PROSPECTUS JANUARY 3, 1994
PREMIER GROWTH FUND, INC.
PREMIER GROWTH FUND, INC. (THE "FUND") IS AN OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. ITS PRIMARY
GOAL IS TO PROVIDE YOU WITH LONG-TERM CAPITAL GROWTH CONSISTENT WITH THE
PRESERVATION OF CAPITAL. CURRENT INCOME IS A SECONDARY GOAL. THE FUND
INVESTS PRINCIPALLY IN EQUITY SECURITIES ISSUED BY FOREIGN AND DOMESTIC
ISSUERS LOCATED THROUGHOUT THE WORLD.
BY THIS PROSPECTUS, CLASS A AND CLASS B SHARES OF THE FUND ARE BEING
OFFERED. CLASS A SHARES ARE SUBJECT TO A SALES CHARGE IMPOSED AT THE TIME
OF PURCHASE AND CLASS B SHARES ARE SUBJECT TO A CONTINGENT DEFERRED
SALES CHARGE IMPOSED ON REDEMPTIONS MADE WITHIN SIX YEARS OF PURCHASE.
OTHER DIFFERENCES BETWEEN THE TWO CLASSES INCLUDE THE SERVICES OFFERED
TO AND THE EXPENSES BORNE BY EACH CLASS AND CERTAIN VOTING RIGHTS, AS
DESCRIBED HEREIN. THE FUND OFFERS THESE ALTERNATIVES TO PERMIT AN INVESTOR
TO CHOOSE THE METHOD OF PURCHASING SHARES THAT IS MOST BENEFICIAL GIVEN
THE AMOUNT OF THE PURCHASE, THE LENGTH OF TIME THE INVESTOR EXPECTS TO
HOLD THE SHARES AND OTHER CIRCUMSTANCES.
YOU CAN PURCHASE OR REDEEM FUND SHARES BY TELEPHONE USING THE
TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S INVESTMENT
ADVISER. DREYFUS HAS ENGAGED FAYEZ SAROFIM & CO. ("SAROFIM") TO SERVE AS
THE FUND'S SUB-INVESTMENT ADVISER AND PROVIDE DAY-TO-DAY MANAGEMENT OF
THE FUND'S INVESTMENTS. DREYFUS AND SAROFIM ARE REFERRED TO COLLECTIVELY
AS "ADVISERS."
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION), DATED
JANUARY 3, 1994, WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER
DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH
MAY BE OF INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A
FREE COPY, 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 666.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE FUND'S SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. THE FUND'S SHARE PRICE AND INVESTMENT RETURN
FLUCTUATE AND ARE NOT GUARANTEED.
TABLE OF CONTENTS
PAGE
FEE TABLE.................................................... 2
CONDENSED FINANCIAL INFORMATION.............................. 3
ALTERNATIVE PURCHASE METHODS................................. 3
DESCRIPTION OF THE FUND...................................... 4
MANAGEMENT OF THE FUND....................................... 11
HOW TO BUY FUND SHARES....................................... 12
SHAREHOLDER SERVICES......................................... 16
HOW TO REDEEM FUND SHARES.................................... 18
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN.............. 22
DIVIDENDS, DISTRIBUTIONS AND TAXES........................... 22
PERFORMANCE INFORMATION...................................... 24
GENERAL INFORMATION.......................................... 24
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
------- -------
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................... 4.50% --
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)...... -- 4.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.......................................... .75% .75%
12b-1 Fees............................................... -- .75%
Service Fees............................................. .25% .25%
Other Expenses........................................... 1.50% 1.50%
Total Fund Operating Expenses............................ 2.50% 3.25%
EXAMPLE
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS B*
1 YEAR........................................ $ 69 $ 73 $ 33
3 YEARS....................................... $119 $130 $100
*Assuming no redemption of Class B shares.
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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
various costs and expenses that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis.
Total Fund Operating Expenses are limited to the expense limitation
provisions of the Investment Advisory Agreement. For Class B, Other
Expenses are estimated based on expenses incurred by Class A. Long-term
investors in Class B shares could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The information in
the foregoing table does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares"
and "Distribution Plan and Shareholder Services Plan."
(2)
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst & Young,
the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available
upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the period July 15, 1993
(commencement of operations) to October 31, 1993. This information has
been derived from information provided in the Fund's financial statements.
CLASS A CLASS B
SHARES SHARES
------ ------
PER SHARE DATA:
Net asset value, beginning of period........ $12.50 $12.50
------ ------
INVESTMENT OPERATIONS:
Investment (loss)-net....................... (.01) (.03)
Net unrealized gain on investments.......... .72 .70
------ ------
TOTAL FROM INVESTMENT OPERATIONS.......... .71 .67
------ ------
Net asset value, end of period.............. $13.21 $13.17
====== ======
TOTAL INVESTMENT RETURN(1) 5.68%(2) 5.36%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .77%(2)(3) 1.14%(2)(3)
Ratio of net investment (loss) to average
net assets................................ (.12%)(2) (.53%)(2)
Portfolio Turnover Rate....................... __ __
Net Assets, end of period (000's Omitted)..... $3,338 $2,554
- ---------------
(1) Exclusive of sales load.
(2) Not annualized.
(3) Net of expenses reimbursed.
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you two 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 Class A and Class B share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 4.50% 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 Fund Shares-Class A Shares." These
shares are subject to an annual service fee at the rate of .25 of 1% of the
value of the average daily net assets of Class A. See "Distribution Plan
and Shareholder Services Plan-Shareholder Services Plan."
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 six years of purchase.
See "How to Buy Fund Shares-Class B Shares" and "How to Redeem Fund
Shares__Contingent Deferred Sales Charge-Class B Shares." These shares
also are subject to an annual service fee at the rate of .25 of 1% of the
value of the average daily net assets of Class B. In addition, Class B
shares are subject to an annual distribution fee at the rate of .75 of 1% of
the value of the average daily net assets of Class B. See "Distribution Plan
and Shareholder Services Plan." The distribution fee paid by Class
(3)
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, Class B shares automatically will convert to Class A shares,
based on the relative net asset values for shares of each Class, and will
no longer be subject to the distribution fee. Class B shares that have been
acquired through the reinvestment of dividends and distributions will be
converted on a pro rata basis together with other Class B shares, in the
proportion that a shareholder's Class B shares converting to Class A
shares bears to the total Class B shares not acquired through the
reinvestment of dividends and distributions.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC on
Class B shares prior to conversion would be less than the initial sales
charge on Class A shares purchased at the same time, and to what extent,
if any, such differential would be offset by the higher return of Class A. In
this regard, 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 fees on Class B shares may exceed the initial sales charge on
Class A shares during the life of the investment. Generally, Class A shares
may be more appropriate for investors who invest $100,000 or more in
Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES - The Fund's primary goal is to provide you with
long-term capital growth consistent with the preservation of capital.
Current income is a secondary goal. The Fund's investment objectives
cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. There can be no assurance that the Fund's investment
objectives will be achieved.
MANAGEMENT POLICIES - The Fund invests principally in equity
securities issued by foreign and domestic issuers located throughout the
world. Equity securities include common stock, convertible securities and
preferred stocks. The Fund may invest in debt securities that management
believes offer opportunities for capital growth. At any one time, the Fund
may invest substantial portions of its assets in issuers in one or more
countries, although the Fund ordinarily will seek to invest its assets in
the securities of issuers located in at least three countries. Under normal
circumstances, the Fund will invest at least 25% of its net assets in the
securities of non-U.S. issuers and 25% of its net assets in the securities
of U.S. issuers. The Fund may invest up to 25% of its total assets in the
securities of issuers having their principal business activities in the
same industry, regardless of country.
There are no limitations on the type, size, operating history or dividend
paying record of companies or industries in which the Fund may invest, the
principal criteria for investment being that the securities provide
opportunities for capital growth. The Fund's policy is to purchase
marketable securities which are not restricted as to public sale, subject
to the limited exception set forth below under "Certain Portfolio
Securities-Illiquid Securities."
The debt securities in which the Fund may invest must be rated at least
Caa by Moody's Investors Service, Inc. ("Moody's") or at least CCC by
Standard & Poor's Corporation ("S&P"), Fitch Investors Service, Inc.
("Fitch") or Duff & Phelps, Inc. ("Duff") or, if unrated, deemed to be of
comparable quality by the Advisers. Securities rated Caa by Moody's or
CCC by S&P, Fitch or Duff are of poor standing and may be in default. The
Fund intends to invest less than 35% of its net assets in debt securities
rated lower than investment grade by Moody's, S&P, Fitch and Duff or, if
unrated, deemed to be of comparable quality by the Advisers. See "Risk
Factors-Lower Rated Securities" below.
The Fund may invest, in anticipation of investing cash positions or for
temporary defensive purposes, in money market instruments consisting of
U.S. Government securities, certificates of deposit, time deposits,
bankers' acceptances, short-term investment grade corporate bonds and
other short-term debt instruments, and repurchase agreements, as set
forth under "Certain Portfolio Securities" below. Under normal market
conditions, the Fund does not expect to have a substantial portion of its
assets invested in money market instruments. However, when the Advisers
determine that adverse market conditions exist, the Fund may
(4)
adopt a temporary defensive posture and invest its entire portfolio in
money market instruments. To the extent the Fund is so invested, the
Fund's investment objectives may not be achieved.
INVESTMENT TECHNIQUES - The Fund may engage in various investment
techniques, such as foreign exchange transactions, each of which may
involve risk. See "Risk Factors" below.
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency
exchange transactions to the extent consistent with its investment
objectives or to hedge its portfolio. The Fund will conduct its currency
exchange transactions either on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, or through entering into
forward contracts to purchase or sell currencies. A forward currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which must be more than two days from the
date of the contract, at a price set at the time of the contract. Forward
currency exchange contracts are entered into in the interbank market
conducted directly between currency traders (typically commercial banks
or other financial institutions) and their customers. The Fund also may
combine forward currency exchange contracts with investments in
securities denominated in other currencies.
BORROWING MONEY - Although the Fund is permitted to borrow money to
the extent permitted under the Investment Company Act of 1940, as
amended, it currently intends to borrow only for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the Fund's total
assets, the Fund will not make any additional investments.
FORWARD COMMITMENTS - The Fund may purchase debt securities on a
when-issued or forward commitment basis, which means that the price is
fixed at the time of commitment, but delivery and payment ordinarily take
place a number of days after the date of the commitment to purchase. 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 before the settlement date if it is deemed advisable. The Fund
will not accrue income in respect of a security purchased on a when-
issued or forward commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis
and certain other securities held by the Fund are subject to changes in
value (both generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based
upon the public's perception of the creditworthiness of the issuer and
changes, real or anticipated, in the level of interest rates. Securities
purchased on a when-issued or forward commitment basis may expose the
Fund to risk because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued or forward
commitment basis can involve the additional risk that the yield available
in the market when the delivery takes place actually may be higher than
that obtained in the transaction itself. A segregated account of the Fund
consisting of cash, cash equivalents or U.S. Government securities or other
high quality liquid debt securities at least equal at all times to the
amount of the when-issued or forward commitments will be established
and maintained at the Fund's custodian bank. Purchasing securities on a
when-issued or forward commitment basis when the Fund is fully or
almost fully invested may result in greater potential fluctuation in the
value of the Fund's net assets and its net asset value per share.
CERTAIN PORTFOLIO SECURITIES
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS - The
Fund's assets may be invested in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"). These securities may not necessarily be denominated in
the same currency as the securities into which they may be converted.
ADRs are receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities issued by a
foreign corporation. EDRs, which are sometimes referred to as Continental
Depositary Receipts ("CDRs"), are receipts issued in Europe typically by
non-United States banks and trust companies that evidence ownership of
either foreign or domestic securities. Generally, ADRs in registered form
are designed for use in the United States securities markets and
(5)
EDRs and CDRs in bearer form are designed for use in Europe. The Fund
may invest in ADRs, EDRs and CDRs through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary, whereas a depositary may establish
an unsponsored facility without participation by the issuer of the
deposited security. Holders of unsponsored depositary receipts generally
bear all the costs of such facilities and the depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to
pass through voting rights to the holders of such receipts in respect of the
deposited securities.
CONVERTIBLE SECURITIES - The Fund may purchase convertible
securities, which are fixed-income securities, such as bonds or preferred
stock, which may be converted at a stated price within a specified period
of time into a specified number of shares of common stock of the same or
a different issuer. Convertible securities are senior to common stock in a
corporation's capital structure, but usually are subordinated to non-
convertible debt securities. While providing a fixed-income stream
(generally higher in yield than the income derivable from a common stock
but lower than that afforded by a non-convertible debt security), a
convertible security also affords an investor the opportunity, through its
conversion feature, to participate in the capital appreciation of the
common stock into which it is convertible.
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
increases, 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.
U.S. GOVERNMENT SECURITIES - The Fund may purchase securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities,
which include U.S. Treasury securities, that differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial maturities of
one year or less; Treasury Notes have initial maturities of one to ten
years; and Treasury Bonds generally have initial maturities of greater
than ten years. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National
Mortgage Association pass-through certificates, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of the Federal
Home Loan Banks, by the right of the issuer to borrow from the U.S.
Treasury; others, such as those issued by the Federal National Mortgage
Association, by discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others, such as
those issued by the Student Loan Marketing Association, only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government-
sponsored agencies and instrumentalities, no assurance can be given that
it will always do so, because the U.S. Government is not obligated to do so
by law. The Fund will invest in such securities only when it is satisfied
that the credit risk with respect to the issuer is minimal.
ZERO COUPON SECURITIEs - The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The Fund also may invest in zero coupon
securities issued by corporations and financial institutions which
constitute a proportionate ownership of the issuer's pool of underlying
U.S. Treasury securities. A zero coupon security pays no interest to its
holder during its life and is sold at a discount to its face value at
maturity. The amount of the discount fluctuates with the market price of
the security. The market prices of zero coupon securities generally are
more volatile than the market prices of securities that pay interest
periodically and are likely to respond to a greater degree to changes in
interest rates than non-zero coupon securities having similar maturities
and credit qualities.
(6)
BANK OBLIGATIONS - The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations of
domestic banks, foreign subsidiaries of domestic banks, foreign branches
of domestic banks, and domestic and foreign branches of foreign banks,
domestic savings and loan associations and other banking institutions.
With respect to such securities issued by foreign branches of domestic
banks, foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, the Fund may be subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic issuers.
Such risks include possible future political and economic developments,
the possible imposition of foreign withholding taxes on interest income
payable on the securities, the possible establishment of exchange controls
or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. The Fund will
not invest more than 15% of the value of its net assets in time deposits
that are illiquid and in other illiquid securities.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the full
amount of the instrument upon maturity. The other short-term obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
REPURCHASE AGREEMENTS - Repurchase agreements involve the
acquisition by the Fund of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and the Fund to resell, the
instrument at a fixed price usually not more than one week after its
purchase. The Fund's custodian or sub-custodian will have custody of, and
will hold in a segregated account, securities acquired by the Fund under a
repurchase agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commission to be loans by the Fund. In an
attempt to reduce the risk of incurring a loss on a repurchase agreement,
the Fund will enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars, or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the value of the
securities purchased should decrease below resale price. The Advisers
will monitor on an ongoing basis the value of the collateral to assure that
it always equals or exceeds the repurchase price. Certain costs may be
incurred by the Fund in connection with the sale of securities if the seller
does not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS -
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper
purchased by the Fund will consist only of direct obligations which, at the
time of their purchase, are (a) rated not lower than Prime-1 by Moody's,
A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued by companies having
an outstanding unsecured debt issue currently rated not lower than Aa3 by
Moody's or AA- by S&P, Fitch or Duff, or (c) if unrated, determined by the
Advisers to be of comparable quality to those rated obligations which may
be purchased by the Fund. The Fund may purchase floating and variable rate
demand notes and bonds, which are obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to demand
payment of principal at any time or at specified intervals. Variable rate
demand notes include variable amount master demand notes, which are
obligations that permit the Fund to invest
(7)
fluctuating amounts at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower. These notes
permit daily changes in the amounts borrowed. As mutually agreed
between the parties, the Fund may increase the amount under the notes at
any time up to the full amount provided by the note agreement, or decrease
the amount, and the borrower may repay up to the full amount of the note
without penalty. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated
that such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. In
connection with floating and variable rate demand obligations, the
Advisers will consider, on an ongoing basis, earning power, cash flow and
other liquidity ratios of the borrower, and the borrower's ability to pay
principal and interest on demand. Such obligations frequently are not rated
by credit rating agencies, and the Fund may invest in them only if at the
time of an investment the borrower meets the criteria set forth above for
other commercial paper issuers.
WARRANTS - The Fund may invest up to 5% of its net assets in
warrants, except that this limitation does not apply to warrants acquired
in units or attached to securities. 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.
ILLIQUID SECURITIES - The Fund may invest up to 15% of the value of its
net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objectives. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale and repurchase agreements providing
for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a lapse
of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However, if
a substantial market of qualified institutional buyers develops pursuant
to Rule 144A under the Securities Act of 1933, as amended, for certain
unregistered securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures approved by
the Fund's Board of Directors. Because it is not possible to predict with
assurance how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board of Directors has directed the Advisers to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing such
restricted securities pursuant to Rule 144A, the Fund's investing in such
securities may have the effect of increasing the level of illiquidity in the
Fund's portfolio during such period.
RATINGS - The ratings of the various rating agencies represent their
opinions as to the quality of the obligations which they undertake to rate.
It should be emphasized, however, that ratings are relative and subjective
and, although ratings may be useful in evaluating the safety of interest
and principal payments, they do not evaluate the market value risk of such
obligations. Therefore, although these ratings may be an initial criterion
for selection of the Fund's investments, the Advisers also will evaluate
such obligations and the ability of their issuers to pay interest and
principal. The Fund will rely on the Advisers' judgment, analysis and
experience in evaluating the creditworthiness of an issuer. In this
evaluation, the Advisers will take into consideration, among other things,
the issuer's financial resources, its sensitivity to economic conditions
and trends, the quality of the issuer's management and regulatory matters.
It also is possible that a rating agency might not timely change the rating
on a particular issue to reflect subsequent events. Once the rating of a
security owned
(8)
by the Fund has been changed, the
Advisers will consider all circumstances deemed relevant in determining
whether the Fund should continue to hold the security.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money to
the extent permitted under the Investment Company Act of 1940; (ii)
invest up to 5% of its total assets in the obligations of any issuer, except
that up to 25% of the value of its total assets may be invested, and
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities may be purchased, without regard to any such
limitation; and (iii) invest up to 25% of its total assets in the securities
of issuers in a single industry, provided that there is no such limitation on
investments in securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. This paragraph describes fundamental
policies of the Fund that cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940)
of the outstanding voting shares of the Fund. See "Investment Objectives
and Management Policies-Investment Restrictions" in the Fund's
Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES - The Fund may (i)
purchase securities of any company having less than three years'
continuous operation (including operations of any predecessors) if such
purchase does not cause the value of its investments in all such
companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to
secure permitted borrowings; and (iii) invest up to 15% of the value of its
net assets in repurchase agreements providing for settlement in more
than seven days after notice and in other illiquid securities. See
"Investment Objectives and Management Policies-Investment
Restrictions" in the Fund's Statement of Additional Information.
RISK FACTORS
INVESTING IN FOREIGN SECURITIES - Foreign securities markets generally
are not as developed or efficient as those in the United States. Securities
of some foreign issuers are less liquid and more volatile than securities
of comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States. The issuers of
some of these securities, such as foreign bank obligations, may be subject
to less stringent or different regulations than are U.S. issuers. In addition,
there may be less publicly available information about a non-U.S. issuer,
and non-U.S. issuers generally are not subject to uniform accounting and
financial reporting standards, practices and requirements comparable to
those applicable to U.S. issuers.
Because stock certificates and other evidences of ownership of such
securities usually are held outside the United States, the Fund will be
subject to additional risks which include possible adverse political and
economic developments, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions that might
adversely affect the payment of principal, interest and dividends on the
foreign securities or might restrict the payment of principal, interest and
dividends to investors located outside the country of the issuers, whether
from currency blockage or otherwise. Custodial expenses for a portfolio of
non-U.S. securities generally are higher than for a portfolio of U.S.
securities.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. Some currency exchange
costs may be incurred when the Fund changes investments from one
country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing
the cost of such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale. Income received
by the Fund from sources within foreign countries may be reduced by
withholding or other taxes imposed by such countries. Tax conventions
between certain countries and the United States, however, may reduce or
eliminate such taxes. All such taxes paid by the Fund will reduce its net
income available for distribution to shareholders.
FOREIGN CURRENCY EXCHANGE - Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by
the forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or perceived
changes in interest rates and other
(9)
complex factors,
as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the United States or abroad.
The foreign currency market offers less protection against defaults in
the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
LOWER RATED SECURITIES - Investors should carefully consider the
relative risks of investing in the higher yielding (and, therefore, higher
risk) debt securities (commonly known as junk bonds) in which the Fund
may invest. These are securities such as those rated Ba by Moody's or BB
by S&P, Fitch or Duff or as low as Caa by Moody's or CCC by S&P, Fitch or
Duff. They generally are not meant for short-term investing and may be
subject to certain risks with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated fixed-
income securities. Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well assured
and often the protection of interest and principal payments may be very
moderate. Securities rated BB by S&P, Fitch or Duff are regarded as having
predominantly speculative characteristics and, while such obligations
have less near-term vulnerability to default than other speculative grade
debt, they face major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. Securities rated
Caa by Moody's or CCC by S&P, Fitch or Duff are of poor standing and may
be in default or have current identifiable vulnerability to default. Such
obligations, though high yielding, are characterized by great risk. See
"Appendix" in the Fund's Statement of Additional Information for a
general description of Moody's, S&P, Fitch and Duff securities ratings.
Although these ratings may be an initial criterion for selection of
portfolio investments, the Advisers also will evaluate these securities
and the ability of the issuers of such securities to pay interest and
principal. The Fund's ability to achieve its investment objectives may be
more dependent on the Advisers' credit analysis than might be the case for
a fund that invested in higher rated securities. See "Certain Portfolio
Securities-Ratings" above.
The market price and yield of securities rated Ba or lower by Moody's
and BB or lower by S&P, Fitch or Duff are more volatile than those of
higher rated securities. Factors adversely affecting the market price and
yield of these securities will adversely affect the Fund's net asset value.
In addition, the retail secondary market for these securities may be less
liquid than that of higher rated securities; adverse conditions could make
it difficult at times for the Fund to sell certain securities or could result
in lower prices than those used in calculating the Fund's net asset value.
The market values of certain lower rated debt securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates, and tend to be more sensitive to economic conditions than
are higher rated securities. Companies that issue such debt securities
often are highly leveraged and may not have available to them more
traditional methods of financing. Therefore, the risk associated with
acquiring the securities of such issuers generally is greater than is the
case with higher rated securities. See "Investment Objectives and
Policies-Risk Factors-Lower Rated Securities" in the Fund's Statement of
Additional Information.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value is not
fixed and should be expected to fluctuate.
You should be aware that equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities, and
that fluctuations can be pronounced. Changes in the value of the Fund's
securities, regardless of whether the securities are equity or debt, will
result in changes in the value of a share of the Fund and thus the Fund's
total return to investors.
For the portion of the Fund's assets invested in debt securities, you
should be aware that even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price
(10)
fluctuations. The values of fixed-income securities also may be affected
by changes in the credit rating or financial condition of the issuing
entities.
The Fund invests for long-term growth rather than short-term profits;
however, a limited amount of short-term trading can be expected in order
to maintain a flexible portfolio strategy. In addition, the possible need to
realize cash for redemption of Fund shares may make it necessary to sell
securities even though such sales would not otherwise be desirable from
an investment standpoint. Consequently, portfolio turnover may vary from
year to year, as well as within a year. Higher portfolio turnover rates are
likely to result in comparatively greater brokerage commissions.
Moreover, when extraordinary market conditions prevail, investment
strategy may shift rapidly, in which case higher turnover rates can be
expected. The amount of portfolio activity will not be a limiting factor
when making portfolio decisions. Under normal market conditions, the
portfolio turnover rate of the Fund generally will be less than 100%. See
"Portfolio Transactions" in the Statement of Additional Information.
Investment decisions for the Fund are made independently from those of
other investment companies or accounts advised by Dreyfus or Sarofim.
However, if such other investment companies or accounts are prepared to
invest in, or desire to dispose of, securities of the type in which the Fund
invests at the same time as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of
the position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER - Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of November 30, 1993, Dreyfus managed or administered
approximately $78 billion in assets for more than 1.9 million investor
accounts nationwide.
Dreyfus supervises and assists in the overall management of the Fund's
affairs under an Investment Advisory Agreement with the Fund, subject to
the overall authority of the Fund's Board of Directors in accordance with
Maryland law.
Dreyfus has engaged Sarofim, located at Two Houston Center, Suite
2907, Houston, Texas 77010, to serve as the Fund's sub-investment
adviser. Sarofim, a registered investment adviser was formed in 1958. As
of November 30, 1993, Sarofim managed approximately $25 billion in
assets for two other registered investment companies and numerous
separate discretionary accounts.
Sarofim, subject to the supervision and approval of Dreyfus, provides
investment advisory assistance and the day-to-day management of the
Fund's investments, as well as investment research and statistical
information, under a Sub-Investment Advisory Agreement with Dreyfus,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law.
The Fund's primary investment officer is Fayez Sarofim. He has held
that position since the Fund's inception. Mr. Sarofim founded Fayez
Sarofim & Co. in 1958. The Fund's other investment officers are identified
under "Management of the Fund" in the Fund's Statement of Additional
Information. Dreyfus and Sarofim also provide research services for the
Fund as well as other funds advised by Dreyfus or Sarofim, respectively,
through a professional staff of portfolio managers and security analysts.
Under the Investment Advisory Agreement, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of .75 of 1% of the value of the
Fund's average daily net assets. For the period from July 15, 1993
(commencement of operations) through October 31, 1993, no advisory fee
was paid to Dreyfus pursuant to an undertaking in effect.
Under the Sub-Investment Advisory Agreement, Dreyfus has agreed to
pay Sarofim an annual fee, payable monthly, as set forth below:
(11)
ANNUAL FEE AS A PERCENTAGE OF
AVERAGE DAILY
TOTAL ASSETS NET ASSETS
- ------------ -----------------------------
0 to $25 million......................................... .11 of 1%
$25 million to $75 million............................... .18 of 1%
$75 million to $200 million.............................. .22 of 1%
$200 million to $300 million............................. .26 of 1%
$300 million or more..................................... .275 of 1%
For the period from July 15, 1993 (commencement of operations) through
October 31, 1993, no sub-advisory fee was paid by Dreyfus to Sarofim
pursuant to an agreement in effect between Dreyfus and Sarofim.
EXPENSES - All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by Dreyfus and/or
Sarofim. The expenses borne by the Fund include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees of Directors
who are not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of Dreyfus or Sarofim or their affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification
fees, advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining corporate existence, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and corporate meetings, and any
extraordinary expenses.
The advisory fee paid by the Fund is higher than that paid by most other
investment companies. From time to time, Dreyfus may waive receipt of
its fees and/or voluntarily assume certain expenses of the Fund, which
would have the effect of lowering the overall expense ratio of the Fund
and increasing yield to investors at the time such amounts are waived or
assumed, as the case may be. The Fund will not pay Dreyfus at a later time
for any amounts it may waive, nor will the Fund reimburse Dreyfus for any
amounts it may assume.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from its own monies, including past
profits but not including the investment advisory fee paid by the Fund.
Dreyfus Service Corporation may pay part or all of these payments to
securities dealers or others for servicing and distribution.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT - The Bank
of New York, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian. The Shareholder Services Group, Inc., a subsidiary of
First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-
9671, is the Fund's Transfer and Dividend Disbursing Agent (the "Transfer
Agent").
HOW TO BUY FUND SHARES
GENERAL - The Fund's distributor is Dreyfus Service Corporation, a
wholly-owned subsidiary of Dreyfus located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
Fund shares may be purchased only by clients of certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers") and other industry professionals (collectively, "Service
Agents"), except that full-time or part-time employees of Dreyfus or any
of its affiliates or subsidiaries, directors of Dreyfus, Board members of a
fund advised by Dreyfus, including members of the Fund's Board, or the
spouse or minor child of any of the foregoing may purchase Class A shares
directly through Dreyfus Service Corporation. Subsequent purchases may
be sent directly to the Transfer Agent or your Service Agent. Service
Agents may receive different levels of compensation for selling different
Classes of shares. Management understands that some Service Agents may
impose certain conditions on their clients which are different from those
described in 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 Shareholder
Services Plan. Each Service Agent has agreed to transmit to its clients a
schedule of such fees. You should consult your Service Agent in this
regard.
(12)
When purchasing Fund shares, you must specify whether the purchase is
for Class A or Class B shares. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $1,000. Subsequent investments
must be at least $100. The initial investment must be accompanied by the
Fund's Account Application.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable
to "Premier Growth Fund, Inc." Payments to open new accounts which are
mailed should be sent to Premier Growth Fund, Inc., P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with 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 and sent to Premier
Growth Fund, Inc., P.O. Box 105, Newark, New Jersey 07101-0105. Neither
initial nor subsequent investments should be made by third party check.
Wire payments may be made if your 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 The Bank of New York, DDA #8900117826/Premier
Growth Fund, Inc. - Class A shares, or DDA #8900115262/Premier Growth
Fund, Inc. - Class B shares, as the case may be, for purchase of 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. If your
initial purchase of Fund shares is by wire, please call 1-800-645-6561
after completing your wire payment to obtain your Fund account number.
Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner
from your bank. All payments should be made in U.S. dollars and, to avoid
fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear.
The Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS
"1111."
Fund shares are sold on a continuous basis. Net asset value per share of
each Class is determined as of the close of trading on the floor of the New
York Stock Exchange (currently 4:00 p.m., New York time), on each day the
New York Stock Exchange is open for business. Net asset value per share of
each Class is computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of assets less liabilities) by the
total number of shares of such Class outstanding. The Fund's investments
are valued based on market value or, where market quotations are not
readily available, based on fair value as determined in good faith by the
Fund's Board of Directors. For further information regarding the methods
employed in valuing the Fund's investments, see "Determination of Net
Asset Value" in the Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, 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").
If an order is received in proper form by the Transfer Agent or other agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on a business day, Fund shares will be
purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on that day.
Otherwise, Fund shares will be purchased at the public offering price
(13)
determined as of the close of trading on the floor of the New York
Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by the close
of trading on the floor of the New York Stock Exchange on any business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealer's responsibility to transmit orders so that they will be received by
Dreyfus Service Corporation before the close of its business day.
CLASS A SHARES - The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
-------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
- --------------------- ------------- --------------- --------------------
<S> <C> <C> <C>
Less than $50,000...................... 4.50 4.70 4.25
$50,000 to less than $100,000.......... 4.00 4.20 3.75
$100,000 to less than $250,000......... 3.00 3.10 2.75
$250,000 to less than $500,000......... 2.50 2.60 2.25
$500,000 to less than $1,000,000....... 2.00 2.00 1.75
$1,000,000 to less than $3,000,000..... 1.00 1.00 1.00
$3,000,000 to less than $5,000,000..... .50 .50 .50
$5,000,000 and over.................... .25 .25 .25
</TABLE>
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with
Dreyfus Service Corporation pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of
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 net asset value, provided that they have
furnished Dreyfus Service Corporation with such information as it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time
employees are eligible to purchase Class A shares at net asset value. In
addition, Class A shares are offered at net asset value to full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries,
directors of Dreyfus, Board members of a fund advised by Dreyfus,
including members of the Fund's Board, or the spouse or minor child of any
of the foregoing.
Class A shares are offered at net asset value without a sales load to
employees participating in 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 initial investment in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). The determination of the number of employees eligible for
participation in a plan or program shall be made on the date Class A
shares are first purchased by or on behalf of employees participating in
such plan or program and on each subsequent January 1st. Dreyfus Service
Corporation may pay dealers a fee of up to .5% of the amount invested
through such dealers in Class A shares at net asset value by employees
participating in Eligible Benefit Plans. All present holdings of shares of
funds in the Dreyfus Family of Funds by Eligible Benefit Plans will be
aggregated to determine the fee payable with respect to each such
purchase of Fund shares. Dreyfus Service Corporation reserves the right to
cease paying these fees at any time. Dreyfus Service Corporation 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.
(14)
Class A shares also may be purchased (including by exchange) at net asset
value without a sales load for Dreyfus-sponsored IRA "Rollover Accounts"
with the distribution proceeds from a qualified retirement plan or a
Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) satisfied the requirements set forth under either clause
(i) or clause (ii) in the preceding paragraph and all or a portion of such
plan's assets were invested in funds in the Dreyfus Family of Funds or
certain other products made available by Dreyfus Service Corporation to
such plans, or (b) invested all of its assets in certain funds in the Dreyfus
Family of Funds or certain other products made available by Dreyfus
Service Corporation to such plans.
For the period from July 15, 1993 (commencement of operations)
through October 31, 1993, Dreyfus Service Corporation retained $2,449
from sales loads on Class A shares. The dealer reallowance may be
changed from time to time but will remain the same for all dealers.
Dreyfus Service Corporation, at its expense, may provide additional
promotional incentives to dealers that sell shares of funds advised by The
Dreyfus Corporation which are sold with a sales load, such as the Fund. In
some instances, those incentives may be offered only to certain dealers
who have sold or may sell significant amounts of shares. Dealers receive a
larger percentage of the sales load from Dreyfus Service Corporation than
they receive for selling most other funds.
CLASS B SHARES - The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is imposed
at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Fund
Shares." Dreyfus Service Corporation compensates certain Service Agents
for selling Class B shares at the time of purchase from Dreyfus Service
Corporation's own assets. The proceeds of the CDSC and the distribution
fee, in part, are used to defray these expenses. For the period from July
15, 1993 (commencement of operations) through October 31, 1993, $256
was retained by Dreyfus Service Corporation from the CDSC on Class B
shares.
RIGHT OF ACCUMULATION - CLASS A SHARES - Reduced sales loads apply
to any purchase of Class A shares, shares of other funds in the Family of
Premier Funds, shares of certain other funds purchased through an
exchange from any funds in the Family of Premier 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
Statement of Additional Information, where the aggregate investment,
including such purchase, is $50,000 or more. If, for example, you
previously purchased and still hold Class A shares of the Fund, or 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 an Eligible Fund having a current value of $20,000, the sales load
applicable to the subsequent purchase would be reduced to 4% 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
Service Agent must notify Dreyfus Service Corporation 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, maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Fund's
Account Application or have filed an Optional Services Form with the
Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House 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 by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306.
(15)
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents
may impose certain conditions on their clients which are different from
those described in this Prospectus. You should consult your Service Agent
in this regard.
EXCHANGE PRIVILEGE - The Exchange Privilege enables clients of
certain Service Agents to purchase, in exchange for Class A or Class B
shares of the Fund, shares of the same Class in certain other funds
managed or administered 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. If you desire to use this
Privilege, you should consult your Service Agent or Dreyfus Service
Corporation to determine if it is available and whether any conditions are
imposed on its use.
To use this Privilege, you or your Service Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing, by wire or by
telephone. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-
4060 or, if you are calling from overseas, call 1-401-455-3306. See "How
to Redeem Fund Shares-Procedures." 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 from Dreyfus
Service Corporation. 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.
Telephone exchanges may be made only if the appropriate "YES" box has
been checked on the Account Application, or a separate signed Optional
Services Form is on file with the Transfer Agent. 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: Exchange Privilege,Wire Redemption
Privilege, Telephone Redemption Privilege, TELETRANSFER Privilege and
the dividend/capital gain distribution option (except for the Dividend
Sweep Privilege) selected by the investor.
Shares will be exchanged at the next determined net asset value;
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 shares at the time of an exchange; however, Class B 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 shares will be calculated from the
date of the initial purchase of the Class B 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 of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to
the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must
notify Dreyfus Service Corporation. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No
fees currently are charged shareholders directly in connection with
exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal fee in accordance
with rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange request in whole or in part.
The Exchange Privilege 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 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 Class A or Class B shares of the Fund, in shares of the
same Class of other funds in the Premier Family of Funds or certain other
funds in the Dreyfus Family of
(16)
Funds of which you
are currently an investor. The amount you designate, which can be
expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth
day of the month according to the schedule you have selected. Shares will
be exchanged at the then-current net asset value; however, a sales load
may be charged with respect to exchanges of Class A shares into funds
sold with a sales load. No CDSC will be imposed on Class B shares at the
time of an exchange; however, Class B 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 shares will be calculated from the date of the initial
purchase of the Class B shares exchanged. See "Shareholder Services" in
the Statement of Additional Information. 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 Premier Growth Fund, Inc., 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 a
taxable gain or loss. For more information concerning this Privilege and
the funds in the Premier Family of Funds or Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain an Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
AUTOMATIC ASSET BUILDER - 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
Automated Clearing House member may be so designated. To establish an
AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form
from Dreyfus Service Corporation. You may cancel your participation in
this Privilege or change the amount of purchase at any time by mailing
written notification to Premier Growth Fund, Inc., P.O. Box 6587,
Providence, Rhode Island 02940-6587, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
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. 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 the Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. 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.
DIVIDEND SWEEP PRIVILEGE - Dividend Sweep Privilege 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
Premier Family of Funds or the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-
current net asset value; 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 Statement of
Additional Information. For more information concerning this Privilege
and the funds in the
(17)
Premier Family of Funds or the
Dreyfus Family of Funds eligible to participate in this Privilege, or to
request a Dividend Sweep Authorization Form, please call toll free 1-800-
645-6561. You may cancel this Privilege by mailing written notification
to Premier Growth Fund, Inc., P.O. Box 6587, Providence, Rhode Island
02940-6587. To select a new fund after cancellation, you must submit a
new authorization form. Enrollment in or cancellation of this Privilege is
effective three business days following receipt. This Privilege is
available only for existing accounts and may not be used to open new
accounts. Minimum subsequent investments do not apply. The Fund may
modify or terminate this Privilege 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 this Privilege.
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 application for the Automatic Withdrawal Plan can
be obtained from Dreyfus Service Corporation. There is a service charge of
50 cents for each withdrawal check. The Automatic Withdrawal Plan may be
ended at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Class B shares withdrawn pursuant to the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Purchases of additional Class A
shares where a sales load is imposed concurrently with withdrawals of
Class A shares generally are undesirable.
RETIREMENT PLANS - The Fund offers a variety of pension and profit-
sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers toll free:
For Keogh Plans, please call 1-800-358-5566.
For IRAs and IRA "Rollover Accounts," please call 1-800-645-6561.
For SEP-IRAs, 401(k) Salary Reduction Plans, and 403(b)(7) Plans,
please call 1-800-322-7880.
LETTER OF INTENT - CLASS A SHARES - By signing a Letter of Intent
form, available from Dreyfus Service Corporation, 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.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your Class A or Class B shares
at any time. Redemption requests should be transmitted to the Transfer
Agent as described below. When a request is received in proper form, the
Fund will redeem the shares at the next determined net asset value as
described below. If you hold Fund
(18)
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 Service Agent.
The Fund imposes no charges (other than any applicable CDSC with respect
to Class B shares) when shares are redeemed directly through Dreyfus
Service Corporation. Service Agents may charge a nominal 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 net asset value.
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 Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO
THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR 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 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 45 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 Dreyfus Service Corporation is imposed on any redemption of Class B
shares which reduces the current net asset value of your Class B shares to
an amount which is lower than the dollar amount of all payments by you
for the purchase of Class B shares of the Fund held by you at the time of
redemption. No CDSC will be imposed to the extent that the net asset
value of the Class B shares redeemed does not exceed (i) the current net
asset value of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the net asset value of
your Class B shares above the dollar amount of all your payments for the
purchase of Class B shares of the Fund held by you at the time of
redemption.
If the aggregate value of Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be
applied to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years 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:
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
(19)
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends
and distributions; then of amounts representing the increases in net asset
value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding six years; then of
amounts representing the cost of shares purchased six years prior to the
redemption; and finally, of amounts representing the cost of shares held
for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 a share
for a cost of $1,000. Subsequently, the shareholder acquired 5 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 net asset value had
appreciated to $12 per share, the value of the investor's shares would be
$1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
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 Internal Revenue Code of 1986, as amended (the
"Code"), of the shareholder, (b) redemptions by employees participating in
Eligible Benefit Plans, (c) redemptions as a result of a combination of any
investment company with the Fund by merger, acquisition of assets or
otherwise, (d) a distribution following retirement under a tax-deferred
retirement plan or upon attaining age 701/2 in the case of an IRA or Keogh
plan or custodial account pursuant to Section 403(b) of the Code, and (e)
redemptions by such shareholders as the Securities and Exchange
Commission or its staff may permit. If the Fund's Directors determine to
discontinue the waiver of the CDSC, the disclosure in the Fund's
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 Fund's 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 Service Agent must notify Dreyfus
Service Corporation. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES - You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, through the
TELETRANSFER Privilege or, if you are a client of a Selected Dealer,
through the Selected Dealer. If you have given your Service Agent
authority to instruct the Transfer Agent to redeem shares and to credit
the proceeds of such redemptions to a designated account at your Service
Agent, you may redeem shares only in this manner and in accordance with
the regular redemption procedure described below. If you wish to use the
other redemption methods described below, you must arrange with your
Service Agent for delivery of the required application(s) to the Transfer
Agent. Other redemption procedures may be in effect for clients of certain
Service Agents. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities.
Your redemption request may direct that the redemption proceeds be
used to purchase shares of other funds advised or administered by Dreyfus
that are not available through the Exchange Privilege. The applicable CDSC
will be charged upon the redemption of Class B shares. Your redemption
proceeds will be invested in shares of the other fund on the next business
day. Before you make such a request, you must obtain and should review a
copy of the current prospectus of the fund being purchased. Prospectuses
may be obtained from Dreyfus Service Corporation. The prospectus will
contain information concerning minimum investment requirements and
other conditions that may apply to your purchase.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed an Optional Services Form with the Transfer Agent.
(20)
If you select the TELETRANSFER Privilege or telephone exchange privilege,
you authorize the Transfer Agent to act on telephone instructions from
any person representing himself or herself to be you, or a representative
of your Service Agent, and reasonably believed by the Transfer Agent to be
genuine. 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 TELETRANSFER redemption or an exchange of Fund shares. In such
cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your redemption request being processed at a later time than it would
have been if TELETRANSFER redemption had been used. During the delay,
the Fund's net asset value may fluctuate.
REGULAR REDEMPTION - Under the regular redemption procedure, you
may redeem shares by written request mailed to Premier Growth Fund,
Inc., P.O. Box 6587, Providence, Rhode Island 02940-6587. Written
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.
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 redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed
an Optional Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House member may
be so designated. Redemption proceeds will be on deposit in your account
at an Automated Clearing House 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. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of
such requests. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER - If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that it
is received by the Transfer Agent prior to the close of trading on the floor
of the New York Stock Exchange (currently 4:00 p.m., New York time), the
redemption request will be effective on that day. If a redemption request
is received by the Transfer Agent after the close of trading on the floor of
the New York Stock Exchange, the redemption request will be effective on
the next business day. It is the responsibility of the Selected Dealer to
transmit a request so that it is received in a timely manner. The proceeds
of the redemption are credited to your account with the Selected Dealer.
See "How to Buy Fund Shares" for a discussion of additional conditions or
fees that may be imposed upon redemption.
(21)
In addition, Dreyfus Service Corporation will accept orders from Selected
Dealers with which it has sales agreements for the repurchase of shares
held by shareholders. Repurchase orders received by dealers by the close
of trading on the floor of the New York Stock Exchange on any business day
and transmitted to Dreyfus Service Corporation prior to the close of its
business day (normally 5:15 p.m., New York time) are effected at the price
determined as of the close of trading on the floor of the New York Stock
Exchange on that day. Otherwise, the shares will be redeemed at the next
determined net asset value. It is the responsibility of the Selected Dealer
to transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE - CLASS A - You may reinvest up to the
number of Class A shares you have redeemed, within 30 days of
redemption, at the then-prevailing net asset value without a sales load, or
reinstate your account for the purpose of exercising the Exchange
Privilege. The Reinvestment Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The Class A and Class B shares are subject to a Shareholder Services Plan
and the Class B shares only are subject to a Distribution Plan.
DISTRIBUTION PLAN - Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, the Fund pays
Dreyfus Service Corporation for advertising, marketing and distributing
Class B shares at an annual rate of .75 of 1% of the value of the average
daily net assets of Class B. Under the Distribution Plan, Dreyfus Service
Corporation may make payments to Service Agents in respect of these
services. Dreyfus Service Corporation determines the amounts to be paid
to Service Agents. Service Agents receive such fees in respect of the
average daily value of Class B shares owned by their clients. From time to
time, Dreyfus Service Corporation may defer or waive receipt of fees
under the Distribution Plan while retaining the ability to be paid by the
Fund under the Distribution Plan thereafter. The fees payable to Dreyfus
Service Corporation under the Distribution Plan for advertising, marketing
and distributing Class B shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN - Under the Shareholder Services Plan,
the Fund pays Dreyfus Service Corporation for the provision of certain
services to the holders of Class A and Class B shares a fee at the annual
rate of .25 of 1% of the value of the average daily net assets of Class A
and Class B. 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
services related to the maintenance of shareholder accounts. Dreyfus
Service Corporation may make payments to Service Agents in respect of
these services. Dreyfus Service Corporation determines the amounts to be
paid to Service Agents. Each Service Agent is required to disclose to its
clients any compensation payable to it by the Fund pursuant to the
Shareholder Services Plan and any other compensation payable by their
clients in connection with the investment of their assets in Class A or
Class B shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year, but the Fund
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 Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional Fund shares of the same Class from which they were paid at net
asset value without a sales load. All expenses are accrued daily and
deducted before declaration of dividends to investors. Dividends paid by
each Class will be calculated at the same time and in the same manner and
will be of the same amount, except that the expenses attributable solely
to Class A or Class B will be borne exclusively by such Class. Class B
shares will receive lower per share dividends than Class A shares because
of the higher expenses borne by Class B. See "Fee Table."
(22)
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds, paid by the
Fund will be taxable to U.S. shareholders as ordinary income whether
received in cash or reinvested in Fund shares. Distributions from net
realized long-term securities gains of the Fund will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their Fund shares and
whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Dividends and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and gains
from the sale or other disposition of market discount bonds, paid by the
Fund to a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign investor claims
the benefit of a lower rate specified in a tax treaty. Distributions from
net realized long-term securities gains paid by the Fund to a foreign
investor as well as the proceeds of any redemptions from a foreign
investor's account, regardless of the extent to which gain or loss may be
realized, generally will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to backup withholding, as
described below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
The Code provides for the "carryover" of some or all of the sales load
imposed on Class A shares if an investor exchanges his Class A shares for
shares of another fund advised or administered by The Dreyfus Corporation
within 91 days of purchase and such other fund reduces or eliminates its
otherwise applicable sales load for the purpose of the exchange. In this
case, the amount of the sales load charged the investor for Class A shares,
up to the amount of the reduction of the sales load charge on the exchange,
is not included in the basis of the investor's Class A shares for purposes
of computing gain or loss on the exchange, and instead is added to the
basis of the fund shares received on the exchange.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify either
that the TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal period ended October 31, 1993 as a "regulated investment company"
under the Code. The Fund intends to continue to qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax to
the extent its earnings are distributed in accordance with applicable
provisions of the Code. In addition, the Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
(23)
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of shares will be
calculated on the basis of average annual total return. Advertisements
also may include performance calculated on the basis of total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made
by the Fund during the measuring period were reinvested in shares of the
same Class. Class A total return figures include the maximum initial sales
charge and Class B total return figures include any applicable CDSC. These
figures also take into account any applicable service and distribution fees.
As a result, at any given time, the performance of Class B should be
expected to be lower than that of Class A. Performance for each Class will
be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund 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 of Class A and Class B for
one, five and ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated. Computations of
average annual total return for periods of less than one year represent an
annualization of the Fund's actual total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and 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
maximum offering price per share at the beginning of the period.
Advertisements may include the percentage rate of total return or may
include the value of a hypothetical investment at the end of the period
which assumes the application of the percentage rate of total return.
Total return also may be calculated by using the net asset value per share
at the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B shares.
Such calculations do not reflect the deduction of the applicable sales
charge which, if reflected, would reduce the performance quoted.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type
and quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Morgan Stanley Capital International World
Index, Standard & Poor's 500 Composite Stock Price Index, Standard &
Poor's MidCap 400 Index, the Dow Jones Industrial Average, Morningstar,
Inc. and other industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on February 5, 1993, and
commenced operations on July 15, 1993. The Fund is authorized to issue
300 million shares of Common Stock, par value $.001 per share. The Fund's
shares are classified into two classes. Each share has one vote and
shareholders will vote in the aggregate and not by class except as
otherwise required by law or when class voting is permitted by the Board
of Directors. However, holders of Class A and Class B shares will be
entitled to vote on matters submitted to shareholders pertaining to the
Shareholder Services Plan and only holders of Class B shares will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
Unless otherwise required by the Investment Company Act of 1940,
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
(24)
the election of Directors or the appointment of auditors. However,
pursuant to the Fund's By-Laws, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Fund to hold a special
meeting of shareholders for purposes of removing a Director from office
or for any other purpose. Fund shareholders may remove a Director by the
affirmative vote of a majority of the Fund'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.
While there is no current intention to do so, the Fund may invest all of
its assets in the securities of a single open-end management investment
company with substantially the same fundamental investment objectives,
policies and investment restrictions as the Fund.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made to your Service 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.
(25)
(Copyright) Dreyfus Service Corporation, 1994
Distributor 070pros1
(Dreyfus Lion Logo)
Premier Growth Fund, Inc.
Prospectus
PREMIER GROWTH FUND, INC.
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 3, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier Growth Fund, Inc. (the "Fund"), dated January 3, 1994, as it may
be revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144.
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
adviser and administrator. Dreyfus has engaged Fayez Sarofim & Co.
("Sarofim") to serve as the Fund's sub-investment adviser and to provide
day-to-day management of the Fund's investments, subject to the supervision
of Dreyfus. Dreyfus and Sarofim are referred to collectively as the
"Advisers."
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of Dreyfus, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
----
Investment Objectives and Management Policies. . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . B-7
Investment Advisory Agreements . . . . . . . . . . . . . . B-10
Distribution Plan and Shareholder Services Plan. . . . . . B-12
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . B-13
Redemption of Fund Shares. . . . . . . . . . . . . . . . . B-15
Shareholder Services . . . . . . . . . . . . . . . . . . . B-16
Determination of Net Asset Value . . . . . . . . . . . . . B-18
Dividends, Distributions and Taxes . . . . . . . . . . . . B-20
Portfolio Transactions . . . . . . . . . . . . . . . . . . B-22
Performance Information. . . . . . . . . . . . . . . . . . B-23
Information About the Fund . . . . . . . . . . . . . . . . B-24
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . B-24
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . B-25
Financial Statements . . . . . . . . . . . . . . . . . . . B-32
Report of Independent Auditors . . . . . . . . . . . . . . B-41
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the
Fund."
Bank Obligations. Domestic commercial banks organized under Federal law
are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System
only if they elect to join. In addition, state banks whose certificates of
deposit ("CDs") may be purchased by the Fund are insured by the FDIC
(although such insurance may not be of material benefit to the Fund,
depending on the principal amount of the CDs of each bank held by the Fund)
and are subject to Federal examination and to a substantial body of Federal
law and regulation. As a result of Federal or state laws and regulations,
domestic branches of domestic banks whose CDs may be purchased by the Fund
generally are required, among other things, to maintain specified levels of
reserves, are limited in the amounts which they can loan to a single
borrower and are subject to other regulation designed to promote financial
soundness. However, not all of such laws and regulations apply to the
foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks, such as
CDs and time deposits ("TDs"), may be general obligations of the parent
banks in addition to the issuing branch, or may be limited by the terms of
a specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and
other taxes on interest income. These foreign branches and subsidiaries
are not necessarily subject to the same or similar regulatory requirements
that apply to domestic banks, such as mandatory reserve requirements, loan
limitations, and accounting, auditing and financial record keeping
requirements. In addition, less information may be publicly available
about a foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch
is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may be required
to: (1) pledge to the regulator, by depositing assets with a designated
bank within the state, a certain percentage of their assets as fixed from
time to time by the appropriate regulatory authority; and (2) maintain
assets within the state in an amount equal to a specified percentage of the
aggregate amount of liabilities of the foreign bank payable at or through
all of its agencies or branches within the state. The deposits of Federal
and State Branches generally must be insured by the FDIC if such branches
take deposits of less than $100,000.
Foreign Currency Transactions. If the Fund enters into a currency
transaction, it shall deposit if so required by applicable regulations,
with its custodian cash or readily marketable securities in a segregated
account of the Fund in an amount at least equal to the value of the Fund's
total assets committed to the consummation of the forward contract. If the
value of the securities placed in the segregated account declines,
additional cash or securities will be placed in the account so that the
value of the account will equal the amount of the Fund's commitment with
respect to the contract.
At or before the maturity of a forward contract, the Fund either may sell
a security and make delivery of the currency, or retain the security and
offset its contractual obligation to deliver the currency by purchasing a
second contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is obligated to
deliver. If the Fund retains the security and engages in an offsetting
transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or loss to the extent movement has occurred
in forward contract prices. Should forward prices decline during the
period between the Fund's entering into a forward contract for the sale of
a currency and the date it enters into an offsetting contract for the
purchase of the currency, the Fund will realize a gain to the extent the
price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the
Fund will suffer a loss to the extent the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period
and the market conditions then prevailing. Because transactions in
currency exchange usually are conducted on a principal basis, no fees or
commissions are involved. The use of forward currency exchange contracts
does not eliminate fluctuations in the underlying prices of the securities,
but it does establish a rate of exchange that can be achieved in the
future. If a devaluation generally is anticipated, the Fund may not be
able to contract to sell the currency at a price above the devaluation
level it anticipates.
Risk Factors--Lower Rated Securities. The Fund is permitted to invest in
securities rated below Baa by Moody's Investors Service, Inc. ("Moody's")
and below BBB by Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") and Duff & Phelps, Inc. ("Duff") and as low as Caa
by Moody's or CCC by S&P, Fitch or Duff. Such securities, though higher
yielding, are characterized by risk. See in the Prospectus "Description of
the Fund--Risk Factors--Lower Rated Securities" for a discussion of certain
risks and the "Appendix" for a general description of Moody's, S&P, Fitch
and Duff ratings. Although ratings may be useful in evaluating the safety
of interest and principal payments, they do not evaluate the market value
risk of these securities. The Fund will rely on the Advisers' judgment,
analysis and experience in evaluating the creditworthiness of an issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These securities are
considered by S&P, Moody's, Fitch and Duff, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation and generally will involve more
credit risk than securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of
default by the issuer is significantly greater for the holders of these
securities because such securities generally are unsecured and often are
subordinated to other creditors of the issuer.
Because there is no established retail secondary market for many of these
securities, the Fund anticipates that such securities could be sold only to
a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is
not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues when
necessary to meet the Fund's liquidity needs or in response to a specific
economic event such as a deterioration in the creditworthiness of the
issuer. The lack of a liquid secondary market for certain securities also
may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's securities and calculating
its net asset value. Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and liquidity
of these securities. In such cases, judgment may play a greater role in
valuation because less reliable, objective data may be available.
These securities may be particularly susceptible to economic downturns.
It is likely that any economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.
The Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with the Distributor or any other persons concerning the
acquisition of such securities, and the Advisers will review carefully the
credit and other characteristics pertinent to such new issues.
Lower rated zero coupon securities involve special considerations. The
credit risk factors pertaining to lower rated securities also apply to
lower rated zero coupon securities. Such zero coupon securities carry an
additional risk in that, unlike securities which pay interest throughout
the period to maturity, the Fund will realize no cash until the cash
payment date unless a portion of such securities are sold and, if the
issuer defaults, the Fund may obtain no return at all on its investment.
See "Dividends, Distributions and Taxes."
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 10 as fundamental policies. These restrictions cannot
be changed with respect to the Fund without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended (the
"Act")) of the Fund's outstanding voting shares. Investment restrictions
numbered 11 through 17 are not fundamental policies and may be changed by a
vote of a majority of the Fund's Directors at any time. The Fund may not:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may
be invested, and securities issued or guaranteed by the U.S. Government, or
its agencies or instrumentalities may be purchased, without regard to any
such limitation.
2. Hold more than 10% of the outstanding voting securities of any single
issuer. This Investment Restriction applies only with respect to 75% of
the Fund's total assets.
3. Concentrate its investments in any particular industry or industries,
except that the Fund may invest up to 25% of the value of its total assets
in a single industry, provided that, when the Fund has adopted a defensive
posture, there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase
and sell securities that are secured by real estate or issued by companies
that invest or deal in real estate.
6. Borrow money, except to the extent permitted under the Act. For
purposes of this Investment Restriction, the entry into options, forward
contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes shall not constitute borrowing.
7. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Fund's Board of Directors.
8. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
9. Issue any senior security (as such term is defined in Section 18(f)
of the Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6 and 13 may be deemed to give rise to a senior
security.
10. Purchase securities on margin, but the Fund may make margin deposits
in connection with transactions in options, forward contracts, futures
contracts, including those relating to indexes, and options on futures
contracts or indexes.
11. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
12. Invest in the securities of a company for the purpose of exercising
management or control, but the Fund will vote the securities it owns in its
portfolio as a shareholder in accordance with its views.
13. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with writing covered put and call
options and the purchase of securities on a when-issued or forward
commitment basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts, futures contracts,
including those relating to indexes, and options on futures contracts or
indexes.
14. Purchase, sell or write puts, calls or combinations thereof, except
as described in the Fund's Prospectus and Statement of Additional
Information.
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
16. Invest in securities of other investment companies, except to the
extent permitted under the Act.
17. Purchase or retain the securities of any issuer if the officers or
Directors of the Fund or the Advisers who own beneficially more than 1/2 of
1% of the securities of such issuer together own beneficially more than 5%
of the securities of such issuers.
As a fundamental policy, the Fund may invest, notwithstanding any other
investment restriction (whether or not fundamental), all of the Fund's
assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objectives, policies and
restrictions as the Fund.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
While not a fundamental policy, the Fund has undertaken to comply with the
following limitations for the purpose of registering Fund shares for sale
in certain states: The Fund will not invest in real estate limited
partnerships or in mineral leases, and will not invest more than 2% of its
assets in warrants not listed on the New York Stock Exchange or the
American Stock Exchange.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to their
principal business occupations during at least the last five years, are
shown below. Each Director who is deemed to be an "interested person" of
the Fund, as defined in the Act, is indicated by an asterisk.
Directors and Officers of the Fund
CLIFFORD L. ALEXANDER, JR., Director. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander
served as Secretary of the Army and Chairman of the Board of the Panama
Canal Company, and from 1975 to 1977, he was a member of the Washington,
D.C. law firm of Verner, Liipfert, Bernhard, McPherson and Alexander. He
is a director of American Home Products Corporation, The Dun & Bradstreet
Corporation, MCI Communications Corporation, Mutual of America Life
Insurance Company and Equitable Resources, Inc., a producer and
distributor of natural gas and crude petroleum. His address is 400 C
Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Director. Professor of Law, New York University School of Law.
Professor Davis has been a member of the New York University law faculty
since 1983. Prior to that time, she served for three years as a judge in
the courts of New York State; was engaged for eight years in the practice
of law, working in both corporate and non-profit sectors; and served for
two years as a criminal justice administrator in the government of the
City of New York. She writes and teaches in the fields of evidence,
constitutional theory, family law, social sciences and the law, legal
process and professional methodology and training. Her address is c/o New
York University School of Law, 249 Sullivan Street, New York, New York
10011.
*JOSEPH S. DiMARTINO, Director. President, Chief Operating Officer and a
director of Dreyfus, Executive Vice President and a director of the
Distributor and an officer, director or trustee of other investment
companies advised or administered by Dreyfus. He is also a director of
Noel Group, Inc., director and Corporate Member of The Muscular Dystrophy
Association and a Trustee of Bucknell University. His address is 200 Park
Avenue, New York, New York 10166.
ERNEST KAFKA, Director. A physician engaged in private practice specializing
in the psychoanalysis of adults and adolescents. Since 1981, he has
served as an Instructor at the New York Psychoanalytic Institute and,
prior thereto, held other teaching positions. For more than the past five
years, Dr. Kafka has held numerous administrative positions and has
published many articles on subjects in the field of psychoanalysis. His
address is 23 East 92nd Street, New York, New York 10021.
SAUL B. KLAMAN, Director. Chairman and Chief Executive Officer of SBK
Associates, Inc., which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of the
National Council of Savings Institutions until June 1985 and Vice Chairman
of Golembe Associates and BEI Golembe, Inc. until 1989 and Chairman
Emeritus of BEI Golembe, Inc. until 1992. He also served as an Economist
to the Board of Governors of the Federal Reserve System and on several
Presidential Commissions and has held numerous consulting and advisory
positions in the fields of economics and housing finance. His address is
431-B Dedham Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Director. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York City
from September 1979 until March 1984 and Commissioner of the Department of
Housing Preservation and Development of New York City from February 1978
until September 1979. Mr. Leventhal was an associate and then a member
of the New York law firm of Poletti Freidin Prashker Feldman and Gartner
from 1974 to 1978. He was Commissioner of Rent and Housing Maintenance
for New York City from 1972 to 1973. His address is 70 Lincoln Center
Plaza, New York, New York 10023-6583.
*HOWARD STEIN, President and Director. Chairman of the Board and Chief
Executive Officer of Dreyfus, Chairman of the Board of the Distributor and
an officer, director, general partner or trustee of other investment
companies advised and administered by Dreyfus. His address is 200 Park
Avenue, New York, New York 10166.
Each of the "non-interested" Directors is also a director of Dreyfus
Appreciation Fund, Inc., General California Municipal Bond Fund, Inc.,
General Government Securities Money Market Fund, Inc., General Money Market
Fund, Inc., General Municipal Bond Fund, Inc., General Municipal Money
Market Fund, Inc. and General New York Municipal Bond Fund, Inc. and a
trustee of General California Municipal Money Market Fund, General New York
Municipal Money Market Fund, Premier California Insured Municipal Bond
Fund, Premier California Municipal Bond Fund, Premier GNMA Fund, Premier
Municipal Bond Fund, Premier New York Municipal Bond Fund and Premier State
Municipal Bond Fund. Mr. Alexander is also a director of The Dreyfus
Socially Responsible Fund and The Dreyfus Third Century Fund, Inc.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Directors of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Directors who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Directors other
than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
Dreyfus or Sarofim, which totalled $5,750 for the period from July 15, 1993
(commencement of operations) through October 31, 1993 for such Directors as
a group.
Officers of the Fund Not Listed Above
THOMAS A. FRANK, Vice President and Investment Officer. An employee of Dreyfus
and an officer of other investment companies advised and administered by
Dreyfus.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
Dreyfus, Secretary of the Distributor and an officer or director of other
investment companies advised or administered by Dreyfus.
JEFFREY N. NACHMAN, Vice President and Treasurer. Vice President--Mutual Fund
Accounting of Dreyfus and an officer of other investment companies advised
or administered by Dreyfus.
PAUL R. CASTI, Controller. Senior Accounting Manager in the Fund Accounting
Department of Dreyfus and an officer of other investment companies advised
or administered by Dreyfus.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of Dreyfus and
an officer of other investment companies advised or administered by
Dreyfus.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of Dreyfus
and an officer of other investment companies advised or administered by
Dreyfus.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of Dreyfus, the
Distributor and other investment companies advised or administered by
Dreyfus.
The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of the
Fund's shares of common stock outstanding on December 1, 1993.
The following entities owned of record and beneficially 5% or more of the
Fund's Class A shares outstanding as of December 1, 1993: Fayez Sarofim &
Co., Two Houston Center Ste 2907, Houston, Texas 77001 - 28.7%; The Dreyfus
Corporation, 200 Park Avenue Floor 7, New York, New York 10166-0799 -
28.4%.
INVESTMENT ADVISORY AGREEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the
Fund."
Investment Advisory Agreement. Dreyfus supervises investment management
of the Fund pursuant to the Investment Advisory Agreement (the "Advisory
Agreement") dated March 24, 1993 between Dreyfus and the Fund. The
Advisory Agreement is subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the Act) of the Fund's
outstanding voting securities, provided that in either event its
continuance also is approved by a majority of the Fund's Directors who are
not "interested persons" (as defined in the Act) of the Fund or Dreyfus, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement is terminable without penalty, on 60
days' notice, by the Fund's Directors or by vote of the holders of a
majority of the Fund's shares, or, on not less than 90 days' notice, by
Dreyfus. The Advisory Agreement will terminate automatically in the event
of its assignment (as defined in the Act).
The following persons also are officers and/or directors of Dreyfus:
Howard Stein, Chairman of the Board and Chief Executive Officer; Julian M.
Smerling, Vice Chairman of the Board of Directors; Joseph S. DiMartino,
President, Chief Operating Officer and a director; Alan M. Eisner, Vice
President and Chief Financial Officer; David W. Burke, Vice President and
Chief Administrative Officer; Robert F. Dubuss, Vice President; Elie M.
Genadry, Vice President--Institutional Sales; Peter A. Santoriello, Vice
President; Robert H. Schmidt, Vice President; Kirk V. Stumpp, Vice
President--New Product Development; Philip L. Toia, Vice President; John J.
Pyburn and Katherine C. Wickham, Assistant Vice Presidents; Maurice
Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Lawrence
M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
As compensation for Dreyfus' services, the Fund has agreed to pay Dreyfus
a monthly advisory fee at the annual rate of .75 of 1% of the Fund's
average daily net assets. For the period from July 15, 1993 (commencement
of operations) through October 31, 1993, no advisory fee was paid to
Dreyfus pursuant to an undertaking in effect.
Dreyfus pays the salaries of all officers and employees employed by both
it and the Fund or the Fund, maintains office facilities, and furnishes the
Fund statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services. Dreyfus also may make such advertising and promotional
expenditures using its own resources, as it from time to time deems
appropriate.
Sub-Investment Advisory Agreement. Sarofim provides investment advisory
assistance and day-to-day management of the Fund's investments pursuant to
the Sub-Investment Advisory Agreement (the "Sub-Advisory Agreement") dated
March 24, 1993 between Sarofim and Dreyfus. The Sub-Advisory Agreement is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of the Fund's outstanding voting
securities, provided that in either event the continuance also is approved
by a majority of the Fund's Directors who are not "interested persons" (as
defined in the Act) of the Fund or Sarofim, by vote cast in person at a
meeting called for the purpose of voting on such approval. The
Sub-Advisory Agreement is terminable without penalty, (i) by Dreyfus on 60
days' notice, (ii) by the Fund's Board of Directors or by vote of the
holders of a majority of the Fund's shares, or (iii) on not less than 90
days' notice, by the Advisers. The Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the Act).
Under the Sub-Advisory Agreement, Dreyfus has agreed to pay Sarofim a
monthly fee at the annual rate set forth in the Fund's Prospectus. For the
period July 15, 1993 (commencement of operations) through October 31, 1993,
no sub-advisory fee was paid by Dreyfus to Sarofim pursuant to an agreement
in effect between Dreyfus and Sarofim.
The following persons are officers and/or directors of Sarofim: Fayez S.
Sarofim, Chairman of the Board and President; Raye G. White, Executive Vice
President, Secretary, Treasurer and a director; Russell M. Frankel, Russell
B. Hawkins, William K. McGee, Jr., Charles E. Sheedy and Ralph Thomas,
Senior Vice Presidents; and Nancy Daniel, Frank P. Lee and James A.
Reynolds, III, Vice Presidents.
Sarofim provides day-to-day management of the Fund's investments in
accordance with the stated policies of the Fund, subject to the supervision
of Dreyfus and the approval of the Fund's Board of Directors. Dreyfus and
Sarofim provide the Fund with Investment Officers who are authorized by the
Fund's Board of Directors to execute purchases and sales of securities.
The Fund's Investment Officers are Joseph S. DiMartino, Thomas A. Frank,
Russell B. Hawkins, Elaine Rees, Fayez S. Sarofim, Richard C. Shields and
Howard Stein. Dreyfus also maintains a research department with a
professional staff of portfolio managers and securities analysts who
provide research services for the Fund as well as other funds advised by
Dreyfus. All purchases and sales are reported for the Board's review at
the meeting subsequent to such transactions.
Expenses. All expenses incurred in the operation of the Fund are borne by
the Fund except to the extent specifically assumed by Dreyfus and/or
Sarofim. The expenses borne by the Fund include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees of Directors
who are not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of Dreyfus or Sarofim or their affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing services,
costs of maintaining corporate existence, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of shareholders' reports and meetings and any extraordinary expenses.
Class A and Class B shares are subject to an annual service fee for ongoing
personal services relating to shareholder accounts and services related to
the maintenance of shareholder accounts. In addition, Class B shares are
subject to an annual distribution fee for advertising, marketing and
distributing Class B shares pursuant to a distribution plan adopted in
accordance with Rule 12b-1 under the Act. See "Distribution Plan and
Shareholder Services Plan."
Dreyfus has agreed that if in any fiscal year the aggregate expenses of
the Fund, exclusive of interest, taxes, brokerage and (with the prior
written consent of the necessary state securities commissions)
extraordinary expenses, but including the advisory fees paid by the Fund,
exceed the expense limitation of any state having jurisdiction over the
Fund, Dreyfus will bear the excess expense to the extent required by state
law. Such payment, if any, will be estimated daily, and reconciled and
paid on a monthly basis.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan and
Shareholder Services Plan."
Class A and Class B shares are subject to a Shareholder Services Plan and
the Class B shares only are subject to a Distribution Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the Act provides, among other things, than an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
of Directors has adopted such a plan (the "Distribution Plan") with respect
to the Class B shares, pursuant to which the Fund pays the Distributor for
advertising, marketing and distributing the Class B shares. Under the
Distribution Plan, the Distributor may make payments to certain financial
institutions, securities dealers and other financial industry professionals
(collectively, "Service Agents") in respect to these services. The Fund's
Board of Directors believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and the holders of Class B shares.
In some states, certain financial institutions effecting transactions in
Fund shares may be required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Distribution Plan,
and the purposes for which such expenditures were incurred, must be made to
the Directors for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B shares may bear for distribution pursuant to the
Distribution Plan without the approval of the holders of Class B shares and
that other material amendments of the Distribution Plan must be approved by
the Board of Directors, and by the Directors who are not "interested
persons" (as defined in the Act) of the Fund and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution Plan, by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Distribution Plan is subject to annual approval by such
vote of the Directors cast in person at a meeting called for the purpose of
voting on the Distribution Plan. The Distribution Plan was so approved by
the Directors at a meeting held on March 24, 1993. The Distribution 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 Distribution Plan or in any agreements
entered into in connection with the Distribution Plan or by vote of the
holders of a majority of Class B shares. For the period from July 15, 1993
(commencement of operations) through October 31, 1993, no fee was paid by
the Fund, with respect to Class B, under the Distribution Plan pursuant to
an undertaking in effect.
Shareholder Services Plan. The Fund has adopted a Shareholder Services
Plan, pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class A and Class B shares.
A quarterly report of the amounts expended under the Shareholder Services
Plan, and the purposes for which such expenditures were incurred, must be
made to the Directors for their review. In addition, the Shareholder
Services Plan provides that it may not be amended without approval of the
Directors, and by the Directors who are neither "interested persons" (as
defined in the Act) of the Fund nor have any direct or indirect financial
interest in the operation of the Shareholder Services Plan or in any
agreements entered into in connection with the Shareholder Services Plan,
by vote cast in person at a meeting called for the purpose of considering
such amendments. The Shareholder Services 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 Shareholder Services Plan. The
Shareholder Services Plan was so approved on March 24, 1993. The
Shareholder Services Plan is terminable at any time by vote of a majority
of the Directors who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan. For period from July 15, 1993 (commencement of operations)
through October 31, 1993, no fee was charged to the Fund, with respect to
Class A or Class B, under the Shareholder Services Plan pursuant to an
undertaking in effect.
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund
Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Premier Family of Funds, 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.
Offering Prices. Based upon the Fund's net asset value at the close of
business on October 31, 1993 the maximum offering price of the Fund's
shares would have been as follows:
Class A shares:
NET ASSET VALUE per share . . . . . . . . . . . . . . . . . . .. . . $13.21
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5 percent of offering price
(approximately 4.7 percent of net asset value per share) . . . .62
Offering price to public . . . . . . . . . . . . . . . . . . . $13.83
Class B shares:
NET ASSET VALUE, redemption price and offering
price to public . . . . . . . . . . . . . . . . . . . $13.17
- -------------
* Class B shares are subject to a contingent deferred sales charge on certain
redemptions, see "How to Redeem Fund Shares" in the Fund's Prospectus.
TeleTransfer Privilege. TeleTransfer purchase orders may be made between
the hours of 8:00 a.m. and 4:00 p.m., New York time, on any business day
that The Shareholder Services Group, Inc., the Fund's transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock Exchange
are open. Such purchases will be credited to the shareholder's Fund
account on the next bank business day. 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 Optional 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 Fund Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still
applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction 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 Fund Shares--TeleTransfer
Privilege."
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
holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchange Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
Redemption Commitment. The Fund is committed 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 Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or in part in securities or other assets in case of an emergency or any
time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In 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 would be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Exchange Privilege. Class A and Class B shares 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 other funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales load,
and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load may be
exchanged without a sales load for Class A shares of other funds sold
without a sales load.
C. Class A shares of funds purchased with a sales load, Class A shares
of funds acquired by a previous exchange from Class A shares
purchased with a sales load and additional Class A shares acquired
through reinvestment of dividends or distributions of any such funds
(collectively referred to herein as "Purchased Shares") may be
exchanged for Class A 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.
D. Class B shares of any fund may be exchanged for Class B shares of
other funds without a sales load. Class B shares of any fund
exchanged for Class B shares of another fund will be subject to the
higher applicable contingent deferred sales charge ("CDSC") of the
two funds, and for purposes of calculating CDSC rates and conversion
periods, will be deemed to have been held since the date the Class B
shares being exchanged were initially purchased.
To accomplish an exchange under item C above, an investor's Service Agent
must notify the Transfer Agent of the investor's prior ownership of such
Class A shares and the investor's account number.
To use this Privilege, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing, by wire or by telephone. Telephone exchanges may be made only if
the appropriate "YES" box has been checked on the Account Application, or a
separate signed Optional Services Form is on file with the Transfer Agent.
By using this Privilege, the investor authorizes the Transfer Agent to act
on telephonic, telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer Agent
to be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchange.
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 shares of the same Class of the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs
set up under Simplified Employee Pension Plans ("SEP-IRAs") with only one
participant, the minimum initial investment is $750. 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 the funds in the Premier Family of Funds or the
Dreyfus Family of Funds. To exchange shares held in Personal Retirement
Plans, the shares exchanged must have a current value of at least $100.
Auto-Exchange Privilege. Auto-Exchange permits an investor to purchase,
in exchange for Class A or Class B shares of the Fund, shares of the same
Class of another Fund in the Premier Family of Funds or the Dreyfus Family
of Funds. This Privilege is available only for existing accounts. Shares
will be exchanged on the basis of relative net asset value as described
above under "Exchange Privilege." 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 his 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 IRA and other retirement
plans are eligible for this Privilege. Exchanges of IRA shares may be made
between IRA accounts and from regular accounts to IRA accounts, but not
from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
The Exchange Privilege and 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.
Optional Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or 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 distributions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. There is a
service charge of $.50 for each withdrawal check. 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 B shares withdrawn pursuant to the
Automatic Withdrawal Plan will be subject to any applicable CDSC.
Dividend Sweep Privilege. The Dividend Sweep Privilege allows investors
to invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of the same Class of another
fund in the 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 distributions paid with respect to Class A shares by a
fund may be invested without imposition of a sales load in Class A
shares of other funds that are offered without a sales load.
B. Dividends and distributions paid with respect to Class A shares by a
fund which does not charge a sales load may be invested in Class A
shares of other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid with respect to Class A shares by a
fund which charges a sales load may be invested in Class A 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 charged by the fund from which
dividends or distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid with respect to Class B shares by a
fund may be invested without imposition of any applicable CDSC in
Class B shares of other funds and the Class B shares of such other
funds will be subject on redemption to any applicable CDSC.
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 Fund
Shares."
Valuation of Portfolio Securities. The Fund's investment securities,
including covered call options written by the Fund, are valued at the last
sale price on the securities exchange or national securities market on
which such securities primarily are traded. Securities not listed on an
exchange or national securities market, or securities in which there were
no transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of
foreign currency will be translated into dollars at the midpoint of the New
York interbank market spot exchange rate as quoted on the day of such
translation by the Federal Reserve Bank of New York or if no such rate is
quoted on such date, at the exchange rate previously quoted by the Federal
Reserve Bank of New York or at such other quoted market exchange rate as
may be determined to be appropriate by the Advisers. Forward currency
contracts will be valued at the current cost of offsetting the contract.
Because of the need to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset value does not
take place contemporaneously with the determination of prices of a majority
of the Fund's securities. Short-term investments are carried at amortized
cost, which approximates value. Any securities or other assets for which
recent market quotations are not readily available are valued at fair value
as determined in good faith by the Fund's Board of Directors. Expenses and
fees of the Fund, including the advisory fee paid by the Fund are accrued
daily and taken into account for the purpose of determining the net asset
value of Fund shares.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Board of Directors, are valued at fair value as
determined in good faith by the Board of Directors. The Board of Directors
will review the method of valuation on a current basis. In making their
good faith valuation of restricted securities, the Directors generally will
take the following factors into consideration: restricted securities which
are, or are convertible into, securities of the same class of securities
for which a public market exists usually will be valued at market value
less the same percentage discount at which purchased. This discount will
be revised periodically by the Board of Directors if the Directors believe
that it 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 of Directors.
Expenses and fees, including the advisory fees (reduced by the expense
limitation, if any), and fees pursuant to the Shareholder Services Plan,
with respect to the Class A and Class B shares, and fees pursuant to the
Distribution Plan, with respect to the Class B shares only, are accrued
daily and taken into account for the purpose of determining the net asset
value of the relevant Class of shares. Because of the difference in
operating expenses incurred by each Class, the per share net asset value of
each Class will differ.
New York Stock Exchange Closings. The holidays (as observed) on which the
New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management of the Fund believes that the Fund has qualified for the fiscal
period ended October 31, 1993 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. As a regulated investment
company, the Fund will pay no Federal income tax on net investment income
and net realized securities gains to the extent that such income and gains
are distributed to shareholders in accordance with applicable provisions of
the Code. To qualify as a regulated investment company, the Fund must pay
out to its shareholders at least 90% of its net income (consisting of net
investment income and net short-term capital gain), must derive less than
30% of its annual gross income from gain on the sale of securities held for
less than three months, and must meet certain asset diversification and
other requirements. Accordingly, the Fund may be restricted in the selling
of securities held for less than three months. The Code, however, allows
the Fund to net certain offsetting positions, making it easier for the Fund
to satisfy the 30% test. The term "regulated investment company" does not
imply the supervision of management or investment practices or policies by
any government agency.
Any dividend or distribution paid shortly after an investor's purchase may
have the effect of reducing the net asset value of the shares below the
cost of the investment. Such a dividend or distribution would be a return
of investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such shares will
be treated as long-term capital loss to the extent of the capital gain
distribution received.
Depending upon the composition of the Fund's income, the entire amount or
a portion of the dividends from net investment income may qualify for the
dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to the Fund's qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent
that the Fund's income consists of dividends paid by U.S. corporations.
However, Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for more than 46 days and
has received a dividend from net investment income with respect to such
shares, the portion designated by the Fund as qualifying for the dividends
received deduction will not be eligible for such shareholder's dividends
received deduction. In addition, the Code provides other limitations with
respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
The Fund may qualify for and may make an election permitted under Section
853 of the Code so that shareholders may be eligible to claim a credit or
deduction on their Federal income tax returns for, and will be required to
treat as part of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the Fund to foreign countries (which
taxes relate primarily to investment income). The Fund may make an
election under Section 853, provided that more than 50% of the value of the
Fund's total assets at the close of the taxable year consists of securities
in foreign corporations, and the Fund satisfies the applicable distribution
provisions of the Code. The foreign tax credit available to shareholders
is subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-US. dollar denominated
securities (including debt instruments and certain forward contracts and
options) may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of the gain realized from the
disposition of market discount bonds will be treated as ordinary income
under Section 1276. A market discount bond is defined as any bond
purchased by the Fund after April 30, 1993, and after its original
issuance, at a price below its face or accreted value. Finally, all or a
portion of the gain realized from engaging in "conversion transactions" may
be treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes from
certain forward contracts and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and
options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner described
above.
Offsetting positions held by the Fund involving certain foreign currency
forward contracts or options may constitute "straddles." "Straddles" are
defined to include "offsetting positions" in actively traded personal
property. The tax treatment of "straddles" is governed by Section 1092 of
the Code, which, in certain circumstances, overrides or modifies the
provisions of Sections 1256 and 988. If the Fund were treated as entering
into "straddles" by reason of its engaging in certain forward contracts or
options transactions, such "straddles" would be characterized as "mixed
straddles" if the forward contracts or options 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 to the extent the "straddle" 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.
Investment by the Fund in securities issued at a discount or providing for
deferred interest or for payment of interest in the form of additional
obligations could under special tax rules affect the amount, timing and
character of distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the Fund could
be required to accrue as income each year a portion of the discount (or
deemed discount) at which such securities were issued and to distribute
such income. In such case, the Fund may have to dispose of securities
which it might otherwise have continued to hold in order to generate cash
to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
Dreyfus assumes general supervision over placing orders on behalf of the
Fund for the purchase or sale of investment securities. Allocation of
brokerage transactions, including their frequency, is made in Dreyfus' best
judgment and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable
net price. Subject to this consideration, the brokers selected will
include those that supplement the Advisers' research facilities with
statistical data, investment information, economic facts and opinions.
Information so received is in addition to and not in lieu of services
required to be performed by the Advisers and the Advisers' fees are not
reduced as a consequence of the receipt of such supplemental information.
Such information may be useful to Dreyfus in serving both the Fund and
other funds which it advises and to Sarofim in serving both the Fund and
the other funds or accounts it advises, and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Advisers in carrying out their obligations to the Fund.
Sales of Fund shares by a broker may be taken into consideration, and
brokers also will be selected because of their ability to handle special
executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Large block
trades may, in certain cases, result from two or more funds advised or
administered by Dreyfus being engaged simultaneously in the purchase or
sale of the same security. Certain of the Fund's transactions in
securities of foreign issuers may not benefit from the negotiated
commission rates available to the Fund for transactions in securities of
domestic issuers. When transactions are executed in the over-the-counter
market, the Fund will deal with the primary market makers unless a more
favorable price or execution otherwise is obtainable.
Portfolio turnover may vary from year to year as well as within a year.
Under normal market conditions, it is anticipated that in any fiscal year
the turnover rate generally will be less than 100%; however, in periods in
which extraordinary market conditions prevail, the Advisers will not be
deterred from changing investment strategy as rapidly as needed, in which
case higher turnover rates can be anticipated which would result in greater
brokerage expenses. The overall reasonableness of brokerage commissions
paid is evaluated by Dreyfus based upon its knowledge of available
information as to the general level of commissions paid by other
institutional investors for comparable services.
In connection with its portfolio securities transactions for the period
July 15, 1993 (commencement of operations) through October 31, 1993, the
Fund paid brokerage commissions of $4,789, none of which was paid to the
Distributor. There were no gross spreads or concessions on principal
transactions for the period July 15, 1993 (commencement of operations)
through October 31, 1993.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance
Information."
The average annual total return for the Fund's Class A and Class B shares
for the 0.299 year period ended October 31, 1993 was 2.84% and 4.62%,
respectively. Average annual total return is calculated by determining the
ending redeemable value of an investment purchased at maximum offering
price per share with a hypothetical $1,000 payment made at the beginning of
the period (assuming the reinvestment of dividends and distributions),
dividing by the amount of the initial investment, taking the "n"th root of
the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result. A Class's average annual total return
figures calculated in accordance with such formula assume that in the case
of Class A the maximum sales load has been deducted from the hypothetical
initial investment at the time of purchase or in the case of Class B the
maximum applicable CDSC has been paid upon redemption at the end of the
period.
Total return is calculated by subtracting the amount of the Fund's maximum
offering price per share at the beginning of a stated period from the net
asset value per share at the end of the period (after giving effect to the
reinvestment of dividends and distributions during the period and any
applicable CDSC), and dividing the result by the maximum offering price per
share at the beginning of the period. Total return also may be calculated
based on the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the
period for Class A shares or without giving effect to any applicable CDSC
at the end of the period for Class B shares. In such cases, the
calculation would not reflect the deduction of the sales load with respect
to Class A shares or any applicable CDSC with respect to Class B shares,
which, if reflected would reduce the performance quoted. The total return
for the Fund's Class A and Class B shares for the period July 15, 1993
(commencement of operations) through October 31, 1993 was .84% and 1.36%,
respectively. Based on net asset value per share, the total return for the
Fund's Class A and Class B shares for this period was 5.68% and 5.36%,
respectively.
From time to time, advertising materials for the Fund may refer to the
fact that the Fund currently looks for successful companies with
established brands that are expanding into the world marketplace. From
time to time, advertising materials or the Fund may also refer to the
clients of Sarofim, such as large corporations, states, universities and
other institutions and organizations.
From time to time advertising materials for the Fund may refer to
Morningstar ratings and related analyses supporting the rating.
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. Shares
have no preemptive or subscription rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary
of First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-
9671, is the Fund's transfer and dividend disbursing agent. Neither The
Bank of New York nor The Shareholder Services Group, Inc. has any part in
determining the investment policies of the Fund or which securities are to
be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-
2696, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019, independent
auditors, have been selected as auditors of the Fund.
APPENDIX
Description of certain ratings assigned by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, Inc. ("Fitch") and Duff & Phelps, Inc. ("Duff"):
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Bonds rated B have a greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions
to meet timely payments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the capacity to
pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally 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 sometime 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.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
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
AAA
Bond Ratings
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment.
Considerable variability in risk during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such
bonds may be in default or have considerable uncertainty as to timely
payment of interest, preferred dividends and/or principal. Protection
factors are narrow and risk can be substantial with unfavorable economic or
industry conditions and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating
category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor.
<TABLE>
<CAPTION>
PREMIER GROWTH FUND, INC.
STATEMENT OF INVESTMENTS OCTOBER 31, 1993
COMMON STOCKS-65.7% SHARES VALUE
---------- ----------
<S> <C> <C>
Auto Related-1.6% Ford Motor.................................................. 1,500 $ 92,813
----------
Banking-1.8% Citicorp.................................................... 3,000 (a) 108,750
----------
Chemicals-2.6% duPont (E.I.) de Nemours.................................... 1,500 71,625
Minnesota Mining & Manufacturing............................ 800 83,000
----------
154,625
----------
Consumer Cyclical-2.7% Toys R Us................................................... 2,000 (a) 80,250
Wal-Mart Stores............................................. 3,000 79,125
----------
159,375
----------
Consumer Growth Staples-4.5% Coca-Cola................................................... 4,000 173,500
Gillette.................................................... 1,500 91,313
----------
264,813
----------
Consumer Non-Durables-2.8% Oreal (L') A.D.R............................................ 2,500 99,375
LVMH Moet Hennessy Louis Vuitton A.D.R...................... 500 63,500
----------
162,875
----------
Consumer Staples-13.0% Guinness PLC A.D.R.......................................... 2,200 70,950
Kellogg..................................................... 1,500 85,688
Nestle A.D.R................................................ 2,500 99,688
PepsiCo..................................................... 2,000 79,000
Philip Morris............................................... 3,000 161,250
Procter & Gamble............................................ 2,000 108,500
Sara Lee.................................................... 2,500 66,250
Unilever NV................................................. 800 91,800
----------
763,126
----------
Energy-9.3% Chevron..................................................... 800 77,600
Elf Aquitaine (Societe Natl) A.D.S.......................... 3,000 117,000
Exxon....................................................... 1,500 98,063
Mobil....................................................... 1,200 97,800
Royal Dutch Petroleum....................................... 1,500 158,625
----------
549,088
----------
Financial-8.6% Deutsche Bank A.D.R......................................... 300 150,000
Eurafrance.................................................. 300 114,665
HSBC Holdings A.D.R......................................... 1,200 138,900
Swiss Bank (Reg)............................................ 500 102,417
----------
505,982
----------
Health Care-7.9% Johnson & Johnson........................................... 2,500 105,313
Merck....................................................... 4,000 128,500
Pfizer...................................................... 1,500 93,375
Roche Holding A.D.S......................................... 3,500 136,062
----------
463,250
----------
Insurance-1.3% Axa......................................................... 300 77,883
----------
Media/Entertainment-1.3% Readers Digest Association, Cl. A........................... 1,800 74,925
----------
Publishing-Newspapers-1.5% News Corp., A.D.S........................................... 1,500 91,125
----------
Utilities-6.8% American Telephone & Telegraph.............................. 2,000 115,250
Eaux (Generale Des)......................................... 200 92,802
General Electric............................................ 2,000 194,000
----------
402,052
----------
TOTAL COMMON STOCKS
(cost $3,646,356)......................................... $3,870,682
==========
PREMIER GROWTH FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1993
PRINCIPAL
SHORT-TERM INVESTMENTS__29.3% AMOUNT VALUE
---------- ----------
U.S. Treasury Bills__29.3% 3.10%, 11/18/93........................................... $ 374,000 $ 373,472
3.19%, 12/9/93............................................ 202,000 201,371
3.57%, 12/16/93........................................... 403,000 401,534
3.20%, 12/23/93........................................... 101,000 100,578
3.15%, 1/20/94............................................ 252,000 250,309
3.24%, 1/27/94............................................ 404,000 401,012
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $1,728,276)......................................... $1,728,276
==========
TOTAL INVESTMENTS
(cost $5,374,632)..................................................................... 95.0% $5,598,958
====== ==========
CASH AND RECEIVABLES (NET)................................................................ 5.0% $ 292,569
====== ==========
NET ASSETS................................................................................ 100.0% $5,891,527
====== ==========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
</TABLE>
See notes to financial statements.
<TABLE>
PREMIER GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1993
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $5,374,632)-see statement................................................... $5,598,958
Cash.................................................................................. 167,264
Receivable for subscriptions to Common Stock.......................................... 144,899
Dividends receivable.................................................................. 3,981
Prepaid expenses...................................................................... 90,624
Due from The Dreyfus Corporation...................................................... 21,377
----------
6,027,103
LIABILITIES:
Payable for investment securities purchased........................................... $ 19,563
Accrued expenses and other liabilities................................................ 116,013 135,576
---------- ----------
NET ASSETS................................................................................ $5,891,527
==========
REPRESENTED BY:
Paid-in capital....................................................................... $5,675,821
Accumulated investment (loss) -net.................................................... (8,679)
Accumulated undistributed net realized gain on investments............................ 59
Accumulated net unrealized appreciation on investments-Note 3......................... 224,326
----------
NET ASSETS at value....................................................................... $5,891,527
==========
Shares of Common Stock outstanding:
Class A Shares
(150 million shares of $.001 par value authorized)................................ 252,640
==========
Class B Shares
(150 million shares of $.001 par value authorized)................................ 193,889
==========
NET ASSET VALUE per share:
Class A Shares
($3,337,978/252,640 shares)....................................................... $13.21
======
Class B Shares
($2,553,549/193,889 shares)....................................................... $13.17
======
</TABLE>
<TABLE> See notes to financial statements.
PREMIER GROWTH FUND, INC.
STATEMENT OF OPERATIONS FROM JULY 15, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1993
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.......................................................................... $ 11,950
Cash dividends (net of $464 foreign taxes withheld at source)..................... 11,734
--------
TOTAL INCOME.............................................................. $ 23,684
EXPENSES:
Investment advisory fee-Note 2(a)................................................. 8,343
Auditing fees..................................................................... 18,000
Legal fees........................................................................ 8,085
Shareholder servicing costs-Note 2(c)............................................. 6,536
Organization expenses............................................................. 6,182
Directors' fees and expenses-Note 2(d)............................................ 5,750
Prospectus and shareholders' reports.............................................. 5,330
Registration fees................................................................. 2,339
Distribution fees (Class B shares)-Note 2(b)...................................... 2,243
Custodian fees.................................................................... 2,076
Miscellaneous..................................................................... 1,204
--------
66,088
Less-expense reimbursement from Investment Adviser due to
undertaking-Note 2(a)......................................................... 33,725
--------
TOTAL EXPENSES............................................................ 32,363
--------
INVESTMENT (LOSS)-NET..................................................... (8,679)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3............................................... $ 59
Net unrealized appreciation on investments............................................ 224,326
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS........................... 224,385
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................................... $215,706
========
See notes to financial statements.
</TABLE>
<TABLE>
PREMIER GROWTH FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS FROM JULY 15, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1993
<S> <C>
OPERATIONS:
Investment (loss)-net.............................................................................. $ (8,679)
Net realized gain on investments................................................................... 59
Net unrealized appreciation on investments for the period.......................................... 224,326
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................................... 215,706
----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares................................................................................. 3,328,136
Class B shares................................................................................. 2,451,603
Cost of shares redeemed:
Class A shares................................................................................. (196,158)
Class B shares................................................................................. (7,760)
----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..................................... 5,575,821
----------
TOTAL INCREASE IN NET ASSETS........................................................... 5,791,527
NET ASSETS:
Beginning of period_Note 1......................................................................... 100,000
----------
End of period [including investment (loss)-net of ($8,679) in 1993]............................... $5,891,527
==========
SHARES
-----------------------------
PERIOD ENDED OCTOBER 31, 1993*
-----------------------------
CLASS A CLASS B
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................................................... 263,706 190,488
Shares redeemed....................................................................... (15,066) (599)
----------- -----------
NET INCREASE IN SHARES OUTSTANDING............................................ 248,640 189,889
=========== ===========
- -------------------
*From July 15, 1993 (commencement of operations) to October 31, 1993.
See notes to financial statements.
</TABLE>
PREMIER GROWTH FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated January 3, 1994.
PREMIER GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Growth Fund, Inc. (the "Fund") was incorporated on February 5,
1993 and had no operations until July 15, 1993 (commencement of operations)
other than matters relating to its organization and registration as a
diversified open-end management investment company under the Investment
Company Act of 1940 ("Act") and the Securities Act of 1933 and the sale and
issuance of 4,000 Class A shares and 4,000 Class B shares of Common Stock
("Initial Shares") to The Dreyfus Corporation ("Dreyfus"). Dreyfus serves as
the Fund's investment adviser. Fayez Sarofim & Co. ("Sarofim") serves as the
Fund's sub-investment adviser. Dreyfus Service Corporation ("Distributor") a
wholly-owned subsidiary of Dreyfus, acts as the distributor of the Fund's
shares. The Distributor is a wholly-owned subsidiary of Dreyfus.
The Fund offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within six years of purchase. Other differences
between the two Classes include the services offered to and the expenses borne
by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Securities for
which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Directors. Short-term
investments are carried at amortized cost, which approximates value.
Investments traded in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income sufficient to
relieve it from all, or substantially all, Federal income taxes.
(E) OTHER: Organization expenses paid by the Fund are included in prepaid
expenses and are being amortized to operations from July 15, 1993, the date
operations commenced, over the period during which it is expected that a
benefit will be realized, not to exceed five years. At October 31, 1993, the
unamortized balance of such expenses amounted to $86,547. In the event that
any of the Initial Shares are redeemed during the amortization period, the
redemption proceeds will be reduced by any unamortized organization expenses
in the same proportion as the number of such shares being redeemed bears to
the number of such shares outstanding at the time of such redemption.
PREMIER GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate of .75 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Investment Advisory Agreement further provides that if in any full fiscal year
the aggregate expenses of the Fund, excluding interest, taxes, brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the fee to be paid to
Dreyfus, or Dreyfus will bear, such excess expense to the extent required by
state law. The most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full fiscal year that such
expenses (exclusive of distribution expenses and certain expenses as described
above) exceed 2 1/2% of the first $30 million, 2% of the next $70 million and
1 1/2% of the excess over $100 million of the average value of the Fund's net
assets in accordance with California "blue sky" regulations.
However, Dreyfus has undertaken from July 15, 1993 through December 31,
1993, or until such time as the assets of the Fund exceed $50 million,
regardless of whether they remain at that level, to waive receipt of the
investment advisory fee payable to it by the Fund. In addition, the Manager
may voluntarily assume part of the other expenses of the Fund provided that
the resulting expense reimbursement would not be less than the amount required
pursuant to the Agreement. The expense reimbursement pursuant to the
undertaking amounted to $33,725 for the period ended October 31, 1993.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and
Sarofim, Dreyfus has agreed to pay Sarofim a monthly sub-advisory fee,
computed at the following annual rates:
ANNUAL FEE AS A PERCENTAGE OF
TOTAL NET ASSETS AVERAGE DAILY NET ASSETS
---------------- -----------------------------
0 to $25 million............................. .11 of 1%
$25 up to $75 million........................ .18 of 1%
$75 up to $200 million....................... .22 of 1%
$200 up to $300 million...................... .26 of 1%
In excess of $300 million.................... .275 of 1%
Sarofim is currently waiving its sub-unvestment advisory fee.
The Distributor retained $2,449 during the period ended October 31, 1993
from commissions earned on sales of the Fund's Class A shares.
The Distributor retained $256 during the period ended October 31, 1993
from contingent deferred sales charges imposed upon redemptions of the Fund's
Class B shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor at an
annual rate of .75 of 1% of the value of the Fund's Class B shares average
daily net assets, for the costs and expenses in connection with advertising,
marketing and distributing the Fund's Class B shares. The Distributor may make
payments to one or more Service Agents (a securities dealer, financial
institution, or other industry professional) based on the value of the Fund's
Class B shares owned by clients of the Service Agent.
During the period ended October 31, 1993, $2,243 was charged to the Fund
pursuant to the Class B Distribution Plan.
PREMIER GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) Under the Shareholder Services Plan, the Fund pays the Distributor, at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A and Class B shares for servicing shareholder accounts. 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 services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. For the period ended October 31, 1993, $2,033 and $748 were charged to
the Class A and Class B shares, respectively, pursuant to the Shareholder
Services Plan.
(D) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, ofthe Investment Adviser and/or the Distributor. Each
director who is not an "affiliated person" receives an annual fee of $1,500
and an attendance fee of $250 per meeting.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases of securities amounted to $3,646,356,
other than short-term securities, during the period ended October 31, 1993.
At October 31, 1993, accumulated net unrealized appreciation on
investments was $224,326, consisting of $257,229 gross unrealized appreciation
and $32,903 gross unrealized depreciation.
At October 31, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER GROWTH FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
PREMIER GROWTH FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Premier Growth Fund, Inc., including the statement of investments, as of
October 31, 1993, and the related statements of operations and changes in net
assets and financial highlights for the period from July 15, 1993
(commencement of operations) to October 31, 1993. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
condensed financial information based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
condensed financial information are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of October 31, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Premier Growth Fund, Inc. at October 31, 1993, and the results of its
operations, the changes in its net assets and the financial highlights for the
period from July 15, 1993 to October 31, 1993, in conformity with generally
accepted accounting principles.
Ernst & Young
New York, New York
December 9, 1993
