Registration No. 333-_____
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
___ Pre-Effective Amendment No. ___ Post-Effective Amendment No.
(Check appropriate box or boxes)
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
(212) 922-6000
(Area Code and Telephone Number)
c/o The Dreyfus Corporation
200 PARK AVENUE, NEW YORK, NEW YORK 10166
(Address of Principal Executive Offices: Number,
Street, City, State, Zip Code)
(Name and Address of Agent for Service)
Mark N. Jacobs, Esq.
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement is declared effective.
It is proposed that this Registration Statement become effective on May 30,
1996 pursuant to Rule 488.
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Registrant has previously filed a declaration of indefinite
registration of its shares pursuant to Rule 24f-2 under the Investment Company
Act of 1940, as amended; accordingly, no fee is payable herewith. Registrant's
Rule 24f-2 Notice for the fiscal year ended May 31, 1995 was filed on July 26,
1995.
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DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
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<CAPTION>
Prospectus/Proxy
FORM N-14 ITEM NO. STATEMENT CAPTION
PART A
<S> <C> <C>
Item 1. Beginning of Registration Statement and
Outside Front Cover Page
of Prospectus Cover Page
Item 2. Beginning and Outside Back Cover Page of
Prospectus Cover Page
Item 3. Synopsis Information and Risk Factors Summary
Item 4. Information About the Transaction Letter to Shareholders;
Proposal No. 1; Comparison of the Funds and the
National Fund
Item 5. Information About the Registrant Letter to Shareholders; Comparison of the Funds
and the Natonal Fund
Item 6. Information About the Company Being Acquired Letter to Shareholders; Comparison of the
Funds and the National Fund
Item 7. Voting Information Letter to Shareholders; Voting Information
Item 8. Interest of Certain Persons and Experts Not Applicable
Item 9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters Not Applicable
Statement of Additional
PART B INFORMATION CAPTION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information About the Registrant Statement of Additional
Information of Dreyfus
Municipal Money Market
Fund, Inc. dated
September 28, 1995
Item 13. Additional Information About the
Company Being Acquired Statement of Additional Information of Dreyfus Michigan
Municipal Money Market Fund, Inc. dated December 15, 1995 and
Statement of Additional Information of Dreyfus Ohio Municipal Money
Market Fund, Inc. dated March 29, 1996
Item 14. Financial Statements Statement of Additional Information of Dreyfus Municipal Money Market
Fund, Inc. dated September 28, 19951; Statement of Additional Information
of Dreyfus Michigan Municipal Money Market Fund, Inc. dated December 15,
1995 and Statement of Additional Information of Dreyfus Ohio Municipal
Money Market Fund, Inc. dated March 29, 19962
PART C
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
1 Incorporated herein by reference to the Registration Statement of the
Registrant on Form N-1A dated September 28, 1995 (File No. 2-65232).
2 Incorporated herein by reference to the Registration Statement of
Dreyfus Michigan Municipal Money Market Fund, Inc. on Form N-1A dated
December 15, 1995 (File No. 33-34844) and the Registration Statement
of Dreyfus Ohio Municipal Money Market Fund, Inc. on Form N-1A dated
March 29, 1996 (File No. 33-38742).
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Preliminary Copy
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
200 Park Avenue
New York, New York 10166
Dear Shareholder:
As a shareholder of Dreyfus Michigan Municipal Moneyp Market Fund, Inc.
(the "Michigan Fund") or Dreyfus Ohio Municipal Money Market Fund, Inc. (the
"Ohio Fund" and, together with the Michigan Fund, the "Funds"), you are entitled
to vote on the proposal described below and in the enclosed materials.
Because each Fund has been unable to attract sufficient assets under
management to operate efficiently without, from time to time, significant
expense subsidization, management of each Fund has determined that certain
operational efficiencies might be achievable if the Fund were to exchange its
assets (subject to its liabilities) for shares of Dreyfus Municipal Money Market
Fund, Inc. (the "National Fund"). The Dreyfus Corporation serves as each Fund's
and the National Fund's investment manager.
The proposal provides that each Fund exchange (the "Exchange") all of its
assets, subject to its liabilities, for shares of the National Fund (the
"National Fund Shares"). Promptly thereafter, each Fund will distribute pro rata
the National Fund Shares received in the Exchange to its shareholders in
complete liquidation of the Fund. Thus, each shareholder will receive the same
number of National Fund Shares (or fractions thereof) as Fund shares held by
such shareholder immediately before the Exchange. The Exchange will not result
in the imposition of Federal income tax on you.
The investment objective of the National Fund is the maximization of
current income exempt from Federal income tax to the extent consistent with the
preservation of capital and the maintenance of liquidity; the National Fund does
not invest so as to avoid the imposition of State income taxes for shareholders
of any particular State. The investment objective of each Fund is to provide you
with as high a level of current income exempt from Federal income tax and, where
applicable, from State income taxes for residents of the States of Michigan and
Ohio, as the case may be, as is consistent with the preservation of capital and
the maintenance of liquidity. The Funds and the National Fund differ in certain
other respects which are described in the enclosed Combined Prospectus/Proxy
Statement. Further information about the transaction is contained in the
enclosed materials, which you should review carefully. You are entitled to vote
on the proposed transaction with respect to each Fund in which you are a
shareholder. Please take the time to consider the enclosed materials and then
vote by completing, dating and signing the enclosed proxy card(s). A
self-addressed, postage-paid envelope has been enclosed for your convenience.
EACH FUND'S BOARD MEMBERS RECOMMEND THAT EACH FUND'S SHAREHOLDERS VOTE IN FAVOR
OF THE PROPOSED TRANSACTION WITH RESPECT TO THEIR FUND. If you have any
questions after considering the enclosed materials, please feel free to call
1-800-645-6561 between the hours of 9:00 a.m. and 5:30 p.m. (New York time),
Monday through Friday.
Sincerely,
Marie E. Connolly,
President
June 10, 1996
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Preliminary Copy
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
A Special Meeting of Shareholders of each of Dreyfus Michigan Municipal
Money Market Fund, Inc. (the "Michigan Fund") and Dreyfus Ohio Municipal Money
Market Fund, Inc. (the "Ohio Fund" and, together with the Michigan Fund, the
"Funds") will be held at the offices of The Dreyfus Corporation, 200 Park
Avenue, 7th Floor, New York, New York 10166, on Monday, July 22, 1996 at 11:00
a.m. for the following purposes:
1. To consider an Agreement and Plan of
Reorganization (each, a "Plan" and, collectively, the "Plans") for
each Fund providing for the transfer of all or substantially all of
such Fund's assets, subject to its liabilities, to Dreyfus Municipal
Money Market Fund, Inc. (the "National Fund"), in exchange (the
"Exchange") for shares of the National Fund and the assumption by the
National Fund of stated liabilities. Shares of the National Fund
received in the Exchange will be distributed by each Fund to its
shareholders in liquidation of the Fund, after which each Fund will be
dissolved; and
2. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on May 30, 1996, will be
entitled to receive notice of and to vote at the meeting.
By Order of the Boards of Directors
John E. Pelletier,
Secretary
New York, New York
June 10, 1996
WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT
IT IS VITAL. BY LAW, THE MEETING OF SHAREHOLDERS OF A
FUND WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY
BUSINESS IF LESS THAN A QUORUM OF ITS SHARES ELIGIBLE
TO VOTE IS REPRESENTED. IN THAT EVENT, SUCH FUND, AT
ITS SHAREHOLDERS' EXPENSE, WOULD CONTINUE TO SOLICIT
VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY,
YOUR VOTE COULD BE CRITICAL TO ENABLE YOUR FUND TO HOLD
THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY
CARD IMMEDIATELY. YOU AND ALL OTHER SHAREHOLDERS WILL
BENEFIT FROM YOUR COOPERATION.
PRELIMINARY COPY JUNE 10, 1996
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
COMBINED PROSPECTUS/PROXY STATEMENT
Special Meeting of Shareholders
to be held on July 22, 1996
This Combined Prospectus/Proxy Statement is furnished in
connection with a solicitation of proxies by the Board of each of Dreyfus
Michigan Municipal Money Market Fund, Inc. (the "Michigan Fund") and Dreyfus
Ohio Municipal Money Market Fund, Inc. (the "Ohio Fund" and, together with the
Michigan Fund, the "Funds") to be used at the Special Meeting of Shareholders
(the "Meeting") of the Fund to be held on Monday, July 22, 1996 at 11:00 a.m.,
at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, New
York, New York 10166, for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders. Shareholders of record at the close of
business on May 30, 1996 (each, a "Shareholder" and, collectively, the
"Shareholders") are entitled to receive notice of and to vote at the Meeting.
Shareholders are entitled to one vote for each share of common stock of a Fund,
par value $.001 per share ("Fund Share"), held and fractional votes for each
fractional Fund Share held. Fund Shares represented by executed and unrevoked
proxies will be voted in accordance with the specifications made thereon. If
the enclosed form of proxy is executed and returned, it nevertheless may be
revoked by giving another proxy or by letter or telegram directed to the
relevant Fund, which must indicate the Shareholder's name and account number.
To be effective, such revocation must be received before the Meeting. In
addition, any Shareholder who attends a Fund's Meeting in person may vote by
ballot at the Meeting, thereby canceling any proxy previously given. As of
April 30, 1996, the following numbers of Fund Shares were issued and
outstanding:
NAME OF FUND SHARES OUTSTANDING
Dreyfus Michigan Municipal
Money Market Fund, Inc. ____
Dreyfus Ohio Municipal
Money Market Fund, Inc. ____
Proxy materials will be mailed to shareholders of record on
or about June 10, 1996. Each Fund's principal executive offices are located at
200 Park Avenue, New York, New York 10166.
This Combined Prospectus/Proxy Statement is being used in
order to reduce the preparation, printing, handling and postage expenses that
would result from the use of a separate proxy statement/prospectus for each
Fund. Shareholders of each Fund will vote separately on the Proposal. Thus, if
the Proposal is approved by one Fund, and disapproved by the other Fund, the
Proposal will be implemented only for the Fund that approved the Proposal.
Therefore, it is essential that Shareholders who own Fund Shares in both Funds
complete, date, sign and return EACH proxy card they receive.
It is proposed that each Fund transfer all or substantially
all of its assets, subject to its liabilities, to Dreyfus Municipal Money
Market Fund, Inc. (the "National Fund") in exchange (the "Exchange") for shares
("National Fund Shares") of the National Fund, all as more fully described
herein. Upon consummation of the Exchange, National Fund Shares received by a
Fund will be distributed to its Shareholders, with each Shareholder receiving a
distribution of an identical number of National Fund Shares (or fractions
thereof) for Fund Shares held prior to the Exchange. Each Fund then will be
dissolved.
The National Fund is an open-end, diversified, management
investment company. The National Fund and the Funds have the same investment
manager and distributor, substantially similar investment objectives and
management policies, and differ substantively only to the extent set forth
herein.
This Combined Prospectus/Proxy Statement, which should be
retained for future reference, sets forth concisely the information about the
National Fund that Shareholders should know before voting on the Proposal or
investing in the National Fund. The National Fund's prospectus dated September
28, 1995 (the "National Fund Prospectus"), the National Fund's Annual Report
for the fiscal year ended May 31, 1995, the Michigan Fund's prospectus dated
December 15, 1995 (the "Michigan Prospectus") and the Ohio Fund's Prospectus
dated March 29, 1996 (the "Ohio Prospectus"), each accompany this Combined
Prospectus/Proxy Statement and are incorporated herein by reference.
Additional information, contained in a Statement of
Additional Information dated May 30, 1996 forming a part of the National Fund's
Registration Statement on Form N-14 (File No. 333-________), has been filed
with the Securities and Exchange Commission and is available without charge by
calling 1-800-645- 6561 or writing to the National Fund at its principal
executive offices located at 200 Park Avenue, New York, New York 10166. The
Statement of Additional Information is incorporated herein by reference in its
entirety.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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MUTUAL FUND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR THE U.S. GOVERNMENT. THERE CAN BE NO
ASSURANCE THAT ANY MONEY MARKET MUTUAL FUND WILL BE ABLE TO
MAINTAIN A STABLE $1.00 SHARE PRICE.
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TABLE OF CONTENTS
PAGE
Summary.....................................................
Reasons for the Exchange....................................
Information about the Exchange..............................
Additional Information about the National Fund
and the Funds.............................................
Voting Information..........................................
Financial Statements and Experts............................
Other Matters...............................................
Notice to Banks, Broker/Dealers and
Voting Trustees and Their Nominees........................
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APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION PROVIDING FOR THE
TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF EACH FUND TO
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
SUMMARY
This Summary is qualified by reference to the more complete information
contained elsewhere in this Combined Prospectus/Proxy Statement, the National
Fund Prospectus, the Michigan Prospectus, the Ohio Prospectus and the form of
Agreement and Plan of Reorganization attached to this Combined Prospectus/Proxy
Statement as Exhibit A.
PROPOSED TRANSACTION. Each Fund's Board, including the Board members who
are not "interested persons" (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")), has unanimously approved an Agreement and Plan of
Reorganization (each, a "Plan" and, collectively, the "Plans"), with respect to
its Fund. The Plans are identical, except for the name of the parties. Each Plan
provides that, subject to the requisite approval of its Shareholders, on the
date of the Exchange each Fund shall assign, transfer and convey to the National
Fund all of the assets (subject to its liabilities) of the Fund, including all
securities and cash, in exchange for National Fund Shares having an aggregate
net asset value equal to the value of the net assets of the Fund acquired. Each
Fund will distribute all National Fund Shares received by it among its
Shareholders so that each Shareholder will receive National Fund Shares
identical in number to the number of Fund Shares held by such Shareholder
immediately before the Exchange. Thereafter, each Fund will be dissolved.
As a result of the Exchange, each Shareholder will cease to be a
shareholder of the relevant Fund and will become a shareholder of the National
Fund as of the close of business on the closing date of the Exchange.
Each Fund's Board has concluded unanimously that the Exchange would be in
the best interests of the Shareholders of the respective Fund and the interests
of existing Shareholders of the Fund would not be diluted as a result of the
transactions contemplated thereby. See "Reasons for the Exchange."
TAX CONSEQUENCES. As a condition to the closing of the Exchange, the Funds
and the National Fund will receive an opinion of counsel to the effect that, for
Federal income tax purposes, (a) no gain or loss will be recognized by Fund
Shareholders for Federal income tax purposes as a result of the Exchange, (b)
the holding period and aggregate tax basis of National Fund Shares received by a
Shareholder will be the same as the holding period and aggregate tax basis of
the Shareholder's Fund Shares, and (c) the holding period and tax basis of the
Fund's assets transferred to the National Fund as a result of the Exchange will
be the same as the holding period and tax basis of such assets held by the Fund
immediately prior to the Exchange. See "Information about the Exchange--Federal
Income Tax Consequences."
COMPARISON OF THE FUNDS AND NATIONAL FUND. The following discussion is a
summary of certain parts of the Michigan Prospectus, the Ohio Prospectus and the
National Fund Prospectus. GENERAL. Each Fund and the National Fund is an
open-end, management investment company, known as a money market mutual fund.
Each Fund and the National Fund is managed by The Dreyfus Corporation
("Dreyfus"). The investment objectives of the National Fund and each Fund are
substantially similar--the maximization of current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity--except that each Fund also seeks income exempt from
the income tax of the State after which it is named, as described below. As a
consequence, the Michigan Fund seeks to invest primarily in Municipal
Obligations (as defined below) that are exempt from State income taxes for
Michigan residents. Similarly, the Ohio Fund seek to invest primarily in
Municipal Obligations that are exempt from State income taxes for Ohio
residents. The National Fund is not limited in this manner and, as a result, the
dividends it pays generally will not be exempt from State income taxes to
residents of Michigan or Ohio, except to the extent the National Fund derives
dividend income from Michigan or Ohio Municipal Obligations, respectively.
The management policies of each Fund and the National Fund are
substantially similar. Each invests primarily in debt securities issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities
("Municipal Obligations"), the interest from which is exempt from Federal income
tax. Each Fund's investments are further limited by the requirement that, under
ordinary circumstances, it invest primarily in Municipal Obligations the
interest on which is exempt from the income tax of the State after which it is
named. In all other material respects, the management policies of the National
Fund and the Funds are the same. For a more complete discussion of each Fund's
and the National Fund's management policies, see "Description of the Fund" in
the Michigan Prospectus, the Ohio Prospectus and the National Fund Prospectus.
The Funds and the National Fund are corporations organized under the laws
of the State of Maryland and have substantially identical charter documents.
FUNDAMENTAL POLICIES. The National Fund is a DIVERSIFIED investment company
which may not invest more than 5% of the value of its total assets in the
obligations of a single issuer, except that up to 25% of the value of the
National 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. Each Fund is a NON-DIVERSIFIED
investment company, meaning that the proportion of each Fund's assets that may
be invested in the securities of a single issuer is not limited by the 1940 Act.
As a diversified investment company that invests in Municipal Obligations of
more than one state, the National Fund should be less susceptible than the Funds
to the risks associated with any single economic, political or regulatory
occurrence.
Each Fund and the National Fund may borrow money from banks for temporary
or emergency purposes (not leveraging) in an amount up to 15% of the value of
its Fund's total assets (including the amount borrowed). The National Fund also
may borrow money from banks in an amount up to 33-1/3% of the value of its total
assets (including the amount borrowed) in order to meet redemption requests
which otherwise might require the untimely disposition of securities.
In all other respects, the fundamental policies and investment restrictions
of each Fund and the National Fund are substantively identical.
FEES AND EXPENSES. The following information concerning fees and expenses
is derived from information set forth under the caption "Annual Fund Operating
Expenses" in each of the National Fund, the Michigan and the Ohio Prospectus.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily net
assets):
NATIONAL FUND MICHIGAN FUND OHIO FUND
Management Fees .50% .50% .50%
Other Expenses .13% .26% .25%
Total Fund
Operating Expenses .63% .76% .75%
Pro Forma For
National Fund
AFTER EXCHANGE
Management Fees .50%
Other Expenses .13%
Total Fund
Operating Expenses .63%
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
NATIONAL FUND MICHIGAN FUND OHIO FUND
1 Year $ 6 $ 8 $ 8
3 Years $20 $24 $24
5 Years $35 $42 $42
10 Years $77 $94 $93
Pro Forma For
National Fund
AFTER EXCHANGE
1 Year $ 6
3 Years $20
5 Years $35
10 Years $77
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1 As of April 1, 1996, annual Total Fund Operating Expenses for the
Michigan Fund are estimated to be approximately .84% of average net
assets, and the amount of expenses that an investor would pay,
assuming redemption after one, three, five and ten years, would be $9,
$27, $47 and $104, respectively.
2 As of April 1, 1996, annual Total Fund Operating Expenses for the
Ohio Fund are estimated to be approximately .81% of average net
assets, and the amount of expenses that an investor would pay,
assuming redemption after one, three, five and ten years, would be
$8, $26, $45, and $100, respectively.
Assuming the approval of the Exchange, Dreyfus, based on
internally-developed estimates dated as of February 29, 1996, believes that the
National Fund Shares initially will have annual Total Fund Operating Expenses of
approximately .63% of average net assets.
SHAREHOLDER SERVICES PLAN. National Fund Shares are subject to a
Shareholder Services Plan which is identical to that adopted by each Fund. See
"Shareholder Services Plan" in the relevant Prospectus for a complete discussion
of each Shareholder Services Plan.
CAPITALIZATION. The following table sets forth as of February 29, 1996 (1)
the capitalization of each Fund, (2) the capitalization of the National Fund,
and (3) the pro forma capitalization of the National Fund, as adjusted showing
the effect of the Exchange had it occurred on such date.
NATIONAL FUND MICHIGAN FUND OHIO FUND
Total net assets....... $1,167,774,707 $52,416,191 40,490,647
Net asset value
per share ..... $1.00 $1.00 $1.00
Shares outstanding..... 1,167,774,707 52,416,191 40,490,647
Pro Forma For
National Fund
AFTER EXCHANGE
Total net assets....... $1,260,681,545
Net asset value
per share ..... $1.00
Shares outstanding..... 1,260,681,545
PURCHASE PROCEDURES. The purchase procedures of the Funds and National Fund
are identical. See "How to Buy [Fund] Shares" in the relevant Prospectus for a
complete discussion of purchase procedures.
REDEMPTION PROCEDURES. The redemption procedures of the Funds and National
Fund are identical. See "How to Redeem [Fund] Shares" in the relevant Prospectus
for a complete discussion of redemption procedures.
DISTRIBUTIONS. The dividend and distributions policies of the Funds and
National Fund are identical. See "Dividends, Distributions and Taxes" in the
relevant Prospectus for a complete discussion of such policies.
SHAREHOLDER SERVICES. The shareholder services offered by the Funds and
National Fund are identical. See "Shareholder Services" in the relevant
Prospectus for a complete description of shareholder services.
RISK FACTORS. The investment risks of each Fund and the National Fund are
substantially similar, except for those incurred by each Fund as a result of its
purchase primarily of one State's Municipal Obligations. See "Description of the
Fund -- Investment Considerations and Risks -- Investing in Michigan/Ohio
Municipal Obligations" in the relevant Prospectus for a complete discussion of
investing primarily in one State's Municipal Obligations.
REASONS FOR THE EXCHANGE The Board of each Fund and the National Fund has
concluded that the Exchange is in the best interests of its respective
shareholders. Each Board believes that the Exchange will permit shareholders to
pursue substantially similar investment goals in a larger fund without diluting
shareholders' interests. Each Fund has been unable to attract sufficient assets
to operate efficiently without, from time to time, significant expense
subsidization by Dreyfus. This expense subsidization has had the effect of
lowering each Fund's overall expenses and increasing returns to shareholders.
Dreyfus has determined not to continue subsidizing the operating expenses of the
Funds. Without this subsidization, the annual operating expenses of each Fund
would increase, as they have already for the current fiscal year, and returns to
shareholders would decrease.
As of March 29, 1996, the Michigan Fund and the Ohio Fund had assets under
management of approximately just $52,126,000 and $41,684,000, respectively. The
expense ratio of the National Fund is lower than that of each Fund. Larger
aggregate net assets should enable the combined Fund to obtain the benefits of
some economies of scale, which may result in an even lower overall expense ratio
for the combined Fund (as compared to the expense ratios of each Fund and the
National Fund alone) through the spreading of fixed costs of fund operations
over a somewhat larger asset base.
In determining whether to recommend approval of the Exchange, each Board
considered the following factors, among others: (1) the relative compatibility
of the Fund's and National Fund's investment objective, management policies and
investment restrictions, as well as shareholder services offered by the Fund and
National Fund; (2) the comparative investment performance of the National Fund
and the Fund; (3) the terms and conditions of the Exchange and whether the
Exchange would result in dilution of shareholder interests; (4) expense ratios
and published information regarding the fees and expenses of the National Fund
and the Fund, as well as the expense ratios of similar funds and the estimated
expense ratio of the combined Fund; (5) the tax consequences of the Exchange;
and (6) the estimated costs incurred by the National Fund and the Fund as a
result of the Exchange. In addition, each Fund's Board considered the Fund's
inability to attract sufficient assets to operate efficiently without, from time
to time, significant expense subsidization by Dreyfus, the fact that Dreyfus has
determined not to continue subsidizing the expenses of the Fund, and the fact
that Dreyfus does not manage another double tax-free Michigan or Ohio municipal
money market fund.
INFORMATION ABOUT THE EXCHANGE
PLAN OF EXCHANGE. The following summary of the Plan is qualified in its
entirety by reference to the Plan attached hereto as Exhibit A. The Plan
provides that the National Fund will acquire all or substantially all of the
assets of each Fund, in exchange for National Fund Shares, and assume each
Fund's stated liabilities on August 1, 1996 or such later date as may be agreed
upon by the parties (the "Closing Date"). The number of National Fund Shares to
be issued to each Fund will be identical to the number of Fund Shares
outstanding on the Closing Date.
Prior to the Closing Date, each Fund will declare a dividend or dividends
which, together with all dividends previously declared, will have the effect of
distributing to the Fund's Shareholders all of such Fund's investment company
taxable income, if any, for the taxable year ending on or prior to the Closing
Date (computed without regard to any deduction for dividends paid) and all of
its net capital gain realized in the taxable year ending on or prior to the
Closing Date (after reduction for any capital loss carry forward).
As conveniently as practicable after the Closing Date, each Fund will
liquidate and distribute pro rata to its Shareholders of record as of the close
of business on the Closing Date the National Fund Shares received by it in the
Exchange. Such liquidation and distribution will be accomplished by establishing
accounts on the share records of the National Fund in the name of each Fund
Shareholder, each account representing the respective pro rata number of
National Fund Shares due to the Shareholder. After such distribution and the
winding up of its affairs, each Fund will be dissolved. After the Closing Date,
any outstanding certificates representing Fund Shares will represent the
National Fund Shares distributed to the record holders of the Fund. Upon
presentation to the transfer agent of the National Fund, Fund Share certificates
will be exchanged for National Fund Share certificates. Certificates for
National Fund Shares will be issued only upon the investor's written request.
The Plan may be amended at any time prior to the Exchange. Each Fund will
provide its Shareholders with information describing any material amendment to
the Plan prior to Shareholder consideration. Each Fund's and the National Fund's
obligations under the Plan are subject to various conditions, including approval
by the requisite number of Shareholders and the continuing accuracy of various
representations and warranties of the Fund and the National Fund being confirmed
by the respective parties.
The total expenses of each Exchange are expected to be approximately
$25,000. Each Fund and the National Fund will bear its own expenses, except for
the expenses of preparing, printing and mailing this Combined Prospectus/Proxy
Statement, the proxy cards and other related materials, which will be borne by
each party to the Exchange ratably according to its respective aggregate net
assets on the date of the Exchange.
If the Exchange is not approved by a Fund's Shareholders, the Fund's Board
will consider other appropriate courses of action, including liquidating the
Fund.
TEMPORARY SUSPENSION OF CERTAIN OF THE FUNDS' INVESTMENT RESTRICTIONS.
Since certain of the Funds' existing investment restrictions could preclude the
Funds from consummating the Exchange in the manner contemplated in the Plan,
Fund Shareholders are requested to authorize the temporary suspension of certain
investment restrictions which restrict the Fund's ability to (i) purchase
securities other than Municipal Obligations and Taxable Investments and (ii)
invest more than 25% of its total assets in the securities of issuers in any
single industry, as set forth in the Fund's Statement of Additional Information,
as well as the temporary suspension of any other investment restriction of the
Fund to the extent necessary to permit the consummation of the Exchange. The
temporary suspension of the Fund's investment restrictions will not affect the
investment restrictions of the National Fund. A vote in favor of the Proposal is
deemed to be a vote in favor of the temporary suspensions.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of Fund assets for National
Fund Shares is intended to qualify for Federal income tax purposes as a tax-free
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). As a condition to the closing of the Exchange, the
National Fund and each Fund will receive the opinion of Stroock & Stroock &
Lavan, counsel to the National Fund and each Fund, to the effect that, on the
basis of the existing provisions of the Code, Treasury regulations issued
thereunder, current administrative regulations and pronouncements and court
decisions, and certain facts, assumptions and representations, for Federal
income tax purposes: (1) the transfer of all or substantially all of a Fund's
assets in exchange for National Fund Shares and the assumption by the National
Fund of Fund liabilities will constitute a "reorganization" within the meaning
of Section 368(a)(1)(C) of the Code; (2) no gain or loss will be recognized by
the National Fund upon the receipt of Fund assets solely in exchange for
National Fund Shares and the assumption by the National Fund of liabilities of
the Fund; (3) no gain or loss will be recognized by a Fund upon the transfer of
its assets to the National Fund in exchange for National Fund Shares and the
assumption by the National Fund of the Fund's liabilities or upon the
distribution (whether actual or constructive) of National Fund Shares to
Shareholders in exchange for their Fund Shares; (4) no gain or loss will be
recognized by the Fund Shareholders upon the exchange of Fund Shares for
National Fund Shares; (5) the aggregate tax basis for National Fund Shares
received by each Fund Shareholder pursuant to the Exchange will be the same as
the aggregate tax basis for Fund Shares held by such Shareholder immediately
prior to the Exchange, and the holding period of National Fund Shares to be
received by each Fund Shareholder will include the period during which Fund
Shares surrendered in exchange therefor were held by such Shareholder (provided
Fund Shares were held as capital assets on the date of the Exchange); and (6)
the tax basis of Fund assets acquired by the National Fund will be the same as
the tax basis of such assets to the Fund immediately prior to the Exchange, and
the holding period of Fund assets in the hands of the National Fund will include
the period during which those assets were held by the Fund.
NONE OF THE FUNDS OR THE NATIONAL FUND HAS SOUGHT A TAX RULING FROM THE
INTERNAL REVENUE SERVICE ("IRS"). THE OPINION OF COUNSEL IS NOT BINDING ON THE
IRS NOR DOES IT PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Fund
Shareholders should consult their tax advisers regarding the effect, if any, of
the proposed Exchange in light of their individual circumstances. Because the
foregoing discussion relates only to the Federal income tax consequences of the
Exchange, Fund Shareholders also should consult their tax advisers as to state
and local tax consequences, if any, of the Exchange. REQUIRED VOTE AND BOARDS'
RECOMMENDATION
Each Fund's Board has approved the Plan and the Exchange and has determined
that (i) participation in the Exchange is in the respective Fund's best
interests and (ii) the interests of Shareholders of such Fund will not be
diluted as a result of the Exchange. Pursuant to each Fund's charter documents,
an affirmative vote of a majority of the Fund's outstanding shares is required
to approve the Plan and the Exchange.
THE BOARD OF EACH FUND, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS,
RECOMMENDS THAT EACH FUND'S SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PLAN AND THE
EXCHANGE.
ADDITIONAL INFORMATION ABOUT THE NATIONAL FUND AND THE FUNDS
Information about the National Fund is incorporated by reference into this
Combined Prospectus/Proxy Statement from the National Fund Prospectus forming a
part of the Registration Statement on Form N-1A (File No. 2-65232). Information
about the Michigan Fund is incorporated by reference into this Combined
Prospectus/Proxy Statement from the Michigan Prospectus forming a part of the
Registration Statement on Form N-1A (File No. 33- 34844). Information about the
Ohio Fund is incorporated by reference into this Combined Prospectus/Proxy
Statement from the Ohio Prospectus forming a part of the Registration Statement
on Form N-1A (File No. 33-38742).
Each Fund and the National Fund are subject to the requirements of the 1940
Act, and file reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Funds or National Fund may be inspected and
copied at the Public Reference Facilities of the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549 and at the Northeast regional office of
the Commission at 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can also be obtained from the Public Reference Branch,
Office of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at prescribed rates.
VOTING INFORMATION
In addition to the use of the mails, proxies may be solicited personally,
by telephone or by telegraph, and each Fund may pay persons holding its Fund
Shares in their names or those of their nominees for their expenses in sending
soliciting materials to their principals.
If a proxy is properly executed and returned accompanied by instructions to
withhold authority to vote, represents a broker "non-vote" (that is, a proxy
from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote Fund
Shares on a particular matter with respect to which the broker or nominee does
not have discretionary power) or is marked with an abstention (collectively,
"abstentions"), the Fund Shares represented thereby will be considered to be
present at a Meeting for purposes of determining the existence of a quorum for
the transaction of business. Abstentions will not constitute a vote "for" or
"against" a matter and will be disregarded in determining the "votes cast" on an
issue. For this reason, abstentions will have the effect of a "no" vote for the
purpose of obtaining requisite approval for the Proposal.
In the event that a quorum is not present at the Meeting, or if a quorum is
present but sufficient votes to approve the Proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the Proposal,
the percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to Shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the Meeting in person or by
proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" the Proposal in favor of such
adjournments, and will vote those proxies required to be voted "AGAINST" the
Proposal against any adjournment. A quorum is constituted with respect to a Fund
by the presence in person or by proxy of the holders of more than one-third of
the outstanding Fund Shares entitled to vote at the Meeting.
The votes of the National Fund's shareholders are not being solicited since
their approval or consent is not necessary for the Exchange.
As of __________ __, 1996, the following were known by the relevant Fund to
own of record 5% or more of its outstanding voting securities:
_____________________. 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. [As of _______ __, 1996, the
following were known by the National Fund to own of record 5% or more of its
outstanding voting securities: _______________________.] As of _________, 1996,
Directors and officers of the National Fund, as a group, owned less than 1% of
the National Fund's outstanding shares. As of __________, 1996, Directors and
officers of each Fund, as a group, owned less than 1% of the Fund's outstanding
shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Michigan Fund for the fiscal year
ended September 30, 1995, which are included in the Michigan Fund's Statement of
Additional Information, the audited financial statements of the Ohio Fund for
the fiscal year ended November 30, 1995, which are included in the Ohio Fund's
Statement of Additional Information, and the audited financial statements of the
National Fund for the fiscal year ended May 31, 1995, which are included in the
National Fund's Statement of Additional Information, each have been audited by
Ernst & Young LLP, independent auditors, whose respective reports thereon are
included therein. The financial statements of each Fund audited by Ernst & Young
LLP have been incorporated herein by reference in reliance upon their reports
given on their authority as experts in accounting and auditing.
OTHER MATTERS
Each Fund's Board members are not aware of any other matters which may come
before the Meeting. However, should any such matters properly come before the
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise each Fund, in care of Dreyfus Transfer, Inc., Attention:
Dreyfus Michigan Municipal Money Market Fund, Inc. or Dreyfus Ohio Municipal
Money Market Fund, Inc., P.O. Box 9671, Providence, Rhode Island 02940-9671,
whether other persons are the beneficial owners of Fund Shares for which proxies
are being solicited from you, and, if so, the number of copies of the Combined
Prospectus/Proxy Statement and other soliciting material you wish to receive in
order to supply copies to the beneficial owners of Fund Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN EACH PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: June 10, 1996
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated ___________, 1996 (the
"Agreement"), between DREYFUS * MUNICIPAL MONEY MARKET FUND, INC., a Maryland
corporation (the "Acquired Fund") and DREYFUS MUNICIPAL MONEY MARKET FUND, INC.,
a Maryland corporation (the "Acquiring Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of substantially all of the
assets of the Acquired Fund in exchange solely for shares (the "Acquiring Fund
Shares") of common stock, par value $.01 per share, of the Acquiring Fund and
the assumption by the Acquiring Fund of certain liabilities of the Acquired Fund
and the distribution, after the Closing Date hereinafter referred to, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation of
the Acquired Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund is a registered, non-diversified, open-end
management investment company and the Acquiring Fund is a registered,
diversified, open-end management investment company, and the Acquired Fund owns
securities which are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, both the Acquiring Fund and the Acquired Fund are authorized to
issue their shares of common stock;
WHEREAS, the Board of the Acquiring Fund has determined that the exchange
of all or substantially all of the assets of the Acquired Fund and certain
liabilities of the Acquired Fund for Acquiring Fund Shares and the assumption of
such liabilities is in the best interests of the Acquiring Fund's shareholders
and that the interests of the Acquiring Fund's existing shareholders would not
be diluted as a result of this transaction; and
WHEREAS, the Board of the Acquired Fund has determined that the exchange of
all or substantially all of the assets and certain of the liabilities of the
Acquired Fund for Acquiring Fund Shares and the assumption of such liabilities
is in the best interests of the Acquired Fund's shareholders and that the
interests of the Acquired Fund's existing shareholders would not be diluted as a
result of this transaction:
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND ASSUMPTION OF ACQUIRED FUND
LIABILITIES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1. Subject to the terms and conditions contained herein, the Acquired
Fund agrees to assign, transfer and convey to the Acquiring Fund all of the
assets of the Acquired Fund, including all securities and cash (subject to its
liabilities), and the Acquiring Fund agrees in exchange therefor (i) to deliver
to the Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined as set forth in paragraph 2.3; and (ii) to
assume certain liabilities of the Acquired Fund, as set forth in paragraph 1.2.
Such transactions shall take place at the closing (the "Closing") on the closing
date (the "Closing Date") provided for in paragraph 3.1. In lieu of delivering
certificates for the Acquiring Fund Shares, the Acquiring Fund shall credit the
Acquiring Fund Shares to the Acquired Fund's account on the books of the
Acquiring Fund and shall deliver a confirmation thereof to the Acquired Fund.
1.2. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
assume all liabilities, expenses, costs, charges and reserves reflected on an
unaudited statement of assets and liabilities of the Acquired Fund prepared by
The Dreyfus Corporation, as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently applied
from the prior audited period. The Acquiring Fund shall assume only those
liabilities of the Acquired Fund reflected in that unaudited statement of assets
and liabilities and shall not assume any other liabilities, whether absolute or
contingent.
1.3. Delivery of the assets of the Acquired Fund to be transferred shall be
made on the Closing Date and shall be delivered to The Bank of New York, 90
Washington Street, New York, New York 10286, the Acquiring Fund's custodian (the
"Custodian"), for the account of the Acquiring Fund, with all securities not in
bearer or book-entry form duly endorsed, or accompanied by duly executed
separate assignments or stock powers, in proper form for transfer, with
signatures guaranteed, and with all necessary stock transfer stamps, sufficient
to transfer good and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian for the account of
the Acquiring Fund free and clear of all liens, encumbrances, rights,
restrictions and claims. All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account of the
Acquiring Fund.
1.4. The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any interest received on or after the Closing Date with respect to assets
transferred to the Acquiring Fund hereunder. The Acquired Fund will transfer to
the Acquiring Fund any distributions, rights or other assets received by the
Acquired Fund after the Closing Date as distributions on or with respect to the
securities transferred. Such assets shall be deemed included in assets
transferred to the Acquiring Fund on the Closing Date and shall not be
separately valued.
1.5. As soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Acquired Fund will liquidate and distribute pro rata to
the Acquired Fund's shareholders of record, determined as of the close of
business on the Closing Date (the "Acquired Fund Shareholders"), Acquiring Fund
Shares received by the Acquired Fund pursuant to paragraph 1.1. Such liquidation
and distribution will be accomplished by the transfer of the applicable
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders and representing
the respective pro rata number of the applicable Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund
simultaneously will be canceled on the books of the Acquired Fund.
1.6. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued in
the manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.7. Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.8. Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Acquired Fund up to and including the Closing Date and
such later date on which the Acquired Fund's existence is terminated. -------- *
Insert MICHIGAN or OHIO, as appropriate.
2. VALUATION.
2.1. The value of the Acquired Fund's assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of 12:00
Noon, New York time, on the Closing Date (such time and date being hereinafter
called the "Valuation Date"), using the valuation procedures set forth in the
Acquiring Fund's Articles of Incorporation and then-current prospectus or
statement of additional information.
2.2. The net asset value of an Acquiring Fund Share shall be the net asset
value per share computed as of the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's Articles of Incorporation and
then-current prospectus or statement of additional information.
2.3. The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Fund's net assets shall be
determined by dividing the value of the net assets of the Acquired Fund
determined using the same valuation procedures referred to in paragraph 2.1 by
the net asset value of one Acquiring Fund Share, determined in accordance with
paragraph 2.2.
2.4. All computations of value shall be made in accordance with the regular
practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1. The Closing Date shall be August 1, 1996 or such later date as the
parties may mutually agree. All acts taking place at the Closing shall be deemed
to take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held at __:__ _.m., New York
time, at the offices of The Dreyfus Corporation, 200 Park Avenue, New York, New
York, or such other time and/or place as the parties may mutually agree.
3.2. The Custodian shall deliver at the Closing a certificate of an
authorized officer stating that the Acquired Fund's portfolio securities, cash
and any other assets have been delivered in proper form to the Acquiring Fund
within two business days prior to or on the Closing Date.
3.3. If on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted;
or (b) trading or the reporting of trading on said Exchange or elsewhere shall
be disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.4. The transfer agent or its agent for the Acquired Fund shall deliver at
the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership of outstanding shares, owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the Secretary of the Acquired Fund, or provide evidence satisfactory to
the Acquired Fund that such Acquiring Fund Shares have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of sale, checks, assignments,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Acquired Fund represents and warrants to the Acquiring Fund as
follows: (a) The Acquired Fund is a corporation duly organized and validly
existing and in good standing under the laws of the State of Maryland and has
power to own all of its properties and assets and to carry out this Agreement.
(b) The Acquired Fund is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end, non-diversified,
management investment company, and such registration has not been revoked
or rescinded and is in full force and effect.
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of the
Acquired Fund's Articles of Incorporation, as the same may have been
amended (the "Charter"), or its Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquired Fund
is a party or by which it is bound.
(d) The Acquired Fund has no material contracts or other commitments
outstanding (other than this Agreement) which will be terminated with
liability to it on or prior to the Closing Date.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The Acquired
Fund knows of no facts which might form the basis for the institution of
such proceedings, and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
(f) The Statements of Assets and Liabilities of the Acquired Fund for
the ** fiscal years ended *** 30, 1995 have been audited by Ernst & Young
LLP, independent auditors, and are in accordance with generally accepted
accounting principles, consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) fairly reflect the
financial condition of the Acquired Fund as of such date, and there are no
known contingent liabilities of the Acquired Fund as of such date not
disclosed therein.
(g) Since *** 30, 1995, there has not been any material adverse change
in the Acquired Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as disclosed on the
statement of assets and liabilities referred to in paragraph 1.2 hereof.
- --------
** Insert six, with respect to the Michigan Fund, and five, with respect
to the Ohio Fund.
*** Insert September, with respect to the Michigan Fund, and November, with
respect to the Ohio Fund.
(h) At the Closing Date, all Federal and other tax returns and reports
of the Acquired Fund required by law to have been filed by such dates shall
have been filed, and all Federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof, and
to the best of the Acquired Fund's knowledge no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(i) For each fiscal year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. All of the issued and outstanding shares of the
Acquired Fund will, at the time of Closing, be held by the persons and in
the amounts set forth in the records of the transfer agent as provided in
paragraph 3.4. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquired
Fund shares, nor is there outstanding any security convertible into any of
the Acquired Fund shares.
(k) On the Closing Date, the Acquired Fund will have full right, power
and authority to sell, assign, transfer and deliver the assets to be
transferred by it hereunder.
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action
on the part of the Acquired Fund's Board and, subject to the approval of
the Acquired Fund Shareholders, this Agreement will constitute the valid
and legally binding obligation of the Acquired Fund, enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the
discretion of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(m) The proxy statement of the Acquired Fund (the "Proxy Statement"),
included in the Registration Statement referred to in paragraph 5.5 (other
than information therein that has been furnished by the Acquiring Fund)
will, on the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which such
statements were made, not materially misleading.
4.2. The Acquiring Fund represents and warrants to
the Acquired Fund as follows:
(a) The Acquiring Fund is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and
has power to carry on its business as it is now being conducted and to
carry out this Agreement.
(b) The Acquiring Fund is registered under the 1940 Act as an
open-end, diversified, management investment company, and such registration
has not been revoked or rescinded and is in full force and effect.
(c) The current prospectus and statement of additional information of
the Acquiring Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act and the rules and regulations of the Securities and
Exchange Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of its
Articles of Incorporation or Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquiring
Fund is a party or by which it is bound.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The
Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions contemplated herein.
(f) The Statements of Assets and Liabilities of the Acquiring Fund for
the ten fiscal years ended May 31, 1995, have been audited by Ernst & Young
LLP, independent auditors, and are in accordance with generally accepted
accounting principles, consistently applied, and such statements (copies of
which have been furnished to the Acquired Fund) fairly reflect the
financial condition of the Acquiring Fund as of such dates.
(g) Since May 31, 1995, there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as disclosed
on the statement of assets and liabilities referred to in paragraph 4.2(f)
hereof.
(h) At the Closing Date, all Federal and other tax returns and reports
of the Acquiring Fund required by law then to be filed shall have been
filed, and all Federal and other taxes shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. The Acquiring Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of the
Acquiring Fund Shares, nor is there outstanding any security convertible
into any Acquiring Fund Shares.
(k) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Acquiring Fund's Directors and
shareholders, and this Agreement will constitute the valid and legally
binding obligation of the Acquiring Fund enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto, and to general principles of equity and the discretion of the
court (regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(l) The Proxy Statement included in the Registration Statement (only
insofar as it relates to the Acquiring Fund and is based on information
furnished by the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not materially
misleading.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1. The Acquiring Fund and the Acquired Fund each will
operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include payment of customary dividends and distributions.
5.2. The Acquired Fund will call a meeting of the Acquired
Fund Shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3. Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
5.4. As promptly as practicable, but in any case within sixty
days after the Closing Date, the Acquired Fund shall furnish the Acquiring
Fund, in such form as is reasonably satisfactory to the Acquiring Fund, a
statement of the earnings and profits of the Acquired Fund for Federal income
tax purposes which will be carried over to the Acquiring Fund as a result of
Section 381 of the Code and which will be certified by the Acquired Fund's
President or a Vice President and its Treasurer.
5.5. The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement, referred to in paragraph
4.1(m), all to be included in a Registration Statement on Form N-14 of the
Acquiring Fund (the "Registration Statement"), in compliance with the 1933 Act,
the Securities Exchange Act of 1934, as amended, and the 1940 Act in connection
with the meeting of the Acquired Fund Shareholders to consider approval of this
Agreement and the transactions contemplated herein.
5.6. The Acquiring Fund agrees to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933 Act, the 1940
Act and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquired Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
6.1. All representations and warranties of the Acquired Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
6.2. The Acquired Fund shall have delivered to the Acquiring
Fund a statement of the Acquired Fund's assets and liabilities, together with a
list of the Acquired Fund's portfolio securities showing the tax basis of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer of the Acquired Fund.
6.3. The Acquired Fund shall have delivered to the Acquiring
Fund on the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer, in form and substance satisfactory to the
Acquiring Fund, to the effect that the representations and warranties of the
Acquired Fund made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as the Acquiring Fund shall
reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
7.1. All representations and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
7.2. The Acquiring Fund shall have delivered to the Acquired
Fund on the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer, in form and substance reasonably satisfactory
to the Acquired Fund, to the effect that the representations and warranties of
the Acquiring Fund made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as the Acquired Fund shall
reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or
before the Closing Date with respect to the Acquired Fund or the Acquiring
Fund, the other party to this Agreement shall, at its option, not be required
to consummate the transactions contemplated by this Agreement.
8.1. This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of the
outstanding shares of the Acquired Fund in accordance with the provisions of
the Acquired Fund's Charter.
8.2. On the Closing Date, no action, suit or other proceeding
shall be pending before any court or governmental agency in which it is sought
to restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission and of state Blue
Sky and securities authorities) deemed necessary by the Acquiring Fund or the
Acquired Fund to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund or
the Acquired Fund, provided that either party hereto may for itself waive any
of such conditions.
8.4. The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the effectiveness thereof
shall have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 1933 Act.
8.5. The Acquired Fund shall have declared a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to the Acquired Fund Shareholders all of the Acquired
Fund's investment company taxable income for all taxable years ending on or
prior to the Closing Date (computed without regard to any deduction for
dividends paid) and all of its net capital gain realized in all taxable years
ending on or prior to the Closing Date (after reduction for any capital loss
carry forward).
8.6. The parties shall have received an opinion of Stroock &
Stroock & Lavan substantially to the effect that for Federal income tax
purposes:
(a) The transfer of all or substantially all of
the Acquired Fund's assets in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain identified liabilities of the
Acquired Fund will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code;
(b) No gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Acquired Fund solely in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund
of certain identified liabilities of the Acquired Fund;
(c) No gain or loss will be recognized by the
Acquired Fund upon the transfer of the Acquired Fund's assets to the Acquiring
Fund in exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain identified liabilities of the Acquired Fund or upon
the distribution (whether actual or constructive) of the Acquiring Fund Shares
to Acquired Fund Shareholders in exchange for their shares of the Acquired Fund;
(d) No gain or loss will be recognized by the
Acquired Fund Shareholders upon the exchange of their Acquired Fund shares for
the Acquiring Fund Shares;
(e) The aggregate tax basis for the Acquiring Fund
Shares received by each of the Acquired Fund Shareholders pursuant to the
Reorganization will be the same as the aggregate tax basis of the Acquired Fund
shares held by such shareholder immediately prior to the Reorganization, and
the holding period of the Acquiring Fund Shares to be received by each Acquired
Fund Shareholder will include the period during which the Acquired Fund shares
exchanged therefor were held by such shareholder (provided the Acquired Fund
shares were held as capital assets on the date of the Reorganization); and
(f) The tax basis of the Acquired Fund assets acquired
by the Acquiring Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization, and the holding period
of the assets of the Acquired Fund in the hands of the Acquiring Fund will
include the period during which those assets were held by the Acquired Fund.
9. TERMINATION OF AGREEMENT.
9.1. This Agreement and the transaction contemplated hereby
may be terminated and abandoned by resolution of the Board of the Acquired Fund
or of the Acquiring Fund, as the case may be, at any time prior to the Closing
Date (and notwithstanding any vote of the Acquired Fund Shareholders) if
circumstances should develop that, in the opinion of either of the parties'
Board, make proceeding with the Agreement inadvisable.
9.2. If this Agreement is terminated and the transaction
contemplated hereby is abandoned pursuant to the provisions of this Section 9,
this Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the directors, officers or shareholders of the
Acquiring Fund or of the Acquired Fund, as the case may be, in respect of this
Agreement, except that the parties shall bear the aggregate expenses of the
transaction contemplated hereby in proportion to their respective net assets as
of the date this Agreement is terminated or the exchange contemplated hereby is
abandoned.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of the Acquiring Fund or of the Acquired
Fund if, in the judgment of either, such waiver will not have a material
adverse effect on the benefits intended under this Agreement to the
shareholders of the Acquiring Fund or of the Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1. None of the representations and warranties
included or provided for herein shall survive consummation of
the transactions contemplated hereby.
11.2. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof, and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the subject
matter hereof. Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided in this
Agreement or as may be, on or subsequent to the date hereof, set forth in a
writing signed by the party to be bound thereby.
11.3. This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement by the Acquiring Fund
and the Acquired Fund shall be governed and construed in accordance with the
internal laws of the State of Maryland without giving effect to principles of
conflict of laws.
11.4. This Agreement may be executed in counterparts,
each of which, when executed and delivered, shall be deemed to
be an original.
11.5. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall
be made by any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
IN WITNESS WHEREOF, the Acquiring Fund and the Acquired Fund
have caused this Agreement and Plan of Reorganization to be executed and
attested on its behalf by its duly authorized representatives as of the date
first above written.
DREYFUS MUNICIPAL MONEY
MARKET FUND, INC.
By:___________________________
Marie E. Connolly,
President
ATTEST:_____________________
John E. Pelletier,
Secretary
DREYFUS * MUNICIPAL
MONEY MARKET FUND, INC.
By:________________________
Marie E. Connolly,
President
ATTEST:______________________
John E. Pelletier,
Secretary
- --------
* Insert MICHIGAN or OHIO, as appropriate.
<PAGE>
Preliminary Copy
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
The undersigned shareholder of Dreyfus Michigan Municipal
Money Market Fund, Inc. (the "Fund") hereby appoints Thomas Healy and George
Attisano, and each of them, the attorneys and proxies of the undersigned, with
full power of substitution, to vote, as indicated herein, all of the shares of
common stock of the Fund standing in the name of the undersigned at the close
of business on May 30, 1996, at a Special Meeting of Shareholders to be held at
the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York,
New York 10166, at 11:00 a.m. on Monday, July 22, 1996, and at any and all
adjournments thereof, with all of the powers the undersigned would possess if
then and there personally present and especially (but without limiting the
general authorization and power hereby given) to vote as indicated on the
proposal, as more fully described in the Combined Prospectus/Proxy Statement
for the meeting.
Please mark boxes in blue or black ink.
1. To approve an Agreement and Plan of Reorganization between
the Fund and Dreyfus Municipal Money Market Fund, Inc., providing for the
transfer of substantially all of the assets of the Fund, subject to its
liabilities.
___ FOR ___ AGAINST ___ ABSTAIN
2. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting, or any
adjournment(s) thereof.
THIS PROXY IS SOLICITED BY THE FUND'S BOARD AND WILL BE VOTED FOR THE ABOVE
PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or
names appearing on this proxy. If shares
are held jointly, each holder should sign.
If signing is by attorney, executor,
administrator, trustee or guardian, please
give full title.
Dated: _______________, 1996
-----------------------------
Signature(s)
------------------------------
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
Preliminary Copy
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
The undersigned shareholder of Dreyfus Ohio Municipal Money
Market Fund, Inc. (the "Fund") hereby appoints Thomas Healy and George
Attisano, and each of them, the attorneys and proxies of the undersigned, with
full power of substitution, to vote, as indicated herein, all of the shares of
common stock of the Fund standing in the name of the undersigned at the close
of business on May 30, 1996, at a Special Meeting of Shareholders to be held at
the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York,
New York 10166, at 11:00 a.m. on Monday, July 22, 1996, and at any and all
adjournments thereof, with all of the powers the undersigned would possess if
then and there personally present and especially (but without limiting the
general authorization and power hereby given) to vote as indicated on the
proposal, as more fully described in the Combined Prospectus/Proxy Statement
for the meeting.
Please mark boxes in blue or black ink.
1. To approve an Agreement and Plan of Reorganization between
the Fund and Dreyfus Municipal Money Market Fund, Inc., providing for the
transfer of substantially all of the assets of the Fund, subject to its
liabilities.
___ FOR ___ AGAINST ___ ABSTAIN
2. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting, or any
adjournment(s) thereof.
THIS PROXY IS SOLICITED BY THE FUND'S BOARD AND WILL BE VOTED FOR THE ABOVE
PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or
names appearing on this proxy. If shares
are held jointly, each holder should sign.
If signing is by attorney, executor,
administrator, trustee or guardian, please
give full title.
Dated:_________________, 1996
------------------------------
Signature(s)
-------------------------------
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
PROSPECTUS
SEPTEMBER 28, 1995
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS MUNICIPAL MONEY MARKET FUND, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL
FUND. ITS GOAL IS THE MAXIMIZATION OF CURRENT INCOME EXEMPT FROM FEDERAL INCOME
TAX TO THE EXTENT CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE
MAINTENANCE OF LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE OR
PENALTY. THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN AMOUNTS
OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME ON THE
AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES BY
TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED SEPTEMBER 28, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO
SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.................... 3
CONDENSED FINANCIAL INFORMATION................... 3
YIELD INFORMATION................................. 4
DESCRIPTION OF THE FUND........................... 4
MANAGEMENT OF THE FUND............................ 8
HOW TO BUY FUND SHARES............................ 9
SHAREHOLDER SERVICES.............................. 11
HOW TO REDEEM FUND SHARES......................... 14
SHAREHOLDER SERVICES PLAN......................... 16
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 16
GENERAL INFORMATION............................... 18
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees................................... .50%
Other Expenses ................................... .12%
Total Fund Operating Expenses..................... .62%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $6 $20 $35 $77
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding the
costs and expenses borne by the Fund, and therefore indirectly by investors, the
payment of which will reduce investors' annual return. You can purchase Fund
shares without charge directly from the Fund's distributor; you may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. See "Management of the Fund" and
"Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst & Young
LLP, the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related notes
are included in the Statement of Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance
data for a share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended May 31,
- -------------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $.9991 $.9985 $.9981 $.9974 $.9972 $.9973 $.9975 $.9981 $.9983 $.9983
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net..... .0479 .0399 .0417 .0539 .0558 .0492 .0341 .0221 .0198 .0294
Net realized and unrealized gain (loss) on
investments............... (.0006) (.0004) (.0007) (.0002) .0001 .0002 .0005 .0002 .-- (.0002)
------ ------ ------ ------ ------ ----- ------- ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .0473 .0395 .0410 .0537 .0559 .0494 .0346 .0223 .0198 .0292
------ ------ ----- ------ ------ ------ ------- ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net (.0479) (.0399) (.0417) (.0539) (.0558) (.0492) (.0340) (.0221) (.0198) (.0294)
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
Net asset value, end of year $.9985 $.9981 $.9974 $.9972 $.9973 $.9975 $.9981 $.9983 $.9983 $.9981
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
----- ------ ------ ------ ------ ------ ------- ------ ------ ------
TOTAL INVESTMENT RETURN 4.90% 4.06% 4.25% 5.53% 5.72% 5.04% 3.46% 2.23% 2.00% 2.98%
$RATIOS / SUPPLEMENTAL DATA:
Ratios of expenses to average
net assets .56% .56% .57% .58% .58% .59% .62% .62% .62% .62%
Ratios of net investment income to average
net assets................ 4.79% 4.00% 4.16% 5.37% 5.59% 4.95% 3.41% 2.22% 1.98% 2.91%
Net Assets, end of year
(000's omitted) $2,635,221 $3,082,658 $2,758,289 $2,179,515 $2,164,461$1,818,864 $1,498,772 $1,413,815 $1,117,002 $933,311
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield. Both
yield figures are based on historical earnings and are not intended to indicate
future performance. It can be expected that these yields will fluctuate
substantially. The yield of the Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
the advertisement). This income is then annualized. That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The effective yield is calculated similarly, but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment. The Fund's yield and effective yield may reflect
absorbed expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield which,
after being taxed at a stated rate, would be equivalent to a stated yield or
effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, such information under certain conditions may not
provide a basis for comparison with domestic bank deposits, other investments
which pay a fixed yield for a stated period of time, or other investment
companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund ReportRegistration Mark, Morningstar, Inc. and
other industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE -- The Fund's goal is the maximization of current
income exempt from Federal income tax to the extent consistent with the
preservation of capital and the maintenance of liquidity. To accomplish this
goal, the Fund invests primarily in Municipal Obligations (described below). The
Fund's investment objective cannot be changed without approval by the holders of
a majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's investmen t
objective will be achieved. Securities in which the Fund invests may not earn as
high a level of current income as long-term or lower quality securities which
generally have less liquidity, greater market risk and more fluctuation in
market value.
MUNICIPAL OBLIGATIONS -- Municipal Obligations are debt obligations issued
by states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the opinion
of bond counsel to the issuer, exempt from Federal income tax. Municipal
Obligations generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are classified as
general obligation bonds, revenue bonds and notes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds are payable from the revenue
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source, but not
from the general taxing power. Tax exempt industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge of the credit of
the issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other revenues.
Municipal Obligations include municipal lease/purchase agreements which are
similar to installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates of
interest.
MANAGEMENT POLICIES _ It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing its securities pursuant to Rule 2a-7 under the Investment Company Act of
1940, certain requirements of which are summarized as follows. In accordance
with Rule 2a-7, the Fund will maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Board of
Directors to present minimal credit risks and which are rated in one of the two
highest rating categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating organization if the
instrument was rated only by one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Board of Directors. Moreover, the Fund will purchase commercial paper, or
other instruments having only commercial paper ratings, only if the security is
rated in the highest rating category by at least one nationally recognized
statistical rating organization or, if unrated , of comparable quality as
determined in accordance with such procedures. The nationally recognized
statistical rating organizations currently rating investments of the type the
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch") and their
rating criteria are described in the Appendix to the Fund's Statement of
Additional Information. For further information regarding the amortized cost
method of valuing securities, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information. There can be no assurance that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic, business
or political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects, or securities whose issuers are
located in the same state. As a result, the Fund may be subject to greater risk
as compared to a fund that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of its
total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended (the
"Code"), issued after August 7, 1986, while exempt from Federal income tax, is a
preference item for the purpose of the alternative minimum tax. Where a
regulated investment company receives such interest, a proportionate share of
any exempt-interest dividend paid by the investment company may be treated as
such a preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if The Dreyfus Corporation determines that their
purchase is consistent with the Fund's investment objective.
The Fund may purchase floating and variable rate demand notes, which are
tax exempt obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any time,
or at specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. Variable rate demand notes include master demand notes
which are obligations that permit the Fund to invest fluctuating amounts, at
varying rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These notes permit daily changes in the amount
borrowed. Frequently, such obligations are secured by letters of credit or other
credit support arrangements provided by banks. Use of letters of credit or other
credit support arrangements will not adversely affect the tax exempt status of
these obligations. Because these notes are direct lending arrangements between
the lender and borrower, it is not contemplated that such instruments generally
will be traded, and there generally is no secondary market for these notes,
although they are redeemable at face value, plus accrued interest. Accordingly,
where these notes are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Each note purchased by the
Fund will meet the quality criteria established for the purchase of Municipal
Obligations. The Dreyfus Corporation, on behalf of the Fund, will consider on an
ongoing basis the creditworthiness of the issuers of the floating and variable
rate demand notes in the Fund's portfolio.
The Fund may purchase from financial institutions participation interests
in Municipal Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an undivided
interest in the Municipal Obligation in the proportion that the Fund's
participation interest bears to the total principal amount of the Municipal
Obligation. These instruments may have fixed, floating or variable rates of
interest, with remaining maturities of 13 months or less. If the participation
interest is unrated, or has been given a rating below that which otherwise is
permissible for purchase by the Fund, the participation interest will be backed
by an irrevocable letter of credit or guarantee of a bank that the Board of
Directors has determined meets the prescribed quality standards for banks set
forth below, or the payment obligation otherwise will be collateralized by U.S.
Government securities. For certain participation interests, the Fund will have
the right to demand payment, on not more than seven days' notice, for all or any
part of the Fund's participation interest in the Municipal Obligation, plus
accrued interest. As to these instruments, the Fund intends to exercise its
right to demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to maintain
or improve the quality of the Fund's investment portfolio.
The Fund may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, the Fund
obligates a broker, dealer or bank to repurchase, at the Fund's option,
specified securities at a specified price and, in this respect, stand-by
commitments are comparable to put options. The exercise of a stand-by commitment
therefore is subject to the ability of the seller to make payment on demand. The
Fund will acquire stand-by commitments solely to facilitate portfolio liquidity
and does not intend to exercise its rights thereunder for trading purposes. The
Fund may pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with the acquisition of stand-by commitments will be taxable.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement) having
a relatively long maturity and bearing interest at a fixed rate substantially
higher than prevailing short-term tax exempt rates, that has been coupled with
the agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders the
option, at periodic intervals, to tender their securities to the institution and
receive the face value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the difference between the
Municipal Obligation's fixed coupon rate and the rate, as determined by a
remarketing or similar agent at or near the commencement of such period, that
would cause the securities, coupled with the tender option, to trade at par on
the date of such determination. Thus, after payment of this fee, the security
holder effectively holds a demand obligation that bears interest at the
prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf of the
Fund, will consider on an ongoing basis the creditworthiness of the issuer of
the underlying Municipal Obligation, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a default in payment
of principal or interest on the underlying Municipal Obligations and for other
reasons.
The Fund may invest up to 10% 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. Such securities may include
securities that are not readily marketable, such as certain securities that are
subject to legal or contractual restrictions on resale, and repurchase
agreements providing for settlement in more than seven days after notice. As to
these securities, the Fund is subject to a risk that should the Fund desire to
sell them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
From time to time, on a temporary basis other than for temporary defensive
purposes (but not to exceed 20% of the value of the Fund's net assets) or for
temporary defensive purposes, the Fund may invest in taxable short-term
investments ("Taxable Investments") consisting of: notes of issuers having, at
the time of purchase, a quality rating within the two highest grades of Moody's,
S&P or Fitch; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper rated not lower than P-1 by Moody's, A-1 by
S&P or F-1 by Fitch; certificates of deposit of U.S. domestic banks, including
foreign branches of domestic banks, with assets of one billion dollars or more;
time deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by the
Fund that are attributable to income earned by the Fund from Taxable Investments
will be taxable to investors. See "Dividends, Distributions and Taxes." Except
for temporary defensive purposes, at no time will more than 20% of the value of
the Fund's net assets be invested in Taxable Investments. If the Fund purchases
Taxable Investments, it will value them using the amortized cost method and
comply with the provisions of Rule 2a-7 relating to purchases of taxable
instruments. Under normal market conditions, the Fund anticipates that not more
than 5% of its total assets will be invested in any one category of Taxable
Investments. Taxable Investments are more fully described in the Statement of
Additional Information, to which reference hereby is made. CERTAIN FUNDAMENTAL
POLICIES _ The Fund may (i) borrow money from banks, but only for temporary or
emergency purposes, in an amount up to (a) 15% of the Fund's total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made or (b) one-third of the value of its total assets (including the amount
borrowed) in order to meet redemption requests which otherwise might require the
untimely disposition of securities; (ii) pledge, hypothecate, mortgage or
otherwise encumber its assets, but only to secure borrowings for temporary or
emergency purposes; (iii) invest up to 5% of its assets in the obligations of
any one 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; and (iv) invest up to 25% of its assets in the securities of issuers
in any single industry, provided that there is no such limitation on the
purchase of Municipal Obligations and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and Management Policies _
Investment Restrictions" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS _ 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 issuing entities.
New issues of Municipal Obligations usually are offered on a when-issued
basis, which means that delivery and payment for such Municipal Obligations
ordinarily take place within 45 days after the date of the commitment to
purchase. The payment obligation and the interest rate that will be received on
the Municipal Obligations are fixed at the time the Fund enters into the
commitment. The Fund will make commitments to purchase such Municipal
Obligations only with the intention of actually acquiring the securi ties, but
the Fund may sell these securities before the settlement date if it is deemed
advisable, although any gain realized on such sale would be taxable. The Fund
will not accrue income in respect of a when-issued security prior to its stated
delivery date. No additional when-issued commitments will be made if more than
20% of the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and the securities
held in the Fund's portfolio are subject to changes in value (both generally
changing in the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of
interest rates. Municipal Obligations purchased on a when-issued basis may
expose the Fund to risk because they may experience such fluctuations prior to
their actual delivery. Purchasing Municipal Obligations 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. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the when-issued
commitments will be established and maintained at the Fund's custodian bank.
Purchasing Municipal Obligations on a 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.
Certain municipal lease/purchase obligations in which the Fund may invest
may contain "non-appropriation" clauses which provide that the municipality has
no obligation to make lease payments in future years unless money is
appropriated for such purpose on a yearly basis. Although "non-appropriation"
lease/purchase obligations are secured by the leased property, disposition of
the leased property in the event of foreclosure might prove difficult. In
evaluating the credit quality of a municipal lease/purchase obligation that is
unrated, The Dreyfus Corporation will consider, on an ongoing basis, a number of
factors including the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase the
cost of Municipal Obligations available for purchase by the Fund and thus reduce
available yield. Shareholders should consult their tax advisers concerning the
effect of these provisions on an investment in the Fund. Proposals that may
restrict or eliminate the income tax exemption for interest on Municipal
Obligations may be introduced in the future. If any such proposal were enacted
that would reduce the availability of Municipal Obligations for investment by
the Fund so as to adversely affect Fund shareholders, the Fund would reevaluate
its investment objective and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If legislation were enacted
that would treat a type of Municipal Obligation as taxable, the Fund would treat
such security as a permissible Taxable Investment within the applicable limits
set forth herein.
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However, if such
other investment companies are prepared to invest in, or desire to dispose of,
Municipal Obligations or Taxable Investments at the same time as the Fund,
available investments or opportunities for sales will be allocated equitably to
each investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price paid
or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser. The
Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A., which is
a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As of August
31, 1995, The Dreyfus Corporation managed or administered approximately $80
billion in assets for more than 1.8 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall management of
the Fund's affairs under a Management Agreement with the Fund, subject to the
overall authority of the Fund's Board of Directors in accordance with Maryland
law.
Mellon is a publicly owned multibank holding company incorporated under
Pennsylvania law in 1971 and registered under the Federal Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon is
among the twenty-five largest bank holding companies in the United States based
on total assets. Mellon's principal wholly-owned subsidiaries are Mellon Bank,
N.A., Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCOCredit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries, including The Dreyfus
Corporation, Mellon managed more than $203 billion in assets as of June 30,
1995, including approximately $73 billion in mutual fund assets. As of June 30,
1995, Mellon, through various subsidiaries, provided non-investment services,
such as custodial and administration services, for more than $707 billion in
assets, including approximately $71 billion in mutual fund assets.
For the fiscal year ended May 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts it may waive, nor will the
Fund reimburse The Dreyfus Corporation for any amounts it may assume.
The Dreyfus Corporation may pay the Fund's distributor for shareholder
services from The Dreyfus Corporation's own assets, including past profits but
not including the management fee paid by the Fund. The Fund's distributor may
use part or all of such payments to pay securities dealers or others in respect
of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston,Massachusetts 02109. The
Distributor's ultimate parent company is Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank of New
York, 90 Washington Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a nominal
fee if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Fund be used as a vehicle for Keogh, IRA or other qualified
plans. 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 securities dealer, bank or other financial institution which has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. The initial investment must be accompanied by
the Fund's Account Application. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund ad vised by The Dreyfus
Corporation, including members of the Fund'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 Dreyfus Corporation or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. 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, 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.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application. For subsequent investments,
your Fund account number should appear on the check and an investment slip
should be enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. Neither initial nor subseq uent investments
should be made by third party check. Purchase orders may be delivered in person
only to a Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed under
"General Information."
Wire payments may be made if your bank account is in a commercial bank that
is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA#8900052368/Dreyfus Municipal
Money Market Fund, Inc., for purchase of Fund shares in your name. The wire must
include your Fund account number (for new accounts, your Taxpayer Identification
Number ("TIN") should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number.Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You may
obtain further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check used
for investment in your account does not clear. The Fund makes available to
certain large institutions the ability to issue purchase instructions through
compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House member. You must direct the institution to
transmit immediately available funds through the Automated Clearing House to The
Bank of New York with instructions to credit your Fund account. The instructions
must specify your Fund account registration and your Fund account number
PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per share
next determined after an order in proper form and Federal Funds (monies of
member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent. If you do not remit
Federal Funds, your payment must be converted into Federal Funds. This usually
occurs within one business day of receipt of a bank wire and within two business
days of receipt of a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal Reserve System may
take considerably longer to convert into Federal Funds. Prior to receipt of
Federal Funds, your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon, New
York time, on each day that the New York Stock Exchange is open for business.
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
shares outstanding. See "Determination of Net Asset Value" in the Fund's
Statement of Additional Information.
If your payments are received in or converted into Federal Funds by 12:00
Noon, New York time, by the Transfer Agent, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, by the Transfer Agent, you will begin to
accrue dividends on the following business day.
Qualified institutions may telephone orders for the purchase of Fund
shares. These orders will become effective at the price determined at 12:00
Noon, New York time, and the shares purchased will receive the dividend on Fund
shares declared on that day, if the telephone order is placed by 12:00 Noon, New
York time, and Federal Funds are received by 4:00 p.m., New York time, on that
day.
Federal regulations require that you provide a certified TIN upon opening
or reopening an account. See "Dividends, Distributions and Taxes" and the Fund's
Account Application for further information concerning this requirement. Failure
to furnish a certified TIN to the Fund could subject you to a $50 penalty
imposed by the Internal Revenue Service (the "IRS"). DREYFUS TELETRANSFER
PRIVILEGE _ You may purchase shares (minimum $500, maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Fund's Account Application or have filed 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 member may be so designated. The Fund may modify or
terminate this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may request a
Dreyfus TELETRANSFER purchase of shares by telephoning 1-800-221-4060, if you
are calling from overseas, call 1-401-455-3306. PROCEDURES FOR MULTIPLE ACCOUNTS
- -- Special procedures have been designed for banks and other institutions that
wish to open multiple accounts. The institution may open a single master account
by filing one application with the Transfer Agent, and may open individual
sub-accounts at the same time or at some later date. For further information,
please refer to the Statement of Additional Information. SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you. If
you desire to use this service, please call 1-800-645-6561 to determine if it is
available and whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the Transfer
Agent in writing or by telephone. Before any exchange, you must obtain and
should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being exchanged must
have a current value of at least $500; furthermore, when establishing a new
account by exchange, the shares being exchanged must have a value of at least
the minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given to
all shareholders automatically, unless you check the applicable "No" box on the
Account Application, indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing account by
written request, signed by all shareholders on the account or by a separate
signed Shareholder Services Form, also available by calling 1-800-645-6561. If
you have established the Telephone Exchange Privilege, you may telephone
exchange instructions by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares_Procedures." Upon
an exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange Privilege,
Check Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege, and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a sales
load. If you are exchanging into a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which reflect a
reduced sales load, if the shares of the fund from which you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange from
shares purchased with a sales load, or (c) acquired through reinvestment of
dividends or distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of your exchange you must notify the Transfer
Agent. Any such qualification is subject to confirmation of your holdings
through a check of appropriate records. See "Shareholder Services" in the
Statement of Additional Information. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserves the right,
upon not less than 60 days' written notice, to charge shareholders a nominal fee
in accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in part.
The availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable gain
or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of the Fund, in shares of certain other funds in the
Dreyfus Family of Funds of which you are currently an investor. The amount you
designate, which can be expressed either in terms of a specific dollar or share
amount ($100 minimum), will be exchanged automatically on the first and/or
fifteenth of the month according to the schedule you have selected. Shares will
be exchanged at the then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right to
exercise this Privilege may be modified or cancelled by the Fund or the Transfer
Agent. You may modify or cancel your exercise of this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. The Fund may charge a service fee for the use of this Privilege. No
such fee currently is contemplated. The exchange of shares of one fund for
shares of another is treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder, and, therefore, an exchanging
shareholder may realize a taxable gain or loss. For more information concerning
this Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares are
purchased by transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the specified
amount, and Fund shares will be purchased, once a month, on either the first or
fifteenth day, or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member may
be so designated. To establish a Dreyfus-Automatic Asset Builder account, you
must file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, and the notification will be effective
three business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or certain
veterans', military or other payments from the Federal government automatically
deposited into your Fund account. You may deposit as much of such payments as
you elect. To enroll in Dreyfus Government Direct Deposit, you must file with
the Transfer Agent a completed Direct Deposit Sign-Up Form for each type of
payment that you desire to include in this Privilege. The appropriate form may
be obtained by calling 1-800-645-6561. Death or legal incapacity will terminate
your participation in this Privilege. You may elect at any time to terminate
your participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay period.
To establish a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer must
complete the reverse side of the form and return it to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may change the
amount of purchase or cancel the authorization only by written notification to
your employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any other
person, to arrange for transactions under the Dreyfus Payroll Savings Plan. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program
account, you must supply the necessary information on the Fund's Account
Application and file the required authorization form(s) with the Transfer
Agent. For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing your
participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be, as
provided under the terms of such Privilege(s). The Fund may modify or terminate
this Program at any time.
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share price s which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the shares
purchased will be subject on redemption to the contingent deferred sales
charge, if any, applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information. Dreyfus Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain distributions,
if any, from the Fund to a designated bank account. Only an account maintained
at a domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service. For more
information concerning these privileges or to request a Dividend Options Form,
please call toll free 1-800-645-6561. You may cancel these privileges by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after cancellation,
you must submit a new Dividend Options Form. Enrollment in or cancellation of
these privileges is effective three business days following receipt. These
privileges are available only for existing accounts and may not be used to open
new accounts. Minimum subsequent investments do not apply for Dreyfus Dividend
Sweep. The Fund may modify or terminate these privileges at any time or charge
a service fee. No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An application
for the Automatic Withdrawal Plan can be obtained by calling 1-800-645-6561.
There is a service charge of 50cents for each withdrawal check. The Automatic
Withdrawal Plan may be ended at any time by you, the Fund or the Transfer
Agent. Shares for which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
HOW TO REDEEM FUND SHARES GENERAL _ You may request redemption of your
shares at any time. Redemption requests should be transmitted to the Transfer
Agent as described below. When a request is received in proper form, the Fund
will redeem the shares at the next determined net asset value. The Fund imposes
no charges when shares are redeemed. Securities dealers, banks and other
financial institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any certificates representing Fund shares being
redeemed must be submitted with the redemption request. The value of the shares
redeemed may be more or less than their original cost, depending upon the
Fund's then-current net asset value. If a redemption request in proper form is
received by the Transfer Agent by 12:00 Noon, New York time, on a business day,
shares will be redeemed at the net asset value determined on that day. If the
request is received later that day by the Transfer Agent, shares will be
redeemed at the next determined net asset value. The Fund ordinarily will make
payment for all shares redeemed within seven days after receipt by the Transfer
Agent of a redemption request in proper form, except as provided by the rules
of the Securities and Exchange Commission.
HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO
YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES
BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A
PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC
ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF
YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON
SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE
ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has received
your Account Application. The Fund reserves the right to redeem your account
upon not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES _ You may redeem shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the Wire
Redemption Privilege, the Telephone Redemption Privilege, or the Dreyfus
TELE TRANSFER Privilege. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. You may redeem Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select a telephone
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to act on
telephone instructions from any person representing himself or herself to be
you, and reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring a
form of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent instructions. Neither
the Fund nor the Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine. During times of drastic
economic or market conditions, you may experience difficulty in contacting the
Transfer Agent by telephone to request a redemption or exchange of Fund shares.
In such cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in your
redemption request being processed at a later time than it would have been if
telephone redemption had been used.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the
location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests must
be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally will
be accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information." Redemption proceeds of at
least $1,000 will be wired to any member bank of the Federal Reserve System in
accordance with a written signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- You may request on the Account Application,
Shareholder Services Form or by later written request that the Fund provide
Redemption Checks drawn on the Fund's account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or more. Redemption
Checks should not be used to close your account. Redemption Checks are free,
but the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor a Redemption Che
ck because of insufficient funds or other valid reason. You should date your
Redemption Checks with the current date when you write them. Please do not
postdate your Redemption Checks. If you do, the Transfer Agent will honor, upon
presentment, even if presented before the date of the check, all postdated
Redemption Checks which are dated within six months of presentment for payment,
if they are otherwise in good order. Shares for which certificates have been
issued may not be redeemed by Redemption Check. This Privilege may be modified
or terminated at any time by the Fund or the Transfer Agent upon notice to
shareholders.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your bank
is not a member. To establish the Wire Redemption Privilege, you must check the
appropriate box and supply the necessary information on the Fund's Account
Application or file a Shareholder Services Form with the Transfer Agent. You
may direct that redemption proceeds be paid by check (maximum $150,000 per
day)made out to the owners of record and mailed to your address. Redemption
proceeds of less than $1,000 will be paid automatically by check. Holders of
jointly registered Fund or bank accounts may have redemption proceeds of not
more than $250,000 wired within any 30-day period. You may telephone redemption
requests by calling 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. This Privilege may be modified
or terminated at any time by the Transfer Agent or the Fund. The Fund's
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire. Shares for which certificates have been issued are
not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. Shares
for which certificates have been issued are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE -- You may redeem shares (minimum $500 per
day) by telephone if you have checked the appropriate box and supplied the
necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in one of
these documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated Clearing
House member bank ordinarily two days after receipt of the redemption request
or, at your request, paid by check (maximum $150,000 per day) and mailed to
your address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank account
not more than $250,000 within any 30-day period. The Fund reserves the right to
refuse any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate this Privilege at any time or charge
a service fee upon notice to shareholders. No such fee currently is
contemplated. If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares issued in certificate form are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN The Fund has adopted a Shareholder Services Plan
pursuant to which the Fund reimburses Dreyfus Service Corporation, a
wholly-owned subsidiary of The Dreyfus Corporation, an amount not to exceed an
annual rate of .25 of 1% of the value of the Fund's average daily net assets
for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES The Fund ordinarily declares dividends
from net investment income on each day the New York Stock Exchange is open for
business. Dividends usually are paid on the last calendar day of each month and
are automatically reinvested in additional Fund shares at net asset value or,
at your option, are paid in cash. The Fund's earnings for Saturdays, Sundays
and holidays are declared as dividends on the preceding business day. If you
redeem all shares in your account at any time during the month, all dividends
to which you are entitled will be paid to you along with the proceeds of the
redemption. If you are an omnibus accountholder and indicate in a partial
redemption request that a portion of any accrued dividends to which such
account is entitled belongs to an underlying accountholder who has redeemed all
shares in his or her account, such portion of the accrued dividends will be
paid to you along with the proceeds of the redemption. Distributions from net
realized securities gains, if any, generally are declared and paid once a year,
but the Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will not
make distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose whether
to receive distributions in cash or to reinvest in additional Fund shares at
net asset value. All expenses are accrued daily and deducted before declaration
of dividends to investors. Except for dividends from Taxable Investments, the
Fund anticipates that substantially all dividends paid by the Fund will not be
subject to Federal income tax. Dividends derived from Taxable Investments,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, paid by the Fund are subject to Federal
income tax as ordinary income, whether or not reinvested. No dividend paid by
the Fund will qualify for the dividends received deduction allowable to certain
U.S. corporations. Distributions from net realized long-term securities gains
of the Fund generally are taxable as long-term capital gains for Federal income
tax purposes if you are a citizen or resident of the United States. The Code
provides that the net capital gain of an individual generally will not be
subject to Federal income tax at a rate in excess of 28%. Under the Code,
interest on indebtedness incurred or continued to purchase or carry Fund shares
which is deemed to relate to exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the Fund may be
excluded by shareholders of the Fund from their gross income for Federal income
tax purposes, the Fund may purchase specified private activity bonds, the
interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax as well
as a component in computing the corporate environmental tax or (iii) a factor
in determining the extent to which a shareholder's Social Security benefits are
taxable. If the Fund purchases such securities, the portion of the Fund's
dividends related thereto will not necessarily be tax exempt to an investor who
is subject to the alternative minimum tax and/or the tax on Social Security
benefits and may cause an investor to be subject to such taxes. Taxable
dividends derived from net investment income, together with distributions from
net realized short-term securities gains and all or a portion of any gains
realized from the sale or other disposition of certain market discount bonds,
paid by the Fund to a foreign investor generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the foreign investor
claims the benefit of a lower rate specified in a tax treaty. Distributions
from net realized long-term securities gains paid by the Fund to a foreign
investor generally will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to backup withholding, as described
below, unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will be mailed
to you annually. You also will receive periodic summaries of your account which
will include information as to dividends and distributions from securities
gains, if any, paid during the year. These statements set forth the dollar
amount of income exempt from Federal tax and the dollar amount, if any, subject
to Federal tax . These dollar amounts will vary depending on the size and
length of time of your investment in the Fund. If the Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day. Federal
regulations generally require the Fund to withhold ("backup withholding") and
remit to the U.S. Treasury 31% of taxable dividends and distributions from net
realized securities gains of the Fund paid to a shareholder if such shareholder
fails to certify either that the TIN furnished in connection with opening an
account is correct, or that such shareholder has not received notice from the
IRS of being subject to backup withholding as a result of a failure to properly
report taxable dividend or in terest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding if the
IRS determines a shareholder's TIN is incorrect or if a shareholder has failed
to properly report taxable dividend and interest income on a Federal income tax
return. A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return. Management of the Fund believes that the Fund has
qualified for the fiscal year ended May 31, 1995 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if such
qualification is in the best interest of its shareholders. Such qualification
relieves the Fund of any liability for Federal income taxes to the extent its
earnings are distributed in accordance with the applicable provisions of the
Code. The Fund is subject to a non-deductible 4% excise tax, measured with
respect to certain undistributed amounts of taxable investment income and
capital gains. You should consult your tax adviser regarding specific questions
as to Federal, state or local taxes.
GENERAL INFORMATION The Fund was incorporated under Maryland law on July
30, 1979, and commenced operations on August 7, 1980. On May 29, 1991, the
Fund's name was changed from Dreyfus Tax Exempt Money Market Fund, Inc. to
Dreyfus Municipal Money Market Fund, Inc. The Fund is authorized to issue 5
billion shares of Common Stock, par value $.01 per share. Each share has one
vote. Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to the
Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of shareholders
for purposes of removing a Director from office and the holders of at least 25%
of such shares may require the Fund to hold a special meeting of shareholders
for any other purpose. Fund shareholders may remove a Director by the
affirmative vote of a majority of the Fund's outstanding voting shares. In
addition, the Board of Directors will call a meeting of shareholders for the
purpose of electing Directors if, at any time, less than a majority of the
Directors then holding office have been elected by shareholders. The Transfer
Agent maintains a record of your ownership and sends you confirmations and
statements of account. Shareholder inquiries may be made by writing to the Fund
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling
toll free 1-800-645-6561. In New York City, call 1-718-895-1206; outside the
U.S. and Canada call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
[This Page Intentionally Left Blank]
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Municipal
Money Market
Fund, Inc.
Prospectus
Registration Mark
<PAGE>
PROSPECTUS DECEMBER 15, 1995
DREYFUS MICHIGAN
MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC. (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH AS
HIGH A LEVEL OF CURRENT INCOME EXEMPT FROM FEDERAL AND STATE OF MICHIGAN INCOME
TAXES AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF
LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED DECEMBER 15, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO
SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL TOLL FREE
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.................... 3
CONDENSED FINANCIAL INFORMATION................... 3
YIELD INFORMATION................................. 4
DESCRIPTION OF THE FUND........................... 4
MANAGEMENT OF THE FUND............................ 7
HOW TO BUY FUND SHARES............................ 8
SHAREHOLDER SERVICES.............................. 10
HOW TO REDEEM FUND SHARES......................... 13
SHAREHOLDER SERVICES PLAN......................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 16
GENERAL INFORMATION............................... 18
APPENDIX.......................................... 19
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees................... .50%
Other Expenses.................... .26%
Total Fund Operating Expenses..... .76%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period: $8 $24 $42 $94
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. You can purchase Fund shares without charge directly from the Fund's
distributor; you may be charged a nominal fee if you effect transactions in
Fund shares through a securities dealer, bank or other financial institution.
See "Management of the Fund" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related notes
are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------------------------------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $1.0000 $1.0000 $1.0000 $ .9999 $ .9999 $ .9993
-------- -------- -------- -------- -------- --------
INVESTMENT OPERATIONS:
Investment income--net.............. .0132 .0507 0313 .0209 .0222 .0330
Net realized and unrealized gain
(loss) on investments............. -- -- (.0001) -- (.0006) --
-------- ------- -------- ------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS.. .0132 .0507 .0312 .0209 .0216 .0330
-------- -------- ------- -------- -------- --------
DISTRIBUTIONS:
Dividends from investment income--net (.0132) (.0507) (.0313) (.0209) (.0222) (.0330)
-------- -------- -------- -------- -------- --------
Net asset value, end of year....... . $1.0000 $1.0000 $ .9999 $ .9999 $ .9993 $ .9993
-------- -------- -------- -------- -------- --------
-------- -------- -------- ------- ------ -------
TOTAL INVESTMENT RETURN ................ 6.07%(2) 5.19% 3.17% 2.11% 2.25% 3.35%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets ---- .03% .41% .58% .53% .65%
Ratio of net investment income
to average net assets............. 6.21%(2) 4.87% 3.18% 2.09% 2.21% 3.30%
Decrease reflected in above expense ratios
due to undertakings
by The Dreyfus Corporation........ 2.78%(2) .74% .33% .20% .20% .11%
Net Assets, end of year (000's omitted) $19,929 $102,707 $83,025 $72,957 $60,137 $58,575
(1)From July 13, 1990 (commencement of operations) to September 30, 1990.
(2)Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly, but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment. The Fund's yield and effective
yield may reflect absorbed expenses pursuant to any undertaking that may be in
effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund ReportRegistration Mark, Morningstar, Inc.
and other industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as high a level
of current income exempt from Federal and State of Michigan income taxes as is
consistent with the preservation of capital and the maintenance of liquidity.
To accomplish its investment objective, the Fund invests primarily in the debt
securities of the State of Michigan, its political subdivisions, authorities
and corporations, the interest from which is, in the opinion of bond counsel to
the issuer, exempt from Federal and State of Michigan income taxes
(collectively, "Michigan Municipal Obligations"). To the extent acceptable
Michigan Municipal Obligations are at any time unavailable for investment by
the Fund, the Fund will invest temporarily in other debt securities the
interest from which is, in the opinion of bond counsel to the issuer, exempt
from Federal, but not State of Michigan, income tax. The Fund's investment
objective cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
the Fund's outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved. Securities in which the Fund will invest
may not earn as high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market risk and more
fluctuation in market value.
MUNICIPAL OBLIGATIONS
Debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax ("Municipal Obligations")
generally include debt obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds issued by or on behalf
of public authorities. Municipal Obligations are classified as general
obligation bonds, revenue bonds and notes. General obligation bonds are secured
by the issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from the
general taxing power. Tax exempt industrial development bonds, in most cases,
are revenue bonds that do not carry the pledge of the credit of the issuing
municipality, but generally are guaranteed by the corporate entity on whose
behalf they are issued. Notes are short-term instruments which are obligations
of the issuing municipalities or agencies and are sold in anticipation of a
bond sale, collection of taxes or receipt of other revenues. Municipal
Obligations include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates of
interest.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least 80%
of the value of its net assets (except when maintaining a temporary defensive
position) in Municipal Obligations. Under normal circumstances, at least 65% of
the value of the Fund's net assets will be invested in Michigan Municipal
Obligations and the remainder may be invested in securities that are not
Michigan Municipal Obligations and therefore may be subject to Michigan income
taxes. See "Investment Considerations and Risks _ Investing in Michigan
Municipal Obligations" below, and "Dividends, Distributions and Taxes." The
Fund also may invest in Taxable Investments of the quality described under
"Appendix -- Certain Portfolio Securities -- Taxable Investments."
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing its securities pursuant to Rule 2a-7 under the 1940 Act, certain
requirements of which are summarized as follows. In accordance with Rule 2a-7,
the Fund will maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments having remaining maturities of 13 months or
less and invest only in U.S. dollar denominated securities determined in
accordance with procedures established by the Fund's Board to present minimal
credit risks and which are rated in one of the two highest rating categories
for debt obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by only
one such organization) or, if unrated, are of comparable quality as determined
in accordance with procedures established by the Board. The nationally
recognized statistical rating organizations currently rating instruments of the
type the Fund may purchase are Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Group, a division of TheMcGraw Hill Companies, Inc.
("S&P") and Fitch Investors Service, L.P. ("Fitch") and their rating criteria
are described in "Appendix B" to the Statement of Additional Information. For
further information regarding the amortized cost method of valuing securities,
see "Determination of Net Asset Value" in the Statement of Additional
Information. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax. Where
a regulated investment company receives such interest, a proportionate share of
any exempt-interest dividend paid by the investment company may be treated as
such a preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if The Dreyfus Corporation determines that their
purchase is consistent with the Fund's investment objective. See "Investment
Considerations and Risks" below.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- 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 issuing
entities.
INVESTING IN MICHIGAN MUNICIPAL OBLIGATIONS -- You should consider carefully
the special risks inherent in the Fund's investment in Michigan Municipal
Obligations. Michigan's economy has been undergoing certain basic changes in
its underlying structure. These changes reflect a diversifying economy which is
less reliant on the automobile industry. As a result, it is anticipated that
the State's economy in the future will be less susceptible to cyclical swings
and more resilient when national downturns occur. The principal sectors of
Michigan's diversifying economy are manufacturing of durable goods (including
automobile and office equipment manufacturing), tourism and agriculture.
Michigan's unemployment rate averaged 9.9% in 1985 and averaged 5.9% in 1994.
Michigan's Annual Financial Reports for the fiscal years ended
September 30, 1987 through 1989 showed positive balances in the State's general
cash position representing an improvement from the negative cash position of
prior years. Michigan ended fiscal years 1989-90 and 1990-91 with negative
balances of $310 million and $169 million, respectively. This cumulative
deficit was eliminated as of the fiscal year ended September 30, 1992. Michigan
ended fiscal years 1992-93 and 1993-94 with surpluses of approx imately $308
million and $460 million, respectively. You should obtain and review a copy of
the Statement of Additional Information which more fully sets forth these and
other risk factors.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than 25% of the
value of its total assets in Municipal Obligations which are related in such a
way that an economic, business, or political development or change affecting
one such security also would affect the other securities; for example,
securities the interest upon which is paid from revenue of similar types of
projects. As a result, the Fund may be subject to greater risk as compared to a
fund that does not follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure might
prove difficult. In evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, The Dreyfus Corporation will consider, on an
ongoing basis, a number of factors including the likelihood that the issuing
municipality will discontinue appropriation funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase the
cost of the Municipal Obligations available for purchase by the Fund and thus
reduce the available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for interest
on Municipal Obligations may be introduced in the future. If any such proposal
were enacted that would reduce the availability of Municipal Obligations for
investment by the Fund so as to adversely affect Fund shareholders, the Fund
would reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation as
taxable, the Fund would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
NON-DIVERSIFIED STATUS -- The Fund's classification as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act. A
"diversified" investment company is required by the 1940 Act generally to
invest, with respect to 75% of its total assets, not more than 5% of such
assets in the securities of a single issuer. Since a relatively high percentage
of the Fund's assets may be invested in the obligations of a limited number of
issuers, the Fund's portfolio securities may be more sensitive to changes in
the market value of a single issuer or industry. However, to meet Federal tax
requirements, at the close of each quarter the Fund may not have more than 25%
of its total assets invested in any one issuer and, with respect to 50% of
total assets, not more than 5% of its total assets invested in any one issuer.
These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. However, if such other investment companies are prepared to invest
in, or desire to dispose of, Municipal Obligations or Taxable Investments,
available investments or opportunities for sales will be allocated equitably to
each investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price paid
or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon").
As of November 30, 1995, The Dreyfus Corporation managed or administered
approximately $83 billion in assets for more than 1.7 million investor accounts
nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board in accordance with
Maryland law.
Mellon is a publicly owned multibank holding company incorporated under
Pennsylvania law in 1971 and registered under the Federal Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon is
among the twenty-five largest bank holding companies in the United States based
on total assets. Mellon's principal wholly-owned subsidiaries are Mellon Bank,
N.A., Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCOCredit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries, including TheDreyfus
Corporation, Mellon managed more than $209 billion in assets as of September
30, 1995, including approximately $80 billion in proprietary mutual fund
assets. As of September 30, 1995, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or administration services,
for more than $717 billion in assets including approximately $55 billion in
mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to pay
The Dreyfus Corporation a monthly fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts it may waive, nor will the
Fund reimburse The Dreyfus Corporation for any amounts it may assume. For the
fiscal year ended September 30, 1995, the Fund paid The Dreyfus Corporation a
monthly management fee at the effective annual rate of .39 of 1% of the value
of the Fund's average daily net assets pursuant to undertakings by The Dreyfus
Corporation.
The Dreyfus Corporation may pay the Fund's distributor for shareholder
services from The Dreyfus Corporation's own assets, including past profits but
not including the management fee paid by the Fund. The Fund's distributor may
use part or all of such payments to pay securities dealers or others in respect
of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor's ultimate parent company is Boston Institutional
Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of TheDreyfus Corporation, is located at One American
Express Plaza, Providence, Rhode Island 02903, and serves as the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank of New
York, 90 Washington Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Share certificates are issued only
upon your written request. No stock certificates are issued for fractional
shares. It is not recommended that the Fund be used as a vehicle for Keogh, IRA
or other qualified plans. 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 securities dealer, bank or other financial institution which has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. The initial investment must be accompanied
by the Fund's Account Application. For full time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund'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 Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund account, the minimum initial investment is $50. 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, 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 also be aware, however, that periodic investment plans do not
guarantee a profit and will not protect an investor against loss in a declining
market.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application. For subsequent investments,
your Fund account number should appear on the check and an investment slip
should be enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. Neither initial nor subseq uent investments
should be made by third party check. Purchase orders may be delivered in person
only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the
location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900052708/Dreyfus Michigan
Municipal Money Market Fund, Inc., for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account registration
and dealer number, if applicable. If your initial purchase of Fund shares is by
wire, please call 1-800-645-6561 after completing your wire payment to obtain
your Fund account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House member. You must direct the institution to
transmit immediately available funds through the Automated Clearing House to
The Bank of New York with instructions to credit your Fund account. The
instructions must specify your Fund account registration and your Fund account
number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit at
a Federal Reserve Bank) are received by the Transfer Agent. If you do not remit
Federal Funds, your payment must be converted into Federal Funds. This usually
occurs within one business day of receipt of a bank wire or within two business
days of receipt of a check drawn on a member bank of the Federal Reserve
System. Checks drawn on banks which are not members of the Federal Reserve
System may take considerably longer to convert into Federal Funds. Prior to
receipt of Federal Funds, your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open for business.
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
shares outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, by the Transfer Agent, you will begin to
accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares. These orders will become effective at the price determined at 12:00
Noon, New York time, and the shares purchased will receive the dividend on Fund
shares declared on that day if the telephone order is placed by 12:00 Noon, New
York time, and Federal Funds are received by 4:00 p.m., New York time, on that
day.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish such a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these documents and
your Fund account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
The Fund may modify or terminate this Privilege at any time or charge a service
fee upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by telephoning 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you. If
you desire to use this service, please call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must obtain
and should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being exchanged
must have a current value of at least $500; furthermore, when establishing a
new account by exchange, the shares being exchanged must have a value of at
least the minimum initial investment required for the fund into which the
exchange is being made. The ability to issue exchange instructions by telephone
is given to all Fund shareholders automatically, unless you check the
applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services Form,
also available by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-33 06. See
"How to Redeem Fund Shares_Procedures." Upon an exchange into a new account,
the following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TELETRANSFER Privilege and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds sold
with a sales load. If you are exchanging into a fund that charges a sales load,
you may qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of your exchange you must notify
the Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services" in
the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund reserves
the right, upon not less than 60 days' written notice, to charge shareholders a
nominal fee in accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange request in whole
or in part. The availability of Fund Exchanges may be modified or terminated at
any time upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis), in
exchange for shares of the Fund, in shares of other funds in the Dreyfus Family
of Funds of which you are currently an investor. The amount you designate,
which can be expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right to
exercise this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. You may modify or cancel your exercise of this Privilege at any
time by writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence,
Rhode Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. See "Dividends, Distributions
and Taxes." For more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this Privilege, or to obtain
a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares are
purchased by transferring funds from the bank account designated by you. At
your option, the account designated by you will be debited in the specified
amount, and Fund shares will be purchased, once a month, on either the first or
fifteenth day, or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member may
be so designated. To establish a Dreyfus-AUTOMATIC Asset Builder account, you
must file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, and the notification will be effective
three business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social Security,
or certain veterans', military or other payments from the Federal government
automatically deposited into your Fund account. You may deposit as much of such
payments as you elect. To enroll in Dreyfus Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time to
terminate your participation by notifying in writing the appropriate Federal
agency. The Fund may terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN -- Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay period.
To establish a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer must
complete the reverse side of the form and return it to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may change the
amount of purchase or cancel the authorization only by written notification to
your employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any other
person, to arrange for transactions under the Dreyfus Payroll Savings Plan. The
Fund may modify or terminate this Privilege at any time or charge a service
fee.
No such fee currently is contemplated.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program
account, you must supply the necessary information on the Fund's Account
Application and file the required authorization form(s) with the Transfer
Agent. For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing your
participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be, as
provided under the terms of such Privilege(s). The Fund may modify or terminate
this Program at any time.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are an investor. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the shares
purchased will be subject on redemption to the contingent deferred sales
charge, if any, applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information. Dreyfus Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain distributions,
if any, from the Fund to a designated bank account. Only an account maintained
at a domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new fund
after cancellation, you must submit a new Dividend Options Form. Enrollment in
or cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges at
any time or charge a service fee. No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An application
for the Automatic Withdrawal Plan can be obtained by calling 1-800-645-6561.
There is a service charge of 50cents for each withdrawal check. The Automatic
Withdrawal Plan may be ended at any time by you, the Fund or the Transfer
Agent. Shares for which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL -- You may request redemption of shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When a
request is received in proper form, the Fund will redeem the shares at the next
determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares. Any stock certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO
YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES
BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A
PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC
ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF
YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON
SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE
ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed
until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is $500
or less and remains so during the notice period.
PROCEDURES -- You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or, if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, through the Check Redemption
Privilege, the Wire Redemption Privilege, the Telephone Redemption Privilege,
or the Dreyfus TELETRANSFER Privilege. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities. TheFund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any time
or charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you and
reasonably believed by the Transfer Agent to be genuine. The Fund will require
the Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the Fund
nor the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to request
a redemption or exchange of Fund shares. In such cases, you should consider
using the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being processed at
a later time than it would have been if telephone redemption had been used.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO
THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature must
be guaranteed. The Transfer Agent has adopted standards and procedures pursuant
to which signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank
of the Federal Reserve System in accordance with a written signature-guaranteed
request.
CHECK REDEMPTION PRIVILEGE -- You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any person
in the amount of $500 or more. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer Agent will impose a
fee for stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor the Redemption Check due to insufficient funds or
other valid reason. You should date your Redemption Checks with the current
date when you write them. Please do not postdate your Redemption Checks. If you
do, the Transfer Agent will honor, upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good order.
Shares for which certificates have been issued may not be redeemed by
Redemption Check.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your bank
is not a member. You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered Fund or bank accounts may have redemption
proceeds of not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. The Statement of Additional Information
sets forth instructions for transmitting redemption requests by wire. Shares
for which certificates have been issued are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306. Shares for which
certificates have been issued are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE -- You may request by telephone that redemption
proceeds (minimum $500) be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an Automated Clearing House member may be designated. Redemption
proceeds will be on deposit in your account at an Automated Clearing House
member bank ordinarily two days after receipt of the redemption request or, at
your request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem through
the Dreyfus TELETRANSFER Privilege for transfer to their bank account not more
than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares issued in certificate form are not eligible for this privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1% of
the value of the Fund's average daily net assets for certain allocated expenses
of providing personal services and/or maintaining shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Dividends usually
are paid on the last calendar day of each month and are automatically
reinvested in additional Fund shares at net asset value or, at your option,
paid in cash. The Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. If you redeem all shares
in your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If you
are an omnibus accountholder and indicate in a partial redemption request that
a portion of any accrued dividends to which such account is entitled belongs to
an underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with proceeds
of the redemption. Distributions from net realized securities gains, if any,
generally are declared and paid once a year, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional Fund shares at net asset value. All expenses
are accrued daily and deducted before declaration of dividends to investors.
Dividends paid by the Fund to a Michigan resident individual are not
subject to the Michigan personal income tax and are excluded from the taxable
income base of the Michigan intangibles tax to the extent that dividends paid
are attributable to income received by the Fund as interest from the Fund's
investment in Michigan Municipal Obligations and U.S. Government obligations,
including obligations issued by U.S. possessions. Dividends or distributions
paid by the Fund to a Michigan resident that are attributable to most other
sources are subject to the Michigan personal income tax and are included in the
taxable income base of the Michigan intangibles tax.
For Michigan personal income and intangibles tax purposes, the
proportionate share of dividends from the Fund's net investment income from
other than Michigan Municipal Obligations and distributions from any short-term
or long-term capital gains will be included in Michigan taxable income and will
be included in the taxable income base of the Michigan intangibles tax, except
that dividends from net investment income or distributions from capital gains
reinvested in Fund shares are exempt from such tax. In addition, for Michigan
personal income tax purposes, any gain or loss realized when the shareholder
sells or exchanges shares of the Fund will be included in Michigan taxable
income. Persons engaging in business activities in Michigan may be subject to
the Michigan Single Business Tax and should consult their tax advisers with
respect to the application of such tax in connection with an investment in the
Fund.
The foregoing discussion of Michigan personal income, personal
property, and business tax consequences applies only to taxpayers who are
individuals residing in Michigan. To the extent that investors are subject to
state or local taxes outside of Michigan, dividends and distributions paid by
the Fund may represent taxable income.
Except for dividends from Taxable Investments, the Fund anticipates that
substantially all dividends paid by the Fund will not be subject to Federal
income tax. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, are subject to Federal income tax as ordinary income
whether or not reinvested. Distributions from net realized long-term securities
gains of the Fund generally are taxable as long-term capital gains for Federal
income tax purposes if you are a citizen or resident of the United States. The
Code provides that the net capital gain of an individual generally will not be
subject to Federal income tax at a rate in excess of 28%. Under the Code,
interest on indebtedness incurred or continued to purchase or carry Fund shares
which is deemed to relate to exempt-interest dividends is not deductible. No
dividend paid by the Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations.
Although all or a substantial portion of the dividends paid by the Fund
may be excluded by shareholders of the Fund from their gross income for Federal
income tax purposes, the Fund may purchase specified private activity bonds,
the income from which may be; (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax as well
as a component in computing the corporate environmental tax or (iii) a factor
in determining the extent to which a shareholder's Social Security benefits are
taxable. If the Fund purchases such securities, the portion of the Fund's
dividends related thereto will not necessarily be tax exempt to an investor who
is subject to the alternative minimum tax and/or tax on Social Security
benefits and may cause an investor to be subject to such taxes.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable
gain or loss.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth the
dollar amount of income exempt from Federal tax and the dollar amount, if any,
subject to Federal tax. These dollar amounts will vary depending on the size
and length of time of your investment in the Fund. If the Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends and
distributions from net realized securities gains paid to a shareholder of the
Fund if such shareholder fails to certify either that the TIN furnished in
connection with opening an account is correct or such shareholder has not
received notice from the IRS of being subject to backup withholding as a result
of a failure to properly report taxable dividend or interest income on a
Federal income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report taxable dividend
and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that the Fund has qualified for the fiscal
year ended September 30, 1995 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify as long as such qualification
is in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on May 16, 1990, and
commenced operations on July 13, 1990. The Fund is authorized to issue 1
billion shares of Common Stock, par value $.001 per share. Each share has one
vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require the
Fund to hold a special meeting of shareholders for purposes of removing a
Director from office and the holders of at least 25% of such shares may require
the Fund to hold a special meeting of shareholders for any other purpose. Fund
shareholders may remove a Director by the affirmative vote of not less than a
majority of the Fund's outstanding voting shares. In addition, the Board of
Directors will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors holding office
at the time had been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S. and
Canada, call 516-794-5452.
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund may borrow money from banks, but 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
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments.
FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations and
other 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 that will
be received on a forward commitment or when-issued security are fixed at the
time the Fund enters into the commitment. However, the Fund does not make a
payment until it receives delivery from the other party to the transaction. The
Fund will make commitments to purchase such securities only with the intention
of actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. A segregated account of
the Fund consisting of cash, cash equivalents or U.S. Government securities or
other high quality liquid debt securities at least equal at all times to the
amount of the commitments will be established and maintained at the Fund's
custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and
variable rate demand notes and bonds, which are tax exempt obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as lender,
and the borrower. These obligations permit daily changes in the amount
borrowed. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments will
generally be traded, and there generally is no established secondary market for
these obligations, although they are redeemable at face value, plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on dema
nd. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest, with remaining maturities
of 13 months or less. If the participation interest is unrated, or has been
given a rating below that which otherwise is permissible for purchase by the
Fund, the participation interest will be backed by an irrevocable letter of
credit or guarantee of a bank that the Board of Directors has determined meets
the prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities. For
certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest. As
to these instruments, the Fund intends to exercise its right to demand payment
only upon a default under the terms of the Municipal Obligation, as needed to
provide liquidity to meet redemptions, or to maintain or improve the quality of
its investment portfolio.
TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a fixed
rate substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank, broker-dealer
or other financial institution, pursuant to which such institution grants the
security holders the option, at periodic intervals, to tender their securities
to the institution and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic fees equal to
the difference between the Municipal Obligation's fixed coupon rate and the
rate, as determined by a remarketing or similar agent at or near the
commencement of such period, that would cause the securities, coupled with the
tender option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand obligation
that bears interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligations, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable in
the event of a default in payment of principal or interest on the underlying
Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS -- The Fund may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to repurchase, at the
Fund's option, specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a stand-by
commitment therefore is subject to the ability of the seller to make payment on
demand. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The Fund may pay for stand-by commitments if such action is
deemed necessary, thus increasing to a degree the cost of the underlying
Municipal Obligation and similarly decreasing such security's yield to
investors.
ILLIQUID SECURITIES -- The Fund may invest up to 10% 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.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
TAXABLE INVESTMENTS -- From time to time, on a temporary basis other than
for temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may invest in
taxable short-term investments ("Taxable Investments") consisting of: notes of
issuers having, at the time of purchase, a quality rating within the two
highest grades of Moody's, S&P or Fitch; obligations of the U.S. Government,
its agencies or instrumentalities; commercial paper rated not lower than P-2 by
Moody's, A-2 by S&P or F-2 by Fitch; certificates of deposit of U.S. domestic
banks, including foreign branches of domestic banks, with assets of one billion
dollars or more; time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the foregoing.
Dividends paid by the Fund that are attributable to income earned by the Fund
from Taxable Investments will be taxable to investors. See "Dividends,
Distributions and Taxes." Except for temporary defensive purposes, at no time
will more than 20% of the value of the Fund's net assets be invested in Taxable
Investments. If the Fund purchases Taxable Investments, it will value them
using the amortized cost method and comply with the provisions of Rule 2a-7
relating to purchases of taxable instruments. When the Fund has adopted a
temporary defensive position, including when acceptable Michigan Municipal
Obligations are unavailable for investment by the Fund, in excess of 35% of the
Fund's net assets may be invested in securities that are not exempt from State
of Michigan income taxes. Under normal market conditions, the Fund anticipates
that not more than 5% of the value of its total assets will be invested in any
one category of Taxable Investments. Taxable Investments are more fully
described in the Statement of Additional Information to which reference hereby
is made.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
Michigan Municipal
Money Market
Fund, Inc.
Prospectus
Registration Mark
<PAGE>
PROSPECTUS
MARCH 29, 1996
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC. (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH AS
HIGH A LEVEL OF CURRENT INCOME EXEMPT FROM FEDERAL AND STATE OF OHIO INCOME
TAXES AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF
LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE OR
PENALTY. THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN AMOUNTS
OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME ON THE
AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES BY
TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MARCH 29, 1996, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT 144
GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL TOLL FREE
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.................... 3
Condensed Financial Information................... 3
Yield Information................................. 4
Description of the Fund........................... 4
Management of the Fund............................ 7
How to Buy Shares................................. 8
Shareholder Services.............................. 10
How to Redeem Shares.............................. 13
Shareholder Services Plan......................... 15
Dividends, Distributions and Taxes................ 16
General Information............................... 18
Appendix.......................................... 19
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees............................. .50%
Other Expenses.............................. .25%
Total Fund Operating Expenses............... .75%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at
the end of each time period: $8 $24 $42 $93
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. You can purchase Fund shares without charge directly from the Fund's
distributor; you may be charged a nominal fee if you effect transactions in
Fund shares through a securities dealer, bank or other financial institution.
See "Management of the Fund" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related notes
are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
-----------------------------------------------------
PER SHARE DATA: 1991(1) 1992 1993 1994 1995
-------- -------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............... $1.00 $1.00 $1.00 $1.00 $1.00
--------- ------ ------- ------- ------
INVESTMENT OPERATIONS:
Investment income--net............................. .0334 .0326 .0244 .0264 .0349
Net realized and unrealized gain (loss) on investment .-- .-- .-- (.0008) (.0003)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................. .0334 .0326 .0244 .0256 .0346
------ --------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income--net.............. (.0334) (.0326) (.0244) (.0264) (.0349)
---------- ------ ------ ------- -------
Net asset value, end of year....................... $1.00 $1.00 $1.00 $1.00 $1.00
-------- ------- ---------- ------- ----
-------- ------- ---------- ------- ----
TOTAL INVESTMENT RETURN............................... 4.50%(2) 3.31% 2.47% 2.67% 3.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .-- .09% .20% .28% .51%
Ratio of net investment income to average net assets 4.43%(2) 3.27% 2.44% 2.65% 3.50%
Decrease reflected in above expense ratios due to undertakings
by The Dreyfus Corporation....................... 1.31%(2) .76% .56% .48% .24%
Net Assets, end of year (000's omitted)........... $27,562 $62,550 $63,883 $63,053 $43,642
(1) From March 1, 1991 (commencement of operations) to November 30, 1991.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly, but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment. The Fund's yield and effective
yield may reflect absorbed expenses pursuant to any undertaking that may be in
effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund ReportRegistration Mark, Morningstar, Inc.
and other industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as high a level
of current income exempt from Federal and State of Ohio income taxes as is
consistent with the preservation of capital and the maintenance of liquidity.
To accomplish this goal, the Fund invests primarily in the debt securities of
the State of Ohio, its political subdivisions, authorities and corporations,
the interest from which is, in the opinion of bond counsel to the issuer,
exempt from Federal and State of Ohio income taxes (collectively, "Ohio
Municipal Obligations"). To the extent acceptable Ohio Municipal Obligations
are at any time unavailable for investment by the Fund, the Fund will invest
temporarily in other debt securities the interest from which is, in the opinion
of bond counsel to the issuer, exempt from Federal, but not State of Ohio,
income tax. The Fund's investment objective cannot be changed without approval
by the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Fund's outstanding voting shares. There can
be no assurance that the Fund's investment objective will be achieved.
Securities in which the Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MUNICIPAL OBLIGATIONS
Debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax ("Municipal Obligations")
generally include debt obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds issued by or on behalf
of public authorities. Municipal Obligations are classified as general
obligation bonds, revenue bonds and notes. General obligation bonds are secured
by the issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from the
general taxing power. Tax exempt industrial development bonds, in most cases,
are revenue bonds that do not carry the pledge of the credit of the issuing
municipality, but generally are guaranteed by the corporate entity on whose
behalf they are issued. Notes are short-term instruments which are obligations
of the issuing municipalities or agencies and are sold in anticipation of a
bond sale, collection of taxes or receipt of other revenues. Municipal
Obligations include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates of
interest.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least 80%
of the value of its net assets (except when maintaining a temporary defensive
position) in Municipal Obligations. Under normal circumstances, at least 65% of
the value of the Fund's net assets will be invested in Ohio Municipal
Obligations and the remainder may be invested in securities that are not Ohio
Municipal Obligations and therefore may be subject to Ohio income taxes. See
"Investment Considerations and Risks _ Investing in Ohio Municipal Obligations"
below, and "Dividends, Distributions and Taxes." The Fund also may invest in
Taxable Investments of the quality described under "Appendix -- Certain
Portfolio Securities -- Taxable Investments."
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing its securities pursuant to Rule 2a-7 under the 1940 Act, certain
requirements of which are summarized as follows. In accordance with Rule 2a-7,
the Fund is required to maintain a dollar-weighted average portfolio maturity
of 90 days or less, purchase only instruments having remaining maturities of 13
months or less, and invest only in U.S. dollar denominated securities
determined in accordance with procedures established by the Fund's Board to
present minimal credit risks and which are rated in one of the two highest
rating categories for debt obligations by at least two nationally recognized
statistical rating organizations (or one rating organization if the instrument
was rated by only one such organization) or, if unrated, are of comparable
quality as determined in accordance with procedures established by the Board.
The nationally recognized statistical rating organizations currently rating
instruments of the type the Fund may purchase are Moody's Investors Service,
Inc. ("Moody's"), Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc. ("S&P"), and Fitch Investors Servi ce, L.P.
("Fitch") and their rating criteria are described in "Appendix B" to the
Statement of Additional Information. For further information regarding the
amortized cost method of valuing securities, see "Determination of Net Asset
Value" in the Statement of Additional Information. There can be no assurance
that the Fund will be able to maintain a stable net asset value of $1.00 per
share.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax. Where
a regulated investment company receives such interest, a proportionate share of
any exempt-interest dividend paid by the investment company may be treated as
such a preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if The Dreyfus Corporation determines that their
purchase is consistent with the Fund's investment objective. See "Investment
Considerations and Risks" below.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- 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 issuing
entities.
INVESTING IN OHIO MUNICIPAL OBLIGATIONS -- You should consider carefully the
special risks inherent in the Fund's investment in Ohio Municipal Obligations.
Nonmanufacturing industries now employ more than three-fourths of all payroll
employees in Ohio. However, due to the continued importance of manufacturing
industries (including auto-related manufacturing), economic activity in Ohio
tends to be more cyclical than in some other states and in the nation as a
whole. Although Ohio's economy has improved since the 1980-82 national
recession, the State experienced an economic slowdown during its 1990-91 fiscal
year, consistent with national conditions during that period. For Ohio's 1995
fiscal year, the Ohio Office of Budget and Management projected positive $928
million and $1.3 billion ending General Revenue Fund fund and cash balances,
respectively. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth other risk factors.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than 25% of the
value of its total assets in Municipal Obligations which are related in such a
way that an economic, business or political development or change affecting one
such security also would affect the other securities; for example, securities
the interest upon which is paid from revenues of similar types of projects. As
a result, the Fund may be subject to greater risk as compared to a fund that
does not follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although "non-approp
riation" lease/purchase obligations are secured by the leased property,
disposition of the leased property in the event of foreclosure might prove
difficult. In evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, The Dreyfus Corporation will consider, on an
ongoing basis, a number of factors including the likelihood that the issuing
municipality will discontinue appropriation funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase the
cost of the Municipal Obligations available for purchase by the Fund and thus
reduce the available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for interest
on Municipal Obligations may be introduced in the future. If any such proposal
were enacted that would reduce the availability of Municipal Obligations for
investment by the Fund so as to adversely affect Fund shareholders, the Fund
would reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation as
taxable, the Fund would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act. A
"diversified" investment company is required by the 1940 Act generally, with
respect to 75% of its total assets, to invest not more than 5% of such assets
in the securities of a single issuer. Since a relatively high percentage of the
Fund's assets may be invested in the securities of a limited number of issuers,
the Fund's portfolio may be more sensitive to changes in the market value of a
single issuer or industry. However, to meet Federal tax requirements, at the
close of each quarter the Fund may not have more than 25% of its total assets
invested in any one issuer and, with respect to 50% of total assets, not more
than 5% of its total assets invested in any one issuer. These limitations do
not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. However, if such other investment companies desire to invest in,
or dispose of, the same securities as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Fund or the price paid or received by the
Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's investment
adviser. The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon").
As of February 29, 1996, The Dreyfus Corporation managed or administered
approximately $85 billion in assets for more than 1.7 million investor accounts
nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated under
Pennsylvania law in 1971 and registered under the Federal Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon is
among the twenty-five largest bank holding companies in the United States based
on total assets. Mellon's principal wholly-owned subsidiaries are Mellon Bank,
N.A., Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCOCredit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries, including The
Dreyfus Corporation, Mellon managed more than $233 billion in assets as of
December 31, 1995, including approximately $81 billion in proprietary mutual
fund assets. As of December 31, 1995, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or administration services,
for more than $786 billion in assets including approximately $60 billion in
mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to pay
The Dreyfus Corporation a monthly fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. For the fiscal year ended
November 30, 1995, the Fund paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .26 of 1% of the value of the Fund's
average daily net assets pursuant to undertakings by The Dreyfus Corporation.
From time to time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus Corporation
for any amounts it may assume.
In allocating brokerage transactions, TheDreyfus Corporation seeks to
obtain the best execution of orders at the most favorable net price. Subject to
this determination, The Dreyfus Corporation may consider, among other things,
the receipt of research services and/or the sale of shares of the Fund or other
funds advised by The Dreyfus Corporation as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the Statement of Additional Information.
The Dreyfus Corporation may pay the Fund's distributor for shareholder
services from its own assets, including past profits but not including the
management fee paid by the Fund. The Fund's distributor may use part or all of
such payments to pay securities dealers, banks or other financial institutions
in respect of these services. DISTRIBUTOR -- The Fund's distributor is Premier
Mutual Fund Services, Inc. (the "Distributor"), located at One Exchange Place,
Boston, Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc. TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN
_ Dreyfus Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O.Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer and
Dividend Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90
Washington Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued only
upon your written request. No certificates are issued for fractional shares. It
is not recommended that the Fund be used as a vehicle for Keogh, IRA or other
qualified plans. 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 securities dealer, bank or other financial institution which has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. The initial investment must be accompanied
by the Account Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund'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 Dreyfus Corporation or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. 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
BuilderRegistration Mark, 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.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed should
be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application. For subsequent investments,
your Fund account number should appear on the check and an investment slip
should be enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. Neither initial nor subseq uent investments
should be made by third party check. Purchase orders may be delivered in person
only to a Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information."
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900119233/Dreyfus Ohio
Municipal Money Market Fund, Inc., for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account registration
and dealer number, if applicable. If your initial purchase of Fund shares is by
wire, please call 1-800-645-6561 after completing your wire payment to obtain
your Fund account number. Please include your Fund account number on the
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House member. You must direct the institution to
transmit immediately available funds through the Automated Clearing House to
The Bank of New York with instructions to credit your Fund account. The
instructions must specify your Fund account registration and your Fund account
number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit at
a Federal Reserve Bank) are received by the Transfer Agent. If you do not remit
Federal Funds, your payment must be converted into Federal Funds. This usually
occurs within one business day of receipt of a bank wire or within two business
days of receipt of a check drawn on a member bank of the Federal Reserve
System. Checks drawn on banks which are not members of the Federal Reserve
System may take considerably longer to convert into Federal Funds. Prior to
receipt of Federal Funds, your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open for business.
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
shares outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
If your payments are received in or converted into Federal Funds by
l2:00 Noon, New York time, by the Transfer Agent, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, by the Transfer Agent, you will begin to
accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares. These orders will become effective at the price determined at 12:00
Noon, New York time, and the shares purchased will receive the dividend on Fund
shares declared on that day if the telephone order is placed by 12:00 Noon, New
York time, and Federal Funds are received by 4:00 p.m., New York time, on that
day.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS"). DREYFUS
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500, maximum
$150,000) 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 member may be so designated. The Fund may modify or
terminate this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you. If
you desire to use this service, please call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must obtain
and should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being exchanged
must have a current value of at least $500; furthermore, when establishing a
new account by exchange, the shares being exchanged must have a value of at
least the minimum initial investment required for the fund into which the
exchange is being made. The ability to issue exchange instructions by telephone
is given to all Fund shareholders automatically, unless you check the
applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services Form,
also available by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. See
"How to Redeem Shares_Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER
Privilege and the dividend/capital gain distribution option (except for Dreyfus
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds sold
with a sales load. If you are exchanging into a fund that charges a sales load,
you may qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous exchange from shares
purchased with a sales load, or (c) acquired through reinvestment of dividends
or distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent. Any
such qualification is subject to confirmation of your holdings through a check
of appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not less
than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in part.
The availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis), in
exchange for shares of the Fund, in shares of other funds in the Dreyfus Family
of Funds of which you are currently an investor. The amount you designate,
which can be expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first and or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right to
exercise this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. You may modify or cancel your exercise of this Privilege at any
time by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a service fee
for the use of this Privilege. No such fee currently is contemplated. For more
information concerning this Privilege and the funds in the Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. See
"Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares are
purchased by transferring funds from the bank account designated by you. At
your option, the account designated by you will be debited in the specified
amount, and Fund shares will be purchased, once a month, on either the first or
fifteenth day, or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member may
be so designated. To establish a Dreyfus-Automatic Asset Builder account, you
must file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, and the notification will be effective
three business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social Security,
or certain veterans', military or other payments from the Federal government
automatically deposited into your Fund account. You may deposit as much of such
payments as you elect. To enroll in Dreyfus Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in the Privilege. The appropriate
form may be obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time to
terminate your participation by notify ing in writing the appropriate Federal
agency. Further, the Fund may terminate your participation upon 30 days' notice
to you.
DREYFUS PAYROLL SAVINGS PLAN -- Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay period.
To establish a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer must
complete the reverse side of the form and return it to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may change the
amount of purchase or cancel the authorization only by written notification to
your employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any other
person, to arrange for transactions under the Dreyfus Payroll Savings Plan. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program
account, you must supply the necessary information on the Account Application
and file the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary authorization
form(s), please call toll free 1-800-782-6620. You may terminate your
participation in this Program at any time by discontinuing your participation
in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan, as the case may be, as provided under the
terms of such Privilege(s). The Fund may modify or terminate this Program at
any time.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are an investor. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the shares
purchased will be subject on redemption to the contingent deferred sales
charge, if any, applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information. Dreyfus Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain distributions,
if any, from the Fund to a designated bank account. Only an account maintained
at a domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new fund
after cancellation, you must submit a new Dividend Options Form. Enrollment in
or cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges at
any time or charge a service fee. No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An application
for the Automatic Withdrawal Plan can be obtained by calling 1-800-645-6561.
The Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When a
request is received in proper form, the Fund will redeem the shares at the next
determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO
YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS
UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES
BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A
PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE
PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC
ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF
YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON
SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE
ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed
until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is $500
or less and remains so during the notice period.
PROCEDURES
You may redeem shares by using the regular redemption procedure through
the Transfer Agent, or, if you have checked the appropriate box and supplied
the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, through the Check Redemption
Privilege, the Wire Redemption Privilege, the Telephone Redemption Privilege,
or the Dreyfus TELETRANSFER Privilege. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities. The Fund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any time
or charge a service fee upon notice to shareholders. No such fee is currently
contemplated. Shares for which certificates have been issued are not eligible
for the Check Redemption, Wire Redemption, Telephone Redemption or Dreyfus
TELETRANSFER Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. If you select a telephone redemption privilege or
telephone exchange privilege (which is granted automatically unless you refuse
it), you authorize the Transfer Agent to act on telephone instructions from any
persons representing himself or herself to be you and reasonably believed by
the Transfer Agent to be genuine. The Fund will require
the Transfer Agent to employ reasonable procedures, such as requiring a form
of personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the Fund
nor the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to request
a redemption or exchange of Fund shares. In such cases, you should consider
using the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being processed at
a later time than it would have been if telephone redemption had been used.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO
THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of
the nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature must
be guaranteed. The Transfer Agent has adopted standards and procedures pursuant
to which signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank
of the Federal Reserve System in accordance with a written signature-guaranteed
request.
CHECK REDEMPTION PRIVILEGE -- You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any person
in the amount of $500 or more. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer Agent will impose a
fee for stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor the Redemption Check due to insufficient funds or
other valid reason. You should date your Redemption Checks with the current
date when you write them. Please do not postdate your Redemption Checks. If you
do, the Transfer Agent will honor, upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good order.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your bank
is not a member. You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered Fund or bank accounts may have redemption
proceeds of not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-645-6561 or, if you are calling
from overseas, call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that redemption
proceeds (maximum $150,000 per day) be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
DREYFUS TELETRANSFER PRIVILEGE -- You may request by telephone that redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be designated.
Redemption proceeds will be on deposit in your account at an Automated Clearing
House member bank ordinarily two days after receipt of the redemption request
or, at your request, paid by check (maximum $150,000 per day) and mailed to
your address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank account
not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1% of the
value of the Fund's average daily net assets for certain allocated expenses of
providing personal services and/or maintaining shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Dividends usually
are paid on the last day of each month, and are automatically reinvested in
additional Fund shares at net asset value or, at your option, paid in cash. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the next preceding business day. If you redeem all shares in your account at
any time during the month, all dividends to which you are entitled will be paid
to you along with the proceeds of the redemption. If you are an omnibus
accountholder and indicate in a partial redemption request that a portion of
any accrued dividends to which such account is entitled belongs to an
underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities gains,
if any, generally are declared and paid once a year, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from
net realized securities gains unless capital loss carryovers, if any, have
been utilized or have expired. You may choose whether to receive distributions
in cash or to reinvest in additional Fund shares at net asset value. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends paid by the Fund to an Ohio resident, or to a corporation
subject to the Ohio Corporation Franchise Tax, are not subject to Ohio state
and local income taxes or the net income basis of the Ohio Corporation
Franchise Tax to the extent that such dividends are attributable to income
received by the Fund from its investments in Ohio Municipal Obligations and
direct obligations of the United States, certain Federal agencies and certain
U.S. territories. Dividends or distributions paid by the Fund to an Ohio
resident, or to a corporation subject to the Ohio Corporation Franchise Tax,
that are attributable to most other sources are subject to Ohio state and local
income taxes and are includable in the net income basis of the Ohio Corporation
Franchise Tax. Fund shares are not subject to property taxation by the State of
Ohio or its political subdivisions, except when held by a "dealer in
intangibles" (generally, a person in the lending or brokerage business), a
decedent's estate, an Ohio insurance company, or a corporation taxed on the net
worth basis of the Ohio Corporation Franchise Tax.
The foregoing discussion of Ohio personal and corporate tax
consequences applies, respectively, only to investors who are individuals that
reside in Ohio or to corporations subject to the Ohio Corporation Franchise Tax
on such income. To the extent that investors are subject to state or local
taxes outside of Ohio, dividends and distributions paid by the Fund may
represent taxable income.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal income tax. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund are subject to Federal income tax as
ordinary income whether or not reinvested in additional Fund shares. No
dividend paid by the Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations. Distributions from net realized
long-term securities gains of the Fund generally are taxable as long-term
capital gains for Federal income tax purposes if you are a citizen or resident
of the United States. The Code provides that the net capital gain of an
individual generally will not be subject to Federal income tax at a rate in
excess of 28%. Under the Code, interest on indebtedness incurred or continued
to purchase or carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible.
Although all or a substantial portion of the dividends paid by the Fund
may be excluded by shareholders of the Fund from their gross income for Federal
income tax purposes, the Fund may purchase specified private activity bonds,
the interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax as well
as a component in computing the corporate environmental tax or (iii) a factor
in determining the extent to which a shareholder's Social Security benefits are
taxable. If the Fund purchases such securities, the portion of the Fund's
dividends related thereto will not necessarily be tax exempt to an investor who
is subject to the alternative minimum tax and/or tax on Social Security
benefits and may cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth the
dollar amount of income exempt from Federal tax and the dollar amount, if any,
subject to Federal tax. These dollar amounts will vary depending on the size
and length of time of your investment in the Fund. If the Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable
gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends and
distributions from net realized securities gains paid to a shareholder of the
Fund if such shareholder fails to certify either that the TIN furnished in
connection with opening an account is correct, or such shareholder has not
received notice from the IRS of being subject to backup withholding as a result
of a failure to properly report taxable dividend or interest income on a
Federal income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a shareholder's TIN is
incorrect or if a shareholder has failed to properly report taxable dividend
and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended November 30, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the Fund
of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on January 24, 1991, and
commenced operations on March 1, 1991. The Fund is authorized to issue l
billion shares of Common Stock, par value $.001 per share. Each share has one
vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, pursuant to the Fund's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for purposes of
removing a Board member from office and the holders of at least 25% of such
shares may require the Fund to hold a special meeting of shareholders for any
other purpose. Fund shareholders may remove a Board member by the affirmative
vote of a majority of the Fund's outstanding voting shares. In addition, the
Fund's 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 Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S. and
Canada, call 516-794-5452.
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY _ The Fund may borrow money from banks, but 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
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments.
FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations and other
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 that will
be received on a forward commitment or when-issued security are fixed when the
Fund enters into the commitment, but the Fund does not make a 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. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the commitments will be
established and maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and variable
rate demand notes and bonds, which are tax exempt obligations ordinarily having
stated maturities in excess of 13 months, but which permit the holder to demand
payment of principal at any time, or at specified intervals not exceeding 13
months, in each case upon not more than 30 days' notice. Variable rate demand
notes include master demand notes which are obligations that permit the Fund to
invest fluctuating amounts at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
permit daily changes in the amount borrowed. Because these obligations are
direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations, although
they are redeemable at face value plus accrued interest. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Each obligation purchased by
the Fund will meet the quality criteria established for the purchase of
Municipal Obligations.
TAX EXEMPT PARTICIPATION INTEREST _ The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest, with remaining maturities
of 13 months or less. If the participation interest is unrated, or has been
given a rating below that which otherwise is permissible for purchase by the
Fund, the participation interest will be backed by an irrevocable letter of
credit or guarantee of a bank that the Fund's Board has determined meets the
prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities. For
certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest. As
to these instruments, the Fund intends to exercise its right to demand payment
only upon a default under the terms of the Municipal Obligation, as needed to
provide liquidity to meet redemptions, or to maintain or improve the quality of
its investment portfolio.
TENDER OPTION BONDS _ The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a fixed
rate substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank, broker-dealer
or other financial institution, pursuant to which such institution grants the
security holders the option, at periodic intervals, to tender their securities
to the institution and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic fees equal to
the difference between the Municipal Obligation's fixed coupon rate and the
rate, as determined by a remarketing or similar agent at or near the
commencement of such period, that would cause the securities, coupled with the
tender option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand obligation
that bears interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligations, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable in
the event of a default in payment of principal or interest on the underlying
Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS _ The Fund may acquire "stand-by commitments" with respect
to Municipal Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at the Fund's
option, specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a stand-by
commitment therefore is subject to the ability of the seller to make payment on
demand. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The Fund may pay for stand-by commitments if such action is
deemed necessary, thus increasing to a degree the cost of the underlying
Municipal Obligation and similarly decreasing such security's yield to
investors. Gains realized in connection with stand-by commitments will be
taxable.
ILLIQUID SECURITIES -- The Fund may invest up to 10% 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.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
TAXABLE INVESTMENTS _ From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the Fund's
net assets) or for temporary defensive purposes, the Fund may invest in taxable
short-term investments ("Taxable Investments") consisting of: notes of issuers
having, at the time of purchase, a quality rating within the two highest grades
of Moody's, S&P or Fitch; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper rated not lower than P-2 by Moody's, A-2 by
S&P or F-2 by Fitch; certificates of deposit of U.S. domestic banks, including
foreign branches of domestic banks, with assets of one billion dollars or more;
time deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by the
Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for tem porary defensive purposes, at no time will more than 20%
of the value of the Fund's net assets be invested in Taxable Investments. If
the Fund purchases Taxable Investments, it will value them using the amortized
cost method and comply with the provisions of Rule 2a-7 relating to purchases
of taxable instruments. When the Fund has adopted a temporary defensive
position, including when acceptable Ohio Municipal Obligations are unavailable
for investment by the Fund, in excess of 35% of the Fund's net assets may be
invested in securities that are not exempt from Ohio income taxes. Under normal
market conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
[This Page Intentionally Left Blank]
Ohio Municipal
Money Market
Fund, Inc.
Prospectus
Registration Mark
<PAGE>
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
June 10, 1996
Acquisition of the Assets of
DREYFUS MICHIGAN MUNICIPAL MONEY MARKET FUND, INC.
DREYFUS OHIO MUNICIPAL MONEY MARKET FUND, INC.
200 Park Avenue
New York, New York 10166
1-800-554-4611
By and in Exchange for Shares of
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
200 Park Avenue
New York, New York 10166
1-800-554-4611
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Combined
Prospectus/Proxy Statement dated June 10, 1996, relating specifically to the
proposed transfer of all or substantially all of the assets and liabilities of
each of Dreyfus Michigan Municipal Money Market Fund, Inc. and Dreyfus Ohio
Municipal Money Market Fund, Inc. in exchange for shares of Dreyfus Municipal
Money Market Fund, Inc. Each such transfer is to occur pursuant to an Agreement
and Plan of Reorganization. This Statement of Additional Information consists
of this cover page and the following described documents, each of which is
attached hereto and incorporated herein by reference:
1. The Statement of Additional Information of Dreyfus
Municipal Money Market Fund, Inc. dated September 28, 1995.
2. Annual Report of Dreyfus Municipal Money Market
Fund, Inc. for the fiscal year ended May 31, 1995.
3. Semi-Annual Report of Dreyfus Municipal Money
Market Fund, Inc. for the six-month period ended November 30, 1995.
4. Annual Report of Dreyfus Michigan Municipal Money
Market Fund, Inc. for the fiscal year ended September 30, 1995.
5. Annual Report of Dreyfus Ohio Municipal Money
Market Fund, Inc. for the fiscal year ended November 30, 1995.
The Combined Prospectus/Proxy Statement dated June 10, 1996 may be
obtained by writing to Dreyfus Municipal Money Market Fund, Inc., c/o The
Dreyfus Corporation, 200 Park Avenue, New York, New York 10166.
- ------------------------------------------------------------------
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
SEPTEMBER 28, 1995
- ---------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Municipal Money Market Fund, Inc. (the "Fund"), dated September 28,
1995, as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares.
TABLE OF CONTENTS
PAGE
Investment Objective and Management Policies......................... B-2
Management of the Fund............................................... B-8
Management Agreement................................................. B-12
Shareholder Services Plan............................................ B-13
Purchase of Fund Shares.............................................. B-14
Redemption of Fund Shares............................................ B-15
Shareholder Services................................................. B-18
Determination of Net Asset Value..................................... B-20
Dividends, Distributions and Taxes................................... B-21
Yield Information.................................................... B-21
Portfolio Transactions............................................... B-22
Information About the Fund........................................... B-23
Custodian, Transfer and Dividend Disbursing Agent, Counsel and
Independent Auditors.............................................. B-23
Appendix............................................................. B-24
Financial Statements................................................. B-28
Report of Independent Auditors....................................... B-39
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "DESCRIPTION OF THE FUND."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended May 31, 1995, computed on a
monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("FITCH") or ("MOODY'S") or ("S&P") OF VALUE
<S> <C> <C> <C>
VMIG 1/MIG 1, SP-1+/SP-1,
F-1+/F-1 P-1 A-1+/A-1 94.0%
AAA/AA Aaa/Aa AAA/AA 1.1
Not Rated Not Rated Not Rated 4.9
------
100.0%
</TABLE>
MUNICIPAL OBLIGATIONS. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, hospitals, mass transportation, schools,
streets and water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding obligations, obtaining
funds for general operating expenses and lending such funds to other public
institutions and facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds to provide for the construction, equipment, repair or improvement of
privately operated housing facilities, sports facilities, convention or trade
show facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the interest
paid on such obligations may be exempt from Federal income tax, although
current tax laws place substantial limitations on the size of such issues. Such
obligations are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the opinion of bond
counsel to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes are tax exempt obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. The issuer of such notes ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding principal amount of
the notes plus accrued interest upon a specified number of days' notice to the
noteholders. The interest rate on a floating rate demand note is based on a
known lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate demand
note is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "Act"), the identification of the issuer of Municipal
Obligations depends on the terms and conditions of the security. When the
assets and revenues of an agency, authority, instrumentality or other political
subdivision are separate from those of the government creating the subdivision
and the security is backed only by the assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the case
of an industrial development bond, if that bond is backed only by the assets
and revenues of the non-governmental user, then such non-governmental user
would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity guarantees a security, such a guaranty
would be considered a separate security and will be treated as an issue of such
government or other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a particular
offering, maturity of the obligation and rating of the issue. The imposition of
the Fund's management fee, as well as other operating expenses, will have the
effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease obligations do
not constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation ordinarily is backed
by the municipality's covenant to budget for, appropriate and make the payments
due under the lease obligation. However, certain lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove difficult.
The Fund will seek to minimize these risks by investing only in those lease
obligations that (1) are rated in one of the two highest categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was rated
only by one such organization) or (2) if unrated, are purchased principally
from the issuer or domestic banks or other responsible third parties, in each
case only if the seller shall have entered into an agreement with the Fund
providing that the seller or other responsible third party will either remarket
or repurchase the lease obligation within a short period after demand by the
Fund. The staff of the Securities and Exchange Commission currently considers
certain lease obligations to be illiquid. Accordingly, not more than 10% of the
value of the Fund's net assets will be invested in lease obligations that are
illiquid and in other illiquid securities. See "Investment Restriction No. 12"
below.
The Fund will not purchase tender option bonds unless (a) the demand
feature applicable thereto is exercisable by the Fund within 13 months of the
date of such purchase upon no more than 30 days' notice and thereafter is
exercisable by the Fund no less frequently than annually upon no more than 30
days' notice and (b) at the time of such purchase, the Manager reasonably
expects (i) based upon its assessment of current and historical interest rate
trends, that prevailing short-term tax exempt rates will not exceed the stated
interest rate on the underlying Municipal Obligations at the time of the next
tender fee adjustment and (ii) that the circumstances which might entitle the
grantor of a tender option to terminate the tender option would not occur prior
to the time of the next tender opportunity. At the time of each tender
opportunity, the Fund will exercise the tender option with respect to any
tender option bonds unless the Manager reasonably expects, (x) based upon its
assessment of current and historical interest rate trends, that short-term tax
exempt rates will not exceed the stated interest rate on the underlying
Municipal Obligations at the time of the next tender fee adjustment and (y)
that the circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with respect to
tender option bonds, or otherwise dispose of its tender option bonds, prior to
the time the tender option is scheduled to expire pursuant to the terms of the
agreement under which the tender option is granted. The Fund otherwise will
comply with the provisions of Rule 2a-7 in connection with the purchase of
tender option bonds, including, without limitation, the requisite determination
by the Board of Directors that the tender option bonds in question meet the
quality standards described in Rule 2a-7, which, in the case of a tender option
bond subject to a conditional demand feature, would include a determination
that the security has received both the required short-term and long-term
quality rating or is determined to be of comparable quality. In the event of a
default of the Municipal Obligation underlying a tender option bond, or the
termination of the tender option agreement, the Fund would look to the maturity
date of the underlying security for purposes of compliance with Rule 2a-7 and,
if its remaining maturity was greater than 13 months, the Fund would sell the
security as soon as would be practicable. The Fund will purchase tender option
bonds only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not adversely affect
the tax exempt status of the underlying Municipal Obligations and that payment
of any tender fees will not have the effect of creating taxable income for the
Fund. Based on the tender option bond agreement, the Fund expects to be able to
value the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
RATINGS OF MUNICIPAL OBLIGATIONS. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated in the
highest rating category by at least two rating organizations (or one rating
organization if the instrument was rated by only one such rating organization)
or the Fund's Board determines that it is no longer of comparable quality or
(b) the Manager becomes aware that any portfolio security not so highly rated
or any unrated security has been given a rating by any rating organization
below the rating organization's second highest rating category, the Fund's
Board will reassess promptly whether such security presents minimal credit risk
and will cause the Fund to take such action as it determines is in the best
interest of the Fund and its shareholders; provided that the reassessment
required by clause (b) is not required if the portfolio security is disposed of
or matures within five business days of the Manager becoming aware of the new
rating and the Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such organizations
or their rating systems, the Fund will attempt to use comparable ratings as
standards for its investments in accordance with the investment policies
contained in the Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P and Fitch represent their opinions as to the quality of
the Municipal Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and are not
absolute standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Manager also will
evaluate these securities and the creditworthiness of the issuers of such
securities.
ILLIQUID SECURITIES. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities Act of
1933, as amended, for certain restricted securities held by the Fund, the Fund
intends to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board. Because it is not possible to predict
with assurance how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board has directed the Manager to monitor carefully
the Fund's investments in such securities with particular regard to trading
activity, availability of reliable price information and other relevant
information. To the extent that, for a period of time, qualified institutional
buyers cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level of
illiquidity in the Fund's portfolio during such period.
TAXABLE INVESTMENTS. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary authority
of the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest. Interest may
fluctuate based on generally recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to such U.S.
Government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars. Time
deposits which may be held by the Fund will not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. Other short term bank obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into repurchase
agreements only with domestic banks with total assets in excess of one billion
dollars or primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect to securities of the type in which the
Fund may invest, and will require that additional securities be deposited with
it if the value of the securities purchased should decrease below resale price.
The Manager will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the repurchase price. Certain costs may
be incurred by the Fund in connection with the sale of the securities if the
seller does not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the seller of
the securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
INVESTMENT RESTRICTIONS. The Fund has adopted investment restrictions
numbered 1 through 11 as fundamental policies, which cannot be changed without
approval by the holders of a majority (as defined in the Act) of the Fund's
outstanding voting shares. Investment restriction numbered 12 is not a
fundamental policy and may be changed by a vote of a majority of the Fund's
Directors at any time. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Fund's Prospectus.
2. Borrow money, except from banks for temporary or emergency purposes and
not for investment, in an amount up to (a) 15% of the value of the Fund's total
assets (including the amount borrowed) valued at market less liabilities (not
including the amount borrowed) at the time the borrowing is made or (b)
one-third of the value of its total assets (including the amount borrowed) in
order to meet redemption requests which otherwise might require the untimely
disposition of securities. While borrowings under (a) exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional investments. If
due to market fluctuations or other reasons the value of the Fund's assets
falls below 300% of its borrowings, the Fund will reduce its borrowings within
three business days. To do this, the Fund may have to sell a portion of its
investments at a time when it may be disadvantageous to do so.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers except that the Fund may
bid, separately or as part of a group, for the purchase of Municipal
Obligations directly from an issuer for its own portfolio in order to take
advantage of the lower purchase price available.
6. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests, but this shall
not prevent the Fund from investing in Municipal Obligations secured by real
estate or interests therein.
7. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and in
the Fund's Prospectus.
8. Invest more than 5% of its assets in the obligations of one 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.
9. Invest more than 25% of its assets in the securities of issuers in any
single industry; provided that there shall be no limitation on the purchase of
Municipal Obligations and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
10. Purchase more than 10% of the voting securities of any issuer or invest
in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets and
except for the purchase, to the extent permitted by Section 12 of the Act, of
shares of registered unit investment trusts whose assets consist substantially
of Municipal Obligations.
12. 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 10% of the value of the Fund's net assets would be so
invested.
For purposes of Investment Restriction No. 9, industrial development bonds,
where the payment of principal and interest is the ultimate responsibility of
companies within the same industry, are grouped together as an "industry."
If a percentage restriction is adhered to at the time of an
investment, a later increase in percentage resulting from a change in values or
assets will not constitute a violation of that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states. Should
the Fund determine that a commitment is no longer in the best interests of the
Fund and its shareholders, the Fund reserves the right to revoke the commitment
by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below. Each Director who is deemed to be an "interested person" of the
Fund, as defined in the Act, is indicated by an asterisk.
DIRECTORS OF THE FUND
*DAVID W. BURKE, DIRECTOR. Consultant to the Manager since August 1994. From
October 1990 to August 1994, Vice President and Chief Administrative
Officer of the Manager. From 1977 to 1990, Mr. Burke was involved in
the management of national television news, as Vice President and
Executive Vice President of ABC News, and subsequently as President
of CBS News. He is 58 years old and his address is 200 Park Avenue,
New York, New York 10166.
HODDING CARTER, III, DIRECTOR. President of Main Street, a television
production company. Since 1991, a syndicated columnist for United
Media - NEA. From 1985 to 1986, he was editor and chief correspondent
of "Capitol Journal," a weekly Public Broadcasting System ("PBS")
series on Congress. From 1981 to 1984, he was anchorman and chief
correspondent for PBS' "Inside Story," a regularly scheduled
half-hour critique of press performance. From 1977 to July 1980, Mr.
Carter served as Assistant Secretary of State for public affairs and
department spokesman. He is 59 years old and his address is
MainStreet, 918 Sixteenth Street, N.W., Washington, D.C. 20006.
*JOSEPH S. DiMARTINO, CHAIRMAN OF THE BOARD. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. For more
than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and, until
August 24, 1994, the Fund's distributor. From August 1994 to December
31, 1994, he was a director of Mellon Bank Corporation. He is
Chairman of the Board of Noel Group, Inc., a venture capital company;
a trustee of Bucknell University; and a director of the Muscular
Dystrophy Association, HealthPlan Services Corporation, Belding
Heminway, Inc., a manufacturer and marketer of industrial threads,
specialty yarns, home furnishings, and fabrics, Curtis Industries,
Inc., a national distributor of security products, chemicals and
automotive and other hardware, Simmons Outdoor Corporation and
Staffing Resources, Inc. He is 51 years old and his address is 200
Park Avenue, New York, New York 10166.
EHUD HOUMINER, DIRECTOR. Since July 1991, Professor and
Executive-in-Residence at the Columbia Business School, Columbia
University. From 1992 to 1995, he was a consultant to Bear, Stearns &
Co. Inc., investment bankers. He was President and Chief Executive
Officer of Philip Morris USA, manufacturers of consumer products,
from December 1988 until September 1990. He also is a director of
Avnet Inc. He is 54 years old and his address is c/o Columbia
Business School, Columbia University, Uris Hall, Room 526, New York,
New York 10027.
RICHARD C. LEONE, DIRECTOR. President of The Twentieth Century Fund, Inc., a
tax exempt research foundation engaged in economic, political and
social policy studies. From April 1990 to March 1994, Chairman, and
from April 1988 to March 1994, a Commissioner of The Port Authority of
New York and New Jersey. A member in 1985, and from January 1986 to
January 1989, Managing Director of Dillon, Read & Co. Inc. Mr. Leone
is also a director of Resource Mortgage Capital, Inc. He is 54 years
old and his address is 41 East 70th Street, New York, New York 10021.
HANS C. MAUTNER, DIRECTOR. Chairman, Trustee and Chief Executive Officer of
Corporate Property Investors, a real estate investment company. Since
January 1986, a Director of Julius Baer Investment Management, Inc., a
wholly-owned subsidiary of Julius Baer Securities, Inc. He is 57 years
old and his address is 305 East 47th Street, New York, New York 10017.
ROBIN A. SMITH, DIRECTOR. Since 1993, Vice President, and from March 1992
to October 1993, Executive Director, of One to One Partnership, Inc.,
a national non-profit organization that seeks to promote mentoring
and economic empowerment for at-risk youths. From June 1986 to
February 1992, she was an investment banker with Goldman, Sachs, &
Co. She is also a Trustee of Westover School and a Board member of
the Jacobs A. Riis Settlement House and the High/Slop Education
Research Foundation. She is 31 years old and her address is 280 Park
Avenue, New York, New York 10010.
JOHN E. ZUCCOTTI, DIRECTOR. President and Chief Executive Officer of
Olympia & York Companies (U.S.A.) and a member of its Board of
Directors since the inception of a Board on July 27, 1993. From 1986
to 1990, he was a partner in the law firm of Brown & Wood and from
1978 to 1986, a partner in the law firm of Tufo & Zuccotti. First
Deputy mayor of the City of New York from December 1975 to June 1977,
and Chairman of the City Planning Commission for the City of New York
from 1973 to 1975. Mr. Zuccotti also is a Director of Empire Blue
Cross & Blue Shield, Catellus Development Corporation, a real estate
development corporation, and Starrett Housing Corporation, a
construction, development and management of real estate properties
corporation. He is 58 years old and his address is 237 Park Avenue,
New York, New York 10017.
For so long as the Plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Fund's Directors who are not
"interested persons" of the Fund, as defined in the Act, will be selected and
nominated by the Directors who are not "interested persons" of the Fund.
The Fund 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
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 Fund for the fiscal year ended May 31, 1995,
and by all other 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) for the year ended December 31, 1994, is as
follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
MEMBER FUND* FUND'S EXPENSES RETIREMENT BOARD MEMBER
<S> <C> <C> <C> <C>
David W. Burke $4,464 none none $ 27,898 (52)
Hodding Carter, III $6,500 none none $ 33,625 (7)
Joseph S. DiMartino $8,125** none none $445,000*** (93)
Ehud Houminer $6,500 none none $ 25,701 (11)
Richard C. Leone $6,500 none none $ 33,125 (7)
Hans C. Mautner $6,000 none none $ 33,625 (7)
Robin A. Smith $6,500** none none $ 35,000*** (7)
John E. Zuccotti $6,500 none none $ 33,625 (7)
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $222 for all Directors as a group.
** Estimated amount for the current fiscal year ending May 31, 1996.
*** Estimated amount for the year ending December 31, 1995.
</TABLE>
OFFICERS OF THE FUND
MARIEE. CONNOLLY, PRESIDENT AND TREASURER. President and Chief Operating
Officer of the Distributor and an officer of other investment companies
advised or administered by the Manager. From December 1991 to July 1994,
she was President and Chief Compliance Officer of Funds Distributor, Inc.,
the ultimate parent company of which is Boston Institutional Group, Inc.
Prior to December 1991, she served as Vice President and Controller, and
later as Senior Vice President, of The Boston Company Advisors, Inc. She
is 37 years old.
JOHN E. PELLETIER, VICE PRESIDENT AND SECRETARY. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc. From
August 1990 to February 1992, he was employed as an Associate at Ropes &
Gray. He is 30 years old.
ERIC B. FISCHMAN, VICE PRESIDENT AND ASSISTANT SECRETARY. Associate General
Counsel of the Distributor and an officer of other investment companies
advised or administered by the Manager. From September 1992 to August 1994,
he was an attorney with the Board of Governors of the Federal Reserve
System. He is 30 years old.
FREDERICK C. DEY, VICE PRESIDENT AND ASSISTANT TREASURER. Senior Vice President
of the Distributor and an officer of other investment companies advised or
administered by the Manager. From 1988 to August 1994, he was manager of
the High Performance Fabric Division of Springs Industries Inc. He is 33
years old.
JOSEPH S. TOWER,III, ASSISTANT TREASURER. Senior Vice President, Treasurer and
Chief Financial Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager. From July 1988
to August 1994, he was employed by The Boston Company, Inc. where he held
various management positions in the Corporate Finance and Treasury areas.
He is 32 years old.
JOHN J. PYBURN, ASSISTANT TREASURER. Assistant Treasurer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From 1984 to July 1994, he was Assistant Vice President in the
Mutual Fund Accounting Department of the Manager. He is 59 years old.
RUTH D. LEIBERT, ASSISTANT SECRETARY. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Manager's Funds, a registered investment
company. From March 1990 until September 1991, she was Development Director
of The Rockland Center for the Arts. She is 50 years old.
The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166.
The following entity is known by the Fund to own, of record, more than 5%
of the Fund's voting securities outstanding on September 7, 1995: Cudd and
Company, 1211 Avenue of Americas, New York, NY 10036 - 5.7%.
Directors and officers of the Fund, as a group, owned less than 1% of the
Fund's Common Stock outstanding on September 7, 1995.
MANAGEMENT AGREEMENT
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "MANAGEMENT OF THE FUND."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii) vote of
a majority (as defined in the Act) of the outstanding voting securities of the
Fund, provided that in either event the continuance also is approved by a
majority of the Directors who are not "interested persons" (as defined in the
Act) of the Fund or the Manager, by vote cast in person at a meeting called for
the purpose of voting on such approval. The Agreement was approved by
shareholders on August 4, 1994, and was last approved by the Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons" of any party to the Agreement, at a meeting held on January 30, 1995.
The Agreement is terminable without penalty, on not less than 60 days' notice,
by the Fund's Board of Directors, by vote of the holders of a majority of the
Fund's shares, or by the Manager. The Agreement will terminate automatically in
the event of its assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager: Howard
Stein, Chairman of the Board and Chief Executive Officer; W. Keith Smith, Vice
Chairman of the Board; Robert E. Riley, President, Chief Operating Officer and a
director; Stephen E. Canter, Vice Chairman, Chief Investment Officer and a
director; Lawrence S. Kash, Vice Chairman--Distribution and a director; Phillip
L. Toia, Vice Chairman--Operations and Administration and a director; Henry D.
Gottmann, Vice President--Retail Sales and Services; Barbara E. Casey, Vice
President--Retirement Services; Diane M. Coffey, Vice President--Corporate
Communications; Elie M. Genadry, Vice President--Institutional Sales; William F.
Glavin, Jr., Vice President--Corporate Development; Katherine C. Wickham, Vice
President--Human Resources; Mark N. Jacobs, Vice President--Legal and Secretary;
Daniel C. Maclean, Vice President and General Counsel; Jeffrey N. Nachman, Vice
President--Mutual Fund Accounting; Maurice Bendrihem, Controller; Elvira
Oslapas, Assistant Secretary; and Mandell L. Berman, Frank V. Cahouet, Alvin E.
Friedman, Lawrence M. Greene, Julian M. Smerling and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance with
the stated policies of the Fund, subject to the approval of the Fund's Board of
Directors. The Manager is responsible for investment decisions and provides the
Fund with portfolio managers who are authorized by the Board of Directors to
execute purchases and sales of securities. The Fund's portfolio managers are A.
Paul Disdier, Karen M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C.
Shaffro, L. Lawrence Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The
Manager also maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research services for the
Fund as well as for other funds advised by the Manager. All purchases and sales
are reported for the Directors' review at the meeting subsequent to such
transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include: taxes, interest, brokerage fees and commissions, if
any, fees of Directors who are not officers, directors, employees or holders of
5% or more of the outstanding voting securities of the Manager, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of independent pricing services, costs of maintaining corporate
existence, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of shareholders' reports
and corporate meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, and any extraordinary expenses.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets, as provided in the Agreement. All
fees and expenses are accrued daily and deducted before declaration of
dividends to investors. The management fees paid for the fiscal years ended May
31, 1993, 1994 and 1995 were $7,201,632, $6,516,300 and $5,500,256,
respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitations of any state having jurisdiction over the Fund, the Manager will
bear such excess or refund to the Fund, on an estimated basis monthly, the
amount of such excess, initially as a reduction of its management fee. During
the fiscal year ended May 31, 1995, no expense reimbursements were made
pursuant to such limitation.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "SHAREHOLDER SERVICES PLAN."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by the
Directors who are not "interested persons" (as defined in the Act) of the Fund
or the Manager and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual approval
by such vote of the Directors cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable at any time by vote of a
majority of the Directors who are not "interested persons" and have no direct
or indirect financial interest in the operation of the Plan.
For the fiscal year ended May 31, 1995, $356,051 was charged to the Fund
under the Plan.
PURCHASE OF FUND SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY FUND SHARES."
THE DISTRIBUTOR. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also acts
as distributor for the other funds in the Dreyfus Family of Funds and for
certain other investment companies. In some states, banks or other institutions
effecting transactions in Fund shares may be required to register as dealers
pursuant to state law.
USING FEDERAL FUNDS. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund may
attempt to notify the investor upon receipt of checks drawn on banks that are
not members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities dealer,
bank or other financial institution and his order to purchase Fund shares is
paid for other than in Federal Funds, the securities dealer, bank or other
financial institution, acting on behalf of its customer, will complete the
conversion into, or itself advance, Federal Funds generally on the business day
following receipt of the customer order. The order is effective only when so
converted and received by the Transfer Agent. An order for the purchase of Fund
shares placed by an investor with sufficient Federal Funds or cash balance in
his brokerage account with a securities dealer, bank or other financial
institution will become effective on the day that the order, including Federal
Funds, is received by the Transfer Agent.
PROCEDURES FOR MULTIPLE ACCOUNTS. The Transfer Agent will provide each
institution with a written confirmation for each transaction in a sub-account
at no additional charge. Upon receipt of funds for investment by interbank
wire, the Transfer Agent promptly will confirm the receipt of the investment by
telephone or return wire to the transmitting bank, if the investor so requests.
The Transfer Agent also will provide each institution with a monthly
statement setting forth, for each sub-account, the share balance, income earned
for the month, income earned for the year to date and the total current value
of the account.
DREYFUS TELETRANSFER PRIVILEGE. Dreyfus TELETRANSFER purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are open.
Such purchases will be credited to the shareholder's Fund account on the next
bank business day. To qualify to use the Dreyfus TELETRANSFER Privilege, the
initial payment for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See "Redemption of Fund
Shares--Dreyfus TELETRANSFER Privilege."
SERVICE CHARGES. There are no sales or service charges by the Fund or
the Distributor, although investment dealers, banks and other financial
institutions may make reasonable charges to investors for their services. The
services provided and fees therefor are established by each institution acting
independently of the Fund. The Fund has been given to understand that these
fees may be charged for customer services including, but not limited to,
same-day investment of client funds; same-day access to client funds; advice to
customers about the status of their accounts, yield currently being paid or
income earned to date; provision of periodic account statements showing
security and money market positions; other services available from the dealer,
bank or other financial institution; and assistance with inquiries related to
their investment. Any such fees will be deducted monthly from the investor's
account, which on smaller accounts could constitute a substantial portion of
the distributions. Small, inactive, long-term accounts involving monthly
service charges may not be in the best interest of investors. Investors should
be aware that they may purchase shares of the Fund directly from the Fund
without imposition of any maintenance or service charges, other than those
already described herein.
REOPENING AN ACCOUNT. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the calendar
year the account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
REDEMPTION OF FUND SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO REDEEM FUND SHARES."
CHECK REDEMPTION PRIVILEGE. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption Checks
("Checks") drawn on the Fund's account. Checks will be sent only to the
registered owner(s) of the account and only to the address of record. The
Account Application or later written request must be manually signed by the
registered owner(s). Checks may be made payable to the order of any person in
an amount of $500 or more. When a Check is presented to the Transfer Agent for
payment, the Transfer Agent, as the investor's agent, will cause the Fund to
redeem a sufficient number of shares in the account to cover the amount of the
Check. Dividends are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors generally will be subject
to the same rules and regulations that apply to checking accounts, although
election of this Privilege creates only a shareholder-transfer agent
relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient funds.
Checks should not be used to close an account.
WIRE REDEMPTION PRIVILEGE. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the investor
and reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege on
the same business day if the Transfer Agent receives the redemption request in
proper form prior to Noon on such day; otherwise, the Fund will initiate
payment on the next business day. Redemption proceeds will be transferred by
Federal Reserve wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form. Redemption
proceeds, if wired, must be in the amount of $1,000 or more and will be wired
to the investor's account at the bank of record designated in the investor's
file at the Transfer Agent, if the investor's bank is a member of the Federal
Reserve System, or to a correspondent bank if the investor's bank is not a
member. Fees ordinarily are imposed by such bank and borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment 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
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors 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
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. Investors should be aware that if they
have selected the Dreyfus TELETRANSFER Privilege, any request for a wire
redemption will be effected as a Dreyfus TELETRANSFER transaction through the
Automated Clearing House ("ACH") system unless more prompt transmittal
specifically is requested. Redemption proceeds will be on deposit in the
investor's account at an ACH member bank ordinarily two business days after
receipt of the redemption request. See "Purchase of Fund Shares--Dreyfus
TELETRANSFER Privilege."
STOCK CERTIFICATES; SIGNATURES. Any stock certificate 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. The Fund has committed itself to pay in cash
all redemption requests made by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. This commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission and is a fundamental policy of the Fund which may not be changed
without shareholder approval. In the case of requests for redemption in excess
of such amount, the Board of Directors reserves the right to make payments in
whole or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges would be incurred.
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or when
an emergency exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its net asset value
is not reasonably practicable or (c) for such other periods as the Securities
and Exchange Commission by order may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "SHAREHOLDER SERVICES."
FUND EXCHANGES. 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 that are offered without a sales load will
be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and the applicable sales load
will be deducted.
C. Shares of funds purchased with a sales load may be exchanged without a
sales load for shares of any 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"), provided that, if the sales load applicable to the Offered
Shares exceeds the maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the Purchased Shares were
acquired), without giving effect to any reduced loads, the difference will be
deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor must give exchange instructions to
the Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the account application,
indicating that the investor specifically refuses this Privilege.
By using the Telephone Exchange Privilege, the investor authorizes the
Transfer Agent to act on telephonic instructions from any person representing
himself or herself to be the investor, and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to limitations as to
the amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchange.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified Employee
Pension Plan ("SEP-IRAs") with only one partici- pant, the minimum initial
investment is $750. To exchange shares held in corporate plans, 403(b)(7) Plans
and SEP-IRAs with more than one participant, the minimum initial investment is
$100 if the plan has at least $2,500 invested among the funds in the Dreyfus
Family of Funds. To exchange shares held in personal retirement plans, the
shares exchanged must have a current value of at least $100.
DREYFUS AUTO-EXCHANGE PRIVILEGE. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares of
another fund in the Dreyfus Family of Funds. This Privilege is available only
for existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business days
following notification by the investor. An investor will be notified if his
account falls below the amount designated to be exchanged under this Privilege.
In this case, an investor's account will fall to zero unless additional
investments are made in excess of the designated amount prior to the next
Auto-Exchange transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA accounts
to regular accounts. With respect to all other retirement accounts exchanges
may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject any
exchange request in whole or in part. The Fund Exchanges service or the Dreyfus
Auto-Exchange Privilege may be modified or terminated at any time upon notice
to shareholders.
AUTOMATIC WITHDRAWAL PLAN. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the Fund or
the Transfer Agent. Shares for which certificates have been issued may not be
redeemed through to the Automatic Withdrawal Plan.
DREYFUS DIVIDEND SWEEP. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is 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 that are 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 which charges a sales load
may be invested in shares of other funds sold with a sales load (referred to
herein as "Offered Shares"), provided that, if the sales load applicable to the
Offered Shares exceeds the maximum sales load charged by the fund from which
dividends or distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in shares of
other funds that impose a contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY FUND SHARES."
AMORTIZED COST PRICING. The valuation of the Fund's portfolio
securities is based upon their amortized cost, which does not take into account
unrealized capital gains or losses. This involves valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument.
The Board of Directors has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed for
purposes of sales and redemptions at $1.00. Such procedures include review of
the Fund's portfolio holdings by the Board of Directors, at such intervals as
it deems appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations or market equivalents deviates
from $1.00 per share based on amortized cost. Market quotations and market
equivalents used in such review are obtained from an independent pricing
service (the "Service") approved by the Board of Directors. The Service values
the Fund's investments based on methods which include consideration of: yields
or prices of municipal bonds of comparable quality, coupon, maturity and type;
indications of values from dealers; and general market conditions. The Service
also may employ electronic data processing techniques and/or a matrix system to
determine valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Directors. If such
deviation exceeds 1/2 of 1%, the Board of Directors promptly will consider what
action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, it has agreed to
take such corrective action as it regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends
or paying distributions from capital or capital gains; redeeming shares in
kind; or establishing a net asset value per share by using available market
quotations or market equivalents.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which the
New York Stock Exchange is closed currently are: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "DIVIDENDS, DISTRIBUTIONS AND
TAXES."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Internal Revenue
Code of 1986, as amended.
YIELD INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "YIELD INFORMATION."
For the seven-day period ended May 31, 1995, the Fund's yield was
3.61% and effective yield was 3.67%. Yield is computed in accordance with a
standardized method which involves determining the net change in the value of a
hypothetical pre-existing Fund account having a balance of one share at the
beginning of a seven calendar day period for which yield is to be quoted,
dividing the net change by the value of the account at the beginning of the
period to obtain the base period return, and annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value of
the account reflects the value of additional shares purchased with dividends
declared on the original share and any such additional shares and fees that may
be charged to shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include realized gains
and losses or unrealized appreciation and depreciation. Effective yield is
computed by adding 1 to the base period return (calculated as described above),
raising that sum to a power equal to 365 divided by 7, and subtracting 1 from
the result.
Based upon a 1995 Federal income tax rate of 39.60%, the Fund's tax
equivalent yield for the seven-day period ended May 31, 1995 was 5.98%. Tax
equivalent yield is computed by dividing that portion of the yield or effective
yield (calculated as described above) which is tax exempt by 1 minus a stated
tax rate and adding the quotient to that portion, if any, of the yield of the
Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of the
highest Federal marginal personal income tax rate in effect during 1995. The
tax equivalent figure, however, does not include the potential effect of any
state or local (including, but not limited to, county, district or city) taxes,
including applicable surcharges. In addition, there may be pending legislation
which could affect such stated tax rates or yields. Each investor should
consult its tax adviser, and consider its own factual circumstances and
applicable tax laws, in order to ascertain the relevant tax equivalent yield.
Yields will fluctuate and are not necessarily representative of future
results. Each investor should remember that yield is a function of the type and
quality of the instruments in the portfolio, portfolio maturity and operating
expenses. An investor's principal in the Fund is not guaranteed. See
"Determination of Net Asset Value" for a discussion of the manner in which the
Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent yields
or charts in its advertising. These hypothetical yields or charts will be used
for illustrative purposes only and not as representative of the Fund's past or
future performance.
Advertising materials for the Fund also may refer to or discuss
then-current or past economic conditions, developments and/or events, including
those relating to or arising from actual or proposed tax legislation. From time
to time, advertising materials for the Fund may also refer to statistical or
other information concerning trends relating to investment companies, as
compiled by industry associations such as the Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily are
purchased directly from the issuer or from an underwriter; other purchases and
sales usually are placed with those dealers from which it appears that the best
price or execution will be obtained. Usually no brokerage commissions, as such,
are paid by the Fund for such purchases and sales, although the price paid
usually includes an undisclosed compensation to the dealer acting as agent. The
prices paid to underwriters of newly-issued securities usually include a
concession paid by the issuer to the underwriter, and purchases of after-market
securities from dealers ordinarily are executed at a price between the bid and
asked price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds it
advises and, conversely, research services furnished to the Manager by brokers
in connection with other funds the Manager advises may be used by the Manager
in advising the Fund. Although it is not possible to place a dollar value on
these services, it is the opinion of the Manager that the receipt and study of
such services should not reduce the overall expenses of its research
department.
INFORMATION ABOUT THE FUND
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "GENERAL INFORMATION."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights and
are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary of
First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is
the Fund's transfer and dividend disbursing agent. Neither The Bank of New York
nor The Shareholder Services Group, Inc. has any part in determining the
investment policies of the Fund or which securities are to be purchased or sold
by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
of Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of S&P, Moody's and Fitch ratings:
S&P
MUNICIPAL BOND RATINGS
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree. The
AA rating may be modified by the addition of a plus or minus sign to show
relative standing within the category.
MUNICIPAL NOTE RATINGS
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
COMMERCIAL PAPER RATINGS
The rating A is the highest rating and is assigned by S&P to issues
that 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. Paper rated A-1 indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted with a
plus (+) sign designation.
Moody's
MUNICIPAL BOND RATINGS
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the Aa rating category. The modifier 1 indicates a ranking for
the security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end of a
rating category.
MUNICIPAL NOTE RATINGS
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in bond
risk, long-term secular trends for example, may be less important over the
short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature is
not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to the
fact that the source of payment may be limited to the external liquidity with
no or limited legal recourse to the issuer in the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
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 wide range
of financial markets and assured sources of alternate liquidity.
Fitch
MUNICIPAL 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+. Plus (+) and minus (-) signs are used with the rating symbol AA 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+.
F-2
GOOD CREDIT QUALITY. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the F-1+ and F-1 categories.
<PAGE>
Dreyfus Municipal Money Market Fund, Inc.
Statement of Investments
May 31, 1995
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments-100.0% Amount Value
-------------- --------------
<S> <C> <C>
Alabama-4.8%
Alabama Industrial Development Authority, SWDR, VRDN (Pine City Fiber Co.
Project)
4.30% (LOC; Barclays Bank) (a,b)........................................ $ 39,000,000 $39,000,000
Birmingham Medical Clinic Board, Revenue, VRDN (University of Alabama)
4.35% (LOC; Morgan Guaranty Trust Co.) (a,b)............................ 5,000,000 5,000,000
Alaska-1.3%
Valdez, Marine Terminal Revenue, Refunding, CP (Arco Transportation Project)
4.20%, Series C, 7/21/95................................................ 11,800,000 11,800,000
California-4.1%
California School Cash Reserve Program Authority (Pooled Project)
4.50%, Series A, 7/5/95................................................. 15,000,000 15,010,088
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding, VRDN
3.90%, Series A (Insured; MBIA and SBPA; Industrial Bank of Japan) (a).. 13,000,000 13,000,000
Los Angeles Unified School District, TRAN 4.50%, 7/10/95.................... 10,000,000 10,009,276
Colorado-2.8%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
4.15%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,200,000 12,200,000
Denver Urban Renewal Authority, Tax Increment Revenue (Downtown Denver
Renewal)
4.75%, Series A, 8/24/95 (Collateralized in; U.S. Treasury Bills)....... 14,115,000 14,115,000
Connecticut-2.8%
Connecticut Housing Financing Authority, Housing Mortgage Financing Program:
4.40%, Series E, 11/15/95 (Escrowed in; U.S. Government Securities)..... 13,200,000 13,200,000
4.50%, Series E2, 11/15/95 (Escrowed in; U.S. Government Securities).... 12,400,000 12,400,000
Delaware-9.9%
Delaware Economic Development Authority, Revenue, VRDN
(Hospital Billing and Collection Service Ltd. Project):
4.10%, Series A (Insured; MBIA) (a)................................... 25,000,000 25,000,000
4.10%, Series B (Insured; MBIA) (a)................................... 25,000,000 25,000,000
4.10%, Series C (Insured; MBIA) (a)................................... 41,400,000 41,400,000
District of Columbia-1.8%
District of Columbia, VRDN (General Fund Recovery):
4.75%, Series B (LOC; Union Bank of Switzerland) (a,b).................. 5,100,000 5,100,000
4.75%, Series B-3 (LOC; Union Bank of Switzerland) (a,b)................ 11,700,000 11,700,000
Florida-1.3%
Sarasota County Health Facility Authority, HR, VRDN (Aces Venice Hospital
Project)
4.65% (LOC; Krediet Bank) (a,b)......................................... 12,500,000 12,500,000
Georgia-1.4%
Athens-Clarke County Industrial Development Authority, IDR, VRDN
(Nakanishi Manufacturing Corp. Project) 4.40% (LOC; Sumitomo Bank) (a,b) 6,000,000 6,000,000
Rockdale County Development Authority, Industrial Revenue, VRDN
(Liochem Inc. Project) 4.70% (LOC; Sanwa Bank) (a,b).................... 7,000,000 7,000,000
Hawaii-1.1%
Honolulu City and County, Multi-Family Revenue, VRDN (Royal Kunia Gardens)
4.40%, Series B (LOC; Bank of Tokyo) (a,b).............................. $ 9,900,000 $ 9,900,000
Illinois-3.3%
Illinois Development Finance Authority, PCR, VRDN (Illinois Power Co.)
4.15%, Series C (LOC; Mitsubishi Bank) (a,b)............................ 10,400,000 10,400,000
Illinois Health Facilities Authority, Revenue, VRDN (Revolving Fund Pooled
Financing)
4.20%, Series C (LOC; First National Bank of Chicago) (a,b)............. 16,250,000 16,250,000
Southwestern Development Authority, SWDR, VRDN (Shell Oil Co. Wood River
Project)
4.45% (Corp Guaranty; Shell Oil Co.) (a)................................ 4,400,000 4,400,000
Indiana-1.6%
Fort Wayne Hospital Authority, HR, VRDN (Parkview Memorial Hospital)
4.25%, Series B (LOC; Fuji Bank) (a,b).................................. 4,500,000 4,500,000
City of Petersburg, SWDR, VRDN (Indianapolis Power and Light Co. Project)
4.10%, Series A (Corp. Guaranty; Indianapolis Power and Light Co.) (a).. 10,000,000 10,000,000
Iowa-4.0%
Iowa Finance Authority, SWDR, VRDN (Cedar River Paper Co. Project)
4.45%, Series A (LOC; Swiss Bank Corp.) (a,b)........................... 37,100,000 37,100,000
Kansas-4.0%
Butler County, Solid Waste Disposal and Cogeneration Revenue, VRDN
(Texaco Refining and Marketing Project) 4.50%, Series B (LOC; Bank of Tokyo) (a,b) 25,500,000 25,500,000
Topeka, MFHR, VRDN (Topeka Retirement Center Limited)
4.275% (LOC; Krediet Bank) (a,b)........................................ 6,970,000 6,970,000
Wichita, PCR, Refunding, VRDN (CIC Industries Inc. Project)
4.70% (LOC; The Bank of New York) (a,b)................................. 5,000,000 5,000,000
Kentucky-2.3%
City of Carroll, Collateralized Solid Waste Disposal Facilities Revenue, VRDN
(Utility Co. Project) 4.45%, Series A (a)............................... 17,000,000 17,000,000
Daviess County, Solid Waste Disposal Facility Revenue, VRDN (Scott Paper Co.
Project)
4.45%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b).................. 4,500,000 4,500,000
Louisiana-4.9%
Louisiana Public Facility Authority, School Board Advance Funding
4.60%, 8/31/95 (GIC; American International Group)...................... 12,050,000 12,061,559
New Orleans Aviation Board, Revenue, VRDN (Passenger Facility Charge Project)
4.45% (LOC: Banque Paribas and Canadian Imperial Bank of Commerce) (a,b) 10,000,000 10,000,000
West Baton Rouge Parish Industrial District No. 3, Revenue, VRDN
(Dow Chemical Co. Project) 4.50% (Corp. Guaranty; Dow Chemical Co.) (a). 23,600,000 23,600,000
Maine-1.6%
Orrington, RRR, VRDN (Penobscott Energy Recovery Co. Project)
5.025%, Series B (LOC: Bank of Nova Scotia, Bankers Trust, Canadian
Imperial Bank
of Commerce, Long-Term Credit Bank of Japan, and Toronto Dominian Bank)
(a,b).................................................... 14,520,000 14,520,000
Maryland-.6%
Baltimore County, Housing Mortgage Revenue, Refunding, VRDN (Spring Hill)
4% (LOC; Sumitomo Bank) (a,b)........................................... $ 5,750,000 $ 5,750,000
Massachusetts-1.4%
Massachusetts Health and Education Facilities Authority, Revenue
(Boston Univeristy) 4.10%, Series H, 6/6/95 (LOC; First Chicago Corp.) (b) 13,000,000 13,000,000
Michigan-6.3%
Kent Hospital Finance Authority, Hospital Facility Revenue, VRDN
(Butterworth Hospital) 4.20%, Series A (LOC; Sanwa Bank) (a,b).......... 9,100,000 9,100,000
Michigan Hospital Finance Authority, Revenue, VRDN
(Hospital Equipment Loan Program) 3.95% (LOC; Comerica Bank) (a,b)...... 3,800,000 3,800,000
Michigan Housing Development Authority, Rental Housing Revenue, VRDN
4.10%, Series C (LOC: Credit Suisse) (a,b).............................. 17,000,000 17,000,000
Michigan Strategic Fund, SWDR, VRDN (Grayling Generating Project)
4.30% (LOC; Barclays Bank) (a,b)........................................ 8,000,000 8,000,000
Midland County Economic Development Corp., Economic Development
Limited Obigation Revenue, VRDN (Dow Chemical Co. Project)
4.60%, Series A (Corp. Guaranty; Dow Chemical Co.) (a).................. 21,000,000 21,000,000
Montana-2.3%
Montana Board of Investment, RRR, VRDN (Colstrip Project)
4.70% (LOC; Fuji Bank) (a,b)............................................ 21,050,000 21,050,000
Nebraska-1.5%
Nebraska Higher Education Loan Program Inc., Revenue, VRDN
(Multiple Mode-Student Loan) 3.90%, Series A (Insured; MBIA) (a)........ 12,995,000 12,995,000
Nebraska Investment Finance Authority, HR, VRDN (Multiple Mode Depreciation
Assets)
4.10%, Series A (Insured; FGIC) (a)..................................... 1,360,000 1,360,000
New Jersey-.5%
New Jersey Housing and Mortgage Finance Agency, Revenue, Statewide Mortgage
4.20%, 9/29/95 (LOC; Bayerische Landesbank) (b)......................... 5,095,000 5,095,000
New York-2.3%
New York State Energy, Research and Development Authority, PCR, VRDN
(Niagara Mohawk Power Co. Project)
4.40%, Series A (LOC; Toronto-Dominion Bank) (a,b)...................... 8,500,000 8,500,000
Suffolk County, TAN 4.50%, Series II, 9/14/95............................... 13,000,000 13,015,065
North Carolina-.4%
North Carolina Medical Care Community, HR, VRDN
(Pooled Equipment Financing Project) 4.10% (Insured; MBIA) (a).......... 3,400,000 3,400,000
Ohio-1.8%
Ohio Water Development Authority, PCR (Edison Project)
4.25%, 9/1/95 (LOC; Barclays Bank) (b).................................. 5,000,000 5,000,000
University of Cincinnati, General Receipt, BAN 4.75%, 8/30/95............... 12,000,000 12,019,934
Pennsylvania-1.8%
Columbia County Industrial Development Authority, IDR, VRDN (Kleerdex Co.
Project)
4.45% (LOC; Bank of Tokyo) (a,b)........................................ $ 4,800,000 $ 4,800,000
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, VRDN
4.20%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,100,000 12,100,000
South CarolinaN.9%
York County, Industrial Revenue, VRDN (Textron Project) 5.63% (LOC; Bankers
Trust) (a,b)................................................................ 7,500,000 7,500,000
Tennessee-1.2%
Franklin, IDB, Multi-Family Revenue, VRDN (Landings Project)
3.65%, Series C (LOC; Citibank) (a,b)................................... 10,700,000 10,700,000
Texas-15.9%
Greater East Texas Higher Education Authority Inc., Student Loan Revenue:
4.50%, Series B, 7/1/95 (LOC; Student Loan Marketing Association) (b)... 9,000,000 9,000,000
VRDN:
Refunding, 4%, Series A (LOC; Student Loan Marketing Association) (a, b) 10,000,000 10,000,000
4.35%, Series B (LOC; Student Loan Marketing Association) (a, b)...... 24,000,000 24,000,000
Gulf Coast Waste Disposal Authority, VRDN (Amoco Oil Co. Project):
PCR 4.45% (Corp. Guaranty; Amoco Credit Corp.) (a)...................... 32,700,000 32,700,000
SWDR, Refunding 4.45% (Corp: Guaranty; Amoco Credit Corp.) (a).......... 6,000,000 6,000,000
Harris County Health Facilities Development Corp., HR, VRDN
(Memorial Hospital Systems Project) 4.80% (LOC; Societe Generale) (a,b). 15,900,000 15,900,000
North Texas Higher Education Authority Inc., Student Loan Revenue, VRDN
4.30% (LOC; Fuji Bank) (a,b)............................................ 19,800,000 19,800,000
San Antonio, Electric and Gas Revenue, CP 4.15%, Series A, 7/24/95
(LOC: Bank of Tokyo, Credit Suisse, Mitsubishi Bank, Sanwa Bank, Sumitomo
Bank,
Texas Commerce Bank, Toronto Dominion Bank and Union Bank of Switzerland) (b) 10,500,000 10,500,000
State of Texas, TRAN 5%, 8/31/95............................................ 20,000,000 20,040,345
Utah-4.6%
Intermountain Power Agency, Power Supply Revenue, CP
4.05%, Series E, 6/8/95 (LOC; Industrial Bank of Japan) (b)............. 30,300,000 30,300,000
Utah Board of Regents, Student Loan Revenue, Refunding, VRDN
4.20%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,500,000 12,500,000
Virginia-1.9%
Charles City and County Industrial Development Authority, Exempt Facility
Revenue,
VRDN (Chambers Development Inc. Project)
4.40% (LOC; North Carolina National Bank) (a,b)......................... 9,000,000 9,000,000
Richmond Industrial Development Authority, Revenue, VRDN
(Cogentrix of Richmond Project) 4.60%, Series A (LOC; Banque Paribas) (a,b) 9,000,000 9,000,000
WashingtonN.9%
Seattle, Municipality Metropolitan Sewer Revenue, BAN 3.50%, 7/1/95......... 8,655,000 8,648,877
Dreyfus Municipal Money Market Fund, Inc.
West Virginia-.9%
Marion County, Commission Solid Waste Disposal Facility Revenue, VRDN
(Granttown Project) 4.30%, Series B (LOC; National Westminster Bank) (a,b) $ 8,000,000 $ 8,000,000
Wisconsin-1.8%
City of Ashwaubenon, IDR, VRDN (Bemis Corp. Project)
5.85% (LOC; Northwest Bank of Minneapolis) (a,b)........................ 3,000,000 3,000,000
Milwaukee Housing Authority, MFHR, VRDN (Yankee Hill Apartments)
3.65% (LOC; Citibank) (a,b)............................................. 14,000,000 14,000,000
--------------
TOTAL INVESTMENTS (cost $928,668,351)....................................... $928,710,144
--------------
--------------
Summary of Abbreviations
BAN Bond Anticipation Notes MFHR Multi-Family Housing Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
GIC Guaranteed Investment Contract SBPA Standby Bond Purchase Agreement
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDB Industrial Development Board TAN Tax Anticipation Notes
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
MBIA Municipal Bond Investors Assurance
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 97.9%
Not Rated (e) Not Rated (e) Not Rated (e) 2.1
--------
100.0%
--------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At May 31, 1995, 59.4% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign banks,
brokerage firms, corporations and government agencies.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper
by Moody's and Standard & Poor's, respectively.
(e) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may invest.
<TABLE>
<CAPTION>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities
May 31, 1995 ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $928,668,351)Nsee statement..................................... $928,710,144
Interest receivable..................................................... 7,260,761
Prepaid expenses........................................................ 111,996
--------------
936,082,901
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 418,867
Due to Custodian........................................................ 2,041,276
Accrued expenses and other liabilities.................................. 312,049 2,772,192
------------ --------------
NET ASSETS ................................................................ $933,310,709
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $935,113,042
Accumulated undistributed investment incomeNnet......................... 133,931
Accumulated net realized (loss) on investments.......................... (1,978,057)
Accumulated gross unrealized appreciation on investments................ 41,793
--------------
NET ASSETS at value applicable to 935,113,042 shares outstanding
(5 billion shares of $.01 par value Common Stock authorized)............ $933,310,709
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($933,310,709 / 935,113,042 shares)..................................... $1.00
------
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Operations
year ended May 31, 1995
INVESTMENT INCOME:
Interest Income......................................................... $38,760,431
Expenses:
Management fee-Note 2(a).............................................. $5,500,256
Shareholder servicing costs-Note 2(b)................................. 957,339
Custodian fees........................................................ 100,137
Registration fees..................................................... 51,460
Professional fees..................................................... 51,354
Directors' fees and expenses--Note 2(c)............................... 42,854
Prospectus and shareholders' reports.................................. 33,130
Miscellaneous......................................................... 35,774
------------
Total Expenses.................................................... 6,772,304
-------------
INVESTMENT INCOMENNET............................................. 31,988,127
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investmentsNNote 1(b).............................. $ 64,104
Net unrealized appreciation on investments.............................. 34,481
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 98,585
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $32,086,712
-------------
-------------
</TABLE>
<TABLE>
<CAPTION>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended May 31,
-----------------------------------
1994 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment incomeNnet.................................................. $ 25,779,255 $ 31,988,127
Net realized gain on investments....................................... 508,174 64,104
Net unrealized appreciation on investments for the year................ 6,158 34,481
---------------- ----------------
Net Increase In Net Assets Resulting From Operations................. 26,293,587 32,086,712
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment incomeNnet.................................................. (25,779,255) (31,988,127)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.......................................... 4,240,427,196 3,482,290,984
Dividends reinvested................................................... 18,349,521 22,043,236
Cost of shares redeemed................................................ (4,556,104,173) (3,688,123,812)
---------------- ----------------
(Decrease) In Net Assets From Capital Stock Transactions............. (297,327,456) (183,789,592)
---------------- ----------------
Total (Decrease) In Net Assets................................... (296,813,124) (183,691,007)
NET ASSETS:
Beginning of year...................................................... 1,413,814,840 1,117,001,716
---------------- ----------------
End of year (including undistributed investment incomeNnet:
$133,931 in 1994 and in 1995)........................................ $1,117,001,716 $ 933,310,709
----------------
----------------
----------------
----------------
</TABLE>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended May 31,
--------------------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995
------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ .9973 $ .9975 $ .9981 $ .9983 $ .9983
------- --------- ------- --------- ---------
Investment Operations:
Investment incomeNnet........................ .0492 .0341 .0221 .0198 .0294
Net realized and unrealized gain (loss) on investments .0002 .0005 .0002 .- (.0002)
------- --------- ------ ---------- ---------
Total from Investment Operations........... .0494 .0346 .0223 .0198 .0292
------- --------- ------ ---------- ---------
Distributions;
Dividends from investment incomeNnet......... (.0492) (.0340) (.0221) (.0198) (.0294)
-------- -------- ------- --------- ---------
Net asset value, end of year................. $ .9975 $ .9981 $ .9983 $ .9983 $ .9981
------- --------- -------- -------- ---------
------- --------- -------- -------- ---------
TOTAL INVESTMENT RETURN.......................... 5.04% 3.46% 2.23% 2.00% 2.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .59% .62% .62% .62% .62%
Ratio of net investment income to average net assets 4.95% 3.41% 2.22% 1.98% 2.91%
Net Assets, end of year (000's Omitted)...... $1,818,864 $1,498,772 $1,413,815 $1,117,002 $933,311
</TABLE>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct subsidiary
of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor")
was engaged as the Fund's distributor. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration services,
which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent
company of which is Boston Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment incomeNnet. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately $1,338,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1995. If not
applied, the carryover expires in fiscal 1996.
At May 31, 1995, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments). NOTE 2-Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of 1/2 of 1% of the average daily
value of the Fund's net assets and is Dreyfus Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage
commissions and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of expenses
in any full fiscal year that such expenses exceed 2 1/2% of the first $30
million, 2% of the next $70 million and 1 1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with California
"blue sky" regulations. There was no expense reimbursement for the year ended
May 31, 1995.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for servicing shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. During the year ended May 31, 1995, the
Fund was charged an aggregate of $356,051 pursuant to the Shareholder Services
Plan.
(c) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or Dreyfus
Service Corporation. Each director who is not an "affiliated person" receives
an annual fee of $4,500 and an attendance fee of $500 per meeting. The Chairman
of the Board receives an additional 25% of such compensation.
Dreyfus Municipal Money Market Fund, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Municipal Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Municipal Money Market Fund, Inc., including the statement of
investments, as of May 31, 1995, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1995 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Municipal Money Market Fund, Inc. at May 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
July 7, 1995
<PAGE>
Dreyfus Municipal Money
Market Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus, which must precede or
accompany this report.
Municipal Money Market Fund, Inc.
Annual Report
May 31, 1995
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this annual report for the Dreyfus
Municipal Money Market Fund. For the period ended May 31, 1995, the yield
provided by your Fund was 2.94%. After taking into account the effect of
compounding, the effective yield was 2.98%.* Dividends of approximately $.029
per share paid during the period were exempt from Federal income tax.**
Federal Reserve Board action since our last letter was limited to just one
50 basis point tightening move, which represented a decrease in magnitude from
previous actions. The fact that the increase was smaller reflected, in part,
the belief that some slowing in the economy had occurred. However, as some
economic indicators had continued to conflict with that sentiment, the argument
for a moderate hike appeared to be in order. More recent events suggest the Fed
may ease soon and, in large part, market levels now reflect those expectations.
While market fundamentals do affect the short-term municipal market, the
overriding influence continues to be market technicals (i.e. supply/demand).
Since the rates on those securities in the portfolio which provide the highest
degree of liquidity (1-day and 7-day demand notes) are adjusted on a daily or
weekly basis, your Fund's yield reflects these rapid adjustments and fluctuates
accordingly. Currently, rates on such securities provide an attractive return,
trading at better than 75% of the taxable overnight repurchase rate. We
anticipate that these yields will drop significantly in the coming weeks as
many holdings in municipal money market funds mature at the end of June.
However, if previous summer technicals are repeated, we expect the situation to
reverse in late July and August as issuers return to the market with their
summer financings.
In the wake of the Orange County, California bankruptcy filing in December,
we continue to devote our resources to locating those credits which achieve our
high internal standards and which provide your Fund with attractive returns. We
have included a current Statement of Investments and recent financial
statements for your review and look forward to serving your investment needs in
the future.
Very truly yours, .
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
June 16, 1995 New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested
monthly.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Investments
May 31, 1995
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments-100.0% Amount Value
-------------- --------------
<S> <C> <C>
Alabama-4.8%
Alabama Industrial Development Authority, SWDR, VRDN (Pine City Fiber Co.
Project)
4.30% (LOC; Barclays Bank) (a,b)........................................ $ 39,000,000 $39,000,000
Birmingham Medical Clinic Board, Revenue, VRDN (University of Alabama)
4.35% (LOC; Morgan Guaranty Trust Co.) (a,b)............................ 5,000,000 5,000,000
Alaska-1.3%
Valdez, Marine Terminal Revenue, Refunding, CP (Arco Transportation Project)
4.20%, Series C, 7/21/95................................................ 11,800,000 11,800,000
California-4.1%
California School Cash Reserve Program Authority (Pooled Project)
4.50%, Series A, 7/5/95................................................. 15,000,000 15,010,088
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding, VRDN
3.90%, Series A (Insured; MBIA and SBPA; Industrial Bank of Japan) (a).. 13,000,000 13,000,000
Los Angeles Unified School District, TRAN 4.50%, 7/10/95.................... 10,000,000 10,009,276
Colorado-2.8%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
4.15%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,200,000 12,200,000
Denver Urban Renewal Authority, Tax Increment Revenue (Downtown Denver
Renewal)
4.75%, Series A, 8/24/95 (Collateralized in; U.S. Treasury Bills)....... 14,115,000 14,115,000
Connecticut-2.8%
Connecticut Housing Financing Authority, Housing Mortgage Financing Program:
4.40%, Series E, 11/15/95 (Escrowed in; U.S. Government Securities)..... 13,200,000 13,200,000
4.50%, Series E2, 11/15/95 (Escrowed in; U.S. Government Securities).... 12,400,000 12,400,000
Delaware-9.9%
Delaware Economic Development Authority, Revenue, VRDN
(Hospital Billing and Collection Service Ltd. Project):
4.10%, Series A (Insured; MBIA) (a)................................... 25,000,000 25,000,000
4.10%, Series B (Insured; MBIA) (a)................................... 25,000,000 25,000,000
4.10%, Series C (Insured; MBIA) (a)................................... 41,400,000 41,400,000
District of Columbia-1.8%
District of Columbia, VRDN (General Fund Recovery):
4.75%, Series B (LOC; Union Bank of Switzerland) (a,b).................. 5,100,000 5,100,000
4.75%, Series B-3 (LOC; Union Bank of Switzerland) (a,b)................ 11,700,000 11,700,000
Florida-1.3%
Sarasota County Health Facility Authority, HR, VRDN (Aces Venice Hospital
Project)
4.65% (LOC; Krediet Bank) (a,b)......................................... 12,500,000 12,500,000
Georgia-1.4%
Athens-Clarke County Industrial Development Authority, IDR, VRDN
(Nakanishi Manufacturing Corp. Project) 4.40% (LOC; Sumitomo Bank) (a,b) 6,000,000 6,000,000
Rockdale County Development Authority, Industrial Revenue, VRDN
(Liochem Inc. Project) 4.70% (LOC; Sanwa Bank) (a,b).................... 7,000,000 7,000,000
Hawaii-1.1%
Honolulu City and County, Multi-Family Revenue, VRDN (Royal Kunia Gardens)
4.40%, Series B (LOC; Bank of Tokyo) (a,b).............................. $ 9,900,000 $ 9,900,000
Illinois-3.3%
Illinois Development Finance Authority, PCR, VRDN (Illinois Power Co.)
4.15%, Series C (LOC; Mitsubishi Bank) (a,b)............................ 10,400,000 10,400,000
Illinois Health Facilities Authority, Revenue, VRDN (Revolving Fund Pooled
Financing)
4.20%, Series C (LOC; First National Bank of Chicago) (a,b)............. 16,250,000 16,250,000
Southwestern Development Authority, SWDR, VRDN (Shell Oil Co. Wood River
Project)
4.45% (Corp Guaranty; Shell Oil Co.) (a)................................ 4,400,000 4,400,000
Indiana-1.6%
Fort Wayne Hospital Authority, HR, VRDN (Parkview Memorial Hospital)
4.25%, Series B (LOC; Fuji Bank) (a,b).................................. 4,500,000 4,500,000
City of Petersburg, SWDR, VRDN (Indianapolis Power and Light Co. Project)
4.10%, Series A (Corp. Guaranty; Indianapolis Power and Light Co.) (a).. 10,000,000 10,000,000
Iowa-4.0%
Iowa Finance Authority, SWDR, VRDN (Cedar River Paper Co. Project)
4.45%, Series A (LOC; Swiss Bank Corp.) (a,b)........................... 37,100,000 37,100,000
Kansas-4.0%
Butler County, Solid Waste Disposal and Cogeneration Revenue, VRDN
(Texaco Refining and Marketing Project) 4.50%, Series B (LOC; Bank of Tokyo) (a,b) 25,500,000 25,500,000
Topeka, MFHR, VRDN (Topeka Retirement Center Limited)
4.275% (LOC; Krediet Bank) (a,b)........................................ 6,970,000 6,970,000
Wichita, PCR, Refunding, VRDN (CIC Industries Inc. Project)
4.70% (LOC; The Bank of New York) (a,b)................................. 5,000,000 5,000,000
Kentucky-2.3%
City of Carroll, Collateralized Solid Waste Disposal Facilities Revenue, VRDN
(Utility Co. Project) 4.45%, Series A (a)............................... 17,000,000 17,000,000
Daviess County, Solid Waste Disposal Facility Revenue, VRDN (Scott Paper Co.
Project)
4.45%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b).................. 4,500,000 4,500,000
Louisiana-4.9%
Louisiana Public Facility Authority, School Board Advance Funding
4.60%, 8/31/95 (GIC; American International Group)...................... 12,050,000 12,061,559
New Orleans Aviation Board, Revenue, VRDN (Passenger Facility Charge Project)
4.45% (LOC: Banque Paribas and Canadian Imperial Bank of Commerce) (a,b) 10,000,000 10,000,000
West Baton Rouge Parish Industrial District No. 3, Revenue, VRDN
(Dow Chemical Co. Project) 4.50% (Corp. Guaranty; Dow Chemical Co.) (a). 23,600,000 23,600,000
Maine-1.6%
Orrington, RRR, VRDN (Penobscott Energy Recovery Co. Project)
5.025%, Series B (LOC: Bank of Nova Scotia, Bankers Trust, Canadian
Imperial Bank
of Commerce, Long-Term Credit Bank of Japan, and Toronto Dominian Bank)
(a,b).................................................... 14,520,000 14,520,000
Maryland-.6%
Baltimore County, Housing Mortgage Revenue, Refunding, VRDN (Spring Hill)
4% (LOC; Sumitomo Bank) (a,b)........................................... $ 5,750,000 $ 5,750,000
Massachusetts-1.4%
Massachusetts Health and Education Facilities Authority, Revenue
(Boston Univeristy) 4.10%, Series H, 6/6/95 (LOC; First Chicago Corp.) (b) 13,000,000 13,000,000
Michigan-6.3%
Kent Hospital Finance Authority, Hospital Facility Revenue, VRDN
(Butterworth Hospital) 4.20%, Series A (LOC; Sanwa Bank) (a,b).......... 9,100,000 9,100,000
Michigan Hospital Finance Authority, Revenue, VRDN
(Hospital Equipment Loan Program) 3.95% (LOC; Comerica Bank) (a,b)...... 3,800,000 3,800,000
Michigan Housing Development Authority, Rental Housing Revenue, VRDN
4.10%, Series C (LOC: Credit Suisse) (a,b).............................. 17,000,000 17,000,000
Michigan Strategic Fund, SWDR, VRDN (Grayling Generating Project)
4.30% (LOC; Barclays Bank) (a,b)........................................ 8,000,000 8,000,000
Midland County Economic Development Corp., Economic Development
Limited Obigation Revenue, VRDN (Dow Chemical Co. Project)
4.60%, Series A (Corp. Guaranty; Dow Chemical Co.) (a).................. 21,000,000 21,000,000
Montana-2.3%
Montana Board of Investment, RRR, VRDN (Colstrip Project)
4.70% (LOC; Fuji Bank) (a,b)............................................ 21,050,000 21,050,000
Nebraska-1.5%
Nebraska Higher Education Loan Program Inc., Revenue, VRDN
(Multiple Mode-Student Loan) 3.90%, Series A (Insured; MBIA) (a)........ 12,995,000 12,995,000
Nebraska Investment Finance Authority, HR, VRDN (Multiple Mode Depreciation
Assets)
4.10%, Series A (Insured; FGIC) (a)..................................... 1,360,000 1,360,000
New Jersey-.5%
New Jersey Housing and Mortgage Finance Agency, Revenue, Statewide Mortgage
4.20%, 9/29/95 (LOC; Bayerische Landesbank) (b)......................... 5,095,000 5,095,000
New York-2.3%
New York State Energy, Research and Development Authority, PCR, VRDN
(Niagara Mohawk Power Co. Project)
4.40%, Series A (LOC; Toronto-Dominion Bank) (a,b)...................... 8,500,000 8,500,000
Suffolk County, TAN 4.50%, Series II, 9/14/95............................... 13,000,000 13,015,065
North Carolina-.4%
North Carolina Medical Care Community, HR, VRDN
(Pooled Equipment Financing Project) 4.10% (Insured; MBIA) (a).......... 3,400,000 3,400,000
Ohio-1.8%
Ohio Water Development Authority, PCR (Edison Project)
4.25%, 9/1/95 (LOC; Barclays Bank) (b).................................. 5,000,000 5,000,000
University of Cincinnati, General Receipt, BAN 4.75%, 8/30/95............... 12,000,000 12,019,934
Pennsylvania-1.8%
Columbia County Industrial Development Authority, IDR, VRDN (Kleerdex Co.
Project)
4.45% (LOC; Bank of Tokyo) (a,b)........................................ $ 4,800,000 $ 4,800,000
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, VRDN
4.20%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,100,000 12,100,000
South CarolinaN.9%
York County, Industrial Revenue, VRDN (Textron Project) 5.63% (LOC; Bankers
Trust) (a,b)................................................................ 7,500,000 7,500,000
Tennessee-1.2%
Franklin, IDB, Multi-Family Revenue, VRDN (Landings Project)
3.65%, Series C (LOC; Citibank) (a,b)................................... 10,700,000 10,700,000
Texas-15.9%
Greater East Texas Higher Education Authority Inc., Student Loan Revenue:
4.50%, Series B, 7/1/95 (LOC; Student Loan Marketing Association) (b)... 9,000,000 9,000,000
VRDN:
Refunding, 4%, Series A (LOC; Student Loan Marketing Association) (a, b) 10,000,000 10,000,000
4.35%, Series B (LOC; Student Loan Marketing Association) (a, b)...... 24,000,000 24,000,000
Gulf Coast Waste Disposal Authority, VRDN (Amoco Oil Co. Project):
PCR 4.45% (Corp. Guaranty; Amoco Credit Corp.) (a)...................... 32,700,000 32,700,000
SWDR, Refunding 4.45% (Corp: Guaranty; Amoco Credit Corp.) (a).......... 6,000,000 6,000,000
Harris County Health Facilities Development Corp., HR, VRDN
(Memorial Hospital Systems Project) 4.80% (LOC; Societe Generale) (a,b). 15,900,000 15,900,000
North Texas Higher Education Authority Inc., Student Loan Revenue, VRDN
4.30% (LOC; Fuji Bank) (a,b)............................................ 19,800,000 19,800,000
San Antonio, Electric and Gas Revenue, CP 4.15%, Series A, 7/24/95
(LOC: Bank of Tokyo, Credit Suisse, Mitsubishi Bank, Sanwa Bank, Sumitomo
Bank,
Texas Commerce Bank, Toronto Dominion Bank and Union Bank of Switzerland) (b) 10,500,000 10,500,000
State of Texas, TRAN 5%, 8/31/95............................................ 20,000,000 20,040,345
Utah-4.6%
Intermountain Power Agency, Power Supply Revenue, CP
4.05%, Series E, 6/8/95 (LOC; Industrial Bank of Japan) (b)............. 30,300,000 30,300,000
Utah Board of Regents, Student Loan Revenue, Refunding, VRDN
4.20%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,500,000 12,500,000
Virginia-1.9%
Charles City and County Industrial Development Authority, Exempt Facility
Revenue,
VRDN (Chambers Development Inc. Project)
4.40% (LOC; North Carolina National Bank) (a,b)......................... 9,000,000 9,000,000
Richmond Industrial Development Authority, Revenue, VRDN
(Cogentrix of Richmond Project) 4.60%, Series A (LOC; Banque Paribas) (a,b) 9,000,000 9,000,000
WashingtonN.9%
Seattle, Municipality Metropolitan Sewer Revenue, BAN 3.50%, 7/1/95......... 8,655,000 8,648,877
Dreyfus Municipal Money Market Fund, Inc.
West Virginia-.9%
Marion County, Commission Solid Waste Disposal Facility Revenue, VRDN
(Granttown Project) 4.30%, Series B (LOC; National Westminster Bank) (a,b) $ 8,000,000 $ 8,000,000
Wisconsin-1.8%
City of Ashwaubenon, IDR, VRDN (Bemis Corp. Project)
5.85% (LOC; Northwest Bank of Minneapolis) (a,b)........................ 3,000,000 3,000,000
Milwaukee Housing Authority, MFHR, VRDN (Yankee Hill Apartments)
3.65% (LOC; Citibank) (a,b)............................................. 14,000,000 14,000,000
--------------
TOTAL INVESTMENTS (cost $928,668,351)....................................... $928,710,144
--------------
--------------
Summary of Abbreviations
BAN Bond Anticipation Notes MFHR Multi-Family Housing Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
GIC Guaranteed Investment Contract SBPA Standby Bond Purchase Agreement
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDB Industrial Development Board TAN Tax Anticipation Notes
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
MBIA Municipal Bond Investors Assurance
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 97.9%
Not Rated (e) Not Rated (e) Not Rated (e) 2.1
--------
100.0%
--------
--------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At May 31, 1995, 59.4% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign banks,
brokerage firms, corporations and government agencies.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(e) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board of Directors to be of comparable
quality to those rated securities in which the Fund may invest.
<TABLE>
<CAPTION>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities
May 31, 1995 ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $928,668,351)Nsee statement..................................... $928,710,144
Interest receivable..................................................... 7,260,761
Prepaid expenses........................................................ 111,996
--------------
936,082,901
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 418,867
Due to Custodian........................................................ 2,041,276
Accrued expenses and other liabilities.................................. 312,049 2,772,192
------------ --------------
NET ASSETS ................................................................ $933,310,709
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $935,113,042
Accumulated undistributed investment incomeNnet......................... 133,931
Accumulated net realized (loss) on investments.......................... (1,978,057)
Accumulated gross unrealized appreciation on investments................ 41,793
--------------
NET ASSETS at value applicable to 935,113,042 shares outstanding
(5 billion shares of $.01 par value Common Stock authorized)............ $933,310,709
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($933,310,709 / 935,113,042 shares)..................................... $1.00
------
------
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Operations
year ended May 31, 1995
INVESTMENT INCOME:
Interest Income......................................................... $38,760,431
Expenses:
Management fee-Note 2(a).............................................. $5,500,256
Shareholder servicing costs-Note 2(b)................................. 957,339
Custodian fees........................................................ 100,137
Registration fees..................................................... 51,460
Professional fees..................................................... 51,354
Directors' fees and expenses--Note 2(c)............................... 42,854
Prospectus and shareholders' reports.................................. 33,130
Miscellaneous......................................................... 35,774
------------
Total Expenses.................................................... 6,772,304
-------------
INVESTMENT INCOMENNET............................................. 31,988,127
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investmentsNNote 1(b).............................. $ 64,104
Net unrealized appreciation on investments.............................. 34,481
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 98,585
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $32,086,712
-------------
-------------
</TABLE>
<TABLE>
<CAPTION>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended May 31,
-----------------------------------
1994 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment incomeNnet.................................................. $ 25,779,255 $ 31,988,127
Net realized gain on investments....................................... 508,174 64,104
Net unrealized appreciation on investments for the year................ 6,158 34,481
---------------- ----------------
Net Increase In Net Assets Resulting From Operations................. 26,293,587 32,086,712
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment incomeNnet.................................................. (25,779,255) (31,988,127)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.......................................... 4,240,427,196 3,482,290,984
Dividends reinvested................................................... 18,349,521 22,043,236
Cost of shares redeemed................................................ (4,556,104,173) (3,688,123,812)
---------------- ----------------
(Decrease) In Net Assets From Capital Stock Transactions............. (297,327,456) (183,789,592)
---------------- ----------------
Total (Decrease) In Net Assets................................... (296,813,124) (183,691,007)
NET ASSETS:
Beginning of year...................................................... 1,413,814,840 1,117,001,716
---------------- ----------------
End of year (including undistributed investment incomeNnet:
$133,931 in 1994 and in 1995)........................................ $1,117,001,716 $ 933,310,709
---------------- ----------------
---------------- ----------------
</TABLE>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended May 31,
--------------------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995
------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ .9973 $ .9975 $ .9981 $ .9983 $ .9983
------- --------- ------- --------- ---------
Investment Operations:
Investment incomeNnet........................ .0492 .0341 .0221 .0198 .0294
Net realized and unrealized gain (loss) on investments .0002 .0005 .0002 .- (.0002)
------- --------- ------ ---------- ---------
Total from Investment Operations........... .0494 .0346 .0223 .0198 .0292
------- --------- ------ ---------- ---------
Distributions;
Dividends from investment incomeNnet......... (.0492) (.0340) (.0221) (.0198) (.0294)
-------- -------- ------- --------- ---------
Net asset value, end of year................. $ .9975 $ .9981 $ .9983 $ .9983 $ .9981
------- --------- -------- -------- ---------
------- --------- -------- -------- ---------
TOTAL INVESTMENT RETURN.......................... 5.04% 3.46% 2.23% 2.00% 2.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .59% .62% .62% .62% .62%
Ratio of net investment income to average net assets 4.95% 3.41% 2.22% 1.98% 2.91%
Net Assets, end of year (000's Omitted)...... $1,818,864 $1,498,772 $1,413,815 $1,117,002 $933,311
</TABLE>
See notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct subsidiary
of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor")
was engaged as the Fund's distributor. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration services,
which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent
company of which is Boston Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment incomeNnet. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately $1,338,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1995. If not
applied, the carryover expires in fiscal 1996.
At May 31, 1995, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments). NOTE 2-Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of 1/2 of 1% of the average daily
value of the Fund's net assets and is Dreyfus Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage
commissions and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of expenses
in any full fiscal year that such expenses exceed 2 1/2% of the first $30
million, 2% of the next $70 million and 1 1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance with California
"blue sky" regulations. There was no expense reimbursement for the year ended
May 31, 1995.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for servicing shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. During the year ended May 31, 1995, the
Fund was charged an aggregate of $356,051 pursuant to the Shareholder Services
Plan.
(c) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or Dreyfus
Service Corporation. Each director who is not an "affiliated person" receives
an annual fee of $4,500 and an attendance fee of $500 per meeting. The Chairman
of the Board receives an additional 25% of such compensation.
Dreyfus Municipal Money Market Fund, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Municipal Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Municipal Money Market Fund, Inc., including the statement of
investments, as of May 31, 1995, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1995 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Municipal Money Market Fund, Inc. at May 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
July 7, 1995
Dreyfus Municipal Money Market Fund, Inc.
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended May 31,
1995 as "exempt-interest dividends" (not generally subject to regular Federal
income tax).
<PAGE>
Dreyfus Municipal Money
Market Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained in the Prospectus, which must precede or
accompany this report.
Municipal Money Market Fund, Inc.
Semi-Annual Report
November 30, 1995
Dreyfus Municipal Money Market Fund, Inc.
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Municipal
Money Market Fund. For its semi-annual reporting period ended November 30,
1995, your Fund produced an annualized yield of 3.22%. For investors in the
highest Federal income tax bracket (39.6%), this equates to a taxable
equivalent yield of 5.33%. Income dividends of approximately $.016 per share
were paid during the period. Reinvesting these dividends and calculating the
effect of compounding resulted in an annualized effective yield of 3.27%.*
These dividends were exempt from Federal personal income taxes, although some
income may be subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
THE ECONOMY
Modest economic growth and low inflation have spurred a dramatic, year-long
rally in the bond market. Short-term rates rates have fallen as well. The
Federal Reserve Board's reduction of the Fed Funds rate last summer confirmed
what investors had already suspected: inflation, at least for the immediate
future, was under control. Now questions abound regarding the duration of the
economic recovery and the likelihood of recession.
The economic recovery of the 1990s was productivity-driven. Corporations
implemented extraordinary cost control measures that, while dramatically
improving bottom line earnings, now contribute to the slow rate of employment
growth. Job creation is a significant factor that affects consumer spending and
a major component of economic activity. The pace of new job creation, currently
at its slowest since World War II, is worrisome. Indeed, wages and salaries
grew at under 3% over the past year, barely keeping pace with inflation. Still,
surveys indicate that consumers remain optimistic, despite indications that
their spending is being affected by the slow growth in disposable income.
Recent reports on retail sales confirm this reticence in spending. A
consumer-led weakening of the economy could lead to further Federal Reserve
easing of monetary policy.
It was concern about lagging economic growth that prompted the Federal
Reserve to ease the Federal Funds rate in July. The housing market and new home
construction had been helped earlier this year by low interest rates although
both have exhibited signs of weakness recently. Business capital spending,
another engine of economic growth, has been solid. Exports represent another
bright area of the economy. Because of the new competitiveness of American
businesses abroad, the U.S. trade deficit continues to shrink. Through
September, the trade deficit with Japan narrowed for the sixth consecutive
month. Exports, while a relatively small component of overall economic activity
in this country, provide an important support for the job market. If U.S.
products lose competitiveness in world markets, foreign orders may go elsewhere
and jobs could be lost here.
MARKET ENVIRONMENT
In addition to the impact of action taken by the Federal Reserve Board,
technical factors (i.e., supply/demand) contributed to a significant
strengthening of market conditions in late June and early July. Demand exceeded
supply during this time, and short-term yields on municipal issues dropped
accordingly.
In the fall, rates on short-term issues settled into a trading range.
However, a steady interchange of variable rate demand notes (VRDNs) between
corporate holders and municipal money market funds kept rates on these
securities attractive, which resulted in an inverted yield curve (where rates
on shorter maturities are higher than rates on longer issues) throughout most
of the season. It is expected that this situation will change dramatically in
January as cashflows into municipal money market funds increase demand for
VRDNs and their rates drop.
THE PORTFOLIO
With the inverted yield curve, daily and weekly demand notes yielded
moderately more than both commercial paper and notes through most of the
period. However, since this situation is expected to change, our investment
strategy involved an attempt to lengthen the maturity, where possible, and to
lock in rates that we felt would outperform variable rate notes early in 1996.
The commercial paper and one-year note markets provided the means for
extending while attempting to maintain a competitive yield. However, our
success in achieving the desired average maturity was somewhat limited due to a
dearth of high quality issues from which to choose. As a result, your Fund's
current average maturity still leaves room to extend if a change in market or
supply conditions warrants.
Our primary tasks - to preserve principal, to invest in those issues that
meet our high quality standards, and to maintain a balance of income and
liquidity consistent with our conservative management philosophy N continue to
guide our portfolio decisions.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
December 15, 1995 New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<TABLE>
<CAPTION>
Dreyfus Municipal Money Market Fund, Inc.
Statement of Investments
November 30, 1995 (Unaudited)
Principal
Tax Exempt Investments-100.0% Amount Value
-------------- --------------
<S> <C> <C>
Alabama-4.2%
Alabama Industrial Development Authority, SWDR, VRDN (Pine City Fiber Co.
Project)
3.90% (LOC; Barclays Bank) (a,b)........................................ $ 39,000,000 $ 39,000,000
Alaska-1.5%
Valdez, Marine Terminal Revenue, Refunding, CP (Arco Transportation Project)
3.90%, Series C, 12/13/95............................................... 14,100,000 14,100,000
California-2.9%
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding, VRDN
4.15%, Series A (Insured; MBIA and SBPA; Industrial Bank of Japan) (a).. 13,000,000 13,000,000
South Coast Local Education Agencies and Partnerships 5%, 8/14/96........... 14,560,000 14,603,775
Colorado-2.8%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
3.75%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,200,000 12,200,000
Denver Urban Renewal Authority, Tax Increment Revenue
(Downtown Denver Renewal)
4.20%, Series A, 2/15/96 (Collateralized in; U.S. Treasury Bills)..... 14,115,000 14,115,000
Delaware-8.0%
Delaware Economic Development Authority, Revenue, VRDN
(Hospital Billing and Collection Service Limited Project):
3.75%, Series A (Insured; MBIA) (a)................................... 25,000,000 25,000,000
3.75%, Series B (Insured; MBIA) (a)................................... 14,000,000 14,000,000
3.75%, Series C (Insured; MBIA) (a)................................... 36,400,000 36,400,000
District of Columbia-2.3%
District of Columbia, VRDN (General Fund Recovery):
4%, Series B-1 (LOC; Union Bank of Switzerland) (a,b)................... 5,100,000 5,100,000
4%, Series B-3 (LOC; Landesbank Hessen) (a,b)........................... 16,500,000 16,500,000
Florida-3.6%
Jacksonville Electric Authority, Revenue, CP
3.70%, Series D-1, 12/19/95 (LOC; Credit Suisse) (b).................... 13,000,000 13,000,000
Sunshine State Governmental Financing Commision, Revenue, CP
3.75, Series B, 2/12/96 (Liquidity Facility; State Board of Administration of Florida) 20,390,000 20,390,000
Georgia-3.5%
Athens-Clarke County Industrial Development Authority, IDR, VRDN
(Nakanishi Manufacturing Corp. Project) 4.325% (LOC; Sumitomo Bank) (a,b) 6,000,000 6,000,000
Burke County Development Authority, PCR, Refunding, VRDN
(Oglethorpe Power Corp.)
3.60% (Insured; FGIC and SBPA; Credit Local de France) (a).............. 9,400,000 9,400,000
Savannah Economic Development Authority, Revenue Exempt Facilities, VRDN
(Home Depot Project) 3.90%, Series A (Corp. Guaranty; Home Depot) (a)... 17,000,000 17,000,000
Hawaii-1.1%Honolulu City and County, Multi-Family Revenue, VRDN (Royal Kunia Gardens)
4.30%, Series B (LOC; Bank Of Tokyo) (a,b).............................. $ 9,900,000 $9,900,000
Illinois-5.9%
Illinois Development Finance Authority, PCR, VRDN (Illinois Power Co.)
4%, Series C (LOC; Mitsubishi Bank) (a,b)............................... 10,400,000 10,400,000
Illinois Health Facilities Authority, Revenue, VRDN:
(Northwestern Memorial Hospital)
3.85% (Corp. Guaranty; Northwestern Memorial Hospital) (a)........... 24,600,000 24,600,000
(Revolving Fund Pooled Financing)
3.85%, Series G (LOC; First National Bank of Chicago) (a,b)........... 16,250,000 16,250,000
Southwestern Development Authority, SWDR, VRDN (Shell Oil Co. Wood River
Project)
3.95% (Corp. Guaranty; Shell Oil Co.) (a)............................... 4,400,000 4,400,000
Indiana-1.5%
Fort Wayne Hospital Authority, HR, VRDN (Parkview Memorial Hospital)
4.20%, Series B (LOC; Fuji Bank) (a,b).................................. 4,500,000 4,500,000
City of Petersburg, SWDR, VRDN (Indianapolis Power and Light Co. Project)
3.75%, Series A (Corp. Guaranty; Indianapolis Power and Light Co.) (a).. 10,000,000 10,000,000
Kansas-1.3%
Topeka, MFHR, VRDN (Topeka Retirement Center Limited)
4.05% (LOC; Krediet Bank) (a,b)......................................... 6,970,000 6,970,000
Wichita, PCR, Refunding, VRDN (CIC Industries Inc. Project)
4.45% (LOC; The Bank of New York) (a,b)................................. 5,000,000 5,000,000
Kentucky-.5%
Daviess County, Solid Waste Disposal Facility, Revenue, VRDN (Scott Paper Co.
Project)
3.95%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b).................. 4,500,000 4,500,000
Louisiana-2.2%
New Orleans Aviation Board, Revenue, VRDN (Passenger Facility Charge Project)
3.95% (LOC: Banque Paribas and Canadian Imperial Bank of Commerce) (a,b) 10,000,000 10,000,000
West Baton Rouge Parish Industrial District No. 3, Revenue, VRDN
(Dow Chemical Co. Project) 4.10%, Series A (Corp. Guaranty; Dow Chemical
Co.) (a)................................................. 10,600,000 10,600,000
Maine-1.5%
Orrington, RRR, VRDN (Penobscott Energy Recovery Co. Project)
5.075%, Series B (LOC: Bank of Nova Scotia, Bankers Trust,
Canadian Imperial Bank of Commerce, Long-Term Credit Bank of Japan and
Toronto Dominian Bank) (a,b)............................................ 13,610,000 13,610,000
Maryland-4.3%
Montgomery County, Consolidated, CP:
3.70%, 1/12/96 (LOC; Union Bank of Switzerland) (b)..................... 30,000,000 30,000,000
Maryland (continued)Montgomery County, Consolidated, CP (continued):
3.60%, 2/9/96 (LOC; Union Bank of Switzerland) (b)...................... $ 10,000,000 $ 10,000,000
MassachusettsN1.5%
Massachusetts Water Resource Authority, CP
3.65%, 12/19/95 (LOC; Morgan Guaranty Trust Co.) (b).................... 14,000,000 14,000,000
Michigan-5.4%
Michigan Building Authority, Revenue, CP
3.70%, Series 1, 12/27/95 (LOC; Canadian Imperial Bank of Commerce) (b). 24,000,000 24,000,000
Michigan Hospital Finance Authority, Revenue, VRDN
(Hospital Equipment Loan Program)
3.55% (LOC; Manufacturers Hanover Bank) (a,b)........................... 1,600,000 1,600,000
Michigan Housing Development Authority, Rental Housing Revenue, Refunding,
VRDN
3.65%, Series C (LOC; Credit Suisse) (a,b).............................. 17,000,000 17,000,000
Michigan Strategic Fund, SWDR, VRDN (Grayling Generating Project)
3.80% (LOC; Barclays Bank) (a,b)........................................ 8,000,000 8,000,000
Nebraska-1.5%
Nebraska Higher Education Loan Program Inc., Revenue, VRDN
(Multiple Mode-Student Loan) 3.65%, Series A (Insured; MBIA) (a)........ 12,995,000 12,995,000
Nebraska Investment Finance Authority, HR, VRDN (Multiple Mode Depreciation
Assets)
3.60%, Series A (Insured; FGIC) (a)..................................... 1,360,000 1,360,000
Nevada-.8%
Washoe County, Water Facility Revenue, CP (Sierra Pacific Power Co. Project)
3.90%, 12/15/95 (LOC; Union Bank of Switzerland) (b).................... 7,645,000 7,645,000
New Jersey-2.7%
Burlington County, BAN 3.75%, 6/14/96....................................... 25,500,000 25,460,604
New York-13.8%
New York City:
CP 3.80%, Series H-5, 12/6/95 (Insured; MBIA and
Liquidity Facility; Landesbank Hessen)................................ 25,000,000 25,000,000
RAN 4.75%, Series B, 6/28/96 (LOC: Bank of Nova Scotia, Canadian Imperial
Bank
of Commerce, Chemical Bank, Citibank, Comerica Bank,
Morgan Guaranty Trust Co. and Union Bank of Switzerland) (b).......... 15,000,000 15,062,764
TAN 4.50%, Series A, 2/15/96............................................ 15,000,000 15,023,668
New York City Municipal Water Finance Authority, Water and Sewer Systems
Revenue,
CP 3.55%, 1/25/96 (LOC; Canadian Imperial Bank of Commerce) (b)......... 15,000,000 15,000,000
New York State Dormitory Authority, Revenues, CP (Memorial Sloan Kettering)
3.70%, Series D, 12/7/95 (LOC; Chemical Bank) (b)....................... 22,950,000 22,950,000
New York State Local Government Assistance Corporation, VRDN:
3.50%, Series A (LOC: Credit Suisse, Swiss Bank Corp. and
Union Bank of Switzerland) (a,b)...................................... $ 11,800,000 $ 11,800,000
3.50%, Series C (LOC; Landesbank Hessen) (a,b).......................... 10,000,000 10,000,000
New York State Power Authority, CP 3.70%, 12/13/95 (Liquidity Facility: Bank of America,
The Bank of New York, Bank of Nova Scotia, Chemical Bank, Citibank,
Industrial Bank of Japan, Mitsubishi Bank and Sanwa Bank)............... 5,000,000 15,000,000
North Carolina-.4%
North Carolina Medical Care Community, HR, VRDN (Pooled Equipment Financing
Project)
3.75% (Insured; MBIA) (a)............................................... 3,400,000 3,400,000
North Dakota-1.0%
North Dakota Housing Finance Agency, Revenue, Home Mortgage
(Housing Finance Program)
3.70, Series C, 12/1/95 (GIC; Trinity Funding Corp.).................... 9,000,000 9,000,000
Ohio-1.4%
University of Cincinnati, General Receipt, BAN 4.25%, 8/28/96............... 13,000,000 13,023,132
Pennsylvania-3.2%
Columbia County Industrial Development Authority, IDR, VRDN (Kleerdex Co.
Project)
4.30% (LOC; Bank of Tokyo) (a,b)........................................ 4,800,000 4,800,000
Delaware Valley Regional Finance Authority, Local Government Revenue, VRDN
4%, Series D (LOC; Marine Midland Bank) (a,b)........................... 5,000,000 5,000,000
Pennsylvania Energy Development Authority, EDR, VRDN (B & W Ebensburg
Project)
3.75% (LOC; Swiss Bank Corp.) (a,b)..................................... 8,500,000 8,500,000
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, VRDN
3.80%, Series A (LOC; Fuji Bank) (a,b).................................. 12,100,000 12,100,000
South Carolina-.8%
York County, Industrial Revenue, VRDN (Textron Project)
5.46% (LOC; Bankers Trust) (a,b)........................................ 7,500,000 7,500,000
Tennessee-3.0%
Franklin, IDB, Multi-Family Revenue, VRDN (Landings Project)
3.65%, Series C (LOC; Citibank) (a,b)................................... 10,700,000 10,700,000
Sevier County Public Building Authority, Local Government Public Improvement,
VRDN:
3.70%, Series B-2 (Insured; AMBAC and SBPA; Krediet Bank) (a)........... 5,000,000 5,000,000
3.70%, Series B-1 (Insured; AMBAC and SBPA; Krediet Bank) (a)........... 5,000,000 5,000,000
3.90%, Series A-1 (Insured; AMBAC and SBPA; Krediet Bank) (a)........... 7,500,000 7,500,000
Texas-8.7
Brazos River Authority, PCR, Refunding, VRDN (Utility Electric Co.)
3.95%, Series C (LOC; Swiss Bank Corp.) (a,b)........................... 7,000,000 7,000,000
Greater East Texas Higher Education Authority Inc., Student Loan Revenue, VRDN:
4%, Series B (LOC; Student Loan Marketing Association) (a,b)............ $ 10,000,000 $ 10,000,000
Refunding, 3.95%, Series A (LOC; Student Loan Marketing Association) (a) 10,000,000 10,000,000
Gulf Coast Industrial Development Authority, SWDR, VRDN (Citgo Petroleum)
4% (LOC; Nationsbank of Texas) (b)...................................... 10,000,000 10,000,000
North Texas Higher Education Authority Inc., Student Loan Revenue, VRDN
4.05% (LOC; Fuji Bank) (a,b)............................................ 10,000,000 10,000,000
Pan-Handle Plains Higher Education Authority Inc., Student Loan Revenue, VRDN
3.75% (LOC; Student Loan Marketing Association) (a,b)................... 13,000,000 13,000,000
San Antonio, Electric and Gas Revenue, CP
3.80%, Series A, 12/5/95 (LOC: Bank of Tokyo, Credit Suisse, Mitsubishi
Bank,
Sanwa Bank, Sumitomo Bank, Texas Commerce Bank and
Toronto Dominion Bank) (b).............................................. 10,500,000 10,500,000
State of Texas Public Finance Authority, Revenue, CP
3.75%, 1/17/96 (Liquidity Facility; State of Texas Treasurer)........... 11,500,000 11,500,000
Utah-4.3%
Intermountain Power Agency, Power Supply Revenue, CP
3.75%, 12/5/95 (LOC; Bank of America) (b)............................... 27,900,000 27,900,000
Utah Board of Regents, Student Loan Revenue, Refunding, VRDN
3.85%, Series A (LOC; Student Loan Marketing Association) (a,b)......... 12,500,000 12,500,000
Virginia-.9%
Charles City and County Industrial Development Authority, Exempt Facility
Revenue,
VRDN (Chambers Development Inc. Project)
4% (LOC; North Carolina National Bank) (a,b)............................ 8,700,000 8,700,000
Washington-.9%
Seattle, Municipal Power and Light Revenue, CP
3.75%, 2/8/96 (LOC; Morgan Guaranty Trust Co.) (b)...................... 8,500,000 8,500,000
West Virginia-.8%
Marion County, Commission Solid Waste Disposal Facility Revenue, VRDN
(Granttown Project) 3.85%, Series B (LOC; National Westminster Bank) (a,b) 7,800,000 7,800,000
Wisconsin-1.8%
City of Ashwaubenon, IDR, VRDN (Bemis Corp. Project)
5.688% (LOC; Norwest Bank of Minneapolis) (a,b)......................... 3,000,000 3,000,000
Milwaukee Housing Authority, MFHR, VRDN (Yankee Hill Apartments)
3.65% (LOC; Citibank) (a,b)............................................. 14,000,000 14,000,000
-------------
TOTAL INVESTMENTS (cost $938,348,155)....................................... $938,358,943
-------------
-------------
Dreyfus Municipal Money Market Fund, Inc.
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BAN Bond Anticipation Notes Insurance Corporation
CP Commercial Paper MFHR Multi-Family Housing Revenue
EDR Economic Development Revenue PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RAN Revenue Anticipation Notes
GIC Guaranteed Investment Contract RRR Resources Recovery Revenue
HR Hospital Revenue SBPA Standby Bond Purchase Agreement
IDB Industrial Development Board SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue TAN Tax Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 94.7%
AAA/AAA (e) Aaa/A/ (e) AAA/AA (e) 1.5
Not Rated (f) Not Rated (f) Not Rated (f) 3.8
--------
100.0%
--------
--------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At November 30, 1995, 58.9% of the
Fund's net assets are backed by letters of credit issued by domestic banks,
foreign banks, and government agencies.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper
by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings
of the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may invest.
<PAGE>
<TABLE>
<CAPTION>
See independent accountants' review report and notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities
<S> <C> <C>
November 30, 1995 (Unaudited) ASSETS:
Investments in securities, at value
(cost $938,348,155)-see statement..................................... $938,358,943
Cash.................................................................... 10,039,714
Interest receivable..................................................... 4,896,768
Prepaid expenses........................................................ 135,315
-------------
953,430,740
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $385,641
Accrued expenses and other liabilities.................................. 297,020 682,661
--------- -------------
NET ASSETS ................................................................ $952,748,079
-------------
-------------
REPRESENTED BY:
Paid-in capital......................................................... $954,479,862
Accumulated undistributed investment incomeNnet......................... 133,931
Accumulated net realized (loss) on investments.......................... (1,876,502)
Accumulated gross unrealized appreciation on investments................ 10,788
-------------
NET ASSETS at value applicable to 954,479,862, outstanding shares of Common
Stock, equivalent to $1.00 per share (5 billion shares of $.01
par value authorized)................................................... $952,748,079
-------------
-------------
See independent accountants' review report and notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Statement of Operations six months
ended November 30, 1995 (Unaudited)
INVESTMENT INCOME:
Interest Income......................................................... $20,106,332
Expenses:
Management fee-Note 2(a).............................................. $2,586,830
Shareholder servicing costs-Note 2(b)................................. 541,831
Custodian fees........................................................ 42,580
Professional fees..................................................... 41,011
Registration fees..................................................... 39,933
Directors' fees and expenses--Note 2(c)............................... 29,184
Prospectus and shareholders' reports.................................. 27,124
Miscellaneous......................................................... 17,791
----------
Total Expenses.................................................... 3,326,284
------------
INVESTMENT INCOME-NET............................................. 16,780,048
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 1(b).............................. $ 101,555
Net unrealized (depreciation) on investments............................ (31,005)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 70,550
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $16,850,598
------------
------------
</TABLE>
<PAGE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
Dreyfus Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended Six Months Ended
May 31, November 30, 1995
1995 (Unaudited)
----------------- ---------------------
<S> <C> <C>
OPERATIONS:
Investment income-net.............................................. $ 31,988,127 $ 16,780,048
Net realized gain on investments................................... 64,104 101,555
Net unrealized appreciation (depreciation) on investments for the period 34,481 (31,005)
---------------
---------------
Net Increase In Net Assets Resulting From Operations............. 32,086,712 16,850,598
-------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net.............................................. (31,988,127) (16,780,048)
---------------- --------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold...................................... 3,482,290,984 1,842,026,664
Dividends reinvested............................................... 22,043,236 11,005,225
Cost of shares redeemed............................................ (3,688,123,812) (1,833,665,069)
--------------- ---------------
Increase (Decrease) In Net Assets From Capital Stock Transactions (183,789,592) 19,366,820
--------------- ---------------
Total Increase (Decrease) In Net Assets...................... (183,691,007) 19,437,370
NET ASSETS:
Beginning of period................................................ 1,117,001,716 933,310,709
--------------- ---------------
End of period (including undistributed investment income-net:
$133,931 and $133,931, respectively)............................. $ 933,310,709 $ 952,748,079
--------------- ---------------
--------------- ---------------
</TABLE>
<PAGE>
See independent accountants' review report and notes to financial statements.
Dreyfus Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has
been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
Year Ended May 31, November 30, 1995
----------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
-------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Investment Operations:
Investment income-net............... .0492 .0341 .0221 .0198 .0294 .0162
Net realized and unrealized gain (loss)
on investments.................... .0002 .0005 .0002 .- (.0002) .0001
-------- -------- -------- -------- -------- --------
Total from Investment Operations.... .0494 .0346 .0223 .0198 .0292 .0163
-------- -------- -------- -------- -------- --------
Distributions;
Dividends from investment income net (.0492) (.0340) (.0221) (.0198) (.0294) (.0162)
-------- -------- -------- -------- -------- --------
Net asset value, end of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
TOTAL INVESTMENT RETURN................. 5.04% 3.46% 2.23% 2.00% 2.98% 3.25%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .59% .62% .62% .62% .62% .64%*
Ratio of net investment income to average
net assets........................ 4.95% 3.41% 2.22% 1.98% 2.91% 3.23%*
Net Assets, end of period (000's Omitted) $1,818,864 $1,498,772 $1,413,815 $1,117,002 $933,311 $952,748
* Annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
Shares Shares
---------------- ----------------
Dreyfus Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group, Inc.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment incomeNnet. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately $1,338,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1995. If not
applied, the carryover expires in fiscal 1996.
At November 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments). Dreyfus Municipal Money Market
Fund, Inc.
NOTE 2-Management Fee and
Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of 1/2 of 1% of the average daily
value of the Fund's net assets and is payable monthly. The Agreement provides
for an expense reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, interest on borrowings, brokerage commissions and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund. The most stringent state expense limitation
applicable to the Fund presently requires reimbursement of expenses in any full
fiscal year that such expenses exceed 21\2% of the first $30 million, 2% of the
next $70 million and 11\2% of the excess over $100 million of the average value
of the Fund's net assets in accordance with California "blue sky" regulations.
There was no expense reimbursement for the six months ended November 30, 1995.
Effective December 1, 1995, Dreyfus Transfer, Inc., a wholly-owned
subsidiary of the Manager, serves as the Fund's Transfer and Dividend
Disbursing Agent.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the six months ended November 30, 1995, the Fund was charged an
aggregate of $296,501 pursuant to the Shareholder Services Plan.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
<PAGE>
Dreyfus Municipal Money Market Fund, Inc.
Review Report of Ernst & Young LLP, Independent Accountants
Shareholders and Board of Directors
Dreyfus Municipal Money Market Fund, Inc.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Municipal Money Market Fund, Inc., including the statement of
investments, as of November 30, 1995, and the related statements of operations
and changes in net assets and financial highlights for the six month period
ended November 30, 1995. These financial statements and financial highlights
are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements and financial highlights taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the statement of changes in net assets for the year ended May 31,
1995 and financial highlights for the five years in the period ended May 31,
1995 and in our report dated July 7, 1995, we expressed an unqualified opinion
on such statement of changes in net assets and financial highlights.
New York, New York
December 29, 1995
<PAGE>
Dreyfus Michigan Municipal
Money Market Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus, which must precede or
accompany this report.
Michigan Municipal Money Market Fund, Inc.
Annual Report
September 30, 1995 Dreyfus Michigan Municipal Money Market Fund, Inc.
Letter to Shareholders
Dear Shareholder:
The Federal Reserve Board relaxed its policy of monetary restraint in July
1995 when it modestly lowered the Fed Funds rate. This reduction ended the
upward pressure on short-term rates that had prevailed since the beginning of
1994. The Fed's restraint had been based on concern about a resurgence of
inflation, given the strong economic news then prevailing. But in July, reports
indicated a significant weakening trend in the economy. The July reduction in
the Fed Funds rate signaled that economic growth issues outweighed, for a time,
Federal Reserve fears of a resurgence of inflation. The Fed's easing was
limited to a lowering of the Fed Funds rate by 25 basis points; the discount
rate remained at 5.25% - its level for most of 1995. For the 12-month reporting
period ended September 30, 1995, your Fund provided a yield of 3.30%. For
investors in Michigan's highest income tax bracket, this equates to a taxable
equivalent yield of 5.90%.* Income dividends of approximately $.033 per share
were paid during the period. Reinvesting these dividends and calculating the
effect of this compounding resulted in an effective yield of 3.35%.** These
dividends were exempt from Federal, Michigan and Detroit personal income taxes,
although some income may be subject to the Federal Alternative Minimum Tax
(AMT) for certain shareholders.
THE ECONOMY
The Fed easing was triggered by concern about the weakening economy.
Economic reports indicated flagging home and auto sales, and a decline in new
home construction from earlier this year. Furthermore, rising business
inventories (a frequent harbinger of a business slowdown) and weakening retail
sales lent additional credibility to the case for easier credit conditions. By
midyear, jobless claims were also on the rise. More recently, however, some
indicators have reflected economic strength. Inflation is moderate, but various
sectors of the economy such as consumer spending and housing appear to be
picking up. It is expected that the stronger numbers will forestall any
immediate easing by the Federal Reserve Board. Nevertheless, one should not
rule out the possibility of another Fed move before year-end.
MARKET ENVIRONMENT
While market fundamentals do affect the short-term municipal market, the
overriding influence continues to be market technicals (i.e., supply/demand).
Since the rates on those securities in the portfolio that provide the highest
degree of liquidity (1-day and 7-day demand notes) are adjusted on a daily or
weekly basis, your Fund's yield reflects these rapid adjustments and fluctuates
accordingly. One example of these seasonal adjustments occurred in late June
and early July as demand exceeded supply, and short-term yields on municipal
issues dropped accordingly. Apart from seasonal considerations, monthly
technicals can also occur, resulting in temporary declines in yields. Available
supply evaporates quickly as interest payments and proceeds of bond maturities
flow into money market funds during the first days of each month. Primarily for
these reasons, the yields of municipal money market funds tend to seesaw during
these time periods. In yet another example of seasonal influences, the coming
weeks may provide a window of opportunity, as year-end technicals are expected
to temporarily soften short-term rates.
THE PORTFOLIO
In the wake of the Orange County, California bankruptcy filing in December
1994, we continue to be even more vigilant in using our credit research
facilities to locate those credits that meet our high internal standards and
that can provide your Fund with attractive returns. As Michigan-exempt issues
meeting these guidelines have become available, we have extended the Fund's
maturity in an effort to enhance your Fund's yield. Given the potential for
temporary market weakness in December, we anticipate e xtending your Fund's
average maturity, when advantageous, in expectation of a decline in yields
after the New Year. Our primary tasks - to preserve principal, to invest in
those issues that meet our high quality standards, and to maintain a balance of
income and liquidity consistent with our conservative management philosophy N
continue to guide our portfolio management decisions.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in Dreyfus.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
October 9, 1995 New York, N.Y.
* Tax equivalency includes highest combined Federal, Michigan State and
Detroit tax rate, after giving effect to State tax benefit (44.07%).
* Effective yield is based upon dividends declared daily and reinvested
monthly.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Investments
September 30, 1995
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments - 100.0% Amount Value
--------------------------
<S> <C> <C>
Birmingham, EDR, VRDN (Brown Street Association Project)
4.775% (LOC; Bankers Trust) (a,b)....................................... $ 2,000,000 $ 2,000,000
Delta County Economic Development Corporation, EIR (Mead-Escambia Paper Co.):
Refunding, CP 3.70%, Series A, 10/18/95 (LOC; Swiss Bank Corp.) (b)..... 1,500,000 1,500,000
VRDN 4.60% (LOC; Union Bank of Switzerland) (a,b)....................... 1,400,000 1,400,000
City of Detroit School District, SAAN (Wayne County) 4.50%, 5/1/96.......... 5,000,000 5,018,385
City of Kalamazoo, TAN 6%, 12/31/95......................................... 2,500,000 2,510,072
Kalamazoo County City School District, SAAN 4.50%, 4/1/96................... 2,000,000 2,008,775
Kalamazoo County Economic Development Corporation, Industrial and Economic
Development Revenue, VRDN (WBC Properties Limited Project)
4.50% (LOC; Old Kent Bank and Trust) (a,b).............................. 3,000,000 3,000,000
Michigan Building Authority, Revenue, Refunding 5.20%, Series I, 10/1/95.... 1,000,000 1,000,000
Michigan Higher Education Student Loan Authority, Revenue, Refunding, VRDN
(Series XII-B) 4.45% (Insured; AMBAC and SBPA; Kredietbank) (a)......... 2,000,000 2,000,000
Michigan Hospital Finance Authority, HR, VRDN (Hospital Loan Equipment
Program)
4.45% (LOC; First America Bank) (a,b)................................... 2,100,000 2,100,000
Michigan Housing Development Authority, LOR, Refunding, VRDN
(Harbortown Limited Divide Project) 4.525% (LOC; Bankers Trust) (a,b)... 1,000,000 1,000,000
Michigan Job Development Authority, PCR, VRDN
(Mazda Motor Manufacturing USA Corp. Project)
4.25% (LOC; Sumitomo Bank) (a,b)........................................ 3,000,000 3,000,000
Michigan Municipal Bond Authority, Revenue, Notes 5%, Series B, 5/3/96...... 5,000,000 5,021,117
Michigan Strategic Fund:
CP (Dow Chemical Co. Project):
3.90%, 11/9/95 (Corp. Guaranty; Dow Chemical Co.)..................... 2,000,000 2,000,000
Small Business Revenue 3.80%, 12/8/95 (Corp. Guaranty; Dow Chemical Co.) 1,000,000 1,000,000
LOR, VRDN:
4.50%, Series C-1 (LOC; Comerica Bank) (a,b).......................... 2,200,000 2,200,000
(Consumer Power Project)
4.45%, Series A (LOC; Union Bank of Switzerland) (a,b)............ 1,000,000 1,000,000
(Dow Chemical Co. Project) 4.75% (Corp. Guaranty; Dow Chemical Co.) (a) 900,000 900,000
(Fritz and Caroline Huebner Trust/Plascore)
4.50%, Series B-2 (LOC; Comerica Bank) (a,b)...................... 900,000 900,000
(Hi-Lex Controls Inc. Project) 4.50% (LOC; Bank of Tokyo) (a,b)....... 2,900,000 2,900,000
(K&M Machine Fabric) 4.50%, Series A-4 (LOC; Comerica Bank) (a,b)..... 1,000,000 1,000,000
Refunding (Lousiana-Pacific Corp.) 4.40% (LOC; Wachovia Bank) (a,b)... 2,600,000 2,600,000
(Thorn Apple Valley Inc. Project) 4.70% (LOC; Old Kent Bank and Trust) (a,b) 2,600,000
2,600,000
Midland County Economic Development Corporation, Economic Development,
LOR, VRDN (Dow Chemical Co. Project)
4.60%, Series A (Corp. Guaranty; Dow Chemical Co.) (a).................. 4,500,000 4,500,000
Sterling Heights Economic Development Corporation, LOR, Refunding,
VRDN (Sterling Shopping Center) 4.35% (LOC; National Bank of Detroit) (a,b) $ 1,455,000 $ 1,455,000
------------
TOTAL INVESTMENTS (cost $54,613,349)........................................ $54,613,349
------------
------------
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation
LOR Limited Obligation Revenue
CP Commercial Paper PCR Pollution Control Revenue
EDR Economic Development Revenue SAAN State Aid Anticipation Notes
EIR Environment Improvement Revenue SBPA Standby Bond Purchase Agreement
HR Hospital Revenue TAN Tax Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- -------- -------- ------------------ ---------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 78.7%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 15.8
Not Rated (f) Not Rated (f) Not Rated (f) 5.5
------- 100.0%
-------
-------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At September 30, 1995, 48.9% of
the Fund's net assets are backed by letters of credit issued by domestic
banks, foreign banks and brokerage firms.
(c) Fitch currently provides
creditworthiness information for a limited number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings
of the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Fund's Board of Directors to be of comparable
quality to those rated securities in which the Fund may invest.
(g) At September 30,1995, the Fund had $20,755,000 (35.4% of net assets)
invested in securities whose payment of principal and interest is dependent
upon revenues generated from industrial projects.
See notes to financial statements.
<TABLE>
<CAPTION>
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities
September 30, 1995 ASSETS:
<S> <C> <C>
Investments in securities, at valueNNote 1(a)........................... $54,613,349
Cash.................................................................... 3,558,049
Interest receivable..................................................... 474,632
Prepaid expenses........................................................ 6,671
------------
58,652,701
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $24,277
Accrued expenses and other liabilities.................................. 53,203 77,480
------- ------------
NET ASSETS ................................................................ $58,575,221
------------
------------
REPRESENTED BY:
Paid-in capital......................................................... $58,618,038
Accumulated net realized (loss) on investments.......................... (42,817)
------------
NET ASSETS at value applicable to 58,618,038 shares outstanding
(1 billion shares of $.001 par value Common Stock authorized)........... $58,575,221
------------
------------
NET ASSET VALUE, offering and redemption price per share
($58,575,221 / 58,618,038 shares)....................................... $1.00
-----
-----
See notes to financial statements.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Operations
year ended September 30, 1995
INVESTMENT INCOME:
Interest Income......................................................... $2,445,081
Expenses:
Management fee-Note 2(a).............................................. $308,404
Shareholder servicing costs-Note 2(b)................................. 81,566
Auditing fees......................................................... 31,227
Legal fees............................................................ 13,979
Directors' fees and expenses-Note 2(c)................................ 7,858
Custodian fees........................................................ 6,097
Prospectus and shareholders' reports.................................. 4,254
Registration fees..................................................... 3,122
Miscellaneous......................................................... 12,889
--------- 469,396
LessNreduction in management fee due to
undertakings-Note 2(a)............................................ 62,536
---------
Total Expenses.................................................. 406,860
----------
INVESTMENT INCOME-NET....................................................... 2,038,221
NET REALIZED (LOSS) ON INVESTMENTSNNote 1(b)................................ (1,174)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,037,047
----------
----------
See notes to financial statements.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended September 30,
--------------------------------
1994 1995
------------- -------------
OPERATIONS:
Investment incomeNnet................................................... $ 1,512,802 $2,038,221
Net realized (loss) on investments...................................... (36,398) (1,174)
Net unrealized (depreciation) on investments for the year............... (835) --
-------------- ----------
Net Increase In Net Assets Resulting From Operations.................. 1,475,569 2,037,047
--------------- ---------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment incomeNnet................................................... (1,512,802) (2,038,221)
-------------- ----------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 73,677,034 68,516,307
Dividends reinvested.................................................... 1,317,328 1,698,385
Cost of shares redeemed................................................. (87,777,102) (71,775,659)
------------- -----------
(Decrease) In Net Assets From Capital Stock Transactions.............. (12,782,740) (1,560,967)
------------- -----------
Total (Decrease) In Net Assets.................................. (12,819,973) (1,562,141)
NET ASSETS:
Beginning of year....................................................... 72,957,335 60,137,362
-------------- ----------
End of year............................................................. $ 60,137,362 $ 58,575,221
------------- -----------
-------------- -----------
</TABLE>
See notes to financial statements.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995
---------------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.0000 $1.0000 $ .9999 $ .9999 $ .9993
---------------- ------- -------- ---------
Investment Operations:
Investment incomeNnet........................ .0507 .0313 .0209 .0222 .0330
Net realized and unrealized (loss) on investments.N (.0001) .- (.0006) .-
-------- -------- -------- -------- ---------
Total from Investment Operations........... .0507 .0312 .0209 .0216 .0330
-------- ------- -------- -------- ---------
Distributions;
Dividends from investment incomeNnet......... (.0507) (.0313) (.0209) (.0222) (.0330)
-------- -------- --------- ------- ---------
Net asset value, end of year................. $1.0000 $ .9999 $ .9999 $ .9993 $ .9993
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
TOTAL INVESTMENT RETURN.......................... 5.19% 3.17% 2.11% 2.25% 3.35%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .03% .41% .58% .53% .65%
Ratio of net investment income to average net assets 4.87% 3.18% 2.09% 2.21% 3.30%
Decrease reflected in the above expense ratios due to
undertakings by the Manager................ .74% .33% .20% .20% .11%
Net Assets, end of year (000's Omitted)...... $102,707 $83,025 $72,957 $60,137 $58,575
</TABLE>
See notes to financial statements.
Dreyfus Michigan Municipal Money Market Fund, Inc.
N
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a non-diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group, Inc.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately $42,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1995. The
carryover does not include net realized securities losses from November 1, 1994
through September 30, 1995, which are treated, for Federal income tax purposes,
as arising in fiscal 1996. If not applied, $1,000 of the carryover expires in
fiscal 2000, $4,000 expires in fiscal 2001, $1,000 expires in fiscal 2002 and
$36,000 expires in fiscal 2003. Dreyfus Michigan Municipal Money Market Fund,
Inc. NOTES TO FINANCIAL STATEMENTS (continued) At September 30, 1995, the cost
of investments for Federal income tax purposes was substantially the same as
the cost for financial reporting purposes (see the Statement of Investments).
NOTE 2-Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .50 of 1% of the average daily
value of the Fund's net assets and is payable monthly. The Agreement provides
for an expense reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. However, the Manager had
undertaken, from October 1, 1994 through July 10, 1995 to reduce the management
fee paid by the Fund, to the extent that the Fund's aggregate expenses
(excluding certain expenses as described above) exceeded specified annual
percentages of the Fund's average daily net assets. The Manager has currently
undertaken through December 31, 1995 to reduce the management fee paid by, or
reimburse such excess expenses of the Fund, to the extent that the Fund's
aggregate annual expenses (exclusive of certain expenses as described above)
exceed an annual rate of .70 of 1% of the average daily value of the Fund's net
assets. The reduction in management fee, pursuant to the undertakings, amounted
to $62,536 for the year ended September 30, 1995.
The undertaking may be modified by the Manager from time to time, provided
that the resulting expense reimbursement would not be less than the amount
required pursuant to the Agreement.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended September 30, 1995, the Fund was charged an aggregate of
$31,245 pursuant to the Shareholder Services Plan.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000. The Chairman of the Board
receives an additional 25% of such compensation.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Michigan Municipal Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Michigan Municipal Money Market Fund, Inc., including the statement of
investments, as of September 30, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995 by correspondence with the custodian . An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Michigan Municipal Money Market Fund, Inc. at September 30, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
New York, New York
November 2, 1995
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment incomeNnet during the fiscal year ended
September 30, 1995 as "exempt-interest dividends" (not subject to regular
Federal and, for individuals who are Michigan residents, Michigan personal
income taxes).
<PAGE>
Dreyfus Ohio Municipal
Money Market Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained in the Prospectus, which must precede or
accompany this report.
Ohio Municipal Money Market Fund, Inc.
Annual Report
November 30, 1995 Dreyfus Ohio Municipal Money Market Fund, Inc.
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Ohio
Municipal Money Market Fund, Inc. For its annual reporting period ended
November 30, 1995, your Fund produced a yield of 3.49%. For investors in the
highest income tax bracket, this equates to a taxable equivalent yield of
6.25%.* Income dividends of approximately $.035 per share were paid during the
period. Reinvesting these dividends and calculating the effect of compounding
resulted in an effective yield of 3.55%.** These dividends were exempt from
Federal and State of Ohio personal income taxes, although some income may be
subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
Modest economic growth and low inflation have spurred a dramatic, year-long
rally in the bond market. Short-term rates have fallen as well. The Federal
Reserve Board's reduction of the Fed Funds rate last summer confirmed what
investors had already suspected: that inflation, at least for the immediate
future, was under control. Now questions abound regarding the duration of the
economic recovery and the likelihood of recession.
The economic recovery of the 1990s was productivity-driven. Corporations
implemented extraordinary cost control measures that, while dramatically
improving bottom line earnings, now contribute to the slow rate of employment
growth. Job creation is a significant factor that affects consumer spending and
a major component of economic activity. The pace of new job creation, currently
at its slowest since World War II, is worrisome. Indeed, wages and salaries
grew at under 3% over the past year, barely keeping pace with inflation. Still,
surveys indicate that consumers remain optimistic, despite indications that
their spending is being affected by the slow growth in disposable income.
Recent reports on retail sales confirm this reticence in spending. A
consumer-led weakening of the economy could lead to further Federal Reserve
easing of monetary policy.
It was concern about lagging economic growth that prompted the Federal
Reserve to ease the Federal Funds rate in July. The housing market and new home
construction had been helped earlier this year by low interest rates, though
both have exhibited signs of weakness recently. Another engine of economic
growth, business capital spending, has been solid. Exports represent another
bright area of the economy. Because of the new competitiveness of American
businesses abroad, the U.S. trade deficit continues to shrink. Through
September, the trade deficit with Japan narrowed for the sixth consecutive
month. Exports, while a relatively small component of overall economic activity
in this country, provide an important support for the job market. If U.S.
products lose competitiveness in world markets, foreign orders may go elsewhere
and jobs could be lost here.
MARKET ENVIRONMENT
In addition to the impact of action taken by the Federal Reserve Board,
technical factors (i.e., supply/demand) contributed to a significant
strengthening of market conditions in late June and early July. Demand exceeded
supply during this time, and short-term yields on municipal issues dropped
accordingly.
In the Fall, rates on short-term issues settled into a trading range.
However, a steady interchange of variable rate demand notes (VRDNs) between
corporate holders and municipal money market funds kept rates on these
securities attractive, which resulted in an inverted yield curve (where rates
on shorter maturities are higher than rates on longer issues) through most of
the season. We believe that this situation will change dramatically in January
as cashflows into municipal money market funds increase demand for VRDNs and
their rates drop.
THE PORTFOLIO
With the inverted yield curve, daily and weekly demand notes yielded
moderately more than both commercial paper and notes through most of the
period. But since this situation is expected to change, our investment strategy
involved an attempt to lengthen the maturity, where possible, and to lock in
rates that we felt would outperform variable rate notes early in 1996.
The commercial paper and one-year note markets provided the means for
extending maturity while attempting to maintain a competitive yield. However,
our success in achieving the desired average maturity was somewhat limited due
to a dearth of high quality issues from which to choose. As a result, your
Fund's current average maturity still leaves room to extend should a change in
market or supply conditions warrant.
Our primary tasks - to preserve principal, to invest in those issues that
meet our high quality standards, and to maintain a balance of income and
liquidity consistent with our conservative management philosophy - continue to
guide our portfolio decisions.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
December 15, 1995 New York, N.Y.
* Tax equivalent yield is based on the highest Federal (39.6%) and Ohio (4.53%)
income tax brackets.
**Effective yield is based upon dividends declared daily and reinvested
monthly.
<PAGE>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Statement of Investments
November 30, 1995
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments-100.0% Amount Value
-------------- ------------
<S> <C> <C>
Ohio-97.7%
City of Akron, Sewer Systems Revenue, Special Assessment Notes, VRDN
3.80% (LOC; Credit Suisse) (a,b)........................................ $ 700,000 $ 700,000
City of Cincinnati School District, TAN 5.80%, 12/29/95..................... 2,000,000 2,000,584
Cleveland-Cuyahoga County Port Authority, Revenue, VRDN
(Rock and Roll Hall of Fame Project) 3.80% (LOC; Credit Local de France) (a,b) 2,500,000
2,500,000
City of Cleveland School District, RAN 4.50%, 6/1/96 (Insured; AMBAC)....... 3,400,000 3,416,527
Greene County, BAN 4.25%, Series B, 7/18/96................................. 2,023,215 2,028,723
Hamilton County, Hospital Facilities Revenue, VRDN (Bethesda Hospital Inc.)
3.70% (LOC; Rabobank Nederland) (a,b)................................... 2,000,000 2,000,000
Montgomery County, BAN 5%, 1/26/96.......................................... 2,000,000 2,002,367
Ohio Air Quality Development Authority, Revenue, Refunding:
Environmental Improvement (USX Project) 3.70%, 5/1/96 (LOC; Wachovia Bank) (b) 1,730,000
1,730,000
VRDN (Cincinnati Gas and Electric) 3.80%, Series A (LOC; ABN-Amro Bank) (a,b) 2,000,000
2,000,000
Ohio Public Facilities Commission, Refunding (Higher Education Capital
Facilities)
5.20%, Series A, 5/1/96 (Insured; AMBAC)................................ 3,500,000 3,512,078
Ohio State University, General Receipts, VRDN 3.90%, Series B (a)........... 2,000,000 2,000,000
Piqua, IDR, VRDN (Berwick Steel Co. Project) 4.20% (LOC; Sanwa Bank) (a,b).. 2,000,000 2,000,000
Scioto County, Marine Terminal Facility Revenue, Refunding, VRDN
(Norfolk Southern Corp. Project) 3.65% (a).............................. 7,500,000 7,500,000
City of Sharonville, IDR, VRDN (Edgecomb Metals Co. Project)
3.95% (LOC; Banque Nationale de Paris) (a,b)............................ 1,150,000 1,150,000
Toledo-Lucas County Port Authority, Development Revenue, VRDN
(Frostbite Brands Inc. Project) 4.25% (LOC; Old Kent Bank and Trust) (a,b) 1,140,000 1,140,000
City of Twinsburg, IDR, VRDN (United Stationers Supply Co.)
4.05% (LOC; PNC Bank) (a,b)............................................. 4,000,000 4,000,000
University of Cincinnati, General Receipts, BAN 4.25%, 8/28/96.............. 1,000,000 1,001,779
Warren County, IDR, VRDN (Johnson and Hardin Enterprises)
4.10%, Series A (LOC; PNC Bank of Ohio) (a,b)........................... 1,700,000 1,700,000
U.S. Related-2.3%
Puerto Rico Industrial and Environmental Pollution Control Facility Authority
(Key Pharmaceuticals) 3.80%, 12/1/96 (LOC; Morgan Guarantee Trust Co.) (b) 1,000,000 $ 1,001,940
------------
TOTAL INVESTMENTS (cost $43,383,998)........................................ $ 43,383,998
------------
------------
Dreyfus Ohio Municipal Money Market Fund, Inc.
Summary of Abbreviations
AMBAC American Municipal Bond Assurance Corporation RAN Revenue Anticipation Notes
BAN Bond Anticipation Notes TAN Tax Anticipation Notes
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
Summary of Combined Ratings (Unaudited)
Moody's or Standard & Poor's Percentage of Value
- --------- -------------------- ----------------------
VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 62.8%
Aaa/Aa (c) AAA/AA (c) 23.0
Not Rated (d) Not Rated (d) 14.2
--------
100.0%
--------
--------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At November 30, 1995, 43.3% of the Fund's
net assets are backed by letters of credit issued by domestic banks and
foreign banks, of which PNC Bank provided letters of credit to 13.06% of
the Fund's net assets.
(c) Notes which are not MIG or SP rated are represented
by bond ratings of the issuers.
(d) Securities which, while not rated by
Moody's and Standard & Poor's, respectively, have been determined by the
Fund's Board of Directors to be of comparable quality to those rated
securities in which the Fund may invest.
(e) At November 30, 1995, the Fund
had $17,490,000 (40.1% of net assets) invested in securities whose payment
of prinicipal and interest is dependent upon revenues generated from
industry.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Statement of Assets and Liabilities
<S> <C> <C>
November 30, 1995 ASSETS:
Investments in securities, at valueNNote 1(a)........................... $43,383,998
Cash.................................................................... 903,875
Interest receivable..................................................... 394,014
Prepaid expenses........................................................ 5,892
------------
44,687,779
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 17,792
Payable for investment securities purchased............................. 1,001,940
Accrued expenses........................................................ 26,497 1,046,229
---------- ------------
NET ASSETS ................................................................ $43,641,550
------------
------------
REPRESENTED BY:
Paid-in capital......................................................... $43,689,681
Accumulated net realized (loss) on investments.......................... (48,131)
------------
NET ASSETS at value applicable to 43,689,681 shares outstanding
(1 billion shares of $.001 par value Common Stock authorized)........... $43,641,550
------------
------------
NET ASSET VALUE, offering and redemption price per share
($43,641,550 / 43,689,681 shares)....................................... $1.00
-----
-----
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Statement of Operations
year ended November 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
Interest Income......................................................... $2,055,683
Expenses:
Management fee-Note 2(a).............................................. $256,547
Shareholder servicing costs-Note 2(b)................................. 66,388
Auditing fees......................................................... 13,069
Legal fees............................................................ 12,838
Directors' fees and expenses-Note 2(c)................................ 8,210
Prospectus and shareholders' reports.................................. 4,789
Custodian fees........................................................ 3,313
Registration fees..................................................... 2,925
Miscellaneous......................................................... 15,623
---------
Total Expenses.................................................. 383,702
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 124,498
---------
Net Expenses.................................................... 259,204
----------
INVESTMENT INCOME-NET....................................................... 1,796,479
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (47)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,796,432
----------
----------
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Statement of Changes in Net Assets
Year Ended November 30,
---------------------------------
1994 1995
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 1,699,227 $ 1,796,479
Net realized (loss) on investments...................................... (48,084) (47)
--------------- -----------
Net Increase In Net Assets Resulting From Operations.................. 1,651,143 1,796,432
-------------- ------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................... (1,699,227) (1,796,479)
--------------- -----------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 274,495,559 131,376,569
Dividends reinvested.................................................... 1,498,252 1,597,594
Cost of shares redeemed................................................. (276,775,461) (152,385,902)
--------------- -----------
(Decrease) In Net Assets From Capital Stock Transactions.............. (781,650) (19,411,739)
--------------- -----------
Total (Decrease) In Net Assets.................................... (829,734) (19,411,786)
NET ASSETS:
Beginning of year....................................................... 63,883,070 63,053,336
-------------- ------------
End of year............................................................. $ 63,053,336 $ 43,641,550
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each year indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended November 30,
--------------------------------------------------------------
PER SHARE DATA: 1991(1) 1992 1993 1994 1995
--------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- --------- --------- ---------
Investment Operations:
Investment incomeNnet........................ .0334 .0326 .0244 .0264 .0349
Net realized and unrealized (loss) on investments - - - (.0008) (.0003)
------- --------- -------- -------- ---------
Total from Investment Operations........... .0334 .0326 .0244 .0256 .0346
------- --------- -------- -------- ---------
Distributions;
Dividends from investment incomeNnet......... (.0334) (.0326) (.0244) (.0264) (.0349)
-------- -------- --------- ------- ---------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- --------- --------- --------- ---------
------- --------- --------- --------- ---------
TOTAL INVESTMENT RETURN.......................... 4.50%(2) 3.31% 2.47% 2.67% 3.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .- .09% .20% .28% .51%
Ratio of net investment income to average net assets 4.43%(2) 3.27% 2.44% 2.65% 3.50%
Decrease reflected in the above expense ratios due to
undertakings by the Manager................ 1.31%(2) .76% .56% .48% .24%
Net Assets, end of year (000's Omitted)...... $27,562 $62,550 $63,883 $63,053 $43,642
(1) From March 1, 1991 (commencement of operations) to November 30, 1991.
(2) Annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Ohio Municipal Money Market Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a non-diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group, Inc.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To the
extent that net realized capital gain can be offset by capital loss carryovers,
it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise
taxes. Dreyfus Ohio Municipal Money Market Fund, Inc. The Fund has an unused
capital loss carryover of approximately $48,100 available for Federal income
tax purposes to be applied against future net securities profits, if any,
realized subsequent to November 30, 1995. If not applied, $48,000 of the
carryover expires in fiscal 2002 and $100 expires in fiscal 2003.
At November 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments). NOTE 2NManagement Fee and Other
Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .50 of 1% of the average daily
value of the Fund's net assets and is payable monthly. The Agreement provides
for an expense reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. However, the Manager had
undertaken from December 1, 1994 through November 30, 1995, to reduce the
management fee paid by the Fund, to the extent that the Fund's aggregate
expenses (exclusive of certain expenses as described above) exceeded specified
annual percentages of the Fund's average daily net assets. The reduction in the
management fee, pursuant to the undertakings, amounted to $124,498 for the year
ended November 30, 1995.
Effective December 1, 1995, Dreyfus Transfer, Inc., a wholly-owned
subsidiary of The Dreyfus Corporation, serves as the Fund's Transfer and
Dividend Disbursing Agent.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended November 30, 1995, the Fund was charged an aggregate of
$36,245 pursuant to the Shareholder Services Plan.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000. The Chairman of the Board
receives an additional 25% of such compensation.
<PAGE>
Dreyfus Ohio Municipal Money Market Fund, Inc.
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Ohio Municipal Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Ohio Municipal Money Market Fund, Inc., including the statement of
investments, as of November 30, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Ohio Municipal Money Market Fund, Inc. at November 30, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
New York, New York
December 28, 1995
<PAGE>
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment incomeNnet during the fiscal year ended November
30, 1995 as "exemptNinterest dividends" (not subject to regular Federal and,
for individuals who are Ohio residents, Ohio personal income taxes).
<PAGE>
DREYFUS MUNICIPAL MONEY MARKET FUND, INC.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
The response to this item is incorporated by
reference to Item 27 of Part C of Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A as filed on
May 27, 1986.
ITEM 16. Exhibits - All references are to Post-Effective
Amendment No. 24 to the Registrant's Registration
Statement on Form N-1A filed on September 26, 1995
(File No. 2-65232) (the "Registration Statement")
unless otherwise noted.
(1) Registrant's Articles of Incorporation, as amended, are
incorporated by reference to Exhibit (1) to the
Registration Statement on Form N-1A filed on August 13,
1979, Exhibit (1)(b) of Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A filed on October
15, 1979, Exhibit (1)(c) of Pre- Effective Amendment No. 2
to the Registration Statement on Form N-1A filed on
February 8, 1980, and Exhibit (1)(b) of Post-Effective
Amendment No. 16 to the Registration Statement on Form N-1A
filed on August 1, 1991.
(2) Registrant's Bylaws, as amended, are incorporated by
reference to Exhibit (2) of Post-Effective Amendment
No. 12 to the Registration Statement on Form N-1A
filed on September 27, 1989.
(3) Not Applicable.
*(4) Form of Agreement and Plan of Reorganization.
(5) Not Applicable.
(6) Registrant's Management Agreement is incorporated by
reference to Exhibit (5) to the Registration
Statement.
- --------
* Filed herewith as Exhibit A to the Combined
Prospectus/Proxy Statement.
(7) Registrant's Distribution Agreement is incorporated
by reference to Exhibit (6) to the Registration
Statement.
(8) Not Applicable.
(9)(a)Registrant's Amended and Restated Custody Agreement is
incorporated by reference to Exhibit 8(a) of Post-
Effective Amendment No. 14 to the Registration Statement on
Form N-1A filed on September 26, 1990.
(9)(b)Registrant's Form of Sub-Custodian Agreements are incorporated
by reference to Exhibit 8(b) of Post- Effective Amendment
No. 22 to the Registration Statement on Form N-1A filed on
July 25, 1994.
(10) Not Applicable.
(11) Opinion and consent of Stroock & Stroock & Lavan regarding
legality of issuance of shares and other matters is
incorporated by reference to Exhibit (10) to the
Registration Statement.
(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.
(13) Not Applicable.
(14) Consent of Independent Auditors.
(15) Not Applicable.
**(16) Powers of Attorney.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of
a prospectus which is a part of this registration statement
by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of
1933, as amended, the reoffering prospectus will contain
the information called for by the applicable registration
form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by
the other items of the applicable form.
(2) The undersigned Registrant agrees that every
prospectus that is filed under paragraph (1) above
will be filed as a part of an amendment to the
registration statement and will not be used until
the amendment is effective, and that, in determining
any liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be
deemed to be a new registration statement for the
securities offered therein, and the offering of the
securities at that time shall be deemed to be the
initial bona fide offering of them.
- --------
** Incorporated by reference to the signature page hereto.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this
Registration Statement has been signed on behalf of the Registrant, in the City
of New York, State of New York, on the 30th day of April, 1996.
DREYFUS MUNICIPAL MONEY MARKET
FUND, INC.
(Registrant)
By:/S/MARIE E. CONNOLLY
Marie E. Connolly, President
Each person whose signature appears below on this
Registration Statement hereby constitutes and appoints Eric B. Fischman and
Elizabeth Bachman, and each of them, with full power to act without the other,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to this
Registration Statement (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
/S/MARIE E. CONNOLLY President and Treasurer April 30, 1996
Marie E. Connolly (Principal Executive
Officer)
/S/JOHN F. TOWER, III Assistant Treasurer April 30, 1996
John F. Tower, III (Principal Financial
and Accounting Officer)
/S/JOSEPH S. DIMARTINO Director April 30, 1996
Joseph S. DiMartino
/S/DAVID W. BURKE Director April 30, 1996
David W. Burke
<PAGE>
/S/HODDING CARTER, III Director April 30, 1996
Hodding Carter, III
/S/EHUD HOUMINER Director April 30, 1996
Ehud Houminer
/S/RICHARD C. LEONE Director April 30, 1996
Richard C. Leone
/S/HANS C. MAUTNER Director April 30, 1996
Hans C. Mautner
/S/ROBIN A. SMITH Director April 30, 1996
Robin A. Smith
/S/JOHN E. ZUCCOTTI Director April 30, 1996
John E. Zuccotti
INDEX OF EXHIBITS
(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.
(14) Consent of Ernst & Young LLP, Independent Auditors.
<PAGE>
EXHIBIT 12
April 30, 1996
Dreyfus Municipal Money Market Fund, Inc.
200 Park Avenue
New York, New York 10166
Dreyfus Michigan Municipal Money Market Fund, Inc.
200 Park Avenue
New York, New York 10166
Dreyfus Ohio Municipal Money Market Fund, Inc.
200 Park Avenue
New York, New York 10166
Re: Registration Statement on Form N-14
(REGISTRATION NO. 333- )
Gentlemen:
You have requested our opinion as to certain Federal income tax
consequences of the reorganization contemplated by the Agreement and Plan of
Reorganization, substantially in the form included as Exhibit A to the
Registration Statement on Form N-14 of Dreyfus Municipal Money Market Fund, Inc.
(Reg. No. 333-_____) (the "Registration Statement"), between Dreyfus Michigan
Municipal Money Market Fund, Inc. and Dreyfus Ohio Municipal Money market Fund,
Inc. (each, an "Acquired Fund" and, collectively, the "Acquired Funds") and
Dreyfus Municipal Money Market Fund, Inc. (the "Acquiring Fund"). You have
advised us that each Acquired Fund and the Acquiring Fund has qualified and will
qualify as a "regulated investment company" within the meaning of Subchapter M
of Chapter 1 of the Internal Revenue Code of 1986, as amended (the "Code"), for
each of its taxable years ending on or before or including the Closing Date.
In rendering this opinion, we have examined the Agreement and Plan of
Reorganization, the Registration Statement, the Articles of Incorporation, as
amended, of the Acquiring Fund, the Articles of Incorporation of each
Acquired Fund, the Prospectus and Statement of Additional Information of the
Acquiring Fund and each Acquired Fund, incorporated by reference in the
Registration Statement, and such other documents as we have deemed necessary or
relevant for the purpose of this opinion. In issuing our opinion, we have
relied upon the representation of each of the Acquired Funds that its Articles
of Incorporation is the document pursuant to which it has operated to date and
that it has operated in accordance with all laws applicable to such entity and
the statements and representations made herein and in the Registration
Statement. We also have relied upon the representation of the Acquiring Fund
that its Articles of Incorporation, as amended, is the document pursuant to
which it has operated to date and will operate following the reorganization and
that it has operated and will operate following the reorganization in
accordance with all laws applicable to such entity and the statements and
representations made herein and in the Registration Statement. As to various
questions of fact material to this opinion, where relevant facts were not
independently established by us, we have relied upon statements of, and written
information provided by, representatives of the Acquiring Fund and the Acquired
Funds. We also have examined such matters of law as we have deemed necessary or
appropriate for the purpose of this opinion. We note that our opinion is based
on our examination of such law, our review of the documents described above,
the statements and representations referred to above and in the Registration
Statement and the Agreement and Plan of Reorganization, the provisions of the
Code, the regulations, published rulings and announcements thereunder, and the
judicial interpretations thereof currently in effect. Any change in applicable
law or any of the facts and circumstances described in the Registration
Statement, or inaccuracy of any statements or representations on which we have
relied, may affect the continuing validity of our opinion.
Capitalized terms not defined herein have the respective meanings given such
terms in the Agreement and Plan of Reorganization.
Based on the foregoing, it is our opinion that for Federal income tax purposes:
<PAGE>
Dreyfus Municipal Money Market Fund, Inc.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Dreyfus Ohio Municipal Money Market Fund, Inc.
April 30, 1996
Page 2
(a) The transfer of all or substantially all of an Acquired Fund's
assets in exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain identified liabilities of the Acquired Fund will
constitute a "reorganization" within the meaning of Section 368(a)(1)(C) of the
Code;
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of an Acquired Fund solely in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Acquired Fund;
(c) No gain or loss will be recognized by an Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange for
the Acquiring Fund Shares and the assumption by the Acquiring Fund of certain
identified liabilities of the Acquired Fund or upon the distribution of the
Acquiring Fund Shares to Acquired Fund Shareholders in exchange for their
shares of the Acquired Fund;
(d) No gain or loss will be recognized by Acquired Fund Shareholders
upon the exchange of their Acquired Fund shares for the Acquiring Fund Shares;
(e) The aggregate tax basis for the Acquiring Fund Shares received by
an Acquired Fund Shareholder pursuant to the reorganization will be the same as
the aggregate tax basis of the Acquired Fund shares held by such shareholder
immediately prior to the reorganization, and the holding period of the
Acquiring Fund Shares to be received by the Acquired Fund Shareholder will
include the period during which the Acquired Fund shares exchanged therefor
were held by such shareholder (provided the Acquired Fund shares were held as
capital assets on the date of the reorganization); and
(f) The tax basis of an Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the reorganization, and the holding period of the
assets of the Acquired Fund in the hands of the Acquiring Fund will include the
period during which those assets were held by the Acquired Fund.
<PAGE>
Dreyfus Municipal Money Market Fund, Inc.
Dreyfus Michigan Municipal Money Market Fund, Inc.
Dreyfus Ohio Municipal Money Market Fund, Inc.
April 30, 1996
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the Combined
Prospectus/Proxy Statement included in the Registration Statement, and to the
filing of this opinion as an exhibit to any Statement, and to the filing of
this opinion as an exhibit to any application made by or on behalf of the
Acquiring Fund or any distributor or dealer in connection with the registration
and qualification of the Acquiring Fund or the Acquiring Fund Shares under the
securities laws of any state or jurisdiction. In giving such permission, we do
not admit hereby that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial
Statement and Experts" in this Registration Statement (Form N-14) of Dreyfus
Municipal Money Market Fund, Inc.
We also consent to the use of our reports dated July 7, 1995, November 2,
1995 and December 28, 1995 for Dreyfus Municipal Money Market Fund, Inc.,
Dreyfus Michigan Municipal Market Fund, Inc., and Dreyfus Ohio Municipal Money
Market Fund, Inc., respectively, and to the references to our firm under the
captions "Condensed Financial Information" and "Custodian, Transfer and Dividend
Disbursing Agent, Counsel and Independent Auditors" included in the Registration
Statements of Dreyfus Municipal Money Market Fund, Inc. dated September 28,
1995, Dreyfus Michigan Municipal Money Market Fund, Inc. dated December 15, 1995
and Dreyfus Ohio Municipal Money Market Fund, Inc. dated March 29, 1996 which
are incorporated by reference in this Registration Statement.
ERNST & YOUNG LLP
New York, New York
April 29, 1996
