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DREYFUS GROWTH AND VALUE FUNDS, INC.
DREYFUS AGGRESSIVE GROWTH FUND
DREYFUS LARGE COMPANY VALUE FUND
DREYFUS AGGRESSIVE VALUE FUND
DREYFUS MIDCAP VALUE FUND
DREYFUS SMALL COMPANY VALUE FUND
DREYFUS INTERNATIONAL VALUE FUND
DREYFUS EMERGING LEADERS FUND
DREYFUS PREMIER TECHNOLOGY GROWTH FUND
(CLASS A, CLASS B, CLASS C, CLASS R AND CLASS T SHARES)
DREYFUS PREMIER FUTURE LEADERS FUND
(CLASS A, CLASS B, CLASS C, CLASS R AND CLASS T SHARES)
STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 2000
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This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current relevant
Prospectus of Dreyfus Aggressive Growth Fund, Dreyfus Aggressive Value Fund,
Dreyfus International Value Fund, Dreyfus Emerging Leaders Fund, Dreyfus Premier
Technology Growth Fund and Dreyfus MidCap Value Fund, each dated January 1,
2000, Dreyfus Large Company Value Fund and Dreyfus Small Company Value Fund,
each dated March 1, 2000, and Dreyfus Premier Future Leaders Fund, dated June
30, 2000 (each, a "Fund" and collectively, the "Funds") of Dreyfus Growth and
Value Funds, Inc. (the "Company"), as each may be revised from time to time. To
obtain a copy of the Prospectus for a Fund other than Dreyfus Premier Technology
Growth Fund and Dreyfus Premier Future Leaders Fund, please write to the Company
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call one of
the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452
To obtain a copy of the Prospectus for Dreyfus Premier Technology Growth
Fund or Dreyfus Premier Future Leaders Fund (collectively, the "Dreyfus Premier
Funds"), please call 1-800-554-4611.
Each Fund's most recent Annual Report and Semi-Annual Report to
Shareholders are separate documents supplied with this Statement of Additional
Information, and the financial statements, accompanying notes and report of
independent auditors appearing in the Annual Report are incorporated by
reference into this Statement of Additional Information. Dreyfus Premier Future
Leaders Fund has not commenced operations as of the date of this Statement of
Additional Information.
TABLE OF CONTENTS
Page
Description of the Company and Funds.......................................B-3
Management of the Company.................................................B-16
Management Arrangements...................................................B-23
How to Buy Shares.........................................................B-28
Distribution Plan and Shareholder Services Plan...........................B-37
How to Redeem Shares......................................................B-39
Shareholder Services......................................................B-44
Determination of Net Asset Value..........................................B-50
Dividends, Distributions and Taxes........................................B-51
Portfolio Transactions....................................................B-53
Performance Information...................................................B-56
Information About the Company and Funds...................................B-58
Counsel and Independent Auditors..........................................B-60
Appendix..................................................................B-61
DESCRIPTION OF THE COMPANY AND FUNDS
The Company is a Maryland corporation formed on November 16, 1993. Each
Fund is a separate series of the Company, an open-end management investment
company, known as a mutual fund. Each Fund is diversified, which means that,
with respect to 75% of its total assets, the Fund will not invest more than 5%
of its assets in the securities of any single issuer, nor hold more than 10% of
the outstanding voting securities of any single issuer.
The Dreyfus Corporation (the "Manager") serves as each Fund's investment
adviser.
Dreyfus Service Corporation (the "Distributor") is the distributor of each
Fund's shares.
Certain Portfolio Securities
The following information supplements (except as noted) and should
be read in conjunction with the relevant Fund's Prospectus.
Convertible Securities. (All Funds) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy seniority in
right of payment to all equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower ratings than
similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the market
value of convertible securities tends to decline as interest rates increase and,
conversely, tends to increase as interest rates decline. In addition, because of
the conversion feature, the market value of convertible securities tends to vary
with fluctuations in the market value of the underlying common stock. A unique
feature of convertible securities is that as the market price of the underlying
common stock declines, convertible securities tend to trade increasingly on a
yield basis, and so may not experience market value declines to the same extent
as the underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no securities
investments are without risk, investments in convertible securities generally
entail less risk than investments in common stock of the same issuer.
Convertible securities provide for a stable stream of income with
generally higher yields than common stocks, but there can be no assurance of
current income because the issuers of the convertible securities may default on
their obligations. A convertible security, in addition to providing fixed
income, offers the potential for capital appreciation through the conversion
feature, which enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.
Depositary Receipts. (All Funds) Each Fund may invest in the securities of
foreign issuers in the form of American Depositary Receipts and American
Depositary Shares ("ADRs")and Global Depositary Receipts and Global Depositary
Shares (collectively, "GDRs") and other forms of depositary receipts. 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. GDRs are receipts issued outside the
United States 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
GDRs in bearer form are designed for use outside the United States.
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary. 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.
Warrants. (All Funds) A warrant gives the holder the right to subscribe to
a specified amount of the issuing corporation's capital stock at a set price for
a specified period of time. Each Fund may invest up to 5% of its net assets in
warrants, except that this limitation does not apply to warrants purchased by
the Fund that are sold in units with, or attached to, other securities.
Investment Companies. (All Funds) Each Fund may invest in securities
issued by registered and unregistered investment companies. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), a Fund's investment in such
securities, subject to certain exceptions, currently is limited to (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Fund's total
assets with respect to any one investment company and (iii) 10% of the Fund's
total assets in the aggregate. Investments in the securities of other investment
companies may involve duplication of advisory fees and certain other expenses.
Illiquid Securities. (All Funds) Each 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
objective. These securities may include securities that are not readily
marketable, such as securities that are subject to legal or contractual
restrictions on resale, repurchase agreements providing for settlement in more
than seven days after notice, and certain privately negotiated, non-exchange
traded options and securities used to cover such options. As to these
securities, a 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
Money Market Instruments. (All Funds) When the Manager determines that
adverse market conditions exist, a Fund may adopt a temporary defensive position
and invest up to 100% of its assets in money market instruments, including U.S.
Government securities, repurchase agreements, bank obligations and commercial
paper. A Fund also may purchase money market instruments when it has cash
reserves or in anticipation of taking a market position.
Investment Techniques
The following information supplements (except as noted) and should be read
in conjunction with the relevant Fund's Prospectus.
Foreign Currency Transactions. (All Funds) A Fund may enter into foreign
currency transactions for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the Fund has
agreed to buy or sell; to hedge the U.S. dollar value of securities the Fund
already owns, particularly if it expects a decrease in the value of the currency
in which the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, a Fund's purchase
of foreign currencies for U.S. dollars or the maintenance of short positions in
foreign currencies. A short position would involve the Fund agreeing to exchange
an amount of a currency it did not currently own for another currency at a
future date in anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive. A Fund's success in
these transactions will depend principally on the Manager's ability to predict
accurately the future exchange rates between foreign currencies and the U.S.
dollar.
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 complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention, or failure to intervene, by U.S.
or foreign governments or central banks, or by currency controls or political
developments in the United States or abroad.
Short-Selling. (All Funds) In these transactions, a Fund sells a security
it does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by the Fund, which would result in a loss or gain, respectively.
Securities will not be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed 25%
of the value of a Fund's net assets. A Fund may not make a short sale which
results in the Fund having sold short in the aggregate more than 5% of the
outstanding securities of any class of an issuer.
A Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns. At no time will more than 15% of
the value of a Fund's net assets be in deposits on short sales against the box.
Until the Fund closes its short position or replaces the borrowed
security, the Fund will: (a) segregate permissible liquid assets in an amount
that, together with the amount deposited with the broker as collateral, always
equals the current value of the security sold short; or (b) otherwise cover its
short position.
Borrowing Money. (All Funds) Each Fund is permitted to borrow to the
extent permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 33-1/3% of the value of its total assets. Each of
Dreyfus Aggressive Value Fund, Dreyfus Emerging Leaders Fund, Dreyfus
International Value Fund, Dreyfus Midcap Value Fund and Dreyfus Premier Future
Leaders Fund, however, currently intends to borrow money only for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value of its
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 such borrowings exceed 5% of a Fund's total assets, the
Fund will not make any additional investments.
Leverage. (Dreyfus Aggressive Growth Fund, Dreyfus Large Company Value
Fund, Dreyfus Small Company Value Fund and Dreyfus Premier Technology Growth
Fund) Leveraging (buying securities using borrowed money) exaggerates the effect
on net asset value of any increase or decrease in the market value of a Fund's
portfolio. These borrowings will be subject to interest costs which may or may
not be recovered by appreciation of the securities purchased; in certain cases,
interest costs may exceed the return received on the securities purchased. For
borrowings for investment purposes, the 1940 Act requires a Fund to maintain
continuous asset coverage (total assets including borrowings, less liabilities
exclusive of borrowings) of 300% of the amount borrowed. If the required
coverage should decline as a result of market fluctuations or other reasons, the
Fund may be required to sell some of its portfolio holdings within three days to
reduce the amount of its borrowings and restore the 300% asset coverage, even
though it may be disadvantageous from an investment standpoint to sell
securities at that time. The Fund also may be required to maintain minimum
average balances in connection with such borrowing or pay a commitment or other
fee to maintain a line of credit; either of these requirements would increase
the cost of borrowing over the stated interest rate.
A Fund may enter into reverse repurchase agreements with banks,
broker/dealers or other financial institutions. This form of borrowing involves
the transfer by the Fund of an underlying debt instrument in return for cash
proceeds based on a percentage of the value of the security. The Fund retains
the right to receive interest and principal payments on the security. At an
agreed upon future date, the Fund repurchases the security at principal plus
accrued interest. As a result of these transactions, the Fund is exposed to
greater potential fluctuations in the value of its assets and its net asset
value per share. To the extent a Fund enters into a reverse repurchase
agreement, the Fund will segregate permissible liquid assets at least equal to
the aggregate amount of its reverse repurchase obligations, plus accrued
interest, in certain cases, in accordance with releases promulgated by the
Securities and Exchange Commission. The Securities and Exchange Commission views
reverse repurchase transactions as collateralized borrowings by a Fund. Except
for these transactions, the Fund's borrowings generally will be unsecured.
Derivatives. (All Funds) Each Fund may invest in, or enter into,
derivatives, such as options and futures, for a variety of reasons, including to
hedge certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for a Fund to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities. However, derivatives may entail investment
exposures that are greater than their cost would suggest, meaning that a small
investment in derivatives could have a large potential impact on the Fund's
performance.
If a Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or result
in a loss. The Fund also could experience losses if its derivatives were poorly
correlated with its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market for many
derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.
Although none of the Funds will be a commodity pool, certain derivatives
subject the Funds to the rules of the Commodity Futures Trading Commission which
limit the extent to which a Fund can invest in such derivatives. Each Fund may
invest in futures contracts and options on futures contacts for hedging purposes
without limit. However, a Fund may not invest in such contracts and options for
other purposes if the sum of the amount of initial margin deposits and premiums
paid for unexpired options with respect to such contracts, other than for bona
fide hedging purposes, exceeds 5% of the liquidation value of the Fund's assets,
after taking into account unrealized profits and unrealized losses on such
contracts and options; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.
Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily variation margin system operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
derivatives purchased on an exchange. In contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly, the
Manager will consider the creditworthiness of counterparties to over-the-counter
derivatives in the same manner as it would review the credit quality of a
security to be purchased by a Fund. Over-the-counter derivatives are less liquid
than exchange-traded derivatives since the other party to the transaction may be
the only investor with sufficient understanding of the derivative to be
interested in bidding for it.
Futures Transactions--In General (All Funds) A Fund may enter into futures
contracts in U.S. domestic markets or, if applicable, on exchanges located
outside the United States. Foreign markets may offer advantages such as trading
opportunities or arbitrage possibilities not available in the United States.
Foreign markets, however, may have greater risk potential than domestic markets.
For example, some foreign exchanges are principal markets so that no common
clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits a Fund might realize in
trading could be eliminated by adverse changes in the currency exchange rate, or
the Fund could incur losses as a result of those changes. Transactions on
foreign exchanges may include commodities which are traded on domestic exchanges
or those which are not. Unlike trading on domestic commodity exchanges, trading
on foreign commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to a Fund which could
adversely affect the value of the Fund's net assets. Although each Fund intends
to purchase or sell futures contracts only if there is an active market for such
contracts, no assurance can be given that a liquid market will exist for any
particular contract at any particular time. Many futures exchanges and boards of
trade limit the amount of fluctuation permitted in futures contract prices
during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the ability of the
Manager to predict correctly movements in the direction of the relevant market
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the securities being hedged and
the price movements of the futures contract. For example, if a Fund uses futures
to hedge against the possibility of a decline in the market value of securities
held in its portfolio and the prices of such securities instead increase, the
Fund will lose part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in its futures
positions. Furthermore, if in such circumstances the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin requirements. A
Fund may have to sell such securities at a time when it may be disadvantageous
to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, a Fund may be required to segregate permissible liquid
assets to cover its obligations relating to its transactions in derivatives. To
maintain this required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
derivative position at a reasonable price. In addition, the segregation of such
assets will have the effect of limiting the Fund's ability otherwise to invest
those assets.
Specific Futures Transactions (All Funds) A Fund may purchase and sell stock
index futures contracts. A stock index future obligates a Fund to pay or receive
an amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index based on
the stock prices of the securities that comprise it at the opening of trading in
such securities on the next business day.
A Fund may purchase and sell interest rate futures contracts. An interest
rate future obligates the Fund to purchase or sell an amount of a specific debt
security at a future date at a specific price.
A Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.
Options--In General (All Funds) A Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and put options. Each
Fund may write (i.e. sell) covered call and put option contracts to the extent
of 20% of the value of its net assets at the time such option contracts are
written. A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to sell,
and obligates the writer to buy, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
A covered call option written by a Fund is a call option with respect to
which the Fund owns the underlying security or otherwise covers the transaction
by segregating permissible liquid assets. A put option written by a Fund is
covered when, among other things, the Fund segregates permissible liquid assets
having a value equal to or greater than the exercise price of the option to
fulfill the obligation undertaken. The principal reason for writing covered call
and put options is to realize, through the receipt of premiums, a greater return
than would be realized on the underlying securities alone. A Fund receives a
premium from writing covered call or put options which it retains whether or not
the option is exercised.
There is no assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any particular option
or at any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a variety
of reasons. In the past, for example, higher than anticipated trading activity
or order flow, or other unforeseen events, at times have rendered certain of the
clearing facilities inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
Specific Options Transactions (All Funds) A Fund may purchase and sell call and
put options in respect of specific securities (or groups or "baskets" of
specific securities) or stock indices listed on national securities exchanges or
traded in the over-the-counter market. An option on a stock index is similar to
an option in respect of specific securities, except that settlement does not
occur by delivery of the securities comprising the index. Instead, the option
holder receives an amount of cash if the closing level of the stock index upon
which the option is based is greater than in the case of a call, or less than in
the case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
A Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a price
which is expected to be lower or higher than the spot price of the currency at
the time the option is exercised or expires.
A Fund may purchase cash-settled options on equity index swaps in pursuit
of its investment objective. Equity index swaps involve the exchange by the Fund
with another party of cash flows based upon the performance of an index or a
portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by a Fund of options will be subject to the Manager's
ability to predict correctly movements in the prices of individual stocks, the
stock market generally or foreign currencies. To the extent such predictions are
incorrect, the Fund may incur losses.
Future Developments. A Fund may take advantage of opportunities in the
area of options and futures contracts and options on futures contracts and any
other derivatives which are not presently contemplated for use by the Fund or
which are not currently available but which may be developed, to the extent such
opportunities are both consistent with the Fund's investment objective and
legally permissible for the Fund. Before entering into such transactions or
making any such investment, the Fund will provide appropriate disclosure in its
Prospectus or Statement of Additional Information.
Lending Portfolio Securities. (All Funds) Each Fund may lend securities
from its portfolio to brokers, dealers and other financial institutions needing
to borrow securities to complete certain transactions. However, Dreyfus Large
Company Value Fund, Dreyfus Small Company Value Fund and Dreyfus Premier
Technology Growth Fund are the only Funds which currently intend to lend
portfolio securities. In connection with such loans, the Fund continues to be
entitled to payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities, which affords the Fund an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 33-1/3% of
the value of the Fund's total assets and the Fund will receive collateral
consisting of cash, U.S. Government securities or irrevocable letters of credit
which will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. These loans are terminable by the
Fund at any time upon specified notice. The Fund might experience risk of loss
if the institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund. In connection with its securities lending
transactions, a Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part of
the interest earned from the investment of collateral received for securities
loaned.
Forward Commitments. (All Funds) Each Fund may purchase securities on a
forward commitment or when-issued basis, which means that delivery and payment
take place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment, but the
Fund does not make payment until it receives delivery from the counterparty. The
Fund will commit 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 segregate permissible
liquid assets at least equal at all times to the amount of the Fund's purchase
commitments.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (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 forward commitment or when-issued basis may expose the Fund to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued 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.
Purchasing securities on a forward commitment or when-issued 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.
Investment Considerations and Risks
Equity Securities. (All Funds) Equity securities, including common stock,
preferred stock, convertible securities and warrants, fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities, and
such fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
Dreyfus Aggressive Growth Fund, Dreyfus Aggressive Value Fund, Dreyfus
Small Company Value Fund, Dreyfus Emerging Leaders Fund, Dreyfus Premier
Technology Growth Fund and Dreyfus Premier Future Leaders Fund each may purchase
securities of small capitalization companies (and Dreyfus Midcap Value Fund may
purchase mid-capitalization companies), the prices of which may be subject to
more abrupt or erratic market movements than larger, more established companies,
because these securities typically are traded in lower volume and the issuers
typically are more subject to changes in earnings and prospects. These Funds may
purchase securities of companies in initial public offerings or shortly
thereafter. The prices of these companies' securities may be very volatile,
rising and falling rapidly based, among other reasons, solely on investor
perceptions rather than economic reasons. The Fund may purchase securities of
companies which have no earnings or have experienced losses. The Fund generally
will make these investments based on a belief that actual anticipated products
or services will produce future earnings. If the anticipated event is delayed or
does not occur, or if investor perception about the company change, the
company's stock price may decline sharply and its securities may become less
liquid. The Fund, together with other investment companies advised by the
Manager and its affiliates, may own significant positions in portfolio companies
which, depending on market conditions, may affect adversely the Fund's ability
to dispose of some or all of its positions should it desire to do so.
Dreyfus Premier Technology Growth Fund invests in, and the other Funds may
invest in, securities issued by companies in the technology sector, which has
been among the most volatile sectors of the stock market.
Fixed-Income Securities. (Dreyfus Aggressive Value Fund and Dreyfus Large
Company Value Fund only) Each of these Funds may invest in corporate debt
obligations and other fixed-income securities when management believes that such
securities offer opportunities for capital growth. 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 fluctuations. The values of
fixed-income securities also may be affected by changes in the credit rating or
financial condition of the issuer. Certain securities purchased by a Fund, such
as those rated Baa or lower by Moody's Investors Service, Inc. ("Moody's") and
BBB or lower by Standard & Poor's Ratings Group ("S&P") in the case of Dreyfus
Aggressive Value Fund, or those rated Baa by Moody's and BBB by S&P, Fitch IBCA,
Inc. and Duff & Phelps Credit Rating Co. in the case of Dreyfus Large Company
Value Fund, may be subject to such risks with respect to the issuing entity and
to greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Once the rating of a portfolio security has been
changed, the Fund will consider all circumstances deemed relevant in determining
whether to continue to hold the security. See "Lower Rated Securities" below
with respect to Dreyfus Aggressive Value Fund only and the "Appendix."
Lower Rated Securities. (Dreyfus Aggressive Value Fund only) The Fund may
invest up to 35% of its net assets in higher yielding (and, therefore, higher
risk) debt securities such as those rated Ba by Moody's or BB by S&P or as low
as Caa by Moody's or CCC by S&P (commonly known as junk bonds). They may be
subject to greater risks and market fluctuations than certain lower yielding,
higher rated fixed-income securities. See the "Appendix" for a general
description of the ratings of Moody's and S&P for fixed-income securities. 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. 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
Manager's judgment, analysis and experience in evaluating the creditworthiness
of an issuer.
You 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 generally are
considered by Moody's and S&P to be, on balance, 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 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
portfolio 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, the Manager's judgment
may play a greater role in valuation.
These securities may be particularly susceptible to economic downturns. It
is likely that an economic recession would disrupt severely the market for such
securities and may have an adverse impact on the value of such securities, and
could adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon which would 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 any person concerning the acquisition of such securities,
and the Manager will review carefully the credit and other characteristics
pertinent to such new issues.
Foreign Securities. (All Funds) 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.
Because evidence of ownership of such securities usually are held outside
the United States, the Fund investing in such securities will be subject to
additional risks which include possible adverse political and economic
developments, seizure or nationalization of foreign deposits and adoption of
governmental restrictions which might adversely affect or restrict the payment
of principal and interest on the foreign securities to investors located outside
the country of the issuer, whether from currency blockage or otherwise.
Moreover, foreign securities held by the Fund may trade on days when the Fund
does not calculate its net asset value and thus affect the Fund's net asset
value on days when investors have no access to the Fund.
Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable than those of
developed countries. The markets of developing countries may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many developing countries providing
investment opportunities for the Fund have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have adverse
effects on thee economies and securities markets of certain of these countries.
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.
Simultaneous Investments. (All Funds) Investment decisions for each Fund
are made independently from those of the other investment companies advised by
the Manager. If, however, such other investment companies desire to invest in,
or dispose of, the same securities as a 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.
Investment Restrictions
Each Fund's investment objective is a fundamental policy, which cannot be
changed without approval by the holders of a majority (as defined in the 1940
Act) of such Fund's outstanding voting shares. In addition, each Fund has
adopted investment restrictions numbered 1 through 10 as fundamental policies.
Investment restrictions numbered 11 through 16 are not fundamental policies and
may be changed by a vote of a majority of the Company's Board members at any
time. No Fund may:
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. Invest more than 25% of the value of its total assets in the securities
of issuers in any single industry, provided that there shall be no limitation on
the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. For purposes of this Investment Restriction with
respect to Dreyfus Premier Technology Growth Fund, the technology sector in
general is not considered an industry.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
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 or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets). For purposes of this Investment Restriction, the entry into
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices 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
Company's Board.
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 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6, 13 and 14 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 indices, and options on futures contracts
or indices.
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. This Investment Restriction has not been
adopted with respect to Dreyfus Premier Technology Growth Fund or Dreyfus
Premier Future Leaders Fund.
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. This Investment
Restriction has not been adopted with respect to Dreyfus Premier Technology
Growth Fund.
......13. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
14. Purchase, sell or write puts, calls or combinations thereof, except as
described in the relevant 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. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
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.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision of
the Funds. The Board approves all significant agreements between the Company, on
behalf of the Funds, and those companies that furnish services to the Funds.
These companies are as follows:
The Dreyfus Corporation...................... Investment Adviser
Dreyfus Service Corporation.................. Distributor
Dreyfus Transfer, Inc........................ Transfer Agent
Mellon Bank, N.A............................. Custodian for all Funds
except Dreyfus
International Value Fund
The Bank of New York......................... Custodian for Dreyfus
International Value Fund
Board members and officers of the Company, together with information as to
their principal business occupations during at least the last five years, are
shown below.
Board Members of the Company
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of the
Board of various funds in the Dreyfus Family of Funds. He also is a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk management
services to health and other benefit programs, Carlyle Industries, Inc.
(formerly, Belding Heminway Company, Inc.), a button packager and
distributor, Century Business Services, Inc. (formerly, International
Alliance Services, Inc.), a provider of various outsourcing functions for
small and medium sized companies and QuikCAT.com, Inc., a private company
engaged in the development of high speed movement, routing, storage and
encryption of data across cable, wireless and all other modes of data
transport. For more than five years prior to January 1995, he was
President, a director and, until August 1994, Chief Operating Officer of
the Manager and Executive Vice President and a director of the
Distributor. From August 1994 until December 31, 1994, he was a director
of Mellon Financial Corporation. He is 56 years old and his address is 200
Park Avenue, New York, New York 10166.
DAVID P. FELDMAN, Board Member. Director of several mutual funds in the 59 Wall
Street Mutual Funds Group, and of the Jeffrey Company, a private
investment company. He was employed at AT&T from July 1961 to his
retirement in April 1997, most recently serving as Chairman and Chief
Executive Officer of AT&T Investment Management Corporation. He is 60
years old and his address is 466 Lexington Avenue, New York, New York
10017.
EHUD HOUMINER, Board Member. Professor and Executive-in-Residence at the
Columbia Business School, Columbia University. Since January 1996,
Principal of Lear, Yavitz and Associates, a management consulting firm. He
also is a Director of Avnet Inc. and Super-Sol Limited. He is 59 years old
and his address is c/o Columbia Business School, Columbia University, Uris
Hall, Room 526, New York, New York 10027.
GLORIA MESSINGER, Board Member. From 1981 to 1993, Managing Director and Chief
Executive Officer of ASCAP (American Society of Composers, Authors and
Publishers). She is a member of the Board of Directors of the Yale Law
School Fund and Theater for a New Audience, Inc., and was secretary of the
ASCAP Foundation and served as a Trustee of the Copyright Society of the
United States. She is also a member of numerous professional and civic
organizations. She is 70 years old and her address is 747 Third Avenue,
11th Floor, New York, New York 10017.
JOHN SZARKOWSKI, Board Member. Director Emeritus of Photography at The
Museum of Modern Art. Consultant in Photography. He is 74 years old
and his address is Bristol Road, Box 221, East Chatham, New York 12060.
ANNE WEXLER, Board Member. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs. She is also a
director of Wilshire Mutual Funds, Comcast Corporation, The New England
Electric System, and a member of the Council of Foreign Relations and the
National Park Foundation. She is 69 years old and her address is c/o The
Wexler Group, 1317 F Street, N.W., Suite 600, Washington, D.C. 20004.
The Company has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Company, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Company for election to the
Company's Board.
The Company typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the Board
receives an additional 25% of such compensation. Emeritus Board members, if any,
are entitled to receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of compensation paid
to each Board member by the Company for the fiscal year ended October 31, 1999,
and by all funds in the Dreyfus Family of Funds for which such person is a Board
member (the number of which is set forth in parenthesis next to each Board
member's total compensation)* during the year ended December 31, 1999, was as
follows:
Total Compensation
Aggregate From Company and
Name of Board Compensation Fund Complex Paid
Member From the Company** to Board Member
Joseph S. DiMartino $8,750 $642,177(189)
David P. Feldman $7,000 $118,875 (56)
John M. Fraser, Jr. *** $7,000 $ 78,000 (41)
Ehud Houminer $7,000 $ 61,000 (20)
Total Compensation
Aggregate From Company and
Name of Board Compensation Fund Complex Paid
Member From the Company** to Board Member
Gloria Messinger $7,000 $ 23,500 (13)
Jack R. Meyer**** $6,000 $ 5,625 (13)
John Szarkowski $6,500 $ 23,500 (13)
Anne Wexler $7,000 $ 59,125 (28)
-----------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund complex, including the Funds, for which the Board
members serve.
** Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $10,408 for all Board members as a group.
*** Emeritus Board member as of May 24, 2000. **** Resigned as a Board member
effective March 31, 1999.
Officers of the Company
STEPHEN E. CANTER, President. President, Chief Operating Officer, Chief
Investment Officer and a director of the Manager, and an officer of
other investment companies advised and administered by the Manager.
Mr. Canter also is a Director and Executive Committee Member of the
other investment management subsidiaries of Mellon Financial
Corporation, each of which is an affiliate of the Manager. He is 54
years old.
MARK N. JACOBS, Vice President. Vice President, Secretary and General
Counsel of the Manager, and an officer of other investment companies
advised and administered by the Manager. He is 54 years old.
JOSEPHCONNOLLY, Vice President and Treasurer. Director - Mutual Fund Accounting
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 42 years old.
MICHAEL A. ROSENBERG, Secretary. Associate General Counsel of the Manager,
and an officer of other investment companies advised and administered
by the Manager. He is 40 years old.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel and
Assistant Secretary of the Manager, and an officer of other investment
companies advised and administered by the Manager. He is 50 years old.
JAMES WINDELS, Assistant Treasurer. Senior Accounting Manager - Equity Funds of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 41 years old.
The address of each officer of the Company is 200 Park Avenue, New York,
New York 10166.
The Company's Board members and officers, as a group, owned less than 1%
of each Fund's voting securities outstanding on June 15, 2000.
The following persons are known by the Company to own of record 5% or more
of a Fund's outstanding voting securities as of June 15, 2000. A shareholder who
beneficially owns, directly or indirectly, more than 25% of a Fund's voting
securities may be deemed a "control person" (as defined in the 1940 Act) of the
Fund.
Dreyfus Large Company Value Fund
Boston Safe Deposit & Trust Co TTEE................................14.8937%
As Agent-Omnibus Account
1 Cabot Road
Medford, MA 02155-5141
Charles Schwab & Co. Inc...........................................10.7304%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Dreyfus Small Company Value Fund
Citibank, NA Trustee...............................................21.4022%
Joseph E. Seagram & Sons Inc.
Master Trust
111 Wall Street, 14th floor
New York, New York 10005-3509
Charles Schwab & Co. Inc...........................................13.6179%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Boston Safe Deposit & Trust Co TTEE.................................6.2494%
As Agent-Omnibus Account
1 Cabot Road
Medford, MA 02155-5141
The Bank of New York TTEE...........................................6.0880%
Joseph E. Seagrams & Sons
1 Wall Street
New York, NY 10005-2500
Dreyfus Premier Technology Growth Fund (Class A)
--------------------------------------
Charles Schwab & Co., Inc..........................................15.9672%
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104-4122
Merrill Lynch Pierce Fenner & Smith................................ 6.9605%
For the Sole Benefit of its Customers
Attn: Fund Administration
A/C 974T5
4800 Deer Lake Dr. E Floor 3
Jacksonville FL 32246-6484
Dreyfus Premier Technology Growth Fund (Class B)
--------------------------------------
Merrill Lynch Pierce Fenner & Smith................................18.6160%
For the Sole Benefit of its Customers
Attn Fund Administration
A/C 974T5
4800 Deer Lake Dr. E Floor 3
Jacksonville, FL 32246-6484
Dreyfus Premier Technology Growth Fund (Class C)
Merrill Lynch Pierce Fenner & Smith................................27.6644%
For the Sole Benefit of its Customers
Attn: Fund Administration
A/C 974T5
4800 Deer Lake Dr. E Floor 3
Jacksonville FL 32246-6484
Dreyfus Premier Technology Growth Fund (Class R)
Citibank NA Trustee................................................80.6098%
Joseph E. Seagram & Sons Inc.
Master Trust
111 Wall Street, 14th floor
New York, NY 10005-3509
Dreyfus Aggressive Growth Fund
Charles Schwab & Co. Inc............................................5.8274%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street`
San Francisco, CA 94104-4122
Boston Safe Deposit & Trust Co TTEE................................ 5.4496%
As Agent-Omnibus Account
Dreyfus Retirement Services
AIM # 026-0027
135 Santilli Highway
Everett, MA 02149-1906
Dreyfus Aggressive Value Fund
Charles Schwab & Co. Inc........................................... 8.8678%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco. CA 94104-4122
Great West Life.................................................... 8.6275%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco. CA 94104-4122
Dreyfus Midcap Value Fund
Charles Schwab & Co. Inc...........................................13.7585%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Boston Safe Deposit & Trust Co TTEE................................ 8.4782%
As Agent-Omnibus Account
Dreyfus Retirement Services
AIM # 026-0027
135 Santilli Highway
Everett, MA 02149-1906
National Investors Services Corp................................... 5.9097%
For the Exclusive Benefit of Our Customers
55 Water Street, 32nd floor
New York, NY 10041-3299
Dreyfus Emerging Leaders Fund
Charles Schwab & Co. Inc...........................................16.2193%
Reinvest Account
Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Boston Safe Deposit & Trust Co. TTEE...............................13.6535%
Dreyfus Retirement Services
AIM # 026-0027
135 Santilli Highway
Everett, MA 02149-1906
MANAGEMENT ARRANGEMENTS
Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended.
Management Agreement. The Manager provides management services pursuant to
a Management Agreement (the "Agreement") between the Manager and the Company. As
to each Fund, the Agreement is subject to annual approval by (i) the Company's
Board or (ii) vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of such Fund, provided that in either event the continuance
also is approved by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Company or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such approval.
As to each Fund, the Agreement is terminable without penalty, on 60 days'
notice, by the Company's Board or by vote of the holders of a majority of such
Fund's shares, or, on not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically, as to the relevant Fund, in the event of
its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment
Officer and a director; Thomas F. Eggers, Vice Chairman-Institutional and a
director; Lawrence S. Kash, Vice Chairman; J. David Officer, Vice Chairman
and a director; Ronald P. O'Hanley III, Vice Chairman; William T. Sandalls,
Jr., Executive Vice President; Stephen R. Byers, Senior Vice President;
Patrice M. Kozlowski, Senior Vice President-Corporate Communications; Mark N.
Jacobs, Vice President, General Counsel and Secretary; Diane P. Durnin, Vice
President-Product Development; Mary Beth Leibig, Vice President-Human
Resources; Ray Van Cott, Vice President-Information Systems; Theodore A.
Schachar, Vice President-Tax; Wendy Strutt, Vice President; Richard Terres,
Vice President; William H. Maresca, Controller; James Bitetto, Assistant
Secretary; Steven F. Newman, Assistant Secretary; and Mandell L. Berman,
Burton C. Borgelt, Steven G. Elliott, Martin C. McGuinn, Richard W. Sabo and
Richard F. Syron, directors.
The Manager manages each Fund's investments in accordance with the stated
policies of the Fund, subject to the approval of the Company's Board. The
Manager is responsible for investment decisions, and provides the Funds with
portfolio managers who are authorized by the Board to execute purchases and
sales of securities.
The Funds' portfolio managers are as follows:
Dreyfus Aggressive Growth Fund Kevin Sonnett
Dreyfus Large Company Value Fund Timothy M. Ghriskey
Douglas Ramos
Dreyfus Aggressive Value Fund Timothy M. Ghriskey
Douglas Ramos
Dreyfus Midcap Value Fund Peter I. Higgins
Dreyfus Small Company Value Fund Peter I. Higgins
Dreyfus International Value Fund Sandor Cseh
Dreyfus Emerging Leaders Fund Paul Kandel
Hilary Woods
Dreyfus Premier Technology Growth Fund Paul Kandel
Mark Herskovitz
Barry Mills
Dreyfus Premier Future Leaders Fund Paul Kandal
Hilary Woods
The Manager also maintains a research department with a professional staff
of portfolio managers and securities analysts who provide research services for
the Funds and for other funds advised by the Manager.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan and commercial banking or other relationships with the issuers of
securities purchased by a Fund. The Manager has informed the Company that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager's Code of Ethics (the "Code") subjects its employees' personal
securities transactions to various restrictions to ensure that such trading does
not disadvantage any fund advised by the Manager. In that regard, portfolio
managers and other investment personnel of the Manager must preclear and report
their personal securities transactions and holdings, which are reviewed for
compliance with the Code and also are subject to the oversight of Mellon's
Investment Ethics Committee. Portfolio managers and other investment personnel
who comply with the Code's preclearance and disclosure procedures and the
requirements of the Committee may be permitted to purchase, sell or hold
securities which also may be or are held in fund(s) they manage or for which
they otherwise provide investment advice.
The Manager maintains office facilities on behalf of the Funds, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fees paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
Expenses. All expenses incurred in the operation of the Company are borne
by the Company, except to the extent specifically assumed by the Manager. The
expenses borne by the Company include: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager or its 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 maintaining the Company's existence, costs of independent pricing services,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. In addition, the Dreyfus Premier
Funds' Class B, Class C and Class T shares are subject to an annual distribution
fee, and Class A, Class B, Class C and Class T shares are subject to an annual
service fee. See "Distribution Plan and Shareholder Services Plan." Expenses
attributable to a particular Fund are charged against the assets of that Fund;
other expenses of the Company are allocated among the Funds on the basis
determined by the Board, including, but not limited to, proportionately in
relation to the net assets of each Fund.
As compensation for the Manager's services to the Company, the Company has
agreed to pay the Manager a monthly management fee at the annual rate of 1.00%
of the value of Dreyfus International Value Fund's average daily net assets,
.90% of the value of each of Dreyfus Future Leaders Fund's and Dreyfus Premier
Future Leaders Fund's average daily net assets and 0.75% of the value of each
other Fund's average daily net assets.
For the fiscal years ended October 31, 1997, 1998 and 1999, the management
fees payable by each indicated Fund, the amounts waived by the Manager and the
net fee paid by the Fund were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Name of Fund ------------------------------------- ------------------------ ----------------------------------------
Management Fee Payable Reduction In Fee Net Fee Paid
1997 1998 1999 1997 1998 1999 1997 1998 1999
Dreyfus Large Company $745,927 $1,196,867 $1,062,098 $54,892 $0 $0 $691,035 $1,196,867 $1,062,098
Value Fund
Dreyfus Small Company $860,360 $3,078,535 $2,285,905 $51,774 $0 $0 $808,586 $3,087,535 $2,285,905
Value Fund
------------------------------------------------------------------------------
For the fiscal years ended August 31, 1997, 1998 and 1999, the management
fees payable by each indicated Fund, the amounts waived by the Manager and the
net fee paid by the Fund were as follows:
Name of Fund ------------------------------------ -------------------------------- -----------------------------------
Management Fee Payable Reduction In Fee Net Fee Paid
1997 1998 1999 1997 1998 1999 1997 1998 1999
Dreyfus Aggressive $852,091 $636,709 $241,817 $106,990 $247,049 $186,565 $745,101 $389,660
Growth Fund $55,252
Dreyfus Aggressive $550,479 $1,127,829 $703,532 $99,235 $0 $451,244 $1,127,829 $703,532
Value Fund $0
Dreyfus Int'l Value $567,130 $1,359,639 $1,992,970 $18,565 $0 $548,565 $1,359,639 $1,992,970
Fund $0
Dreyfus Emerging $665,291 $1,225,265 $1,784,765 $64,125 $0 $601,166 $1,225,265 $1,784,765
Leaders Fund $0
Dreyfus Midcap $188,561 $941,508 $689,558 $66,302 $0 $122,259 $941,508 $689,558
Value Fund $0
Dreyfus Premier N/A $61,098* $1,686,120 N/A $61,098* $47,855 N/A $1,638,265
Technology Growth $0*
Fund
-------------------------------------------------------------------------------------------------------------------
---------------------------
* For the period October 13, 1997 (commencement of operations) through August
31, 1998.
</TABLE>
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the Fund, the Fund
may deduct from the payment to be made to the Manager under the Agreement, or
the Manager will bear, such excess expense to the extent required by state law.
Such deduction or payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a Fund's net assets increases.
Distributor. The Distributor, a wholly-owned subsidiary of the Manager
located at 200 Park Avenue, New York, New York 10166, serves as each Fund's
distributor on a best efforts basis pursuant to an agreement with the Company
which is renewable annually.
From August 24, 1994 through March 21, 2000, Premier Mutual Fund Services,
Inc. ("Premier") acted as each Fund's distributor. With respect to Dreyfus
Premier Technology Growth Fund, for the fiscal year ended August 31, 1999,
Premier retained $115,900 from sales loads on Class A shares, $4,908 from the
contingent deferred sales charge ("CDSC") on Class B shares and $46,094 from the
CDSC on Class C shares. Class T shares of Dreyfus Premier Technology Growth Fund
had not been offered during the fiscal year ended August 31, 1999 and,
accordingly, no Class T sales loads were retained during that period.
The Distributor may pay dealers a fee based on the amount invested through
such dealers in Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and reserves the right to
cease paying these fees at any time. The Distributor will pay such fees from its
own funds, other than amounts received from the Fund, including past profits or
any other source available to it.
The Distributor, at its expense, may provide promotional incentives to
dealers that sell shares of funds advised by the Manager which are sold with a
sales load. In some instances, those incentives may be offered only to certain
dealers who have sold or may sell significant amounts of shares.
Transfer and Dividend Disbursing Agent and Custodian. Dreyfus Transfer,
Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Company's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Company,
the Transfer Agent arranges for the maintenance of shareholder account records
for each Fund, the handling of certain communications between shareholders and
the Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee computed on the basis
of the number of shareholder accounts it maintains for each Fund during the
month, and is reimbursed for certain out-of-pocket expenses.
Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as custodian for the investments of each
Fund, except Dreyfus International Value Fund. The Bank of New York, 100 Church
Street, New York, New York 10286, acts as custodian for the investments of
Dreyfus International Value Fund. Neither custodian has any part in determining
the investment policies of the Fund or which securities are to be purchased or
sold by the Fund. Under a custody agreement with the Funds, the relevant
custodian holds the Fund's securities and keeps all necessary accounts and
records. For its custody services, the custodian receives a monthly fee based on
the market value of each respective Fund's assets held in custody and receives
certain securities transaction charges.
HOW TO BUY SHARES
ALL FUNDS, EXCEPT THE DREYFUS PREMIER FUNDS--General. Shares are sold
without a sales charge. You may be charged a fee if you effect transactions in
Fund shares through a securities dealer, bank or other financial institution
(collectively, "Service Agents"). Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client of
a Service Agent which maintains an omnibus account in the Fund and has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. However, the minimum initial investment is
$750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal
IRAs for a non-working spouse, Roth IRAs, IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") and rollover IRAs) and 403(b)(7) Plans with
only one participant and $500 for Dreyfus-sponsored Education IRAs, with no
minimum for subsequent purchases. The initial investment must be accompanied by
the Account Application. For full-time or part-time employees of the Manager or
any of its affiliates or subsidiaries, directors of the Manager, Board members
of a fund advised by the Manager, including members of the Company's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of the Manager or any
of its affiliates or subsidiaries who elect to have a portion of their pay
directly deposited into their Fund accounts, the minimum initial investment is
$50. The Fund reserves the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified or
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to the
Fund. The Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time.
Fund shares also are offered without regard to the minimum initial
investment requirements through Dreyfus-Automatic Asset Builder(R), Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to
the Dreyfus Step Program described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in the
relevant Fund's Prospectus and this Statement of Additional Information, and, to
the extent permitted by applicable regulatory authority, may charge their
clients direct fees. You should consult your Service Agents in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the Transfer
Agent or other entity authorized to receive orders on behalf of the Fund. Net
asset value per share 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. For purposes of determining
net asset value, options and futures contracts will be valued 15 minutes after
the close of trading on the floor of the New York Stock Exchange. Net asset
value per share is computed by dividing the value of the Fund's net assets
(i.e., the value of its assets less liabilities) by the total number of Fund
shares 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 Company's Board. Certain securities may be
valued by an independent pricing service approved by the Company's Board and are
valued at fair value as determined by the pricing service. For further
information regarding the methods employed in valuing each Fund's investments,
see "Determination of Net Asset Value."
For certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted, and
must be received by the Transfer Agent, within three business days after the
order is placed. If such payment is not received within three business days
after the order is placed, the order may be cancelled and the institution could
be held liable for resulting fees and/or losses.
DREYFUS PREMIER FUNDS ONLY--General. Class A shares, Class B shares, Class
C shares and Class T shares may be purchased only by clients of Service Agents,
except that full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing may purchase Class A shares directly
through the Distributor. Subsequent purchases may be sent directly to the
Transfer Agent or your Service Agent.
Class R shares are offered only to institutional investors acting for
themselves or in a fiduciary, advisory, agency, custodial or similar capacity
for qualified or non-qualified employee benefit plans, including pension,
profit-sharing, SEP-IRAs and other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state and
local governments ("Retirement Plans"). The term "Retirement Plans" does not
include IRAs or IRA "Rollover Accounts." Class R shares may be purchased for a
Retirement Plan only by a custodian, trustee, investment manager or other entity
authorized to act on behalf of such Retirement Plan. Institutions effecting
transactions in Class R shares for the accounts of their clients may charge
their clients direct fees in connection with such transactions.
When purchasing shares of a Dreyfus Premier Fund, you must specify which
Class is being purchased. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Company reserves
the right to reject any purchase order.
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 the Fund's Prospectus and this Statement of Additional Information,
and, to the extent permitted by applicable regulatory authority, may charge
their clients direct fees. You should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent investments must be
at least $100. However, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working souse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans
with only one participant and $500 for Dreyfus-sponsored Education IRAs with no
minimum for subsequent purchases. The initial investment must be accompanied by
the Account Application. The Company reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Company. The Company reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to certain Retirement
Plans. These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in the
Fund by a Retirement Plan. Participants and plan sponsors should consult their
tax advisers for details.
Fund shares also may be purchased through Dreyfus-Automatic Asset
Builder(R), Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll
Savings Plan described under "Shareholder Services." These services enable you
to make regularly scheduled investments and may provide you with a convenient
way to invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss a declining market.
Fund shares are sold on a continuous basis. Net asset value per share 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. For purposes of determining net asset value,
options and futures contracts will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. 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 its 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 Company's
Board. For further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value."
If an order is received in proper form by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund 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 closing of trading on the floor or the New
York Stock Exchange on that day. Otherwise, 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 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 the Distributor or its designee by the close of its business day
(normally 5:15 p.m., New York time) will be based on the public offering price
per share determined as of the close of trading on the floor o 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 the Distributor or its designee before
the close of its business day. For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of Fund shares may be
transmitted, and must be received by the Transfer Agent, within three business
days after the order is placed. If such payment is not received within three
business days after the order is placed, the order may be canceled and the
institution could be held liable for resulting fees and/or losses.
Class A Shares. The public offering price for Class A shares is the net asset
value per share of that Class plus (except for shareholders beneficially owning
Class A shares of Dreyfus Premier Technology Growth Fund on April 15, 1999) a
sales load as shown below:
Total Sales Load Class A
Share
----------------------------
As a % of As a % of Dealers'
---------------------------------- offering net asset Reallowance
price value as a % of
Amount of Transactions per share per share offering price
Less than $50,000................ 5.75 6.10 5.00
$50,000 to less than $100,000.... 4.50 4.70 3.75
$100,000 to less than $250,000... 3.50 3.60 2.75
$250,000 to less than $500,000... 2.50 2.60 2.25
$500,000 to less than $1,000,000. 2.00 2.00 1.75
$1,000,000 or more............... -0- -0- -0-
For shareholders of Dreyfus Premier Technology Growth Fund who
beneficially owned Class A shares of the Fund on April 15, 1999, the public
offering price for Class A shares of Dreyfus Premier Technology Growth Fund is
the net asset value per share of that Class.
A CDSC of 1% will be assessed at the time of redemption of Class A shares
purchased without an initial sales charge as part of an investment of at least
$1,000,000 and redeemed within one year of purchase. This provision does not
apply to a shareholder of Dreyfus Premier Technology Growth Fund who owned Class
A shares of the Fund on April 15, 1999. The Distributor may pay Service Agents
an amount up to 1% of the net asset value of Class A shares purchased by their
clients that are subject to a CDSC.
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 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 Code) although
more than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established pursuant
to Sections 403(b), 408(k) and 457 of the Code); or an organized group which has
been in existence for more than six months, provided that it is not organized
for the purpose of buying redeemable securities of a registered investment
company and provided, that the purchases are made through a central
administration or a single dealer, or by other means which result in economy of
sales effort or expense.
Set forth below is an example of the method of computing the offering
price of each Dreyfus Premier Fund's Class A shares. The example assumes a
purchase of Class A shares of the Fund aggregating less than $50,000, subject to
the schedule of sales charges set forth above at a price based upon a net asset
value of $12.50 for Dreyfus Premier Future Leaders Fund's Class A shares and,
for Dreyfus Premier Technology Growth Fund, the net asset value of the Fund's
Class A shares on August 31, 1999:
Dreyfus Premier Dreyfus Premier
Technology Growth Fund Future Leaders
Fund
Net Asset Value Per Share $32.21 $12.50
Per Share Sales Charge
Class A - 5.75% of offering $1.96 $ 0.76
------- ----- ------
price
(6.10% of net asset value
per share)
Per Share Offering Price to the $34.17 $13.26
====== ======
Public
Full-time employees of NASD member firms and full-time employees of other
financial institutions which have entered into an agreement with the Distributor
pertaining to the sale of Fund shares (or which otherwise have a brokerage
related or clearing arrangement with an NASD member firm or financial
institution with respect to the sale of such 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 the Distributor with such information as it may request
from time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible to
purchase Class A shares at net asset value. In addition, Class A shares are
offered at net asset value to full-time or part-time employees of the Manager or
any of its affiliates or subsidiaries, directors of the Manager, Board members
of a fund advised by the Manager, including members of the Company'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 Eligible Benefit Plans. 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) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders Asset Management LLC ("Founders"), an affiliate of the
Manager, or certain other products made available by the Distributor to such
plans, or (b) invested all of its assets in certain funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares be
sold for the benefit of clients participating in a "wrap account" or a similar
program under which such clients pay a fee to such broker-dealer or other
financial institution.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by an
insurance company pursuant to the laws of any State or territory of the United
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501(c)(3) of the Code) investing
$50,000 or more in Fund shares, and (iv) a charitable remainder trust (as
defined in Section 501(c)(3) of the Code).
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 in the relevant Dreyfus Premier Fund's Prospectus and in this
Statement of Additional Information under "How to Redeem Shares--Contingent
Deferred Sales Charge--Class B Shares."
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 such Class. 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.
Class C Shares. The public offering price for Class C 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 redemptions of Class C shares made
within the first year of purchase. See "How to Redeem Shares--Contingent
Deferred Sales Charge--Class C Shares."
Class B and Class C Shares. The Distributor compensates certain Service Agents
for selling Class B and Class C shares at the time of purchase from its own
assets. The proceeds of the CDSC and the Distribution Plan fee, in part, are
used to defray these expenses.
Class R Shares. The public offering price for Class R shares is the net asset
value per share of that Class.
Class T Shares. The public offering price for Class T shares is the net asset
value per share of that Class plus a sales load as shown below:
Total Sales Load
Class T Shares
As a % of As a % of Dealers'
offering net asset Reallowance
Amount of Transactions price value as a % of
per share per share offering price
Less than $50,000................ 4.50 4.70 4.00
$50,000 to less than $100,000.... 4.00 4.20 3.50
$100,000 to less than $250,000... 3.00 3.10 2.50
$250,000 to less than $500,000... 2.00 2.00 1.75
$500,000 to less than $1,000,000. 1.50 1.50 1.25
$1,000,000 or more............... -0- -0- -0-
------------------------------------------------------------------------------
A CDSC of 1% will be assessed at the time of redemption of Class T shares
purchased without an initial sales charge as part of an investment of at least
$1,000,000 and redeemed within one year of purchase. The Distributor may pay
Service Agents an amount up to 1% of the net asset value of Class T shares
purchased by their clients that are subject to a CDSC. Because the expenses
associated with Class A shares will be lower than those associated with Class T
shares, purchasers investing $1,000,000 or more in the Fund (assuming
ineligibility to purchase Class R shares) generally will find it beneficial to
purchase Class A shares rather than Class T shares.
Class T shares also may be purchased at net asset value, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a registered
open-end management investment company not managed by the Manager or its
affiliates. The purchase of Class T shares of the Fund must be made within 60
days of such redemption and the shares redeemed must have been subject to an
initial sales charge or a contingent deferred sales charge.
The scale of sales loads applies to purchases of Class T shares made by
any "purchaser," as defined above under Class A Shares.
Set forth below is an example of the method of computing the offering
price of each Dreyfus Premier Fund's Class T shares. The example assumes a
purchase of Class T shares of the Fund aggregating less than $50,000, subject to
the schedule of sales charges set forth above at a price based upon a net asset
value of $12.50 for Dreyfus Premier Future Leaders Fund's Class T shares and,
for Dreyfus Premier Technology Growth Fund, the net asset value of the Fund's
Class T shares on August 31, 1999:
Dreyfus Dreyfus
Premier Premier
Technology Future
Growth Fund Leaders Fund
Net Asset Value Per Share $32.21 $12.50
Per Share Sales Charge
Class T - 4.50% of offering price $1.52 $0.59
------- ---- ----
(4.70% of net asset value per share)
Per Share Offering Price to the Public $33.73 $13.09
====== ======
Class T shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class T 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, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders, or certain other products made available by the Distributor
to such plans, or (b) invested all of its assets in funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
Dealer Reallowance--Class A and Class T Shares. The dealer reallowance provided
with respect to Class A and Class T shares may be changed from time to time but
will remain the same for all dealers. The Distributor, at its own expense, may
provide additional promotional incentives to dealers that sell shares of funds
advised by the Manager which are sold with a sales load, such as Class A and
Class T shares. In some instances, these incentives may be offered only to
certain dealers who have sold or may sell significant amounts of such shares.
Right of Accumulation--Class A and Class T Shares. Reduced sales loads apply to
any purchase of Class A and Class T shares, shares of other funds in the Dreyfus
Premier Family of Funds, shares of certain other funds advised by the Manager or
Founders, 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 below, where the aggregate investment
including such purchase, is $50,000 or more. If, for example, you previously
purchased and still hold Class A or Class T shares of a Dreyfus Premier Fund, or
shares of any other Eligible Fund, or combination thereof, with an aggregate
current market value of $40,000 and subsequently purchase Class A or Class T
shares of such Fund having a current value of $20,000, the sales load applicable
to the subsequent purchase would be reduced to 4.50% of the offering price in
the case of Class A shares or 4.00% of the offering price in the case of Class T
shares. 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 at the time of purchase, you or your Service Agent must notify
the Distributor if orders are made by wire, or the Transfer Agent if orders are
made by mail. The reduced sales load is subject to confirmation of your holdings
through a check of appropriate records.
APPLICABLE TO ALL FUNDS
Dreyfus TeleTransfer Privilege. (All Funds) You may purchase shares by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an Automated
Clearing House ("ACH") member may be so designated.
Dreyfus TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day the Transfer Agent and
the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the Dreyfus TeleTransfer Privilege, the initial payment for
purchase of shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature-guaranteed. See "How to Redeem Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. (All Funds) You 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.
DISTRIBUTION PLAN AND
SHAREHOLDER SERVICES PLAN
Class B, Class C and Class T shares of each Dreyfus Premier Fund are
subject to a Distribution Plan, and Class A, Class B, Class C and Class T shares
of each Dreyfus Premier Fund and the shares of each other Fund are subject to a
Shareholder Services Plan.
Distribution Plan. (Dreyfus Premier Funds only) Rule 12b-1 (the "Rule")
adopted by the Securities and Exchange Commission under the 1940 Act, provides,
among other things, that an investment company may bear expenses of distributing
its shares only pursuant to a plan adopted in accordance with the Rule. The
Company's Board has adopted such a plan (the "Distribution Plan") with respect
to Class B, Class C and Class T shares of each Dreyfus Premier Fund pursuant to
which the Fund pays the Distributor for distributing its Class B, Class C and
Class T shares at an annual rate of 0.75% of the value of the average daily net
assets of Class B and Class C shares and 0.25% of the value of the average daily
net assets of Class T shares. The Company's Board believes that there is a
reasonable likelihood that the Distribution Plan will benefit the Fund and the
holders of its Class B, Class C and Class T shares.
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
Board for its review. In addition, the Distribution Plan provides that it may
not be amended to increase materially the costs which holders of Class B, Class
C or Class T shares may bear pursuant to the Distribution Plan without the
approval of the holders of such shares and that other material amendments of the
Distribution Plan must be approved by the Board, and by the Board members who
are not "interested persons" (as defined in the 1940 Act) of the Company 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 Board cast in person at a meeting called for the purpose of
voting on the Distribution Plan. As to the relevant Class of shares of the Fund,
the Distribution Plan may be terminated at any time by vote of a majority of the
Board members 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 such Class of shares.
With respect to Dreyfus Premier Technology Growth Fund, for the fiscal
year ended August 31, 1999, the Fund paid $78,928 and $32,288 with respect to
Class B shares and Class C shares, respectively, pursuant to the Distribution
Plan.
The Distribution Plan was not in effect with respect to Class T shares of
Dreyfus Premier Technology Growth Fund during the fiscal year ended August 31,
1999 and, accordingly, no fees were paid pursuant to the Distribution Plan with
respect to the Fund's Class T shares during that period.
Shareholder Services Plan. (All Funds) The Company has adopted a
Shareholder Services Plan as to Class A, Class B, Class C and Class T shares of
each Dreyfus Premier Fund, and as to the shares of each other Fund. Under the
Plan, the Company pays the Distributor for the provision of certain services to
the holders of such shares a fee at the annual rate of 0.25% of the value of the
average daily net assets of the shares. 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 such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make payments
to certain Service Agents in respect of these services.
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 Board for its review. In addition, the Shareholder Services Plan provides
that material amendments must be approved by the Company's Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act) of
the Company and 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, by vote cast in person at a meeting called
for the purpose of considering such amendments. As to each Fund, the Shareholder
Services Plan is subject to annual approval by such vote of the Board members
cast in person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan is terminable with respect to each
Fund at any time by vote of a majority of the Board members 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 the fiscal year ended October 31, 1999, the amount paid by each
indicated Fund pursuant to the Shareholder Services Plan was as follows:
Name of Fund Amount Paid
Dreyfus Large Company Value Fund $354,033
Dreyfus Small Company Value Fund $761,968
For the fiscal year ended August 31, 1999, the amount paid by each
indicated Fund pursuant to the Shareholder Services Plan was as follows:
Name of Fund Amount Paid
Dreyfus Aggressive Growth Fund $ 80,606
Dreyfus Aggressive Value Fund $234,511
Dreyfus Emerging Leaders Fund $495,768
Dreyfus International Value Fund $498,243
Dreyfus Midcap Value Fund $229,853
Dreyfus Premier Technology Growth Fund
Class A $524,394
Class B* $ 26,309
Class C* $ 10,796
---------------------------------
*For the period April 15, 1999 through August 31, 1999.
The Shareholder Services Plan was not in effect with respect to Class T
shares of Dreyfus Premier Technology Growth Fund during the fiscal year ended
August 31, 1999 and, accordingly, no fees were paid pursuant to the Shareholder
Services Plan with respect to the Fund's Class T shares during that period.
HOW TO REDEEM SHARES
Redemption Fee. (All Funds, except the Dreyfus Premier Funds) The Fund
will deduct a redemption fee equal to 1% of the net asset value of Fund shares
redeemed (including redemptions through the use of the Fund Exchanges service)
less than 30 days following the issuance of such shares. The redemption fee will
be deducted from the redemption proceeds and retained by the Fund and used
primarily to offset the transaction costs that short-term trading imposes on the
Fund and its shareholders. For purposes of calculating the 30-day holding
period, the Fund will employ the "first-in, first-out" method, which assumes
that the shares you are redeeming or exchanging are the ones you have held the
longest.
No redemption fee will be charged on the redemption or exchange of shares
(1) through the Fund's Automatic Withdrawal Plan or Dreyfus Auto-Exchange
Privilege, (2) through accounts reflected on the records of the Transfer Agent
as omnibus accounts approved by the Distributor, (3) through accounts
established by Service Agents approved by the Distributor that utilize the
National Securities Clearing Corporation's networking system, or (4) acquired
through the reinvestment of dividends or capital gains distributions. The
redemption fee may be waived, modified or terminated at any time.
For the fiscal year ended October 31, 1999, the amount of redemption fees
retained by each indicated Fund was as follows:
Name of Fund Amount Retained
Dreyfus Large Company Value Fund $0
Dreyfus Small Company Value Fund $0
For the fiscal year ended August 31, 1999, the amount of redemption fees
retained by each indicated Fund was as follows:
Name of Fund Amount Retained
Dreyfus Aggressive Growth Fund $0
Dreyfus Aggressive Value Fund $0
Dreyfus Emerging Leaders Fund $0
Dreyfus International Value Fund $0
Dreyfus Midcap Value Fund $0
Dreyfus Premier Technology Growth Fund* $0
---------------------------------
* Prior to April 15, 1999, Dreyfus Premier Technology Growth Fund charged a
1% redemption fee on shares (which were reclassified as Class A shares
effective April 15, 1999) held for six months or less.
Contingent Deferred Sales Charge--Class B Shares. (Dreyfus Premier Funds
only) A CDSC 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 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 for Class B shares:
Year Since CDSC as a % of
Purchase Payment Amount Invested or
Was Made Redemption
Proceeds
First............................. 4.00
Second............................ 4.00
Third............................. 3.00
Fourth............................ 3.00
Fifth............................. 2.00
Sixth............................. 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amounts of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of shares
purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share for
a cost of $1,000. Subsequently, the shareholder acquired five additional shares
through dividend reinvestment. During the second year after the purchase the
investor decided to redeem $500 of the 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 represented 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.
Contingent Deferred Sales Charge--Class C Shares. (Dreyfus Premier Funds
only) A CDSC of 1% is imposed on any redemption of Class C shares within one
year of the date of purchase. The basis for calculating the payment of any such
CDSC will be the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge -- Class B Shares" above.
Waiver of CDSC. (Dreyfus Premier Funds only) The CDSC may be waived in
connection with (a) redemptions made within one year after the death or
disability, as defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by employees participating in Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with the Fund
by merger, acquisition of assets or otherwise, (d) a distribution following
retirement under a tax-deferred retirement plan or upon attaining age 70-1/2 in
the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b)
of the Code, and (e) redemptions pursuant to the Automatic Withdrawal Plan, as
described below. If the Company's Board determines to discontinue the waiver of
the CDSC, the disclosure herein 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 or this Statement
of Additional Information 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 the Distributor. Any
such qualification is subject to confirmation of your entitlement.
Redemption Through a Selected Dealer. (Dreyfus Premier Funds only) 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 if
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 Shares" for a discussion of additional conditions or fees that may be
imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by dealers
by the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee prior to the
close of its business day (normally 5:15 p.m., New York time), are effected at
the price determined as of the close of trading on the floor of the 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. (Dreyfus Premier Funds only) Upon written request,
you may reinvest up to the number of Class A, Class B or Class T shares you have
redeemed, within 45 days of redemption, at the then-prevailing net asset value
without a sales load, or reinstate your account for the purpose or exercising
Fund Exchanges. Upon reinstatement, with respect to Class B shares, or Class A
or Class T shares if such shares were subject to a CDSC, your account will be
credited with an amount equal to the CDSC previously paid upon redemption of the
shares reinvested. The Reinvestment Privilege may be exercised only once.
Wire Redemption Privilege. (All Funds) By using this Privilege, you
authorize the Transfer Agent to act on wire, telephone or letter redemption
instructions from any person representing himself or herself to be you (or a
representative of your Service Agent for a Dreyfus Premier Fund) and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Company will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt by the Transfer Agent of the redemption request in
proper form. Redemption proceeds ($1,000 minimum) will be transferred by Federal
Reserve wire only to the commercial bank account specified by you on the Account
Application or Shareholder Services Form, or to a correspondent bank if your
bank is not a member of the Federal Reserve System. Fees ordinarily are imposed
by such bank and borne by the investor. Immediate notification by the
correspondent bank to your bank is necessary to avoid a delay in crediting the
funds to your bank account.
If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code which
may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
If you do not have direct access to telegraphic equipment, you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171, toll
free. You should advise the operator that the above transmittal code must be
used and should also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent. This
request must be signed by each shareholder, with each signature guaranteed as
described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. (All Funds) You may request by telephone
that redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an ACH member may be designated. Holders of jointly registered Fund or
bank accounts may redeem through the Dreyfus TeleTransfer Privilege for transfer
to their bank account not more than $500,000 within any 30-day period. You
should be aware that if you have selected the Dreyfus TeleTransfer Privilege,
any request for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the ACH system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in your account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "How to Buy Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. (All Funds) 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 Exchanges Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must appear with the
signature. The Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians, and may accept
other suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to
signature-guarantees, please call one of the telephone numbers listed on the
cover.
Redemption Commitment. (All Funds) The Company has committed itself to pay
in cash all redemption requests by any shareholder of record of a Fund, limited
in amount during any 90-day period to the lesser of $250,000 or 1% of the value
of such 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 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. (All Funds) 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 relevant 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
Fund Exchanges. You may purchase, in exchange for shares of a Fund, shares
of certain other funds managed or administered by the Manager, to the extent
such shares are offered for sale in your state of residence. A 1% redemption fee
will be charged upon an exchange of Fund shares (except for a Dreyfus Premier
Fund), where the exchange occurs less than 30 days following the issuance of
such shares. With regard to each Dreyfus Premier Fund, in exchange for shares of
the Fund, you may purchase shares of the same Class of another fund in the
Dreyfus Premier Family of Funds, shares of the same Class of certain funds
advised by Founders, or shares of certain other funds in the Dreyfus Family of
Funds, and, with respect to Class T shares of the Fund, Class A shares of
certain Dreyfus Premier fixed-income funds, to the extent such shares are
offered for sale in your state of residence. Shares of other funds purchased by
exchange, will be purchased on the basis of relative net asset value per share
as follows:
A. Exchanges for shares of funds offered without a sales load will be
made without a sales load in shares of other funds offered without a
sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged without
a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), but if the sales load applicable to the
Offered Shares exceeds the maximum sales load that could have
been imposed in connection with the Purchased Shares (at the time
the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
E. Shares of funds subject to a CDSC exchanged for shares of another
fund will be subject to the higher applicable CDSC of the two funds
and, for purposes of calculating CDSC rates and conversion periods,
if any, will be deemed to have been held since the date the shares
being exchanged were initially purchased.
To accomplish an exchange under item D above, you or, with respect to a
Dreyfus Premier Fund, your Service Agent acting on your behalf, must notify the
Transfer Agent of your prior ownership of Fund shares and your account number.
Dreyfus Premier Fund shares subject to a CDSC also may be exchanged for
shares of Dreyfus Worldwide Dollar Money Market Fund, Inc. The shares so
purchased will be held in a special account created solely for this purpose
("Exchange Account"). Exchanges of shares from an Exchange Account only can be
made into certain other funds managed or administered by the Manager. No CDSC is
charged when an investor exchanges into an Exchange Account; however, the
applicable CDSC will be imposed when shares are redeemed from an Exchange
Account or other applicable Fund account. Upon redemption, the applicable CDSC
will be calculated without regard to the time such shares were held in an
Exchange Account. See "How to Redeem Shares." Redemption proceeds for Exchange
Account shares are paid by Federal wire or check only. Exchange Account shares
also are eligible for the Dreyfus Auto-Exchange Privilege, Dreyfus Dividend
Sweep and the Automatic Withdrawal Plan.
To request an exchange, you or, with respect to a Dreyfus Premier Fund,
your Service Agent acting on your behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application, indicating
that you specifically refuse this Privilege. By using the Telephone Exchange
Privilege, you authorize the Transfer Agent to act on telephonic instructions
(including over The Dreyfus Touch(R) automated telephone system) 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. 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. No fees currently are charged shareholders
directly in connection with exchanges, although the Company reserves the right,
upon not less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission.
Exchanges of Class R shares of a Dreyfus Premier Fund held by a Retirement
Plan may be made only between the investor's Retirement Plan account in one fund
and such investor's Retirement Plan account in another fund.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege permits
you to purchase, in exchange for shares of a Fund, shares of another fund in the
Dreyfus Family of Funds of which you are a shareholder. With regard to each
Dreyfus Premier Fund, in exchange for shares of the Fund, you may purchase
shares of the same Class of another fund in the Dreyfus Premier Family of Funds,
shares of the same Class of certain funds advised by Founders, or shares of
certain other funds in the Dreyfus Family of Funds, and, with respect to Class T
shares of the Fund, Class A shares of certain Dreyfus Premier fixed-income
funds, of which you are a shareholder. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net asset
value as described above under "Fund Exchanges." Enrollment in or modification
or cancellation of this Privilege is effective three business days following
notification by you. You will be notified if your account falls below the amount
designated to be exchanged under this Privilege. In this case, your 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.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Company reserves the right to reject any
exchange request in whole or in part. Shares may be exchanged only between
accounts having identical names and other identifying designations. The Fund
Exchanges service or Dreyfus Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
Dreyfus-Automatic Asset Builder(R). Dreyfus-Automatic Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you.
Dreyfus Government Direct Deposit Privilege. Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social Security,
or certain veterans' military or other payments from the U.S. Government
automatically deposited into your fund account. You may deposit as much of such
payments as you elect.
Dreyfus Payroll Savings Plan. Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the ACH system at each pay period. To establish a Dreyfus
Payroll Savings Plan account, you must file an authorization form with your
employer's payroll department. It is the sole responsibility of your employer to
arrange for transactions under the Dreyfus Payroll Savings Plan.
Dreyfus Step Program. (All Funds, except the Dreyfus Premier Funds)
Dreyfus Step Program enables you to purchase Fund shares without regard to the
Fund's minimum initial investment requirements through Dreyfus-Automatic Asset
Builder(R), Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll
Savings Plan. To establish a Dreyfus Step Program account, you must supply the
necessary information on the Account Application and file the required
authorization form(s) with the Transfer Agent. For more information concerning
this Program, or to request the necessary authorization form(s), please call
toll free 1-800-782-6620. You may terminate your participation in this Program
at any time by discontinuing participation in Dreyfus-Automatic Asset Builder,
Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as
the case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time. If you wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a Dreyfus-sponsored
retirement plan, you may do so only for IRAs, SEP-IRAs and rollover IRAs.
Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, from a Fund in shares of another fund in the Dreyfus Family of Funds, with
regard to each Dreyfus Premier Fund, or shares of the same Class of another fund
in the Dreyfus Premier Family of Funds, shares of the same Class of certain
funds advised by Founders, or shares of certain other funds in the Dreyfus
Family of Funds, and with respect to Class T shares of the Fund, Class A shares
of certain Dreyfus Premier fixed-income funds, of which you are a shareholder.
Shares 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 by a fund may be invested
without imposition of a sales load in shares of other funds
offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund that charges a sales load
may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), but 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 by a fund may be invested in shares
of other funds that impose a CDSC and the applicable CDSC, if any,
will be imposed upon redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from a Fund to a designated
bank account. Only an account maintained at a domestic financial institution
which is an ACH member may be so designated. Banks may charge a fee for this
service.
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. Withdrawal
payments are the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and distributions,
your shares will be reduced and eventually may be depleted. The Automatic
Withdrawal Plan may be terminated at any time by you, the Company or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Certain Retirement Plans, including Dreyfus-sponsored retirement plans,
may permit certain participants to establish an automatic withdrawal plan from
such Retirement Plans. Participants should consult their Retirement Plan sponsor
and tax adviser for details. Such a withdrawal plan is different than the
Automatic Withdrawal Plan.
With respect to each Dreyfus Premier Fund, no CDSC with respect to Class B
shares will be imposed on withdrawals made under the Automatic Withdrawal Plan,
provided that the amounts withdrawn under the plan do not exceed on an annual
basis 1% of the account value at the time the shareholder elects to participate
in the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed, on an annual basis, 12% of the
value of the shareholders account will be subject to a CDSC on the amounts
exceeding 12% of the initial account value. Withdrawals of Class A and Class T
shares subject to a CDSC and Class C shares under the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Purchases of additional Class A and
Class T shares where the sales load is imposed concurrently with withdrawals of
Class A and Class T shares generally are undesirable.
Letter of Intent--Class A and Class T Shares. (Dreyfus Premier Funds only)
By signing a Letter of Intent form, which can be obtained by calling
1-800-554-4611, you become eligible for the reduced sales load applicable to the
total number of Eligible Fund shares purchased in a 13 month period pursuant to
the terms and conditions set forth in the Letter of Intent. A minimum initial
purchase of $5,000 is required. To compute the applicable sales load, the
offering price of shares you hold (on the date of submission of the Letter of
Intent) in any Eligible Fund that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward completion of the Letter
of Intent. However, the reduced sales load will be applied only to new
purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in the
Letter of Intent for payment of a higher sales load if you do not purchase the
full amount indicated in the Letter of Intent. The escrow will be released when
you fulfill the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load reduction, the sales
load will be adjusted to reflect your total purchase at the end of 13 months. If
total purchases are less than the amount specified, you will be requested to
remit an amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If such
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of Class A or Class T shares of the Fund 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 or Class T
shares, you must indicate your intention to do so under a Letter of Intent.
Purchases pursuant to a Letter or Intent will be made at the then-current net
asset value plus the applicable sales load in effect at the time such Letter of
Intent was executed.
Corporate Pension/Profit-Sharing and Retirement Plans. The Company makes
available to corporations a variety of prototype pension and profit-sharing
plans, including a 401(k) Salary Reduction Plan. In addition, the Company makes
available Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs),
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan, a
403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares. All
fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may not
be made in advance of receipt of funds.
You should read the prototype retirement plan and the appropriate form of
custodial agreement for further details on eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
Valuation of Portfolio Securities. Each Fund's securities, including
covered call options written by a 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 that open short
positions are valued at the asked price. 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 U.S. dollars at the midpoint of the New York
interbank market spot exchange rate as quoted on the day of such translation or,
if no such rate is quoted on such date, such other quoted market exchange rate
as may be determined to be appropriate by the Manager. Forward currency
contracts will be valued at the current cost of offsetting the contract. If a
Fund has to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value may not take place
contemporaneously with the determination of prices of certain of the Fund's
securities. Short-term investments may be carried at amortized cost, which
approximates value. Expenses and fees, including the management fee and fees
pursuant to the Distribution Plan, if applicable, and the Shareholder Services
Plan, are accrued daily and taken into account for the purpose of determining
the net asset value of a Fund's shares.
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Board, are valued at fair value as determined in
good faith by the Board. The Board will review the method of valuation on a
current basis. In making their good faith valuation of restricted securities,
the Board members generally will take the following factors into consideration:
restricted securities 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 if the Board members 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.
New York Stock Exchange Closings. The holidays (as observed) on which
--------------------------------
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management of the Company believes that each Fund (other than Dreyfus
Premier Future Leaders Fund which had not commenced operations) has qualified
for its most recent fiscal year as a "regulated investment company" under the
Code. Each 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 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 distribute at least 90% of its net
income (consisting of net investment income and net short-term capital gain) to
its shareholders and meet certain asset diversification and other requirements.
If a Fund did not qualify as a regulated investment company, it would be treated
for tax purposes as an ordinary corporation subject to Federal income tax. The
term "regulated investment company" does not imply the supervision of management
or investment practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Any dividend or distribution paid shortly after your purchase may have the
effect of reducing the aggregate net asset value of your shares below the cost
of your investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the Fund's
Prospectus. In addition, if a shareholder holds shares of a 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.
In general, dividends (other than capital gain dividends) paid by a Fund
to U.S. corporate shareholders may be eligible for the dividends received
deduction to the extent that the Fund's income consists of dividends paid by
U.S. corporations on shares that have been held by the Fund for at least 46 days
during the 90-day period commencing 45 days before the shares become
ex-dividend. In order to claim the dividends received deduction, the investor in
the Fund must have held its shares in the Fund for at least 46 days during the
90-day period commencing 45 days before the Fund shares become ex-dividend.
Additional restrictions on an investor's ability to claim the dividends received
deduction may apply.
A Fund may qualify for and may make an election under which 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 incurred or paid by the Fund to
foreign countries. A Fund may make that election 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 certain
distribution requirements. The foreign tax credit available to shareholders is
subject to certain limitations.
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 and non-U.S. dollar
denominated securities (including debt instruments and certain futures or
forward contracts and options) may be treated as ordinary income or loss. In
addition, all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds will be treated as ordinary income.
Finally, all or a portion of the gain realized from engaging in "conversion
transactions" (generally including certain transactions designed to convert
ordinary income into capital gain) may be treated as ordinary income.
Gain or loss, if any, realized by a Fund from certain financial futures or
forward contracts and options transactions ("Section 1256 contracts") 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 contract and option
as well as from closing transactions. In addition, any Section 1256 contracts
remaining unexercised at the end of the Fund's taxable year will be treated as
sold for its then fair market value, resulting in additional gain or loss to
such Fund.
Offsetting positions held by a Fund involving certain financial futures or
forward contracts or options transactions with respect to actively traded
personal property may be considered, for tax purposes, to constitute
"straddles." To the extent the straddle rules apply to positions established by
the Fund, losses realized by the Fund may be deferred to the extent of
unrealized gain in the offsetting position. In addition, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gains on straddle positions may be treated as short-term
capital gains or ordinary income. Certain of the straddle positions held by the
Fund may constitute "mixed straddles." The Fund may make one or more elections
with respect to the treatment of "mixed straddles," resulting in different tax
consequences In certain circumstances, the provisions governing the tax
treatment of straddles override or modify certain of the provisions discussed
above.
If a Fund either (1) holds an appreciated financial position with respect
to stock, certain debt obligations, or partnership interests ("appreciated
financial position") and then enters into a short sale, futures or forward
contract, or offsetting notional principal contract (collectively, a "Contract")
with respect to the same or substantially identical property or (2) holds an
appreciated financial position that is a Contract and then acquires property
that is the same as, or substantially identical to, the underlying property, the
Fund generally will be taxed as if the appreciated financial position were sold
at its fair market value on the date the Fund enters into the financial position
or acquires the property, respectively.
If a Fund enters into certain derivatives (including forward contracts,
long positions under notional principal contracts, and related puts and calls)
with respect to equity interests in certain pass-thru entities (including other
regulated investment companies, real estate investment trusts, partnerships,
real estate mortgage investment conduits and certain trusts and foreign
corporations), long-term capital gain with respect to the derivative may be
recharacterized as ordinary income to the extent it exceeds the long-term
capital gain that would have been realized had the interest in the pass-thru
entity been held directly by the Fund during the term of the derivative
contract. Any gain recharacterized as ordinary income will be treated as
accruing at a constant rate over the term of the derivative contract and may be
subject to an interest charge. The Treasury has authority to issue regulations
expanding the application of these rules to derivatives with respect to debt
instruments and/or stock in corporations that are not pass-thru entities.
Investment by the Fund in securities issued or acquired 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 each year to accrue a portion of the discount (or deemed discount) at
which the securities were issued and to distribute such income in order to
maintain its qualification as a regulated investment company. 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 the distribution requirements.
If a Fund invests in an entity that is classified as a "passive foreign
investment company"("PFIC") for Federal income tax purposes, the operation of
certain provisions of the Code applying to PFICs could result in the imposition
of certain Federal income taxes on the Fund. In addition, gain realized from the
sale or other disposition of PFIC securities held beyond the end of the Fund's
taxable year may be treated as ordinary income under Section 1291 of the Code
and, with respect to PFIC securities that are marked-to-market, under Section
1296 of the Code.
Federal regulations require that you provide a certified taxpayer
identification number ("TIN") upon opening or reopening an account. See the
Account Application for further information concerning this requirement. Failure
to furnish a certified TIN to the Company could subject you to a $50 penalty
imposed by the Internal Revenue Service.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf of
the Company for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of the Manager 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 Manager's 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
Manager and the Manager's fees are not reduced as a consequence of the receipt
of such supplemental information. Such information may be useful to the Manager
in serving both the Company and other funds it advises and, conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Manager in carrying out its obligations to the Company.
Sales by a broker of shares of a Fund or other funds managed, advised or
administered by the Manager or its affiliates 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 the Manager
being engaged simultaneously in the purchase or sale of the same security.
Certain of the Funds' transactions in securities of foreign issuers may not
benefit from the negotiated commission rates available to the Funds for
transactions in securities of domestic issuers. When transactions are executed
in the over-the-counter market, each Fund will deal with the primary market
makers unless a more favorable price or execution otherwise is obtainable.
Foreign exchange transactions are made with banks or institutions in the
interbank market at prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as within a year. In
periods in which extraordinary market conditions prevail, the Manager will not
be deterred from changing a Fund's 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 the Manager based upon its knowledge of available
information as to the general level of commissions paid by other institutional
investors for comparable services. Higher portfolio turnover rates usually
generate additional brokerage commissions and transaction costs and any
short-term gains realized from these transactions are taxable to shareholders as
ordinary income.
For the fiscal years ended October 31, 1997, 1998 and 1999, the amounts
paid by the indicated Funds for brokerage commissions, gross spreads and
concessions on principal transactions, none of which was paid to the
Distributor, were as follows:
Name of Fund Brokerage Commissions
Paid
1997 1998 1999
---- ---- ----
Dreyfus Large Company Value Fund $ 584,746 $ 912,073 $ 468,397
Dreyfus Small Company Value Fund $ 1,304,668 $1,870,438
For the fiscal years ended August 31, 1997, 1998 and 1999, the amounts
paid by the indicated Funds for brokerage commissions, gross spreads and
concessions on principal transactions none of which was paid to the Distributor,
were as follows:
Name of Fund Brokerage Commissions
Paid
1997 1998 1999
---- ---- ----
Dreyfus Aggressive Growth Fund $ 945,195 $ 536,245 $ 94,085
Dreyfus Aggressive Value Fund $ 763,570 $ 962,236 $547,239
Dreyfus Emerging Leaders Fund $2,104,861 $2,289,601 $621,306
Dreyfus International Value Fund $ 275,265 $ 340,173 $426,862
Dreyfus Midcap Value Fund $ 408,251 $ 726,775 $891,167
Dreyfus Premier Technology Growth Fund $ 0 $ $202,514
206,639(1)
--------------------------
(1) For the period October 13, 1997 (commencement of operations) through August
31, 1998.
The aggregate amount of transactions during the last fiscal year in
securities effected on an agency basis through a broker for, among other things,
research services, and the commissions and concessions related to such
transactions were as follows:
Transaction Amount Commissions
and Concessions
Dreyfus Large Company Value Fund $60,922,278 $ 65,901
Dreyfus MidCap Value Fund $ 0 $ 0
Dreyfus Small Company Value Fund $ 0 $ 0
Dreyfus Aggressive Growth Fund $ 0 $ 0
Dreyfus Aggressive Value Fund $37,781,161 $ 49,932
Dreyfus Emerging Leaders Fund $13,984,163 $ 37,388
Dreyfus International Value Fund $ 0 $ 0
Dreyfus Premier Technology Growth Fund $18,909,862 $ 15,400
The Company contemplates that, consistent with the policy of obtaining the
most favorable net price, brokerage transactions may be conducted through the
Manager or its affiliates, including Dreyfus Investment Services Corporation
("DISC") and Dreyfus Brokerage Services, Inc. ("DBS"). The Company's Board has
adopted procedures in conformity with Rule 17e-1 under the 1940 Act to ensure
that all brokerage commissions paid to the Manager or its affiliates are
reasonable and fair.
During the fiscal years ended August 31, 1997 and 1998, Dreyfus Aggressive
Value Fund paid to DISC, and during the fiscal year ended August 31, 1999,
Dreyfus Aggressive Value Fund paid to DBS, brokerage commissions of $39,084, $0
and $24,111, respectively. During the fiscal years ended August 31, 1997, 1998
and 1999, this amounted to approximately 9%, 0% and 4%, respectively, of the
aggregate brokerage commissions paid by the Fund for transactions involving
approximately 20%, 0% and 7%, respectively, of the aggregate dollar amount of
transactions for which the Fund paid brokerage commissions.
During the fiscal years ended August 31, 1997 and 1998, Dreyfus Emerging
Leaders Fund paid to DISC, and during the fiscal year ended August 31, 1999,
Dreyfus Emerging Leaders paid to DBS, brokerage commissions of $0, $0 and
$2,825, respectively. During the fiscal years ended August 31, 1997, 1998 and
1999, this amounted to approximately 0%, 0% and 0.5%, respectively, of the
aggregate brokerage commissions paid by the Fund for transactions involving
approximately 0%, 0% and 0.9%, respectively, of the aggregate dollar amount of
transactions for which the Fund paid brokerage commissions.
During the fiscal years ended August 31, 1997 and 1998, Dreyfus Premier
Technology Growth Fund paid to DISC, and during the fiscal year ended August 31,
1999, Dreyfus Premier Technology Growth Fund paid to DBS, brokerage commissions
of $0, $0 and $28,475, respectively. During the fiscal years ended August 31,
1997, 1998 and 1999, this amounted to approximately 0%, 0% and 14%,
respectively, of the aggregate brokerage commissions paid by the Fund for
transactions involving approximately 0%, 0% and 16%, respectively, of the
aggregate dollar amount of transactions for which the Fund paid brokerage
commissions.
During the fiscal years ended October 31, 1997, 1998 and 1999, Dreyfus
Large Company Value Fund paid brokerage commissions of $47,101, $456 and
$17,147, respectively, to DISC. During the fiscal years ended October 31, 1997,
1998 and 1999, this amounted to approximately 10%, 0.08% and 4%, respectively,
of the aggregate brokerage commissions paid by the Fund for transactions
involving approximately 23%, 0.19% and 7%, respectively, of the aggregate dollar
amount of transactions for which the Fund paid brokerage commissions.
With respect to Dreyfus Small Company Value Fund, Dreyfus Aggressive
Growth Fund, Dreyfus Midcap Value Fund and Dreyfus International Equity Fund,
there were no brokerage commissions paid to the Manager or its affiliates for
their most current fiscal years.
PERFORMANCE INFORMATION
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum offering
price in the case of Class A) 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 or
Class T, the maximum sales load has been deducted from the hypothetical initial
investment at the time of purchase or in the case of Class B or Class C, the
maximum applicable CDSC has been paid upon redemption at the end of the period.
Aggregate total return is calculated by subtracting the amount of the
Fund's net asset value (maximum offering price in the case of Class A or Class
T) 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 net asset value (maximum offering price in the case
of Class A or Class T) per share at the beginning of the period. Aggregate 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 or Class T shares or without giving effect
to any applicable CDSC at the end of the period for Class B or Class C shares.
In such cases, the calculation would not reflect the deduction of the sales load
with respect to Class A or Class T shares or any applicable CDSC with respect to
Class B or Class C shares, which, if reflected, would reduce the performance
quoted.
For the indicated period ended August 31, 1999 (October 31, 1999 with
respect to Dreyfus Large Company Value Fund and Dreyfus Small Company Value
Fund), the returns for each Fund were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Aggregate Aggregate
Total Return Annual Total
Since Return Since
Inception Inception
Based on Net Based on Average Average
Name of Fund Asset Value Maximum Annual Annual
(without Offering Total Total
deduction of Price (with Return One Return
maximum deduction of Year Since
sales load maximum sales Inception
or CDSC) load or CDSC)
Dreyfus Large Company Value 154.94% N/A 13.71% 17.38%
Fund(1)
Dreyfus Small Company Value 121.16% N/A 21.45% 14.56%
Fund(1)
Dreyfus Aggressive Growth -13.28% N/A 26.64% -3.57%
Fund(2)
Dreyfus Aggressive Value Fund(2) 140.53% N/A 25.41% 25.09%
Dreyfus Midcap Value Fund(2) 123.21% N/A 55.71% 22.73%
Dreyfus Emerging Leaders Fund(2) 183.33% N/A 50.54% 30.43%
Dreyfus International Value 56.90% N/A 28.19% 12.18%
Fund(2)
Dreyfus Premier Technology
Growth Fund
Class A(3) 158.89% 144.05% 151.84% 60.73%
Class B(4) 13.73% 9.73%
Class C(4) 13.63% 12.63%
Class R(4) 14.05% N/A
---------------------------------------
(1) From December 29, 1993 (commencement of operations) through October 31,
1999.
(2) September 29, 1995 (commencement of operations through August 31, 1999.
(3) October 13, 1997 (commencement of operations through August 31, 1999.
(4) April 15, 1999 (date of initial public offering through August 31, 1999.
</TABLE>
Class T shares of Dreyfus Premier Technology Growth Fund were not being
offered as of August 31, 1999, so performance information is not provided for
such Class.
From time to time, the Company may compare a Fund's performance against
inflation with the performance of other instruments against inflation, such as
short-term Treasury Bills (which are direct obligations of the U.S. Government)
and FDIC-insured bank money market accounts.
Comparative performance information may be used form time to time in
advertising or marketing the Funds' shares, including data from Lipper
Analytical Services, Inc., Micropal, Morningstar, Inc., Standard & Poor's 500
Composite Stock Price Index, Standard & Poor's MidCap 400 Index, the Dow Jones
Industrial Average, Russell Mid Cap Index, Money Magazine, Wilshire 5000 Index
and other industry publications. From time to time, advertising materials for
each Fund may include biographical information relating to its portfolio
manager, and may refer to or include commentary by the Fund's portfolio manager
relating to investment strategy, (including "growth" and "value" investing)
asset growth, current or past business, political, economic or financial
conditions and other matters of general interest to investors. Also, from time
to time, advertising materials for each Fund may include information concerning
retirement and investing for retirement, may refer to the approximate number of
then-current Fund shareholders and may refer to Lipper or Morningstar ratings
and related analysis supporting the ratings. In addition, from time to time,
advertising materials may refer to studies performed by the Manager or its
affiliates, such as "The Dreyfus Tax Informed Investing Study" or "The Dreyfus
Gender Investment Comparison Study" or other such studies. Advertisements for
Dreyfus Emerging Leaders Fund, Dreyfus Small Company Value Fund and Dreyfus
Premier Technology Growth Fund also may discuss the potential benefits and risks
of small cap investing.
INFORMATION ABOUT THE COMPANY AND FUNDS
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. Fund shares
are of one class, except in the case of Dreyfus Premier Technology Growth Fund,
and have equal rights as to dividends and in liquidation. Shares have no
preemptive or subscription rights and are freely transferable.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Board members or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of a majority of
the Company's outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of nine series of shares.
All consideration received by the Company for shares of a Fund, and all assets
in which such consideration is invested, will belong to that Fund (subject only
to the rights of creditors of the Company) and will be subject to the
liabilities related thereto. The income attributable to, and the expenses of, a
Fund will be treated separately from those of the other Funds. The Company has
the ability to create, from time to time, new series without shareholder
approval.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. The Rule exempts the selection of independent
accountants and the election of Board members from the separate voting
requirements of the Rule.
Each Fund will send annual and semi-annual financial statements to all its
shareholders.
Each Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculation on short-term market
movements. A pattern of frequent purchases and exchanges can be disruptive to
efficient portfolio management and, consequently, can be detrimental to the
Fund's performance and its shareholders. Accordingly, if the Company's
management determines that an investor is engaged in excessive trading, the
Company, with or without prior notice, may temporarily or permanently terminate
the availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's account. Such investors also
may be barred from purchasing other funds in the Dreyfus Family of Funds.
Generally, an investor who makes more than four exchanges out of a Fund during
any calendar year or who makes exchanges that appear to coincide with an active
market-timing strategy may be deemed to be engaged in excessive trading.
Accounts under common ownership or control will be considered as one account for
purposes of determining a pattern of excessive trading. In addition, the Company
may refuse or restrict purchase or exchange requests by any person or group if,
in the judgment of the Company's management, the Fund would be unable to invest
the money effectively in accordance with its investment objective and policies
or could otherwise be adversely affected or if the Fund receives or anticipated
receiving simultaneous orders that may significantly affect the Fund (e.g.,
amounts equal to 1% or more of the Fund's total assets). If an exchange request
is refused, the Company will take no other action with respect to the shares
until it receives further instructions from the investor. A Fund may delay
forwarding redemption proceeds for up to seven days if the investor redeeming
shares is engaged in excessive trading or if the amount of the redemption
request otherwise would be disruptive to efficient portfolio management or would
adversely affect the Fund. The Company's policy on excessive trading applies to
investors who invest in a Fund directly or through financial intermediaries, but
does not apply to the Dreyfus Auto-Exchange Privilege, to any automatic
investment or withdrawal privilege described herein, or to participants in
employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Company may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components--redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but the
purchase order would be effective only at the net asset value next determined
after the fund being purchased receives the proceeds of the redemption, which
may result in the purchase being delayed.
Before September 29, 1995, the Company's name was Dreyfus Focus Funds,
Inc. Effective April 15, 1999, Dreyfus Technology Growth Fund changed its name
to Dreyfus Premier Technology Growth Fund.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the Company.
APPENDIX
Description of certain ratings assigned by S&P, Moody's, Fitch and 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, 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.
B
Bonds rated B have a greater vulnerability to default but presently have
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
are dependent upon favorable business, financial and economic conditions to meet
timely payments of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, they are 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 a
minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of the likelihood
of timely payment of debt having an original maturity of no more than 365 days.
Issues assigned an A rating are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with the numbers 1, 2 and
3 to indicate the relative degree of safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
A-3
Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
Moody's
Bond Ratings
Aaa
Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and generally are referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa
Bonds 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 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 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 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 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 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 and in
the categories below B. The modifier 1 indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
Commercial Paper 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.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirements for relatively
high financial leverage. Adequate alternate liquidity is maintained.
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
Bond Ratings
AAA
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 exists 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.
