File Nos. 811-5270
33-16338
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 60 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 60 [ 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.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
____ immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
_X__ on March 31, 1998 pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on (date) pursuant to paragraph (a)(2) 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.
<PAGE>
DREYFUS PREMIER SMALL CAP VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
---------------------------------------------
The following post-effective amendment to the Registrant's Registration
Statement on Form N-1A relates only to Dreyfus Premier Large Company Growth Fund
(to be renamed "Dreyfus Premier Small Cap Value Fund") (hereinafter "Dreyfus
Premier Small Cap Value Fund") and does not affect the Registration Statements
of the following Series of the Registrant:
DREYFUS BOND MARKET INDEX FUND
DREYFUS DISCIPLINED INTERMEDIATE BOND FUND
DREYFUS MONEY MARKET RESERVES
DREYFUS MUNICIPAL RESERVES
DREYFUS U.S. TREASURY RESERVES
DREYFUS DISCIPLINED STOCK FUND
DREYFUS INTERNATIONAL EQUITY ALLOCATION FUND
DREYFUS INSTITUTIONAL PRIME MONEY MARKET FUND
DREYFUS INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
DREYFUS INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
DREYFUS INSTITUTIONAL S&P 500 STOCK INDEX FUND
DREYFUS PREMIER LIMITED TERM INCOME FUND
DREYFUS PREMIER BALANCED FUND
DREYFUS PREMIER SMALL COMPANY STOCK FUND
DREYFUS PREMIER LARGE COMPANY STOCK FUND
DREYFUS PREMIER TAX MANAGED GROWTH FUND
DREYFUS PREMIER MIDCAP STOCK FUND
Items in
Part A of Prospectus
Form N-1A Caption Caption
- -------- ------- ----------
1 Cover Page Cover Page
2 Synopsis Expense Summary
3 Condensed Financial Not Applicable
Information
4 General Description of Investment Objective
Registrant Management Policies;
Investment Techniques;
Certain Portfolio
Securities; General
Information
5 Management of the Fund Management of the Fund;
General information
5A Management's Discussion Management's Discussion
of Fund's Performance of Fund's Performance
6 Capital Stock and Alternative Purchase
Other Securities Methods; How to Buy
Shares; How to Redeem
Shares; Dividends Other
Distributions and Taxes;
General Information
ii
<PAGE>
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 Caption Information Caption
- --------- ------- -----------------------
7 Purchase of Securities Expense Summary;
Being Offered Alternative Purchase
Methods; How to Buy
Shares; Shareholder
Services; Distribution
Plans; How to Redeem
Shares
8 Redemption or How to Redeem Shares
Repurchase
9 Pending Legal Not Applicable
Proceedings
10 Cover Page Cover
11 Table of Contents Table of Contents
12 General Information Management of the Fund
and History
13 Investment Objectives Investment Objective
and Policies and Management Policies
14 Management of the Fund Management of the Fund;
Management Agreement
15 Control Persons and Management of the Fund
Principal Holders of
Securities
16 Investment Advisory Management of the Fund;
and Other Services Management Agreement;
Shareholder Services
17 Investment Allocation Investment Objectives
and Other Services and Management Policies;
Portfolio Transactions
18 Capital Stock and Description of the Fund;
Other Securities See Prospectus -- "Cover
Page" and "How to Redeem
Fund Shares"
19 Purchase, Redemption Purchase of Shares;
and Pricing of Distribution and Service
Securities Being Offered Plans; Redemption of
Shares; Determination
of Net Asset Value
20 Tax Status Dividends, Other
Distributions and
Taxes
iii
<PAGE>
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 Caption Information Caption
- --------- ------- ------------------------
21 Underwriters Purchase of Shares;
Distribution and Service
Plans
22 Calculation of Performance Information
Performance Data
23 Financial Statements To Be Filed By Amendment
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-8
30 Location of Accounts and Records C-11
31 Management Services C-11
32 Undertakings C-11
iv
<PAGE>
Dreyfus Premier Small Cap Value Fund
Prospectus March 31, 1998
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 2000(REGISTERED
TRADEMARK) 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.
- --------------------------------------------------------------------------------
<PAGE>
Table of Contents
Expense Summary............................................................... 3
Alternative Purchase Methods.................................................. 4
Description of the Fund....................................................... 5
Management of the Fund........................................................ 9
How to Buy Shares.............................................................10
Shareholder Services..........................................................14
How to Redeem Shares..........................................................18
Additional Information About Purchases, Exchanges and Redemptions.............21
Distribution Plans (Class A Plan and Class B and C Plans).....................21
Dividends, Other Distributions and Taxes......................................22
Performance Information.......................................................24
General Information...........................................................25
2
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<TABLE>
<CAPTION>
Expense Summary
CLASS A CLASS B CLASS C CLASS R
------- ------- ------- -------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
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) a 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% 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. See "How to Buy Shares Class A
Shares."
** 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 PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- --------------------------------------------------------------------------------
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
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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."
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
4
<PAGE>
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 industry
representations 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 capitalizations companies are
generally less 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 using valuation
models that, in the aggregate, resemble the Russell 2000 Value Index, but are
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) when-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
5
<PAGE>
to certain limitations. Securities rated BBB by Standard & Poor's or Baa by
Moody's are considered by those rating agencies to be "investment grade"
securities, although Moody's considers securities rated Baa to have speculative
characteristics. Further, while bonds rated BBB by Standard & Poor's exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
principal for debt in this category than debt in higher rated categories. 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 2000(REGISTERED TRADEMARK) Index with lower price-to-book ratios and
lower forecasted growth values. The Russell 2000 Index measures the performance
of the smallest 2,000 companies from a universe of the 3,000 largest companies
that are publicly-traded in the United States, 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 additional
collateral or in recovering the securities loaned or even a loss of rights to
the collateral should the borrower of the securities fail financially.
Securities loans, however, are made only to borrowers deemed by Dreyfus to be of
good standing and when, in its judgment, the income to be earned from the loan
justifies the attendant risks.
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 purchase
of securities on a when-issued or delayed delivery basis involves the risk that,
as a result of an increase in yields available in the marketplace, the value of
the securities purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. The Fund will establish a segregated account consisting of cash,
U.S. Government Securities or other high-grade debt obligations in an amount at
least equal at all times to the amounts of its when-issued and delayed delivery
commitments.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS. The Fund may purchase
and sell various financial instruments, including financial futures contracts
(such as index futures contracts) and options (such as options on U.S. or
foreign securities or indices of such securities). These instruments may be
used, for example, to preserve a return or spread or to facilitate or substitute
6
<PAGE>
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 foreign 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."
7
<PAGE>
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
8
<PAGE>
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 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.
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 November 30, 1997, Dreyfus managed or administered approximately $94
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 and has been employed by
Dreyfus as a portfolio manager since February 26, 1996. He is also President and
Chief Executive 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 $299 billion in assets as of September 30, 1997,
including approximately $102 billion in proprietary mutual fund assets. As of
September 30, 1997, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for more
than $1.488 trillion in assets, including approximately $60 billion in mutual
fund assets.
9
<PAGE>
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.
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.
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<PAGE>
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 number 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 #______/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
Builder(REGISTERED TRADEMARK) 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 "[xxxx]" for Class A shares, "[xxxx]" for
Class B shares, "[xxxx]" for Class C shares, and "[xxxx]" for Class R shares.
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<PAGE>
The Distributor may pay dealers a fee of up to 0.5% of the amount invested
through such dealers in Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Shares of funds in 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 adding, with respect to such Class of shares, the value of the
Fund's investments, cash, and other assets attributable to that Class, deducting
liabilities of the Class and dividing the result by the number of shares of that
Class outstanding. 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 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:
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<PAGE>
<TABLE>
<CAPTION>
Total Sales Load
-----------------------------------------
Dealers'
Reallowance
As a % of As a % of as a % of
Offering Price Net Asset Value Offering Price
Amount of Transaction Per Share Per Share -----------------
- -------------------------------- ---------------- -------------------
<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 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.
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<PAGE>
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.
14
<PAGE>
Fund Exchanges
Clients of certain Agents 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 without regard
to the time such shares were held in an Exchange Account. See "How to Redeem
Shares." Redemption proceeds for Exchange Account shares are paid by Federal
wire or check only. Exchange Account shares also are eligible for the
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 Touch(REGISTERED TRADEMARK)
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
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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 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 Builder(REGISTERED TRADEMARK)
Dreyfus-Automatic Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular intervals
selected by you. Fund shares are purchased by transferring funds from the bank
account designated by you. At your option, the bank account designated by you
will be debited in the specified amount, and Fund shares will be purchased, once
a month, on either the first or fifteenth day, or twice a month, on both days.
Only an account maintained at a domestic financial institution which is an ACH
member may be so designated. To establish a Dreyfus-Automatic Asset Builder
account, you must file an authorization form with the Transfer Agent. You may
obtain the necessary authorization form by calling 1-800-554-4611. 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
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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.
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
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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 of Accumulation" benefits described
above may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in the
Letter of Intent for payment of a higher sales load if you do not purchase the
full amount indicated in the Letter of Intent. The escrow will be released when
you fulfill the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load reduction, the sales
load will be adjusted to reflect your total purchase at the end of 13 months. If
total purchases are less than the amount specified, you will be requested to
remit an amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If such
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of Class A 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
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ASSET BUILDER(REGISTERED TRADEMARK) 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 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.
The following table sets forth the rates of the CDSC for Class B shares:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
- ------------------------- ------------------------------
First........................................ 4.00
Second....................................... 4.00
Third........................................ 3.00
Fourth....................................... 3.00
Fifth........................................ 2.00
Sixth........................................ 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and 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
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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 1/2 in the case of an IRA or Keogh plan or
custodial account pursuant to Section 403(b) of the Code, and (e) redemptions
pursuant to the Automatic Withdrawal Plan, as described 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 through the Telephone Redemption
Privilege, which is granted automatically unless you specifically refuse it by
checking the applicable "No" box on the Account Application. The Telephone
Redemption Privilege may be established for an existing account by a separate
signed Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem shares
through the TeleTransfer Privilege 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. 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.
The Telephone Redemption Privilege or telephone exchange privilege
authorizes the Transfer Agent to act on telephone instructions (including over
The Dreyfus Touch(REGISTERED TRADEMARK) 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.
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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 redemption are credited to your account with the Selected Dealer. See "How
to Buy Shares" for a discussion of additional conditions or fees that may be
imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by 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
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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 Plan 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.
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
22
<PAGE>
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.
Under the Taxpayer Relief Act of 1997, different maximum tax rates apply to a
non-corporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on capital assets held for more than one year but not more than 18
months and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain
recognized on capital assets held for more than 18 months. Pursuant to an IRS
notice, the Fund may divide each net capital gain distribution into a 28% rate
gain distribution and a 20% rate gain distribution (in accordance with the
Fund's holding periods for the securities it sold that generated the distributed
gain) and its shareholders must treat those portions accordingly. Dividends and
other distributions also may be subject to state and local taxes.
Dividend distributions paid by the Fund to a non-resident foreign investor
generally are subject to U.S. withholding tax at the rate of 30%, unless the
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
23
<PAGE>
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 the different maximum rates of tax applicable
to non-corporate taxpayers' net capital gain indicated above.
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
24
<PAGE>
Account, which commenced investment operations on [October __, 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 ______ _, 1998, and from the
commencement of its operations through ______ _, 1998, were __.__% and __.__%,
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 __.__% and
__.__%, 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 smallest 2,000 companies from a universe of the 3,000 largest companies
that are publicly-traded in the United States, 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 contingent-deferred sales charges or
distribution or service fees. If the Account had been subject to such fees and
expenses, 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.
25
<PAGE>
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, 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-standardized performance information, such as total
return for periods other than those required to be shown or cumulative
performance data. The Fund may advertise a quotation of yield or other similar
quotation demonstrating the income earned or distributions made by the Fund.
General Information
The Company was incorporated in Maryland on August 6, 1987 under the name
The Laurel Funds, Inc., and changed its name to The Dreyfus/Laurel Funds, Inc.
on October 17, 1994. The Company is registered with the SEC 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.
26
<PAGE>
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.
27
<PAGE>
- --------------------------------------------------------------------------------
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-19
Purchase of Shares................................................ B-19
Distribution and Service Plans.................................... B-21
Redemption of Shares.............................................. B-23
Shareholder Services.............................................. B-24
Determination of Net Asset Value.................................. B-27
Dividends, Other Distributions and Taxes.......................... B-28
Portfolio Transactions............................................ B-32
Performance Information........................................... B-33
Information About the Fund........................................ B-34
Transfer and Dividend Disbursing Agent, Custodian, Counsel and
Independent Auditors............................................ B-34
Appendix.......................................................... B-35
<PAGE>
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
B-2
<PAGE>
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 credit guidelines
of the Company's Board of Directors.
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.
B-3
<PAGE>
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
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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.
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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
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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
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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
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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.
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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
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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
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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.
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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.
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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+RUTHMARIE 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.
B-14
<PAGE>
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 Chairman of the Board of Staffing
Resources, Inc., a temporary placement agency, 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, and
Carlyle Industries, Inc. (formerly Belding Heminway, Inc.), a button
packager and distributor. 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: Himmel and Company, Inc., 399 Boylston Street, 11th Floor,
Massachusetts 02116.
B-15
<PAGE>
o*ARCHS. 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+JOHNJ. 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
- -----------------------
#MARIEE. 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. She is 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. He is 42 years old.
B-16
<PAGE>
#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. She is 33 years old.
#MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer 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. He is 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. He is 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. He is 28 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 __, 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:
B-17
<PAGE>
Total Compensation
From the Company
Aggregate and Fund Complex
Name of Board Compensation Paid to Board
Member From Company# Member****
- ------------- ------------- ------------------
Ruth Marie Adams $_______ $______
Francis P. Brennan* _______ _______
Joseph S. DiMartino** none _______***
James M. Fitzgibbons _______ ______
J. Tomlinson Fort** none none
Arthur L. Goeschel _______ ______
Kenneth A. Himmel _______ ______
Arch S. Jeffery** none none
Stephen J. Lockwood _______ ______
John J. Sciullo _______ ______
Roslyn M. Watson _______ ______
- ----------------------------
# 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 $______ 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 $_______, ________ and $_______, respectively,
and for serving as a Board member of all funds in the Dreyfus/Laurel Funds
(including the Company) were $_____, $______ and $______, respectively. In
addition, Dreyfus reimbursed Messrs. DiMartino, Fort and Jeffery a total
of $______ for expenses attributable to the Company's Board meetings which
is not included in the $_______ 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.
B-18
<PAGE>
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; 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
B-19
<PAGE>
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."
B-20
<PAGE>
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.
B-21
<PAGE>
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.
B-22
<PAGE>
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.
B-23
<PAGE>
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.
B-24
<PAGE>
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 Touch[REGISTERED TRADEMARK] 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 $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 $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.
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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
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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.
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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.
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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,
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<PAGE>
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, 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
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<PAGE>
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
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<PAGE>
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
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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."
The Fund has not commenced operations as of the date of the Prospectus.
Accordingly, no financial or performance information is included at this time
for the Fund.
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; (ii) the Standard & Poor's 500 Composite Stock Price
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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,
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<PAGE>
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.
______________, 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.
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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.
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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 characteristics 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.
B-37
<PAGE>
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.
B-38
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
(formerly, The Laurel Funds, Inc.)
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
--------------------
To be filed by amendment.
(b) Exhibits:
--------
1(a) Articles of Incorporation dated July 31, 1987.
Incorporated by reference to Post-Effective Amendment
No. 41 to the Registrant's 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 to the Registrant's
Registration Statement 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.
C-1
<PAGE>
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 July 15, 1996. Incorporated
by reference to Post-Effective Amendment No. 53 to the
Registrant's Registration Statement on Form N-1A
("Post-Effective Amendment No. 53") filed on August 20,
1997.
1(n) Articles of Amendment dated February 27, 1997.
Incorporated by reference to Post-Effective Amendment
No. 53.
1(o) Articles of Amendment dated August 13, 1997.
Incorporated by reference to Post-Effective Amendment
No. 53.
1(p) Articles of Amendment dated October 30, 1997.
Incorporated by reference to Post-Effective Amendment
No. 56 to the Registrant's Registration Statement on
Form N-1A ("Post-Effective Amendment No. 56") filed on
November 4, 1997.
2 Bylaws. Incorporated by reference to Post-Effective
Amendment No. 53.
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. To be
filed by amendment.
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.
5(d) Form of Sub-Investment Advisory Agreement between The
Dreyfus Corporation and Fayez Sarofim & Co. (relating to
Dreyfus Premier Tax Managed Fund). Incorporated by
reference to Post-Effective Amendment No. 56.
6(a) Distribution Agreement between Premier Mutual Fund
Services, Inc. and the Registrant. Incorporated by
reference to Post-Effective Amendment No. 31.
6(b) Amended Exhibit A to Distribution Agreement between
Premier Mutual Fund Services, Inc. and the Registrant.
To be filed by amendment.
7 Not Applicable.
8(a) Form of Custody Agreement between the Registrant and
Mellon Bank, N.A. Incorporated by reference to
Post-Effective Amendment No. 41.
8(b) Sub-Custodian Agreement between Mellon Bank, N.A. and
Boston Safe Deposit and Trust Company. To be filed by
amendment.
C-2
<PAGE>
10 Opinion of counsel is incorporated by reference to the
Registrant's Registration Statement on Form N-1A --
Registration No. 33-16338 ("Registration Statement")
filed on August 6, 1987 and to Post-Effective Amendment
No. 32 and Post-Effective Amendment No. 56.
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). Incorporated by reference to
Post-Effective Amendment No. 57 to the Registrant's
Registration Statement filed on November 17, 1997
("Post-Effective Amendment No. 57").
15(b) Distribution Plan (relating to Class B Shares and Class
C Shares). Incorporated by reference to Post-Effective
Amendment No. 57.
15(c) Amended Service Plan (relating to Class B Shares, Class
C Shares and Class T Shares). Incorporated by reference
to Post-Effective Amendment No. 57.
15(d) Distribution Plan (relating to Class T shares).
Incorporated by reference to Post-Effective Amendment
No. 56.
16 Schedule for computation of performance calculation is
incorporated by reference to Post-Effective Amendment
No. 26 to the Registrant's Registration Statement on
Form N-1A filed on March 1, 1994.
17 Not applicable.
18(a) Rule 18f-3 Plans. Incorporated by reference to Post-
Effective Amendment No. 50 to Registrant's Registration
Statement on Form N-1A filed on November 1, 1996 and
Post-Effective Amendment No. 53. Certain amended 18f-3
Plans to be filed by amendment.
18(b) Rule 18f-3 Plan (relating to Dreyfus Premier Tax Managed
Growth Fund). Incorporated by reference to
Post-Effective Amendment No. 56.
25(a) Power of Attorney of Marie E. Connolly dated September
25, 1997. Incorporated by reference to Post-Effective
Amendment No. 56.
25(b) Powers of Attorney of the Directors dated October 24,
1996. Incorporated by reference to Post-effective
Amendment No. 53.
C-3
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
Not Applicable.
Item 26. Number of Holders of Securities
-------------------------------
To be filed by amendment.
Item 27. Indemnification
---------------
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been a Director or officer of
the Registrant (hereinafter referred to as "Covered Person") shall be
indemnified by the appropriate Series to the fullest extent permitted
by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by virtue of his
being or having been a Covered Person and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Registrant or
its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Funds; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Directors who are
neither interested persons of the Registrant nor are parties
to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to
a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal proceedings,
challenge any such determination by the Directors, or by independent counsel.
(c) The Registrant may purchase and maintain insurance on behalf of any Covered
Person against any liability asserted against him and incurred by him in any
such capacity or arising out of his status as such, whether or not the
Registrant would have the power to indemnify him against such liability. The
Registrant may not acquire or obtain a contract for insurance that protects or
purports to protect any Covered Person against any liability to the Registrant
or its shareholders to which he would otherwise be subject by reason of willful
C-4
<PAGE>
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
(d) Expenses in connection with the preparation and presentation of a defense to
any claim, action, suit or proceeding of the character described in paragraph
(a) above may be paid by the appropriate Series from time to time prior to final
disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the applicable
Series if it is ultimately determined that he is not entitled to indemnification
hereunder; provided, however, that either (i) such Covered Person shall have
provided appropriate security for such undertaking, (ii) the Registrant is
insured against losses arising out of any such advance payments or (iii) either
a majority of the Directors who are neither interested persons of the funds nor
parties to the matter, or independent legal counsel in a written opinion, shall
have determined, based upon a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that such Covered
Person will be found entitled to indemnification hereunder.
Item 28. Business and Other Connection of Investment Adviser
---------------------------------------------------
Investment Adviser -- The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies comprise a
financial service organization whose business consists primarily of providing
investment management services as the investment adviser, manager and
distributor for sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to institutional and individual
accounts. Dreyfus also serves as sub-investment adviser to and/or administrator
of other investment companies. Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, serves primarily as a registered broker-dealer of shares
of investment companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as investment adviser, sub-investment adviser or
administrator. Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension plans, institutions
and individuals.
Officers and Directors of Investment Adviser
--------------------------------------------
Name and Position
with Dreyfus Other Businesses
- ----------------- ----------------
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
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:
C-5
<PAGE>
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:
C-6
<PAGE>
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 Avenue
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+++;
World Balanced 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.
Vice President, Secretary and Director:
Lion Management, Inc.*
MARK N. JACOBS Vice President, Secretary and Director
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
General Counsel Dreyfus Management, Inc.*;
and Secretary 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
C-7
<PAGE>
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 to 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
C-8
<PAGE>
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
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 Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds Trust
35) The Dreyfus/Laurel Tax-Free Municipal Funds
36) Dreyfus LifeTime Portfolios, Inc.
37) Dreyfus Liquid Assets, Inc.
38) Dreyfus Massachusetts Intermediate Municipal Bond Fund
39) Dreyfus Massachusetts Municipal Money Market Fund
40) Dreyfus Massachusetts Tax Exempt Bond Fund
41) Dreyfus MidCap Index Fund
42) Dreyfus Money Market Instruments, Inc.
43) Dreyfus Municipal Bond Fund, Inc.
44) Dreyfus Municipal Cash Management Plus
45) Dreyfus Municipal Money Market Fund, Inc.
46) Dreyfus New Jersey Intermediate Municipal Bond Fund
47) Dreyfus New Jersey Municipal Bond Fund, Inc.
48) Dreyfus New Jersey Municipal Money Market Fund, Inc.
49) Dreyfus New Leaders Fund, Inc.
50) Dreyfus New York Insured Tax Exempt Bond Fund
51) Dreyfus New York Municipal Cash Management
52) Dreyfus New York Tax Exempt Bond Fund, Inc.
53) Dreyfus New York Tax Exempt Intermediate Bond Fund
54) Dreyfus New York Tax Exempt Money Market Fund
55) Dreyfus 100% U.S. Treasury Intermediate Term Fund
56) Dreyfus 100% U.S. Treasury Long Term Fund
57) Dreyfus 100% U.S. Treasury Money Market Fund
58) Dreyfus 100% U.S. Treasury Short Term Fund
59) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
60) Dreyfus Pennsylvania Municipal Money Market Fund
61) Dreyfus Index Funds, Inc.
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) The Dreyfus Socially Responsible Growth Fund, Inc.
65) Dreyfus Stock Index Fund, Inc.
66) Dreyfus Tax Exempt Cash Management
67) The Dreyfus Third Century Fund, Inc.
68) Dreyfus Treasury Cash Management
69) Dreyfus Treasury Prime Cash Management
C-9
<PAGE>
70) Dreyfus Variable Investment Fund
71) Dreyfus Worldwide Dollar Money Market Fund, Inc.
72) General California Municipal Bond Fund, Inc.
73) General California Municipal Money Market Fund
74) General Government Securities Money Market Fund, Inc.
75) General Money Market Fund, Inc.
76) General Municipal Bond Fund, Inc.
77) General Municipal Money Market Fund, Inc.
78) General New York Municipal Bond Fund, Inc.
79) General New York Municipal Money Market Fund
80) Dreyfus Premier Insured Municipal Bond Fund
81) Dreyfus Premier California Municipal Bond Fund
82) Dreyfus Premier Equity Funds, Inc.
83) Dreyfus Premier International Growth Fund, Inc.
84) Dreyfus Premier GNMA Fund
85) Dreyfus Premier Worldwide Growth Fund, Inc.
86) Dreyfus Premier Municipal Bond Fund
87) Dreyfus Premier New York Municipal Bond Fund
88) Dreyfus Premier State Municipal Bond Fund
89) Dreyfus Premier Value Fund
<TABLE>
<CAPTION>
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
- ------------------ ------------------------- -------------
<S> <C> <C>
Marie E. Connolly+ Director, President, Chief President and
Executive Office and Treasurer
Compliance Officer
Joseph F. Tower, III+ Senior Vice President, Vice President
Treasurer and Chief and Assistant
Financial Officer 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
</TABLE>
- --------------------
+ Principal business address is One Exchange Place, 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
<PAGE>
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.
(3) To file a post-effective amendment using financial statements,
which need not be certified, within six months from the
effective date of Registrant's 1933 Act Registration
Statement, so long as such filing is required by the Rules
promulgated by the Securities and Exchange Commission at such
time.
C-11
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Amendment to its 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 14th day of January, 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 dates
indicated.
Signatures Title Date
---------- ----- ----
/s/Marie E. Connolly* President, Treasurer 1/14/98
- ------------------------
Marie E. Connolly
/s/Francis P. Brennan* Director, 1/14/98
________________________ Chairman of the Board
Francis P. Brennan
/s/Ruth Marie Adams* Director 1/14/98
- ------------------------
Ruth Marie Adams
/s/Joseph S. DiMartino* Director 1/14/98
- ------------------------
Joseph S. DiMartino
/s/James M. Fitzgibbons* Director 1/14/98
- ------------------------
James M. Fitzgibbons
/s/Kenneth A. Himmel* Director 1/14/98
- ------------------------
Kenneth A. Himmel
/s/Stephen J. Lockwood* Director 1/14/98
- ------------------------
Stephen J. Lockwood
/s/Roslyn M. Watson* Director 1/14/98
- ------------------------
Roslyn M. Watson
<PAGE>
/s/J. Tomlinson Fort* Director 1/14/98
- ------------------------
J. Tomlinson Fort
/s/Arthur L. Goeschel* Director 1/14/98
- ------------------------
Arthur L. Goeschel
/s/Arch S. Jeffery* Director 1/14/98
- ------------------------
Arch S. Jeffery
/s/John Sciullo* Director 1/14/98
- ------------------------
John Sciullo
*By: /s/ Marie E. Connolly
------------------------
Marie E. Connolly,
Attorney-in-Fact