[Page 15]
No CDSC with respect to Class B shares will be imposed on withdrawals
made under the Automatic Withdrawal Plan, provided that the amounts withdrawn
under the plan do not exceed on an annual basis 12% of the account value at
the time the shareholder elects to participate in the Automatic Withdrawal
Plan. Withdrawals with respect to Class B shares under the Automatic
Withdrawal Plan that exceed on an annual basis 12% of the value of the
shareholder's account will be subject to a CDSC on the amounts exceeding 12%
of the initial account value. Class C shares, and Class A shares to which a
CDSC applies, that are withdrawn pursuant to the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Purchases of additional Class A
shares where the sales load is imposed concurrently with withdrawals of Class
A shares generally are undesirable.
Retirement Plans
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs, Rollover IRAs and Education IRAs),
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 1-800-554-4611; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
Letter of Intent _ Class A Shares
By signing a Letter of Intent form, available by calling
1-800-554-4611, you become eligible for the reduced sales load applicable to
the total number of Eligible Fund shares purchased in a 13-month period
pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of submission
of the Letter of Intent) in any Eligible Fund that may be used toward "Right o
f Accumulation" benefits described above may be used as a credit toward
completion of the Letter of Intent. However, the reduced sales load will be
applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by purchasing
the specified amount. If your purchases qualify for a further sales load
reduction, the sales load will be adjusted to reflect your total purchase at
the end of 13 months. If total purchases are less than the amount specified,
you will be requested to remit an amount equal to the difference between the
sales load actually paid and the sales load applicable to the aggregate
purchases actually made. If such remittance is not received within 20 days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter
of Intent, will redeem an appropriate number of Class A shares held in escrow
to realize the difference. Signing a Letter of Intent does not bind you to
purchase, or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended purchase to
obtain the reduced sales load. At the time you purchase Class A shares, you
must indicate your intention to do so under a Letter of Intent. Purchases
pursuant to a Letter of Intent will be made at the then-current NAV plus the
applicable sales load in effect at the time such Letter of Intent was
executed.
How to Redeem 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 by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund, 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 (other than any applicable CDSC) when
shares are redeemed. Agents 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 TELETRANSFER PRIVILEGE OR THROUGH
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark ORDER 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, 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 PURSUANT TO THE TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED.
THESE
[Page 16]
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE
PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE _ Class B Shares. A CDSC payable to the
Distributor is imposed on any redemption of Class B shares which reduces the
current NAV of your Class B shares to an amount which is lower than the
dollar amount of all payments by you for the purchase of Class B shares of
the Fund held by you at the time of redemption. No CDSC will be imposed to
the extent that the NAV of the Class B shares redeemed does not exceed (i)
the current NAV of Class B shares acquired through reinvestment of dividends
or other distributions, plus (ii) increases in the NAV of Class B shares
above the dollar amount of all your payments for the purchase of Class B
shares of the Fund held by you at the time of redemption.
If the aggregate value of the Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC may
be applied to the then-current NAV rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class B
shares until the time of redemption of such shares. Solely for purposes of
determining the number of years from the time of any payment for the purchase
of Class B shares, all payments during a month will be aggregated and deemed
to have been made on the first day of the month.
<TABLE>
<CAPTION>
The following table sets forth the rates of the CDSC for Class B
shares:
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
__________ _______________________
<S> <C>
First............................................................................ 4.00
Second........................................................................... 4.00
Third............................................................................ 3.00
Fourth........................................................................... 3.00
Fifth............................................................................ 2.00
Sixth............................................................................ 1.00
</TABLE>
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the
lowest possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and other distributions; then of amounts representing the increase
in NAV of Class B shares above the total amount of payments for the purchase
of Class B shares made during the preceding six years; then of amounts
representing the cost of shares purchased six years prior to the redemption;
and finally, of amounts representing the cost of shares held for the longest
period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired five additional
shares through dividend reinvestment. During the second year after the
purchase the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the NAV has appreciated to $12 per
share, the value of the investor's shares would be $1,260 (105 shares at $12
per share). The CDSC would not be applied to the value of the reinvested
dividend shares and the amount which represents appreciation ($260).
Therefore, $240 of the $500 redemption proceeds ($500 minus $260) would be
charged at a rate of 4% (the applicable rate in the second year after
purchase) for a total CDSC of $9.60.
For purposes of determining the applicable CDSC payable with respect
to redemption of Class B shares of the Fund where such shares were acquired
through exchange of Class B shares of another fund advised by Dreyfus, the
year since purchase payment was made is based on the date of purchase of the
original Class B shares of the fund exchanged.
CONTINGENT DEFERRED SALES CHARGE _ CLASS C SHARES _ A CDSC of 1% payable to
the Distributor is imposed on any redemption of Class C shares within one
year of the date of purchase. The basis for calculating the payment of any
such CDSC will be the method used in calculating the CDSC for Class B shares.
See "Contingent Deferred Sales Charge _ Class B Shares" above.
WAIVER OF CDSC _ The CDSC will be waived in connection with (a) redemptions
made within one year after the death or disability, as defined in Section
72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger, acquisition of
assets or otherwise, (d) distributions following retirement under a
retirement plan or upon attaining age 70 in the case of an IRA or Keogh plan
or custodial account pursuant to Section 403(b) of the
[Page 17]
Code, and (e) redemptions pursuant to the Automatic Withdrawal Plan, as
described under "Shareholder Services_Automatic Withdrawal Plan" above. If
the Company's Board determines to discontinue the waiver of the CDSC, the
disclosure in the Prospectus will be revised appropriately. Any Fund shares
subject to a CDSC which were purchased prior to the termination of such
waiver will have the CDSC waived as provided in the Prospectus at the time of
the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Agent must notify the Distributor. Any
such qualification is subject to confirmation of your entitlement.
PROCEDURES _ You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or, if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, through the TELETRANSFER
Privilege. If you are a client of a Selected Dealer, you may redeem shares
through the Selected Dealer. 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. 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 any redemption privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs, or other retirement plans,
and shares for which certificates have been issued, are not eligible for the
TELETRANSFER Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select the Tele Transfer
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 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
shares by written request mailed to Dreyfus Premier Small Cap Value Fund,
P.O. Box 6587, Providence, Rhode Island 02940-6587. Redemption requests must
be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please contact your Agent or call the telephone number listed on the cover of
this Prospectus.
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.
TELETRANSFER PRIVILEGE _ You may request by telephone that redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank 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 TELETRANSFER
Privilege for transfer to their bank account only up to $250,000 within any
30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling 1-800-554-4611 or, if calling
from overseas, 516-794-5452.
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 redemp
[Page 18]
tion are credited to your account with the Selected Dealer. See "How to Buy
Shares" for a discussion of additional conditions or fees that may be imposed
upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by the
dealer 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, the 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.
REINVESTMENT PRIVILEGE _ Upon written request, you may reinvest up to the
number of Class A or Class B shares you have redeemed, within 45 days of
redemption, at the then-prevailing NAV without a sales load, or reinstate
your account for the purpose of exercising Fund Exchanges. Upon reinvestment,
with respect to Class B shares, or Class A shares if such shares were subject
to a CDSC, the shareholder's account will be credited with an amount equal to
the CDSC previously paid upon redemption of the Class A or Class B shares
reinvested. The Reinvestment Privilege may be exercised only once.
Additional Information About Purchases, Exchanges and Redemptions
The Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculation on short-term
market movements. A pattern of frequent purchases and exchanges can be
disruptive to efficient portfolio management and, consequently, can be
detrimental to the Fund's performance and its shareholders. Accordingly, if
the Fund's management determines that an investor is engaged in excessive
trading, the Fund, with or without prior notice, may temporarily or
permanently terminate the availability of Fund Exchanges, or reject in whole
or part any purchase or exchange request, with respect to such investor's
account.
Such investors also may be barred from purchasing other funds in the Dreyfus
Family of Funds. Generally, an investor who makes more than four exchanges
out of the Fund during any calendar year or who makes exchanges that appear
to coincide with a market-timing strategy may be deemed to be engaged in
excessive trading. Accounts under common ownership or control will be
considered as one account for purposes of determining a pattern of excessive
trading. In addition, the Fund may refuse or restrict purchase or exchange
requests by any person or group if, in the judgment of the Fund's management,
the Fund would be unable to invest the money effectively in accordance with
its investment objective and policies or could otherwise be adversely
affected or if the Fund receives or anticipates receiving simultaneous orders
that may significantly affect the Fund (e.g., amounts equal to 1% or more of
the Fund's total assets). If an exchange request is refused, the Fund will
take no other action with respect to the shares until it receives further
instructions from the investor. The Fund may delay forwarding redemption
proceeds for up to seven days if the investor redeeming shares is engaged in
excessive trading or if the amount of the redemption request otherwise would
be disruptive to efficient portfolio management or would adversely affect the
Fund. The Fund's policy on excessive trading applies to investors who invest
in the Fund directly or through financial intermediaries, but does not apply
to the Dreyfus Auto-Exchange Privilege, to any automatic investment or
withdrawal privilege described herein, or to non-IRA retirement plan
accounts.
During times of drastic economic or market conditions, the Fund may
suspend the Exchange Privilege temporarily without notice and treat exchange
requests based on their separate components _ redemption orders with a
simultaneous request to purchase the other fund's shares. In such case, the
redemption request would be processed at the Fund's next determined net asset
value but the purchase order would be effective only at the net asset value
next determined after the fund being purchased receives the proceeds of the
redemption, which may result in the purchase being delayed.
Distribution Plans
(Class A Plan and Class B and C Plans)
Class A shares are subject to a Distribution Plan adopted pursuant to
Rule 12b-1 under the 1940 Act ("Rule 12b-1"). Class B and Class C shares are
subject to a Distribution Plan and a Service Plan, each adopted pursuant to
Rule 12b-1. 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. Potential investors should read this
Prospectus in light of the terms governing Agreements with their Agents. The
fees payable under the Distribution and Service Plans are payable without
regard to actual expenses incurred. The Fund and the Distributor may suspend
or reduce payments under the Distribution and Service Plans at any time, and
payments are subject to the continuation of the Fund's Plans and the
Agreements described above. From time to time, the Agents, the Distributor
and the Fund may voluntarily agree to reduce the maximum fees payable under
the Plans. See the SAI for more details on the Distribution and Service
Plans.
[Page 19]
DISTRIBUTION PLAN _ CLASS A SHARES _ The Class A shares of the Fund bear
some of the cost of selling those shares under the Distribution Plan (the
"Plan"). The Plan allows the Fund to spend annually up to 0.25% of its
average daily net assets attributable to Class A shares to compensate Dreyfus
Service Corporation, an affiliate of Dreyfus, for shareholder servicing
activities and the Distributor for shareholder servicing activities and
expenses primarily intended to result in the sale of Class A 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 Class A shares of
the Fund.
DISTRIBUTION AND SERVICE PLANS _ CLASS B AND C SHARES _ Under a
Distribution Plan adopted pursuant to Rule 12b-1, the Fund pays the
Distributor for distributing the Fund's Class B and Class C shares at an
aggregate annual rate of .75 of 1% of the value of the average daily net
assets of Class B and Class C. Under a Service Plan adopted pursuant to Rule
12b-1, the Fund pays Dreyfus Service Corporation or the Distributor for the
provision of certain services to the holders of Class B and Class C shares a
fee at the annual rate of .25 of 1% of the value of the average daily net
assets of Class B and Class C. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
providing services related to the maintenance of such shareholder accounts.
With regard to such services, each Agent is required to disclose to its
clients any compensation payable to it by the Fund and any other compensation
payable by its clients in connection with the investment of their assets in
Class B and Class C shares. The Distributor may pay one or more Agents in
respect of services for these Classes of shares. The Distributor determines
the amounts, if any, to be paid to Agents under the Service Plan and the
basis on which such payments are made.
Dividends, Other Distributions and Taxes
The Fund declares and pays dividends from its net investment income,
if any, 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 all 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 and other
distributions 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 are borne exclusively by that
Class. Class B and Class C shares will receive lower per share dividends than
Class A shares, which will in turn receive lower per share dividends than
Class R shares, because of the higher expenses borne by the relevant Classes.
See "Expense Summary."
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 at
NAV; 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 to its
shareholders 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
will be taxable to U.S. shareholders, 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 net capital gain (the excess net of long-term capital gain
over net short-term capital loss) will be 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.
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 foreign investor claims the benefit of a lower rate specified in a
tax treaty. Distributions from net capital gain 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 or her 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 that will include information as to dividends and distributions
from net capital gain, if any, paid during the year. The annual tax notice
and periodic account summaries you will receive designate the portions of
capital gain distributions that are subject to (1) the 20% maximum rate of
tax (10% for investors
[Page 20]
in the 15% marginal tax bracket) enacted by the Taxpayer Relief Act
of 1997 ("Tax Act"), which applies to non-corporate taxpayers' net capital
gain on securities and other capital assets held for more than 18 months, and
(2) the 28% maximum tax rate, applicable to such gain on capital assets held
for more than one year and up to 18 months (which, prior to enactment of the
Tax Act, applied to all such gain on capital assets held for more than one
year).
The Code provides for the "carryover" of some or all of the sales
load imposed on Class A shares if (1) a shareholder redeems those shares or
exchanges those shares for shares of another fund advised or administered by
Dreyfus within 90 days of purchase and (2) in the case of a redemption,
acquires other Fund Class A shares through exercise of the Reinvestment
Privilege or, in the case of an exchange, such other fund reduces or
eliminates its otherwise applicable sales load for the purpose of the exchange
.. In these cases, the amount of the sales load charged on the purchase of the
original Class A shares, up to the amount of the reduction of the sales load
pursuant to the Reinvestment Privilege or on the exchange, as the case may
be, is not included in the basis of such shares for purposes of computing
gain or loss on the redemption or the exchange and instead is added to the
basis of the shares acquired pursuant to the Reinvestment Privilege or the
exchange.
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 59 1\2, generally will
be subject to an additional tax equal to 10% of the taxable portion of the
distribution. If the distribution from such a retirement plan (other than
certain governmental or church plans) for any taxable year following the year
in which the participant reaches age 70 1\2 is less than the "minimum
required distribution" for that taxable year, an excise tax equal to 50% of
the deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a retirement plan will be responsible for reporting
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
will be subject to a 20% income tax withholding.
The Fund must withhold and remit to the U.S. Treasury ("backup
withholding") 31% of dividends, capital gain distributions and redemption
proceeds, regardless of the extent to which gain or loss may be realized,
paid to an individual or certain other non-corporate shareholder if such
shareholder fails to certify that the TIN furnished to the Fund is correct.
Backup withholding at that rate also is required from dividends and capital
gain distributions payable to such a shareholder if (1) that shareholder
fails to certify that he or she has not received notice from the IRS of being
subject to backup withholding as a result of a failure properly to report
taxable dividend or interest income on a Federal income tax return or (2) the
IRS notifies the Fund to institute backup withholding because the IRS
determines that the shareholder's TIN is incorrect or that the shareholder
has failed properly to report such income.
A TIN is either the Social Security number, individual taxpayer
identification 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 and may be claimed as a credit on the record
owner's Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable income and capital
gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
Performance Information
Because the Fund began investment operations on March 31, 1998, there is no
past performance available for the Fund. Since October, 1996, however, the
Fund's portfolio manager, William Rydell, has managed a private account
("Account"), for an institutional investor at Mellon Equity Associates. The
Account, which commenced investment operations on October 24, 1996, invests
in undervalued small capitalization stocks, and has had an investment
objective and investment policies and limitations substantially similar to
those of the Fund. In addition, Mr. Rydell uses the same analytical methods
when identifying potential investments for the Account as he now uses for the
Fund.
The average annual total returns achieved by the Account, prepared
and presented in accordance with Association of Investment Management and
Research (AIMR) standards, for the one-year period ending February 28, 1998,
and from November 1, 1996 through February 28, 1998, were 46.95% and 46.52%,
respectively, before deduction of its investment management and
administrative expenses. If those expenses were deducted, average annual
total returns would have been lower. The performance of the Russell 2000 Value
Index for these periods, which is presented for comparison purposes only,
were 33.88% and 34.99%, respectively. The Russell 2000 Value Index is an
unmanaged index of those companies in the Russell 2000 Index with lower
price-to-book ratios and lower forecasted growth values. The Russell 2000
Index measures the performance of the 2,000 smallest companies in the Russell
3000 Index, which in
[Page 21]
turn measures the performance of the 3,000 largest publicly traded
U.S. companies based on total market capitalization. The Russell 2000 Value
Index does not reflect management or expense charges. Performance information
for the Account and the Russell 2000 Value Index is based on historical
returns and is not intended to indicate future performance.
PLEASE KEEP IN MIND THAT THE PERFORMANCE INFORMATION OF THE ACCOUNT
AND OF THE RUSSELL 2000 VALUE INDEX SHOULD NOT BE VIEWED AS A SUBSTITUTE FOR
THE FUND'S OWN PERFORMANCE, AND THAT THE PERFORMANCE OF AN INVESTMENT IN THE
FUND WILL DIFFER FROM THE PERFORMANCE OF THE ACCOUNT AND OF THE RUSSELL 2000
VALUE INDEX. ALSO, PAST PERFORMANCE OF THE ACCOUNT AND THE RUSSELL 2000 VALUE
INDEX IS NO GUARANTEE OF FUTURE RESULTS OF THE FUND.
The Account was subject to a different fee structure than the Fund
and its shares were not subject to front-end or CDSCs or distribution or
service fees. If the Account had been subject to such charges and fees, the
Account's returns would have been lower. In addition, private accounts, such
as the Account, are not subject to the investment limitations,
diversification requirements, and other restrictions imposed on regulated
investment companies, which, if applicable, could adversely affect the
performance results of a private account.
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 shares and assume
that any income dividends and/or capital gains distributions made by the Fund
during the measuring period were reinvested in shares of the same Class.
Class A total return figures include the maximum initial sales charge and
Class B and Class C total return figures include any applicable CDSC. These
figures also take into account any applicable distribution and servicing
fees. As a result, at any given time, the performance of Class B and Class C
should be expected to be lower than that of Class A and the performance of
Classes A, B and C should be expected to be lower than that of Class R.
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
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.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the NAV (or
maximum offering price for Class A) at the beginning of the period.
Advertisements may include the percentage rate of total return or may include
the value of a hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total return may also
be calculated using the NAV at the beginning of the period instead of the
maximum offering price for Class A shares or without giving effect to any
applicable CDSC at the end of the period for Class B or Class C shares.
Calculations based on NAV do not reflect the deduction of the applicable
sales charge on Class A shares which, if reflected, would reduce the
performance quoted.
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 provides 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. Investors 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 Russell 2000 Value Index, Russell 2000 Index, Russell 2000
Growth Index, Standard & Poor's Composite Index of 500 Stocks, the Consumer
Price Index, the Dow Jones Industrial Average, Lehman Brothers indexes, and
CDA Technologies indexes. 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 advertise non-stan
[Page 22]
dardized 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 as an
open-end management investment company, commonly known as a mutual fund. The
Company has an authorized capitalization of 25 billion shares of $0.001 par
value stock with equal voting rights. The Fund's shares are classified into
four Classes_Class A, Class B, Class C and Class R. The Company's Articles of
Incorporation permit the Board of Directors to create an unlimited number of
investment portfolios (each a "fund") without shareholder approval. The Board
of Directors may liquidate the Fund or any Class without the approval of Fund
or Class shareholders. The Company may in the future seek to achieve the
Fund's investment objective by investing all of the Fund's net investable
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 Class are entitled to vote, each as a separate class. Only
holders of Class A, Class B or Class C shares, as the case may be, will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution and/or Service 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 shares. In
addition, the Board of Directors will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Directors then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account. Shareholder inquiries may be made to
your Agent or by writing to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 23]
[Application Page 1 here]
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[Application Page 2 here]
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[Page 27]
Copy Rights 1998 Dreyfus Service Corporation 148p0398
[Page 28]
DREYFUS PREMIER SMALL CAP VALUE FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 31, 1998
This Statement of Additional Information ("SAI"), which is not a
prospectus, supplements and should be read in conjunction with the current
Prospectus of Dreyfus Premier Small Cap Value Fund (the "Fund"), dated March
31, 1998, as it may be revised from time to time. The Fund is a separate,
diversified portfolio of The Dreyfus/Laurel Funds, Inc. (the "Company"), an
open-end management investment company, known as a mutual fund. To obtain a
copy of the Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call one of the following
numbers:
Call Toll Free 1-800-554-4611
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
manager.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-2
Management of the Fund B-14
Management Arrangements B-20
Purchase of Shares B-21
Distribution and Service Plans B-22
Redemption of Shares B-24
Shareholder Services B-25
Determination of Net Asset Value B-28
Dividends, Other Distributions and Taxes B-29
Portfolio Transactions B-33
Performance Information B-34
Information About the Fund B-35
Transfer and Dividend Disbursing Agent, Custodian, Counsel and
Independent Auditors B-36
Financial Reports B-37
Appendix B-38
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the
Fund."
Portfolio Securities
Government Obligations. The Fund may invest in a variety of U.S.
Treasury obligations, which differ only in their interest rates, maturities
and times of issuance: (a) U.S. Treasury bills have a maturity of one year
or less, (b) U.S. Treasury notes have maturities of one to ten years, and
(c) U.S. Treasury bonds generally have maturities of greater than ten years.
In addition to U.S. Treasury obligations, the Fund may invest in
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities that are supported by any of the following: (a) the full
faith and credit of the U.S. Treasury, (b) the right of the issuer to borrow
an amount limited to a specific line of credit from the U.S. Treasury, (c)
the discretionary authority of the U.S. Government agency or
instrumentality, or (d) the credit of the instrumentality. (Examples of
agencies and instrumentalities are: Federal Land Banks, Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the
United States, Central Bank for Cooperatives, Federal Intermediate Credit
Banks, Federal Home Loan Banks, General Services Administration, Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory
Board, Inter-American Development Bank, Asian-American Development Bank,
Student Loan Marketing Association, International Bank for Reconstruction
and Development and Fannie Mae). No assurance can be given that the U.S.
Government will provide financial support to the agencies or
instrumentalities described in (b), (c) and (d) in the future, other than as
set forth above, since it is not obligated to do so by law.
Repurchase Agreements. The Fund may enter into repurchase agreements
with U.S. Government securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System, or with such other
brokers or dealers that meet the credit guidelines of the Board of
Directors. In a repurchase agreement, the Fund buys a security from a seller
that has agreed to repurchase the same security at a mutually agreed upon
date and price. The Fund's resale price will be in excess of the purchase
price, reflecting an agreed upon interest rate. This interest rate is
effective for the period of time the Fund is invested in the agreement and
is not related to the coupon rate on the underlying security. Repurchase
agreements may also be viewed as a fully collateralized loan of money by the
Fund to the seller. The period of these repurchase agreements will usually
be short, from overnight to one week, and at no time will the Fund invest in
repurchase agreements for more than one year. The Fund will always receive
as collateral securities whose market value including accrued interest is,
and during the entire term of the agreement remains, at least equal to 100%
of the dollar amount invested by the Fund in each agreement, and the Fund
will make payment for such securities only upon physical delivery or upon
evidence of book entry transfer to the account of the Custodian. If the
seller defaults, the Fund might incur a loss if the value of the collateral
securing the repurchase agreement declines and might incur disposition costs
in connection with liquidating the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of a security which is
the subject of a repurchase agreement, realization upon the collateral by
the Fund may be delayed or limited. The Fund seeks to minimize the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligors under repurchase agreements, in accordance with the Fund's credit
guidelines.
When-Issued Securities. New issues of U.S. Treasury and Government
securities are often offered on a when-issued basis. This means that
delivery and payment for the securities normally will take place
approximately 7 to 45 days after the date the buyer commits to purchase
them. The payment obligation and the interest rate that will be received on
securities purchased on a when-issued basis are each fixed at the time the
buyer enters into the commitment. The Fund will make commitments to purchase
such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities or dispose of the
commitment before the settlement date if it is deemed advisable as a matter
of investment strategy. Cash or marketable high-grade debt securities equal
to the amount of the above commitments will be segregated on the Fund's
records. For the purpose of determining the adequacy of these securities the
segregated securities will be valued at market. If the market value of such
securities declines, additional cash or securities will be segregated on the
Fund's records on a daily basis so that the market value of the account will
equal the amount of such commitments by the Fund.
Securities purchased on a when-issued basis and the securities held by
the Fund are subject to changes in market value based upon the public's
perception of changes in the level of interest rates. Generally, the value
of such securities will fluctuate inversely to changes in interest rates --
i.e., they will appreciate in value when interest rates decline and decrease
in value when interest rates rise. Therefore, if in order to achieve higher
interest income the Fund remains substantially fully invested at the same
time that it has purchased securities on a "when-issued" basis, there will
be a greater possibility of fluctuation in the Fund's net asset value.
When payment for when-issued securities is due, the Fund will meet its
obligations from then-available cash flow, the sale of segregated
securities, the sale of other securities and/or, although it would not
normally expect to do so, from the sale of the when-issued securities
themselves (which may have a market value greater or less than the Fund's
payment obligation). The sale of securities to meet such obligations carries
with it a greater potential for the realization of capital gains, which are
subject to federal income taxes.
Commercial Paper. The Fund may invest in commercial paper issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended ("Section
4(2) paper"). Section 4(2) paper is restricted as to disposition under the
federal securities laws and generally is sold to investors who agree that
they are purchasing the paper for an investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper is normally resold to other investors
through or with the assistance of the issuer or investment dealers who make
a market in Section 4(2) paper, thus providing liquidity. Pursuant to
guidelines established by the Company's Board of Directors, Dreyfus may
determine that Section 4(2) paper is liquid for the purposes of complying
with the Fund's investment restriction relating to investments in illiquid
securities.
Warrants. A warrant is an instrument issued by a corporation which
gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time.
The Fund may invest up to 5% of its net assets in warrants, except that this
limitation does not apply to warrants purchased by the Fund that are sold in
units with, or attached to, other securities.
Convertible Securities. The Fund may purchase convertible securities,
which are fixed-income securities such as bonds or preferred stock that may
be converted into or exchanged for a specified number of shares of common
stock of the same or a different issuer within a specified period of time
and at a specified price or formula. Convertible securities are senior to
common stock in a corporation's capital structure, but may be subordinated
to non-convertible debt securities. Before conversion, convertible
securities ordinarily provide a stable stream of income with yields
generally higher than those on common stock, but lower than those on non-
convertible debt securities of similar quality. In general, the market
value of a convertible security is the higher of its "investment value"
(i.e., its value as a fixed-income security) or its "conversion value"
(i.e., the value of the underlying shares of common stock if the security is
converted). As a fixed-income security, the market value of a convertible
security generally increases when interest rates decline and generally
decreases when interest rates rise. However, the price of a convertible
security also is influenced by the market value of the security's underlying
common stock. Thus, the price of a convertible security generally increases
as the market value of the underlying stock rises, and generally decreases
as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the
common stock of the same issuer.
Preferred Stock. The Fund may also purchase preferred stock, which is
a class of capital stock that typically pays dividends at a specified rate.
Preferred stock is generally senior to common stock, but subordinate to debt
securities, with respect to the payment of dividends and on liquidation of
the issuer. In general, the market value of preferred stock is its
"investment value," or its value as a fixed-income security. Accordingly,
the market value of preferred stock generally increases when interest rates
decline and decreases when interest rates rise, but, as with debt
securities, is also affected by the issuer's ability to make payments on the
preferred stock.
Management Policies
The Fund engages in the following practices in furtherance of its
investment objective.
Loans of Fund Securities. The Fund has authority to lend its portfolio
securities provided (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or cash equivalents
adjusted daily to make a market value at least equal to the current market
value of these securities loaned; (2) the Fund may at any time call the loan
and regain the securities loaned; (3) the Fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value
of securities loaned will not at any time exceed one-third of the total
assets of the Fund. In addition, it is anticipated that the Fund may share
with the borrower some of the income received on the collateral for the loan
or that it will be paid a premium for the loan. In determining whether to
lend securities, the Fund considers all relevant factors and circumstances
including the creditworthiness of the borrower.
Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements to meet redemption requests where the liquidation of
portfolio securities is deemed by the Fund to be inconvenient or
disadvantageous. A reverse repurchase agreement is a transaction whereby the
Fund transfers possession of a portfolio security to a bank or broker-dealer
in return for a percentage of the portfolio security's market value. The
Fund retains record ownership of the security involved including the right
to receive interest and principal payments. At an agreed upon future date,
the Fund repurchases the security by paying an agreed upon purchase price
plus interest. Cash or liquid high-grade debt obligations of the Fund equal
in value to the repurchase price including any accrued interest will be
maintained in a segregated account while a reverse repurchase agreement is
in effect.
Derivative Instruments. The Fund may purchase and sell various
financial instruments ("Derivative Instruments"), including financial
futures contracts (such as index futures contracts) and options (such as
options on U.S. and foreign securities or indices of such securities). The
index Derivative Instruments the Fund may use may be based on indices of
U.S. or foreign equity or debt securities. These Derivative Instruments may
be used, for example, to preserve a return or spread or to facilitate or
substitute for the sale or purchase of securities.
Hedging strategies can be broadly categorized as "short hedges" and
"long hedges." A short hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential declines in the
value of one or more investments held in the Fund's portfolio. Thus, in a
short hedge the Fund takes a position in a Derivative Instrument whose price
is expected to move in the opposite direction of the price of the investment
being hedged.
Conversely, a long hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential increases in the
acquisition cost of one or more investments that the Fund intends to
acquire. Thus, in a long hedge the Fund takes a position in a Derivative
Instrument whose price is expected to move in the same direction as the
price of the prospective investment being hedged. A long hedge is sometimes
referred to as an anticipatory hedge. In an anticipatory hedge transaction,
the Fund does not own a corresponding security and, therefore, the
transaction does not relate to a security the Fund owns. Rather, it relates
to a security that the Fund intends to acquire. If the Fund does not
complete the hedge by purchasing the security it anticipated purchasing, the
effect on the Fund's portfolio is the same as if the transaction were
entered into for speculative purposes.
Derivative Instruments on securities generally are used to hedge
against price movements in one or more particular securities positions that
the Fund owns or intends to acquire. Derivative Instruments on indices, in
contrast, generally are used to attempt to hedge against price movements in
market sectors in which the Fund has invested or expects to invest.
Derivative Instruments on debt securities may be used to hedge either
individual securities or broad debt market sectors.
The use of Derivative Instruments is subject to applicable regulations
of the Securities and Exchange Commission ("SEC"), the several options and
futures exchanges upon which they are traded, the Commodity Futures Trading
Commission ("CFTC") and various state regulatory authorities. In addition,
the Fund's ability to use Derivative Instruments will be limited by tax
considerations. See "Dividends, Other Distributions and Taxes."
In addition to the instruments, strategies and risks described below
and in the Prospectus, Dreyfus expects to discover additional opportunities
in connection with other Derivative Instruments. These new opportunities
may become available as Dreyfus develops new techniques, as regulatory
authorities broaden the range of permitted transactions and as new
techniques are developed. Dreyfus may utilize these opportunities to the
extent that they are consistent with the Fund's investment objective and
permitted by the Fund's investment policies and applicable regulatory
authorities.
Special Risks. The use of Derivative Instruments involves special
considerations and risks, certain of which are described below. Risks
pertaining to particular Derivative Instruments are described in the
sections that follow.
(1) Successful use of most Derivative Instruments depends upon
Dreyfus' ability to predict movements of the overall securities and interest
rate markets, which requires different skills than predicting changes in the
prices of individual securities. There can be no assurance that any
particular strategy will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of a Derivative Instrument and price movements of
the investments being hedged. For example, if the value of a Derivative
Instrument used in a short hedge increased by less than the decline in value
of the hedged investment, the hedge would not be fully successful. Such a
lack of correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which Derivative Instruments are traded. The effectiveness of
hedges using Derivative Instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
securities being hedged.
Because there are a limited number of types of exchange-traded options
and futures contracts, it is likely that the standardized contracts
available will not match the Fund's current or anticipated investments
exactly. The Fund may invest in options and futures contracts based on
securities with different issuers, maturities, or other characteristics from
the securities in which it typically invests, which involves a risk that the
options or futures position will not track the performance of the Fund's
other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the Fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of the
contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other investments.
(3) If successful, the above-discussed strategies can reduce risk of
loss by wholly or partially offsetting the negative effect of unfavorable
price movements. However, such strategies can also reduce opportunity for
gain by offsetting the positive effect of favorable price movements. For
example, if the Fund entered into a short hedge because Dreyfus projected a
decline in the price of a security in the Fund's portfolio, and the price of
that security increased instead, the gain from that increase might be wholly
or partially offset by a decline in the price of the Derivative Instrument.
Moreover, if the price of the Derivative Instrument declined by more than
the increase in the price of the security, the Fund could suffer a loss. In
either such case, the Fund would have been in a better position had it not
attempted to hedge at all.
(4) As described below, the Fund might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in Derivative Instruments involving obligations to third
parties (i.e., Derivative Instruments other than purchased options). If the
Fund were unable to close out its positions in such Derivative Instruments,
it might be required to continue to maintain such assets or accounts or make
such payments until the position expired or matured. These requirements
might impair the Fund's ability to sell a portfolio security or make an
investment at a time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a disadvantageous time.
The Fund's ability to close out a position in a Derivative Instrument prior
to expiration or maturity depends on the existence of a liquid secondary
market or, in the absence of such a market, the ability and willingness of
the other party to the transaction ("counterparty") to enter into a
transaction closing out the position. Therefore, there is no assurance that
any position can be closed out at a time and price that is favorable to the
Fund.
Cover for Derivative Instruments. Transactions using Derivative
Instruments may expose the Fund to an obligation to another party. The Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, futures or options, or (2)
cash and short-term liquid debt securities with a value sufficient at all
times to cover its potential obligations to the extent not covered as
provided in (1) above. The Fund will comply with SEC guidelines regarding
cover for Derivative Instruments and will, if the guidelines so require, set
aside cash, U.S. Government securities or other liquid, high-grade debt
securities in a segregated account with its custodian in the prescribed
amount.
Assets used as cover or held in a segregated account cannot be sold
while the position in the corresponding Derivative Instrument is open,
unless they are replaced with other appropriate assets. As a result, the
commitment of a large portion of the Fund's assets to cover or segregated
accounts could impede portfolio management or the Fund's ability to meet
redemption requests or other current obligations.
Options. A call option gives the purchaser the right to buy, and
obligates the writer to sell, the underlying investment at the agreed upon
exercise price during the option period. A put option gives the purchaser
the right to sell, and obligates the writer to buy, the underlying
investment at the agreed upon exercise price during the option period. A
purchaser of an option pays an amount, known as the premium, to the option
writer in exchange for rights under the option contract.
Options on indices are similar to options on securities except that all
settlements are in cash and gain or loss depends on changes in the index in
question rather than on price movements in individual securities.
The purchase of call options can serve as a long hedge, and the
purchase of put options can serve as a short hedge. Writing put or call
options can enable the Fund to enhance income or yield by reason of the
premiums paid by the purchasers of such options. However, if the market
price of the security or other instrument underlying a put option declines
to less than the exercise price on the option, minus the premium received,
the Fund would expect to suffer a loss.
Writing call options can also serve as a limited short hedge because
declines in the value of the hedged investment would be offset to the extent
of the premium received for writing the option. However, if the investment
appreciates to a price higher than the exercise price of the call option, it
can be expected that the option will be exercised and the Fund will be
obligated to sell the investment at less than its market value.
Writing put options can serve as a limited long hedge because increases
in the value of the hedged investment would be offset to the extent of the
premium received for writing the option. However, if the investment
depreciates to a price lower than the exercise price of the put option, it
can be expected that the put option will be exercised and the Fund will be
obligated to purchase the investment at more than its market value.
The value of an option position will reflect, among other things, the
current market value of the underlying investment, the time remaining until
expiration, the relationship of the exercise price to the market price of
the underlying investment, the historical price volatility of the underlying
investment and general market conditions. Options that expire unexercised
have no value.
The Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, the Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing
purchase transaction. Conversely, the Fund may terminate a position in a
put or call option it had purchased by writing an identical put or call
option; this is known as a closing sale transaction. Closing transactions
permit the Fund to realize profits or limit losses on an option position
prior to its exercise or expiration.
The Fund may purchase and sell both exchange-traded and over-the-
counter ("OTC") options. Exchange-traded options in the United States are
issued by a clearing organization that, in effect, guarantees completion of
every exchange-traded option transaction. In contrast, OTC options are
contracts between the Fund and its counterparty (usually a securities dealer
or a bank) with no clearing organization guarantee. Thus, when the Fund
purchases an OTC option, it relies on the counterparty from whom it
purchased the option to make or take delivery of the underlying investment
upon exercise of the option. Failure by the counterparty to do so would
result in the loss of any premium paid by the Fund as well as the loss of
any expected benefit of the transaction. The Fund will enter into only
those option contracts that are listed on a national securities or
commodities exchange or traded in the OTC market for which there appears to
be a liquid secondary market.
The Fund will not purchase or write OTC options if, as a result of such
transaction, the sum of (i) the market value of outstanding OTC options
purchased by the Fund, (ii) the market value of the underlying securities
covered by outstanding OTC call options written by the Fund, and (iii) the
market value of all other assets of the Fund that are illiquid or are not
otherwise readily marketable, would exceed 15% of the net assets of the
Fund, taken at market value. However, if an OTC option is sold by the Fund
to a primary U.S. Government securities dealer recognized by the Federal
Reserve Bank of New York and the Fund has the unconditional contractual
right to repurchase such OTC option from the dealer at a predetermined
price, then the Fund will treat as illiquid such amount of the underlying
securities as is equal to the repurchase price less the amount by which the
option is "in-the-money" (the difference between the current market value of
the underlying securities and the option's strike price). The repurchase
price with primary dealers is typically a formula price that is generally
based on a multiple of the premium received for the option plus the amount
by which the option is "in-the-money."
The Fund's ability to establish and close out positions in exchange-
listed options depends on the existence of a liquid market. However, there
can be no assurance that such a market will exist at any particular time.
Closing transactions can be made for OTC options only by negotiating
directly with the counterparty, or by a transaction in the secondary market
if any such market exists. Although the Fund will enter into OTC options
only with major dealers in unlisted options, there is no assurance that the
Fund will in fact be able to close out an OTC option position at a favorable
price prior to expiration. In the event of insolvency of the counterparty,
the Fund might be unable to close out an OTC option position at any time
prior to its expiration.
If the Fund were unable to effect a closing transaction for an option
it had purchased, it would have to exercise the option to realize any
profit. The inability to enter into a closing purchase transaction for a
covered call option written by the Fund could cause material losses because
the Fund would be unable to sell the investment used as cover for the
written option until the option expires or is exercised.
The Fund may write only covered call options on securities. A call
option is covered if the Fund owns the underlying security or a call option
on the same security with a lower strike price.
Futures Contracts and Options on Futures Contracts. When the Fund
purchases a futures contract, it incurs an obligation to take delivery of a
specified amount of the obligation underlying the futures contract at a
specified time in the future for a specified price. When the Fund sells a
futures contract, it incurs an obligation to deliver a specified amount of
the obligation underlying the futures contract at a specified time in the
future for an agreed upon price. With respect to index futures, no physical
transfer of the securities underlying the index is made. Rather, the
parties settle by exchanging in cash an amount based on the difference
between the contract price and the closing value of the index on the
settlement date.
When the Fund writes an option on a futures contract, it becomes
obligated, in return for the premium paid, to assume a position in a futures
contract at a specified exercise price at any time during the term of the
option. If the Fund writes a call, it assumes a short futures position. If
the Fund writes a put, it assumes a long futures position. When the Fund
purchases an option on a futures contract, it acquires the right, in return
for the premium it pays, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a
put).
The purchase of futures or call options on futures can serve as a long
hedge, and the sale of futures or the purchase of put options on futures can
serve as a short hedge. Writing call options on futures contracts can serve
as a limited short hedge, using a strategy similar to that used for writing
call options on securities or indices. Similarly, writing put options on
futures contracts can serve as a limited long hedge.
No price is paid upon entering into a futures contract. Instead, at
the inception of a futures contract the Fund is required to deposit "initial
margin" consisting of cash or U.S. Government securities in an amount
generally equal to 10% or less of the contract value. Margin must also be
deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction
if all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Fund may be required
by an exchange to increase the level of its initial margin payment.
Subsequent "variation margin" payments are made to and from the futures
broker daily as the value of the futures position varies, a process known as
"marking-to-market." Variation margin does not involve borrowing, but
rather represents a daily settlement of the Fund's obligations to or from a
futures broker. When the Fund purchases an option on a future, the premium
paid plus transaction costs is all that is at risk. In contrast, when the
Fund purchases or sells a futures contract or writes a call or put option
thereon, it is subject to daily variation margin calls that could be
substantial in the event of adverse price movements. If the Fund has
insufficient cash to meet daily variation margin requirements, it might need
to sell securities at a time when such sales are disadvantageous.
Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing transactions
on options, by selling or purchasing, respectively, an instrument identical
to the instrument purchased or sold. Positions in futures and options on
futures may be closed only on an exchange or board of trade that provides a
secondary market. Although the Fund intends to enter into futures and
options on futures only on exchanges or boards of trade where there appears
to be a liquid secondary market, there can be no assurance that such a
market will exist for a particular contract at a particular time. In such
event, it may not be possible to close a futures contract or options
position.
Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a futures or an option on a futures
contract can vary from the previous day's settlement price; once that limit
is reached, no trades may be made that day at a price beyond the limit.
Daily price limits do not limit potential losses because prices could move
to the daily limit for several consecutive days with little or no trading,
thereby preventing liquidation of unfavorable positions.
If the Fund were unable to liquidate a futures or options on futures
position due to the absence of a liquid secondary market or the imposition
of price limits, it could incur substantial losses. The Fund would continue
to be subject to market risk with respect to the position. In addition,
except in the case of purchased options, the Fund would continue to be
required to make daily variation margin payments and might be required to
maintain the position being hedged by the future or option or to maintain
cash or securities in a segregated account.
To the extent that the Fund enters into futures contracts, options on
futures contracts, or options on foreign currencies traded on an exchange
regulated by the CFTC, in each case other than for bona fide hedging
purposes (as defined by the CFTC), the aggregate initial margin and premiums
required to establish those positions (excluding the amount by which options
are "in-the-money" at the time of purchase) will not exceed 5% of the
liquidation value of the Fund's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Fund has
entered into. This policy does not limit to 5% the percentage of the Fund's
assets that are at risk in futures contracts and options on futures
contracts.
The Fund will not enter into futures contracts to the extent that its
outstanding obligations under these contracts would exceed 25% of the Fund's
total assets.
Master/Feeder Option. The Company may in the future seek to achieve
the Fund's investment objective by investing all of the Fund's net
investable assets in another investment company having the same investment
objective and substantially the same investment policies and restrictions as
those applicable to the Fund. Shareholders of the Fund will be given at
least 30 days' prior notice of any such investment. Such investment would
be made only if the Company's Board of Directors determines it to be in the
best interest of the Fund and its shareholders. In making that
determination, the Company's Board of Directors will consider, among other
things, the benefits to shareholders and/or the opportunity to reduce costs
and achieve operational efficiency. Although the Fund believes that the
Company's Board of Directors will not approve an arrangement that is likely
to result in higher costs, no assurance is given that risks will be
materially reduced if this option is implemented.
Investment Restrictions
Fundamental. The following fundamental limitations have been adopted
by the Fund. The Fund may not change any of these fundamental investment
limitations without the consent of: (a) 67% or more of the shares present at
a meeting of shareholders duly called if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy; or (b)
more than 50% of the outstanding shares of the Fund, whichever is less. The
Fund may not:
1. Purchase any securities which would cause 25% or more of the value
of the Fund's total assets at the time of such purchase to be invested in
the securities of one or more issuers conducting their principal activities
in the same industry. (For purposes of this limitation, U.S. Government
securities and state or municipal governments and their political
subdivisions are not considered members of any industry.)
2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended ("1940 Act"), except that (a) the
Fund may borrow money in an amount not exceeding one-third of the Fund's
total assets at the time of such borrowing, and (b) the Fund may issue
multiple classes of shares. The purchase or sale of options, forward
contacts, futures contracts, including those relating to indices, and
options on futures contracts or indices shall not be considered to involve
the borrowing of money or issuance of senior securities.
3. Purchase with respect to 75% of the Fund's total assets securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more
than 5% of the Fund's total assets would be invested in the securities of
that issuer, or (b) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.
4. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such loans.
For purposes of this limitation debt instruments and repurchase agreements
shall not be treated as loans.
5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real
estate, including mortgage loans, or securities of companies that engage in
the real estate business or invest or deal in real estate or interests
therein).
6. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and the later disposition of such
securities in accordance with the Fund's investment program may be deemed an
underwriting.
7. Purchase or sell commodities, except that the Fund may enter into
options, forward contracts, and futures contracts, including those related
to indices, and options on futures contracts or indices.
The Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its investable assets in securities of a
single, open-end management investment company with substantially the same
investment objective, policies, and limitations as the Fund.
Non-fundamental. The Fund has adopted the following additional
non-fundamental investment restrictions. These non-fundamental restrictions
may be changed without shareholder approval, in compliance with applicable
law and regulatory policy.
1. The Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements with
remaining maturities in excess of seven days, time deposits with maturities
in excess of seven days, and other securities that are not readily
marketable. For purposes of this limitation, illiquid securities shall not
include commercial paper issued pursuant to Section 4(2) of the Securities
Act of 1933, as amended, and securities that may be resold under Rule 144A
under that Act, provided that the Board of Directors, or its delegate,
determines that such securities are liquid, based upon the trading markets
for the specific security.
2. The Fund will not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets and except to the extent otherwise permitted by the
1940 Act.
3. The Fund will not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options shall not constitute purchasing securities on
margin.
4. The Fund will not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities
sold short, and provided that transactions in futures contracts and options
are not deemed to constitute selling short.
5. The Fund will not purchase any security while borrowings
representing more than 5% of the Fund's total assets are outstanding.
If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in such percentage resulting from a change in
the values of assets will not constitute a violation of such restriction,
except as otherwise required by the 1940 Act.
MANAGEMENT OF THE FUND
Federal Law Affecting Mellon Bank
The Glass-Steagall Act of 1933 prohibits national banks from engaging
in the business of underwriting, selling or distributing securities and
prohibits a member bank of the Federal Reserve System from having certain
affiliations with an entity engaged principally in that business. The
activities of Mellon Bank, N.A. ("Mellon Bank") in informing its customers
of, and performing, investment and redemption services in connection with
the Fund, and in providing services to the Fund as custodian, as well as
Dreyfus' investment advisory activities, may raise issues under these
provisions. Mellon Bank has been advised by counsel that the activities
contemplated under these arrangements are consistent with statutory and
regulatory obligations.
Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank or Dreyfus
from continuing to perform all or a part of the above services for its
customers and/or the Fund. If Mellon Bank or Dreyfus were prohibited from
serving the Fund in any of its present capacities, the Board of Directors
would seek an alternative provider(s) of such services.
Directors and Officers of the Company
The Company has a Board composed of eleven Directors which supervises
the Fund's investment activities and reviews contractual arrangements with
companies that provide the Fund with services. The following lists the
Directors and officers and their positions with the Company and their
present and principal occupations during the past five years. Each Director
who is an "interested person" of the Company (as defined in the 1940 Act) is
indicated by an asterisk(*). Each of the Directors also serves as a Trustee
of The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust (collectively, with the Company, the "Dreyfus/Laurel Funds").
Directors of the Company
o+RUTH MARIE ADAMS. Director of the Company; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution; from
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 83 years old. Address: 1026 Kendal Lyme Road, Hanover, New
Hampshire 03755.
o+FRANCIS P. BRENNAN. Chairman of the Board of Directors and Assistant
Treasurer of the Company; Director and Chairman, Massachusetts Business
Development Corp.; and from November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 81 years old. Address: Massachusetts Business
Development Corp., 50 Milk Street, Boston, Massachusetts 02109.
o+JOSEPH S. DIMARTINO, Director of the Company. Since January 1995, Mr.
DiMartino has served as Chairman of the Board for various funds in the
Dreyfus Family of Funds. He is also a director of The Muscular
Dystrophy Association, HealthPlan Services Corporation, a provider of
marketing, administrative and risk management services to health and
other benefit programs, The Noel Group, Inc., a venture capital
company, Staffing Resources, Inc., a temporary placement agency,
Carlyle Industries, Inc. (formerly Belding Heminway, Inc.), a button
packager and distributor, and Century Business Services, Inc., a
provider of various outsourcing functions for small and medium sized
corporations. Mr. DiMartino is also a Board member of 152 other funds
in the Dreyfus Family of Funds. From November 1995 to January 1997,
Director, Access Capital Strategic Community Investment Fund, Inc. -
Institutional Investment Portfolio and Bank Portfolio. For more than
five years prior to January 1995, he was President, a director and,
until August 24, 1994, Chief Operating Officer of Dreyfus and Executive
Vice President and a director of Dreyfus Service Corporation, a wholly-
owned subsidiary of Dreyfus. From August 1994 to December 31, 1994, he
was a director of Mellon Bank Corporation. Age: 54 years old.
Address: 200 Park Avenue, New York, New York 10166.
o+JAMES M. FITZGIBBONS. Director of the Company; Chairman, Howes Leather
Company, Inc.; Director, Fiduciary Trust Company; Chairman, CEO and
Director, Fieldcrest-Cannon Inc.; Director, Lumber Mutual Insurance
Company; Director, Barrett Resources, Inc.; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio. Age: 63 years old. Address: 40 Norfolk
Road, Brookline, Massachusetts 02167.
o*J. TOMLINSON FORT. Director of the Company; Partner, Reed, Smith, Shaw &
McClay (law firm). From November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 69 years old. Address: 204 Woodcock Drive,
Pittsburgh, Pennsylvania 15215.
o+ARTHUR L. GOESCHEL. Director of the Company; Director, Calgon Carbon
Corporation; Director, Cerex Corporation; Director, National Picture
Frame Corporation; former Chairman of the Board and Director, Rexene
Corporation; Chairman of the Board and Director, Tetra Corporation 1991-
1993; Director, Medalist Corporation 1992-1993. From November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Institutional Investment Portfolio. Age: 76 years old.
Address: Way Hallow Road and Woodland Road, Sewickley, Pennsylvania
15143.
o+KENNETH A. HIMMEL. Director of the Company; former Director, The Boston
Company, Inc. ("TBC") and Boston Safe Deposit and Trust Company;
President and Chief Executive Officer, Himmel & Co., Inc.; Vice
Chairman, Sutton Place Gourmet, Inc.; Managing Partner, Franklin
Federal Partners. From November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Bank Portfolio.
Age: 51 years old. Address: 625 Madison Avenue, New York, New York
10022.
o*ARCH S. JEFFERY. Director of the Company; Financial Consultant. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 80 years old. Address: 1817 Foxcroft Lane, Unit 306, Allison
Park, Pennsylvania 15101.
o+STEPHEN J. LOCKWOOD. Director of the Company; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc.; from
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 50 years old. Address: 401 Edgewater Place, Wakefield,
Massachusetts 01880.
o+JOHN J. SCIULLO. Director of the Company; Dean Emeritus and Professor of
Law, Duquesne University Law School; Director, Urban Redevelopment
Authority of Pittsburgh; from November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. -
Institutional Investment Portfolio. Age: 66 years old. Address: 321
Gross Street, Pittsburgh, Pennsylvania 15224.
o+ROSLYN M. WATSON. Director of the Company; Principal, Watson Ventures,
Inc., Director, American Express Centurion Bank; Director,
Harvard/Pilgrim Community Health Plan, Inc.; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio; Director, Massachusetts Electric Company;
Director, the Hymans Foundation, Inc., prior to February, 1993; Real
Estate Development Project Manager and Vice President, The Gunwyn
Company. Age: 48 years old. Address: 25 Braddock Park, Boston,
Massachusetts 02116-5816.
________________________________
* "Interested person" of the Company, as defined in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
Officers of the Company
#MARIE E. CONNOLLY, President and Treasurer of the Company. President,
Chief Executive Officer, Chief Compliance Officer and a director of the
Distributor and Funds Distributor, Inc., the ultimate parent of which
is Boston Institutional Group, Inc. Age: 40 years old.
#RICHARD W. INGRAM, Vice President and Assistant Treasurer of the Company.
Executive Vice President of the Distributor and Funds Distributor,
Inc.. From March 1994 to November 1995, he was Vice President and
Division Manager for First Data Investor Services Group. From 1989 to
1994, he was Vice President, Assistant Treasurer and Tax Director -
Mutual Funds of TBC. Age: 42 years old.
#MARY A. NELSON, Vice President and Assistant Treasurer of the Company.
Vice President of the Distributor and Funds Distributor, Inc. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for TBC. Age: 33 years old.
#MICHAEL S. PETRUCELLI, Vice President, Assistant Treasurer and Assistant
Secretary of the Company. Senior Vice President of Funds Distributor,
Inc. From December 1989 through November 1996, he was employed by GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as Director of GE Investment Services. Age: 36 years old.
#JOSEPH F. TOWER, III, Vice President and Assistant Treasurer of the
Company. Senior Vice President, Treasurer and Chief Financial Officer
of the Distributor and Funds Distributor, Inc. From July 1988 to
August 1994, he was employed by TBC where he held various management
positions in the Corporate Finance and Treasury areas. Age: 35 years
old.
#DOUGLAS C. CONROY, Vice President and Assistant Secretary of the Company.
Assistant Vice President of Funds Distributor, Inc. From April 1993 to
January 1995, he was a Senior Fund Accountant for Investors Bank &
Trust Company. From December 1991 to March 1993, he was employed as a
Fund Accountant at TBC. Age: 28 years old.
#CHRISTOPHER J. KELLEY, Vice President and Assistant Secretary of the
Company. Vice President and Senior Associate General Counsel of Funds
Distributor, Inc. and the Distributor. From April 1994 to July 1996, he
was Assistant Counsel at Forum Financial Group. From October 1992 to
March 1994, Mr. Kelley was employed by Putnam Investments in legal and
compliance capacities. Age: 33 years old.
#KATHLEEN K. MORRISEY. Vice President and Assistant Secretary of the
Company. Vice President and Assistant Secretary of Funds Distributor,
Inc. From July 1994 to November 1995, she was a Fund Accountant II for
Investors Bank & Trust Company. Age: 25 years old.
#ELBA VASQUEZ. Vice President and Assistant Secretary of the Company.
Assistant Vice President of Funds Distributor, Inc. From March 1990 to
May 1996, she was employed by U.S. Trust Company of New York, where she
held various positions in the sales and marketing of their proprietary
family of mutual funds. Age: 36 years old.
___________________________
# Officer also serves as an officer for other investment companies advised
by Dreyfus, including The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel
Tax-Free Municipal Funds.
The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166.
The officers and Directors of the Company as a group owned beneficially
less than 1% of the total shares of the Fund outstanding as of March 13,
1998.
No officer or employee of the Distributor (or of any parent, subsidiary
or affiliate thereof) receives any compensation from the Company for serving
as an officer or Director of the Company. In addition, no officer or
employee of Dreyfus (or of any parent, subsidiary or affiliate thereof)
serves as an officer or Director of the Company. The Dreyfus/Laurel Funds
pay each Trustee/Director who is not an "interested person" of the Company
(as defined in the 1940 Act) $27,000 per annum (and an additional $25,000
for the Chairman of the Board of Trustees/Directors of the Dreyfus/Laurel
Funds). In addition, the Dreyfus/Laurel Funds pay each Trustee/Director who
is not an "interested person" of the Company (as defined in the 1940 Act)
$1,000 per joint Dreyfus/Laurel Funds Board meeting attended, plus $750 per
joint Dreyfus/Laurel Funds Audit Committee meeting attended, and reimburse
each Trustee/Director who is not an "interested person" of the Company (as
defined in the 1940 Act) for travel and out-of-pocket expenses.
For the fiscal year ended October 31, 1997, the aggregate amount of
fees and expenses received by each current Director from the Company and all
other funds in the Dreyfus Family of Funds for which such person is a Board
member were as follows:
Total Compensation
From the Company
Aggregate and Fund Complex
Name of Board Compensation Paid to Board
Member From Company# Member****
Ruth Marie Adams $10,000 $31,500
Francis P. Brennan* $19,833 $63,750
Joseph S. DiMartino** none $517,075***
James M. Fitzgibbons $10,583 $31,500
J. Tomlinson Fort** none none
Arthur L. Goeschel $11,500 $37,500
Kenneth A. Himmel $10,167 $32,500
Arch S. Jeffery** none none
Stephen J. Lockwood $11,167 $33,250
John J. Sciullo $11,167 $32,500
Roslyn M. Watson $11,167 $32,500
____________________________
# Amounts required to be paid by the Company directly to the non-interested
Directors, that would be applied to offset a portion of the management fee
payable to Dreyfus, are in fact paid directly by Dreyfus to the non-interested
Directors. Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $14,973 for the Company.
* Compensation of Francis P. Brennan includes $25,000 paid by the Dreyfus/Laurel
Funds to be the Chairman of the Board.
**For the fiscal year ended October 31, 1997, Joseph S. DiMartino, J. Tomlinson
Fort and Arch S. Jeffery were paid directly by Dreyfus for serving as Board
members of the Company and the funds in the Dreyfus/Laurel Funds. For the
fiscal year ended October 31, 1997, the aggregate amount of fees and expenses
received by Joseph S. DiMartino, J. Tomlinson Fort and Arch S. Jeffery from
Dreyfus for serving as a Board member of the Company were $11,833, $11,833 and
$11,500, respectively, and for serving as a Board member of all funds in the
Dreyfus/Laurel Funds (including the Company) were $33,500, $33,500 and
$34,500, respectively. In addition, Dreyfus reimbursed Messrs. DiMartino,
Fort and Jeffery a total of $4,494 for expenses attributable to the Company's
Board meetings which is not included in the $14,973 amount in note # above.
*** Amount paid to Joseph S. DiMartino from the funds in the Fund Complex for
the year ended December 31, 1997.
****The Dreyfus Family of Funds consists of 152 mutual funds.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. Dreyfus serves as investment manager for the
Fund pursuant to an Investment Management Agreement with the Company dated
April 4, 1994, transferred to Dreyfus as of October 17, 1994 (the
"Management Agreement"). Pursuant to the 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 investment manager, Dreyfus manages the Fund by
making investment decisions based on the Fund's investment objective,
policies and restrictions. The Management Agreement was approved with
respect to the Fund on January 28, 1998 and will continue in effect until
April 4, 1999. Thereafter, the Management Agreement will be subject to
review and approval at least annually by the Board of Directors.
The Management Agreement will continue from year to year provided that
a majority of the Directors who are not interested persons (as defined in
the 1940 Act) of the Company or Dreyfus and either a majority of all
Directors or a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act) approve its continuance. The Company may terminate
the Management Agreement upon the vote of a majority of the Board of
Directors or upon the vote of a majority of the outstanding voting
securities of the Fund on sixty days' written notice to Dreyfus. Dreyfus
may terminate the Management Agreement upon sixty days' written notice to
the Company. The Management Agreement will terminate immediately and
automatically upon its assignment.
The following persons are officers and/or directors of Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman--Distribution and a director; Ronald P. O'Hanley III,
Vice Chairman; J. David Officer, Vice Chairman; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Kozlowski, Vice
President--Corporate Communications; Mary Beth Leibig, Vice President--Human
Resources; Jeffrey N. Nachman, Vice President--Mutual Fund Accounting;
Andrew S. Wasser, Vice President--Information Systems; William V. Healey,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt, Frank V.
Cahouet and Richard F. Syron, directors.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Premier Family of
Funds, funds in the Dreyfus Family of Funds, and for certain other
investment companies.
Sales Loads -- Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary
purchasing securities for a single trust estate or a single fiduciary
account (including a pension, profit-sharing or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Internal
Revenue Code of 1986, as amended (the "Code")) although more than one
beneficiary is involved; or a group of accounts established by or on behalf
of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established
pursuant to Sections 403(b), 408(k) and 457 of the Code); or an organized
group which has been in existence for more than six months, provided that it
is not organized for the purpose of buying redeemable securities of a
registered investment company and provided that the purchases are made
through a central administration or a single dealer, or by other means which
result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares of the Fund aggregating less than $50,000 subject to the schedule
of sales charges set forth in the Fund's Prospectus at a price based upon
the initial offering price of $12.50:
Net Asset Value per share $12.50
Per Share Sales Charge - 5.75% of offering price
(6.10% of net asset value per share) $ .76
Per Share Offering Price to Public $13.26
TeleTransfer Privilege. TeleTransfer purchase orders may be made at
any time. Purchase orders received by 4:00 p.m., New York time, on any
business day Dreyfus Transfer, Inc., the Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock Exchange
("NYSE") are open for business will be credited to the shareholder's Fund
account on the next bank business day following such purchase order.
Purchase orders made after 4:00 p.m., New York time, on any business day the
Transfer Agent and the NYSE are open for business, or orders made on
Saturday, Sunday or any Fund holiday (e.g., when the NYSE is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
TeleTransfer Privilege, the initial payment for purchase of Fund shares must
be drawn on, and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Shares - TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
In-Kind Purchases. If the following conditions are satisfied, the Fund
may at its discretion, permit the purchase of shares through an "in-kind"
exchange of securities. Any securities exchanged must meet the investment
objective, policies and limitations of the Fund, must have a readily
ascertainable market value, must be liquid and must not be subject to
restrictions on resale. The market value of any securities exchanged, plus
any cash, must be at least equal to $25,000. Shares purchased in exchange
for securities generally cannot be redeemed for fifteen days following the
exchange in order to allow time for the transfer to settle.
The basis of the exchange will depend upon the relative net asset value
of the shares purchased and securities exchanged. Securities accepted by
the Fund will be valued in the same manner as the Fund values its assets.
Any interest earned on the securities following their delivery to the Fund
and prior to the exchange will be considered in valuing the securities. All
interest, dividends, subscription or other rights attached to the securities
become the property of the Fund, along with the securities. For further
information about "in-kind" purchases, call 1-800-554-4611.
DISTRIBUTION AND SERVICE PLANS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plans
(Class A Plan and Class B and C Plans)."
Class A, Class B and Class C shares are subject to annual fees for
distribution and shareholder services.
The SEC has adopted Rule 12b-1 under the 1940 Act (the "Rule")
regulating the circumstances under which investment companies such as the
Company may, directly or indirectly, bear the expenses of distributing their
shares. The Rule defines distribution expenses to include expenditures for
"any activity which is primarily intended to result in the sale of fund
shares." The Rule, among other things, provides that an investment company
may bear such expenses only pursuant to a plan adopted in accordance with
the Rule.
Distribution Plan--Class A Shares. The Company has adopted a
Distribution Plan pursuant to the Rule with respect to the Class A shares of
the Fund ("Class A Plan"), whereby Class A shares of the Fund may spend
annually up to 0.25% of the average of its net assets for costs and expenses
incurred in connection with the distribution of, and shareholder servicing
with respect to, Class A shares.
The Class A Plan provides that a report of the amounts expended under
the Class A Plan, and the purposes for which such expenditures were
incurred, must be made to the Company's Directors for their review at least
quarterly. In addition, the Class A Plan provides that it may not be
amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Class A Plan without approval of the Fund's
shareholders, and that other material amendments of the Class A Plan must be
approved by the vote of a majority of the Directors and of the Directors who
are not "interested persons" (as defined in the 1940 Act) of the Company or
the Distributor and who do not have any direct or indirect financial
interest in the operation of the Class A Plan, cast in person at a meeting
called for the purpose of considering such amendments. The Class A Plan is
subject to annual approval by the entire Board of Directors and by the
Directors who are neither interested persons nor have any direct or indirect
financial interest in the operation of the Class A Plan, by vote cast in
person at a meeting called for the purpose of voting on the Class A Plan.
The Class A Plan was so approved by the Directors at a meeting held on
January 28, 1998, and its applicability to the Fund was approved on the same
date. The Class A Plan is terminable, as to the Fund's Class A shares, at
any time by vote of a majority of the Directors who are not interested
persons and have no direct or indirect financial interest in the operation
of the Class A Plan or by vote of the holders of a majority of the
outstanding shares of such class of the Fund.
Distribution and Service Plans -- Class B and Class C Shares. In
addition to the above described current Class A Plan for Class A shares, the
Board of Directors has adopted a Service Plan (the "Service Plan") under the
Rule for Class B and Class C shares, pursuant to which the Fund pays the
Distributor and Dreyfus Service Corporation for the provision of certain
services to the holders of Class B and Class C shares. The Company's Board
of Directors has also adopted a Distribution Plan pursuant to the Rule with
respect to Class B and Class C shares (the "Distribution Plan"). The
Company's Board of Directors believes that there is a reasonable likelihood
that the Distribution and Service Plans (the "Plans") will benefit the Fund
and the holders of Class B and Class C shares.
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, each Plan provides that it may not
be amended to increase materially the cost which holders of Class B or Class
C shares may bear pursuant to the Plan without the approval of the holders
of such Classes and that other material amendments of the Plan must be
approved by the Board of Directors and by the Directors who are not
interested persons of the Fund and have no direct or indirect financial
interest in the operation of the Plan or in any agreements entered into in
connection with the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. Each Plan is subject to annual
approval by such vote of the Directors cast in person at a meeting called
for the purpose of voting on the Plan. Each Plan was so approved by the
Directors at a meeting held on January 28, 1998, and the applicability of
each Plan to the Fund was approved on the same date. Each Plan may be
terminated at any time by vote of a majority of the Directors who are not
interested persons and have no direct or indirect financial interest in the
operation of the Plan or in any agreements entered into in connection with
the Plan or by vote of the holders of a majority of Class B and Class C
shares.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Shares--TeleTransfer Privilege."
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the SEC. In the case of requests
for redemptions in excess of such amount, the Company's Board reserves the
right to make payments in whole or in part in securities or other assets in
case of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing shareholders. In
such event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the NYSE is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the SEC so that disposal of the Fund's investments
or determination of its net asset value is not reasonably practicable, or
(c) for such other periods as the SEC by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the respective Class of certain other funds advised or
administered by Dreyfus. Shares of the same Class of such funds purchased
by exchange will be purchased on the basis of relative net asset value per
share as follows:
A. Exchanges into shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales
load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales load
and additional shares acquired through reinvestment of dividends or
other distributions of any such funds (collectively referred to herein
as "Purchased Shares") may be exchanged for shares of other funds sold
with a sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds the
maximum sales load that could have been imposed in connection with the
Purchased Shares (at the time the Purchased Shares were acquired),
without giving effect to any reduced loads, the difference will be
deducted.
E. Shares of funds subject to a contingent deferred sales charge
("CDSC") that are exchanged for shares of another fund will be subject
to the higher applicable CDSC of the two funds and, for purposes of
calculating CDSC rates and conversion periods, if any, will be deemed
to have been held since the date the shares being exchanged were
initially purchased.
To accomplish an exchange under item D above, an investor's Agent must
notify the Transfer Agent of the investor's prior ownership of shares with a
sales load and the investor's account number.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
To request an exchange, an investor or an investor's Agent acting on
the investor's behalf must give exchange instructions to the Transfer Agent
in writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic exchange instructions (including over The Dreyfus
Touchr automated telephone system) from any person representing himself or
herself to be the investor or a representative of the investor's Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. The minimum
initial investment is generally $750 for Dreyfus-sponsored Keogh Plans, IRAs
(including regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs,
IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs"), and
rollover IRAs), and 403(b)(7) Plans with only one participant, and $500 for
Dreyfus-sponsored Education IRAs. To exchange shares held in corporate
plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, the
minimum initial investment is generally $100 if the plan has at least $2,500
invested among shares of the same Class of the funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds. To exchange shares held in
a personal retirement plan account, the shares exchanged must have a current
value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of the Fund, shares of the same
Class of certain other funds in the Dreyfus Premier Family of Funds or the
Dreyfus Family of Funds. This Privilege is available only for existing
accounts. With respect to Class R shares held by a Retirement Plan,
exchanges may be made only between the investor's Retirement Plan account in
one fund and such investor's Retirement Plan account in another fund.
Shares will be exchanged on the basis of relative net asset value as
described above under "Fund Exchanges." Enrollment in or modification or
cancellation of this Privilege is effective three business days following
notification by the investor. An investor will be notified if the
investor's account falls below the amount designated to be exchanged under
this Privilege. In this case, an investor's account will fall to zero
unless additional investments are made in excess of the designated amount
prior to the next Auto-Exchange transaction. Shares held under IRAs and
other retirement plans are eligible for this Privilege. Exchanges of IRA
shares may be made between IRA accounts and from regular accounts to IRA
accounts, but not from IRA accounts to regular accounts. With respect to
all other retirement accounts, exchanges may be made only among those
accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-554-4611. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchange service or the
Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
other distributions, the investor's shares will be reduced and eventually
may be depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Class C shares, Class A shares to which a CDSC applies, and, unless certain
conditions described in the Prospectus are satisfied, Class B shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to any
applicable CDSC.
Dividend Sweep. Dividend Sweep allows investors to invest
automatically their dividends or dividends and other distributions, if any,
from the Fund in shares of the same Class of certain other funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same Class of other funds
purchased pursuant to this Privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and other distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds that are
offered without a sales load.
B. Dividends and other distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and other distributions paid by a fund which charges a
sales load may be invested in shares of other funds sold with a sales
load (Offered Shares), provided that, if the sales load applicable to
the Offered Shares exceeds the maximum sales load charged by the fund
from which dividends or other distributions are being swept, without
giving effect to any reduced loads, the difference will be deducted.
D. Dividends and other distributions paid by a fund may be invested
in shares of other funds that impose a CDSC and the applicable CDSC, if
any, will be imposed upon redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans. The Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans, including a 401(k) Salary Reduction Plan. In addition, the Fund
makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs for
a non-working spouse, Roth IRAs, SEP-IRAs, Education IRAs, and IRA "Rollover
Accounts") and 403(b)(7) Plans. Plan support services also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity that acts as custodian may charge a fee for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity that acts as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$1,000 with no minimum for subsequent purchases. The minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs,
and rollover IRAs) and 403(b)(7) Plans with only one participant. and $500
for Dreyfus-sponsored Education IRAs ,with no minimum for subsequent
purchases.
Each investor should read the prototype retirement plan and the
appropriate form of custodial agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available or, in the case of fixed-
income securities (excluding short-term investments), that are not valued by
the independent pricing service utilized by the Fund, are valued at fair
value as determined in good faith by the Board. The Board will review the
method of valuation on a current basis. In making their good faith
valuation of restricted securities, the Board members generally will take
the following factors into consideration: restricted securities that are,
or are convertible into, securities of the same class of securities for
which a public market exists usually will be valued at market value less the
same percentage discount at which purchased. This discount will be revised
periodically by the Board if it believes that the discount no longer
reflects the value of the restricted securities. Restricted securities not
of the same class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment from cost will
be based upon considerations deemed relevant by the Board.
New York Stock Exchange Closings. The holidays (as observed) on which
the NYSE is currently scheduled to be closed are: New Year's Day, Dr.
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."
The term "regulated investment company" does not imply the supervision
of management or investment practices or policies by any government agency.
General. To qualify for treatment as a regulated investment company
under the Code, the Fund -- which is treated as a separate corporation for
federal tax purposes -- (1) must distribute to its shareholders each year at
least 90% of its investment company taxable income (generally consisting of
net investment income, net short-term capital gains and net gains from
certain foreign currency transactions) ("Distribution Requirement"),
(2) must derive at least 90% of its annual gross income from specified
sources ("Income Requirement") and (3) must meet certain asset
diversification and other requirements.
Any dividend or other distribution paid shortly after an investor's
purchase of shares may have the effect of reducing the net asset value of
the shares below the cost of his or her investment. Such a dividend or
other distribution would be a return on investment in an economic sense,
although taxable as stated in the Fund's Prospectus. In addition, if a
shareholder sells shares of the Fund held for six months or less and
received a capital gain distribution with respect to those shares, any loss
incurred on the sale of those shares will be treated as a long-term capital
loss to the extent of the capital gain distribution received.
Dividends and other distributions declared by the Fund in October,
November or December of any year and payable to shareholders of record on a
date in any of those months are deemed to have been paid by the Fund and
received by the shareholders on December 31 of a year if the distributions
are paid by the Fund during the following January. Accordingly, those
distributions will be taxed to shareholders for the year in which that
December 31 falls.
A portion of the dividends paid by the Fund, whether received in cash
or reinvested in additional Fund shares, may be eligible for the dividends-
received deduction allowed to corporations. The eligible portion may not
exceed the aggregate dividends received by the Fund from U.S. corporations.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
federal alternative minimum tax.
Foreign Taxes. Dividends and interest received by the Fund, and gains
realized thereby, may be subject to income, withholding or other taxes
imposed by foreign countries and U.S. possessions ("foreign taxes") that
would reduce the yield and/or return on its securities. Tax conventions
between certain countries and the United States may reduce or eliminate
these foreign taxes, however, and many foreign countries do not impose taxes
on capital gains in respect of investments by foreign investors.
Passive Foreign Investment Companies. The Fund may invest in the stock
of "passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation -- other than a "controlled foreign corporation" (i.e., a
foreign corporation in which, on any day during its taxable year, more than
50% of the total voting power of all voting stock therein or the total value
of all stock therein is owned, directly, indirectly, or constructively, by
"U.S. shareholders," defined as U.S. persons that individually own,
directly, indirectly, or constructively, at least 10% of that voting power)
as to which the Fund is a U.S. shareholder -- that, in general, meets either
of the following tests: (1) at least 75% of its gross income is passive or
(2) an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, the Fund will
be subject to federal income tax on a portion of any "excess distribution"
received on the stock of a PFIC or of any gain on disposition of the stock
(collectively "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a dividend to its shareholders. The balance
of the PFIC income will be included in the Fund's investment company taxable
income and, accordingly, will not be taxable to it to the extent it
distributes that income to its shareholders.
If the Fund invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund" ("QEF"), then in lieu of the foregoing tax and
interest obligation, the Fund would be required to include in income each
year its pro rata share of the QEF's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) -- which likely would have to be distributed by the Fund to
satisfy the Distribution Requirement and avoid imposition of the 4% excise
tax mentioned in the Prospectus under "Dividends, Other Distributions and
Taxes" ("Excise Tax") -- even if those earnings and gain were not received
by the Fund from the QEF. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements
thereof.
The Fund may elect to "mark to market" its stock in any PFIC. "Marking-
to-market," in this context, means including in ordinary income each taxable
year the excess, if any, of the fair market value of a PFIC's stock over the
Fund's adjusted basis therein as of the end of that year. Pursuant to the
election, the Fund also would be allowed to deduct (as an ordinary, not
capital, loss) the excess, if any, of its adjusted basis in PFIC stock over
the fair market value thereof as of the taxable year-end, but only to the
extent of any net mark-to-market gains with respect to that stock included
by the Fund for prior taxable years. The Fund's adjusted basis in each
PFIC's stock with respect to which it makes this election will be adjusted
to reflect the amounts of income included and deductions taken under the
election.
Foreign Currency, Futures, Forwards and Hedging Transactions. Gains
from the sale or other disposition of foreign currencies (except certain
gains therefrom that may be excluded by future regulations), and gains from
options, futures and forward contracts derived by the Fund with respect to
its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gains and
losses from the disposition of foreign currencies and certain foreign-
currency-denominated instruments (including debt instruments and financial
forward and futures contracts and options) may be treated as ordinary income
or loss under Section 988 of the Code. In addition, all or a portion of any
gain realized from the disposition of certain market discount bonds and from
engaging in "conversion transactions" that would otherwise be treated as
capital gain may be treated as ordinary income. "Conversion transactions"
are defined to include certain option and straddle investments.
Under Section 1256 of the Code, any gain or loss realized by the Fund
on the exercise or lapse of, or closing transactions respecting, certain
options, future and forward contracts ("Section 1256 Contracts") may be
treated as 60% long-term capital gain or loss and 40% short-term capital
gain or loss. In addition, any Section 1256 Contracts remaining
unexercised at the end of the Fund's taxable year will be treated as sold
for their then fair market value (a process known as "marking-to-market"),
resulting in additional gain or loss to the Fund characterized in the manner
described above. As of the date of this SAI, it is not entirely clear
whether that 60% portion will qualify for the reduced maximum tax rates on
net capital gain enacted by the Taxpayer Relief Act of 1997 ("Tax Act") --
20% (10% for taxpayers in the 15% marginal tax bracket) for gain recognized
on capital assets held for more than 18 months -- instead of the 28% rate in
effect before that legislation, which now applies to gain recognized on
capital assets held for more than one year but not more than 18 months,
although technical corrections legislation passed by the House of
Representatives late in 1997 would treat it as qualifying therefor.
Offsetting positions held by the Fund involving certain options, future
or forward contracts may constitute "straddles," which are defined to
include "offsetting positions" in actively traded personal property. All or
a portion of any capital gain from certain straddle transactions may be
recharacterized as ordinary income. If the Fund were treated as entering
into straddles by reason of its engaging in certain options, future or
forward contract transactions, such straddles would be characterized as
"mixed straddles" if the transactions comprising a part of such straddles
were governed by Section 1256. The Fund may make one or more elections with
respect to mixed straddles; depending on which election is made, if any, the
results to the Fund may differ. If no election is made, then to the extent
the straddle and conversion transactions rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to the
extent of unrealized gain in the offsetting position. Moreover, as a result
of the straddle rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gains may
be treated as short-term capital gains or ordinary income.
If the Fund has an "appreciated financial position" -- generally, an
interest (including an interest through an option, futures or forward
contract, or short sale) with respect to any stock, debt instrument (other
than "straight debt"), or partnership interest the fair market value of
which exceeds its adjusted basis -- and enters into a "constructive sale" of
the same or substantially similar property, the Fund will be treated as
having made an actual sale thereof, with the result that gain will be
recognized at that time. A constructive sale generally consists of a short
sale, an offsetting notional principal contract, or futures or forward
contract entered into by the Fund or a related person with respect to the
same or substantially similar property. In addition, if the appreciated
financial position is itself a short sale or such a contract, acquisition of
the underlying property or substantially similar property will be deemed a
constructive sale.
Investment by the Fund in securities issued or acquired at a discount
(for example, zero coupon securities) could, under special tax rules, affect
the amount and timing of distributions to shareholders by causing the Fund
to recognize income prior to the receipt of cash payments. For example, the
Fund could be required to take into gross income annually a portion of the
discount (or deemed discount) at which the securities were issued and could
need to distribute such income to satisfy the Distribution Requirement and
to avoid the Excise Tax. In such case, the Fund may have to dispose of
securities it might otherwise have continued to hold in order to generate
cash to satisfy these requirements.
State and Local Taxes. Depending upon the extent of the Fund's
activities in states and localities in which it is deemed to be conducting
business, it may be subject to the tax laws thereof. Shareholders are also
advised to consult their tax advisers concerning the application of state
and local taxes to them.
Foreign Shareholders - U.S. Federal Income Taxation. U.S. federal
income taxation of a shareholder who, as to the United States, is a
non-resident alien individual, a foreign trust or estate, a foreign
corporation or a foreign partnership (a "foreign shareholder") depends on
whether the income from the Fund is "effectively connected" with a U.S.
trade or business carried on by the shareholder, as discussed generally
below. Special U.S. federal income tax rules that differ from those
described below may apply to certain foreign persons who invest in the Fund,
such as a foreign shareholder entitled to claim the benefits of an
applicable tax treaty. Foreign shareholders are advised to consult their
own tax advisers with respect to the particular tax consequences to them of
an investment in the Fund.
Foreign Shareholders - Income Not Effectively Connected. Dividends
distributed to a foreign shareholder whose ownership of Fund shares is not
effectively connected with a U.S. trade or business carried on by the
foreign shareholder generally will be subject to U.S. federal withholding
tax of 30% (or lower treaty rate). Capital gains realized by foreign
shareholders on the sale of Fund shares and distributions to them of net
capital gain generally will not be subject to U.S. federal income tax unless
the foreign shareholder is a non-resident alien individual and is physically
present in the United States for more than 182 days during the taxable year.
In the case of certain foreign shareholders, the Fund may be required to
withhold U.S. federal income tax at the rate of 31% of capital gain
distributions and of the gross proceeds from a redemption of Fund shares
unless the shareholder certifies his or her foreign status to the Fund.
Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's ownership of Fund shares is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of the Fund shares will be subject to U.S. federal income
tax at the graduated rates applicable to U.S. citizens and domestic
corporations, as the case may be. Foreign shareholders also may be subject
to the branch profits tax.
Foreign Shareholders - Estate Tax. Foreign individuals generally are
subject to federal estate tax on their U.S. situs property, such as shares
of the Fund, that they own at the time of their death. Certain credits
against that tax and relief under applicable tax treaties may be available.
PORTFOLIO TRANSACTIONS
All portfolio transactions of the Fund are placed on behalf of the Fund
by Dreyfus. Debt securities purchased and sold by the Fund are generally
traded on a net basis (i.e., without commission) through dealers acting for
their own account and not as brokers, or otherwise involve transactions
directly with the issuer of the instrument. This means that a dealer (the
securities firm or bank dealing with the Fund) makes a market for securities
by offering to buy at one price and sell at a slightly higher price. The
difference between the prices is known as a spread. Other portfolio
transactions may be executed through brokers acting as agent. The Fund will
pay a spread or commissions in connection with such transactions. Dreyfus
uses its best efforts to obtain execution of portfolio transactions at
prices which are advantageous to the Fund and at spreads and commission
rates, if any, which are reasonable in relation to the benefits received.
Dreyfus also places transactions for other accounts that it provides with
investment advice.
Brokers and dealers involved in the execution of portfolio transactions
on behalf of the Fund are selected on the basis of their professional
capability and the value and quality of their services. In selecting brokers
or dealers, Dreyfus will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any spreads (or commissions, if
any). Any spread, commission, fee or other remuneration paid to an
affiliated broker-dealer is paid pursuant to the Company's procedures
adopted in accordance with Rule 17e-1 under the 1940 Act. Dreyfus may use
research services of and place brokerage transactions with broker-dealers
affiliated with it or Mellon Bank if the commissions are reasonable, fair
and comparable to commissions charged by non-affiliated brokerage firms for
similar services.
Brokers or dealers may be selected who provide brokerage and/or
research services to the Fund and/or other accounts over which Dreyfus or
its affiliates exercise investment discretion. Such services may include
advice concerning the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance
and settlement).
The receipt of research services from broker-dealers may be useful to
Dreyfus in rendering investment management services to the Fund and/or its
other clients; and, conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of other clients of
Dreyfus may be useful to these organizations in carrying out their
obligations to the Fund. The receipt of such research services does not
reduce these organizations' normal independent research activities; however,
it enables these organizations to avoid the additional expenses which might
otherwise be incurred if these organizations were to attempt to develop
comparable information through their own staffs.
Although Dreyfus manages other accounts in addition to the Fund,
investment decisions for the Fund are made independently from decisions made
for these other accounts. It sometimes happens that the same security is
held by more than one of the accounts managed by Dreyfus. Simultaneous
transactions may occur when several accounts are managed by the same
investment manager, particularly when the same investment instrument is
suitable for the investment objective of more than one account.
When more than one account is simultaneously engaged in the purchase or
sale of the same investment instrument, the prices and amounts are allocated
in accordance with a formula considered by Dreyfus to be equitable to each
account. In some cases this system could have a detrimental effect on the
price or volume of the investment instrument as far as the Fund is
concerned. In other cases, however, the ability of the Fund to participate
in volume transactions will produce better executions for the Fund. While
the Directors will continue to review simultaneous transactions, it is their
present opinion that the desirability of retaining the Dreyfus as investment
manager to the Fund outweighs any disadvantages that may be said to exist
from exposure to simultaneous transactions.
Portfolio Turnover. The portfolio turnover rate for the Fund is
calculated by dividing the lesser of the Fund's annual sales or purchases of
portfolio securities (exclusive of purchases and sales of securities whose
maturities at the time of acquisition were one year or less) by the monthly
average value of securities in the Fund during the year.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance
Information."
Performance information for the Fund may be compared, in reports and
promotional literature, to indexes including, but not limited to: (i) the
Russell 2000 Value Index, the Russell 2000 Growth Index, or the Russell 2000
Index; (ii) the Standard & Poor's 500 Composite Stock Price Index, the Dow
Jones Industrial Average, or other appropriate unmanaged domestic or foreign
indices of performance of various types of investments so that investors may
compare the Fund's results with those of indices widely regarded by
investors as representative of the securities markets in general; (iii)
other groups of mutual funds tracked by Lipper Analytical Services, Inc., a
widely used independent research firm which ranks mutual funds by overall
performance, investment objectives and assets, or tracked by other services,
companies, publications, or persons who rank mutual funds on overall
performance or other criteria; (iv) the Consumer Price Index (a measure of
inflation) to assess the real rate of return from an investment in the Fund,
or the Fund's performance against inflation to the performance of other
instruments against inflation; and (v) products managed by a universe of
money managers with similar performance objectives. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect deductions
or administrative and management costs and expenses.
From time to time, advertising material for the Fund may include (i)
biographical information relating to its portfolio manager, including honors
and awards received, and may refer to or include commentary by the Fund's
portfolio manager relating to investment strategy, asset growth, current or
past business, political, economic or financial conditions and other matters
of general interest to investors; (ii) information concerning retirement and
investing for retirement, including statistical data or general discussions
about the growth and development of Dreyfus Retirement Services (in terms of
new customers, assets under management, market share, etc.) and its presence
in the defined contribution plan market; (iii) the approximate number of
then current Fund shareholders; and (iv) Lipper or Morningstar ratings and
related analysis supporting the ratings. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions or
administrative and management costs and expenses.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
The Fund is currently one of eighteen portfolios of the Company. Fund
shares have no preemptive, subscription or conversion rights and are freely
transferable.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Company's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Company, Dreyfus Transfer, Inc. arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications between
shareholders and the Fund, and the payment of dividends and distributions
payable by the Fund. For these services, Dreyfus Transfer, Inc. receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Company during the month, and is reimbursed for certain
out-of-pocket expenses.
Mellon Bank, the parent of Dreyfus, located at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as the custodian of the Fund's
investments. Under a custody agreement with the Company, Mellon Bank holds
the Fund's portfolio securities and keeps all necessary accounts and
records. Dreyfus Transfer, Inc. and Mellon Bank, as custodian, have no part
in determining the investment policies of the Fund or which securities are
to be purchased or sold by the Fund.
Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., Second
Floor, Washington, D.C. 20036-1800, has passed upon the legality of the
shares offered by the Prospectus and this SAI.
KPMG Peat Marwick LLP, 345 Park Avenue, New York, New York 10154 was
appointed by the Directors to serve as the Fund's independent auditors for
the year ending October 31, 1998, providing audit services including
(1) examination of the annual financial statements, (2) assistance, review
and consultation in connection with SEC filings and (3) review of the annual
federal income tax return filed on behalf of the Fund.
FINANCIAL REPORTS
DREYFUS PREMIER SMALL CAP VALUE FUND (in organization)
Statement of Assets and Liabilities March 31 1998
Value
ASSETS Cash $ 5,000,000
NET ASSETS Represented by paid-in capital $ 5,000,000
Net Asset Value Per Share
Net Assets Class A Class B Class C Class R
$3,500,000 $500,000 $500,000 $500,000
Shares Outstanding 280,000 40,000 40,000 40,000
NET ASSET VALUE PER SHARE $12.50 $12.50 $12.50 $12.50
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
The Dreyfus/Laurel Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and operates as a series company currently offering
seventeen series including the Dreyfus Premier Small Cap Value Fund (the
"Fund"). The Fund's investment objective is to achieve investment returns
that consistently outperform the Russell 2000 Value Index by investing
primarily in common stocks of small capitalization companies while
maintaining investment characteristics and a risk profile that, in the
aggregate, are similar to that of the Russell 2000 Value Index. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's investment manager. Dreyfus is
a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. is the distributor of the Fund's
shares. The Company is authorized to issue 25 billion shares of $0.001 par
value stock. The Fund's shares are classified into four classes of shares:
Class A, Class B, Class C and Class R. Class A shares are sold with a front-
end sales charge, while Class B and Class C shares are subject to a
contingent deferred sales charge. Class R shares are sold at net asset
value to institutional investors. Each class of shares has identical rights
and privileges, except with respect to distribution and services fees and
voting rights on matters affecting a single class.
Pursuant to an Investment Management Agreement with the Manager, the
Manager provides or arranges for one or more third parties and/or affiliates
to provide investment advisory, administrative, custody, fund accounting and
transfer agency services to the Fund. The Manager also directs the
investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at
the annual rate of 1.25% of the value of the Fund's average daily net
assets. Out of its fee, the Manager pays all of the expenses of the Fund
except brokerage fees, taxes, interest, commitment fees, Rule 12b-1
distribution fees and expenses, service fees, fees and expenses of non-
interested Directors (including counsel fees) and extraordinary expenses.
In addition, the Manager is required to reduce its fee in an amount equal to
the Fund's allocable portion of fees and expenses of the non-interested
Directors (including counsel). Each director receives $27,000 per year,
$1,000 for each Board meeting attended and $750 for each for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of
$25,000 per year. These fees pertain to the following funds: The
Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and
The Dreyfus/Laurel Funds Trust. These fees and expenses are charged and
allocated to each series based on net assets. Amounts required to be paid
by the Company directly to the non-interested Directors, that would be
applied to offset a portion of the management fee payable to the Manager,
are in fact paid directly by the Manager to the non-interested Directors.
Under the Fund's Distribution Plan (the "Plan") adopted pursuant to
Rule 12b-1 under the Act, the Fund may pay annually up to .25% of the value
of its average daily net assets attributable to its Class A shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of
the Manager, for shareholder servicing activities and the Distributor for
activities and expenses primarily intended to result in the sale of Class A
shares. Under the distribution plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .75% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service
plan adopted pursuant to Rule 12b-1, under which the Fund pays Dreyfus
Service Corporation or the Distributor for providing certain services to the
holders of Class B and Class C shares a fee at the annual rate of .25% of
the value of the average daily net assets of Class B and Class C shares.
Class R shares bear no service or distribution fee.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of the majority of
those Directors who are not "interested persons" of the Company and who have
no direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan.
Independent Auditors' Report
The Board of Directors and Shareholders
The Dreyfus/Laurel Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of Dreyfus
Premier Small Cap Value Fund (in organization) of The Dreyfus/Laurel Funds,
Inc. as of March 31, 1998. This financial statement is the responsibility of
the Fund's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of assets and
liabilities is free of material misstatement. An audit of a statement of
assets and liabilities includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of assets and liabilities. An
audit of a statement of assets and liabilities also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall statement of assets and liabilities
presentation. We believe that our audit of the statement of assets and
liabilities provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Dreyfus
Premier Small Cap Value Fund (in organization) of The Dreyfus/Laurel Funds,
Inc. as of March 31, 1998 in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
New York, New York
March 31, 1998
APPENDIX
DESCRIPTION OF STANDARD & POOR'S, MOODY'S, FITCH AND DUFF RATINGS
Standard & Poor's (S&P)
Bond Ratings
AAA An obligation rated `AAA' has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA An obligation rated `AA' differs from the highest rated issues
only in small degree. The obligors capacity to meet its financial
commitment on the obligation is very strong.
A An obligation rated `A' is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories. However,
the obligor's capacity to meet its financial commitment on the
obligation is still strong.
BBB An obligation rated `BBB' exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet
its financial commitment on the obligation.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus
sign (+) designation.
Moody's
Bond Ratings
Aaa Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and generally
are referred to as "gilt edge." Interest payments are protected
by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what
generally are known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa
securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which suggest
a susceptibility to impairment some time in the future.
Baa Bonds which are rated Baa are considered as medium grade
obligations (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment charac
teristics and in fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Fitch Investors Services, L.P. ("Fitch")
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for
timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect
an assurance of timely payment only slightly less in degree than
issues rated `F-1+'.
Duff & Phelps Inc. ("Duff")
Commercial Paper Ratings
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor.
IBCA Limited/IBCA Inc. ("IBCA")
Commercial Paper Ratings
Short-term obligations, including commercial paper, rated A-1+ by
IBCA are obligations supported by the highest capacity for timely
repayment. Obligations rated A-1 have a strong capacity for
timely repayment.
THE DREYFUS/LAUREL FUNDS, INC.
(formerly, The Laurel Funds, Inc.)
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Not Applicable.
Included in Part B:
- - Statement of Assets and Liabilities
- - Notes to Statement of Assets and Liabilities
(b) Exhibits:
1(A) Articles of Incorporation dated July 31, 1987. Incorporated by reference
to Post- Effective Amendment No. 41 to the Registration Statement on Form
N-1A ("Post-Effective Amendment No. 41") filed on December 29, 1995.
1(B) Articles Supplementary dated October 15, 1993 increasing authorized capital
stock. Incorporated by reference to Post-Effective Amendment No. 39 to
the Registrant's Registration Statement on Form N-1A ("Post Effective
Amendment No. 39") filed on September 22, 1995.
1(C) Articles of Amendment dated March 31, 1994. Incorporated by
reference to Post-Effective Amendment No. 41.
1(D) Articles Supplementary dated March 31, 1994 reclassifying shares.
Incorporated by reference to Post-Effective Amendment No. 41.
1(E) Articles Supplementary dated May 24, 1994 designating and classifying
shares. Incorporated by reference to Post-Effective Amendment No. 39.
1(F) Articles of Amendment dated October 17, 1994. Incorporated by reference to
Post-Effective Amendment No. 31 to the Registrant's Registration Statement
on Form N-1A ("Post-Effective Amendment No. 31") filed on December 13,
1994.
1(G) Articles Supplementary dated December 19, 1994 designating classes.
Incorporated by reference to Post-Effective Amendment No. 32 on Form N-1A
("Post-Effective Amendment No. 32") filed on December 19, 1994.
1(H) Articles of Amendment dated June 9, 1995. Incorporated by reference to
Post-Effective Amendment No. 39.
1(I) Articles of Amendment dated August 30, 1995. Incorporated by reference to
Post-Effective Amendment No. 39.
1(J) Articles Supplementary dated August 31, 1995 reclassifying shares.
Incorporated by reference to Post-Effective Amendment No. 39.
1(K) Articles of Amendment dated October 31, 1995 designating and classifying
shares. Incorporated by reference to Post-Effective Amendment No. 41.
1(L) Articles of Amendment dated November 22, 1995 designating and reclassifying
shares. Incorporated by reference to Post-Effective Amendment No. 41.
1(M) Articles of Amendment dated March 25, 1998. Filed herewith.
2 Bylaws. Incorporated by reference to Pre-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form N-1A filed on August 6,
1987 --Registration No. 33-16338 ("Registration Statement").
3 Not Applicable.
4 Specimen security. Incorporated by reference to Post-Effective
Amendment No. 54 to the Registrant's Registration Statement on Form N-1A.
5(a) Form of Investment Management Agreement between Mellon Bank, N.A. and the
Registrant. Incorporated by reference to Post-Effective Amendment No. 41.
5(b) Amended Exhibit A to Investment Management Agreement between Mellon Bank,
N.A. and the Registrant.
5(c) Assignment and Assumption Agreement among Mellon Bank, N.A., The Dreyfus
Corporation and the Registrant (relating to Investment Management
Agreement). Incorporated by reference to Post-Effective Amendment No. 31
filed on December 13, 1994.
5(d) Investment Sub-Advisory Agreement among Mellon Bank, N.A., S.A.M. Finance
S.A. and the Registrant for the European Fund. Incorporated by reference
to Post-Effective Amendment No. 22 filed on September 3, 1993.
5(e) Investment Sub-Advisory Agreement among Mellon Bank, N.A., S.A.M. Finance
S.A. and the Registrant for the International Equity Allocation Fund.
Incorporated by reference to Post-Effective Amendment No. 31 filed
on December 13, 1994.
5(f) Assignment Agreement among Mellon Bank, N.A., The Dreyfus Corporation,
S.A.M. Finance S.A. and the Registrant (relating to Investment Sub-Advisory
Agreement for the European Fund). To be filed by amendment.
5(g) Assignment Agreement among Mellon Bank, N.A., The Dreyfus Corporation,
S.A.M. Finance S.A. and the Registrant (relating to Investment Sub-Advisory
Agreement for the International Equity Allocation Fund). To be filed by
amendment.
6 Form of Distribution Agreement between Premier Mutual Fund Services,
Inc. and the Registrant. Incorporated by reference to Post-Effective
Amendment No. 31 filed on December 13, 1994.
6(a) Amended Exhibit A to Distribution Agreement between and the Registrant
Premier Mutual Fund Services, Inc. and the Registrant.
7 Not Applicable.
8(a) Custody Agreement with Boston Safe Deposit and Trust Company with respect
to the European Fund. Incorporated by reference to Post-Effective
Amendment No. 23 filed on December 30, 1993.
8(b) Form of Custody Agreement between the Registrant and Mellon Bank, N.A.
Incorporated by reference to Post-Effective Amendment No. 41.
8(c) Supplement to Custody Agreement with Boston Safe Deposit and Trust Company
with respect to the European Fund. Incorporated by reference to Post-
Effective Amendment No. 29 filed on May 19, 1994.
8(d) Custody Agreement with Boston Safe Deposit and Trust Company with respect
to the International Equity Allocation Fund. To be filed by
amendment.
8(e) Sub-Custodian Agreement between Mellon Bank, N.A. and Boston Safe Deposit
and Trust Company. Incorporated by reference to Post-Effective Amendment
No.61 filed on February 26, 1998.
10 Opinion of counsel is incorporated by reference to the Registration
Statement and to Post-Effective Amendment No. 32 filed on December 19,
1994. Consent of counsel is filed herewith.
11 Not Applicable.
12 Not Applicable.
13 Letter of Investment Intent. Incorporated by reference to the
Registration Statement.
14 Not Applicable.
15(a)Restated Distribution Plan (relating to Investor Shares and Class A
Shares) for Dreyfus Bond Market Index Fund, Dreyfus International Equity
Allocation Fund, Dreyfus Institutional Government Money Market Fund,
Dreyfus Institutional Prime Money Market Fund, Dreyfus Institutional U.S.
Treasury Money Market Fund, Dreyfus Money Market Reserves, Dreyfus
Municipal Reserves, Dreyfus BASIC S&P 500 Stock Index Fund, Dreyfus U.S.
Treasury Reserves, Dreyfus Premier Balanced Fund, Dreyfus Premier Limited
Term Income Fund, Dreyfus Premier Small Company Stock Fund and Dreyfus
Disciplined Intermediate Bond Fund, incorporated by reference to Post-
Effective Amendment No. 31 filed on December 13, 1994. Restated
Distribution Plan for Dreyfus Disciplined Stock Fund is incorporated by
reference to Post-Effective Amendment No. 61 to the Registrant's
Registration Statement ("Post-Effective Amendment No. 61") filed on
February 26, 1998.
15(b)Form of Distribution and Service Plans (relating to Class B Shares
and Class C Shares). Incorporated by reference to Post-Effective Amendment
No. 32 filed on December 19, 1994.
16 Schedule for Computation of Performance Calculation for Dreyfus
Disciplined Intermediate Bond Fund is incorporated by reference to Post
Effective amendment No. 44 filed on April 30, 1996. Schedule for
Computation of Performance Calculation for other funds is also incorporated
by reference to Post-Effective Amendment No. 26 filed on March 1, 1994.
18 Rule 18f-3 Plans. Incorporated by reference to Post-Effective Amendment
No. 61 filed on February 26, 1998.
25(a)Powers of Attorney of the Directors dated January 28, 1998.
Filed herewith.
25(b)Power of Attorney of Marie E. Connolly dated January 28, 1998.
Filed herewith.
Item 25. Persons Controlled by or Under Common Control with Registrant
Not Applicable.
Item 26. Number of Holders of Securities
------------------------------------------
Set forth below are the number of recordholders of securities
of Dreyfus Premier Small Cap Value as of March 13, 1998:
Fund Class Recordholders
- ---- _____ ______________
Dreyfus Premier Small Cap Value Fund Class A 0
Class B 0
Class C 0
Class R 0
Item 27. Indemnification
--------------------
Under a provision of the Registrant's Second Amended and Restated Agreement
and Declaration of Trust (the "Declaration of Trust"), any past or present
Trustee or officer of the Registrant is indemnified to the fullest extent
permitted by law against liability and all expenses reasonably incurred by
him/her in connection with any action, suit or proceeding to which he/she may be
a party or otherwise involved by reason of his/her being or having been a
Trustee or officer of the Registrant.
This provision does not authorize indemnification against any liability to
the Registrant or its shareholders to which such Trustee or officer would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his/her duties. Moreover, this provision
does not authorize indemnification where such Trustee or officer is finally
adjudicated not to have acted in good faith in the reasonable belief that
his/her actions were in or not opposed to the best interests of the Registrant.
Expenses may be paid by the Registrant in advance of the final disposition of
any action, suit or proceeding upon receipt of an undertaking by such Trustee or
officer to repay such expenses to the Registrant if it is ultimately determined
that indemnification of such expenses is not authorized under the Declaration of
Trust.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees: Skillman
Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management, Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust Company****
RICHARD F. SYRON Chairman of the Board and
Director Chief Executive Officer:
American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance Company
John Hancock Place, Box 111
Boston, Massachusetts, 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference 1730 K
Street, NW, Suite 120 Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY President:
Assistant Secretary The Truepenny Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
Secretary and Director:
Dreyfus Partnership Management Inc.*;
Director:
The Dreyfus Trust Company++;
Assistant Secretary:
Dreyfus Service Corporation*;
Dreyfus Investment Advisors, Inc.*;
Assistant Clerk:
Dreyfus Insurance Agency of
Massachusetts, Inc.+++++
______________________________________
* The address of the business so indicated is 200 Park Avenue, New York,
New York 10166.
** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route `d'Esch, L-
1470 Luxembourg.
++++ The address of the business so indicated is 69, Route `d'Esch, L-
2953 Luxembourg.
+++++The address of the business so indicated is 53 State Street,
Boston, Massachusetts 02103.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management Funds
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Preferred Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Funds, Inc.
34) Dreyfus Investment Grade Bond Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier International Growth Fund, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Worldwide Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus Index Funds, Inc.
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ ___________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Treasurer and Chief Financial Assistant
Officer and Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts 02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation P.O. Box 9671
Providence, Rhode Island 02940-9671
2. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when requested in
writing to do so by the holders of at least 10% of the Registrant's outstanding
shares and in connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon request and
without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485 (b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, and
State of New York on the 30th day of March, 1998.
The Dreyfus/Laurel Funds, Inc.
BY: /s/Marie E. Connolly
------------------------------
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
date indicated.
Signature Title Date
__________________________ ___________________ __________
/s/Marie E. Connolly President, Treasurer 03/30/98
__________________________
Marie E. Connolly
/s/Francis P. Brennan* Director 03/30/98
__________________________ Chairman of the Board
Francis P. Brennan
/s/Ruth Marie Adams* Director 03/30/98
__________________________
Ruth Marie Adams
/s/Joseph S. DiMartino* Director 03/30/98
__________________________
Joseph S. DiMartino
/s/James M. Fitzgibbons* Director 03/30/98
__________________________
James M. Fitzgibbons
/s/Kenneth A. Himmel* Director 03/30/98
__________________________
Kenneth A. Himmel
/s/Stephen J. Lockwood* Director 03/30/98
- --------------------------
Stephen J. Lockwood
/s/Roslyn M. Watson* Director 03/30/98
- --------------------------
Roslyn M. Watson
/s/J. Tomlinson Fort* Director 03/30/98
__________________________
J. Tomlinson Fort
/s/Arthur L. Goeschel* Director 03/30/98
__________________________
Arthur L. Goeschel
/s/Arch S. Jeffery* Director 03/30/98
__________________________
Arch S. Jeffery
/s/John Sciullo* Director 03/30/98
__________________________
John Sciullo
*BY: /s/ Marie E. Connolly
---------------------
Marie E. Connolly
Attorney-in-Fact
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
THE DREYFUS/LAUREL FUNDS, INC.
Pursuant to Sections 2-605(a)(4) and 2-607 of the Maryland General
Corporation Law, The Dreyfus/Laurel Funds, Inc. (the "Corporation"), a
Maryland Corporation, incorporated on August 6, 1987, having its principal
office in Maryland in Baltimore, Maryland, hereby adopts the following
Articles of Amendment to the Corporation's Articles of Incorporation:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation ("Board") by Article FIFTH of the Articles of
Incorporation of the Corporation, as amended, the Board, in accordance with
Sections 2-605(a)(4) and 2-607(a)(2) of the Maryland General Corporation Law,
hereby changes the name of "Dreyfus Premier Large Company Growth Fund" to
"Dreyfus Premier Small Cap Value Fund", without change to the respective
designations of the Classes thereof.
SECOND: The amendments contained herein were approved by a majority of
the Board, and are limited to changes permitted by Section 2-605(a)(4) of the
Maryland General Corporation Law to be made without action by the
stockholders of the Corporation.
THIRD: The Corporation is registered with the Securities and Exchange
Commission as an open-end investment company under the Investment Company Act
of 1940, as amended.
IN WITNESS WHEREOF, the undersigned hereby executes these Articles of
Amendment on behalf of the Corporation, acknowledging it to be the act of the
Corporation, and further states under the penalties of perjury that, to the
best of his or her knowledge, information and belief, the matters and facts
set forth herein are true in all material respects.
Dated: March 25, 1998 THE DREYFUS/LAUREL FUNDS, INC.
By: /s/ Douglas Conroy
Name: Douglas Conroy
Title: Vice President
Attest: /s/ Mary Nelson
Name: Mary Nelson
Title: Vice President
AMENDED
EXHIBIT A
Investment Portfolio Investment Management Fee Continuation
Date
Dreyfus Money Market 0.50% April 4, 1998
Reserves
Dreyfus U.S. Treasury 0.50% April 4, 1998
Reserves
Dreyfus Municipal 0.50% April 4, 1998
Reserves
Dreyfus Disciplined 0.90% April 4, 1998
Stock Fund
Dreyfus Premier Limited 0.60% April 4, 1998
Term Income Fund
Dreyfus Institutional 0.15% April 4, 1998
Prime Money Market Fund
Dreyfus Institutional 0.15% April 4, 1998
Government Money Market Fund
Dreyfus Institutional 0.15% April 4, 1998
U.S. Treasury Money Market Fund
Dreyfus BASIC S&P 500 0.20% April 4, 1998
Stock Index Fund
Dreyfus Premier Midcap 1.10% April 4, 1998
Stock Fund
Dreyfus Premier 1.00% April 4, 1998
Balanced Fund
Dreyfus Bond Market 0.15% April 4, 1998
Index Fund
Dreyfus Premier Large 0.90% April 4, 1998
Company Stock Fund
Dreyfus Premier Small 1.25% April 4, 1998
Company Stock Fund
Dreyfus International 1.25% April 4, 1998
Equity Allocation Fund
Dreyfus Disciplined 0.55% April 4, 1998
Intermediate Bond Fund
Dreyfus Premier Tax 1.10% April 4, 1999
Managed Growth Fund
Dreyfus Premier Small 1.25% April 4, 1999
Cap Value Fund
Name of Series Reapproval Date Reapproval Day
Dreyfus Disciplined Stock Fund April 4, 1998 April 4th
Dreyfus Premier Midcap Stock Fund April 4, 1998 April 4th
Dreyfus BASIC S&P 500 Stock Index Fund April 4, 1998 April 4th
Dreyfus Premier Large Company Stock Fund April 4, 1998 April 4th
Dreyfus Bond Market Index Fund April 4, 1998 April 4th
Dreyfus International Equity Allocation Fund April 4, 1998 April 4th
Dreyfus Money Market Reserves April 4, 1998 April 4th
Dreyfus U.S. Treasury Reserves April 4, 1998 April 4th
Dreyfus Municipal Reserves April 4, 1998 April 4th
Dreyfus Institutional Prime Money Market Fund April 4, 1998 April 4th
Dreyfus Institutional Government Money April 4, 1998 April 4th
Market Fund
Dreyfus Institutional U.S. Treasury April 4, 1998 April 4th
Money Market Fund
Dreyfus Premier Balanced Fund April 4, 1998 April 4th
Dreyfus Premier Small Company Stock Fund April 4, 1998 April 4th
Dreyfus Premier Limited Term Income Fund April 4, 1998 April 4th
Dreyfus Disciplined Intermediate Bond Fund April 4, 1998 April 4th
Dreyfus Premier Tax Managed Growth Fund April 4, 1999 April 4th
Dreyfus Premier Small Cap Value Fund April 4, 1999 April 4th
Independent Auditors' Consent
To the Shareholders and Board of Directors
The Dreyfus/Laurel Funds, Inc.
We consent to the use of our report dated March 31, 1998 with respect to the
statement of assets and liabilities dated March 31, 1998 of the Dreyfus
Premier Small Cap Value Fund (in organization) of The Dreyfus/Laurel Funds,
Inc. included in the Statement of Additional Information and to the reference
to our firm under the heading "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" in the Statement of Additional
Information.
KPMG Peat Marwick LLP
New York, New York
March 31, 1998
KIRKPATRICK & LOCKHART LLP
1800 MASSACHUSETTS AVENUE, N.W.
2ND FLOOR
WASHINGTON, D.C. 20036-1800
TELEPHONE (202) 778-9000
FACSIMILE (202) 778-9100
November 24, 1997
The Dreyfus/Laurel Funds, Inc.
200 Park Avenue - 55th Floor
New York, New York 10166
Re: The Dreyfus/Laurel Funds, Inc.--
Post-Effective Amendment No. 62
(1933 Act File No. 33-16338)
Dear Sir or Madam:
In connection with the filing of the Post-Effective Amendment No. 62 to
the Registration Statement on Form N-1A (File No. 33-16338) of The
Dreyfus/Laurel Funds, Inc., which you are about to file with the Securities
and Exchange Commission, we hereby consent to the reference to our firm as
"counsel" in the Statement of Additional Information incorporated by
reference into the Prospectus of Dreyfus Premier Small Cap Value Fund.
Very truly yours,
Kirkpatrick & Lockhart LLP
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Richard W. Ingram,
Christopher Kelley, Kathleen K. Morrisey, Michael S. Petrucelli, and Elba
Vasquez and each of them, with full power to act without the other, his or
her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of each Fund enumerated on
Exhibit A hereto (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
January 28, 1998
/s/ Marie E. Connolly
Marie E. Connolly, President
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Marie E. Connolly, Richard
W. Ingram, Christopher Kelley, Kathleen K. Morrisey, Michael S. Petrucelli
and Elba Vasquez and each of them, with full power to act without the other,
his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement of each Fund enumerated on
Exhibit A hereto (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
/s/Ruth Marie Adams
Ruth Marie Adams
/s/ Francis P. Brennan
Francis P. Brennan
/s/ Joseph S. DiMartino
Joseph S. DiMartino
/s/ James M. Fitzgibbons
James M. Fitzgibbons
/s/ J. Tomlinson Fort
J. Tomlinson Fort
/s/ Arthur L. Goeschel
Arthur L. Goeschel
/s/ Kenneth A. Himmel
Kenneth A. Himmel
/s/ Arch S. Jeffery
Arch S. Jeffery
/s/ Stephen J. Lockwood
Stephen J. Lockwood
/s/ John J. Sciullo
John J. Sciullo
/s/ Roslyn Watson
Roslyn Watson
Exhibit A
The Dreyfus/Laurel Funds, Inc.
The Dreyfus/Laurel Funds Trust
The Dreyfus/Laurel Tax-Free Municipal Funds
