PROSPECTUS
MARCH 31, 1995
TABLE OF CONTENTS
Page
ANNUAL FUND OPERATING EXPENSES ................ 3
CONDENSED FINANCIAL INFORMATION................ 4
YIELD INFORMATION ............................. 4
DESCRIPTION OF THE FUND ....................... 5
MANAGEMENT OF THE FUND......................... 9
HOW TO BUY FUND SHARES......................... 10
SHAREHOLDER SERVICES........................... 12
HOW TO REDEEM FUND SHARES...................... 15
SERVICE PLAN AND DISTRIBUTION PLAN............. 18
SHAREHOLDER SERVICES PLANS..................... 18
DIVIDENDS, DISTRIBUTIONS AND TAXES............. 19
GENERAL INFORMATION............................ 20
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GENERAL MONEY MARKET FUND, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL OF
CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY THE FUND.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THE FUND'S SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS
AS DESCRIBED HEREIN. BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A AND
CLASS B SHARES. CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS
TO THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. SHARES OF
EACH CLASS BEAR CERTAIN COSTS PURSUANT TO SEPARATE PLANS ADOPTED IN
ACCORDANCE WITH RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
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.
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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 31, 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
1-800-554-4611. WHEN TELEPHONING, ASK FOR OPERATOR 666.
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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. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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Page 2
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
--------- ---------
<S> <C> <C>
Management Fees.......................................................... .50% .50%
12b-1 Fees............................................................... .20% .20%
Other Expenses........................................................... .28% .49%
Total Fund Operating Expenses............................................ .98% 1.19%
EXAMPLE:
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:
1 YEAR $ 10 $ 12
3 YEARS $ 31 $ 38
5 YEARS $ 54 $ 65
10 YEARS $120 $144
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect. Other
Expenses of Class B are based on amounts for Class A for the Fund's last
fiscal year. Certain Service Agents (as defined below) may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. See "Management of the Fund," "How to
Buy Fund Shares," "Service Plan and Distribution Plan" and "Shareholder
Services Plans."
Page 3
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 for Class A are included in the Statement of Additional Information,
available upon request. No financial information is available for Class B
shares, which had not been offered as of the date of this Prospectus.
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 JANUARY 31.
-------------------------------------------------------------------------------
PER SHARE DATA: 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ .9999 $1.0000 $1.0000 $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net .0752 .0591 .0598 .0687 .0846 .0739 .0547 .0321 .0253 .0369
Net realized gain (loss)
on investments. .0001 -- -- (.0001) .0001 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS. .0753 .0591 .0598 .0686 .0847 .0739 .0547 .0321 .0253 .0369
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS;
Dividends from investment
income_net..... (.0752) (.0591) (.0598) (.0687) (.0846) (.0739) (.0547) (.0321) (.0253) (.0369)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year $1.0000 $1.0000 $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 7.79% 6.08% 6.15% 7.10% 8.80% 7.64% 5.61% 3.26% 2.56% 3.75%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets .98% .97% .95% .97% .93% .91% .92% .95% .94% .94%
Ratio of net investment income to
average net assets 7.48% 5.89% 6.00% 6.84% 8.43% 7.39% 5.44% 3.22% 2.53% 3.68%
Decrease reflected in above expense
ratios due to undertakings
by The Dreyfus Corporation -- -- -- -- -- -- -- -- .02% .04%
Net Assets, end of year (000's Omitted) $543,988$628,176$763,441$710,810$915,548$677,257$845,690$688,785$616,072$672,116
</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." Both yield
figures also take into account any applicable class expenses. As a result, at
any given time, the performance of Class B should be expected to be lower
than that of Class A. See "Annual Fund Operating Expenses."
Page 4
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information 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
GENERAL -- By this Prospectus, two classes of shares of the Fund are being
offered--Class A shares and Class B shares (each such class being referred to
as a "Class"). The Classes are identical, except for the services offered to
and expenses borne by each Class pursuant to separate plans adopted by the
Fund's Board of Directors. See "Service Plan and Distribution Plan" and
"Shareholder Services Plans." In addition, Class B shares are charged
directly for sub-accounting services provided by Service Agents at the annual
rate of .05% of the value of the average daily net assets of Class B. The
sub-accounting fee paid by Class B, together with amounts payable pursuant to
the Distribution Plan and Shareholder Services Plan, will cause Class B to
have a higher expense ratio and to pay lower dividends than Class A. You
should consult your Service Agent to determine which Class is offered by the
Service Agent.
INVESTMENT OBJECTIVE -- The Fund's goal is to provide you with as high a
level of current income as is consistent with the preservation of capital.
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. No assurance can be given 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.
MANAGEMENT POLICIES -- To achieve its goal the Fund invests in short-term
money market obligations, including securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, time deposits,
certificates of deposit, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign branches of domestic banks,
foreign subsidiaries of domestic banks, domestic and foreign branches of
foreign banks and thrift institutions, repurchase agreements, and high
quality domestic and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of interest. The
Fund may invest in U.S. dollar denominated obligations issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities, including obligations of supranational
entities. During normal market conditions, at least 25% of the value of the
Fund's total assets will be invested in bank 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 below.
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 by only
one such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Board of
Directors. The nationally recognized statistical rating organizations
currently rating instruments of the type the Fund may purchase are Moody's
Page 5
Investors Service, Inc., Standard & Poor's Corporation, Duff & Phelps Credit
Rating Co., Fitch Investors Service, Inc., IBCA Limited and IBCA Inc. and
Thomson BankWatch, Inc. and their rating criteria are described in the
Appendix to the Fund's Statement of Additional Information.
In addition, the Fund will not invest more than 5% of its total
assets in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts issued by, a single issuer,
except that (i) the Fund may invest more than 5% of its total assets in a
single issuer for a period of up to three business days in certain limited
circumstances, (ii) the Fund may invest in obligations issued or guaranteed
by the U.S. Government without any such limitation, and (iii) the limitation w
ith respect to puts does not apply to unconditional puts if no more than 10%
of the Fund's total assets is invested in securities issued or guaranteed by
the issuer of the unconditional put. Investments in rated securities not
rated in the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization), and unrated securities not determined by the Board of
Directors to be comparable to those rated in the highest category, will be
limited to 5% of the Fund's total assets, with the investment in any one such
issuer being limited to no more than the greater of l% of the Fund's total
assets or $1,000,000. As to each security, these percentages are measured at
the time the Fund purchases the security. 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.
PORTFOLIO SECURITIES -- 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.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time. Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits that 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. 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.
Page 6
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper purchased by
the Fund will consist only of direct obligations issued by domestic and
foreign entities. The other corporate obligations in which the Fund may
invest consist of high quality, U.S. dollar denominated short-term bonds and
notes (including variable amount master demand notes) issued by domestic and
foreign corporations.
The Fund also may purchase floating and variable rate demand notes
and bonds, which are 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
obligations 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 amounts borrowed. As mutually agreed
between the parties, the Fund may increase or decrease the amounts under
these obligations, and the borrower may repay up to the full amount of the
obligation without penalty. 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 demand. Such obligations frequently
are not rated by credit rating agencies and the Fund may invest in
obligations which are not so rated only if The Dreyfus Corporation determines
that at the time of investment the obligations are of comparable quality to
the other obligations in which the Fund may invest. 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 obligations in the
Fund's portfolio.
The Fund may invest in obligations issued or guaranteed by one or
more foreign governments or any of their political subdivisions, agencies, or
instrumentalities that are determined by The Dreyfus Corporation to be of
comparable quality to the other obligations in which the Fund may invest.
Such securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank. The percentage
of the Fund's assets invested in securities issued by foreign governments
will vary depending on the relative yields of such securities, the economic
and financial markets of the countries in which the investments are made and
the interest rate climate of such countries.
The Fund may purchase from financial institutions participation
interests in securities in which the Fund may invest. A participation
interest gives the Fund an undivided interest in the security in the
proportion that the Fund's participation interest bears to the total
principal amount of the security. 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 is permissible for purchase by the Fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank, or the payment obligation otherwise will be collateralized by U.S.
Government securities, or, in the case of unrated participation interests,
The Dreyfus Corporation must have determined that the instrument is of
comparable quality to those instruments in which the Fund may invest. For
certain participation interests, the Fund will have the right to demand paymen
t, on not more than seven days' notice, for all or any part of the Fund's
participation interest in the security, plus accrued interest. As to these
instruments, the Fund intends to exercise its right to demand payment only
Page 7
upon a default under the terms of the security, as needed to provide
liquidity to meet redemptions, or to maintain or improve the quality of its
investment portfolio.
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.
CERTAIN FUNDAMENTAL POLICIES -- The Fund (i) may borrow money from banks, but
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
based on the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While borrowings exceed
5% of the value of the Fund's total assets, the Fund will not make any
additional investments; (ii) may pledge its assets, but only in an amount up
to 15% of the value of its total assets, to secure borrowings for temporary
or emergency purposes; (iii) may invest up to 5% of its assets in the
commercial paper of any one issuer; (iv) as to 25% of its assets, may invest
up to 15% in the obligations of any one bank and, as to the remainder, may
invest not more than 5% of its assets in the obligations of any one bank (in
each case, subject to the provisions of Rule 2a-7); (v) will invest at least
25% of its assets in obligations issued by banks; and (vi) may invest up to
25% of its assets in the securities of issuers in any other industry,
provided that there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. 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.
RISK FACTORS -- Since the Fund's portfolio may contain securities issued by
foreign governments, or any of their political subdivisions, agencies or
instrumentalities, and by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. In making foreign investments, therefore, the Fund will give
appropriate consideration to the following factors, among others.
Foreign securities markets generally are not as developed or
efficient as those in the United States. Securities of some foreign issuers
are less liquid and more volatile than securities of comparable U.S. issuers.
Similarly, volume and liquidity in most foreign securities markets are less
than in the United States and, at times, volatility of price can be greater
than in the United States. The issuers of some of these securities, such as
bank obligations, may be subject to less stringent or different regulation
than are U.S. issuers. In addition, there may be less publicly available
information about a non-U.S. issuer, and non-U.S. issuers generally are not
subject to uniform accounting and financial reporting standards, practices
and requirements comparable to those applicable to U.S. issuers.
Because evidences of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks which
include possible adverse political and economic developments, possible
seizure or nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the payment of
principal and interest on the foreign securities or might restrict the
payment of principal and interest to investors located outside the country of
the issuer, whether from currency blockage or otherwise.
Page 8
Furthermore, some of these securities are subject to brokerage taxes
levied by foreign governments, which has the effect of increasing the cost of
such investment and reducing the realized gain or increasing the realized
loss on such securities at the time of sale. Income earned or received by the
Fund from sources within foreign countries may be reduced by withholding and
other taxes imposed by such countries. Tax conventions between certain
countries and the United States, however, may reduce or eliminate such taxes.
All such taxes paid by the Fund will reduce its net income available for
distribution to shareholders. The Dreyfus Corporation will consider available
yields, net of any required taxes, in selecting foreign securities.
To the extent the Fund's investments are concentrated in the banking
industry, the Fund will have correspondingly greater exposure to the risk
factors which are characteristic of such investments. Sustained increases in
interest rates can adversely affect the availability or liquidity and cost of
capital funds for a bank's lending activities, and a deterioration in general
economic conditions could increase the exposure to credit losses. In
addition, the value of and the investment return on the Fund's shares could
be affected by economic or regulatory developments in or related to the
banking industry, which industry also is subject to the effects of the
concentration of loan portfolios in leveraged transactions and in particular
businesses, and competition within the banking industry as well as with other
types of financial institutions. The Fund, however, will seek to minimize its
exposure to such risks by investing only in debt securities which are
determined to be of high quality.
OTHER INVESTMENT CONSIDERATIONS -- The Fund attempts to increase yields by
trading to take advantage of short-term market variations. This policy is
expected to result in high portfolio turnover but should not adversely affect
the Fund since the Fund usually does not pay brokerage commissions when it
purchases short-term debt obligations. The value of the portfolio securities
held by the Fund will vary inversely to changes in prevailing interest rates.
Thus, if interest rates have increased from the time a security was
purchased, such security, if sold, might be sold at a price less than its
purchase cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
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, money market instruments 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 February 28, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for more than 1.9 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., AFCO Credit Corporation and
Page 9
a number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $70
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
For the fiscal year ended January 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.
Shares of each Class bear certain costs of distributing shares in
accordance with separate plans adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. See "Annual Fund Operating Expenses" and
"Service Plan and Distribution Plan."
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 Service Agents
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 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 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. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, is the Fund's sub-custodian.
HOW TO BUY FUND SHARES
Fund shares may be purchased only by clients of certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers"), and other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Agents") that
have entered into service agreements with the Distributor. The Fund reserves
the right to reject any purchase order. Stock certificates are issued only
upon written request. No certificates are issued for fractional shares.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent 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. The Fund reserves the right to offer Fund shares without regard
to minimum purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other programs where cont
ributions or account information can be transmitted in a manner and form
acceptable to the Fund.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments 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 indicating which Class of shares is being purchased. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent
Page 10
to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement
plan accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to the
Dreyfus Financial Center located in the lobby of 200 Park Avenue, New York,
New York. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED
ONLY UPON RECEIPT THEREBY. Other purchase procedures may be in effect for
clients of certain Service Agents.
Wire payments may be made either to The Bank of New York or to First
Interstate Bank of California 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 #8900051957/General Money
Market Fund, Inc._Class A, or DDA #8900251662/General Money Market Fund,
Inc._Class B; or to First Interstate Bank of California, DDA #250039500/Genera
l Money Market Fund, Inc._Class A, or DDA #250640299/General Money Market
Fund, Inc._Class B, 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."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for Servicing (as defined under "Service
Plan and Distribution Plan_Service Plan"). These fees would be in addition to
any amounts which might be received under the Fund's Service Plan or
Distribution Plan. Service Agents may receive different levels of
compensation for selling different Classes of shares. Each Service Agent has
agreed to transmit to its clients a schedule of such fees. You should consult
your Service Agent in this regard.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in the Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Page 11
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 in written or
telegraphic form, or by First Interstate Bank of California in telegraphic
form. 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 that 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 twice each day: as
of 12:00 Noon, New York time/9:00 a.m., California time, and as of the close
of trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
New York time/1:00 p.m., California time), on each day the New York Stock
Exchange or the Fund's Transfer Agent is open for business. Net asset value
per share of each Class is computed by dividing the value of the Fund's net
assets represented by such Class (i.e., the value of its assets less
liabilities) by the total number of shares of such Class 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, or received in Federal
Funds by 12:00 Noon, California time, by First Interstate Bank of California,
on a business day, 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, or received in Federal Funds after
12:00 Noon, California time, by First Interstate Bank of California, you will
begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares. A telephone order placed with the Distributor or its designee in New
York 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 such order is placed by 12:00 Noon, New York time,
and Federal Funds are received by the Transfer Agent by 4:00 p.m., New York
time, on that day. A telephone order placed with the Distributor or its
designee in California will become effective at the price determined at 1:00
p.m., California time, and the shares purchased will receive the dividend on
Fund shares declared on that day if such order is placed by 12:00 Noon,
California time, and Federal Funds are received by First Interstate Bank of
California by 4:00 p.m., California 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").
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients that are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES -- Clients of certain Service Agents 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, you
should consult your Service Agent or call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
Page 12
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. 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 1-401-455-3306. 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 and the dividend/capital gain
distribution option (except for 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 that do not include the sales
load or that reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must notify
the Distributor. 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.
AUTO-EXCHANGE PRIVILEGE -- The 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. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a
Page 13
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 an Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
AUTOMATIC ASSET BUILDERRegistration Mark -- 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 that is an Automated Clearing House
member may be so designated. To establish an AUTOMATIC Asset Builder account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form from your Service Agent or 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,
or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427, and the
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or 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.
QUARTERLY DISTRIBUTION PLAN -- The Quarterly Distribution Plan permits you to
receive quarterly payments from the Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter.
You may open a Quarterly Distribution Plan by submitting a request to
the Transfer Agent. The Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued must be
presented before redemption under the Plan.
DIVIDEND OPTIONS -- Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by the
Fund in shares of 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
prices that do not include the sales load or that reflect a reduced sales
load. See "Shareholder Services" in the Statement of Additional Information.
Dividend ACH permits you to transfer electronically on the payment date
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 that 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
Page 14
Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated. Shares
held under Keogh Plans or IRAs are not eligible for Dividend Sweep.
PAYROLL SAVINGS PLAN -- The 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 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
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.
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.
RETIREMENT PLANS -- The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; and for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
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. Service Agents
may charge a nominal fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then-current net asset
value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK OR THROUGH
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 OR 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, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
Page 15
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES -- You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege, or, if you are
a client of a Selected Dealer, through the Selected Dealer. If you have given
your Service Agent authority to instruct the Transfer Agent to redeem shares
and to credit the proceeds of such redemptions to a designated account at
your Service Agent, you may redeem shares only in this manner and in
accordance with the regular redemption procedure described below. If you wish
to use the other redemption methods described below, you must arrange with
your Service Agent for delivery of the required application(s) to the
Transfer Agent. Other redemption procedures may be in effect for clients of
certain Service Agents. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities.
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, or a
representative of your Service Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a 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 the Dreyfus Financial Center located in the lobby
of 200 Park Avenue, New York, New York. THESE REQUESTS WILL BE FORWARDED TO
THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. 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 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."
Page 16
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 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. Shares
held under Keogh Plans, IRAs or other retirement plans are not eligible for
this Privilege. 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 held under Keogh Plans, IRAs or other retirement
plans, and 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 held under Keogh Plans, IRAs or other retirement plans, and shares for
which the certificates have been issued, are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a Selected
Dealer, you may make redemption requests to the Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent by 12:00 Noon, New York time, or by the Los Angeles office
of the Distributor or its designee by 12:00 Noon, California time, on a
business day, the proceeds of the redemption ordinarily will be transmitted
in Federal Funds on the same day and the shares will not receive the dividend
declared on that day. If a redemption request is received by the Transfer
Agent after 12:00 Noon, New York time, or by the Los Angeles office of the
Distributor or its designee after 12:00 Noon, California time, the shares
will receive the dividend declared on that day and
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the proceeds of redemption ordinarily will be transmitted in Federal Funds on
the next business day. It is the responsibility of the Selected Dealer to
transmit a request so that it is received in a timely manner. The proceeds
of the redemption are credited to your account with the Selected Dealer.
SERVICE PLAN AND DISTRIBUTION PLAN
SERVICE PLAN (CLASS A ONLY) -- Under the Service Plan, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, the Fund directly bears,
with respect to Class A, the costs of preparing, printing and distributing
prospectuses and statements of additional information and of implementing and
operating the Service Plan. In addition, the Fund reimburses (a) the
Distributor for payments made for distributing Class A shares and servicing
shareholder accounts ("Servicing") and (b) The Dreyfus Corporation, Dreyfus
Service Corporation, a wholly-owned subsidiary of The Dreyfus Corporation,
and any affiliate of either of them (collectively, "Dreyfus") for payments
made for Servicing, at an aggregate annual rate of up to .20 of 1% of the
value of the average daily net assets of Class A. Each of the Distributor and
Dreyfus may pay one or more Service Agents a fee in respect of Class A shares
owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
The schedule of such fees and the basis upon which such fees will be paid
shall be determined from time to time by the Fund's Board. If a holder of
Class A shares ceases to be a client of a Service Agent, but continues to
hold Class A shares, Dreyfus will be permitted to act as a Service Agent in
respect of such Fund shareholders and receive payments under the Service Plan
for Servicing. The fees payable for Servicing are payable without regard to
actual expenses incurred.
DISTRIBUTION PLAN (CLASS B ONLY) -- Under the Distribution Plan, adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
directly bears, with respect to Class B, the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, the Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the average daily
net assets of Class B.
SHAREHOLDER SERVICES PLANS
CLASS A -- The Fund has adopted a Shareholder Services Plan with respect to
Class A pursuant to which the Fund reimburses Dreyfus Service Corporation an
amount not to exceed an annual rate of .25 of 1% of the value of the average
daily net assets of Class A for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. At no time,
however, will the amount paid under this Plan, together with amounts
otherwise paid with respect to Class A under the Fund's Service Plan as a "ser
vice fee" pursuant to Article III, Section 26, of the NASD Rules of Fair
Practice, exceed the maximum amount permitted to be paid under the NASD Rules
as a service fee. 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.
CLASS B -- The Fund has adopted a Shareholder Services Plan with respect to
Class B pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class B shares a fee at the annual rate of
.25 of 1% of the value of the average daily net assets of Class B. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the maintenan
ce of such shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any compensation
Page 18
payable to it by the Fund pursuant to the Shareholder Services Plan and any
other compensation payable by their clients in connection with the investment
of their assets in Fund shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day the New York Stock Exchange or the Transfer Agent is open for
business. The Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. Dividends usually are
paid on the last calendar day of each month and automatically are reinvested
in additional Fund shares at net asset value or, at your option, paid in
cash. 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. 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 Internal Revenue Code of 1986, as amended (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 acc
rued daily and deducted before declaration of dividends to investors.
Dividends paid by each Class will be calculated at the same time and in the
same manner and will be of the same amount, except that the expenses
attributable solely to a Class will be borne exclusively by such Class. Class
B shares will receive lower per share dividends than Class A shares because
of the higher expenses borne by Class B. See "Annual Fund Operating
Expenses."
Dividends derived from net investment income, 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 received in cash or reinvested in additional Fund
shares. No dividends 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. The Code provides that the net
capital gain of an individual generally will not be subject to Federal income
tax at a rate in excess of 28%. Dividends and distributions may be subject to
certain state and local taxes.
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 is
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.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of 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
interest
Page 19
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 January 31, 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 15, 1981, and
commenced operations on February 8, 1982. The Fund is authorized to issue 15
billion shares of Class A Common Stock and one billion shares of Class B
Common Stock, par value $.01 per share. Each share has one vote and
shareholders will vote in the aggregate and not by Class except as otherwise
required by law.
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 special
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
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or by calling toll free 1-800-242-8671. In New York City, call
1-718-895-1396; on Long Island, call 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.
First Albany Corporation
Service Agent
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