File Nos. 2-77767
811-3481
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 36 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 36 [X]
(Check appropriate box or boxes.)
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
X on April 1, 2000 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
General Money Market Funds
General Money Market Fund
General Government Securities Money Market Fund
General Treasury Prime Money Market Fund
General Municipal Money Market Fund
General California Municipal Money Market Fund
General Minnesota Municipal Money Market Fund
General New York Municipal Money Market Fund
Investing in high quality, short-term securities for current income, safety of
principal and liquidity
PROSPECTUS April 1, 2000
CLASS A SHARES
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Funds
Contents
The Funds
- --------------------------------------------------------------------------------
Introduction 1
General Money Market Fund 2
General Government Securities
Money Market Fund 4
General Treasury Prime
Money Market Fund 6
General Municipal
Money Market Fund 8
General California Municipal
Money Market Fund 10
General Minnesota Municipal
Money Market Fund 12
General New York Municipal
Money Market Fund 14
Management 16
Financial Highlights 17
Your Investment
- --------------------------------------------------------------------------------
Account Policies 20
Distributions and Taxes 22
Services for Fund Investors 23
Instructions for Regular Accounts 24
Instructions for IRAs 25
For More Information
- --------------------------------------------------------------------------------
MORE INFORMATION ON EACH FUND CAN BE FOUND IN THE FUND'S CURRENT
ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
Introduction
Each fund is a money market mutual fund with a separate investment portfolio.
The operations and results of a fund are unrelated to those of each other fund.
This combined prospectus has been prepared for your convenience so that you can
consider seven investment choices in one document.
As a money market fund, each fund is subject to maturity, quality and
diversification requirements designed to help it maintain a stable share price.
Generally, each fund is required to invest at least 95% of its assets in the
securities of issuers with the highest credit rating or the unrated equivalent
as determined by Dreyfus, with the remainder invested in securities with the
second-highest credit rating.
An investment in a fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in a fund.
Concepts to understand
MONEY MARKET FUND: a specific type of fund that seeks to maintain a $1.00 price
per share. Money market funds are subject to strict federal requirements and
must:
(pound) maintain an average dollar-weighted portfolio maturity of 90 days or
less
(pound) buy individual securities that have remaining maturities of 13 months or
less
(pound) invest only in high quality, dollar-denominated obligations
CREDIT RATING: a measure of the issuer's expected ability to make all required
interest and principal payments in a timely manner. An issuer with the highest
credit rating has a very strong degree of certainty (or safety) with respect to
making all payments. An issuer with the second-highest credit rating has a
strong capacity to make all payments, but the degree of safety is somewhat less
The Funds
<PAGE 1>
General Money Market Fund
-----------------------
Ticker Symbol: GMMXX
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital. To pursue this goal, the fund invests in a diversified
portfolio of high quality, short-term debt securities, including the following:
(pound) securities issued or guaranteed by the U.S. government or its agencies
or instrumentalities
(pound) certificates of deposit, time deposits, bankers' acceptances and other
short-term securities issued by domestic or foreign banks or their
subsidiaries or branches
(pound) repurchase agreements
(pound) asset-backed securities
(pound) domestic and dollar-denominated foreign commercial paper, and other
short-term corporate obligations, including those with floating or
variable rates of interest
(pound) dollar-denominated obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions or agencies
Normally, the fund invests at least 25% of its net assets in domestic or
dollar-denominated foreign bank obligations.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) the risks generally associated with concentrating investments in the
banking industry, such as interest rate risk, credit risk and regulatory
developments relating to the banking industry
(pound) the risks generally associated with dollar-denominated foreign
investments, such as economic and political developments, seizure or
nationalization of deposits, imposition of taxes or other restrictions
on the payment of principal and interest
<PAGE 2>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
7.71 5.84 3.39 2.58 3.51 5.44 4.83 4.99 4.93 4.59
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '90 +1.90%
WORST QUARTER: Q3 '93 +0.63%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
4.59% 4.96% 4.77%
The fund's 7-day yield on 12/31/99 was 5.05%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.04%
Other expenses 0.04%
- --------------------------------------------------------------------------------
TOTAL 0.78%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
$80 $249 $433 $966
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class A
shares, servicing shareholder accounts and advertising and marketing relating to
the fund. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General Money Market Fund
<PAGE 3>
General Government Securities Money Market Fund
----------------------
Ticker Symbol: GGSXX
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund invests in securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities, and repurchase agreements
in respect of these securities.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
A security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity. The current market prices for such securities
are not guaranteed and will fluctuate. The fund is subject to the risk that
interest rates could rise sharply, causing the fund's share price to drop.
<PAGE 4>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
7.51 5.66 3.47 2.71 3.69 5.36 4.79 4.86 4.83 4.46
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '90 +1.85%
WORST QUARTER: Q3 '93 +0.66%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
4.46% 4.86% 4.73%
The fund's 7-day yield on 12/31/99 was 4.71%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.02%
Other expenses 0.04%
- --------------------------------------------------------------------------------
TOTAL 0.76%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------
$78 $243 $422 $942
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class A
shares, servicing shareholder accounts and advertising and marketing relating to
the fund. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General Government Securities Money Market Fund
<PAGE 5>
General Treasury Prime Money Market Fund
------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund only invests in securities issued or guaranteed as
to principal and interest by the U.S. government.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
A security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity. The current market prices for such securities
are not guaranteed and will fluctuate. The fund is subject to the risk that
interest rates could rise sharply, causing the fund's share price to drop.
<PAGE 6>
PAST PERFORMANCE
As a new fund, past performance information is not available for the fund as of
the date of this prospectus.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.05%
Other expenses 0.05%
- --------------------------------------------------------------------------------
TOTAL 0.80%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years
- --------------------------------------------------------------------------------
$82 $255
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class A
shares, servicing shareholder accounts and advertising and marketing relating to
the fund. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: estimated fees to be paid by the fund for miscellaneous items
such as transfer agency, custody, professional and registration fees.
General Treasury Prime Money Market Fund
<PAGE 7>
General Municipal Money Market Fund
----------------------
Ticker Symbol: GTMXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal personal income
tax, to the extent consistent with the preservation of capital and the
maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal personal
income tax. The fund also may invest in high quality, short-term structured
notes, which are derivative instruments whose value is tied to underlying
municipal obligations. Structured notes typically are purchased in privately
negotiated transactions from financial institutions. When the portfolio manager
believes that acceptable municipal obligations are unavailable for investment,
the fund may invest temporarily in high quality, taxable money market
instruments. Municipal obligations are typically of two types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal income
tax, interest from some of its holdings may be subject to the federal
alternative minimum tax. In addition, the fund occasionally may invest in
taxable money market instruments.
<PAGE 8>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
5.53 4.19 2.62 2.05 2.40 3.42 2.93 3.15 2.98 2.74
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '90 +1.40%
WORST QUARTER: Q1 '94 +0.46%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
2.74% 3.04% 3.20%
The fund's 7-day yield on 12/31/99 was 3.83%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price. The fund has no sales charge (load) or Rule 12b-1 distribution fees for
Class A.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Shareholder services fee 0.02%
Other expenses 0.06%
- --------------------------------------------------------------------------------
TOTAL 0.58%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
$59 $186 $324 $726
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General Municipal Money Market Fund
<PAGE 9>
General California Municipal Money Market Fund
----------------------
Ticker Symbol: GCAXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal and California
state personal income taxes, to the extent consistent with the preservation of
capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal and
California state personal income taxes. The fund also may invest in high
quality, short-term structured notes, which are derivative instruments whose
value is tied to underlying municipal obligations. Structured notes typically
are purchased in privately negotiated transactions from financial institutions.
When the portfolio manager believes that acceptable California municipal
obligations are unavailable for investment, the fund may invest in securities
that may be subject to California state income tax, but are free from federal
income tax. Municipal obligations are typically of two types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) California's economy and revenues underlying its municipal obligations
may decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal and
California state income taxes, interest from some of its holdings may be subject
to the federal alternative minimum tax. In addition, the fund occasionally may
invest in taxable money market instruments and/or municipal bonds that are
exempt only from federal personal income tax.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 10>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
5.93 4.66 2.90 2.30 2.57 3.22 2.84 2.99 2.73 2.46
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '90 +1.48%
WORST QUARTER: Q1 '94 +0.51%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
2.46% 2.85% 3.26%
The fund's 7-day yield on 12/31/99 was 3.46%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price. The fund has no sales charge (load) or Rule 12b-1 distribution fees for
Class A.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Shareholder services fee 0.04%
Other expenses 0.07%
- --------------------------------------------------------------------------------
TOTAL 0.61%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------
$62 $195 $340 $762
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General California Municipal Money Market Fund
<PAGE 11>
General Minnesota Municipal Money Market Fund
------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal and Minnesota
state personal income taxes, to the extent consistent with the preservation of
capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal and
Minnesota state personal income taxes. When the portfolio manager believes that
acceptable Minnesota municipal obligations are unavailable for investment, the
fund may invest in securities that may be subject to Minnesota state income tax,
but are free from federal income tax. Municipal obligations are typically of two
types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) Minnesota's economy and revenues underlying its municipal obligations
may decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Although the fund's objective is to generate income exempt from federal and
Minnesota state income taxes, interest from some of its holdings may be subject
to the federal alternative minimum tax. In addition, the fund occasionally may
invest in taxable money market instruments and/or municipal bonds that are
exempt only from federal personal income tax.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 12>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the fund's performance for the calendar year 1999. The table
shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.71
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '99 +0.76%
WORST QUARTER: Q1 '99 +0.59%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (6/1/98)
- --------------------------------------------------------------------------------
2.71% 2.75%
The fund's 7-day yield on 12/31/99 was 3.68%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price. The fund has no sales charge (load) or Rule 12b-1 distribution fees for
Class A.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Shareholder services fee 0.00%
Other expenses 0.31%
- --------------------------------------------------------------------------------
TOTAL 0.81%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$83 $259 $450 $1,002
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus waived a portion of its fee and assumed certain other
fund expenses pursuant to an undertaking, reducing total expenses from 0.81% to
0.65%. This undertaking was voluntary.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General Minnesota Municipal Money Market Fund
<PAGE 13>
General New York Municipal Money Market Fund
-----------------------
Ticker Symbol: GNMXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal, New York state
and New York city personal income taxes, to the extent consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal, New
York state and New York city personal income taxes. The fund also may invest in
high quality, short-term structured notes, which are derivative instruments
whose value is tied to underlying municipal obligations. Structured notes
typically are purchased in privately negotiated transactions from financial
institutions. When the portfolio manager believes that acceptable New York
municipal obligations are unavailable for investment, the fund may invest in
securities that may be subject to New York state and New York city income taxes,
but are free from federal income tax. Municipal obligations are typically of two
types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) New York's economy and revenues underlying its municipal obligations may
decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal, New
York state and New York city income taxes, interest from some of its holdings
may be subject to the federal alternative minimum tax. In addition, the fund
occasionally may invest in taxable money market instruments and/or municipal
bonds that are exempt only from federal personal income tax.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 14>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class A.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
5.76 4.28 2.63 1.97 2.46 3.28 2.79 3.00 2.73 2.48
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '90 +1.45%
WORST QUARTER: Q1 '93 +0.46%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
2.48% 2.86% 3.13%
The fund's 7-day yield on 12/31/99 was 3.51%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class A in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price. The fund has no sales charge (load) or Rule 12b-1 distribution fees for
Class A.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Shareholder services fee 0.10%
Other expenses 0.08%
- --------------------------------------------------------------------------------
TOTAL 0.68%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- -----------------------------------------------------------------------------
$69 $218 $379 $847
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
SHAREHOLDER SERVICES FEE: a fee of up to 0.25% used to reimburse the fund's
distributor for shareholder account service and maintenance.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees.
General New York Municipal Money Market Fund
<PAGE 15>
MANAGEMENT
The investment adviser for each fund is The Dreyfus Corporation, 200 Park
Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages more than
$127 billion in over 160 mutual fund portfolios. For the past fiscal year, each
operational fund, except General Minnesota Municipal Money Market Fund, paid
Dreyfus a management fee at an annual rate of 0.50% of the fund's average daily
net assets. For the past fiscal year, General Minnesota Municipal Money Market
Fund paid Dreyfus a management fee at an annual rate of 0.34% of the fund's
average daily net assets. Dreyfus is the primary mutual fund business of Mellon
Financial Corporation, a global financial services company with approximately
$2.5 trillion of assets under management, administration or custody, including
approximately $485 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
Each fund, Dreyfus and Dreyfus Service Corporation (each fund's distributor)
have adopted a code of ethics that permits its personnel, subject to such code,
to invest in securities, including securities that may be purchased or held by
the fund. The Dreyfus code of ethics restricts the personal securities
transactions of its employees, and requires portfolio managers and other
investment personnel to comply with the code's preclearance and disclosure
procedures. Its primary purpose is to ensure that personal trading by Dreyfus
employees does not disadvantage any Dreyfus-managed fund.
<PAGE 16>
FINANCIAL HIGHLIGHTS
The following tables describe the performance of the Class A shares of each fund
(except General Treasury Prime Money Market Fund) for the periods indicated. As
a new fund, financial highlights information was not available for General
Treasury Prime Money Market Fund as of November 30, 1999. "Total return" shows
how much your investment in the fund would have increased (or decreased) during
each period, assuming you had reinvested all dividends and distributions. These
figures have been independently audited by Ernst & Young LLP, whose report,
along with the fund's financial statements, is included in the annual report.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TEN MONTHS ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JANUARY 31,
GENERAL MONEY MARKET FUND 1999 1998 1997(1) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .044 .049 .041 .047 .053 .037
Distributions:
Dividends from investment
income -- net (.044) (.049) (.041) (.047) (.053) (.037)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
Total return (%) 4.53 4.98 4.99(2) 4.81 5.42 3.75
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .78 .77 .88(2) .84 .86 .94
Ratio of net investment income
to average net assets (%) 4.44 4.88 4.89(2) 4.71 5.28 3.68
Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- -- -- -- .01 .04
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 863,981 835,706 903,313 764,119 654,581 572,116
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JANUARY 31 TO NOVEMBER 30.
(2) ANNUALIZED.
TEN MONTHS ENDED
GENERAL GOVERNMENT SECURITIES YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JANUARY 31,
MONEY MARKET FUND 1999 1998 1997(1) 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .043 .048 .040 .047 .052 .038
Distributions:
Dividends from investment
income -- net (.043) (.048) (.040) (.047) (.052) (.038)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
Total return (%) 4.42 4.88 4.84(2) 4.75 5.35 3.90
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .76 .77 .82(2) .82 .84 .83
Ratio of net investment income
to average net assets (%) 4.35 4.77 4.78(2) 4.65 5.22 3.82
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 610,511 539,878 510,289 519,861 530,054 513,345
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JANUARY 31 TO NOVEMBER 30.
(2) ANNUALIZED.
Financial Highlights
<PAGE 17>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED NOVEMBER 30,
GENERAL MUNICIPAL MONEY MARKET FUND 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .027 .030 .031 .029 .034
Distributions:
Dividends from investment income -- net (.027) (.030) (.031) (.029) (.034)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.71 3.02 3.14 2.97 3.41
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .58 .60 .62 .66 .66
Ratio of net investment income to average net assets (%) 2.68 2.98 3.09 2.93 3.35
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 285,849 280,398 273,058 256,862 294,379
FOUR MONTHS ENDED
GENERAL CALIFORNIA MUNICIPAL YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JULY 31,
MONEY MARKET FUND 1999 1998 1997(1) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .024 .027 .010 .029 .029 .031
Distributions:
Dividends from investment
income -- net (.024) (.027) (.010) (.029) (.029) (.031)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.44 2.78 2.96(2) 2.95 2.94 3.14
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .61 .64 .70(2) .64 .65 .52
Ratio of net investment income
to average net assets (%) 2.42 2.74 2.97(2) 2.91 2.91 3.07
Decrease reflected in above expense
ratios due to actions by Dreyfus (%) -- -- -- -- -- .11
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 523,890 335,726 361,102 327,226 390,155 463,404
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO NOVEMBER 30.
(2) ANNUALIZED.
<PAGE 18>
YEAR ENDED NOVEMBER 30,
GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND 1999 1998(1)
- --------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00
Investment operations: Investment income -- net .027 .014
Distributions: Dividends from investment income -- net (.027) (.014)
Net asset value, end of period 1.00 1.00
Total return (%) 2.68 2.81(2)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .65 .65(2)
Ratio of net investment income to average net assets (%) 2.73 2.80(2)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .16 .76(2)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 106 1,014
(1) FROM JUNE 1, 1998 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1998.
(2) ANNUALIZED.
GENERAL NEW YORK MUNICIPAL YEAR ENDED NOVEMBER 30,
MONEY MARKET FUND 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations:
Investment income -- net .024 .027 .029 .028 .032
Distributions:
Dividends from investment income -- net (.024) (.027) (.029) (.028) (.032)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.45 2.77 2.98 2.84 3.28
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .68 .68 .66 .68 .58
Ratio of net investment income to average net assets (%) 2.42 2.74 2.94 2.80 3.23
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) -- -- -- -- .05
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 378,115 405,054 440,750 507,537 636,013
</TABLE>
Financial Highlights
<PAGE 19>
Your Investment
ACCOUNT POLICIES
Buying shares
GENERAL FUNDS are designed primarily for people who are investing through a
third party such as a bank, broker-dealer or financial adviser. Third parties
with whom you open a fund account may impose policies, limitations and fees
which are different than those described here.
APPLICABLE TO GENERAL MONEY MARKET FUND, GENERAL GOVERNMENT SECURITIES MONEY
MARKET FUND AND GENERAL TREASURY PRIME MONEY MARKET FUND ONLY:
YOUR PRICE FOR FUND SHARES is the fund's net asset value (NAV), which is
generally calculated twice a day, at 5:00 p.m. and 8:00 p.m., every day the New
York Stock Exchange or the fund's transfer agent is open. Your order will be
priced at the next NAV calculated after your order is accepted by the fund's
transfer agent or other authorized entity. Each fund's investments are valued
based on amortized cost.
IF YOUR PAYMENTS ARE RECEIVED in or converted into Federal Funds by 12:00 noon,
you will receive the dividend declared that day. If your payments are received
in or converted into Federal Funds after 12:00 noon, you will begin to accrue
dividends on the following business day. Qualified institutions may telephone
orders to buy shares. If such an order is made by 5:00 p.m. and Federal Funds
are received by 6:00 p.m., the shares will be purchased at the NAV determined at
5:00 p.m. and will receive the dividend declared that day. If such an order is
made after 5:00 p.m. but by 8:00 p.m., and Federal Funds are received by 11:00
a.m. the next business day, the shares will be purchased at the NAV determined
at 8:00 p.m. and will begin to accrue dividends on the next business day. All
times are Eastern time.
APPLICABLE TO GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND, GENERAL MUNICIPAL
MONEY MARKET FUND, GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND AND GENERAL NEW
YORK MUNICIPAL MONEY MARKET FUND ONLY:
YOUR PRICE FOR FUND SHARES is the fund's net asset value (NAV), which is
generally calculated twice a day, at 12:00 noon and 8:00 p.m., for the Minnesota
Municipal Money Market Fund and three times a day, at 12:00 noon, 2:00 p.m. and
8:00 p.m., for each other municipal money market fund, every day the New York
Stock Exchange or the fund's transfer agent is open. Your order will be priced
at the next NAV calculated after your order is accepted by the fund's transfer
agent or other authorized entity. Each fund's investments are valued based on
amortized cost.
IF YOUR PAYMENTS ARE RECEIVED in or converted into Federal Funds by 12:00 noon
for the Minnesota Municipal Money Market Fund or by 4:00 p.m. for each other
municipal money market fund, you will receive the dividend declared that day. If
your payments are received in or converted into Federal Funds after 12:00 noon
for the Minnesota Municipal Money Market Fund or after 4:00 p.m. for each other
municipal money market fund, you will begin to accrue dividends on the following
business day. Qualified institutions may telephone orders to buy shares. If such
an order is made by 12:00 noon for the Minnesota Municipal Money Market Fund or
by 2:00 p.m. for each other municipal money market fund, and Federal Funds are
received by 4:00 p.m., the shares will be purchased at the next NAV determined
after the telephone order is accepted and will receive the
<PAGE 20>
dividend declared that day. If such an order is made after 12:00 noon for the
Minnesota Municipal Money Market Fund or after 2:00 p.m. for any of the other
municipal money market funds, but by 8:00 p.m., and Federal Funds are received
by 11:00 a.m. the next business day, the shares will be purchased at the NAV
determined at 8:00 p.m. and will begin to accrue dividends on the next business
day. All times are Eastern time.
BECAUSE THE MUNICIPAL MONEY MARKET FUNDS seek tax-exempt income, they are not
recommended for purchase in IRAs or other qualified plans.
- --------------------------------------------------------------------------------
Minimum investments
Initial Additional
- --------------------------------------------------------------------------------
REGULAR ACCOUNTS $2,500 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
BEFORE SELLING OR WRITING A CHECK for recently purchased shares, please note
that if the fund has not yet collected payment for the shares you are selling,
it may delay sending the proceeds for up to eight business days or until it has
collected payment.
- --------------------------------------------------------------------------------
Limitations on selling shares by phone
Proceeds
sent by Minimum Maximum
- --------------------------------------------------------------------------------
CHECK NO MINIMUM $250,000 PER DAY
WIRE $1,000 $500,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
TELETRANSFER $500 $500,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding.
AMORTIZED COST: a method of valuing a money market fund's portfolio securities,
which does not take into account unrealized gains or losses. As a result,
portfolio securities are valued at their acquisition cost, adjusted over time
based on discounts or premiums reflected in their purchase price. This method of
valuation is designed to permit a fund to maintain a stable NAV.
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
(pound) amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
(pound) requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
Your Investment
<PAGE 21>
ACCOUNT POLICIES (CONTINUED)
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
EACH FUND RESERVES THE RIGHT TO:
(pound) refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group
who, in the fund's view, is likely to engage in excessive trading
(usually defined as more than four exchanges out of the fund within a
calendar year)
(pound) refuse any purchase or exchange request in excess of 1% of the fund's
total assets
(pound) change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
(pound) change its minimum investment amounts
(pound) delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or
during unusual market conditions)
Each fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the
California Municipal Money Market Fund and New York Municipal Money Market Fund
charge regular accounts with balances below $2,000 an annual fee of $12. The fee
will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; accounts participating in automatic
investment programs; and accounts opened through a financial institution.
With respect to any fund, if your account falls below $500, the fund may ask you
to increase your balance. If it is still below $500 after 45 days, the fund may
close your account and send you the proceeds.
DISTRIBUTIONS AND TAXES
EACH FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income
once a month, and distributes any net realized securities gains once a year.
Your dividends and distributions will be reinvested in the fund unless you
instruct the fund otherwise. There are no fees or sales charges on
reinvestments.
DIVIDENDS AND DISTRIBUTIONS PAID by the taxable money market funds are taxable
to U.S. shareholders as ordinary income (unless your investment is in an IRA or
other tax-deferred account).
EACH MUNICIPAL MONEY MARKET FUND anticipates that, under normal market
conditions, virtually all of its income dividends will be exempt from federal
and, as to California Municipal Money Market Fund, California, as to Minnesota
Municipal Money Market Fund, Minnesota, and as to New York Municipal Money
Market Fund, New York state and New York city, personal income taxes. However,
any dividends and distributions from taxable investments are taxable as ordinary
income.
The tax status of any distribution is the same regardless of how long you have
been in the fund and whether you reinvest your distributions or take them in
cash.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Concepts to understand
DIVIDENDS AND DISTRIBUTIONS: income or interest paid by a fund's portfolio
investments and passed on to fund shareholders. These are calculated on a
per-share basis: each share earns the same rate of return, so the more fund
shares you own, the higher your distribution.
SECURITIES GAINS: distributions derived from the profits the fund earns when it
sells securities for a higher price than it paid for them.
<PAGE 22>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-645-6561.
- --------------------------------------------------------------------------------
For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
one Dreyfus fund into another
(not available for IRAs).
- --------------------------------------------------------------------------------
For exchanging shares
DREYFUS AUTO- For making regular exchanges
EXCHANGE PRIVILEGE from one Dreyfus fund into
another.
- --------------------------------------------------------------------------------
For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds.
24-hour automated account access
YOU CAN EASILY MANAGE YOUR DREYFUS ACCOUNTS, check your account balances,
transfer money between your Dreyfus funds, get price and yield information and
much more -- when it's convenient for you -- by calling 1-800-645-6561.
Checkwriting privilege
YOU MAY WRITE REDEMPTION CHECKS against your account in amounts of $500 or more.
These checks are free; however, a fee will be charged if you request a stop
payment or if the transfer agent cannot honor a redemption check due to
insufficient funds or another valid reason. Please do not postdate your checks
or use them to close your account.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one Dreyfus fund into another. You can request your exchange in writing or
by phone. Be sure to read the current prospectus for any fund into which you are
exchanging before investing. Any new account established through an exchange
will have the same privileges as your original account (as long as they are
available). There is currently no fee for exchanges, although you may be charged
a sales load when exchanging into any fund that has one.
Dreyfus TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the Dreyfus TeleTransfer privilege. You can set up TeleTransfer
on your account by providing bank account information and following the
instructions on your application.
Account statements
EVERY FUND INVESTOR AUTOMATICALLY RECEIVES regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
Retirement plans
A variety of retirement plans are offered for the taxable money market funds,
including traditional, Roth and Education IRAs. Here's where you call for
information:
(pound) for traditional, rollover, Roth and Education IRAs, call 1-800-645-6561
(pound) for SEP-IRAs, Keogh accounts, 401(k) and 403(b) accounts, call
1-800-358-0910
Your Investment
<PAGE 23>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
The Dreyfus Family of Funds
P.O. Box 9387
Providence, RI 02940-9387
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
The Dreyfus Family of Funds
P.O. Box 105
Newark, New Jersey 07101-0105
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities
Money Market Fund
DDA# 8900052414
* General Treasury Prime
Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* General California Municipal
Money Market Fund
DDA# 8900052163
* General Minnesota Municipal
Money Market Fund
DDA# 8900337451
* General New York Municipal
Money Market Fund
DDA# 8900052171
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities Money Market Fund
DDA# 8900052414
* General Treasury Prime Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* General California Municipal Money Market Fund
DDA# 8900052163
* General Minnesota Municipal Money Market Fund
DDA# 8900337451
* General New York Municipal Money Market Fund
DDA# 8900052171
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate
on your application which automatic service(s) you want. Return
your application with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a redemption check OR letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 21).
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 9671
Providence, RI 02940-9671
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
<PAGE 24>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail the slip and the check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
By Telephone
------------
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities Money Market Fund
DDA# 8900052414
* General Treasury Prime Money Market Fund
DDA# 8900403349
* the share class
* your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
------------
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a redemption check OR letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 21).
Mail your request to:
The Dreyfus Trust Company
P.O. Box 6427
Providence, RI 02940-6427
------------
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
Your Investment
<PAGE 25>
For More Information
General Money Market Fund
- -----------------------------------
SEC file number: 811-3207
General Government Securities Money Market Fund
- -----------------------------------
SEC file number: 811-3456
General Treasury Prime Money Market Fund
- -----------------------------------
SEC file number: 811-3456
General Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-3481
General California Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-4871
General Minnesota Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-3481
General New York Municipal Money Market Fund
- -----------------------------------
SEC file number: 811-4870
More information on each fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance and lists portfolio holdings.
Statement of Additional Information (SAI)
Provides more details about each fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of certain fund documents can be viewed
online or downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (for information, call 1-202-942-8090) or, after paying a
duplicating fee, by E-mail request to [email protected], or by writing to the
SEC's Public Reference Section, Washington, DC 20549-0102.
(c) 2000 Dreyfus Service Corporation
GEN-P0400A
<PAGE>
General Money Market Funds
General Money Market Fund
General Government Securities Money Market Fund
General Treasury Prime Money Market Fund
General Municipal Money Market Fund
General California Municipal Money Market Fund
General Minnesota Municipal Money Market Fund
General New York Municipal Money Market Fund
Investing in high quality, short-term securities for current income, safety of
principal and liquidity
PROSPECTUS April 1, 2000
CLASS B SHARES
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Funds
Contents
The Funds
- --------------------------------------------------------------------------------
Introduction 1
General Money Market Fund 2
General Government Securities
Money Market Fund 4
General Treasury Prime
Money Market Fund 6
General Municipal
Money Market Fund 8
General California Municipal
Money Market Fund 10
General Minnesota Municipal
Money Market Fund 12
General New York Municipal
Money Market Fund 14
Management 16
Financial Highlights 17
Your Investment
- --------------------------------------------------------------------------------
Account Policies 20
Distributions and Taxes 22
Services for Fund Investors 23
Instructions for Regular Accounts 24
Instructions for IRAs 25
For More Information
- --------------------------------------------------------------------------------
MORE INFORMATION ON EACH FUND CAN BE FOUND IN THE FUND'S CURRENT
ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
Introduction
Each fund is a money market mutual fund with a separate investment portfolio.
The operations and results of a fund are unrelated to those of each other fund.
This combined prospectus has been prepared for your convenience so that you can
consider seven investment choices in one document.
As a money market fund, each fund is subject to maturity, quality and
diversification requirements designed to help it maintain a stable share price.
Generally, each fund is required to invest at least 95% of its assets in the
securities of issuers with the highest credit rating or the unrated equivalent
as determined by Dreyfus, with the remainder invested in securities with the
second-highest credit rating.
An investment in a fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in a fund.
Concepts to understand
MONEY MARKET FUND: a specific type of fund that seeks to maintain a $1.00 price
per share. Money market funds are subject to strict federal requirements and
must:
(pound) maintain an average dollar-weighted portfolio maturity of 90 days or
less
(pound) buy individual securities that have remaining maturities of 13 months or
less
(pound) invest only in high quality, dollar-denominated obligations
CREDIT RATING: a measure of the issuer's expected ability to make all required
interest and principal payments in a timely manner. An issuer with the highest
credit rating has a very strong degree of certainty (or safety) with respect to
making all payments. An issuer with the second-highest credit rating has a
strong capacity to make all payments, but the degree of safety is somewhat less
The Funds
<PAGE 1>
General Money Market Fund
-----------------------
Ticker Symbol: GMBXX
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital. To pursue this goal, the fund invests in a diversified
portfolio of high quality, short-term debt securities, including the following:
(pound) securities issued or guaranteed by the U.S. government or its agencies
or instrumentalities
(pound) certificates of deposit, time deposits, bankers' acceptances and other
short-term securities issued by domestic or foreign banks or their
subsidiaries or branches
(pound) repurchase agreements
(pound) asset-backed securities
(pound) domestic and dollar-denominated foreign commercial paper, and other
short-term corporate obligations, including those with floating or
variable rates of interest
(pound) dollar-denominated obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions or agencies
Normally, the fund invests at least 25% of its net assets in domestic or
dollar-denominated foreign bank obligations.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) the risks generally associated with concentrating investments in the
banking industry, such as interest rate risk, credit risk and regulatory
developments relating to the banking industry
(pound) the risks generally associated with dollar-denominated foreign
investments, such as economic and political developments, seizure or
nationalization of deposits, imposition of taxes or other restrictions
on the payment of principal and interest
<PAGE 2>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
4.68 4.84 4.73 4.37
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '97 +1.22%
WORST QUARTER: Q2 '99 +1.02%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (3/31/95)
- --------------------------------------------------------------------------------
4.37% 4.74%
The fund's 7-day yield on 12/31/99 was 4.80%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.08%
- --------------------------------------------------------------------------------
TOTAL 1.03%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$105 $328 $569 $1,259
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.03% to 1.00%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General Money Market Fund
<PAGE 3>
General Government Securities Money Market Fund
----------------------
Ticker Symbol: GSBXX
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund invests in securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities, and repurchase agreements
in respect of these securities.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
A security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity. The current market prices for such securities
are not guaranteed and will fluctuate. The fund is subject to the risk that
interest rates could rise sharply, causing the fund's share price to drop.
<PAGE 4>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
4.60 4.69 4.61 4.21
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '97 +1.18%
WORST QUARTER: Q2 '99 +0.98%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (3/31/95)
- --------------------------------------------------------------------------------
4.21% 4.61%
The fund's 7-day yield on 12/31/99 was 4.46%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.08%
- --------------------------------------------------------------------------------
TOTAL 1.03%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$105 $328 $569 $1,259
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.03% to 1.00%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General Government Securities Money Market Fund
<PAGE 5>
General Treasury Prime Money Market Fund
------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund only invests in securities issued or guaranteed as
to principal and interest by the U.S. government.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
A security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity. The current market prices for such securities
are not guaranteed and will fluctuate. The fund is subject to the risk that
interest rates could rise sharply, causing the fund's share price to drop.
<PAGE 6>
PAST PERFORMANCE
As a new fund, past performance information is not available for the fund as of
the date of this prospectus.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.10%
- --------------------------------------------------------------------------------
TOTAL 1.05%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years
- --------------------------------------------------------------------------------
$107 $334
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and estimated fees to be paid by the fund for
miscellaneous items such as transfer agency, custody, professional and
registration fees.
General Treasury Prime Money Market Fund
<PAGE 7>
General Municipal Money Market Fund
-----------------------
Ticker Symbol: GBMXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal personal income
tax to the extent consistent with the preservation of capital and the
maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal personal
income tax. The fund also may invest in high quality, short-term structured
notes, which are derivative instruments whose value is tied to underlying
municipal obligations. Structured notes typically are purchased in privately
negotiated transactions from financial institutions. When the portfolio manager
believes that acceptable municipal obligations are unavailable for investment,
the fund may invest temporarily in high quality, taxable money market
instruments. Municipal obligations are typically of two types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal income
tax, interest from some of its holdings may be subject to the federal
alternative minimum tax. In addition, the fund occasionally may invest in
taxable money market instruments.
<PAGE 8>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.66 2.86 2.60 2.35
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '97 +0.76%
WORST QUARTER: Q1 '99 +0.52%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (3/31/95)
- --------------------------------------------------------------------------------
2.35% 2.68%
The fund's 7-day yield on 12/31/99 was 3.45%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.10%
- --------------------------------------------------------------------------------
TOTAL 1.05%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$107 $334 $579 $1,283
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.05% to 0.98%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General Municipal Money Market Fund
<PAGE 9>
General California Municipal Money Market Fund
----------------------
Ticker Symbol: GENXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal and California
state personal income taxes to the extent consistent with the preservation of
capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal and
California state personal income taxes. The fund also may invest in high
quality, short-term structured notes, which are derivative instruments whose
value is tied to underlying municipal obligations. Structured notes typically
are purchased in privately negotiated transactions from financial institutions.
When the portfolio manager believes that acceptable California municipal
obligations are unavailable for investment, the fund may invest in securities
that may be subject to California state income tax, but are free from federal
income tax. Municipal obligations are typically of two types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) California's economy and revenues underlying its municipal obligations
may decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal and
California state income taxes, interest from some of its holdings may be subject
to the federal alternative minimum tax. In addition, the fund occasionally may
invest in taxable money market instruments and/or municipal bonds that are
exempt only from federal personal income taxes.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 10>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.48 2.62 2.34 2.09
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '97 +0.71%
WORST QUARTER: Q1 '99 +0.44%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (8/1/95)
- --------------------------------------------------------------------------------
2.09% 2.42%
The fund's 7-day yield on 12/31/99 was 3.14%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.13%
- --------------------------------------------------------------------------------
TOTAL 1.08%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$110 $343 $595 $1,317
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.08% to 0.95%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General California Municipal Money Market Fund
<PAGE 11>
General Minnesota Municipal Money Market Fund
-----------------------
Ticker Symbol: GMNXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal and Minnesota
state personal income taxes to the extent consistent with the preservation of
capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal and
Minnesota state personal income taxes. When the portfolio manager believes that
acceptable Minnesota municipal obligations are unavailable for investment, the
fund may invest in securities that may be subject to Minnesota state income tax,
but are free from federal income tax. Municipal obligations are typically of two
types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) Minnesota's economy and revenues underlying its municipal obligations
may decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Although the fund's objective is to generate income exempt from federal and
Minnesota state income taxes, interest from some of its holdings may be subject
to the federal alternative minimum tax. In addition, the fund occasionally may
invest in taxable money market instruments and/or municipal bonds that are
exempt only from federal personal income taxes.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 12>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance for the calendar year
1999. The table shows the fund's average annual total return over time. Of
course, past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.55
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '99 +0.71%
WORST QUARTER: Q1 '99 +0.56%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (6/1/98)
- --------------------------------------------------------------------------------
2.55% 2.59%
The fund's 7-day yield on 12/31/99 was 3.51%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.33%
- --------------------------------------------------------------------------------
TOTAL 1.28%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$130 $406 $702 $1,545
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus waived a portion of its fee and assumed certain other
fund expenses pursuant to an undertaking, reducing total expenses from 1.28% to
0.80%. This undertaking was voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General Minnesota Municipal Money Market Fund
<PAGE 13>
General New York Municipal Money Market Fund
----------------------
Ticker Symbol: GNYXX
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal, New York state
and New York city personal income taxes to the extent consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal, New
York state and New York city personal income taxes. The fund also may invest in
high quality, short-term structured notes, which are derivative instruments
whose value is tied to underlying municipal obligations. Structured notes
typically are purchased in privately negotiated transactions from financial
institutions. When the portfolio manager believes that acceptable New York
municipal obligations are unavailable for investment, the fund may invest in
securities that may be subject to New York state and New York city income taxes,
but are free from federal income tax. Municipal obligations are typically of two
types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) New York's economy and revenues underlying its municipal obligations
may decline
(pound) the fund's portfolio securities may be more sensitive to risks that are
specific to investing primarily in a single state
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal, New
York state and New York city income taxes, interest from some of its holdings
may be subject to the federal alternative minimum tax. In addition, the fund
occasionally may invest in taxable money market instruments and/or municipal
bonds that are exempt only from federal personal income tax.
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
<PAGE 14>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in Class B.
The bar chart shows the changes in the fund's performance from year to year. The
table shows the fund's average annual total return over time. Of course, past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
2.51 2.70 2.42 2.16
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '97 +0.70%
WORST QUARTER: Q1 '99 +0.46%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
Since
inception
1 Year (9/8/95)
- --------------------------------------------------------------------------------
2.16% 2.48%
The fund's 7-day yield on 12/31/99 was 3.22%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class B in the table below. Annual fund operating
expenses are paid out of fund assets, so their effect is included in the share
price.
- --------------------------------------------------------------------------------
Fee table
ANNUAL FUND OPERATING EXPENSES
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.20%
Shareholder services fee 0.25%
Other expenses 0.13%
- --------------------------------------------------------------------------------
TOTAL 1.08%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
$110 $343 $595 $1,317
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. The figures
shown would be the same whether you sold your shares at the end of a period or
kept them. Because actual return and expenses will be different, the example is
for comparison only.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.08% to 0.98%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for distributing Class B
shares. Because this fee is paid out of the fund's assets on an ongoing basis,
over time it will increase the cost of your investment and may cost you more
than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for shareholder
account service and maintenance.
OTHER EXPENSES: a fee of 0.05% paid by the fund for sub-accounting services
provided by third parties and fees paid by the fund for miscellaneous items such
as transfer agency, custody, professional and registration fees.
General New York Municipal Money Market Fund
<PAGE 15>
MANAGEMENT
The investment adviser for each fund is The Dreyfus Corporation, 200 Park
Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages more than
$127 billion in over 160 mutual fund portfolios. For the past fiscal year, each
operational fund, except General Minnesota Municipal Money Market Fund, paid
Dreyfus a management fee at the annual rate of 0.50% of the fund's average daily
net assets. For the past fiscal year, General Minnesota Municipal Money Market
Fund paid Dreyfus a management fee at the annual rate of 0.34% of the fund's
average daily net assets. Dreyfus is the primary mutual fund business of Mellon
Financial Corporation, a global financial services company with approximately
$2.5 trillion of assets under management, administration or custody, including
approximately $485 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
Each fund, Dreyfus and Dreyfus Service Corporation (each fund's distributor)
have adopted a code of ethics that permits its personnel, subject to such code,
to invest in securities, including securities that may be purchased or held by
the fund. The Dreyfus code of ethics restricts the personal securities
transactions of its employees, and requires portfolio managers and other
investment personnel to comply with the code's preclearance and disclosure
procedures. Its primary purpose is to ensure that personal trading by Dreyfus
employees does not disadvantage any Dreyfus-managed fund.
<PAGE 16>
FINANCIAL HIGHLIGHTS
The following tables describe the performance of the Class B shares of each fund
(except General Treasury Prime Money Market Fund) for the periods indicated. As
a new fund, financial highlights information was not available for General
Treasury Prime Money Market Fund as of November 30, 1999. "Total return" shows
how much your investment in the fund would have increased (or decreased) during
each period, assuming you had reinvested all dividends and distributions. These
figures have been independently audited by Ernst & Young LLP, whose report,
along with the fund's financial statements, is included in the annual report.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
TEN MONTHS ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JANUARY 31,
GENERAL MONEY MARKET FUND 1999 1998 1997(1) 1997 1996(2)
- ---------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations: Investment income -- net .042 .047 .039 .046 .043
Distributions: Dividends from investment
income -- net (.042) (.047) (.039) (.046) (.043)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 4.32 4.78 4.83(3) 4.65 5.18(3)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.00 1.00 1.00(3) 1.00 1.00(3)
Ratio of net investment income to average net assets (%) 4.24 4.66 4.78(3) 4.56 5.00(3)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .03 .06 .05(3) .07 .07(3)
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 3,056,844 2,427,332 1,231,132 369,205 50,446
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JANUARY 31 TO NOVEMBER 30.
(2) FROM MARCH 31, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JANUARY 31, 1996.
(3) ANNUALIZED.
TEN MONTHS ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JANUARY 31,
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND 1999 1998 1997(1) 1997 1996(2)
- ---------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations: Investment income -- net .041 .046 .038 .045 .042
Distributions: Dividends from investment
income -- net (.041) (.046) (.038) (.045) (.042)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 4.17 4.66 4.69(3) 4.58 5.04(3)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.00 .97 1.00(3) 1.00 1.00(3)
Ratio of net investment income to average net assets (%) 4.09 4.55 4.60(3) 4.48 5.01(3)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .03 .05 .05(3) .08 .10(3)
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 659,185 645,984 364,845 90,175 58
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JANUARY 31 TO NOVEMBER 30.
(2) FROM MARCH 31, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JANUARY 31, 1996.
(3) ANNUALIZED.
Financial Highlights
<PAGE 17>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED NOVEMBER 30,
GENERAL MUNICIPAL MONEY MARKET FUND 1999 1998 1997 1996 1995(1)
- --------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations: Investment income -- net .023 .026 .028 .027 .020
Distributions: Dividends from investment income -- net (.023) (.026) (.028) (.027) (.020)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.31 2.64 2.86 2.70 3.01(2)
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .98 .96 .95 .85 1.10(2)
Ratio of net investment income to average net assets (%) 2.29 2.59 2.87 2.65 2.83(2)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .07 .09 .16 .29 .09(2)
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 376,104 377,636 263,008 17,491 3,024
(1) FROM MARCH 31, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO NOVEMBER 30, 1995.
(2) ANNUALIZED.
FOUR MONTHS ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED JULY 31,
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND 1999 1998 1997(1) 1997 1996(2)
- ---------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations: Investment income -- net .020 .024 .009 .026 .025
Distributions: Dividends from
investment income -- net (.020) (.024) (.009) (.026) (.025)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.06 2.39 2.57(3) 2.61 2.56
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .95 1.00 1.00(3) 1.00 1.00
Ratio of net investment income to average net assets (%) 2.06 2.34 2.62(3) 2.52 2.45
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .13 .07 .13(3) .07 .08
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 17,314 8,760 2,669 928 5,475
(1) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO NOVEMBER 30.
(2) FROM AUGUST 1, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JULY 31, 1996.
(3) ANNUALIZED.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<PAGE 18>
YEAR ENDED NOVEMBER 30,
GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND 1999 1998(1)
- -----------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00
Investment operations: Investment income -- net .025 .013
Distributions: Dividends from investment income -- net (.025) (.013)
Net asset value, end of period 1.00 1.00
Total return (%) 2.52 2.67(2)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .80 .80(2)
Ratio of net investment income to average net assets (%) 2.49 2.63(2)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .48 .87(2)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 40,411 28,160
(1) FROM JUNE 1, 1998 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, 1998.
(2) ANNUALIZED.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30,
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND 1999 1998 1997 1996 1995(1)
- ---------------------------------------------------------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment operations: Investment income -- net .021 .024 .027 .025 .006
Distributions: Dividends from investment income -- net (.021) (.024) (.027) (.025) (.006)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
Total return (%) 2.12 2.47 2.68 2.55 2.82(2)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) .98 .98 .95 .95 1.04(2)
Ratio of net investment income to average net assets (%) 2.14 2.44 2.64 2.47 3.64(2)
Decrease reflected in above expense ratios
due to actions by Dreyfus (%) .10 .08 .08 .16 --
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 93,287 46,997 42,169 36,199 --
(1) FROM SEPTEMBER 8, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO NOVEMBER 30, 1995.
(2) ANNUALIZED.
</TABLE>
Financial Highlights
<PAGE 19>
Your Investment
ACCOUNT POLICIES
Buying shares
GENERAL FUNDS are designed primarily for people who are investing through a
third party such as a bank, broker-dealer or financial adviser. Third parties
with whom you open a fund account may impose policies, limitations and fees
which are different than those described here.
APPLICABLE TO GENERAL MONEY MARKET FUND, GENERAL GOVERNMENT SECURITIES MONEY
MARKET FUND AND GENERAL TREASURY PRIME MONEY MARKET FUND ONLY:
YOUR PRICE FOR FUND SHARES is the fund's net asset value (NAV), which is
generally calculated twice a day, at 5:00 p.m. and 8:00 p.m., every day the New
York Stock Exchange or the fund's transfer agent is open. Your order will be
priced at the next NAV calculated after your order is accepted by the fund's
transfer agent or other authorized entity. Each fund's investments are valued
based on amortized cost.
IF YOUR PAYMENTS ARE RECEIVED in or converted into Federal Funds by 12:00 noon,
you will receive the dividend declared that day. If your payments are received
in or converted into Federal Funds after 12:00 noon, you will begin to accrue
dividends on the following business day. Qualified institutions may telephone
orders to buy shares. If such an order is made by 5:00 p.m. and Federal Funds
are received by 6:00 p.m., the shares will be purchased at the NAV determined at
5: 00 p.m. and will receive the dividend declared that day. If such an order is
made after 5:00 p.m. but by 8:00 p.m., and Federal Funds are received by 11:00
a.m. the next business day, the shares will be purchased at the NAV determined
at 8: 00 p.m. and will begin to accrue dividends on the next business day. All
times are Eastern time.
APPLICABLE TO GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND, GENERAL MUNICIPAL
MONEY MARKET FUND, GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND AND GENERAL NEW
YORK MUNICIPAL MONEY MARKET FUND ONLY:
YOUR PRICE FOR FUND SHARES is the fund's net asset value (NAV), which is
generally calculated twice a day, at 12:00 noon and 8:00 p.m., for the Minnesota
Municipal Money Market Fund and three times a day, at 12:00 noon, 2:00 p.m. and
8: 00 p.m., for each other municipal money market fund, every day the New York
Stock Exchange or the fund's transfer agent is open. Your order will be priced
at the next NAV calculated after your order is accepted by the fund's transfer
agent or other authorized entity. Each fund's investments are valued based on
amortized cost.
IF YOUR PAYMENTS ARE RECEIVED in or converted into Federal Funds by 12:00 noon
for the Minnesota Municipal Money Market Fund or by 4:00 p.m. for each other
municipal money market fund, you will receive the dividend declared that day. If
your payments are received in or converted into Federal Funds after 12:00 noon
for the Minnesota Municipal Money Market Fund or after 4:00 p.m. for each other
municipal money market fund, you will begin to accrue dividends on the following
business day. Qualified institutions may telephone orders to buy shares. If such
an order is made by 12:00 noon for the Minnesota Municipal Money Market Fund or
by 2: 00 p.m. for each other municipal money market fund, and Federal Funds are
received by 4:00 p.m., the shares will be purchased at the NAV determined after
the telephone order is accepted and will receive the dividend
<PAGE 20>
declared that day. If such an order is made after 12:00 noon for the Minnesota
Municipal Money Market Fund or after 2:00 p.m. for any of the other municipal
money market funds, but by 8:00 p.m., and Federal Funds are received by 11:00
a.m. the next business day, the shares will be purchased at the NAV determined
at 8: 00 p.m. and will begin to accrue dividends on the next business day. All
times are Eastern time.
BECAUSE THE MUNICIPAL MONEY MARKET FUNDS seek tax-exempt income, they are not
recommended for purchase in IRAs or other qualified retirement plans.
- --------------------------------------------------------------------------------
Minimum investments
Initial Additional
- --------------------------------------------------------------------------------
REGULAR ACCOUNTS $2,500 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
BEFORE SELLING OR WRITING A CHECK for recently purchased shares, please note
that if the fund has not yet collected payment for the shares you are selling,
it may delay sending the proceeds for up to eight business days or until it has
collected payment.
- --------------------------------------------------------------------------------
Limitations on selling shares by phone
Proceeds
sent by Minimum Maximum
- --------------------------------------------------------------------------------
CHECK NO MINIMUM $250,000 PER DAY
WIRE $1,000 $500,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
TELETRANSFER $500 $500,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding.
AMORTIZED COST: a method of valuing a money market fund's portfolio securities,
which does not take into account unrealized gains or losses. As a result,
portfolio securities are valued at their acquisition cost, adjusted over time
based on the discounts or premiums reflected in their purchase price. This
method of valuation is designed to permit a fund to maintain a stable NAV.
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
(pound) amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
(pound) requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
Your Investment
<PAGE 21>
ACCOUNT POLICIES (CONTINUED)
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
EACH FUND RESERVES THE RIGHT TO:
(pound) refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group
who, in the fund's view, is likely to engage in excessive trading
(usually defined as more than four exchanges out of the fund within a
calendar year)
(pound) refuse any purchase or exchange request in excess of 1% of the fund's
total assets
(pound) change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
(pound) change its minimum investment amounts
(pound) delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or
during unusual market conditions)
Each fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
DISTRIBUTIONS AND TAXES
EACH FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income
once a month, and distributes any net realized securities gains once a year.
Your dividends and distributions will be reinvested in the fund unless you
instruct the fund otherwise. There are no fees or sales charges on
reinvestments.
DIVIDENDS AND DISTRIBUTIONS PAID by the taxable money market funds are taxable
to U.S. shareholders as ordinary income (unless your investment is in an IRA or
other tax-deferred account).
EACH MUNICIPAL MONEY MARKET FUND anticipates that, under normal market
conditions, virtually all of its income dividends will be exempt from federal
and, as to California Municipal Money Market Fund, California, as to Minnesota
Municipal Money Market Fund, Minnesota, and as to New York Municipal Money
Market Fund, New York state and New York city, personal income taxes. However,
any dividends and distributions from taxable investments are taxable as ordinary
income.
The tax status of any distribution is the same regardless of how long you have
been in the fund and whether you reinvest your distributions or take them in
cash.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the
California Municipal Money Market Fund and New York Municipal Money Market Fund
charge regular accounts with balances below $2,000 an annual fee of $12. The fee
will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; accounts participating in automatic
investment programs; and accounts opened through a financial institution.
With respect to any fund, if your account falls below $500, the fund may ask you
to increase your balance. If it is still below $500 after 45 days, the fund may
close your account and send you the proceeds.
Concepts to understand
DIVIDENDS AND DISTRIBUTIONS: income or interest paid by a fund's portfolio
investments and passed on to fund shareholders. These are calculated on a
per-share basis: each share earns the same rate of return, so the more fund
shares you own, the higher your distribution.
SECURITIES GAINS: distributions derived from the profits the fund earns when it
sells securities for a higher price than it paid for them.
<PAGE 22>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-645-6561.
- --------------------------------------------------------------------------------
For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
one Dreyfus fund into another
(not available for IRAs).
- --------------------------------------------------------------------------------
For exchanging shares
DREYFUS AUTO- For making regular exchanges
EXCHANGE PRIVILEGE from one Dreyfus fund into
another.
- --------------------------------------------------------------------------------
For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds.
24-hour automated account access
YOU CAN EASILY MANAGE YOUR DREYFUS ACCOUNTS, check your account balances,
transfer money between your Dreyfus funds, get price and yield information and
much more -- when it's convenient for you -- by calling 1-800-645-6561.
Checkwriting privilege
YOU MAY WRITE REDEMPTION CHECKS against your account in amounts of $500 or more.
These checks are free; however, a fee will be charged if you request a stop
payment or if the transfer agent cannot honor a redemption check due to
insufficient funds or another valid reason. Please do not postdate your checks
or use them to close your account.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one Dreyfus fund into another. You can request your exchange in writing or
by phone. Be sure to read the current prospectus for any fund into which you are
exchanging before investing. Any new account established through an exchange
will have the same privileges as your original account (as long as they are
available). There is currently no fee for exchanges, although you may be charged
a sales load when exchanging into any fund that has one.
Dreyfus TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the Dreyfus TeleTransfer privilege. You can set up TeleTransfer
on your account by providing bank account information and following the
instructions on your application.
Account statements
EVERY FUND INVESTOR AUTOMATICALLY RECEIVES regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
Retirement plans
A variety of retirement plans are offered for the taxable money market funds,
including traditional, Roth and Education IRAs. Here's where you call for
information:
(pound) for traditional, rollover, Roth and Education IRAs,
call 1-800-645-6561
(pound) for SEP-IRAs, Keogh accounts, 401(k) and 403(b) accounts, call
1-800-358-0910
Your Investment
<PAGE 23>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
The Dreyfus Family of Funds
P.O. Box 9387
Providence, RI 02940-9387
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
The Dreyfus Family of Funds
P.O. Box 105
Newark, New Jersey 07101-0105
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities
Money Market Fund
DDA# 8900052414
* General Treasury Prime
Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* General California Municipal
Money Market Fund
DDA# 8900052163
* General Minnesota Municipal
Money Market Fund
DDA# 8900337451
* General New York Municipal
Money Market Fund
DDA# 8900052171
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities Money Market Fund
DDA# 8900052414
* General Treasury Prime Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* General California Municipal Money Market Fund
DDA# 8900052163
* General Minnesota Municipal Money Market Fund
DDA# 8900337451
* General New York Municipal Money Market Fund
DDA# 8900052171
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate
on your application which automatic service(s) you want. Return
your application with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a redemption check OR letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 21).
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 9671
Providence, RI 02940-9671
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
<PAGE 24>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail in the slip and the check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Government Securities Money Market Fund
DDA# 8900052414
* General Treasury Prime Money Market Fund
DDA# 8900403349
* the share class
* your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
-------------
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a redemption check OR letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 21).
Mail in your request to:
The Dreyfus Trust Company
P.O. Box 6427
Providence, RI 02940-6427
-------------
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
Your Investment
<PAGE 25>
For More Information
General Money Market Fund
- -----------------------------------
SEC file number: 811-3207
General Government Securities Money Market Fund
- -----------------------------------
SEC file number: 811-3456
General Treasury Prime Money Market Fund
- -----------------------------------
SEC file number: 811-3456
General Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-3481
General California Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-4871
General Minnesota Municipal Money Market Fund
- ----------------------------------
SEC file number: 811-3481
General New York Municipal Money Market Fund
- -----------------------------------
SEC file number: 811-4870
More information on each fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance and lists portfolio holdings.
Statement of Additional Information (SAI)
Provides more details about each fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of certain fund documents can be viewed
online or downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (for information, call 1-202-942-8090) or, after paying a
duplicating fee, by E-mail request to [email protected], or by writing to the
SEC's Public Reference Section, Washington, DC 20549-0102.
(c) 2000 Dreyfus Service Corporation
GEN-P0400B
<PAGE>
General Money Market Funds
General Money Market Fund
General Treasury Prime Money Market Fund
General Municipal Money Market Fund
Investing in high quality, short-term securities for current income, safety of
principal and liquidity
PROSPECTUS April 1, 2000
CLASS X SHARES
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Funds
Contents
The Funds
- --------------------------------------------------------------------------------
Introduction 1
General Money Market Fund 2
General Treasury Prime
Money Market Fund 4
General Municipal
Money Market Fund 6
Management 8
Financial Highlights 9
Your Investment
- --------------------------------------------------------------------------------
Account Policies 10
Distributions and Taxes 13
Services for Fund Investors 14
Instructions for Regular Accounts 15
Instructions for IRAs 16
For More Information
- --------------------------------------------------------------------------------
MORE INFORMATION ON EACH FUND CAN BE FOUND IN THE FUND'S CURRENT
ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
Introduction
Each fund is a money market mutual fund with a separate investment portfolio.
The operations and results of a fund are unrelated to those of each other fund.
This combined prospectus has been prepared for your convenience so that you can
consider three investment choices in one document.
As a money market fund, each fund is subject to maturity, quality and
diversification requirements designed to help it maintain a stable share price.
Generally, each fund is required to invest at least 95% of its assets in the
securities of issuers with the highest credit rating or the unrated equivalent
as determined by Dreyfus, with the remainder invested in securities with the
second-highest credit rating.
An investment in a fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although each fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in a fund.
Concepts to understand
MONEY MARKET FUND: a specific type of fund that seeks to maintain a $1.00 price
per share. Money market funds are subject to strict federal requirements and
must:
(pound) maintain an average dollar-weighted portfolio maturity of 90 days or
less
(pound) buy individual securities that have remaining maturities of 13 months or
less
(pound) buy only high quality, dollar-denominated obligations
CREDIT RATING: a measure of the issuer's expected ability to make all required
interest and principal payments in a timely manner. An issuer with the highest
credit rating has a very strong degree of certainty (or safety) with respect to
making all payments. An issuer with the second-highest credit rating has a
strong capacity to make all payments, but the degree of safety is somewhat less
The Funds
<PAGE 1>
General Money Market Fund
------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital. To pursue this goal, the fund invests in a diversified
portfolio of high quality, short-term debt securities, including the following:
(pound) securities issued or guaranteed by the U.S. government or its agencies
or instrumentalities
(pound) certificates of deposit, time deposits, bankers' acceptances and other
short-term securities issued by domestic or foreign banks or their
subsidiaries or branches
(pound) repurchase agreements
(pound) asset-backed securities
(pound) domestic and dollar-denominated foreign commercial paper, and other
short-term corporate obligations, including those with floating or
variable rates of interest
(pound) dollar-denominated obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions or agencies
Normally, the fund invests at least 25% of its net assets in domestic or
dollar-denominated foreign bank obligations.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
(pound) the risks generally associated with concentrating investments in the
banking industry, such as interest rate risk, credit risk and regulatory
developments relating to the banking industry
(pound) the risks generally associated with dollar-denominated foreign
investments, such as economic and political developments, seizure or
nationalization of deposits, imposition of taxes or other restrictions
on the payment of principal and interest
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
<PAGE 2>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in the fund.
The bar chart shows the changes in the fund's Class A performance from year to
year. The table shows the fund's Class A average annual total return over time.
Both the bar chart and table assume reinvestment of dividends and distributions.
Class A shares are not offered in this prospectus; however, except to the extent
Class A and Class X have different expenses and Class X may be subject to a
contingent deferred sales charge (CDSC), Class X should have similar annual
returns to Class A, since each invests in the same portfolio of securities. Of
course, past performance is no guarantee of future results. Since Class X shares
have less than one calendar year of performance, past performance for Class X is
not included in this section of the prospectus.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
7.71 5.84 3.39 2.58 3.51 5.44 4.83 4.99 4.93 4.59
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q2 '90 +1.90%
WORST QUARTER: Q3 '93 +0.63%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
CLASS A SHARES
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
4.59% 4.96% 4.77%
The fund's 7-day yield on 12/31/99 was 5.05%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class X in the table below.
- --------------------------------------------------------------------------------
Fee table
SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum contingent deferred
sales charge (CDSC) 4.00%
AS A % OF THE PURCHASE OR SALE PRICE, WHICHEVER IS LESS
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.25%
Shareholder services fee 0.25%
Other expenses 0.30%
- --------------------------------------------------------------------------------
TOTAL 1.30%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years
- --------------------------------------------------------------------------------
WITH REDEMPTION $532 $712
WITHOUT REDEMPTION $132 $412
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.30% to 1.05%. The undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for financing the sale
and distribution of Class X shares. Because this fee is paid out of the fund's
assets on an ongoing basis, over time it will increase the cost of your
investment and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: estimated fees to be paid by the fund for miscellaneous items
such as transfer agency, custody, professional and registration fees.
General Money Market Fund
<PAGE 3>
General Treasury Prime Money Market Fund
-------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity.
To pursue this goal, the fund only invests in securities issued or guaranteed as
to principal and interest by the U.S. government.
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates
A security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity. The current market prices for such securities
are not guaranteed and will fluctuate. The fund is subject to the risk that
interest rates could rise sharply, causing the fund's share price to drop.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
<PAGE 4>
PAST PERFORMANCE
As a new fund, past performance information is not available for the fund as of
the date of this prospectus.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class X in the table below.
- --------------------------------------------------------------------------------
Fee table
SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum contingent deferred
sales charge (CDSC) 4.00%
AS A % OF THE PURCHASE OR SALE PRICE, WHICHEVER IS LESS
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.25%
Shareholder services fee 0.25%
Other expenses 0.05%
- --------------------------------------------------------------------------------
TOTAL 1.05%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years
- --------------------------------------------------------------------------------
WITH REDEMPTION $507 $634
WITHOUT REDEMPTION $107 $334
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor for financing the sale
and distribution of Class X shares. Because this fee is paid out of the fund's
assets on an ongoing basis, over time it will increase the cost of your
investment and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: estimated fees to be paid by the fund for miscellaneous items
such as transfer agency, custody, professional and registration fees.
General Treasury Prime Money Market Fund
<PAGE 5>
General Municipal Money Market Fund
------------------
Ticker Symbol: N/A
GOAL/APPROACH
The fund seeks to maximize current income exempt from federal personal income
tax to the extent consistent with the preservation of capital and the
maintenance of liquidity.
To pursue this goal, the fund normally invests substantially all of its net
assets in municipal obligations that provide income exempt from federal personal
income tax. The fund also may invest in high quality, short-term structured
notes, which are derivative instruments whose value is tied to underlying
municipal obligations. Structured notes typically are purchased in privately
negotiated transactions from financial institutions. When the fund manager
believes that acceptable municipal obligations are unavailable for investment,
the fund may invest temporarily in high quality, taxable money market
instruments. Municipal obligations are typically of two types:
(pound) GENERAL OBLIGATION BONDS, which are secured by the full faith and credit
of the issuer and its taxing power
(pound) REVENUE BONDS, which are payable from the revenues derived from a
specific revenue source, such as charges for water and sewer service or
highway tolls
MAIN RISKS
The fund's yield will vary as the short-term securities in its portfolio mature
and the proceeds are reinvested in securities with different interest rates.
While the fund has maintained a constant share price since inception, and will
continue to try to do so, the following factors could reduce the fund's income
level and/or share price:
(pound) interest rates could rise sharply, causing the fund's share price to
drop
(pound) any of the fund's holdings could have its credit rating downgraded or
could default
Derivative securities, such as structured notes, can be highly volatile, and the
possibility of default by the financial institution or counterparty may be
greater for these securities than for other types of money market instruments.
Although the fund's objective is to generate income exempt from federal income
tax, interest from some of its holdings may be subject to the federal
alternative minimum tax. In addition, the fund occasionally may invest in
taxable money market instruments.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
<PAGE 6>
PAST PERFORMANCE
The bar chart and table below show some of the risks of investing in the fund.
The bar chart shows the changes in the fund's Class A performance from year to
year. The table shows the fund's Class A average annual total return over time.
Both the bar chart and table assume reinvestment of dividends and distributions.
Class A shares are not offered in this prospectus; however, except to the extent
Class A and Class X have different expenses and Class X may be subject to a
CDSC, Class X should have similar annual returns to Class A, since each invests
in the same portfolio of securities. Of course, past performance is no guarantee
of future results. Since Class X shares have less than one calendar year of
performance, past performance for Class X is not included in this section of the
prospectus.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
5.53 4.19 2.62 2.05 2.40 3.42 2.93 3.15 2.98 2.74
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '90 +1.40%
WORST QUARTER: Q1 '94 +0.46%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
CLASS A SHARES
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
2.74% 3.04% 3.20%
The fund's 7-day yield on 12/31/99 was 3.83%. For the fund's current yield, call
toll-free 1-800-645-6561.
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described for Class X in the table below.
- --------------------------------------------------------------------------------
Fee table
SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum contingent deferred
sales charge (CDSC) 4.00%
AS A % OF THE PURCHASE OR SALE PRICE, WHICHEVER IS LESS
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees 0.50%
Rule 12b-1 fee 0.25%
Shareholder services fee 0.25%
Other expenses 0.23%
- --------------------------------------------------------------------------------
TOTAL 1.23%
- --------------------------------------------------------------------------------
Expense example
1 Year 3 Years
- --------------------------------------------------------------------------------
WITH REDEMPTION $525 $690
WITHOUT REDEMPTION $125 $390
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations. For the fiscal year ended
November 30, 1999, Dreyfus assumed certain fund expenses pursuant to an
undertaking, reducing total expenses from 1.23% to 1.05%. This undertaking was
voluntary.
RULE 12B-1 FEE: the fee paid to the fund's distributor for financing the sale
and distribution of Class X shares. Because this fee is paid out of the fund's
assets on an ongoing basis, over time it will increase the cost of your
investment and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: estimated fees to be paid by the fund for miscellaneous items
such as transfer agency, custody, professional and registration fees.
General Municipal Money Market Fund
<PAGE 7>
MANAGEMENT
The investment adviser for each fund is The Dreyfus Corporation, 200 Park
Avenue, New York, New York 10166. Founded in 1947, Dreyfus manages more than
$127 billion in over 160 mutual fund portfolios. For the past fiscal year, each
fund paid Dreyfus a management fee at the annual rate of 0.50% of the fund's
average daily net assets. Dreyfus is the primary mutual fund business of Mellon
Financial Corporation, a global financial services company with approximately
$2.5 trillion of assets under management, administration or custody, including
approximately $485 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
Each fund, Dreyfus and Dreyfus Service Corporation (each fund's distributor)
have adopted a code of ethics that permits its personnel, subject to such code,
to invest in securities, including securities that may be purchased or held by
the fund. The Dreyfus code of ethics restricts the personal securities
transactions of its employees, and requires portfolio managers and other
investment personnel to comply with the code's preclearance and disclosure
procedures. Its primary purpose is to ensure that personal trading by Dreyfus
employees does not disadvantage any Dreyfus-managed fund.
<PAGE 8>
FINANCIAL HIGHLIGHTS
The following tables describe the performance of the Class X shares of each fund
(except General Treasury Prime Money Market Fund) for the periods indicated. As
a new fund, financial highlights information was not available for General
Treasury Prime Money Market Fund as of November 30, 1999. "Total return" shows
how much your investment in the fund would have increased (or decreased) during
each period, assuming you had reinvested all dividends and distributions. These
figures have been independently audited by Ernst & Young LLP, whose report,
along with the fund's financial statements, is included in the annual report
PERIOD ENDED
NOVEMBER 30,
GENERAL MONEY MARKET FUND 1999(1)
- --------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00
Investment operations:
Investment income -- net .021
Distributions:
Dividends from investment income -- net (.021)
Net asset value, end of period 1.00
Total return (%) 4.33(2)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.05(2)
Ratio of net investment income to average net assets (%) 4.01(2)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) .25(2)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 554
(1) FROM JUNE 1, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO NOVEMBER 30, 1999.
(2) ANNUALIZED.
PERIOD ENDED
NOVEMBER 30,
GENERAL MUNICIPAL MONEY MARKET FUND 1999(1)
- --------------------------------------------------------------------------------
PER-SHARE DATA ($)
Net asset value, beginning of period 1.00
Investment operations:
Investment income -- net .012
Distributions:
Dividends from investment income -- net (.012)
Net asset value, end of period 1.00
Total return (%) 2.43(2)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.05(2)
Ratio of net investment income to average net assets (%) 2.22(2)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) .18(2
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 1
(1) FROM JUNE 1, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO NOVEMBER 30, 1999.
(2) ANNUALIZED.
Financial Highlights
<PAGE 9>
Your Investment
ACCOUNT POLICIES
GENERAL FUNDS ARE DESIGNED PRIMARILY FOR PEOPLE who are investing through a
third party such as a bank, broker-dealer or financial adviser. Third parties
with whom you open a fund account may impose policies, limitations and fees
which are different than those described here.
YOU MAY BUY CLASS X SHARES ONLY IF you establish an Auto-Exchange Account
pursuant to which the Class X shares purchased will be exchanged for Class B
shares of up to five Dreyfus Premier funds within two years of your initial
purchase of Class X shares. Subsequent purchases of Class X shares of a fund
must be exchanged for Class B shares within two years of your initial purchase.
CLASS X SHARES AND CLASS B SHARES of the Dreyfus Premier funds are subject to a
contingent deferred sales charge (CDSC), which is assessed only if you sell your
shares within six years of purchase. Under certain circumstances, you may not
have to pay a CDSC when you sell shares. Consult your financial representative
or the Statement of Additional Information (SAI) to see if a CDSC waiver may
apply to you. The following table sets forth the rates of the CDSC for Class X
shares and Class B shares of the Dreyfus Premier funds for which Class X may be
automatically exchanged.
- --------------------------------------------------------------------------------
Sales charges
CDSC -- CHARGED WHEN YOU SELL SHARES
CDSC as a % of your initial
Years since purchase investment or your redemption
was made (whichever is less)
- --------------------------------------------------------------------------------
Up to 2 years 4.00%
2 -- 4 years 3.00%
4 -- 5 years 2.00%
5 -- 6 years 1.00%
More than 6 years Shares will automatically
convert to Class A of the
selected Dreyfus Premier fund
CLASS X SHARES ALSO CARRY an annual Rule 12b-1 fee of 0.25% of the class's
average daily net assets. The Class B shares of the Dreyfus Premier funds you
receive in exchange for your fund Class X shares will convert to Class A shares
of the Dreyfus Premier funds approximately six years after the date you
purchased the exchanged Class X shares. Upon conversion to Class A shares, Class
B shares of the Dreyfus Premier funds will not be subject to a CDSC. Class A
shares of the Dreyfus Premier funds are not subject to a Rule 12b-1 fee. Class A
shares of the Dreyfus Premier funds are subject to an annual shareholder
services fee of 0.25% paid to the distributor for providing shareholder
services.
You should invest in Class X shares of a fund only as part of a long-term
investment in the Dreyfus Family of Funds. If you are seeking only to invest in
a money market fund and do not expect to exchange fund shares for Class B shares
of a Dreyfus Premier fund, you should consider more suitable investments,
including another class of the fund's shares or other money market funds offered
by Dreyfus. Consult your financial representative for more details.
<PAGE 10>
Buying shares
YOUR PRICE FOR FUND SHARES is the fund's net asset value (NAV), which is
generally calculated twice a day, at 5:00 p.m. and 8:00 p.m., for General Money
Market Fund and General Treasury Prime Money Market Fund and three times a day,
at 12:00 noon, 2:00 p.m. and 8:00 p.m., for General Municipal Money Market Fund,
every day the New York Stock Exchange or the fund's transfer agent is open. Your
order will be priced at the next NAV calculated after your order is accepted by
the fund's transfer agent or other authorized entity. Each fund's investments
are valued based on amortized cost.
IF YOUR PAYMENTS ARE RECEIVED in or converted into Federal Funds by 12:00 noon
for the taxable money market funds or by 4:00 p.m. for the municipal money
market fund, you will receive the dividend declared that day. If your payments
are received in or converted into Federal Funds after 12:00 noon for the taxable
money market funds or after 4:00 p.m. for the municipal money market fund, you
will begin to accrue dividends on the following business day. Qualified
institutions may telephone orders to buy shares. If such an order is made by 5:
00 p.m. for the taxable money market funds or by 2:00 p.m. for the municipal
money market fund, and Federal Funds are received by 6:00 p.m. or 4:00 p.m.,
respectively, the shares will be purchased at the next NAV determined after the
telephone order is accepted, and will receive the dividend declared that day. If
such an order is made after 5:00 p.m. for the taxable money market funds or
after 2: 00 p.m. for the municipal money market fund, but by 8:00 p.m., and
Federal Funds are received by 11:00 a.m. the next business day, the shares will
be purchased at the NAV determined at 8: 00 p.m. and will begin to accrue
dividends on the next business day. All times are Eastern time.
Because the municipal money market fund seeks tax-exempt income, it is not
recommended for purchase in IRAs or other qualified plans.
- --------------------------------------------------------------------------------
Minimum investments
Initial Additional
- --------------------------------------------------------------------------------
REGULAR ACCOUNTS $2,500 $100
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear.
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding.
AMORTIZED COST: a method of valuing a money market fund's portfolio securities,
which does not take into account unrealized gains or losses. As a result,
portfolio securities are valued at their acquisition cost, adjusted over time
based on the discounts or premiums reflected in their purchase price. This
method of valuation is designed to permit a fund to maintain a stable NAV.
Your Investment
<PAGE 11>
ACCOUNTS POLICIES (CONTINUED)
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are subject to the lowest charge. The CDSC is based
on the lesser of the original purchase cost or the current market value of the
shares being sold.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment
Limitations on selling shares by phone
Proceeds
sent by Minimum Maximum
- --------------------------------------------------------------------------------
CHECK NO MINIMUM $250,000 PER DAY
WIRE $1,000 $500,000 FOR JOINT ACCOUNTS
EVERY 30 DAYS
General policies
IF YOUR ACCOUNT FALLS BELOW $500, the fund may ask you to increase your balance.
If it is still below $500 after 45 days, the fund may close your account and
send you the proceeds.
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
EACH FUND RESERVES THE RIGHT TO:
(pound) refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group
who, in the fund's view, is likely to engage in excessive trading
(usually defined as more than four exchanges out of the fund within a
calendar year)
(pound) refuse any purchase or exchange request in excess of 1% of the fund's
total assets
(pound) change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
(pound) change its minimum investment amounts
(pound) delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or
during unusual market conditions)
Each fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
(pound) amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
(pound) requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
<PAGE 12>
DISTRIBUTIONS AND TAXES
EACH FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income
once a month, and distributes any net realized securities gains once a year. You
may choose to receive your dividends and distributions in cash or automatically
reinvest them in shares of one of your Dreyfus Premier funds through Dreyfus
Dividend Sweep (not available for IRAs). There are no fees or sales charges on
reinvestments.
DIVIDENDS AND DISTRIBUTIONS PAID by the taxable money market funds are taxable
to U.S. shareholders as ordinary income (unless your investment is in an IRA or
other tax-deferred account).
The municipal money market fund anticipates that, under normal market
conditions, virtually all of its income dividends will be exempt from federal
personal income taxes. However, any dividends and distributions from taxable
investments are taxable as ordinary income.
The tax status of any distribution is the same regardless of how long you have
been in the fund and whether you reinvest your distributions or take them in
cash.
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Concepts to understand
DIVIDENDS AND DISTRIBUTIONS: income or interest paid by a fund's portfolio
investments and passed on to fund shareholders. These are calculated on a
per-share basis: each share earns the same rate of return, so the more fund
shares you own, the higher your distribution.
SECURITIES GAINS: distributions derived from the profits a fund earns when it
sells securities for a higher price than it paid for them.
Your Investment
<PAGE 13>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASE fund shares may impose different
restrictions on the services and privileges offered by the fund, or may not make
them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Exchange privilege
YOU CAN EXCHANGE CLASS X SHARES worth $500 or more (no minimum for retirement
accounts) from one fund into Class B shares of a Dreyfus Premier fund. Class B
shares of a Dreyfus Premier fund may not be exchanged for Class X shares of a
fund. You can request your exchange by contacting your financial representative.
Be sure to read the current prospectus for any fund into which you are
exchanging before investing. Any new account established through an exchange
will have the same privileges as your original account (as long as they are
available). There is currently no fee for exchanges.
Dreyfus Auto-Exchange privilege
TO INVEST IN CLASS X SHARES OF A FUND, you will be required to participate in
the Dreyfus Auto-Exchange privilege. As a participant, you will have to
establish the time and amount of your automatic exchanges such that all of the
Class X shares purchased will have been exchanged for Class B shares of a
Dreyfus Premier fund within two years of your initial purchase. You can change
the time or amount of your automatic exchanges by contacting your financial
representative.
CDSC under Exchange and Auto-Exchange privileges
SHARES WILL BE EXCHANGED PURSUANT TO the Exchange privilege or Auto-Exchange
privilege at the then-current NAV. No CDSC will be imposed at the time of the
exchange; however, shares acquired through an exchange will be subject to the
higher CDSC applicable to the exchanged or acquired shares. For purposes of
computing any applicable CDSC, the length of time you have owned your shares
will be measured from the date of original purchase and will not be affected by
the exchange.
Reinvestment privilege
UPON WRITTEN REQUEST YOU CAN reinvest up to the number of Class X shares you
sold within 45 days of selling them at the current share price. If you paid a
CDSC, it will be credited back to your account. This privilege may be used only
once.
Dreyfus Dividend Sweep
YOU CAN AUTOMATICALLY REINVEST YOUR DIVIDENDS and distributions from the fund
into one or more of the Dreyfus Premier funds you have selected (not available
for IRAs). You can set up this service with your application, or by calling your
financial representative or 1-800-645-6561.
24-hour automated account access
YOU CAN EASILY MANAGE YOUR DREYFUS ACCOUNTS, check your account balances,
transfer money between your Dreyfus funds, get price and yield information and
much more -- when it's convenient for you -- by calling 1-800-645-6561.
Account statements
EVERY FUND INVESTOR AUTOMATICALLY RECEIVES regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
<PAGE 14>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587
Providence, RI 02940-6587
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
Name of Fund
P.O. Box 6587
Providence, RI 02940-6587
Attn: Institutional Processing
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Treasury Prime
Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Treasury Prime Money Market Fund
DDA# 8900403349
* General Municipal Money Market Fund
DDA# 8900052376
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 12).
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 6587 Providence, RI 02940-6587
Attn: Institutional Processing
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
Your Investment
<PAGE 15>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail in the slip and the check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427
Providence, RI 02940-6427
Attn: Institutional Processing
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* fund name and DDA#
* General Money Market Fund
DDA# 8900051957
* General Treasury Prime Money Market Fund
DDA# 8900403349
* the share class
* your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 12).
Mail in your request to:
The Dreyfus Trust Company
P.O. Box 6427
Providence, RI 02940-6427
Attn: Institutional Processing
The General Municipal Money Market Fund is not recommended for IRAs.
<PAGE 16>
NOTES
<PAGE 17>
For More Information
General Money Market Fund
- --------------------------------------
SEC file number: 811-3207
General Treasury Prime Money Market Fund
- --------------------------------------
SEC file number: 811-3456
General Municipal Money Market Fund
- -------------------------------------
SEC file number: 811-3481
More information on each fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes a fund's performance and lists portfolio holdings.
Statement of Additional Information (SAI)
Provides more details about each fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of certain fund documents can be viewed
online or downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (for information, call 1-202-942-8090) or, after paying a
duplicating fee, by E-mail request to [email protected], or by writing to the
SEC's Public Reference Section, Washington, DC 20549-0102.
(c) 2000 Dreyfus Service Corporation
GEN-P0400X
- ------------------------------------------------------------------------------
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND
GENERAL MONEY MARKET FUND, INC.
GENERAL TREASURY PRIME MONEY MARKET FUND
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MINNESOTA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
CLASS A AND CLASS B SHARES
STATEMENT OF ADDITIONAL INFORMATION
APRIL 1, 2000
- ------------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus for Class A or Class B shares of General Government Securities Money
Market Fund (the "Government Money Fund"), General Money Market Fund, Inc. (the
"Money Fund"), General Treasury Prime Money Market Fund (the "Treasury Money
Fund"), General California Municipal Money Market Fund (the "California
Municipal Fund"), General Minnesota Municipal Money Market Fund (the "Minnesota
Municipal Fund"), General Municipal Money Market Fund (the "National Municipal
Fund") and General New York Municipal Money Market Fund (the "New York Municipal
Fund") (each, a "Fund" and collectively, the "Funds"), dated April 1, 2000, as
it may be revised from time to time. To obtain a copy of the Prospectus for
Class A or Class B shares of a Fund, please write to a Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call one of the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1396
Outside the U.S. -- Call 516-794-5452
The most recent Annual and Semi-Annual Report to Shareholders of each Fund
are separate documents supplied with this Statement of Additional Information,
and the financial statements, accompanying notes and reports of independent
auditors appearing in the Annual Report are incorporated by reference into this
Statement of Additional Information. When requesting a copy of this Statement of
Additional Information, you will receive the report(s) for the Fund(s) in which
you are a shareholder.
EACH FUND IS A SEPARATE INVESTMENT PORTFOLIO WITH OPERATIONS AND RESULTS
THAT ARE UNRELATED TO THOSE OF EACH OTHER FUND. THE GOVERNMENT MONEY FUND AND
THE TREASURY MONEY FUND ARE SEPARATE SERIES OF GENERAL GOVERNMENT SECURITIES
MONEY MARKET FUNDS, INC. (THE "GOVERNMENT COMPANY"). THE MINNESOTA MUNICIPAL
FUND AND THE NATIONAL MUNICIPAL FUND ARE SEPARATE SERIES OF GENERAL MUNICIPAL
MONEY MARKET FUNDS, INC. (THE "MUNICIPAL COMPANY"). THIS COMBINED STATEMENT OF
ADDITIONAL INFORMATION HAS BEEN PROVIDED FOR YOUR CONVENIENCE TO PROVIDE YOU
WITH THE OPPORTUNITY TO CONSIDER SEVEN INVESTMENT CHOICES IN ONE DOCUMENT.
TABLE OF CONTENTS
Page
DESCRIPTION OF THE FUNDS...................................................B-3
MANAGEMENT OF THE FUNDS....................................................B-24
MANAGEMENT ARRANGEMENTS....................................................B-29
HOW TO BUY SHARES..........................................................B-33
SERVICE PLAN AND DISTRIBUTION PLAN.........................................B-37
SHAREHOLDER SERVICES PLANS.................................................B-40
HOW TO REDEEM SHARES.......................................................B-40
SHAREHOLDER SERVICES.......................................................B-43
DETERMINATION OF NET ASSET VALUE...........................................B-47
DIVIDENDS, DISTRIBUTIONS AND TAXES.........................................B-48
YIELD INFORMATION..........................................................B-50
PORTFOLIO TRANSACTIONS.....................................................B-53
INFORMATION ABOUT THE FUNDS................................................B-53
COUNSEL AND INDEPENDENT AUDITORS...........................................B-54
YEAR 2000 ISSUES...........................................................B-55
APPENDIX A.................................................................B-57
APPENDIX B.................................................................B-60
APPENDIX C.................................................................B-64
APPENDIX D.................................................................B-83
APPENDIX E.................................................................B-89
APPENDIX F.................................................................B-115
DESCRIPTION OF THE FUNDS
Each of the Government Company, the Money Fund and the Municipal Company
is a Maryland corporation formed on April 8, 1982, April 8, 1982 and May 15,
1981, respectively. Each of the California Municipal Fund and the New York
Municipal Fund is a Massachusetts business trust that commenced operations on
March 10, 1987 and December 2, 1986, respectively.
Each Fund is an open-end management investment company, known as a money
market mutual fund. Each of the Government Money Fund, the Money Fund, the
Treasury Money Fund and the National Municipal Fund is a diversified fund, which
means that, with respect to 75% of its total assets, the Fund will not invest
more than 5% of its assets in the securities of any single issuer. Each of the
other Funds is a non-diversified fund, which 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 Investment Company Act of 1940, as amended (the "1940 Act").
The Dreyfus Corporation (the "Manager") serves as each Fund's investment
adviser.
Dreyfus Service Corporation (the "Distributor") is the distributor of each
Fund's shares.
Certain Portfolio Securities
The following information supplements and should be read in conjunction
with the Funds' Prospectus.
U.S. Government Securities. (GOVERNMENT MONEY FUND, MONEY FUND AND
TREASURY MONEY FUND) The Treasury Money Market Fund only invests in securities
issued or guaranteed by the U.S. Government. Each of the Government Money Fund
and Money Fund may invest in securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, which include Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the Treasury;
others by the right of the issuer to borrow from the Treasury; others by
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others 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 currently 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.
Repurchase Agreements. (GOVERNMENT MONEY FUND AND MONEY FUND) Each of
these Funds may enter into repurchase agreements. In a repurchase agreement, the
Fund buys, and the seller agrees to repurchase, a security at a mutually agreed
upon time and price (usually within seven days). The repurchase agreement
thereby determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. 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 entering into them. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities. 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 $1
billion, 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 the resale
price.
Bank Obligations. (MONEY FUND) The Money Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions.
Certificates of deposit ("CDs") are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits ("TDs") 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.
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 the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
As a result of Federal and state laws and regulations, domestic banks
whose CDs may be purchased by the Fund are, among other things, generally
required to maintain specified levels of reserves, and are subject to other
supervision and regulation designed to promote financial soundness. Domestic
commercial banks organized under Federal law are supervised and examined by the
Comptroller of the Currency and are required to be members of the Federal
Reserve System and to have their deposits insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In addition, state banks
whose CDs may be purchased by the Money Fund are insured by the Bank Insurance
Fund administered by the FDIC (although such insurance may not be of material
benefit to the Fund, depending upon the principal amount of the CDs of each bank
held by the Fund) and are subject to Federal examination and to a substantial
body of Federal law and regulation. However, not all of such laws and
regulations apply to the foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks may be general
obligations of the parent banks in addition to the issuing branch, or may be
limited by the terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal and
interest on the obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. These foreign branches and subsidiaries are
not necessarily subject to the same or similar regulatory requirements as apply
to domestic banks, such as mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements. In addition, less
information may be publicly available about a foreign branch of a domestic bank
or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal and state regulation
as well as governmental action in the country in which the foreign bank has its
head office. A domestic branch of a foreign bank with assets in excess of $1
billion may be subject to reserve requirements imposed by the Federal Reserve
System or by the state in which the branch is located if the branch is licensed
in that state.
In addition, Federal branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may be required to:
(1) pledge to the regulator, by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from time to time by
the appropriate regulatory authority; and (2) maintain assets within the state
in an amount equal to a specified percentage of the aggregate amount of
liabilities of the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal or State Branches generally
must be insured by the FDIC if such branches take deposits of less than
$100,000.
In view of the foregoing factors associated with the purchase of CDs and
TDs issued by foreign branches of domestic banks, by foreign subsidiaries of
domestic banks, by foreign branches of foreign banks or by domestic branches of
foreign banks, the Manager carefully evaluates such investments on a
case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan associations
and similar thrift institutions with less than $1 billion in assets, the
deposits of which are insured by the FDIC, provided the Fund purchases any such
CD in a principal amount of no more than $100,000, which amount would be fully
insured by the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC. Interest payments on such a CD are not insured by the
FDIC. The Fund will not own more than one such CD per such issuer.
Commercial Paper. (MONEY FUND) The Money Fund may purchase commercial
paper consisting 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, including banks.
Floating and Variable Rate Obligations. (MONEY FUND) The Money Fund 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 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 amounts 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.
Participation Interests. (MONEY FUND) The Money 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
Manager must have determined that the instrument is of comparable quality to
those instruments in which the Fund may invest.
Asset-Backed Securities. (MONEY FUND) The Money Fund may purchase
asset-backed securities, which are securities issued by special purpose entities
whose primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash flows
generated by the assets backing the securities and, in certain cases, supported
by letters of credit, surety bonds or other forms of credit or liquidity
enhancements. The value of these asset-backed securities also may be affected by
the creditworthiness of the servicing agent for the pool of assets, the
originator of the loans or receivables or the financial institution providing
the credit support.
Municipal Obligations. (CALIFORNIA MUNICIPAL FUND, MINNESOTA MUNICIPAL
FUND, NATIONAL MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND (COLLECTIVELY, THE
"MUNICIPAL FUNDS")) Each Municipal Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
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, in the opinion of
bond counsel to the issuer, is 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. Certain Municipal Obligations are subject to redemption at a date
earlier than their stated maturity pursuant to call options, which may be
separated from the related Municipal Obligation and purchased and sold
separately.
With respect to the National Municipal Fund, for the purpose of
diversification under the 1940 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.
Certain Tax Exempt Obligations. (MUNICIPAL FUNDS) Each Municipal 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.
Derivative Products. (MUNICIPAL FUNDS) Each Municipal Fund may purchase various
derivative products whose value is tied to underlying municipal obligations. The
Fund will purchase only those derivative products that are consistent with its
investment objective and policies and comply with the quality, maturity and
diversification standards of Rule 2a-7 under the 1940 Act. The principal types
of derivative products are described below.
(1) Tax Exempt Participation Interests. Tax exempt participation interests
give the Fund an undivided interest in a Municipal Obligation in the proportion
that the Fund's participation interest bears to the total principal amount of
the Municipal Obligation. Participation interests may have fixed, floating or
variable rates of interest, and are frequently backed by an irrevocable letter
of credit or guarantee of a bank.
(2) Tender Option Bonds. Tender option bonds grant the holder an option to
tender an underlying Municipal Obligation at par plus accrued interest at
specified intervals to a financial institution that acts as a liquidity
provider. The holder of a tender option bond effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt rate.
(3) Custodial Receipts. In a typical custodial receipt arrangement, an
issuer of a Municipal Obligation deposits it with a custodian in exchange for
two classes of custodial receipts. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest rate is
adjusted and ownership changes. The other class's interest rate also is
adjusted, but inversely to changes in the interest rate of the first class.
(4) Structured Notes. (NATIONAL, CALIFORNIA and NEW YORK MUNICIPAL FUNDS
only) Structured notes typically are purchased in privately negotiated
transactions from financial institutions. When the Fund purchases a structured
note, it will make a payment of principal to the counterparty. Some structured
notes have a guaranteed repayment of principal while others place a portion (or
all) of the principal at risk. The possibility of default by the counterparty or
its credit provider may be greater for structured notes than for other types of
money market instruments.
Stand-By Commitments. (MUNICIPAL FUNDS) Each Municipal 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 its 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.
Ratings of Municipal Obligations. (MUNICIPAL FUNDS) Each Municipal Fund may
invest only in those Municipal Obligations which are rated in one of the two
highest rating categories for debt obligations by at least two 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 Fund's Board.
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings as of the fiscal year ended November
30, 1999, computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Percentage of Value
------------------------------------------
Moody's Standard & California Minnesota National New York
Fitch IBCA, Investors Poor's Ratings Municipal Municipal Municipal Municipal
Inc. or Service, or Group Fund Fund Fund Fund
("Fitch") Inc. ("S&P")
("Moody's")
- ------------- -------------- ----------------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 95.3% 68.3% 94.2% 93.8%
F2+/F2 VMIG2/MIG2, P2 SP2+/SP2 0.2% -- -- --
AAA/AA Aaa/Aa AAA/AA 2.6% 19.1% 2.3% 0.5%
Not Rate Not Rated Not Rated 12.6% 3.5%* 5.7%*
- -------- --------- --------- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0%
====== ====== ====== ======
</TABLE>
- ------------------------
* Included in the Not Rated category are securities which, while not rated,
have been determined by the Manager to be of comparable quality to
securities in the VMIG1/MIG1 or SP-1+/SP-1 rating categories.
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 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
(collectively, the "Rating Agencies") for Municipal Obligations may change as a
result of changes in such organizations or their rating systems, each Fund will
attempt to use comparable ratings as standards for its investments in accordance
with its stated investment policies contained in the Funds' Prospectus and this
Statement of Additional Information. The ratings of the Rating Agencies
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.
Taxable Investments. (MUNICIPAL FUNDS) 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, each
Municipal 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 a Rating Agency; 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 $1 billion 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. 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 California Municipal Fund, the Minnesota Municipal Fund or
the New York Municipal Fund has adopted a temporary defensive position,
including when acceptable California, Minnesota or New York Municipal
Obligations, respectively, are unavailable for investment by the relevant Fund,
in excess of 35% of the Fund's net assets may be invested in securities that are
not exempt from California, Minnesota or New York State and New York City income
taxes, respectively. 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.
Investment Companies. (CALIFORNIA MUNICIPAL FUND, NATIONAL MUNICIPAL FUND
AND NEW YORK MUNICIPAL FUND) Each of these Funds may invest in securities issued
by other investment companies to the extent consistent with its investment
objective. Under the 1940 Act, a Fund's investment in such securities, subject
to certain exceptions, currently is limited to (i) 3% of the total voting stock
of any one investment company, (ii) 5% of the Fund's total assets with respect
to any one investment company and (iii) 10% of the Fund's total assets in the
aggregate. Investments in the securities of other investment companies may
involve duplication of advisory fees and certain other expenses.
Illiquid Securities. (ALL FUNDS) Each Fund may invest up to 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. These securities may include securities that are not readily
marketable, such as 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.
Investment Techniques
In addition to the principal investment strategies discussed in the Funds'
Prospectus, the Funds also may engage in the investment techniques described
below.
Borrowing Money. (ALL FUNDS) Each Fund may borrow money from banks for
temporary or emergency (not leveraging) purposes in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While such borrowings exceed 5% of the value of a
Fund's total assets, the Fund will not make any additional investments.
Forward Commitments. (MUNICIPAL FUNDS) Each Municipal 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 receivable on a forward commitment or when-issued security are
fixed when the Fund enters into the commitment, but the Fund does not make
payment until it receives delivery from the counterparty. The Fund will commit
to purchase such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities before the settlement date if
it is deemed advisable. The Fund will segregate permissible liquid assets at
least equal at all times to the amount of the purchase commitment.
Municipal Obligations and other securities purchased on a forward
commitment or when-issued basis are subject to changes in value (generally
changing in the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of
interest rates. Securities purchased on a forward commitment or when-issued
basis may expose a Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. Purchasing securities on a forward commitment or when-issued
basis when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net asset
value per share.
Investment Considerations and Risks
Bank Securities. (MONEY FUND) To the extent the Money 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 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.
Foreign Securities. (MONEY FUND) Since the Money Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches 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. Such
risks include possible future political and economic developments, seizure or
nationalization of foreign deposits, imposition of foreign withholding taxes on
interest income payable on the securities, establishment of exchange controls or
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest on these securities.
Investing in Municipal Obligations. (MUNICIPAL FUNDS) Each Municipal 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, each of these Funds 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 Municipal Funds
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 Manager 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 Internal Revenue Code of 1986, as amended (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 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.
Investing in California Municipal Obligations. (CALIFORNIA MUNICIPAL FUND)
Since the California Municipal Fund is concentrated in securities issued by
California or entities within California, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds. You
should consider carefully the special risks inherent in the Fund's investment in
California Municipal Obligations. You should review "Appendix C" which sets
forth information relating to investing in California Municipal Obligations.
Investing in Minnesota Municipal Obligations. (MINNESOTA MUNICIPAL Fund)
Since the Minnesota Municipal Fund is concentrated in securities issued by
Minnesota or entities within Minnesota, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds. You
should consider carefully the special risks inherent in the Fund's investment in
Minnesota Municipal Obligations. You should review "Appendix D" which sets forth
information relating to investing in Minnesota Municipal Obligations.
Investing in New York Municipal Obligations. (NEW YORK MUNICIPAL FUND)
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve greater
risk than investments in certain other types of money market funds. You should
consider carefully the special risks inherent in the Fund's investment in New
York Municipal Obligations. You should review "Appendix E" which sets forth
information relating to investing in New York Municipal Obligations.
Simultaneous Investments. (ALL FUNDS) Investment decisions for each Fund
are made independently from those of other investment companies advised by the
Manager. If, however, such other investment companies desire to invest in, or
dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Fund or the price paid or received by the
Fund.
Investment Restrictions
GOVERNMENT MONEY FUND. The Government Money Fund's investment objective is
a fundamental policy, which cannot be changed without approval by the holders of
a majority (as defined in the 1940 Act) of the Fund's outstanding voting shares.
In addition, the Government Money Fund has adopted investment restrictions
numbered 1 through 10 as fundamental policies. Investment restrictions numbered
11 and 12 are not fundamental policies and may be changed by vote of a majority
of the Fund's Board members at any time. The Government Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds, municipal
bonds or industrial revenue bonds.
2. Borrow money, except from banks 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.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options.
5. Underwrite the securities of other issuers.
6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
7. Make loans to others (except through the purchase of debt obligations
referred to in the Fund's Prospectus and this Statement of Additional
Information).
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
10. Invest more than 25% of its assets in the securities of issuers
in any industry, provided that there shall be no limitation on investments in
obligations issued or guaranteed as to principal and interest by the U.S.
Government.
11. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
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.
* * * * *
TREASURY MONEY FUND. The Treasury Money Fund's investment objective is a
fundamental policy, which cannot be changed without approval by the holders of a
majority (as defined in the 1940 Act) of the Fund's outstanding voting shares.
In addition, the Treasury Money Fund has adopted investment restrictions
numbered 1 through 9 as fundamental policies. Investment restrictions numbered
10 and 11 are not fundamental policies and may be changed by vote of a majority
of the Fund's Board members at any time. The Treasury Money Fund may not:
1. Invest in commodities.
2. Borrow money, except 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.
3. Purchase or sell securities on margin.
4. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act).
5. Act as underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
6. Purchase, hold or deal in real estate, or oil, gas, or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest in or deal in real estate.
7. Make loans to others, except through the purchase of debt
obligations.
8. Invest more than 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 without regard to any such limitations. This restriction does not apply
to the purchase of U.S. Government securities.
9. Invest more than 25% of its assets in the securities of issuers
in any industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government.
10. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements.
* * * * *
MONEY FUND. The Money Fund's investment objective is a fundamental policy,
which cannot be changed without approval by the holders of a majority (as
defined in the 1940 Act) of the Fund's outstanding voting shares. In addition,
the Money Fund has adopted investment restrictions numbered 1 through 12 as
fundamental policies. Investment restriction number 13 is not a fundamental
policy and may be changed by vote of a majority of the Fund's Board members at
any time. The Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds, municipal
bonds or industrial revenue bonds (except through the purchase of debt
obligations referred to in the Fund's Prospectus and this Statement of
Additional Information).
2. Borrow money, except from banks 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.
3. Pledge its assets, except in an amount up to 15% of the value of its
total assets but only to secure borrowings for temporary or emergency purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities,
commodities, or oil and gas interests.
8. Make loans to others (except through the purchase of debt obligations
referred to in the Fund's Prospectus and this Statement of Additional
Information).
9. Invest more than 15% of its assets in the obligations of any one bank,
or invest more than 5% of its assets in the commercial paper of any one issuer.
Notwithstanding the foregoing, to the extent required by the rules of the
Securities and Exchange Commission, the Fund will not invest more than 5% of its
assets in the obligations of any one bank.
10. Invest less than 25% of its assets in securities issued by banks or
invest more than 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.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
13. 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.
* * * * *
CALIFORNIA MUNICIPAL FUND. The California Municipal Fund's investment
objective is a fundamental policy, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. In addition, the California Municipal Fund has adopted investment
restrictions numbered 1 through 5 as fundamental policies. Investment
restrictions numbered 6 through 10 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The
California Municipal Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets).
2. Act as underwriter of securities of other issuers, except (i) 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 to take advantage of
the lower purchase price available, and (ii) to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
3. 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.
4. Lend any security or make loans to others if, as a result, more than
33-1/3% of its total assets would be lent to others, except that this limitation
does not apply to the purchase of qualified debt obligations and the entry into
repurchase agreements.
5. Invest more than 25% of its total assets in the securities of issuers
in any single industry; provided that there shall be no such limitation on the
purchase of Municipal Obligations and, for temporary defensive purposes,
securities issued by domestic banks and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
6. Sell securities short or purchase securities on margin.
7. Invest in companies for the purpose of exercising control.
8. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
9. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
10. 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.
* * * * *
MINNESOTA MUNICIPAL FUND. The Minnesota Municipal Fund's investment
objective is a fundamental policy, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. In addition, the Minnesota Municipal Fund has adopted investment
restrictions numbered 1 through 7 as fundamental policies. Investment
restrictions numbered 8 through 13 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The
Minnesota Municipal Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets).
2. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the Fund's
Board.
3. Underwrite the securities of other issuers, except to the extent 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 to take advantage of
the lower purchase price available, and except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
4. Purchase or sell real estate, 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.
5. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act).
6. Purchase securities on margin.
7. 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, for temporary defensive purposes, securities issued
by banks and obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
8. Sell securities short.
9. Invest in companies for the purpose of exercising control.
10. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings.
12. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Fund's Prospectus.
13. Enter into repurchase agreements provided 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.
* * * * *
NATIONAL MUNICIPAL FUND. The National Municipal Fund's investment
objective is a fundamental policy, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. In addition, the National Municipal Fund has adopted investment
restrictions numbered 1 through 7 as fundamental policies. Investment
restrictions numbered 8 through 12 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The
National Municipal Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets).
2. Act as underwriter of securities of other issuers, except (i) 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 to take advantage of
the lower purchase price available, and (ii) to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
3. 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.
4. Lend any security or make loans to others if, as a result, more than
33-1/3% of its total assets would be lent to others, except that this limitation
does not apply to the purchase of qualified debt obligations and the entry into
repurchase agreements.
5. 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, for defensive purposes, securities issued by banks
and obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
6. Purchase more than 10% of the voting securities of any issuer. This
restriction applies only with respect to 75% of the Fund's total assets.
7. Invest more than 15% of its assets in the obligations of any one bank,
or invest more than 5% of its assets in the obligations of any other 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 limitations.
Notwithstanding the foregoing, to the extent required by the rules of the
Securities and Exchange Commission, the Fund will not invest more than 5% of its
assets in the obligations of any one bank, except that up to 25% of the value of
the Fund's total assets may be invested without regard to such limitation.
8. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to the extent necessary to secure permitted borrowings and in connection with
the purchase of securities on a when-issued or forward commitment basis.
9. Sell securities short or purchase securities on margin.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
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.
* * * * *
NEW YORK MUNICIPAL FUND. The New York Municipal Fund's investment
objective is a fundamental policy, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. In addition, the New York Municipal Fund has adopted investment
restrictions numbered 1 through 5 as fundamental policies. Investment
restrictions numbered 6 through 10 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The New
York Municipal Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets).
2. Act as underwriter of securities of other issuers, except (i) 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 to take advantage of
the lower purchase price available, and (ii) to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
3. 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.
4. Lend any security or make loans to others if, as a result, more than
33-1/3% of its total assets would be lent to others, except that this limitation
does not apply to the purchase of qualified debt obligations and the entry into
repurchase agreements.
5. Invest more than 25% of its total assets in the securities of issuers
in any single industry; provided that there shall be no such limitation on the
purchase of Municipal Obligations and, for temporary defensive purposes,
securities issued by domestic banks and obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
6. Sell securities short or purchase securities on margin.
7. Invest in companies for the purpose of exercising control.
8. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
9. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
10. 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.
* * * * *
MUNICIPAL FUNDS. For purposes of Investment Restriction No. 5 for each
Municipal Fund other than the Minnesota Municipal Fund and Investment
Restriction No. 7 for the Minnesota Municipal Fund, 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.
ALL FUNDS. If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a change
in values or assets will not constitute a violation of such restriction.
MANAGEMENT OF THE FUNDS
Each Fund's Board is responsible for the management and supervision of the
Fund. The Board approves all significant agreements between the Fund and those
companies that furnish services to the Fund. These companies are as follows:
The Dreyfus Corporation.....................Investment Adviser
Dreyfus Service Corporation.................Distributor
Dreyfus Transfer, Inc.......................Transfer Agent
The Bank of New York........................Custodian
Board members and officers of each Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below.
Board Members of the Funds
JOSEPH S. DiMARTINO. Since January 1995, Chairman of the Board of various funds
in the Dreyfus Family of Funds. He also is a director of The Muscular
Dystrophy Association, HealthPlan Services Corporation, a provider of
marketing, administrative and risk management services to health and other
benefit programs, Carlyle Industries, Inc. (formerly, Belding Heminway
Company, Inc.), a button packager and distributor, Century Business
Services, Inc. (formerly, International Alliance Services, Inc.), a
provider of various outsourcing functions for small and medium sized
companies, and QuikCAT.com, Inc., a private company engaged in the
development of high speed movement, routing, storage and encryption of
data across cable, wireless and all other modes of data transport. For
more than five years prior to January 1995, he was President, a director
and, until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of the Funds' distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Bank
Corporation. He is 56 years old and his address is 200 Park Avenue, New
York, New York 10166.
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander served
as Secretary of the Army and Chairman of the Board of the Panama Canal
Company, and from 1975 to 1977, he was a member of the Washington, D.C. law
firm of Verner, Liipfert, Bernhard, McPherson and Alexander. He is a
director of American Home Products Corporation, IMS Health, a service
provider of marketing information and information technology, The Dun &
Bradstreet Corporation, MCI WorldCom and Mutual of America Life Insurance
Company and TLC Beatrice International Holdings, Inc. He is 66 years old
and his address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York University School
of Law. Professor Davis has been a member of the New York University law
faculty since 1983. Prior to that time, she served for three years as a
judge in the courts of New York State; was engaged for eight years in the
practice of law, working in both corporate and non-profit sectors; and
served for two years as a criminal justice administrator in the government
of the City of New York. She writes and teaches in the fields of evidence,
constitutional theory, family law, social sciences and the law, legal
process and professional methodology and training. She is 57 years old and
her address is c/o New York University School of Law, 40 Washington Square
South, New York, New York 10012.
ERNEST KAFKA, Board Member. A physician engaged in private practice specializing
in the psychoanalysis of adults and adolescents. Since 1981, he has served
as an Instructor at the New York Psychoanalytic Institute and, prior
thereto, held other teaching positions. He is Associate Clinical Professor
of Psychiatry at Cornell Medical School. For more than the past five
years, Dr. Kafka has held numerous administrative positions and has
published many articles on subjects in the field of psychoanalysis. He is
67 years old and his address is 23 East 92nd Street, New York, New York
10128.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York City
from September 1979 until March 1984 and Commissioner of the Department of
Housing Preservation and Development of New York City from February 1978
to September 1979. Mr. Leventhal was an associate and then a member of the
New York law firm of Poletti Freidin Prashker Feldman and Gartner from
1974 to 1978. He was Commissioner of Rent and Housing Maintenance for New
York City from 1972 to 1973. Mr. Leventhal served as Chairman of Citizens
Union, an organization which strives to reform and modernize city and
state government from June 1994 until June 1997. He is 57 years old and
his address is 70 Lincoln Center Plaza, New York, New York 10023-6583.
Each Fund has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Fund, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Fund for election to the
Fund's Board.
Each 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 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 each Fund indicated below for the fiscal year ended
November 30, 1999, and by all funds in the Dreyfus Family of Funds for which
such person is a Board member (the number of which is set forth in parenthesis
next to each Board member's total compensation)* for the year ended December 31,
1999, are set forth below.
Total Compensation
Aggregate From Funds and
Compensation Fund Complex Paid
Name of Board Member and Fund from the Fund** to Board Member
- ----------------------------- --------------- -- ---------------
JOSEPH S. DiMARTINO $642,177(189)
Government Money Fund $6,250
Money Fund $6,250
California Municipal Fund $4,688
National/Minnesota Municipal Fund*** $6,250
New York Municipal Fund $4,688
CLIFFORD L. ALEXANDER, JR. $85,378(43)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National/Minnesota Municipal Fund*** $5,000
New York Municipal Fund $3,750
PEGGY C. DAVIS $68,378(29)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National/Minnesota Municipal Fund*** $5,000
New York Municipal Fund $3,750
ERNEST KAFKA $68,378(29)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National/Minnesota Municipal Fund*** $5,000
New York Municipal Fund $3,750
SAUL B. KLAMAN**** $68,378(29)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National/Minnesota Municipal Fund*** $5,000
New York Municipal Fund $3,750
NATHAN LEVENTHAL $68,378(29)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund $3,750
National/Minnesota Municipal Fund*** $5,000
New York Municipal Fund $3,750
- -------------------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund complex, including the Funds, for which the Board
members serve.
** Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,726 for the Government Money Fund, $2,092 for the
Money Fund, $1,340 for the California Municipal Fund, $1,575 for the
National/Minnesota Municipal Fund and $1,502 for the New York Municipal
Fund, for all Board members as a group.
*** The National Municipal Fund and the Minnesota Municipal Fund are separate
series of the Municipal Company.
**** Emeritus Board member as of January 18, 2000.
Officers of the Funds
STEPHEN E. CANTER, President. President, Chief Operating Officer, Chief
Investment Officer and a director of the Manager, and an officer of other
investment companies advised and administered by the Manager. Mr. Canter
also is a Director or an Executive Committee Member of the other
investment management subsidiaries of Mellon Financial Corporation, each
of which is an affiliate of the Manager. He is 54 years old.
MARK N. JACOBS, Vice President. Vice President, Secretary and General Counsel of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 53 years old.
JOSEPH CONNOLLY, Vice President and Treasurer. Director - Mutual Fund Accounting
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 42 years old.
STEVEN F. NEWMAN, Secretary. Associate General Counsel and Assistant Secretary
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 50 years old.
MICHAEL A. ROSENBERG, Assistant Secretary. Associate General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. He is 40 years old.
JANETTE E. FARRAGHER, Assistant Secretary. Assistant General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. She is 37 years old.
MICHAEL CONDON, Assistant Treasurer. Senior Treasury Manager of the Manager, and
an officer of other investment companies advised and administered by the
Manager. He is 38 years old.
The address of each officer of the Funds is 200 Park Avenue, New York, New
York 10166.
Each Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on March 1, 2000.
Set forth in "Appendix F" to this Statement of Additional Information are
the shareholders known by each Fund (as indicated) to own of record 5% or more
of such Fund's Class A or Class B shares outstanding on March 1, 2000. A
shareholder who beneficially owns, directly or indirectly, more than 25% of the
Fund's voting securities may be deemed a "control person" (as defined in the
1940 Act) of the Fund.
MANAGEMENT ARRANGEMENTS
Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania Law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. 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.
The Manager provides management services pursuant to separate Management
Agreements (respectively, the "Agreement") between the Company and the Manager.
As to each Fund, the Agreement is subject to annual approval by (i) the Fund's
Board or (ii) vote of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the continuance
also is approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. As to each Fund, the Agreement is terminable without penalty, on 60
days' notice, by the Fund's Board or by vote of the holders of a majority of the
Fund's shares or, upon not less than 90 days' notice, by the Manager. Each
Agreement will terminate automatically, as to the relevant Fund, in the event of
its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment
Officer and a director; Thomas F. Eggers, Vice Chairman-Institutional and a
director, Lawrence S. Kash, Vice Chairman and a director; J. David Officer,
Vice Chairman and a director; Ronald P. O'Hanley III, Vice Chairman; William
T. Sandalls, Jr., Executive Vice President; Stephen R. Byers, Senior
Vice-President; Mark N. Jacobs, Vice President, General Counsel and a
Secretary; Diane P. Durnin, Vice President--Product Development; Patrice M.
Kozlowski, Vice President--Corporate Communications; Mary Beth Leibig, Vice
President--Human Resources; Ray Van Cott, Vice President--Information
Systems; Theodore A. Schachar, Vice President--Tax; Wendy Strutt, Vice
President; Richard Terres, Vice President; William H. Maresca, Controller;
James Bitetto, Assistant Secretary; Stephen F. Newman, Assistant Secretary;
and Mandell L. Berman, Burton C. Borgelt, Steven G. Elliot, Martin C.
McGuinn, Richard W. Sabo and Richard F. Syron directors.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan, and commercial banking or other relationships with issuers of
securities purchased by a Fund. The Manager has informed the funds that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager's Code of Ethics (the "Code") subjects its employees' personal
securities transactions to various restrictions to ensure that such trading does
not disadvantage any fund advised by the Manager. In that regard, portfolio
managers and other investment personnel of the Manager must preclear and report
their personal securities transactions and holdings, which are reviewed for
compliance with the Code, and are also subject to the oversight of Mellon's
Investment Ethics Committee. Portfolio managers and other investment personnel
of the Manager who comply with the Code's preclearance and disclosure
procedures, and the requirements of the Committee, may be permitted to purchase,
sell or hold securities which also may be or are held in fund(s) they manage or
for which they otherwise provide investment advice.
The Manager manages each Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides each
Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The portfolio managers of the Government
Money Fund, the Money Fund and the Treasury Money Fund are Bernard W.
Kiernan, Patricia A. Larkin, James G. O'Connor and Thomas Riordan. The
portfolio managers of the Municipal Funds are Joseph P. Darcy, A. Paul
Disdier, Douglas J. Gaylor, Joseph Irace, Colleen Meehan, Richard J.
Moynihan, W. Michael Petty, Jill C. Shaffro, Scott Sprauer, 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 each Fund and for other funds
advised by the Manager.
The Manager maintains office facilities on behalf of each Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fee paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures using its own resources, as it from time to time deems appropriate.
All expenses incurred in the operation of a Fund are borne by such Fund,
except to the extent specifically assumed by the Manager. The expenses borne by
each Fund include: taxes, interest, brokerage fees and commissions, if any, fees
of Board members who are not officers, directors, employees or holders of 5% or
more of the outstanding voting securities of the Manager, Securities and
Exchange Commission fees, state Blue Sky qualification fees, charges of
custodians, transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal expenses, costs
of maintaining the Fund's existence, investor services (including, without
limitation, telephone and personnel expenses), costs of shareholder reports and
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. Each Fund bears certain expenses
in accordance with separate written plans and also bears certain costs
associated with implementing and operating such plans. See "Service Plan and
Distribution Plan" and "Shareholder Services Plans."
As compensation for the Manager's services under the Agreement, each Fund
has agreed to pay the Manager a monthly management fee at the annual rate of
0.50% of the value of such Fund's average daily net assets. All fees and
expenses are accrued daily and deducted before declaration of dividends to
investors. Set forth below are the total amounts paid by each Fund indicated
below to the Manager for each Fund's last three fiscal years, including for the
Government Money Fund, the Money Fund and the California Municipal Fund, which
changed their fiscal year end to November 30, the relevant period ended November
30, 1997:
<TABLE>
<CAPTION>
Fiscal Year Ended November 30, Ten-Month Period
--------------------------- Ended Fiscal Year Ended
1999 1998 November 30, 1997 January 31, 1997
---- ---- ------------- ----------------
<S> <C> <C> <C> <C>
Government Money $ 6,149,979 $5,124,528 $3,330,297 $3,002,777
Fund
Money Fund $17,915,495 $13,222,636 $7,091,891 $5,285,812
Fiscal Year Ended November 30, Four-Month
--------------------------- Period
Ended Fiscal Year Ended
1999 1998 November 30, 1997 July 31, 1997
---- ---- ------------- ----------------
California $2,175,093 $ 1,794,867 $ 620,429 $1,836,034
Municipal Fund
Management Fee Payable Reduction in Fee Net Fee Paid
---------------------- ---------------- ------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ---- ---- ---- ----
Minnesota $166,440 $65,816* N/A $60,736 $65,816* N/A $105,704 $-0-* N/A
Municipal Fund
Fiscal Year Ended November 30,
------------------------------
1999 1998 1997
---- ---- ----
National $3,259,585 $3,038,316 $2,127,041
Municipal Fund
New York $2,223,274 $2,369,250 $2,599,539
Municipal Fund
- --------------------
* For the period from June 1, 1998 (commencement of operations) through
November 30, 1998.
</TABLE>
The Treasury Money Fund has not completed its first fiscal year.
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest and
(with the prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed 1-1/2% of the
average market value of the net assets of such Fund for that fiscal year, the
Fund may deduct from the payment to be made to the Manager under the Agreement,
or the Manager will bear, such excess expense. Such deduction or payment, if
any, will be estimated daily and reconciled and effected or paid, as the case
may be, on a monthly basis. As to each Fund, no such deduction or payment was
required for the most recent fiscal year end.
As to each Fund, the aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Fund's net assets increases.
Distributor. The Distributor, a wholly-owned subsidiary of the Manager
located at 200 Park Avenue, New York, NewYork 10166, serves as each Fund's
distributor on a best efforts basis pursuant to an agreement which is renewable
annually.
The Distributor may pay dealers a fee based on the amount invested through
such dealers in certain Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs, or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and reserves the right to
cease paying these fees at any time. The Distributor will pay such fees from its
own funds, other than amounts received from the Fund, including past profits or
any other source available to it.
Transfer and Dividend Disbursing Agent and Custodian. Dreyfus Transfer,
Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager, P.O. Box
9671, Providence, Rhode Island 02940-9671, is each Fund's transfer and dividend
disbursing agent. Under a separate transfer agency agreement with each Fund, the
Transfer Agent arranges for the maintenance of shareholder account records for
the Fund, the handling of certain communications between shareholders and the
Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee from each Fund
computed on the basis of the number of shareholder accounts it maintains for
such Fund during the month, and is reimbursed for certain out-of-pocket
expenses.
The Bank of New York (the "Custodian"), 100 Church Street, New York, New
York 10286, is each Fund's custodian. The Custodian has no part in determining
the investment policies of the Fund or which securities are to be purchased or
sold by the Fund. Under a separate custody agreement with each Fund, the
Custodian holds the Fund's securities and keeps all necessary accounts and
records. For its custody services, the Custodian receives a monthly fee from
each Fund based on the market value of the Fund's assets held in custody and
receives certain securities transactions charges.
HOW TO BUY SHARES
Each Fund's 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. For shareholders who purchase Fund
shares from the Distributor, the Distributor will act as Service Agent. Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. Each Fund reserves the right to reject any
purchase order.
The minimum initial investment in each Fund is $2,500, or $1,000 if you
are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund for
its customers of $2,500. Subsequent investments must be at least $100. For the
Government Money Fund, Money Fund and Treasury Money Fund, however, the minimum
initial investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, IRAs set up
under a Simplified Employee Pension Plan ("SEP-IRAs") and rollover IRAs) and
403(b)(7) Plans with only one participant and $500 for Dreyfus-sponsored
Education IRAs, with no minimum for subsequent purchases. It is not recommended
that the Municipal Funds be used as a vehicle for Keogh, IRA or other qualified
plans. The initial investment must be accompanied by the Account Application.
For full-time or part-time employees of the Manager or any of its affiliates or
subsidiaries, directors of the Manager, Board members of a Fund advised by the
Manager, including members of each 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 Manager or any of its affiliates or subsidiaries who
elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Government Money Fund and
the Money Fund reserve the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to such
Fund. Each Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time.
Fund shares also may be purchased through Dreyfus-Automatic Asset
Builder(R), the Government Direct Deposit Privilege or the Payroll Savings Plan
described under "Shareholder Services." These services enable you to make
regularly scheduled investments and may provide you with a convenient way to
invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect you
against loss in a declining market.
Service Agents may receive different levels of compensation for selling
different Classes of shares. Management understands that some Service Agents may
impose certain conditions on their clients which are different from those
described in the Funds' Prospectus and this Statement of Additional Information,
and, to the extent permitted by applicable regulatory authority, may charge
their clients direct fees. You should consult your Service Agent in this regard.
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 or other entity
authorized to receive orders on behalf of the Fund in written or 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 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. 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."
GOVERNMENT MONEY FUND, MONEY FUND AND TREASURY MONEY FUND--Each of these Funds
determines its net asset value per share twice each day the New York Stock
Exchange or the Transfer Agent is open for business: as of 5:00 p.m., New York
time, and as of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by 12:00
Noon, New York time, by the Transfer Agent 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, you
will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 5:00 p.m.,
New York time, and the shares purchased will receive the dividend on Fund shares
declared on that day, if such order is placed with the Distributor or its
designee in New York by 5:00 p.m., New York time, and Federal Funds are received
by 6:00 p.m., New York time, on that day. A telephone order placed with the
Distributor or its designee in New York after 5:00 p.m., New York time, but by
8:00 p.m., New York time, on a given day will become effective at the price
determined at 8:00 p.m., New York time, on that day, and the shares purchased
will begin to accrue dividends on the next business day, if Federal Funds are
received by 11:00 a.m., New York time, on the next business day.
MINNESOTA MUNICIPAL FUND--The Fund determines its net asset value per share
twice each day the New York Stock Exchange or the Transfer Agent is open for
business: as of 12:00 Noon, Eastern time, and as of 8:00 p.m., Eastern time.
If your payments are received in or converted into Federal Funds by 4:00
p.m., Eastern time, by the Transfer Agent on a business day, you will receive
the dividend declared that day. If your payments are received in or converted
into Federal Funds after 4:00 p.m., Eastern 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. A
telephone order placed with the Distributor or its designee in New York will
become effective at the price determined at 12:00 Noon, Eastern time, and the
shares purchased will receive the dividend on Fund shares declared on that day,
if such order is placed with the Distributor or its designee in New York by
12:00 Noon, Eastern time, and Federal Funds are received by 4:00 p.m., Eastern
time, on that day. A telephone order placed with the Distributor or its designee
in New York after 12:00 Noon, Eastern time, but by 8:00 p.m., Eastern time, on a
given day will become effective at the price determined at 8:00 p.m., Eastern
time, on that day, and the shares purchased will begin to accrue dividends on
the next business day, if Federal Funds are received by 11:00 a.m., Eastern
time, on the next business day.
CALIFORNIA MUNICIPAL FUND, NATIONAL MUNICIPAL FUND AND NEW YORK MUNICIPAL
Fund--Each of these Funds determines its net asset value per share three times
each day the New York Stock Exchange or the Transfer Agent is open for business:
as of 12:00 Noon, Eastern time, as of 2:00 p.m., Eastern time, and as of 8:00
p.m., Eastern time.
If your payments are received in or converted into Federal Funds by 4:00
p.m., Eastern time, on a business day, you will receive the dividend declared
that day. If your payments are received in or converted into Federal Funds after
4:00 p.m., Eastern time, 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, or 2:00 p.m., Eastern
time, depending on when the order is accepted on a given day, and the shares
purchased will receive the dividend on Fund shares declared on that day, if the
telephone order is placed with the Distributor or its designee by 2:00 p.m.,
Eastern time, and Federal Funds are received at 4:00 p.m., Eastern time, on that
day. A telephone order placed with the Distributor or its designee in New York
after 2:00 p.m., Eastern time, but by 8:00 p.m., Eastern time, on a given day
will become effective at the price determined at 8:00 p.m., Eastern time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., New York time, on the
next business day.
Using Federal Funds. The Transfer Agent or the Fund may attempt to notify
you 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 you are a
customer of a Selected Dealer and your order to purchase Fund shares is paid for
other than in Federal Funds, the Selected Dealer, acting on your behalf, will
complete the conversion into, or itself advance, Federal Funds, generally on the
business day following receipt of your order. The order is effective only when
so converted and received by the Transfer Agent. If you have sufficient Federal
Funds or a cash balance in your brokerage account with a Selected Dealer, your
order to purchase Fund shares will become effective on the day that the order,
including Federal Funds, is received by the Transfer Agent.
Dreyfus TeleTransfer Privilege. (CALIFORNIA MUNICIPAL FUND, MINNESOTA
MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND ONLY) You may purchase shares by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an Automated
Clearing House ("ACH") member may be so designated.
Dreyfus TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day that the Transfer Agent
and the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the Dreyfus TeleTransfer Privilege, the initial payment for
purchase of 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 "How to Redeem Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. You may reopen an account with a minimum investment
of $100 without filing a new Account Application during the calendar year the
account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
SERVICE PLAN AND DISTRIBUTION PLAN
Class A shares of each of the Government Money Fund, Money Fund and
Treasury Money Fund are subject to a Service Plan and Class B shares of each
Fund are subject to a Distribution Plan.
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange Commission
under the 1940 Act provides, among other things, that an investment company may
bear expenses of distributing its shares only pursuant to a plan adopted in
accordance with the Rule. The Board of each of the Government Money Fund, the
Money Fund and the Treasury Money Fund has adopted separate plans with respect
to Class A and Class B of such Funds and the Board of each of the Municipal
Funds has adopted a plan with respect to Class B of such Funds (each, a "Plan").
Under each Plan, the respective Fund bears directly the costs of preparing,
printing and distributing prospectuses and statements of additional information
and of implementing and operating the Plan. Under each Plan adopted with respect
to Class A of the Government Money Fund, the Money Fund and the Treasury Money
Fund (the "Service Plan"), the Fund pays the Distributor for distributing Class
A shares, servicing shareholder accounts ("Servicing") and advertising and
marketing relating to the fund at an aggregate annual rate of 0.20% of the value
of the Fund's average daily net assets attributable to Class A. Under each
Service Plan, the Distributor may pay one or more Service Agents a fee in
respect of Class A shares of the Fund 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. Under each Fund's Plan adopted with respect to Class
B (the "Distribution Plan"), the Fund pays the Distributor for distributing
(within the meaning of the Rule) Class B shares at an annual rate of 0.20% of
the value of the Fund's average daily net assets attributable to Class B. Each
Fund's Board believes that there is a reasonable likelihood that each Plan will
benefit the Fund and holders of the relevant Class of shares.
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the Fund's
Board for its review. In addition, each Plan provides that it may not be amended
to increase materially the costs which the Fund may bear for distribution
pursuant to the Plan without shareholder approval of the affected Class and that
other material amendments of the Plan must be approved by the Board, and by the
Fund's Board members who are not "interested persons" (as defined in the 1940
Act) of the Fund or the Manager and have no direct or indirect financial
interest in the operation of the Plan or in any related agreements entered into
in connection with such Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. Each Plan is subject to annual approval
by such vote of the Board members cast in person at a meeting called for the
purpose of voting on the Plan. Each Plan is terminable at any time by vote of a
majority of the Fund's Board members who are not "interested persons" and have
no direct or indirect financial interest in the operation of the Plan or in any
of the related agreements or by vote of a majority of the relevant Class of
shares.
From August 23, 1994 through March 21, 2000, Premier Mutual Fund Services,
Inc. ("Premier") acted as the Funds' distributor and received payments under the
Plans. Set forth below are the total amounts paid by each of the Government
Money Fund and the Money Fund pursuant to its Service Plan with respect to Class
A (i) to Premier ("Distributor Payments") as reimbursement for distributing
Class A shares and Servicing, (ii) to the Manager, Dreyfus Service Corporation
and their affiliates (collectively, "Dreyfus") for payments made for Servicing
("Dreyfus Payments"), and (iii) for costs of preparing, printing and
distributing prospectuses and statement of additional information and of
implementing and operating the Service Plan ("Printing and Implementation") for
the Fund's fiscal year ended November 30, 1999:
TOTAL AMOUNT
PAID PURSUANT DREYFUS PRINTING
NAME OF FUND TO SERVICE PLAN DISTRIBUTOR PAYMENTS AND
PAYMENTS IMPLEMENTATION
- ------------- ---------------- ---------------- ------------- ------------
Government
Money Fund
- Class A $2,614,885 $1,477,656 $1,131,021 $6,208
Money Fund
- Class A $3,030,539 $1,286,942 $1,736,520 $7,077
The Treasury Money Fund has not completed its first fiscal year.
Set forth below are the total amounts paid by each Fund to Premier as the
distributor pursuant to the Fund's Distribution Plan with respect to Class B for
the Fund's fiscal year ended November 30, 1999:
TOTAL AMOUNT PAID
NAME OF FUND PURSUANT TO DISTRIBUTION PLAN
- ---------------------- ------------------------------
Government
Money Fund
- Class B $ 662,617
Money Fund
- Class B $28,212,547
California
Municipal Fund
- Class B $ 215,969
Minnesota
Municipal Fund
- Class B $ 186,083
National
Municipal Fund
- Class B $ 4,105,788
New York
Municipal Fund
- Class B $ 588,867
The Treasury Money Fund has not completed its first fiscal year.
SHAREHOLDER SERVICES PLANS
Each Fund has adopted a Shareholder Services Plan with respect to Class A
pursuant to which the Fund reimburses the Distributor an amount not
to exceed an annual rate of 0.25% of the value of the Fund's average daily net
assets attributable to Class A for certain allocated expenses of providing
certain services to the holders of Class A shares. Each Fund also 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 0.25% of the value of the Fund's
average daily net assets attributable to Class B. Under each Shareholder
Services Plan, 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. As to each Fund, under the Shareholders
Services Plan for Class B, the Distributor may make payments to Service Agents
in respect of their services.
A quarterly report of the amounts expended under each Shareholder Services
Plan, and the purposes for which such expenditures were incurred, must be made
to the Fund's Board for its review. In addition, each Shareholder Services Plan
provides that material amendments to the Shareholder Services Plan must be
approved by the Fund's Board, and by the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan, by vote
cast in person at a meeting called for the purpose of considering such
amendments. Each Shareholder Services Plan is subject to annual approval by such
vote of its Board members cast in person at a meeting called for the purpose of
voting on the Shareholder Services Plan. Each Shareholder Services Plan is
terminable at any time by vote of a majority of the Board members who are not
"interested persons" and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan.
Set forth below are the total amounts payable by each Fund pursuant to its
separate Shareholder Services Plans for Class A and Class B (with respect to
Class B, payments under the Plan were made to Premier as the Fund's
distirbutor), the amounts reimbursed to the Fund by the Manager pursuant to
undertakings in effect, if any, and the net amount paid by the Fund for the
Fund's fiscal year ended November 30, 1999:
TOTAL AMOUNT AMOUNT REIMBURSED NET AMOUNT PAID
NAME OF FUND PAYABLE PURSUANT TO PURSUANT TO UNDERTAKING BY FUND
AND CLASS SHAREHOLDER SERVICES
PLAN
Government
Money Fund
- - Class A $ 122,119 $ -0- $ 122,119
- - Class B $1,993,456 $226,715 $1,766,741
Money Fund
- - Class A $ 362,654 $ -0- $ 362,654
- - Class B $8,144,122 $929,591 $7,214,531
California
Municipal
Fund
- - Class A $ 150,789 $ -0- $ 150,789
- - Class B $ 41,860 $ 17,966 $ 23,894
National
Municipal
Fund
- - Class A $ 64,999 $ -0- $ 64,999
- - Class B $1,167,536 $ 268,657 $ 898,879
Minnesota
Municipal
Fund
- - Class A $ -0- $ -0- $ -0-
- - Class B $ 99,233 $ 99,233 $ -0-
New York
Municipal
Fund
- -Class A $ 345,434 $ -0- $ 345,434
- -Class B $ 169,950 $ 59,116 $ 110,834
The Treasury Money Fund has not completed its first fiscal year.
HOW TO REDEEM SHARES
Check Redemption Privilege. Each Fund provides Redemption Checks
("Checks") automatically upon opening an account, unless you specifically refuse
the Check Redemption Privilege by checking the applicable "No" box on the
Account Application. The Check Redemption Privilege may be established for an
existing account by a separate signed Shareholder Services Form. Checks will be
sent only to the registered owner(s) of the account and only to the address of
record. The Account Application or Shareholder Services Form must be manually
signed by the registered owner(s). Checks are drawn on your Fund account and 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
your agent, will cause the Fund to redeem a sufficient number of shares in your
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 you. You
generally will be subject to the same rules and regulations that apply to
checking accounts, although the election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer Agent.
You should date your Checks with the current date when you write them.
Please do not postdate your Checks. If you do, the Transfer Agent will honor,
upon presentment, even if presented before the date of the check, all postdated
Checks which are dated within six months of presentment for payment, if they are
otherwise in good order. If you hold shares in a Dreyfus-sponsored IRA account,
you may be permitted to make withdrawals from your IRA account using checks
furnished to you by The Dreyfus Trust Company.
Checks are free, but the Transfer Agent will impose a fee for stopping
payment of a Check upon your request or if the Transfer Agent cannot honor a
Check due to insufficient funds or other valid reason. If the amount of the
Check is greater than the value of the shares in your 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, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions from
any person representing himself or herself to be you or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, each Fund will initiate payment for shares redeemed pursuant to this
Privilege on the same business day if the Transfer Agent receives a redemption
request in proper form prior to 5:00 p.m., New York time, on such day; otherwise
the Fund will initiate payment on the next business day. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by you on the Account Application or the
Shareholder Services Form, or to a correspondent bank if your bank is not a
member of the Federal Reserve System. Fees ordinarily are imposed by such bank
and borne by the investor. Immediate notification by the correspondent bank to
your bank is necessary to avoid a delay in crediting the funds to your bank
account.
If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code which
may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
If you do not have direct access to telegraphic equipment, you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171, toll
free. You should advise the operator that the above transmittal code must be
used and should also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to receive 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. (CALIFORNIA MUNICIPAL FUND, MINNESOTA
MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND ONLY) You may request by telephone
that redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an ACH member may be designated. Redemption proceeds will be on deposit
in your account at an ACH member bank ordinarily two days after receipt of the
redemption request. Holders of jointly registered Fund or bank accounts may
redeem through the Dreyfus TeleTransfer Privilege for transfer to their bank
account not more than $500,000 within any 30-day period. You should be aware
that if you have selected the Dreyfus TeleTransfer privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction through
the ACH system unless more prompt transmittal specifically is requested. See
"How to Buy Shares--Dreyfus TeleTransfer Privilege."
Redemption Through a Selected Dealer. If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by the
Transfer Agent or its designee by 12:00 Noon, New York time, with respect to the
Municipal Funds, or 5:00 p.m., New York time, with respect to the Government
Money Fund and Money Fund 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 after such time, but by 8:00 p.m., New York time, the redemption
request will be effective on that day, the shares will receive the dividend
declared on that day and the proceeds of redemption ordinarily will be
transmitted in Federal Funds on the next business day. If a redemption request
is received after 8:00 p.m., New York time, the redemption request will be
effective on the next business day. It is the responsibility of the Selected
Dealer to transmit a request so that it is received in a timely manner. The
proceeds of the redemption are credited to your account with the Selected
Dealer.
Stock Certificates; Signatures. Any certificates representing Fund shares
to be redeemed must be submitted with the redemption request. Written redemption
requests must be signed by each shareholder, including each holder of a joint
account, and each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed. The Transfer
Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock 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. Each Fund has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In the case of
requests for redemption in excess of such amount, each Fund's Board 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 the existing shareholders. In such
event, the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sells such securities, brokerage charges might be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or the
date of payment postponed (a) during any period when the New York Stock Exchange
is closed (other than customary weekend and holiday closings), (b) when trading
in the markets a Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of a 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 a Fund's shareholders.
SHAREHOLDER SERVICES
Fund Exchanges. Clients of certain Service Agents may purchase, in
exchange for shares of a Fund, shares of certain other funds managed or
administered by the Manager or Founders Asset Management LLC ("Founders"), an
affiliate of the Manager, to the extent such shares are offered for sale in such
client's state of residence. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds offered without a sales load will
be made without a sales load.
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 for
shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load, and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), but if the sales load applicable to the
Offered Shares exceeds the maximum sales load that could have
been imposed in connection with the Purchased Shares (at the time
the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, you or your Service Agent
acting on your behalf must notify the Transfer Agent of your prior ownership of
fund shares and your account number.
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. The ability to issue exchange instructions by telephone is given to
shareholders of each Fund automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically refuse this
Privilege. By using the Telephone Exchange Privilege, you authorize the Transfer
Agent to act on telephonic instructions (including over The Dreyfus Touch(R)
automated telephone system) from any person representing himself or herself to
be you or a representative of your Service Agent, and reasonably believed by the
Transfer Agent to be genuine. Telephone exchanges may be subject to limitations
as to the amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchange. No fees
currently are charged shareholders directly in connection with exchanges,
although each Fund reserve the right, upon not less than 60 days' written
notice, to charge shareholders a nominal administrative fee in accordance with
rules promulgated by the Securities and Exchange Commission.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege permits
you to purchase, in exchange for shares of a Fund, shares of certain other funds
in the Dreyfus Family of Funds or certain funds advised by Founders of which you
are a shareholder. This Privilege is available only for existing accounts.
Shares will be exchanged on the basis of relative net asset value as described
above under "Fund Exchanges." Enrollment in or modification or cancellation of
this Privilege is effective three business days following notification by you.
You will be notified if your account falls below the amount designated to be
exchanged under this Privilege. In this case, your account will fall to zero
unless additional investments are made in excess of the designated amount prior
to the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares may be
made between IRA accounts and from regular accounts to IRA accounts, but not
from IRA accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
legally may 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. Each Fund reserves the right to reject any
exchange request in whole or in part. The Fund Exchanges service or the
Auto-Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Dreyfus-Automatic Asset Builder(R). Dreyfus-Automatic Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you.
Dreyfus Government Direct Deposit Privilege. Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social Security,
or certain veterans', military or other payments from the Federal Government
automatically deposited into your Fund account. You may deposit as much of such
payments as you elect.
Dreyfus 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 ACH system at each pay period. To establish a Payroll
Savings Plan account, you must file an authorization form with your employer's
payroll department. It is the sole responsibility of your employer to arrange
for transactions under the Dreyfus Payroll Savings Plan.
Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, paid by a Fund in shares of another fund in the Dreyfus Family of Funds or
certain funds advised by Founders of which you are a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the basis
of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds offered without a
sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund that charges a sales load
may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), but if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are being
swept (without giving effect to any reduced loads), the difference
will be deducted.
D. Dividends and distributions paid by a fund may be invested in shares
of other funds that impose a contingent deferred sales charge ("CDSC")
and the applicable CDSC, if any, will be imposed upon redemption of
such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from each Fund to a designated
bank account. Only an account maintained at a domestic financial institution
which is an ACH member may be so designated. Banks may charge a fee for this
service.
Quarterly Distribution Plan. The Quarterly Distribution Plan permits you
to receive quarterly payments from a 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.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. Withdrawal
payments are the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and distributions,
your shares will be reduced and eventually may be depleted. Automatic Withdrawal
may be terminated 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.
Corporate Pension/Profit-Sharing and Personal Retirement Plans.
(GOVERNMENT MONEY FUND, MONEY FUND AND TREASURY MONEY FUND) Each of the
Government Money Fund, Money Fund and Treasury Money Fund makes available to
corporations a variety of prototype pension and profit-sharing plans, including
a 401(k) Salary Reduction Plan. In addition, these Funds make available Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse, Roth
IRAs, SEP-IRAs, rollover IRAs and Education IRAs) and 403(b)(7) Plans. Plan
support services also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan, a
403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares. All
fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of receipt
of funds.
You should read the prototype retirement plans and the applicable form of
custodial agreement for further details as to eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
Amortized Cost Pricing. The valuation of each 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.
Each Fund's Board has established, as a particular responsibility within
the overall duty of care owed to the Fund's shareholders, procedures reasonably
designed to stabilize the Fund's price per share as computed for the purpose of
purchases and redemptions at $1.00. Such procedures include review of the Fund's
portfolio holdings by the Board, at such intervals as it may deem 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. In such review, investments for which market quotations are
readily available will be valued at the most recent bid price or yield
equivalent for such securities or for securities of comparable maturity, quality
and type, as obtained from one or more of the major market makers for the
securities to be valued. Other investments and assets, to the extent a Fund is
permitted to invest in such instruments, will be valued at fair value as
determined in good faith by the Board. With respect to the Municipal Funds,
market quotations and market equivalents used in the Board's review are obtained
from an independent pricing service (the "Service") approved by the Board. The
Service values these Funds' investments based on methods which include
considerations of: yields or prices of municipal obligations 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 a 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 Fund's Board. If such deviation exceeds
1/2 of 1%, the Board promptly will consider what action, if any, will be
initiated. In the event a Fund's Board 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 and Transfer Agent Closings. The holidays (as
observed) on which both the New York Stock Exchange and the Transfer Agent are
closed currently are: New Year's Day, Martin Luther King Jr. Day, Presidents'
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management believes that each Fund (except the Treasury Money Fund) has
qualified for the fiscal year ended November 30, 1999 as a "regulated investment
company" under the Code. It is expected that the Treasury Money Fund will
qualify as a regulated investment company under the Code. Each Fund intends to
continue to so qualify if such qualification is in the best interests of its
shareholders. 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. If the Fund did not qualify as a regulated
investment company, it would be treated for tax purposes as an ordinary
corporation subject to Federal income tax.
Each Fund ordinarily declares dividends from its net investment income on
each day the New York Stock Exchange or, for the Government Money Fund, Money
Fund and Treasury Money Fund only, 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 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. 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.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividend or distribution and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
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.
With respect to the Municipal Funds, if, at the close of each quarter of
its taxable year, at least 50% of the value of the Fund's total assets consists
of Federal tax exempt obligations, then the Fund may designate and pay Federal
exempt-interest dividends from interest earned on all such tax exempt
obligations. Such exempt-interest dividends may be excluded by shareholders of
the Fund from their gross income for Federal income tax purposes. Dividends
derived from Taxable Investments, together with distributions from any net
realized short-term securities gains, generally are taxable as ordinary income
for Federal income tax purposes whether or not reinvested. Distributions from
net realized long-term securities gains generally are taxable as long-term
capital gains to a shareholder who is a citizen or resident of the United
States, whether or not reinvested and regardless of the length of time the
shareholder has held his shares.
With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of obligations which, when held by an individual, the interest
therefrom is exempt from California personal income tax, and if the Fund
qualifies as a management company under the California Revenue and Taxation
Code, then the Fund will be qualified to pay dividends to its shareholders that
are exempt from California personal income tax (but not from California
franchise tax) ("California exempt-interest dividends"). However, the total
amount of California exempt-interest dividends paid by the Fund to a
non-corporate shareholder with respect to any taxable year cannot exceed such
shareholder's pro rata share of interest received by the Fund during such year
that is exempt from California taxation less any expenses and expenditures
deemed to have been paid from such interest.
For shareholders subject to the California personal income tax,
exempt-interest dividends derived from California Municipal Obligations will not
be subject to the California personal income tax. Distributions from net
realized short-term capital gains to California resident shareholders will be
subject to the California personal income tax distributed by the Fund as
ordinary income. Distributions from net realized long-term capital gains may
constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the California Municipal Fund's
shareholders will not be subject to California personal income tax, or receive a
credit for California taxes paid by the Fund, on undistributed capital gains. In
addition, California tax law does not consider any portion of the
exempt-interest dividends paid an item of tax preference for the purpose of
computing the California alternative minimum tax.
With respect to the Minnesota Municipal Fund, dividends paid by the Fund
to a Minnesota resident are not subject to the Minnesota personal income tax to
the extent that the dividends are attributable to income received by the Fund as
interest from Minnesota Municipal Obligations, provided such attributable
dividends represent 95% or more of the exempt-interest dividends that are paid
by the Fund. Moreover, dividends paid by the Fund to a Minnesota resident are
not subject to the Minnesota personal income tax to the extent that the
dividends are attributable to income received by the Fund as interest from the
Fund's investment in direct U.S. Government obligations. Dividends and
distributions by the Fund to a Minnesota resident that are attributable to most
other sources are subject to the Minnesota personal income tax. Dividends and
distributions from the Fund will be included in the determination of taxable net
income of corporate shareholders who are subject to Minnesota income (franchise)
taxes. In addition, dividends attributable to interest received by the Fund that
is a preference item for Federal income tax purposes, whether or not such
interest is from a Minnesota Municipal Obligation, may be subject to the
Minnesota alternative minimum tax. The shares of the Fund are not subject to
property taxation by Minnesota or its political subdivisions.
YIELD INFORMATION
For the seven-day period ended November 30, 1999, the yield and effective
yield for Class A and Class B shares of each Fund were as follows:
Name of Fund and Class Yield Effective Yield
Government Money Fund
Class A 4.73% 4.84%
Class B 4.47% / 4.44%* 4.57% / 4.54%*
Money Fund 4.94% 5.06%
Class A 4.71% / 4.69%* 4.82% / 4.80%*
Class B
California Municipal Fund 2.94% 2.98%
Class A 2.65% / 2.60%* 2.68% / 2.63%*
Class B
Minnesota Municipal Fund 3.14% / 3.04%* 3.19% / 3.09%*
Class A 2.95% / 2.54%* 2.99% / 2.57%*
Class B
National Municipal Fund 3.21% 3.26
Class A 2.81% / 2.75%* 2.85% / 2.79%*
Class B
New York Municipal Fund 3.03% 3.08%
Class A 2.71% / 2.64%* 2.75% / 2.68%*
Class B
- ----------------
* Net of reimbursed expenses.
The Treasury Money Fund has not completed its first fiscal year and,
therefore, no performance data have been provided for such Fund.
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. Both yield figures take into account any
applicable distribution and service fees. As a result, at any given time, the
performance of Class B shares should be expected to be lower than that of Class
A shares.
As to the Municipal Funds, 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. Based upon a
1999 Federal and State of California income tax rate of 45.22%, the tax
equivalent yield for the 7-day period ended November 30, 1999 for Class A and
Class B shares of the California Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
California Municipal Fund
Class A 5.37%
Class B 4.84% / 4.75%*
Based upon a 1999 Federal and State of Minnesota income tax rate of
44.73%, the tax equivalent yield for the seven-day period ended November 30,
1999 for the Class A and Class B shares of the Minnesota Municipal Fund was as
follows:
Name of Fund and Class Tax Equivalent Yield
Minnesota Municipal Fund
Class A 5.65% / 5.47%*
Class B 5.31% / 4.57%*
Based upon a 1999 Federal tax rate of 39.60%, the tax equivalent yield for
the seven-day period ended November 30, 1999 for the Class A and Class B shares
of National Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
National Municipal Fund
Class A 5.31%
Class B 4.65% / 4.55%*
Based upon a combined 1999 Federal, New York State and New York City
personal income tax rate of 46.05%, the tax equivalent yield for the seven-day
period ended November 30, 1999 for Class A and Class B shares of the New York
Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
New York Municipal Fund
Class A 5.62%
Class B 5.02% / 4.89%*
- --------------
* Net of absorbed expenses.
The tax equivalent yields noted above for the National Municipal Fund
represent the application of the highest Federal marginal personal income tax
rate presently in effect. The tax equivalent figures, however, do not include
the potential effect of any state or local (including, but not limited to,
county, district or city) taxes, including applicable surcharges. The tax
equivalent yields noted above for the California Municipal Fund represents the
application of the highest Federal and State of California marginal personal
income tax rates presently in effect. The tax equivalent yields noted above for
the Minnesota Municipal Fund represent the application of the highest Federal
and State of Minnesota marginal personal income tax rates presently in effect.
The tax equivalent yields noted above for the New York Municipal Fund represent
the application of the highest Federal, New York State, and New York City
marginal personal income tax rates presently in effect. For Federal personal
income tax purposes a 39.6% tax rate has been used, for California State income
tax purposes the rate of 9.30% has been used, for Minnesota State income tax
purposes, the rate of 8.50% has been used and for New York State and New York
City personal income tax purposes, the rates of 6.85% and 3.83%, respectively,
have been used. In addition, there may be pending legislation which could affect
such stated tax rates or yields. You should consult your tax adviser, and
consider your 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. You should remember that yield is a function of the type and quality of
the instruments in the portfolio, portfolio maturity and operating expenses.
Your principal in a Fund is not guaranteed. See "Determination of Net Asset
Value" for a discussion of the manner in which a Fund's price per share is
determined.
From time to time, each Municipal 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 being representative of the
Fund's past or future performance.
From time to time, advertising materials for a Fund may refer to or
discuss then-current or past economic conditions, developments and/or events, or
actual or proposed tax legislation, and may refer to statistical or other
information concerning trends relating to investment companies, as compiled by
industry associations such as the Investment Company Institute.
From time to time, advertising materials may refer to studies performed by
the Manager or its affiliates, such as "The Dreyfus Tax Informed Investing
Study" or "The Dreyfus Grade Investment Comparison Study (1996 & 1997)" or such
other studies.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer or
from an underwriter or a market maker for the securities. Usually no brokerage
commissions, as such, are paid by a Fund for such purchases. Purchases from
underwriters of portfolio securities include a concession paid by the issuer to
the underwriter and the purchase price paid to, and sales price received from,
market makers for the securities may include the spread between the bid and
asked price. No brokerage commissions have been paid by any Fund to date.
Transactions are allocated to various dealers by the portfolio managers of
a Fund 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 and may be selected based
upon their sales of shares of a Fund or other funds advised by the Manager or
its affiliates.
Research services furnished by brokers through which a 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 Manager's opinion that the receipt and study of such
services should not reduce the overall expenses of its research department.
INFORMATION ABOUT THE FUNDS
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund shares
have equal rights as to dividends and in liquidation. Shares have no preemptive
or subscription rights and are freely transferable.
The Government Money Fund and Treasury Money Fund are separate series of
the Government Company. The Minnesota Municipal Fund and National Municipal Fund
are separate series of the Municipal Company. Rule 18f-2 under the 1940 Act
provides that any matter required to be submitted under the provisions of the
1940 Act or applicable state law or otherwise to the holders of the outstanding
voting securities of an investment company, such as the Government Company or
the Municipal Company, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
series affected by such matter. Rule 18f-2 further provides that a series shall
be deemed to be affected by a matter unless it is clear that the interests of
each series in the matter are identical or that the matter does not affect any
interest of such series. The Rule exempts the selection of independent
accountants and the election of Board members from the separate voting
requirements of the Rule.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for each 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, 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. Fund
shareholders may remove a Board member by the affirmative vote of a majority, in
the case of the Government Money Fund, National Municipal Fund, Money Fund and
Treasury Money Fund, or two-thirds, in the case of the California Municipal Fund
and New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, the Board will call a meeting of shareholders for the purpose of
electing Board members if, at any time, less than a majority of the Board
members then holding office have been elected by shareholders.
The California Municipal Fund and New York Municipal Fund are organized as
unincorporated business trusts under the laws of the Commonwealth of
Massachusetts. Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Agreement and Declaration of Trust (the "Trust Agreement") for each
of these Funds disclaims shareholder liability for acts or obligations of the
Fund and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee. The
Trust Agreement provides for indemnification from the Fund's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its operations
in such a way so as to avoid, as far as possible, ultimate liability of the
shareholder for liabilities of the Fund.
Each Fund sends annual and semi-annual financial statements to all its
share-holders.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for each Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Funds' Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of each Fund.
YEAR 2000 ISSUES
Each Fund could be adversely affected if the computer systems used by the
Manager and the Fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Manager
has taken steps designed to avoid year 2000-related problems in its systems and
to monitor the readiness of other service providers. In addition, issuers of
securities in which each fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
APPENDIX A
(MONEY FUND ONLY)
Description of the two highest commercial paper, bond and other short- and
long-term rating categories assigned by Standard & Poor's Ratings Group ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), Fitch IBCA, Inc. ("Fitch"), Duff &
Phelps Credit Rating Co. ("Duff"), and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign (+)
designation. Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
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 of funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issues rated Prime-2 (P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1 is regarded as having the strongest
degree of assurance for timely payment. The rating Fitch-2 (Very Good Grade) is
the second highest commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly less in degree than the strongest
issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
The rating TBW-1 is the highest short-term obligation rating assigned by
BankWatch. Obligations rated TBW-1 are regarded as having the strongest capacity
for timely repayment. Obligations rated TBW-2 are supported by a strong capacity
for timely repayment, although the degree of safety is not as high as for issues
rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade obligations
and possess an extremely strong capacity to pay principal and interest. Bonds
rated AA by S&P are judged by S&P to have a very strong capacity to pay
principal and interest and, in the majority of instances, differ only in small
degrees from issues rated AAA. The rating AA may be modified by the addition of
a plus or minus sign to show relative standing within the rating category.
Bonds rated Aaa by Moody's are judged to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all standards
and, together with the Aaa group they comprise what are generally known as
high-grade bonds. Bonds rated Aa are rated lower than Aaa bonds because margins
of protection may not be as large or fluctuations of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger. Moody's applies numerical modifiers 1, 2
and 3 in the Aa rating category. The modifier 1 indicates a ranking for the
security in the higher end of this rating category, the modifier 2 indicates a
mid-range ranking, and the modifier 3 indicates a ranking in the lower end of
the rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to slight market fluctuation other than through changes
in the money rate. The prime feature of an AAA bond is a showing of earnings
several times or many times interest requirements, with such stability of
applicable earnings that safety is beyond reasonable question whatever changes
occur in conditions. Bonds rated AA by Fitch are judged by Fitch to be of safety
virtually beyond question and are readily salable, whose merits are not unlike
those of the AAA class, but whose margin of safety is less strikingly broad. The
issue may be the obligation of a small company, strongly secured but influenced
as to rating by the lesser financial power of the enterprise and more local type
of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than Treasury
debt. Bonds rated AA are considered by Duff to be of high credit quality with
strong protection factors. Risk is modest but may vary slightly from time to
time because of economic conditions.
Fitch also assigns a rating to certain international and U.S. banks. A
Fitch bank rating represents Fitch's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, Fitch uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, Fitch assigns
banks Long- and Short-Term Ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradation from 1 through 5, address the
question of whether the bank would receive support from central banks or
shareholders if it experienced difficulties, and such ratings are considered by
Fitch to be a prime factor in its assessment of credit risk. Individual Ratings,
which range in gradations from A through E, represent Fitch's assessment of a
bank's economic merits and address the question of how the bank would be viewed
if it were entirely independent and could not rely on support from state
authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch examines
all segments of the organization including, where applicable, the holding
company, member banks or associations, and other subsidiaries. In those
instances where financial disclosure is incomplete or untimely, a qualified
rating (QR) is assigned to the institution. BankWatch also assigns, in the case
of foreign banks, a country rating which represents an assessment of the overall
political and economic stability of the country in which the bank is domiciled.
APPENDIX B
(MUNICIPAL FUNDS)
Description of certain 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.
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 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 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. Bonds in the Aa
category which Moody's believes possess the strongest investment attributes are
designated by the symbol Aa1.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment of
short-term promissory obligations, and ordinarily will be evidenced by leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers rated Prime-2 (P-2) have a strong ability for repayment of senior
short-term debt obligations. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
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
difference 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, you 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.
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 operating
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 a rating symbol to indicate the
relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond ratings 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 payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
APPENDIX C
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
RISK FACTORS - INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
The following information is a summary of special factors affecting
investments in California Municipal Obligations. It does not purport to be a
complete description and is based on information drawn from the Official
Statement issued by the State of California (the "State") for its public bond
issue on December 1, 1999. While the Fund has not independently verified this
information, it has no reason to believe that such information is not correct in
all material respects.
STATE FINANCES
THE BUDGET PROCESS
The State's fiscal year begins on July 1 and ends on June 30. The State
operates on a budget basis, using a modified accrual system of accounting, with
revenues credited in the period in which they are measurable and available and
expenditures debited in the period in which the corresponding liabilities are
incurred.
The annual budget is proposed by the Governor by January 10 of each year
for the next fiscal year (the "Governor's Budget"). Under State law, the annual
proposed Governor's Budget cannot provide for projected expenditures in excess
of projected revenues and balances available from prior fiscal years. Following
the submission of the Governor's Budget, the Legislature takes up the proposal.
Under the State Constitution, money may be drawn from the Treasury only
through an appropriation made by law. The primary source of the annual
expenditure authorizations is the Budget Act as approved by the Legislature and
signed by the Governor. The Budget Act must be approved by a two-thirds majority
vote of each House of the Legislature. The Governor may reduce or eliminate
specific line items in the Budget Act or any other appropriations bill without
vetoing the entire bill. Such individual line-item vetoes are subject to
override by a two-thirds majority vote of each House of the Legislature.
Appropriations also may be included in legislation other than the Budget
Act. Bills containing appropriations (except for K-12 and community college
("K-14") education) must be approved by a two-thirds majority vote in each House
of the Legislature and be signed by the Governor. Bills containing K-14
education appropriations require a simple majority vote. Continuing
appropriations, available without regard to fiscal year, also may be provided by
statute or the State Constitution. There is litigation pending concerning the
validity of such continuing appropriations. See "Litigation" below.
Funds necessary to meet an appropriation need not be in the State
Treasury at the time such appropriation is enacted; revenues may be appropriated
in anticipation of their receipt.
THE GENERAL FUND
The moneys of the State are segregated into the General Fund and over 900
special funds, including bond, trust and pension funds. The General Fund
consists of revenues received by the State Treasury and not required by law to
be credited to any other fund, as well as earnings from the investment of State
moneys not allocable to another fund. The General Fund is the principal
operating fund for the majority of governmental activities and is the depository
of most of the major revenue sources of the State. The General Fund may be
expended as a consequence of appropriation measures enacted by the Legislature
and approved by the Governor, as well as appropriations pursuant to various
constitutional authorizations and initiative statutes.
THE SPECIAL FUND FOR ECONOMIC UNCERTAINTIES
The Special Fund for Economic Uncertainties ("SFEU") is funded with
General Fund revenues and was established to protect the State from unforeseen
revenue reductions and/or unanticipated expenditure increases. Amounts in the
SFEU may be transferred by the State Controller as necessary to meet cash needs
of the General Fund. The State Controller is required to return moneys so
transferred without payment of interest as soon as there are sufficient moneys
in the General Fund. At the time of signing of the 1999 Budget Act, on June 29,
1999, the Department of Finance projected the SFEU would have a balance of about
$1.932 billion at June 30, 1999, compared to the original budgeted amount of
$1.1 billion. The 1999 Budget Act projects a balance in the SFEU of $880 million
at June 30, 2000. See "Current State Budget" below.
INTER-FUND BORROWINGS
Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June 30,
1999, the General Fund had no outstanding loans from the SFEU, General Fund
special accounts or other special funds. At the November 1998 election, voters
approved Proposition 2. This proposition requires the General Fund to repay
loans made from certain transportation special accounts (such as the State
Highway Account) at least once per fiscal year, or up to 30 days after adoption
of the annual budget act. Since the General Fund may reborrow from the
transportation accounts soon after the annual repayment is made, the proposition
is not expected to have any adverse impact on the State's cash flow.
WELFARE REFORM
Congress passed and the President signed (on August 22, 1996) the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L.
104-193, the "Welfare Reform Law") fundamentally reforming the nation's welfare
system. Among its many provisions, the Welfare Reform Law includes: (1)
conversion of Aid to Families with Dependent Children from an entitlement
program to a block grant titled Temporary Assistance for Needy Families (TANF),
with time limits on TANF recipients, work requirements and other changes; (ii)
provisions denying certain federal welfare and public benefits to legal
noncitizens (this provision has been amended by subsequent federal law),
allowing states to elect to deny additional benefits (including TANF) to legal
noncitizens, and generally denying almost all benefits to illegal immigrants;
and (iii) changes in the Food Stamp program, including reducing maximum benefits
and imposing work requirements.
California's response to the federal welfare reforms is embodied in
Chapter 270, Statutes of 1997 and is called California Work Opportunity and
Responsibility to Kids ("CalWORKs"), which replaced the former Aid to Families
with Dependent Children (AFDC) and Greater Avenues to Independence (GAIN)
programs, effective January 1, 1998. Consistent with the Welfare Reform Law,
CalWORKs contains new time limits on receipt of welfare aid, both lifetime as
well as for any current period on aid. The centerpiece of CalWORKs is the
linkage of eligibility to work participation requirements. Administration of the
new CalWORKs program is largely at the county level, and counties are given
financial incentives for success in this program.
The long-term impact of the Welfare Reform Law and CalWORKs cannot be
determined until there has been more experience and until an independent
evaluation of the CalWORKs program is completed. In the short-term, the
implementation of the CalWORKs program has continued the trend of declining
welfare caseloads. The CalWORKs caseload trend is projected to have been 646,000
in 1998-99 and to be 602,000 in 1999-00, down from a high of 921,000 cases in
1994-95.
The 1999 Budget Act proposes expenditures which will continue to meet,
but not exceed, the federally-required $2.9 billion combined State and county
maintenance-of-effort requirement. Total CalWORKs-related expenditures are
estimated to be $7.3 billion for 1998-99 and $7.3 billion for 1999-00, including
child care transfer amounts for the Department of Education.
LOCAL GOVERNMENTS
The primary units of local government in California are the counties,
ranging in population from 1,200 in Alpine County to over 9,600,000 in Los
Angeles County. Counties are responsible for the provision of many basic
services, including indigent health care, welfare, jails and public safety in
unincorporated areas. There also are about 470 incorporated cities and thousands
of special districts formed for education, utility and other services. The
fiscal condition of local governments has been constrained since the enactment
of "Proposition 13" in 1978, which reduced and limited the future growth of
property taxes and limited the ability of local governments to impose "special
taxes" (those devoted to a specific purpose) without two-thirds voter approval.
Counties, in particular, have had fewer options to raise revenues than many
other local government entities, and have been required to maintain many
services.
In the aftermath of Proposition 13, the State provided aid to local
governments from the General Fund to make up some of the loss of property tax
moneys, including taking over the principal responsibility for funding K-12
schools and community colleges. During the recession, the Legislature eliminated
most of the remaining components of post-Proposition 13 aid to local government
entities other than K-14 education districts by requiring cities and counties to
transfer some of their property tax revenues to school districts. However, the
Legislature also provided additional funding sources (such as sales taxes) and
reduced certain mandates for local services. Since then, the State also has
provided additional funding to counties and cities through such programs as
health and welfare realignment, welfare reform, trial court restructuring, the
COPs program supporting local public safety departments, and various other
measures.
The 1999 Budget Act includes a $150 million one-time subvention from the
General Fund to local agencies for relief from the 1992 and 1993 property tax
shifts. Legislation has been passed, subject to voter approval at the election
in November 2000, to provide a more permanent payment to local governments to
offset the property tax shift. In addition, legislation was enacted in 1999 to
provide annually up to $50 million relief to cities based on 1997-98 costs of
jail booking and processing fees paid to counties.
Historically, funding for the State's trial court system was divided
between the State and the counties. However, Chapter 850, Statutes of 1997,
implemented a restructuring of the State's trial court funding system. Funding
for the courts, with the exception of costs for facilities, local judicial
benefits, and revenue collection, was consolidated at the State level. The
county contribution for both their general fund and fine and penalty amounts is
capped at the 1994-95 level and becomes part of the Trial Court Trust Fund,
which supports all trial court operations. The State assumed responsibility for
future growth in trial court funding. The consolidation of funding is intended
to streamline the operation of the courts, provide a dedicated revenue source,
and relieve fiscal pressure on the counties. Beginning in 1998-99, the county
general fund contribution for court operations is reduced by $300 million, and
cities will retain $62 million in fine and penalty revenue previously remitted
to the State. The General Fund reimbursed the $362 million revenue loss to the
Trial Court Trust Fund. The 1999 Budget Act includes funds to further reduce the
county General Fund contribution by an additional $96 million by reducing by 100
percent the contributions of the next 18 smallest counties and by 10 percent the
General Fund contribution of the remaining 21 counties.
The entire statewide welfare system has been changed in response to the
change in federal welfare law enacted in 1996 (see "Welfare Reform" above).
Under the CalWORKs program, counties are given flexibility to develop their own
plans, consistent with State law, to implement the program and to administer
many of its elements, and their costs for administrative and supportive services
are capped at the 1996-97 levels. Counties also are given financial incentives
if, at the individual county level or statewide, the CalWORKs program produces
savings associated with specified standards. Counties will still be required to
provide "general assistance" aid to certain persons who cannot obtain welfare
from other programs.
In 1996, voters approved Proposition 218, entitled the "Right to Vote on
Taxes Act," which incorporates new Articles XIII C and XIII D into the
California Constitution. These new provisions place limitations on the ability
of local government agencies to impose or raise various taxes, fees, charges and
assessments without voter approval. Certain "general taxes" imposed after
January 1, 1995 must be approved by voters in order to remain in effect. In
addition, Article XIII C clarifies the right of local voters to reduce taxes,
fees, assessments or charges through local initiatives. Proposition 218 does not
affect the State or its ability to levy or collect taxes.
STATE APPROPRIATIONS LIMIT
The State is subject to an annual appropriations limit imposed by Article
XIII B of the State Constitution (the "Appropriations Limit"). The
Appropriations Limit does not restrict appropriations to pay debt service on
voter-authorized bonds.
Article XIII B prohibits the State from spending "appropriations subject
to limitation" in excess of the Appropriations Limit. "Appropriations subject to
limitation," with respect to the State, are authorizations to spend "proceeds of
taxes," which consist of tax revenues, and certain other funds, including
proceeds from regulatory licenses, user charges or other fees to the extent that
such proceeds exceed "the cost reasonably borne by that entity in providing the
regulation, product or service," but "proceeds of taxes" exclude most state
subventions to local governments, tax refunds and some benefit payments such as
unemployment insurance. No limit is imposed on appropriations of funds which are
not "proceeds of taxes," such as reasonable user charges or fees and certain
other non-tax funds.
Not included in the Appropriations Limit are appropriations for the debt
service costs of bonds existing or authorized by January 1, 1979, or
subsequently authorized by the voters, appropriations required to comply with
mandates of courts or the federal government, appropriations for qualified
capital outlay projects, appropriations of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1, 1990 levels, and
appropriation of certain special taxes imposed by initiative (e.g., cigarette
and tobacco taxes). The Appropriations Limit may be exceeded in cases of
emergency.
The State's Appropriations Limit in each year is based on the limit for
the prior year, adjusted annually for changes in state per capita personal
income and changes in population, and adjusted, when applicable, for any
transfer of financial responsibility of providing services to or from another
unit of government or any transfer of the financial source for the provisions of
services from tax proceeds to non tax proceeds. The measurement of change in
population is a blended average of statewide overall population growth, and
change in attendance at local K-14 school districts. The Appropriations Limit is
tested over consecutive two-year periods. Any excess of the aggregate "proceeds
of taxes" received over such two-year period above the combined Appropriations
Limits for those two years is divided equally between transfers to K-14 school
districts and refunds to taxpayers.
The Legislature has enacted legislation to implement Article XIII B which
defines certain terms used in Article XIII B and sets forth the methods for
determining the Appropriations Limit. California Government Code Section 7912
requires an estimate of the Appropriations Limit to be included in the
Governor's Budget, and thereafter to be subject to the budget process and
established in the Budget Act.
The following table shows the State's Appropriations Limit for the past
four fiscal years and the current fiscal year. As of the enactment of the
1999-2000 Budget, the Department of Finance projects the State's Appropriations
Subject to Limitations will be $6.1 billion under the State's Appropriations
Limit in Fiscal Year 1999-00.
STATE APPROPRIATIONS LIMIT
(MILLIONS)
FISCAL YEARS
1995-96 1996-97 1997-98 1998-99* 1999-00*
State Appropriations Limit $39,309 $42,002 $44,778 $47,573 $50,673
Appropriations Subject to (34,186) (35,103) (40,743) (42,674) (44,528)
-------- -------- -------- -------- --------
Limit
Amount (Over)/Under Limit $5,123 $6,899 $4,035 $4,899 $6,145
====== ====== ====== ====== ======
- ---------------------
* Estimated/Projected
SOURCE: State of California, Department of Finance.
PROPOSITION 98
On November 8, 1988, voters of the State approved Proposition 98, a
combined initiative constitutional amendment and statute called the "Classroom
Instructional Improvement and Accountability Act." Proposition 98 changed State
funding of public education below the university level and the operation of the
State Appropriations Limit, primarily by guaranteeing K-14 schools a minimum
share of General Fund revenues. Under Proposition 98 (as modified by Proposition
111, which was enacted on June 5, 1990), K-14 schools are guaranteed the greater
of (a) in general, a fixed percent of General Fund revenues ("Test 1"), (b) the
amount appropriated to K-14 schools in the prior year, adjusted for changes in
the cost of living (measured as in Article XIII B by reference to State per
capita personal income) and enrollment ("Test 2"), or (c) a third test, which
would replace Test 2 in any year when the percentage growth in per capita
General Fund revenues from the prior year plus one half of one percent is less
than the percentage growth in State per capita personal income ("Test 3"). Under
Test 3, schools would receive the amount appropriated in the prior year adjusted
for changes in enrollment and per capita General Fund revenues, plus an
additional small adjustment factor. If Test 3 is used in any year, the
difference between Test 3 and Test 2 would become a "credit" to schools which
would be the basis of payments in future years when per capita General Fund
revenue growth exceeds per capita personal income growth. Legislation adopted
prior to the end of the 1988-89 Fiscal Year, implementing Proposition 98,
determined the K-14 schools' funding guarantee under Test 1 to be 40.3 percent
of the General Fund tax revenues, based on 1986-87 appropriations. However, that
percent has been adjusted to approximately 35 percent to account for a
subsequent redirection of local property taxes, since such redirection directly
affects the share of General Fund revenues to schools.
Proposition 98 permits the Legislature by two-thirds vote of both Houses,
with the Governor's concurrence, to suspend the K-14 schools' minimum funding
formula for a one-year period. Proposition 98 also contains provisions
transferring certain State tax revenues in excess of the Article XIII B limit to
K-14 schools. See "State Finances--State Appropriations Limit" above.
During the recession in the early 1990s, General Fund revenues for
several years were less than originally projected, so that the original
Proposition 98 appropriations turned out to be higher than the minimum
percentage provided in the law. The Legislature responded to these developments
by designating the "extra" Proposition 98 payments in one year as a "loan" from
future years' Proposition 98 entitlements, and also intended that the "extra"
payments would not be included in the Proposition 98 "base" for calculating
future years' entitlements. By implementing these actions, per-pupil funding
from Proposition 98 sources stayed almost constant at approximately $4,200 from
Fiscal Year 1991-92 to Fiscal Year 1993-94.
In 1992, a lawsuit was filed, California Teachers' Association v. Gould,
which challenged the validity of these off-budget loans. The settlement of this
case, finalized in July 1996, provides, among other things, that both the State
and K-14 schools share in the repayment of prior years' emergency loans to
schools. Of the total $1.76 billion in loans, the State is repaying $935 million
by forgiveness of the amount owed, while schools will repay $825 million. The
State share of the repayment will be reflected as an appropriation above the
current Proposition 98 base calculation. The schools' share of the repayment
will count as appropriations that count toward satisfying the Proposition 98
guarantee, or from "below" the current base. Repayments are spread over the
eight-year period of 1994-95 through 2001-02 to mitigate any adverse fiscal
impact.
Substantially increased General Fund revenues, above initial budget
projections, in the fiscal years 1994-95 through 1998-99 have resulted in
retroactive increases in Proposition 98 appropriations from subsequent fiscal
years' budgets. Because of the State's increasing revenues, per-pupil funding at
the K-12 level has increased by about 44 percent from the level in place from
1991-92 through 1993-94. A significant amount of the "extra" Proposition 98
monies in the last few years has been allocated to special programs,
particularly an initiative to allow each classroom with respect to grades K-3 to
have no more than 20 pupils by the end of the 1997-98 school year. Since the
State expects General Fund revenue growth to continue in 1999-00, there also are
new initiatives to increase school safety, improve schools' accountability for
pupil performance, provide additional textbooks to schools, fund deferred
maintenance projects, increase beginning teacher's salaries and provide
performance incentives to teachers. See "Current State Budget" for further
discussion of education funding.
PRIOR FISCAL YEARS' FINANCIAL RESULTS
The State's financial condition improved markedly during the fiscal years
starting in 1995-96, with a combination of better than expected revenues,
slowdown in growth of social welfare programs, and continued spending restraint
based on actions taken in earlier years. The State's cash position also
improved, and no external deficit borrowing occurred over the end of the last
four fiscal years. The last borrowing to spread out the repayment of a budget
deficit over the end of a fiscal year was $4.0 billion of revenue anticipation
warrants issued in July 1994 and which matured in April 1996.
The State economy grew strongly during the fiscal years beginning in
1995-96 and, as a result, the General Fund took in substantially greater tax
revenues (around $2.2 billion in 1995-96, $1.6 billion in 1996-97 and $2.4
billion in 1997-98 and $1.0 billion in 1998-99) than were initially planned when
the budgets were enacted. The accumulated budget deficit from the recession
years was finally eliminated with the repayment of the revenue anticipation
warrants in April 1996. These additional funds were largely directed to school
spending as mandated by Proposition 98, to make up shortfalls from reduced
federal health and welfare aid in 1995-96 and 1996-97 and particularly in
1998-99 to fund new program incentives.
The following were major features of the 1998 Budget Act and certain
additional fiscal bills enacted before the end of the legislative session:
1....The most significant feature of the 1998-99 budget was agreement on
a total of $1.4 billion of tax cuts. The central element was a bill which
provided for a phased-in reduction of the Vehicle License Fee ("VLF"). Since the
VLF is transferred to cities and counties under existing law, the bill provided
for the General Fund to replace the lost revenues. Starting on January 1, 1999,
the VLF has been reduced by 25 percent, at a cost to the General Fund of
approximately $500 million in the 1998-99 Fiscal Year and about $1 billion
annually thereafter.
In addition to the cut in VLF, the 1998-99 budget included both temporary
and permanent increases in the personal income tax dependent credit ($612
million General Fund cost in 1998-99, but less in future years), a nonrefundable
renters tax credit ($133 million), and various targeted business tax credits
($106 million).
2....Proposition 98 funding for K-14 schools was increased by $1.7
billion in General Fund moneys over revised 1997-98 levels, over $300 million
higher than the minimum Proposition 98 guarantee. Of the 1998-99 funds, major
new programs included money for instructional and library materials, deferred
maintenance, support for increasing the school year to 180 days and reduction of
class sizes in Grade 9. The Budget also included $250 million as repayment of
prior years' loans to schools, as part of the settlement of the California
Teachers' Association v. Gould lawsuit. See "State Finances - Proposition 98"
above.
3....Funding for higher education increased substantially above the
actual 1997-98 level. General Fund support was increased by $340 million (15.6
percent) for the University of California and $267 million (14.1 percent) for
the California State University system. In addition, Community Colleges funding
increased by $300 million (6.6 percent).
4....The Budget included increased funding for health, welfare and social
services programs. A 4.9 percent grant increase was included in the basic
welfare grants, the first increase in those grants in 9 years.
5....Funding for the judiciary and criminal justice programs increased by
about 11 percent over 1997-98, primarily to reflect increased State support for
local trial courts and rising prison population.
6....Major legislation enacted after the 1998 Budget Act included new
funding for resources projects, a share of the purchase of the Headwaters
Forest, funding for the Infrastructure and Economic Development Bank ($50
million) and funding for the construction of local jails. The State realized
savings of $433 million from a reduction in the State's contribution to the
State Teacher's Retirement System in 1998-99.
The revised 1999-2000 Governor's Budget, released on May 14, 1999 (the
"1999 May Revision"), reported that stronger than expected economic conditions
in the State for the latter part of 1998 and into 1999 would produce total
1998-99 General Fund revenues of about $57.9 billion, almost $1.0 billion above
the 1998 Budget Act estimates and $1.6 billion above the initial estimates in
the January 1999-2000 Governor's Budget. The 1999 May Revision projected 1998-99
General Fund expenditures of $58.6 billion, about $400 million higher than the
January 1999-2000 Governor's Budget estimate. Some of this additional revenue
will be directed to K-14 schools pursuant to Proposition 98. The 1999 May
Revision projected a balance in the SFEU at June 30, 1999 of approximately $1.9
billion, $1.3 billion higher than estimated in January 1999.
CURRENT STATE BUDGET
The discussion below of the 1999-00 Fiscal Year budget is based on the
State's estimates and projections of revenues and expenditures for the current
fiscal year and must not be construed as statements of fact. These estimates and
projections are based upon various assumptions as updated in the 1999 Budget
Act, which may be affected by numerous factors, including future economic
conditions in the State and the nation, and there can be no assurance that the
estimates will be achieved.
1999-2000 FISCAL YEAR BUDGET
On January 8, 1999, the Governor released a proposed budget for Fiscal
Year 1999-00 (the "January Governor's Budget"). The January Governor's Budget
generally reported that General Fund revenues for Fiscal Year 1998-99 and Fiscal
Year 1999-00 would be lower than earlier projections (primarily due to weaker
overseas economic conditions perceived in late 1998), while some caseloads would
be higher than earlier projections. The January Governor's Budget proposed $60.5
billion of General Fund expenditures in Fiscal Year 1999-00, with a $415 million
SFEU reserve at June 30, 2000.
The 1999 May Revision showed an additional $4.3 billion of revenues for
combined fiscal years 1998-99 and 1999-00. The final Budget Bill was adopted by
the Legislature on June 16, 1999, and was signed by the Governor on June 29,
1999 (the "1999 Budget Act"), meeting the Constitutional deadline for budget
enactment for only the second time in the 1990's.
The final 1999 Budget Act estimated General Fund revenues and transfers
of $63.0 billion, and contained expenditures totaling $63.7 billion after the
Governor used the line-item veto to reduce the legislative Budget Bill
expenditures by $581 million (both General Fund and Special Fund). The 1999
Budget Act also contained expenditures of $16.1 billion from special funds and
$1.5 billion from bond funds. The Administration estimated that the SFEU would
have a balance at June 30, 2000, of about $880 million. Not included in this
amount was an additional $300 million which (after the Governor's vetoes) was
"set aside" to provide funds for employee salary increases (to be negotiated in
bargaining with employee unions), and for litigation reserves. The 1999 Budget
Act anticipates normal cash flow borrowing during the fiscal year.
The principal features of the 1999 Budget Act include the following:
1....Proposition 98 funding for K-12 schools was increased by $1.6
billion in General Fund moneys over revised 1998-99 levels, $108.6 million
higher than the minimum Proposition 98 guarantee. Of the 1999-00 funds, major
new programs included money for reading improvement, new textbooks, school
safety, improving teacher quality, funding teacher bonuses, providing greater
accountability for school performance, increasing preschool and after school
care programs and funding deferred maintenance of school facilities. The Budget
also includes $310 million as repayment of prior years' loans to schools, as
part of the settlement of the California Teachers' Association v. Gould lawsuit.
See also "State Finances - Proposition 98" above.
2....Funding for higher education increased substantially above the
actual 1998-99 level. General Fund support was increased by $184 million (7.3
percent) for the University of California and $126 million (5.9 percent) for the
California State University system. In addition, Community Colleges funding
increased by $324.3 million (6.6 percent). As a result, undergraduate fees at UC
and CSU will be reduced for the second consecutive year, and the per-unit charge
at Community Colleges will be reduced by $1.
3....The Budget included increased funding of nearly $600 million for
health and human services.
4. About $800 million from the General Fund will be directed toward
infrastructure costs, including $425 million in additional funding for the
Infrastructure Bank, initial planning costs for a new prison in the Central
Valley, additional equipment for train and ferry service, and payment of
deferred maintenance for state parks.
5. The Legislature enacted a one-year additional reduction of 10 percent
of the VLF for calendar year 2000, at a General Fund cost of about $250 million
in each of Fiscal Year 1999-00 and Fiscal Year 2000-01 to make up lost funding
to local governments. Conversion of this one-time reduction to a permanent cut
will remain subject to the revenue tests in the legislation adopted last year.
Several other targeted tax cuts, primarily for businesses, also were approved at
a cost of $54 million in Fiscal Year 1999-00.
6. A one-time appropriation of $150 million, to be split between cities
and counties, was made to offset property tax shifts during the early 1990's.
Additionally, an ongoing $50 million was appropriated as a subvention to cities
for jail booking or processing fees charged by counties when an individual
arrested by city personnel is taken to a county detention facility.
ECONOMY AND POPULATION
INTRODUCTION
California's economy, the largest among the 50 states and one of the
largest in the world, has major components in high technology, trade,
entertainment, agriculture, manufacturing, tourism, construction and services.
Since 1994, California's economy has been performing strongly after suffering a
deep recession between 1990-94.
POPULATION AND LABOR FORCE
The State's July 1, 1998 population of over 33.4 million represented over
12 percent of the total United States population.
California's population is concentrated in metropolitan areas. As of the
April 1, 1990 census, 96 percent resided in the 23 Metropolitan Statistical
Areas in the State. As of July 1, 1998, the 5-county Los Angeles area accounted
for 49 percent of the State's population, with over 16.0 million residents, and
the 10-county San Francisco Bay Area represented 21 percent, with a population
of over 7.0 million.
The following table shows California's population data for 1994 through
1998.
POPULATION 1994-98
% INCREASE % INCREASE
OVER OVER CALIFORNIA
CALIFORNIA PRECEDING UNITED STATES PRECEDING AS % OF
YEAR POPULATION(A) YEAR POPULATION(A) YEAR UNITED
STATES
1994 31,790,000 0.9 260,292,000 1.0 12.2
1995 32,063,000 0.9 262,761,000 0.9 12.2
1996 32,383,000 1.0 265,179,000 0.9 12.2
1997 32,957,000 1.8 267,636,000 0.9 12.3
1998 33,494,000 1.6 270,029,000 0.9 12.4
- --------------
(a) Population as of July 1.
SOURCE: U.S. Department of Commerce, Bureau of the Census; State of California,
Department of Finance.
The following table presents civilian labor force data for the resident
population, age 16 and over, for the years 1993 to 1998.
LABOR FORCE
1993-98
LABOR FORCE TRENDS (THOUSANDS) UNEMPLOYMENT RATE (%)
LABOR UNITED
YEAR FORCE EMPLOYMENT CALIFORNIA STATES
1993 15,359 13,918 9.4 6.9
1994 15,450 14,122 8.6 6.1
1995 15,412 14,203 7.8 5.6
1996 15,511 14,391 7.2 5.4
1997 15,941 14,937 6.3 4.9
1998 16,330 15,361 5.9 4.5
- -----------------
SOURCE: State of California, Employment Development Department.
EMPLOYMENT, INCOME, CONSTRUCTION AND EXPORT GROWTH
The following table shows California's nonagricultural employment
distribution and growth for 1990 and 1998.
PAYROLL EMPLOYMENT BY MAJOR SECTOR
1990 AND 1998
EMPLOYMENT % DISTRIBUTION
(THOUSANDS) OF
EMPLOYMENT
INDUSTRY SECTOR 1990 1998 1990 1998
- --------------- ---- ---- ---- ----
Mining................ 39 25 0.3 0.2
Construction.......... 605 602 4.8 4.4
Manufacturing.........
Nondurable Goods... 721 729 5.7 5.4
High Technology.... 686 534 5.4 3.9
Other Durable goods 690 697 5.4 5.1
Transportation and 624 694 4.9 5.1
Utilities.............
Wholesale and Retail 3,002 3,122 23.7 23.0
Trade
Finance, Insurance
and Real Estate.... 825 798 6.5 5.9
Services.............. 3,395 4,220 26.8 31.1
Government
Federal............ 362 269 2.9 2.0
State and Local.... 1,713 1,894 13.5 13.9
----- ----- ---- ----
TOTAL
NONAGRICULTURAL.... 12,662 13,584 100 100
====== ====== === ===
SOURCE: State of California, Employment Development Department and State of
California, Department of Finance.
The following tables show California's total and per capita income
patterns for selected years.
TOTAL PERSONAL INCOME 1993-98
CALIFORNIA
CALIFORNIA
% OF
YEAR MILLIONS % CHANGE U.S.
- ---- -------- -------- ----
1993 $698,130 2.0* 12.8
1994a 718,321 2.9 12.5
1995 754,269 5.0 12.4
1996 798,020 5.8 12.5
1997 846,017 6.0 12.5
1998b 904,444 6.9 12.7
* Change from prior year.
a Reflects Northridge earthquake, which caused an estimated $15 billion drop in
personal income.
b Estimated by the State of California, Department of Finance.
Note: Omits income for government employees overseas.
SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis.
PER CAPITA PERSONAL INCOME 1993-98
CALIFORNIA
UNITED % OF
YEAR CALIFORNIA % CHANGE STATES % CHANGE U.S.
- ---- ---------- -------- ------ -------- ----
1993 ......... $22,388 1.0* $21,220 3.3* 105.5
1994a ......... 22,899 2.3 22,056 3.9 103.8
1995 ......... 23,901 4.4 23,063 4.6 103.6
1996 ......... 25,050 4.8 24,169 4.8 103.6
1997 ......... 26,218 4.7 25,298 4.7 103.6
1998 ......... 27,116b 3.4 26,368c 4.2 102.8
* Change from prior year
a Reflects Northridge earthquake, which caused an estimated $15 billion drop in
personal income.
b Estimated by the State of California, Department of Finance.
c Estimated by the U.S. Department of Commerce, Bureau of Economic Analysis.
SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis.
LITIGATION
The State is a party to numerous legal proceedings. The following are the
more significant lawsuits pending against the State, as reported by the Office
of the Attorney General.
On December 24, 1997, a consortium of California counties filed a test
claim with the Commission on State Mandates asking the Commission on State
Mandates to determine whether the property tax shift from counties to school
districts beginning in 1993-94 is a reimbursable state mandated cost. See "State
Finances - Local Governments" above. The test claim was heard on October 29,
1998, and the Commission on State Mandates found in favor of the State. In March
1999, Sonoma County filed suit in the Superior Court to overturn the Commission
on State Mandate's decision. In October 1999, a Sonoma County Superior Court
Judge ruled in favor of the County. The State will continue to contest this
lawsuit. Should the courts ultimately find in favor of the counties, the impact
to the State General Fund could be as high as $10.0 billion. In addition, there
would be an annual Proposition 98 General Fund cost of at least $3.75 billion.
This cost would grow in accordance with the annual assessed value growth rate.
On June 24, 1998, plaintiffs in Howard Jarvis Taxpayers Association et
al. v. Kathleen Connell filed a complaint for certain declaratory and injunctive
relief challenging the authority of the State Controller to make payments from
the State Treasury in the absence of a state budget. On July 21, 1998, the trial
court issued a preliminary injunction prohibiting the State Controller from
paying moneys from the State Treasury for fiscal year 1998-99, with certain
limited exceptions, in the absence of a state budget. The preliminary
injunction, among other things, prohibited the State Controller from making any
payments pursuant to any continuing appropriation. On July 22 and 27, 1998,
various employee unions which had intervened in the case appealed the trial
court's preliminary injunction and asked the Court of Appeal to stay the
preliminary injunction. On July 28, 1998, the Court of Appeal granted the
unions' requests and stayed the preliminary injunction pending the Court of
Appeal's decision on the merits of the appeal. On August 5, 1998, the Court of
Appeal denied the plaintiffs' request to reconsider the stay. Also on July 22,
1998, the State Controller asked the California Supreme Court to immediately
stay the trial court's preliminary injunction and to overrule the order granting
the preliminary injunction on the merits. On July 29, 1998, the Supreme Court
transferred the State Controller's request to the Court of Appeal. The matters
are now pending before the Court of Appeal. Briefs have been submitted; no date
has yet been set for oral argument.
The State is involved in a lawsuit, Thomas Hayes v. Commission on State
Mandates, related to state-mandated costs. The action involves an appeal by the
Director of Finance from a 1984 decision by the State Board of Control (now
succeeded by the Commission on State Mandates (COSM)). The Board of Control
decided in favor of local school districts' claims for reimbursement for special
education programs for handicapped students. The case then was brought to the
trial court by the State and later remanded to the COSM for redetermination. The
COSM since has expanded the claim to include supplemental claims filed by
several other institutions. To date, the Legislature has not appropriated funds.
The liability to the State, if all potentially eligible school districts pursue
timely claims, has been estimated by the Department of Finance at more than $1
billion. The Commission on State Mandates issued a decision in December 1998
determining that a small number of components of the State's special education
program are state mandated local costs. The administrative proceeding is in the
"parameters and guidelines" stage where the commission is considering whether
and to what extent the costs associated with the state mandated components of
the special education program are offset by funds that the State already
allocates to that program. The State's position is that all costs are offset by
existing funding. The State has the option to seek judicial review of the
mandate finding.
In Capitola Land v. Anderson and other related state and federal cases,
plaintiffs sought payments from the State under the AFDC-Foster Care program.
Judgment was rendered against the State in Capitola, which the State appealed
and lost. The State then filed a state plan amendment with the federal
Department of Health and Human Services ("DHHS") to enable the State to comply
with the Capitola ruling and receive federal funding. The DHHS denied the state
plan amendment, and the State has filed suit against DHHS. The State Legislature
enacted a statute that conditioned State compliance with the Capitola judgment
on receipt of federal funding (50% contribution). The State then refused to
implement the Capitola judgment based on the new statute. Certain plaintiffs
moved for an order of contempt against the State, which was granted by the trial
court, but was stayed and annulled by the Court of Appeal. The plaintiffs'
petition for review was denied by the California Supreme Court. However, the
State continues to pursue federal funding in federal court. If, as a result of
this litigation, compliance with the Capitola judgment is required and the
judgment is applied retroactively, liability to the State could exceed $200
million.
In January 1997, California experienced major flooding in six different
areas with preliminary estimates of property damage of approximately $1.6 to
$2.0 billion. A substantial number of plaintiffs have joined suit against the
State, local agencies, and private companies and contractors seeking
compensation for the damages they suffered as a result of the 1997 flooding. The
State is vigorously defending the action.
In Just Say No to Tobacco Dough Campaign v. State of California, the
petitioners challenge the appropriation of approximately $166 million of
Proposition 99 funds in the Cigarette and Tobacco Products Surtax Fund for years
ended June 30, 1990, through June 30, 1995, for related disease research. If the
State loses, the General Fund and funds from other sources would be used to
reimburse the Cigarette and Tobacco Products Surtax Fund, an agency fund, for
approximately $166 million. However, the superior court issued an order in
December 1998 granting the State's demurrer to the entire action and dismissing
the case. The superior court thereafter reconsidered its ruling and allowed
plaintiffs to amend their complaint. The State demurred to the amended
complaint. In July 1999, the court again sustained the State's demurrer to the
amended complaint and issued a judgment dismissing the case. Plaintiffs
appealed. The matter will be briefed and will be scheduled for oral argument
before the court.
The State is a defendant in Ceridian Corporation v. Franchise Tax Board,
a suit which challenges the validity of two sections of the California Tax Laws.
The first relates to deduction from corporate taxes for dividends received from
insurance companies to the extent the insurance companies have California
activities. The second relates to corporate deduction of dividends to the extent
the earnings of the dividend paying corporation have already been included in
the measure of their California tax. On August 13, 1998, the court issued a
judgment against the Franchise Tax Board on both issues. The Franchise Tax Board
has appealed the judgment. Briefing is underway. If both sections of the
California tax law are invalidated and all dividends become deductible, General
Fund collections in the future would be reduced annually in the $200-$250
million range for all taxpayers.
The State is involved in a lawsuit related to contamination at the
Stringfellow toxic waste site. In United States, People of the State of
California v. J.B. Stringfellow, Jr., et al., the State is seeking recovery for
past costs of cleanup of the site, a declaration that the defendants are jointly
and severally liable for future costs, and an injunction ordering completion of
the cleanup. However, the defendants have filed a counterclaim against the State
for alleged negligent acts, resulting in significant findings of liability
against the State as owner, operator, and generator of wastes taken to the site.
The State has appealed the rulings. Present estimates of the cleanup range from
$400 million to $600 million. Potential State liability falls within this same
range. However, all or a portion of any judgment against the State could be
satisfied by recoveries from the State's insurance carriers. The State has filed
a suit against certain of these carriers and trial is currently set for January
16, 2001.
The State is a defendant in a coordinated action involving 3,000
plaintiffs seeking recovery for damages caused by the Yuba River flood of
February 1986. The trial court found liability in inverse condemnation and
awarded damages of $500,000 to a sample of plaintiffs. The State's potential
liability to the remaining plaintiffs ranges from $800 million to $1.5 billion.
In 1992, the State and plaintiffs filed appeals. In August 1999, the Court of
Appeal issued a decision reversing the trial court's judgment against the State
and remanding the case for retrial on the inverse condemnation cause of action.
Plaintiffs have petitioned the California Supreme Court for review.
The State is a defendant in a statewide action, Emily Q., et al. v.
Belshe, et al., in which plaintiffs seek to compel a change in early screening
procedures for children with mental health needs. A preliminary injunction was
issued, requiring changes in the screening procedures. The Department of Health
Services, in conjunction with the Department of Mental Health, is in the process
of complying with the injunction. No hearing has been scheduled on the petition
for permanent injunction. The Department of Mental Health estimates the annual
cost to the State for implementation of a permanent injunction to be
approximately $13 million.
Plaintiffs in County of San Bernardino v. Barlow Respiratory Hospital and
related actions seek mandamus relief requiring the State to retroactively
increase out-patient Medi-Cal reimbursement rates. Plaintiffs have estimated the
damages to be several hundred million dollars. The State is vigorously defending
these cases, as well as related federal cases addressing the calculation of
Medi-Cal reimbursement rates in the future.
The State is involved in two refund actions, Cigarettes Cheaper!, et al. v.
Board of Equalization, et al. and California Assn. Of Retail Tobacconists
(CART), et al. v. Board of Equalization, et al., that challenge the
constitutionality of Proposition 10, approved by the voters in 1998. Plaintiffs
allege that Proposition 10, which increases the excise tax on tobacco products,
violates 11 sections of the California Constitution and related provisions of
law. Plaintiffs Cigarettes Cheaper! seek declaratory and injunctive relief and a
refund of over $4 million. The CART case filed by retail tobacconists in San
Diego seeks a refund of $5 million. The State is vigorously contesting these
cases. If the statute is declared unconstitutional, exposure may include the
entire $750 million collected annually with interest.
The State is involved in two cases challenging the constitutionality of
the interest offset provisions of the Revenue and Taxation Code. Plaintiffs in
F. W. Woolworth Co. and Kinney Shoe Corporation v. Franchise Tax Board seek a
refund of over $15 million. The Woolworth case was tried in July 1995 and
judgment was entered for the Franchise Tax Board. The judgment was upheld on
appeal and the plaintiffs' petition for review in the California Supreme Court
was denied. On June 7, 1999, plaintiffs filed a petition for writ of certiorari
in the United States Supreme Court. The Franchise Tax Board filed its opposition
to the petition for writ of certiorari on August 5, 1999.
Hunt-Wesson, Inc. v. Franchise Tax Board was tried in February 1997 with
judgment for the taxpayer. The judgment was reversed on appeal and plaintiffs
petition for review in the California Supreme Court was denied. On September 28,
1999, the United States Supreme Court granted the taxpayer's petition for writ
of certiorari. The Franchise Tax Board estimates that if the interest-offset
provisions are declared unconstitutional, the result would involve potential
reduction of state revenues in the $90 million range annually, with past year
collection and interest exposure of $500 million.
Guy F. Atkinson Company of California v. Franchise Tax Board is a
corporation tax refund action involving the solar energy system tax credit
provided for under the Revenue and Taxation Code. The case went to trial in May
1998 and the trial court entered judgment in favor of the Franchise Tax Board.
The taxpayer has filed an appeal to the California Court of Appeal and briefing
is due to be completed in October 1999. The Franchise Tax Board estimates that
the cost would be $150 million annually if the plaintiff prevails. Allowing
refunds for all open years would entail a refund of at least $500 million.
Jordan, et al. v. Department of Motor Vehicles, et al. and Josephs v.
Zolin, et al. challenge the validity of the Vehicle Smog Impact Fee, a $300 fee
which is collected by the Department of Motor Vehicles from vehicle registrants
when a vehicle without a California new-vehicle certification is first
registered in California. The Jordan plaintiffs contend that the fee violates
the interstate commerce and equal protection clauses of the United States
Constitution as well as Article XIX of the State Constitution. The Josephs case
is a class action civil rights case brought against the current and former
directors of the Department of Motor Vehicles in their individual capacities
claiming the collection of the Vehicle Smog Impact Fee violates the interstate
commerce, equal protection, and privileges and immunities clauses of the United
States Constitution. In October 1999, the Court of Appeals upheld a trial court
judgment for the plaintiffs in the Jordan case, and the State has declined to
appeal further. Although refunds through the court actions could be limited by a
three-year statute of limitations, with a potential liability of about $350
million, the Governor has proposed refunding fees collected back to the
initiation of these fees in 1990. The exposure to the State if the fees are
refunded in full could be up to $800 million.
Craig Brown, et al. v. Department of Health and Human Services, et al. is
a Federal Mandate Proceeding. In fiscal years 1991-92 and 1992-93, the State
used credits from three Public Employees Retirement System accounts in place of
General Fund employer pension contributions. The DHHS has determined that
federally funded programs were overcharged in these fiscal years because they
did not receive the pension credits the State programs received and that
California owes the federal government $120 million for overpayments plus an
additional $80 million in interest through mid 1999. The DHHS Grant Appeals
Board upheld this determination. The present case is aimed at overturning the
DHHS determination. On June 6, 1999, the court ruled against the State. The
State has appealed to the Ninth Circuit. The estimated potential loss is over
$220 million which would be payable from the General Fund or, possibly,
recovered by the federal government through offsets against current grant
payments to the State.
PTI, Inc., et al. v. Philip Morris, et al. was filed by five distributors
in the cigarette import/re-entry business, seeking to overturn the tobacco
Master Settlement Agreement ("MSA") entered between 46 states and the tobacco
industry in November 1998. See "State Finances - Tobacco Litigation" above. The
primary focus of the complaint is the provision of the MSA encouraging
participating states to adopt a statute requiring nonparticipating manufacturers
to either become participating manufacturers and share the financial obligations
under the MSA or pay money into an escrow account. Plaintiffs seek compensatory
and punitive damages against the State and State officials and an order placing
tobacco settlement funds into a trust to be administered by the court for the
treatment of medical expenses of persons injured by tobacco products. A motion
to dismiss the complaint is currently scheduled for hearing in February 2000.
The potential fiscal impact of an adverse ruling is largely unknown, but could
exceed the full amount of the settlement (estimated to be $1 billion annually,
of which 50% will go directly to the State's General Fund and the other 50%
directly to the State's 58 counties and 4 largest cities).
Arnett v. California Public Employees Retirement System, et. al. was
filed by seven former employees of the State of California and local agencies
seeking back wages, damages and injunctive relief. Plaintiffs are former public
safety members who began employment after the age of 40 and are recipients of
Industrial Disability Retirement ("IDR") benefits. Plaintiffs contend that the
formula which determines the amount of IDR benefits violates the federal Age
Discrimination in Employment Act of 1967. Plaintiffs contend that, but for their
ages at hire, they would receive increased monthly IDR benefits similar to their
younger counterparts who began employment before the age of 40. On August 17,
1999, the Ninth Circuit Court of Appeals reversed the District Court's dismissal
of the complaint for failure to state a claim. The State may seek further review
in the United States Supreme Court. However, the case has now been remanded back
to the District Court and trial will most likely occur in December 2000. In the
event of an unfavorable result, CalPERS has estimated the liability to the State
as approximately $315.5 million.
YEAR 2000-RELATED INFORMATION TECHNOLOGY
The State's reliance on information technology in every aspect of its
operations made year 2000-related ("Y2K") information technology ("IT") issues a
high priority for the State. The Department of Information Technology ("DOIT"),
an independent office reporting directly to the Governor, was responsible for
ensuring the State's information technology processes were fully functional
before the year 2000.
The DOIT estimates total Y2K costs identified by the departments under
its supervision at about $357 million. These costs are part of much larger
overall IT costs incurred annually by the State, including costs incurred by
certain independent State entities, such as the judiciary, the Legislature, the
University of California and California State University System. Furthermore,
cost estimates for embedded systems only apply to the subset of embedded systems
posing the highest risk to essential programs. For fiscal year 1999-00, the
Legislature created a fund of $33.5 million ($13.5 million General Fund) for
unanticipated Y2K costs, which can be increased if necessary.
APPENDIX D
INVESTING IN MINNESOTA MUNICIPAL OBLIGATIONS
RISK FACTORS -- INVESTING IN MINNESOTA MUNICIPAL OBLIGATIONS
The following information is a summary of special factors affecting
investments in Minnesota Municipal Obligations. It does not purport to be a
complete description and is drawn from an Official Statement issued by the State
of Minnesota (the "State") for a public bond issue on August 3, 1999. While the
Fund has not independently verified such information, it has no reason to
believe that such information is not correct in all material respects.
State Government. The State of Minnesota was formally organized as a
territory in 1849 and was admitted to the Union in 1858 as the 32nd state.
Bordered by Canada on the north, Lake Superior and Wisconsin on the east, Iowa
on the south, and North and South Dakota on the west, it is the 12th largest and
20th most populous state in the Union.
The Minnesota Constitution organizes State government into three branches:
Executive, Legislative and Judicial. The Legislative Branch is composed of a
Senate and a House of Representatives. Fiscal administration is performed by the
Department of Finance under the control and supervision of the Commissioner of
Finance.
State and State-Related Indebtedness. The Minnesota Constitution
authorizes public debt to be incurred for the acquisition and betterment of
public land, buildings and other improvements of a capital nature or for
appropriations or loans to Minnesota state agencies or political subdivisions
for this purpose, as the Legislature by the three-fifths vote of each House may
direct, and to finance the development of agricultural resources of the State by
extending credit on real estate security, as the Legislature may direct. All
such debt is evidenced by the issuance of State of Minnesota bonds maturing
within 20 years of their date of issue, for which the full faith and credit and
taxing powers of the State are irrevocably pledged. There is no limitation as to
the amount or interest rate of such general obligation issues.
As of August 1999, the total amount of Minnesota general obligation bonds
outstanding was approximately $2.4 billion. The total amount of general
obligation bonds authorized bonds authorized but unissued as of August 1999, was
approximately $682 million.
The Minnesota Constitution limits Minnesota general obligation debt to (i)
short-term debt for Minnesota operating purposes, (ii) short-term debt for
making loans to school districts and (iii) voter-approved long-term debt.
Short-term debt for operating purposes is limited to an amount not in
excess of 15 % of undedicated revenues received during the preceding fiscal year
and must be issued only to meeting obligations incurred pursuant to
appropriation and repaid during the fiscal year in which incurred. The May 1999,
end of session cash flow analysis for Minnesota's Statutory General Fund
indicates that Minnesota will have a positive cash flow balance throughout the
Current Biennium which began on July 1, 1999 and ends June 30, 2001. Therefore,
Minnesota does not expect to do any short-term borrowing for cash flow purposes
during the Current Biennium. Minnesota has no short-term debt outstanding.
There are also various Minnesota authorities and special purpose agencies
created by the state which issue bonds secured by specific revenues. Such debt
is not a general obligation of the State of Minnesota.
Constitutional and Statutory Provisions Relating to Minnesota and Local
Funding. Minnesota revenues in Minnesota are generated primarily from individual
income taxes, corporate franchise taxes, sales and use taxes, insurance gross
earnings taxes, estate taxes, motor vehicle excise taxes, excise taxes on liquor
and tobacco, mortgage taxes, deed taxes, legalized gambling taxes, rental motor
vehicle taxes, 900 telephone service taxes, taconite and iron ore taxes, and
health care provider taxes. In addition to the major taxes described above,
other sources of non-dedicated revenue include minor taxes, 60% of Minnesota's
lottery net proceeds, unrestricted grants, fees and charges of Minnesota state
agencies and departments, and investment income. County, municipal and certain
special purpose districts (such as water, flood or mosquito control districts)
are authorized to levy property taxes within specified legislative limits. A
portion of Minnesota's revenues is allocated from state government to other
governmental units within Minnesota such as municipal and county governments,
school districts and state agencies through a complex series of appropriations
and financial aid formulas. This financial interdependency of the Minnesota
state government with other units of government, subject all levels of
government, in varying degrees, to fluctuations in Minnesota's overall economy.
Minnesota's constitutional prescribed fiscal period is a biennium, and
Minnesota operates on a biennial budget basis with revenues created in the
period in which they are collected and expenditures debited in the period in
which the corresponding liabilities are incurred. The biennium begins on July
1st of the odd numbered year and runs through June 30th of the next odd numbered
year.
Minnesota's ability to appropriate funds is limited by the Minnesota
Constitution, which directs that Minnesota government shall not in any biennium
appropriate funds in excess of projected tax revenues from all sources.
Minnesota is authorized to levy additional taxes to resolve any inadvertent
shortfalls.
Appropriations for each biennium are enacted during the final legislative
session of the immediately preceding biennium. A revenue forecast is prepared
during the legislative session to provide the legislature with updated
information for the appropriations process. During each biennium, regular
forecasts of revenues and expenditures are prepared.
Minnesota's biennial appropriation process relies on revenue forecasting
as the basis for establishing aggregate expenditure levels. Risks are inherent
in the revenue and expenditure forecasts. Assumptions about U.S. economic
activity and federal tax and expenditure policies underlie these forecasts. Any
federal law changes that increase federal income taxes or reduce federal
spending programs may adversely affect these forecasts. Finally, even if
economic and federal tax assumptions are correct, revenue forecasts are still
subject to some normal level of error. The correctness of revenue forecasts and
the strength of Minnesota's overall economy may restrict future aid or
appropriations from Minnesota government to other units of government.
The Cash Flow Account was established in the Accounting General Fund for
the purpose of providing sufficient cash balances to cover monthly revenue and
expenditure imbalances. The use of funds from the Cash Flow Account is governed
by statute. The Cash Flow Account balance is set for the Current Biennium at
$350 million. The Budget Reserve Account was established in the Accounting
General Fund for the purpose of reserving funds to cushion the State from an
economic downturn. The use of funds from the Budget Reserve Account and the
allocation of surplus forecast balances to the Budget Reserve Account are
governed by statute. The Budget Reserve Account balance is set for the Current
Biennium at $622 million.
For the fiscal year ended June 30, 1996, net revenues (including revenue
accruals) were $9.617 billion and total expenditures (including encumbrances
outstanding) and net transfers were $9.302 billion.
For the fiscal year ended June 30, 1997, net revenues (including revenue
accruals) were $10.538 billion. After total expenditures (including encumbrances
outstanding) and net transfers of $10.229 billion, Fiscal year 1997 ended with
an Unrestricted Accounting General Fund balance of $1.167 billion.
For the fiscal year ended June 30, 1998, net revenues (including revenue
accruals) were $10.904 billion and total expenditures (including encumbrances
outstanding) and net transfers were $10.015 billion. For the twelve months ended
June 30, 1998, net revenues (which include only receipts in those months) were
$10.925 billion and total expenditures (which include only current year
expenditures) and net transfers were $9.710 billion.
For the twelve months ended June 30, 1999, net revenues (which include
only receipts in those months) were $11.683 billion and total expenditures
(which include only current year expenditures) and net transfers were $10.548
billion.
During the 1999 legislative session, changes were made to the budget for
the Previous Biennium. Accounting General Fund resources were forecast to be
$22.849 billion. Accounting General Fund expenditures were forecast to be
$21.331 billion, resulting in a projected Unreserved Accounting General Fund
balance of $1.518 billion. That balance included a Cash Flow Account of $350
million, a Budget Reserve Account of $622 million, a Property Tax Reform Account
of $330 million, and a Dedicated Reserves of $132 million, resulting in a
projected Unrestricted Accounting General Fund balance on June 30, 1999 of $84
million.
During the 1999 legislative session, the Legislature and Governor enacted
revenue measures and appropriations to establish the biennial operating budget
for the Current Biennium. Accounting General Fund resources are forecast to be
$24.620 billion. Current Biennium revenues, excluding the balance brought
forward from the Previous Biennium, are expected to be $2.248 billion (10.8%)
greater than in the Previous Biennium. Accounting General Fund expenditures are
forecast to be $23.384 billion, $2.053 billion (9.6%) greater than the Previous
Biennium. The budgeted revenues and spending generate a projected Unreserved
Accounting General Fund balance of $1.236 billion, including a Cash Flow Account
of $350 million, a Budget Reserve Account of $622 million, and Dedicated
Reserves of $133 million, resulting in a projected Unrestricted Accounting
General Fund on June 30, 2001 of $130 million.
The 1999 legislative session produced significant tax law changes. The
Legislature adopted, and the Governor approved large tax reductions for
Minnesota taxpayers. For Fiscal Year 1999, the Legislature passed a $1.250
billion sales tax rebate. This rebate represents a refund of a portion of sales
taxes paid during the Previous Biennium to be paid in August 1999. Individual
income tax rates were permanently reduced in all three brackets, from 6.0% to
5.5%, from 8.0% to 7.25%, and from 8.5% to 8.0%. In addition, the "marriage
penalty" inherent in the previous rate structure was eliminated. These changes
reduce projected Accounting and General Fund non-dedicated revenues by $1.312
billion for the Current Biennium.
The Legislature also followed the Governor's recommendation to set aside
$968 million in one-time tobacco settlement revenue into endowments. New
endowments were created to support health professional education, medical
research, and tobacco use prevention and local public health programs. These
funds are removed from the Accounting General Fund and separately invested in
new endowment funds. The investment income from these endowment funds will be
available for program expenditures.
The largest single change in projected Accounting General Fund spending
for the Current Biennium is in K-12 education finance, which grows by $1.068
billion (15.7%) over the Previous Biennium. In addition to normal biennial
growth in pupil units and formula inflation, the enacted budget provides for an
increase in the general education aid formula of 4.7% in Fiscal Year 2000 and
3.2% in Fiscal Year 2001, a biennial increase of $460 million. The Legislature
also adopted an additional $101 million for special education and $86 million to
reduce lower elemantary grade class sizes.
In 1992 the Minnesota Legislature established the MinnesotaCare(R) program
to provide subsidized health care insurance for long-term uninsured Minnesotans,
reform individual and small group health insurance regulations, create a health
care analysis unit to collect condition-specific data about health care
practices in order to develop practice parameters for health care providers,
implement certain cost containment measures into the system, and establish an
office of rural health to ensure the health care needs of all Minnesotans are
being met. The program is not part of the Accounting General Fund. A separate
account, called the Health Care Access Fund, has been established in Minnesota's
Special Reserve Fund to account for revenues and expenditures for the
MinnesotaCare(R) program. Program expenditures are limited to revenues received
in the Health Care Access Fund. Program revenues are derived from dedication of
insurance premiums paid by individuals, and permanent taxes including a 2% gross
revenue tax on hospitals, health care providers and wholesale drug distributors,
a 2% use tax on prescription drugs and a 1% gross premium tax on nonprofit
health service plans and HMOs. For calendar years 1998 and 1999, these permanent
taxes have been temporarily lowered to 1.5% and to zero, respectively. The
provider tax will continue at 1.5% until calendar year 2002, while the gross
premium tax may be returned to previous levels or revised depending on the
Health Care Access Fund's annual fund balance. The Commissioners of Finance and
Revenue will determine the necessary tax level, to be effective for calendar
year 2000, in September 1999.
The 1993 Legislature adopted legislation establishing a school district
credit enhancement program. The legislation authorizes and directs the
Commissioner of Finance, under certain circumstances and subject to the
availability of funds, to issue a warrant and authorize the Commissioner of
Children, Families and Learning to pay debt service coming due on school
district tax and state-aid anticipation certificates of indebtedness,
certificates of indebtedness and capital notes for equipment, certificates of
participation, and school district general obligation bonds in the event that
the school district notifies the Commissioner of Children, Families and Learning
that it does not have sufficient money in its debt service fund for that
purpose, or the paying agent informs the Commissioner of Children, Families and
Learning that it has not received from the school district timely payment of
moneys to be used to pay debt service. The legislation appropriates annually
from the Accounting General Fund to the Commissioner of Children, Families and
Learning the amount needed to pay any warrants which are issued. The amounts
paid on behalf of any school district are required to be repaid by it with
interest, either through a reduction of subsequent state-aid payments or by the
levy of an ad valorem tax which may be made with the approval of the
Commissioner of Children, Families and Learning. As of August 1999, there were
approximately $177 million of certificates of indebtedness enrolled in the
program, all of which will mature within a 13 month period. The State expects
that school districts will issue certificates of indebtedness next year and will
enroll these certificates in the program in about the same amount of principal
as this year.
School districts may issue certificates of indebtedness or capital notes
to purchase certain equipment. The certificates or notes may be issued by
resolution of the Board, are general obligations of the school district and must
be payable in not more than five years. As of August 1, 1999, there are
approximately $29 million principal amount of certificates and notes enrolled in
the program.
Certain school districts, with the approval of the Commissioner of
Children, Families and Learning, may issue certificates of participation in
installment contracts for the purchase of real or personal property or in lease
purchase agreements for the lease with the option to purchase of real or
personal property. Such certificates of participation, contracts and agreements
are not general obligations of the school districts, but are payable from taxes
levied annually in amounts necessary to pay the amounts due thereunder. As of
August 1, 1999 there were $63 million of certificates of participation enrolled
in the program.
School districts are authorized to issue general obligation bonds only
when authorized by school district electors or special law, and only after
levying a direct, irrevocable ad valorem tax on all taxable property in the
school district for the years and in amounts sufficient to produce sums not less
than 5% in excess of the principal of an interest on the bonds when due. As of
August 1, 1999, the total amount of principal on certificates and capital notes
issued for equipment and bonds, plus the interest on these obligations, through
the year 2026, is approximately $5.8 billion. However, more certificates of
indebtedness, capital notes, certificates of participation and bonds are
expected to be enrolled in the program and these amounts are expected to
increase.
Based upon the amount of certificates of indebtedness and capital notes
for equipment, certificates of participation and bonds now enrolled in the
program, during the Current Biennium the total amount of principal and interest
coming due as of August 1, 1999 is about $643 million, with the maximum amount
of principal and interest payable in any one month being $216 million.
The State had not had to make any debt service payments on behalf of
school districts under the program and does not expect to make any payments in
the future. If such payments are made the State expects to recover all or
substantially all of the amounts so paid pursuant to contractual agreements with
the school districts.
The amount of revenue generated by Minnesota's tax structure, because of
the dependence on the income and sales taxes, is sensitive to the status of the
national and local economy. There can be no assurance that the financial
problems referred to or similar future problems will not affect the market value
or marketability of the Minnesota Municipal Obligations or the ability of the
issuers thereof to pay the interest or principal of such obligations.
Minnesota general obligation bonds are rated Aaa by Moody's and AAA by S&P
and AAA by Fitch.
Selected Economic and Demographic Factors. Diversity and a significant
natural resource base are two important characteristics of Minnesota's economy.
Minnesota's economy is being lifted by strong earnings growth in the service
industry, rising housing construction, and job gains which are slowly firming up
to labor market.
When viewed in 1998 at a highly aggregative level of detail, the structure
of Minnesota's economy parallels the structure of the U.S. economy as a whole.
Minnesota employment in ten major industrial sectors was distributed in
approximately the same proportions as national employment. In all sectors, the
share of total Minnesota employment was within two percentage points of national
employment share.
Minnesota's employment in the durable goods industries continues to be
highly concentrated in industries specializing in the manufacturing of
industrial machinery, fabricated metal and instruments. This emphasis is
partially explained by the location in Minnesota of computer-related equipment
manufacturers. Further, manufacturers of food products, wood products, and
printed and published materials joined the high technology manufacturing group
which has lead to significant business expansion in Minnesota in this decade.
The importance of Minnesota's rich natural resource base for overall
employment is apparent in the employment mix in non-durable goods industries. In
1998, approximately 30% of Minnesota's non-durable goods employment was
concentrated in food and kindred industries, and approximately 17% in paper and
allied industries. This compares to approximately 22% and 9%, respectively, for
comparable sectors in the national economy. Both of these industries rely
heavily on renewable resources in Minnesota. Over half of Minnesota's acreage is
devoted to agricultural purposes and nearly one-third to forestry. Printing and
publishing are also relatively more important in Minnesota than in the U.S.
Mining is currently a less significant factor in the Minnesota economy
than it once was. Mining employment, primarily in the iron ore or taconite
industry, dropped from 17.3 per thousand in 1979 to 8.1 per thousand in 1998. It
is not expected that mining employment will soon return to 1979 levels. However,
Minnesota retains vast quantities of taconite as well as copper, nickel, cobalt
and peat which may be utilized in the future.
While Minnesota's involvement in the defense industry is limited, as
military procurement cuts continue, Minnesota employers may face challenges in
maintaining employment and sales. More importantly, Minnesota firms producing
electronic components, communication equipment, electrical equipment, chemicals,
plastics, computers and software may face additional competition from companies
converting from military to civilian production.
Minnesota resident population grew from 4,085,000 in 1980 to 4,387 in 1990
or, at an average annual compound rate of .7%. In comparison, U.S. population
grew at an annual compound rate of .9% during this period. Minnesota population
is currently forecast by the U.S. Department of Commerce to grow at an annual
compound rate of .8% through 2010.
Employment and Income Growth in Minnesota. In the period 1980 to 1990,
overall employment growth in Minnesota lagged behind national growth. However,
manufacturing has been a strong sector, with Minnesota employment outperforming
its U.S. counterpart in both the 1980-1990 and 1990-1998 periods.
In spite of the strong manufacturing sector, during the 1980 to 1990
period, total employment in Minnesota increased 17.9% as compared to 20.1%
nationally. Most of Minnesota's slower growth can be associated with declining
agricultural employment and two recessions in the U.S. economy in the early
1980's which were more severe in Minnesota than nationwide. Minnesota non-farm
employment growth generally kept pace with the nation in the period after the
1981-82 recession ended in late 1982. In the period 1990 through 1996, non-farm
employment growth in Minnesota exceeded national growth. Since then, such growth
has expanded at about the same rate as the national growth. Between 1990 and
1998, Minnesota's non-farm employment grew 20.2% compared to 15.0% nationwide.
Since 1980, Minnesota per capita personal income has been within five
percentage points of national per capita personal income. The state's per capita
income, which is computed by dividing personal income by total resident
population, has generally remained above the national average in spite of the
early 1980's recessions and some difficult years in agriculture. In 1998,
Minnesota per capita personal income was 102.8% of its U.S. counterpart.
Another measure of the vitality of Minnesota's economy is its unemployment
rate. During 1997 and 1998, respectively, Minnesota's monthly unemployment rate
was generally less than the national unemployment rate, averaging 2.5% in 1998,
as compared to the national average of 4.5%.
APPENDIX E
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
RISK FACTORS - INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The following information is a summary of special factors affecting
investments in New York Municipal Obligations. It does not purport to be a
complete description and is based on information drawn from the Official
Statement issued by the State of New York (the "State") for its public bond
issue on August 24, 1999. While the Fund has not independently verified this
information, it has no reason to believe that such information is not correct in
all material respects.
The State's fiscal year begins on April 1stand ends on March 31st. On
March 31, 1999, the State adopted the debt service portion of the State budget
for the 1999-2000 fiscal year; four months later, on August 4, 1999, it enacted
the remainder of the budget. The Governor approved the budget as passed by the
Legislature. Prior to passing the budget in its entirety for the 1999-2000
fiscal year, the State enacted appropriations that permitted the State to
continue its operations.
Following enactment of the 1999-2000 budget, the State prepared a
Financial Plan for the 1999-2000 fiscal year (the "1999-2000 Financial Plan")
that sets forth projected receipts and disbursements based on the actions taken
by the Legislature. For fiscal year 1999-2000, General Fund disbursements,
including transfers to support capital projects, debt service and other funds,
are estimated at $37.36 billion, an increase of $868 million or 2.38 % over
1998-99. Projected spending under the 1999-2000 enacted budget is $215 million
above the Governor's Executive Budget recommendations. The increase in General
Fund spending is comprised of $1.1 billion in legislative additions to the
Executive Budget (primarily in education), offset by various actions, including
reestimates of required spending based on year-to-date results and the
identification of certain other resources that offset spending, such as $250
million from commencing the process of privatizing the Medical Malpractice
Insurance Association (MMIA), $250 million from the retention of the Debt
Reduction Reserve Fund within the General Fund and about $100 million in excess
fund balances. The MMIA was established in 1983 to provide excess liability
insurance to doctors and medical providers. Legislation enacted with the
1999-2000 budget initiates the process of MMIA privatization and transfers
excess fund balances to the State.
The 1999-2000 enacted budget provides for $831 million in new funding for
public schools, the largest year-to-year increase in State history. The budget
also enacts several new tax cuts valued at $375 million when fully phased in by
2003-04. None of the $1.82 billion cash surplus from 1998-99 is assumed to
support spending in 1999-2000, but instead is reserved to help offset the costs
of previously enacted tax cuts that take effect after 1999-2000.
The 1999-2000 Financial Plan projects a closing balance of $2.85 billion
in the General Fund. The balance is comprised of the $1.82 billion surplus from
1998-99 that has been set aside to finance already-enacted tax cuts, $473
million in the Tax Stabilization Reserve Fund (TSRF), $250 million in the Debt
Reduction Reserve Fund (DRRF), $107 million in the Contingency Reserve Fund
(CRF), and $200 million in the Community Projects Fund (CPF), which finances
legislative initiatives. The State expects to close fiscal year 1999-2000 with
cash balances in these funds at their highest levels ever.
Many complex political, social and economic forces influence the State's
economy and finances, which in turn may affect the State Financial Plan. These
forces may affect the State unpredictably from fiscal year to fiscal year and
are influenced by governments, institutions, and organizations that are not
subject to the State's control. The State Financial Plan also is based upon
forecasts of national and State economic activity. Economic forecasts frequently
have failed to predict accurately the timing and magnitude of changes in the
national and State economies. The Division of Budget (DOB) believes that its
projections of receipts and disbursements relating to the current State
Financial Plan, and the assumptions on which they are based, are reasonable.
Actual results, however, could differ materially and adversely from the
projections set forth below, and those projections may be changed materially and
adversely from time to time. See the section entitled "Special Considerations"
below for a discussion of risks and uncertainties faced by the State.
1999-2000 STATE FINANCIAL PLAN
Four governmental fund types comprise the State Financial Plan: the
General Fund, the Special Revenue Funds, the Capital Projects Funds, and the
Debt Service Funds. The State's fund structure adheres to the accounting
standards of the Governmental Accounting Standards Board.
GENERAL FUND
The General Fund is the principal operating fund of the State and is used
to account for all financial transactions except those required to be accounted
for in another fund. It is the State's largest fund and receives almost all
State taxes and other resources not dedicated to particular purposes. In the
State's 1999-2000 fiscal year, the General Fund (exclusive of transfers) is
expected to account for approximately 47.1 % of All Governmental Funds
disbursements and 69.3 % of total State Funds disbursements. General Fund moneys
also are transferred to other funds, primarily to support certain capital
projects and debt service payments in other fund types.
Total receipts and transfers from other funds are projected to be $39.31
billion in 1999-2000, an increase of $2.57 billion over 1998-99. Total General
Fund disbursements and transfers to other funds are projected to be $37.36
billion, an increase of $868 million over 1998-99.
Projected General Fund Receipts
Total General Fund receipts and transfers in 1999-2000 are projected to be
$39.31 billion, an increase of $2.57 billion from the $36.74 billion recorded in
1998-99. This total includes $35.93 billion in tax receipts, $1.36 billion in
miscellaneous receipts, and $2.02 billion in transfers from other funds. The
transfer of the $1.82 billion surplus recorded in 1998-99 to the 1999-2000
fiscal period has the effect of exaggerating the growth in State receipts from
year to year by depressing reported 1998-99 figures and inflating 1999-2000
projections.
The Personal Income Tax is imposed on the income of individuals, estates
and trusts and is based, with certain modifications, on federal definitions of
income and deductions. Net General Fund personal income tax collections are
projected to reach $22.95 billion in 1999-2000, well over half of all General
Fund receipts and nearly $2.87 billion above the reported 1998-99 collection
total. Much of this growth is associated with the $1.82 billion net impact of
the transfer of the surplus from 1998-99 to the current year as partially offset
by the diversion of an additional $661 million in income tax receipts to the
School Tax Relief (STAR) fund. The STAR program was created in 1997 as a
State-funded local property tax relief program funded through the use of
personal income tax receipts. Adjusted for these transactions, the growth in net
income tax receipts is roughly $1.8 billion, an increase of almost 9 %.
This growth is largely a function of two factors: (i) the 8 % growth in
income tax liability projected for 1999; and (ii) the impact of the 1998 tax
year settlement recorded early in the 1999-2000 fiscal year.
The most significant statutory change made this year provides for an
increase, phased-in over two years, in the earned income tax credit from 20% to
25% of the federal credit.
User taxes and fees are comprised of three-quarters of the State's 4%
sales and use tax, cigarette, alcoholic beverage, container, and auto rental
taxes, and a portion of the motor fuel excise levies. This category also
includes receipts from the motor vehicle registration fees and alcoholic
beverage license fees. Dedicated transportation funds outside of the General
Fund receive a portion of motor fuel tax and motor vehicle registration fees and
all of the highway use taxes.
Receipts from user taxes and fees are projected to total $7.35 billion, an
increase of $105 million from reported collections in the prior year. The sales
tax component of this category accounts for virtually all of the 1999-2000
growth. Growth in base sales tax yield, after adjusting for tax law and other
changes, is projected at 5.6%. Modest increases in motor fuel and auto rental
tax receipts over 1998-99 levels are also expected. However, receipts from other
user taxes and fees are estimated to decline by $177 million.
The yield of other excise taxes in this category, particularly the
cigarette and alcoholic beverage taxes, show long-term declining trends. General
Fund declines in 1999-2000 motor vehicle fee receipts, in contrast, reflect
statutory fee reductions and an increased amount of collections earmarked to the
Dedicated Highway and Bridge Trust Fund.
Significant statutory changes made in this category during the 1999-2000
legislative session include: delaying until March 1, 2000 the implementation of
the exemption from State sales tax of clothing and footwear priced under $110;
providing week-long sales tax exemptions in September 1999 and January 2000 for
clothing and footwear priced under $500; enactment of a variety of small sales
tax exemptions including certain equipment used in providing telecommunications
service for sale, property and services used in theatrical productions, computer
hardware used to design Internet web sites, and building materials used in
farming; a reduction in the beer tax rate; and an expanded exemption from the
alcoholic beverage tax for small brewers.
Business taxes include franchise taxes based generally on net income of
general business, bank and insurance corporations, as well as
gross-receipts-based taxes on utilities and gallonage-based petroleum business
taxes. Beginning in 1994, a 15% surcharge on these levies began to be phased out
and, for most taxpayers, there is no surcharge liability for taxable periods
ending in 1997 and thereafter.
Total business tax collections in 1999-2000 are now projected to be $4.63
billion, $230 million below results for the prior fiscal year. The
year-over-year decline in projected receipts in this category is largely
attributable to statutory changes. These include the first year of a scheduled
corporation franchise tax rate reduction, the alternative minimum tax rate
reduction, the fixed dollar minimum rate reduction, and the expansion of the
investment tax credit to financial service companies. Ongoing tax reductions
include the second year of the "Power for Jobs" utility tax credit program, the
gross receipts tax rate reduction, and scheduled additional diversion of General
Fund petroleum business and utility tax receipts to dedicated transportation
funds.
Legislation enacted this year affecting receipts in this category
includes: a phased reduction in the net income tax rate applicable to bank and
insurance companies from 9% to 7.5%; reforms to the corporation franchise
subsidiary capital tax; a further reduction in the alternative minimum tax rate
from 3% to 2.5%; doubling the economic development zone and zone equivalent area
wage tax credits; and providing further reforms to the apportionment of income
for the airline industry.
Other taxes include the estate and gift tax, the real property gains tax
and pari-mutuel taxes. Taxes in this category are now projected to total $1
billion, $137 million below last year's amount. The primary factors accounting
for most of the expected decline include: an adverse tax tribunal decision
resulting in significant refunds of the now repealed real property gains tax;
pari-mutuel tax reductions enacted with the 1999-2000 budget; and the effects of
the already enacted reductions in the estate and gift taxes.
Significant legislation passed with the 1999-2000 enacted budget affecting
these sources include both the extension of and an increase in certain temporary
tax reductions at the State's race tracks and conformity with new federal estate
tax provisions.
Miscellaneous receipts include investment income, abandoned property
receipts, medical provider assessments, minor federal grants, receipts from
public authorities, and certain other license and fee revenues. Miscellaneous
receipts are expected to total $1.36 billion, down $142 million from the prior
year amount. This reflects the loss of non-recurring receipts received in
1998-99 and the growing effects of the phase-out of the medical provider
assessments.
Transfers from other funds to the General Fund consist primarily of tax
revenues in excess of debt service requirements, including the 1% sales tax used
to support payments to Local Government Assistance Corporation (LGAC).
Transfers from other funds are expected to total $2.02 billion, or $99
million more than total receipts from this category during 1998-99. Total
transfers of sales taxes in excess of LGAC debt service requirements are
expected to increase by approximately $93 million, while transfers from all
other funds are expected to increase by $6 million.
Projected General Fund Disbursements
General Fund disbursements, including transfers to support capital
projects, debt service and other funds, are estimated at $37.36 billion in
1999-2000, an increase of $868 million or 2.38% over 1998-99.
Following the pattern of the last two fiscal years, education programs
receive the largest share of new funding contained in the 1999-2000 Financial
Plan. School aid is expected to grow by $831 million or 8.58% over 1998-99
levels (on a State fiscal year basis). Outside of education, the largest growth
in spending is for State Operations ($207 million, including $100 million
reserved for possible collective bargaining costs); Debt Service ($183 million);
and mental hygiene programs, including funding for a cost of living increase for
care providers ($114 million). These increases were offset, in part, by spending
reductions or actions in health and social welfare ($280 million), and in
general State charges ($222 million).
Grants to Local Governments is the largest category of General Fund
disbursements and includes financial assistance to local governments and
not-for-profit corporations, as well as entitlement benefits to individuals. The
largest areas of spending in this category are for aid to elementary and
secondary schools (41%) and for the State's share of Medicaid payments to
providers (22%). Grants to Local Governments are projected at $25.60 billion in
1999-2000, an increase of $910 million or 3.68% over 1998-99.
Under the 1999-2000 enacted budget, General Fund spending on school aid is
projected at $10.52 billion on a State fiscal year basis, an increase of $831
million from the prior year. The budget provides additional funding for
operating aid, building aid, and several other targeted aid programs. It also
funds the balance of aid payable for the 1998-99 school year that is due
primarily in the first quarter of the 1999-2000 fiscal year. For all other
educational programs, disbursements are projected to grow by $78 million to
$2.99 billion.
Spending for Medicaid in 1999-2000 is projected to total $5.54 billion,
essentially unchanged from 1998-99, due in part to the use of $145 million in
other available funds that lowers disbursements in this area. Disbursements for
all other health and social welfare programs are projected to total $2.70
billion, a decrease of $252 million. Lower welfare spending, driven by State and
federal reforms and a robust economy, accounts for most of the decline.
The remaining disbursements primarily support community-based mental
hygiene programs, local transportation programs, and revenue sharing payments to
local governments. Revenue sharing and other general purpose aid to local
governments is projected at $825 million.
State operations pays for the costs of operating the Executive,
Legislative, and Judicial branches of government, including the prison system,
mental hygiene institutions, and the State University system (SUNY). Personal
Service costs account for approximately 73% of spending in this category.
Spending in State operations is projected to increase by $207 million or
3.1% over the prior year. The growth reflects $100 million in projected spending
for new collective bargaining agreements that the State expects to be ratified
in the current year. Funding for this expense will come from the Collective
Bargaining Reserve. The annualized costs of current collective bargaining
agreements, growth in the Legislative and Judiciary budgets, and staffing costs
for the State's Year 2000 compliance programs also contribute to the
year-to-year growth in spending. The State's overall workforce is expected to
remain stable at around 191,300 employees.
General State charges account for the costs of providing fringe benefits
to State employees and retirees of the Executive, Legislature, and Judiciary.
These payments, many of which are mandated by statute and collective bargaining
agreements, include employer contributions for pensions, social security, health
insurance, workers' compensation, and unemployment insurance. General State
charges also cover State payments-in-lieu-of-taxes to local governments for
certain State-owned lands, and the costs of defending lawsuits against the State
and its public officers.
Disbursements in this category are estimated at $2.04 billion, a decrease
of $222 million from the prior year. The change primarily reflects projected
growth of $27 million in a variety of programs offset by the use of proceeds
from the privatization of the MMIA, which is expected to offset certain General
Fund fringe benefit costs over the next two fiscal years by approximately $250
million annually.
This category accounts for debt service on short-term obligations of the
State, i.e., the interest costs of the State's commercial paper program. The
commercial paper program is expected to have an average of approximately $185
million outstanding during 1999-2000. The majority of the State's debt service
is for long-term bonds, and is shown in the Financial Plan as a transfer to the
General Debt Service Fund.
Transfers to other funds from the General Fund are made primarily to
finance certain portions of State capital projects spending and debt service on
long-term bonds where these costs are not funded from other sources.
Long-term debt service transfers are projected at $2.27 billion in
1999-2000, an increase of $183 million from 1998-99. The increase reflects debt
service costs from prior-year bond sales (net of refunding savings), and certain
sales planned to occur during the 1999-2000 fiscal year.
Transfers for capital projects provide General Fund support for projects
that are not financed with bond proceeds, dedicated taxes, other revenues, or
federal grants. Transfers in this category are projected to total $168 million
in 1999-2000. The decline of $78 million from the prior year is due primarily to
the delay of the receipt of payment of certain reimbursements in 1998-99.
Receipts of $50 million transferred to DRRF in 1998-99 will be used in the
Capital Projects Fund in 1999-2000 to provide pay-as-you-go funding for five
capital programs that were previously funded with bond proceeds. The 1999-2000
enacted budget also reserves $250 million in new resources for DRRF.
All other transfers (excluding DRRF), which reflect the remaining
transfers from the General Fund to other funds, are estimated to total $385
million in 1999-2000, a decline of $84 million from 1998-99, primarily because
of certain non-recurring transfers that occurred last year.
NON-RECURRING RESOURCES
The DOB estimates that the 1999-2000 State Financial Plan contains actions
that provide non-recurring resources or savings totaling approximately $500
million, or 1.3% of General Fund resources, the largest of which is the first
phase of the privatization of MMIA. To the greatest extent possible, one-time
resources are expected to be utilized to finance one-time costs, including Year
2000 compliance costs and certain capital spending.
OUTYEAR PROJECTIONS OF RECEIPTS AND DISBURSEMENTS
State law requires the Governor to propose a balanced budget each year.
Preliminary analysis by DOB indicates that the State will have a 2000-01 budget
gap of approximately $1.9 billion, or about $300 million above the 1999-2000
Executive Budget estimate (after adjusting for the projected costs of collective
bargaining). This estimate includes an assumption for the projected costs of new
collective bargaining agreements, $500 million in assumed operating
efficiencies, as well as the planned application of approximately $615 million
of the $1.82 billion tax reduction reserve. In recent years, the State has
closed projected budget gaps which DOB estimates at $5.0 billion (1995-96), $3.9
billion (1996-97), $2.3 billion (1997-98), and less than $1 billion (1998-99).
DOB will formally update its projections of receipts and disbursements for
future years as part of the Governor's 2000-01 Executive Budget submission. The
revised expectations for these years will reflect the cumulative impact of tax
reductions and spending commitments enacted over the last several years as well
as new 2000-01 Executive Budget recommendations.
The State and the United University Professionals (UUP) union have reached
a tentative agreement on a new four-year labor contract. The State is continuing
negotiations with other unions representing State employees, the largest of
which is the Civil Service Employees Association (CSEA). CSEA previously failed
to ratify a tentative agreement on a new four-year contract earlier in 1999. The
1999-2000 Financial Plan has reserved $100 million for possible collective
bargaining agreements, and reserves are contained in the preliminary outyear
projection for 2000-01 to cover the recurring costs of any new agreements. To
the extent these reserves are inadequate to finance such agreements, the costs
of new labor contracts could increase the size of future budget gaps.
Sustained growth in the State's economy could contribute to closing
projected budget gaps over the next several years, both in terms of
higher-than-projected tax receipts and in lower-than-expected entitlement
spending. The State assumes that the 2000-01 Financial Plan will achieve $500
million in savings from initiatives by State agencies to deliver services more
efficiently, workforce management efforts, maximization of federal and
non-General Fund spending offsets, and other actions necessary to help bring
projected disbursements and receipts into balance. The projections do not assume
any gap-closing benefit from the potential settlement of State claims against
the tobacco industry.
OTHER GOVERNMENTAL FUNDS
In addition to the General Fund, the State Financial Plan includes Special
Revenue Funds, Capital Projects Funds and Debt Service Funds which are discussed
below. Amounts below do not include other sources and uses of funds transferred
to or from other fund types.
Special Revenue Funds
Total disbursements for programs supported by Special Revenue Funds are
projected at $30.94 billion, an increase of $1.29 billion or 4.35% over the
prior year. Special Revenue Funds include federal grants and State special
revenue funds.
Federal grants are projected to comprise 72% of all Special Revenue Funds
spending in 1999-2000, comparable to prior years. Disbursements from federal
funds are estimated at $22.17 billion, an increase of $741 million or 3.46%.
Medicaid is the largest program within federal funds, accounting for 56% of
total spending in this category. In 1999-2000, Medicaid spending is projected at
$14.32 billion, an increase of $711 million over 1998-99. The remaining growth
in federal funds is primarily for the Child Health Plus program, which is
estimated at $117 million in 1999-2000. This growth is offset by decreased
spending in certain social services programs resulting from more recent spending
reestimates.
State special revenue spending is projected to be $8.77 billion, an
increase of $550 million or 6.69% from the last fiscal year. The spending growth
is primarily due to $661 million for the next phase of the STAR program and $250
million in additional general State charges funded by proceeds from the MMIA
transaction, offset by a decrease of $185 million in projected educational
spending as a result of lower projected Lottery proceeds and a decline of $112
million in transportation disbursements. The remainder reflects the net impact
of spending reestimates.
Capital Projects Funds
Spending from Capital Projects Funds in 1999-2000 is projected at $4.18
billion, an increase of $114 million or 2.80% from last fiscal year.
Transportation, environmental, education and mental hygiene programs are the
major sources of year-to-year spending growth in this category.
Debt Service Funds
Spending from Debt Service Funds are estimated at $3.64 billion in
1999-2000, up $370 million or 11.31% from 1998-99. Transportation purposes,
including debt service on bonds issued for State and local highway and bridge
programs financed through the New York State Thruway Authority and supported by
the Dedicated Highway and Bridge Trust Fund, account for $124 million of the
year-to-year growth. Debt service for educational purposes, including State and
City University programs financed through the Dormitory Authority, will increase
by $80 million. The remaining growth is for a variety of programs in mental
health and corrections, and for general obligation financings.
SPECIAL CONSIDERATIONS
GENERAL
Many complex political, social and economic forces influence the State's
economy and finances, which may in turn affect the State's Financial Plan. These
forces may affect the State unpredictably from fiscal year to fiscal year and
are influenced by governments, institutions, and events that are not subject to
the State's control. The Financial Plan also is necessarily based upon forecasts
of national and State economic activity. Economic forecasts have frequently
failed to predict accurately the timing and magnitude of changes in the national
and State economies.
The State Financial Plan is based upon forecasts of national and State
economic activity developed through both internal analysis and review of
national and State economic forecasts prepared by commercial forecasting
services and other public and private forecasters. Economic forecasts have
frequently failed to predict accurately the timing and magnitude of changes in
the national and State economies. Many uncertainties exist in forecasts of both
the national and State economies, including consumer attitudes toward spending,
the extent of corporate and governmental restructuring, the condition of the
financial sector, federal, fiscal and monetary policies, the level of interest
rates, and the condition of the world economy, which could have an adverse
effect on the State. There can be no assurance that the State economy will not
experience results in the current fiscal year that are worse than predicted,
with corresponding material and adverse effects on the State's projections of
receipts and disbursements.
Projections of total State receipts in the Financial Plan are based on the
State tax structure in effect during the fiscal year and on assumptions relating
to basic economic factors and their historical relationships to State tax
receipts. In preparing projections of State receipts, economic forecasts
relating to personal income, wages, consumption, profits and employment have
been particularly important. The projection of receipts from most tax or revenue
sources is generally made by estimating the change in yield of such tax or
revenue source caused by economic and other factors, rather than by estimating
the total yield of such tax or revenue source from its estimated tax base. The
forecasting methodology, however, ensures that State fiscal year collection
estimates for taxes that are based on a computation of annual liability, such as
the business and personal income taxes, are consistent with estimates of total
liability under such taxes.
Projections of total State disbursements are based on assumptions relating
to economic and demographic factors, potential collective bargaining agreements,
levels of disbursements for various services provided by local governments
(where the cost is partially reimbursed by the State), and the results of
various administrative and statutory mechanisms in controlling disbursements for
State operations. Factors that may affect the level of disbursements in the
fiscal year include uncertainties relating to the economy of the nation and the
State, the policies of the federal government, collective bargaining
negotiations and changes in the demand for and use of State services.
An additional risk to the State Financial Plan arises from the potential
impact of certain litigation and of federal disallowances now pending against
the State, which could adversely affect the State's projections of receipts and
disbursements. The State Financial Plan assumes no significant litigation or
federal disallowance or other federal actions that could affect State finances,
but has significant reserves in the event of such an action.
Additional risks to the Financial Plan arise out of potential actions at
the federal level. Potential changes to federal tax law currently under
discussion as part of the federal government's efforts to enact a multi-year tax
reduction package could alter the federal definitions of income on which certain
State taxes rely. Certain proposals, if enacted, could have a significant impact
on State revenues in the future.
The Personal Responsibility and Work Opportunity Reconciliation Act of
1996 created a new Temporary Assistance to Needy Families program (TANF)
partially funded with a fixed federal block grant to states. This law also
imposes (with certain exceptions) a five-year durational limit on TANF
recipients, requires that virtually all recipients be engaged in work or
community service activities within two years of receiving benefits, and limits
assistance provided to certain immigrants and other classes of individuals.
States are required to meet work activity participation targets for their TANF
caseload and conform with certain other federal standards or face potential
sanctions in the form of a reduced federal block grant and increased State/local
funding requirements. Any future reduction could have an adverse impact on the
State's Financial Plan. However, the State has been able to demonstrate
compliance with TANF work requirements to date and does not now expect to be
subject to associated federal fiscal penalties.
The Division of the Budget believes that its projections of receipts and
disbursements relating to the current State Financial Plan, and the assumptions
on which they are based, are reasonable. Actual results, however, could differ
materially and adversely from projections. In the past, the State has taken
management actions to address potential Financial Plan shortfalls, and may take
similar actions should adverse variances occur in its projections for the
current fiscal year.
Despite recent budgetary surpluses recorded by the State, actions
affecting the level of receipts and disbursements, the relative strength of the
State and regional economy, and actions by the federal government could impact
projected budget gaps for the State. These gaps would result from a disparity
between recurring revenues and the costs of increasing the level of support for
State programs. For example, the fiscal effects of tax reductions adopted in the
last several fiscal years are projected to grow more substantially in the
forecast period, continuing to restrain receipts levels and placing pressure on
future spending levels. To address a potential imbalance in any given fiscal
year, the State would be required to take actions to increase receipts and/or
reduce disbursements as it enacts the budget for that year, and, under the State
Constitution, the Governor is required to propose a balanced budget each year.
There can be no assurance, however, that the Legislature will enact the
Governor's proposals or that the State's actions will be sufficient to preserve
budgetary balance in a given fiscal year or to align recurring receipts and
disbursements in future fiscal years.
To help guard against these risks, the State has projected reserves of
$2.4 billion in 1999-2000.
CASH-BASIS RESULTS FOR PRIOR FISCAL YEARS
GENERAL FUND 1996-97 THROUGH 1998-99
New York State's financial operations have improved during recent fiscal
years. During its last seven fiscal years, the State has recorded balanced
budgets on a cash basis, with positive year-end fund balances.
A description of cash-basis results in the General Fund for the prior
three fiscal years is presented below.
1998-99 Fiscal Year
The State ended its 1998-99 fiscal year on March 31, 1999 in balance on a
cash basis, with a General Fund cash surplus as reported by the DOB of $1.82
billion. The cash surplus was derived primarily from higher-than-projected tax
collections as a result of continued economic growth, particularly in the
financial markets and the securities industries.
The State reported a General Fund closing cash balance of $892 million, an
increase of $254 million from the prior fiscal year. The balance is held in
three accounts within the General Fund: the Tax Stabilization Reserve Fund
(TSRF), the Contingency Reserve Fund (CRF) and the Community Projects Fund
(CPF). The TSRF closing balance was $473 million, following an additional
deposit of $73 million in 1998-99. The CRF closing balance was $107 million,
following a deposit of $39 million in 1998-99. The CPF, which finances
legislative initiatives, closed the fiscal year with a balance of $312 million.
The closing fund balance excludes $2.31 billion that the State deposited
into the tax refund reserve account at the close of 1998-99 to pay for tax
refunds in 1999-2000 of which $521 million was made available as a result of the
Local Government Assistance Corporation (LGAC) financing program and was
required to be on deposit as of March 31, 1999. The tax refund reserve account
transaction has the effect of decreasing reported personal income tax receipts
in 1998-99, while increasing reported receipts in 1999-2000.
General Fund receipts and transfers from other funds (net of tax refund
reserve account activity) for the 1998-99 fiscal year totaled $36.74 billion, an
increase of 6.34% from 1997-98 levels. General Fund disbursements and transfers
to other funds totaled $36.49 billion for the 1998-99 fiscal year, an increase
of 6.23% from 1997-98 levels.
1997-98 Fiscal Year
The State ended its 1997-98 fiscal year in balance on a cash basis, with a
General Fund cash surplus as reported by DOB of approximately $2.04 billion. The
cash surplus was derived primarily from higher-than-anticipated receipts and
lower spending on welfare, Medicaid, and other entitlement programs.
The General Fund had a closing balance of $638 million, an increase of
$205 million from the prior fiscal year. The TSRF closing balance was $400
million, following a required deposit of $15 million (repaying a transfer made
in 1991-92) and an additional deposit of $68 million made from the 1997-98
surplus. The CRF closing balance was $68 million, following a $27 million
deposit from the surplus. The CPF closed the fiscal year with a balance of $170
million. The General Fund closing balance did not include $2.39 billion in the
tax refund reserve account, of which $521 million was made available as a result
of the LGAC financing program and was required to be on deposit on March 31,
1998.
General Fund receipts and transfers from other funds (net of tax refund
reserve account activity) for the 1997-98 fiscal year totaled $34.55 billion, an
annual increase of 4.57% over 1996-97. General Fund disbursements and transfers
to other funds were $34.35 billion, an annual increase of 4.41%.
1996-97 Fiscal Year
The State ended its 1996-97 fiscal year on March 31, 1997 in balance on a
cash basis, with a General Fund cash surplus as reported by DOB of approximately
$1.42 billion. The cash surplus was derived primarily from higher-than-expected
receipts and lower-than-expected spending for social services programs.
The General Fund closing balance was $433 million, an increase of $146
million from the 1995-96 fiscal year. The balance included $317 million in the
TSRF, after a required deposit of $15 million (repaying a transfer made in
1991-92) and an additional deposit of $65 million in 1996-97. In addition, $41
million remained on deposit in the CRF. The remaining $75 million reflected
amounts then on deposit in the CPF. The General Fund closing balance did not
include $1.86 billion in the tax refund reserve account, of which $521 million
was made available as a result of the LGAC financing program and was required to
be on deposit as of March 31, 1997.
General Fund receipts and transfers from other funds (net of tax refund
reserve account activity) for the 1996-97 fiscal year totaled $33.04 billion, an
increase of 0.7% from the previous fiscal year. General Fund disbursements and
transfers to other funds totaled $32.90 billion for the 1996-97 fiscal year, an
increase of 0.7% from the 1995-96 fiscal year.
OTHER GOVERNMENTAL FUNDS (1996-97 THROUGH 1998-99)
Activity in the three other governmental funds has remained relatively
stable over the last three fiscal years, with federally-funded programs
comprising approximately two-thirds of these funds. The most significant change
in the structure of these funds has been the redirection of a portion of
transportation-related revenues from the General Fund to two dedicated funds in
the Special Revenue and Capital Projects fund types. These revenues are used to
support the capital programs of the Department of Transportation, the
Metropolitan Transportation Authority (MTA) and other transit entities.
In the Special Revenue Funds, disbursements increased from $26.02 billion
to $29.65 billion over the last three years, primarily as a result of increased
costs for the federal share of Medicaid and the initial costs of the STAR
program. Other activity reflected dedication of taxes for mass transportation
purposes, new lottery games, and new fees for criminal justice programs.
Disbursements in the Capital Projects Funds increased over the three-year
period from $3.54 billion to $4.06 billion, primarily for education,
environment, public protection and transportation programs. The composition of
this fund type's receipts also has changed as dedicated taxes, federal grants
and reimbursements from public authority bonds increased, while general
obligation bond proceeds declined.
Activity in the Debt Service Funds reflected increased use of bonds during
the three-year period for improvements to the State's capital facilities and the
ongoing costs of the LGAC fiscal reform program. The increases were moderated by
the refunding savings achieved by the State over the last several years using
strict present value savings criteria. Disbursements in this fund type increased
from $2.53 billion to $3.27 billion over the three-year period.
The State Financial Plan is based upon a June 1999 projection by DOB of
national and State economic activity. The information in this section summarizes
the national and State economic situation and outlook upon which projections of
receipts and certain disbursements were made for the 1999-2000 Financial Plan.
The national economy has maintained a robust rate of growth during the
past six quarters as the expansion, which is well into its ninth year,
continues. The national expansion, if it continues through February 2000, will
be the longest on record. Since early 1992, approximately 19 million jobs have
been added nationally. Output growth has averaged 3.2% over this period,
essentially the same as the 3.3% average annual growth during the post-World War
II period. The State economy also has continued to expand, with over 600,000
jobs added since late 1992. Employment growth has been slower than in the nation
during this period, although the State's relative performance has improved in
the last two years. Growth in average wages in New York has generally
outperformed the nation, while growth in personal income per capita has kept
pace with the nation.
DOB expects that national economic growth will be quite robust throughout
calendar year 1999. Growth in real Gross Domestic Product for 1999 is projected
to be 4.0%, with a decline in net exports overwhelmed by continued strong
consumer spending. The projected overall growth rate of the national economy for
calendar year 1999 is nearly identical to the consensus forecast of a widely
followed survey of national economic forecasters. Inflation, as measured by the
Consumer Price Index, is projected to be about 2.1%, a modest increase despite
strong economic growth. Personal income and wages are projected to increase by
5.1% and 6.3% respectively.
The forecast of the State's economy shows continued expansion during the
1999 calendar year, with employment growth gradually slowing as the year
progresses. The financial and business service sectors are expected to continue
to do well, while employment in the manufacturing sector is expected to post a
modest decline. On an average annual basis, the employment growth rate in the
State is expected to be somewhat lower than in 1998 and the unemployment rate is
expected to drop further to 5.1%. Personal income is expected to record moderate
gains in 1999. Wage growth in 1999 is expected to be slower than in the previous
year as the recent robust growth in bonus payments moderates.
The forecast for continued growth, and any resultant impact on the State's
1999-2000 Financial Plan, contains some uncertainties. Stronger-than-expected
gains in employment and wages or in stock market prices could lead to
unanticipated strong growth in consumer spending. Inventory investment due to
Y2K may be significantly stronger than expected towards the end of this year
possibly followed by significant weakness early next year. Also, improvements in
foreign economies may be weaker than expected and therefore, may have
unanticipated effects on the domestic economy. The inflation rate may differ
significantly from expectations due to the conflicting impacts of a tight labor
market and improved productivity growth as well as to the future direction and
magnitude of fluctuations of oil prices. In addition, the State economic
forecast could over- or underestimate the level of future bonus payments,
financial sector profits or inflation growth, resulting in unexpected economic
impacts. Similarly, the State forecast could fail to correctly estimate the
amount of employment change in the banking, financial and other business service
sectors as well as the direction of employment change that is likely to
accompany telecommunications and energy deregulation.
THE NEW YORK ECONOMY
New York is the third most populous state in the nation and has a
relatively high level of personal wealth. The State's economy is diverse, with a
comparatively large share of the nation's finance, insurance, transportation,
communications and services employment, and a very small share of the nation's
farming and mining activity. The State's location and its excellent air
transport facilities and natural harbors have made it an important link in
international commerce. Travel and tourism constitute an important part of the
economy. Like the rest of the nation, New York has a declining proportion of its
workforce engaged in manufacturing, and an increasing proportion engaged in
service industries.
Services: The services sector, which includes entertainment, personal
services, such as health care and auto repairs, and business-related services,
such as information processing, law and accounting, is the State's leading
economic sector. The services sector accounts for more than three of every 10
nonagricultural jobs in New York and has a noticeably higher proportion of total
jobs than does the rest of the nation.
Manufacturing: Manufacturing employment continues to decline in importance
in New York, as in most other states, and New York's economy is less reliant on
this sector than is the nation. The principal manufacturing industries in recent
years produced printing and publishing materials, instruments and related
products, machinery, apparel and finished fabric products, electronic and other
electric equipment, food and related products, chemicals and allied products,
and fabricated metal products.
Trade: Wholesale and retail trade is the second largest sector in terms of
nonagricultural jobs in New York but is considerably smaller when measured by
income share. Trade consists of wholesale businesses and retail businesses, such
as department stores and eating and drinking establishments.
Finance, Insurance and Real Estate: New York City is the nation's leading
center of banking and finance and, as a result, this is a far more important
sector in the State than in the nation as a whole. Although this sector accounts
for under one-tenth of all nonagricultural jobs in the State, it contributes
about one-fifth of all nonfarm labor and proprietors' income.
Agriculture: Farming is an important part of the economy of large regions
of the State, although it constitutes a very minor part of total State output.
Principal agricultural products of the State include milk and dairy products,
greenhouse and nursery products, apples and other fruits, and fresh vegetables.
New York ranks among the nation's leaders in the production of these
commodities.
Government: Federal, State and local government together are the third
largest sector in terms of nonagricultural jobs, with the bulk of the employment
accounted for by local governments. Public education is the source of nearly
one-half of total State and local government employment.
ECONOMIC AND DEMOGRAPHIC TRENDS
In the calendar years 1987 through 1998, the State's rate of economic
growth was somewhat slower than that of the nation. In particular, during the
1990-91 recession and post-recession period, the economy of the State, and that
of the rest of the Northeast, was more heavily damaged than that of the nation
as a whole and has been slower to recover. The total employment growth rate in
the State has been below the national average since 1987. The unemployment rate
in the State dipped below the national rate in the second half of 1981 and
remained lower until 1991; since then, it has been higher. According to data
published by the US Bureau of Economic Analysis, personal income in the State
has risen more slowly since 1988 than personal income for the nation as a whole,
although preliminary data suggests that, in 1998, the State personal income rose
more rapidly. Total State nonagricultural employment has declined as a share of
national nonagricultural employment.
State per capita personal income has historically been significantly
higher than the national average, although the ratio has varied substantially.
Because New York City is a regional employment center for a multi-state region,
State personal income measured on a residence basis understates the relative
importance of the State to the national economy and the size of the base to
which State taxation applies.
PUBLIC AUTHORITIES
The fiscal stability of the State is related in part to the fiscal
stability of its public authorities. For the purposes of this summary, public
authorities refer to public benefit corporations, created pursuant to State law,
other than local authorities. Public authorities are not subject to the
constitutional restrictions on the incurrence of debt that apply to the State
itself and may issue bonds and notes within the amounts and restrictions set
forth in legislative authorization. The State's access to the public credit
markets could be impaired and the market price of its outstanding debt may be
materially and adversely affected if any of its public authorities were to
default on their respective obligations. As of December 31, 1998, there were 17
public authorities that had outstanding debt of $100 million or more, and the
aggregate outstanding debt, including refunding bonds, of these State public
authorities was $94 billion, only a portion of which constitutes State-supported
or State-related debt.
The State has numerous public authorities with various responsibilities,
including those which finance, construct and/or operate revenue-producing public
facilities. Public authorities generally pay their operating expenses and debt
service costs from revenues generated by the projects they finance or operate,
such as tolls charged for the use of highways, bridges or tunnels, charges for
public power, electric and gas utility services, rentals charged for housing
units, and charges for occupancy at medical care facilities. In addition, State
legislation authorizes several financing techniques for public authorities.
Also, there are statutory arrangements providing for State local assistance
payments otherwise payable to localities to be made under certain circumstances
to public authorities. Although the State has no obligation to provide
additional assistance to localities whose local assistance payments have been
paid to public authorities under these arrangements, the affected localities may
seek additional State assistance if local assistance payments are diverted. Some
authorities also receive moneys from State appropriations to pay for the
operating costs of certain of their programs. As described below, the MTA
receives the bulk of this money in order to provide transit and commuter
services.
Beginning in 1998, the Long Island Power Authority (LIPA) assumed
responsibility for the provision of electric utility services previously
provided by Long Island Lighting Company for Nassau, Suffolk and a portion of
Queen Counties, as part of an estimated $7 billion financing plan. As of the
date of this AIS, LIPA has issued over $5 billion in bonds secured solely by
ratepayer charges. LIPA's debt is not considered either State-supported or
State-related debt.
METROPOLITAN TRANSPORTATION AUTHORITY
The MTA oversees the operation of subway and bus lines in New York City by
its affiliates, the New York City Transit Authority and the Manhattan and Bronx
Surface Transit Operating Authority (collectively, the TA). The MTA operates
certain commuter rail and bus services in the New York metropolitan area through
the MTA's subsidiaries, the Long Island Rail Road Company, the Metro-North
Commuter Railroad Company, and the Metropolitan Suburban Bus Authority. In
addition, the Staten Island Rapid Transit Operating Authority, an MTA
subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (TBTA), the MTA
operates certain intrastate toll bridges and tunnels. Because fare revenues are
not sufficient to finance the mass transit portion of these operations, the MTA
has depended on, and will continue to depend on, operating support from the
State, local governments and TBTA, including loans, grants and subsidies. If
current revenue projections are not realized and/or operating expenses exceed
current projections, the TA or commuter railroads may be required to seek
additional State assistance, raise fares or take other actions.
Since 1980, the State has enacted several taxes--including a surcharge on
the profits of banks, insurance corporations and general business corporations
doing business in the 12-county Metropolitan Transportation Region served by the
MTA and a special one-quarter of 1% regional sales and use tax--that provide
revenues for mass transit purposes, including assistance to the MTA. Since 1987,
State law also has required that the proceeds of a one-quarter of 1% mortgage
recording tax paid on certain mortgages in the Metropolitan Transportation
Region be deposited in a special MTA fund for operating or capital expenses. In
1993, the State dedicated a portion of certain additional State petroleum
business tax receipts to fund operating or capital assistance to the MTA. The
1999-2000 enacted budget provides State assistance to the MTA totaling
approximately $1.4 billion, an increase of $55 million over the 1998-99 fiscal
year.
State legislation accompanying the 1996-97 adopted State budget authorized
the MTA, TBTA and TA to issue an aggregate of $6.5 billion in bonds to finance a
portion of the $12.17 billion MTA capital plan for the 1995 through 1999
calendar years (the 1995-99 Capital Program). In July 1997, the Capital Program
Review Board (CPRB) approved the 1995-99 Capital Program and subsequently
amended it in August 1997 and in March 1999. The MTA plan now totals $12.55
billion. The 1995-99 Capital Program was the fourth capital plan since the
Legislature authorized procedures for the adoption, approval and amendment of
MTA capital programs and is designed to upgrade the performance of the MTA's
transportation systems by investing in new rolling stock, maintaining
replacement schedules for existing assets and bringing the MTA system into a
state of good repair. The 1995-99 Capital Program assumed the issuance of an
estimated $5.2 billion in bonds under this $6.5 billion aggregate bonding
authority. The remainder of the plan was projected to be financed with
assistance from the federal government, the State, the City of New York, and
from various other revenues generated from actions taken by the MTA.
There can be no assurance that the MTA's capital plan for 2000 through
2004 will be adequate to finance the MTA's capital needs over the plan period,
or that funding sources identified in the approved plan will not be reduced or
eliminated.
There can be no assurance that all the necessary governmental actions for
future capital programs will be taken, that funding sources currently identified
will not be decreased or eliminated, or that the 2000-04 Capital Program or
parts thereof will not be delayed or reduced. Should funding levels fall below
current projections, the MTA would have to revise its 2000-04 Capital Program
accordingly. If the 2000-04 Capital Program is delayed or reduced, ridership and
fare revenues may decline, which could, among other things, impair the MTA's
ability to meet its operating expenses without additional assistance.
THE CITY OF NEW YORK
The fiscal health of the State also may be affected by the fiscal health
of New York City, which continues to receive significant financial assistance
from the State. State aid contributes to the City's ability to balance its
budget and meet its cash requirements. The State also may be affected by the
ability of the City and certain entities issuing debt for the benefit of the
City to market their securities successfully in the public credit markets.
FISCAL OVERSIGHT
In response to the City's fiscal crisis in 1975, the State took action to
assist the City in returning to fiscal stability. Among those actions, the State
established the Municipal Assistance Corporation for the City of New York (NYC
MAC) to provide financing assistance to the City; the New York State Financial
Control Board (the Control Board) to oversee the City's financial affairs; and
the Office of the State Deputy Comptroller for the City of New York (OSDC) to
assist the Control Board in exercising its powers and responsibilities. A
"control period" existed from 1975 to 1986, during which the City was subject to
certain statutorily-prescribed fiscal controls. The Control Board terminated the
control period 1986 when certain statutory conditions were met. State law
requires the Control Board to reimpose a control period upon the occurrence, or
"substantial likelihood and imminence" of the occurrence, of certain events,
including (but not limited to) a City operating budget deficit of more than $100
million or impaired access to the public credit markets.
Currently, the City and its Covered Organizations (i.e., those
organizations which receive or may receive moneys from the City directly,
indirectly or contingently) operate under the City's Financial Plan. The City's
Financial Plan summarizes its capital, revenue and expense projections and
outlines proposed gap-closing programs for years with projected budget gaps. The
City's projections set forth in its Financial Plan are based on various
assumptions and contingencies, some of which are uncertain and may not
materialize. Unforeseen developments and changes in major assumptions could
significantly affect the City's ability to balance its budget as required by
State law and to meet its annual cash flow and financing requirements.
To successfully implement its Financial Plan, the City and certain
entities issuing debt for the benefit of the City must market their securities
successfully. The City issues securities to finance, refinance and rehabilitate
infrastructure and other capital needs, as well as for seasonal financing needs.
In City fiscal year 1997-98, the State constitutional debt limit would have
prevented the City from entering into new capital contracts. Therefore, in 1997,
the State created the New York City Transitional Finance Authority (TFA) in
order to finance a portion of the City's capital program. Despite this
additional financing mechanism, the City currently projects that, if no further
action is taken, it will reach its debt limit in City's current fiscal year
1999-2000. To continue its capital plan without interruption, the City is
proposing an amendment to the State Constitution to change the methodology used
to calculate the debt limit. Since an amendment to the Constitution to raise the
debt limit could not take effect until City fiscal year 2001-02 at the earliest,
the City has decided to securitize a portion of its share of the proceeds from
the settlement with the nation's tobacco companies. However, a number of
potential developments may affect both the availability and level of funding
that the City will receive from the tobacco settlement. City officials have
indicated that, should their efforts to securitize a portion of City tobacco
settlement proceeds fail or not be accomplished in a timely manner, the City
will request that the State increase the borrowing authority of the TFA.
MONITORING AGENCIES
The staffs of the Control Board, OSDC and the City Comptroller issue
periodic reports on the City's Financial Plans. The reports analyze the City's
forecasts of revenues and expenditures, cash flow, and debt service
requirements, as well as evaluate compliance by the City and its Covered
Organizations with its Financial Plan. According to staff reports, while
economic growth in New York City has been slower than in other regions of the
country, a surge in Wall Street profitability resulted in increased tax revenues
and produced a substantial surplus for the City in City fiscal year 1997-98.
Recent staff reports also indicate that the City projects a surplus for City
fiscal year 1998-99. Although several sectors of the City's economy have
expanded over the last several years, especially tourism and business and
professional services, City tax revenues remain heavily dependent on the
continued profitability of the securities industries and the performance of the
national economy. In addition, the size of recent tax reductions has increased
to over $2 billion in City fiscal year 1999-2000 through the expiration of a
personal income tax surcharge, the repeal of the non-resident earnings tax and
the elimination of the sales tax on clothing items costing less than $110. Staff
reports have indicated that recent City budgets have been balanced in part
through the use of nonrecurring resources and that the City's Financial Plan
relies in part on actions outside its direct control. These reports also have
indicated that the City has not yet brought its long-term expenditure growth in
line with recurring revenue growth and that the City is likely to continue to
face substantial gaps between forecast revenues and expenditures in future years
that must be closed with reduced expenditures and/or increased revenues. In
addition to these monitoring agencies, the Independent Budget Office (IBO) has
been established pursuant to the City Charter to provide analysis to elected
officials and the public on relevant fiscal and budgetary issues affecting the
City.
OTHER LOCALITIES
Certain localities outside New York City have experienced financial
problems and have requested and received additional State assistance during the
last several State fiscal years. The potential impact on the State of any future
requests by localities for additional oversight or financial assistance is not
included in the projections of the State's receipts and disbursements for the
State's 1999-2000 fiscal year.
The State has provided extraordinary financial assistance to select
municipalities, primarily cities, since the 1996-97 fiscal year. Funding has
essentially been continued or increased in each subsequent fiscal year. Such
funding in 1999-2000 totals $113.9 million. In 1997-98, the State increased
General Purpose State Aid for local governments by $27 million to $550 million,
and has continued funding at this new level since that date.
While the distribution of General Purpose State Aid for local governments
was originally based on a statutory formula, in recent years both the total
amount appropriated and the shares appropriated to specific localities have been
determined by the Legislature. A State commission established to study the
distribution and amounts of general purpose local government aid failed to agree
on any recommendations for a new formula.
Counties, cities, towns, villages and school districts have engaged in
substantial short-term and long-term borrowings. In 1997, the total indebtedness
of all localities in the State, other than New York City, was approximately
$21.0 billion. A small portion (approximately $80 million) of that indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant to
enabling State legislation. State law requires the Comptroller to review and
make recommendations concerning the budgets of those local government units
(other than New York City) authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Twenty-two localities had outstanding indebtedness for deficit financing at the
close of their fiscal year ending in 1997.
Like the State, local governments must respond to changing political,
economic and financial influences over which they have little or no control.
Such changes may adversely affect the financial condition of certain local
governments. For example, the federal government may reduce (or in some cases
eliminate) federal funding of some local programs which, in turn, may require
local governments to fund these expenditures from their own resources. It is
also possible that the State, New York City, or any of their respective public
authorities may suffer serious financial difficulties that could jeopardize
local access to the public credit markets, which may adversely affect the
marketability of notes and bonds issued by localities within the State.
Localities also may face unanticipated problems resulting from certain pending
litigation, judicial decisions and long-range economic trends. Other large-scale
potential problems, such as declining urban populations, increasing
expenditures, and the loss of skilled manufacturing jobs, also may adversely
affect localities and necessitate State assistance.
LITIGATION
GENERAL
The legal proceedings listed below involve State finances and programs and
miscellaneous civil rights, real property, contract and other tort claims in
which the State is a defendant and the potential monetary claims against the
State are substantial, generally in excess of $100 million. These proceedings
could adversely affect the financial condition of the State in the 1999-2000
fiscal year or thereafter.
As of August 24, 1999, except as described below, no current litigation
involves the State's authority, as a matter of law, to contract indebtedness,
issue its obligations, or pay such indebtedness when due, or affects the State's
power or ability, as a matter of law, to impose or collect significant amounts
of taxes and revenues.
The State is party to other claims and litigation which its legal counsel
has advised are not probable of adverse court decisions or are not deemed
adverse and material. Although the amounts of potential losses resulting from
this litigation, if any, are not presently determinable, it is the State's
opinion that its ultimate liability in these cases is not expected to have a
material and adverse effect on the State's financial position in the 1999-2000
fiscal year or thereafter.
The General Purpose Financial Statements for the 1998-99 fiscal year
report estimated probable awarded and anticipated unfavorable judgments of $895
million, of which $132 million is expected to be paid during the 1999-2000
fiscal year.
Adverse developments in the proceedings described below, other proceedings
for which there are unanticipated, unfavorable and material judgments, or the
initiation of new proceedings could affect the ability of the State to maintain
a balanced 1999-2000 Financial Plan. The State believes that the 1999-2000
Financial Plan includes sufficient reserves to offset the costs associated with
the payment of judgments that may be required during the 1999-2000 fiscal year.
These reserves include (but are not limited to) amounts appropriated for court
of claims payments and projected fund balances in the General Fund. In addition,
any amounts ultimately required to be paid by the State may be subject to
settlement or may be paid over a multi-year period. There can be no assurance,
however, that adverse decisions in legal proceedings against the State would not
exceed the amount of all potential 1999-2000 Financial Plan resources available
for the payment of judgments, and could therefore affect the ability of the
State to maintain a balanced 1999-2000 Financial Plan.
TAX LAW
In New York Association of Convenience Stores, et al. v. Urbach, et al.,
petitioners, New York Association of Convenience Stores, National Association of
Convenience Stores, M.W.S. Enterprises, Inc. and Sugarcreek Stores, Inc. are
seeking to compel respondents, the Commissioner of Taxation and Finance and the
Department of Taxation and Finance, to enforce sales and excise taxes imposed,
pursuant to Tax Law Articles 12-A, 20 and 28, on tobacco products and motor fuel
sold to non-Indian consumers on Indian reservations. In orders dated August 13,
1996 and August 24, 1996, the Supreme Court, Albany County, ordered, inter alia,
that there be equal implementation and enforcement of said taxes for sales to
non-Indian consumers on and off Indian reservations, and further ordered that,
if respondents failed to comply within 120 days, no tobacco products or motor
fuel could be introduced onto Indian reservations other than for Indian
consumption or, alternately, the collection and enforcement of such taxes would
be suspended statewide. Respondents appealed to the Appellate Division, Third
Department, and invoked CPLR 5519(a)(1), which provides that the taking of the
appeal stayed all proceedings to enforce the orders pending the appeal.
Petitioners' motion to vacate the stay was denied. In a decision entered May 8,
1997, the Third Department modified the orders by deleting the portion thereof
that provided for the statewide suspension of the enforcement and collection of
the sales and excise taxes on motor fuel and tobacco products. The Third
Department held, inter alia, that petitioners had not sought such relief in
their petition and that it was an error for the Supreme Court to have awarded
such undemanded relief without adequate notice of its intent to do so. On May
22, 1997, respondents appealed to the Court of Appeals on other grounds, and
again invoked the statutory stay. On October 23, 1997, the Court of Appeals
granted petitioners' motion for leave to cross appeal from the portion of the
Third Department's decision that deleted the statewide suspension of the
enforcement and collection of the sales and excise taxes on motor fuel and
tobacco. On July 9, 1998, the New York Court of Appeals reversed the order of
the Appellate Division, Third Department, and remanded the matter to the Supreme
Court, Albany County, for further proceedings. The Court held that the
petitioners had standing to assert an equal protection claim, but that their
claim did not implicate racial discrimination. The Court remanded the case to
Supreme Court, Albany County, for resolution of the question of whether there
was a rational basis for the Tax Department's policy of non-enforcement of the
sales and excise taxes on reservation sales of cigarettes and motor fuel to
non-Indians. In a footnote, the Court stated that, in view of its disposition of
the case, petitioners' cross-appeal regarding the statewide suspension of the
taxes is "academic." By decision and judgment dated July 9, 1999, the Supreme
Court, Albany County, granted judgment dismissing the petition. The time in
which to appeal the July 9, 1999 decision and judgment has not yet expired.
LINE ITEM VETO
In an action commenced in June 1998 by the Speaker of the Assembly of the
State of New York against the Governor of the State of New York (Silver v.
Pataki, Supreme Court, New York County), the Speaker challenges the Governor's
application of his constitutional line item veto authority to certain portions
of budget bills adopted by the State Legislature contained in Chapters 56, 57
and 58 of the Laws of 1998. On July 10, 1998, the State filed a motion to
dismiss this action. By order entered January 7, 1999, the Court denied the
State's motion to dismiss. On January 27, 1999, the State appealed that order.
On April 27, 1999, the Appellate Division, First Department, held that the
State's automatic stay of litigation pending the resolution of the appeal would
be vacated unless the State perfected its appeal for the Court's September 1999
appellate term. The State perfected its appeal on July 12, 1999.
MEDICAID
Several cases challenge provisions of Chapter 81 of the Laws of 1995 which
alter the nursing home Medicaid reimbursement methodology on and after April 1,
1995. Included are New York State Health Facilities Association, et al. v.
DeBuono, et al., St. Luke's Nursing Center, et al. v. DeBuono, et al., New York
Association of Homes and Services for the Aging v. DeBuono et al. (three cases),
Healthcare Association of New York State v. DeBuono and Bayberry Nursing Home et
al. v. Pataki, et al. Plaintiffs allege that the changes in methodology have
been adopted in violation of procedural and substantive requirements of State
and federal law.
In a consolidated action commenced in 1992, Medicaid recipients and home
health care providers and organizations challenge promulgation by the State
Department of Social Services (DSS) in June 1992 of a home assessment resource
review instrument (HARRI), which is to be used by DSS to determine eligibility
for and the nature of home care services for Medicaid recipients, and challenge
the policy of DSS of limiting reimbursable hours of service until a patient is
assessed using the HARRI (Dowd, et al. v. Bane, Supreme Court, New York County).
In a related case, Rodriguez v. DeBuono, on April 19, 1999, the United States
District Court for the Southern District of New York enjoined the State's use of
task based assessment, which is similar to the HARRI, unless the State assesses
safety monitoring as a separate task based assessment, on the grounds that its
use without such additional assessment violated federal Medicaid law and the
Americans with Disabilities Act. The State appealed from the April 19, 1999
order and on July 12, 1999 argued the appeal before the Second Circuit.
In several cases, plaintiffs seek retroactive claims for reimbursement for
services provided to Medicaid recipients who were also eligible for Medicare
during the period January 1, 1987 to June 2, 1992. Included are Matter of New
York State Radiological Society v. Wing, Appel v. Wing, E.F.S. Medical Supplies
v. Dowling, Kellogg v. Wing, Lifshitz v. Wing, New York State Podiatric Medical
Association v. Wing and New York State Psychiatric Association v. Wing. These
cases were commenced after the State's reimbursement methodology was held
invalid in New York City Health and Hospital Corp. v. Perales. The State
contends that these claims are time-barred. In a judgment dated September 5,
1996, the Supreme Court, Albany County, dismissed Matter of New York State
Radiological Society v. Wing as time-barred. By order dated November 26, 1997,
the Appellate Division, Third Department, affirmed that judgment. By decision
dated June 9, 1998, the Court of Appeals denied leave to appeal. In a decision
entered December 15, 1998, the Appellate Division, First Department, dismissed
the remaining cases in accordance with the result in Matter of New York State
Radiological Society v. Wing. By decision dated July 8, 1999, the Court of
Appeals denied leave to appeal.
Several cases, including Port Jefferson Health Care Facility, et al. v.
Wing (Supreme Court, Suffolk County), challenge the constitutionality of Public
Health Law ss.2807-d, which imposes a tax on the gross receipts hospitals and
residential health care facilities receive from all patient care services.
Plaintiffs allege that the tax assessments were not uniformly applied, in
violation of federal regulations. In a decision dated June 30, 1997, the Court
held that the 1.2% and 3.8% assessments on gross receipts imposed pursuant to
Public Health Law ss.ss. 2807-d(2)(b)(ii) and 2807-d(2)(b)(iii), respectively,
are unconstitutional. An order entered August 27, 1997 enforced the terms of the
decision. The State appealed that order. By decision and order dated August 31,
1998, the Appellate Division, Second Department, affirmed that order. On
September 30, 1998, the State moved for re-argument or, in the alternative, for
a certified question for the Court of Appeals to review. By order dated January
7, 1999, the motion was denied. A final order was entered in Supreme Court on
January 26, 1999. On February 23, 1999, the State appealed that order to the
Court of Appeals. The case is scheduled to be argued on October 20, 1999.
In Dental Society, et al. v. Pataki, et al. (United States District Court,
Northern District of New York, commenced February 2, 1999), plaintiffs challenge
the State's reimbursement rates for dental care provided under the State's
dental Medicaid program. Plaintiffs claim that the State's Medicaid fee schedule
violates Title XIX of the Social Security Act (42 U.S.C. ss. 1396a et seq.) and
the federal and State Constitutions. On June 25, 1999, the State filed its
answer.
SHELTER ALLOWANCE
In an action commenced in March 1987 against State and New York City
officials (Jiggetts, et al. v. Bane, et al., Supreme Court, New York County),
plaintiffs allege that the shelter allowance granted to recipients of public
assistance is not adequate for proper housing. In a decision dated April 16,
1997, the Court held that the shelter allowance promulgated by the Legislature
and enforced through the State Department of Social Services regulations is not
reasonably related to the cost of rental housing in New York City and results in
homelessness to families in New York City. A judgment was entered on July 25,
1997, directing, inter alia, that the State (i) submit a proposed schedule of
shelter allowances (for the Aid to Dependent Children program and any successor
program) that bears a reasonable relation to the cost of housing in New York
City; and (ii) compel the New York City Department of Social Services to pay
plaintiffs a monthly shelter allowance in the full amount of their contract
rents, provided they continue to meet the eligibility requirements for public
assistance, until such time as a lawful shelter allowance is implemented, and
provide interim relief to other eligible recipients of Aid to Dependent Children
under the interim relief system established in this case. The State appealed to
the Appellate Division, First Department from each and every provision of this
judgment except that portion directing the continued provision of interim
relief. By decision and order dated May 6, 1999, the Appellate Division, First
Department, affirmed the July 25, 1997 judgment. By order dated July 8, 1999,
the Appellate Division denied the State's motion for leave to appeal to the
Court of Appeals from the May 6, 1999 decision and order. The State's motion for
leave to appeal to the Court of Appeals is pending in that court.
REAL PROPERTY CLAIMS
On March 4, 1985 in Oneida Indian Nation of New York, et al. v. County of
Oneida, the United States Supreme Court affirmed a judgment of the United States
Court of Appeals for the Second Circuit holding that the Oneida Indians have a
common-law right of action against Madison and Oneida Counties for wrongful
possession of 872 acres of land illegally sold to the State in 1795. At the same
time, however, the Court reversed the Second Circuit by holding that a
third-party claim by the counties against the State for indemnification was not
properly before the federal courts. The case was remanded to the District Court
for an assessment of damages, which action is still pending. The counties may
still seek indemnification in the State courts.
In 1998, the United States filed a complaint in intervention in Oneida
Indian Nation of New York. In December 1998, both the United States and the
tribal plaintiffs moved for leave to amend their complaints to assert claims for
250,000 acres, to add the State as a defendant, and to certify a class made up
of all individuals who currently purport to hold title within said 250,000 acre
area. These motions were argued March 29, 1999 and are still awaiting
determination. The District Court has not yet rendered a decision. By order
dated February 24, 1999, the District Court appointed a federal settlement
master. A conference scheduled by the District Court for May 26, 1999 to address
the administration of this case has been adjourned indefinitely.
Several other actions involving Indian claims to land in upstate New York
are also pending. Included are Cayuga Indian Nation of New York v. Cuomo, et
al., and Canadian St. Regis Band of Mohawk Indians, et al. v. State of New York,
et al., both in the United States District Court for the Northern District of
New York. The Supreme Court's holding in Oneida Indian Nation of New York may
impair or eliminate certain of the State's defenses to these actions, but may
enhance others. In the Cayuga Indian Nation of New York case, by order dated
March 29, 1999, the United States District Court for the Northern District of
New York appointed a federal settlement master. In June 1999, the federal
government moved to have the State held jointly and severally liable for any
damages owed to the plaintiffs. This motion was argued before the District Court
on July 8, 1999. The damages phase of the trial of this case is scheduled to
begin on December 1, 1999. In the Canadian St. Regis Band of Mohawk Indians
case, the United States District Court for the Northern District of New York has
directed the parties to rebrief outstanding motions to dismiss brought by the
defendants. The State filed its brief on July 1, 1999. The motions are scheduled
for argument on September 21, 1999.
CIVIL RIGHTS CLAIMS
In an action commenced in 1980 (United States, et al. v. Yonkers Board of
Education, et al.), the United States District Court for the Southern District
of New York found, in 1985, that Yonkers and its public schools were
intentionally segregated. In 1986, the District Court ordered Yonkers to develop
and comply with a remedial educational improvement plan (EIP I). On January 19,
1989, the District Court granted motions by Yonkers and the NAACP to add the
State Education Department, the Yonkers Board of Education, and the State Urban
Development Corporation as defendants, based on allegations that they had
participated in the perpetuation of the segregated school system. On August 30,
1993, the District Court found that vestiges of a dual school system continued
to exist in Yonkers. On March 27, 1995, the District Court made factual findings
regarding the role of the State and the other State defendants (the State) in
connection with the creation and maintenance of the dual school system, but
found no legal basis for imposing liability. On September 3, 1996, the United
States Court of Appeals for the Second Circuit, based on the District Court's
factual findings, held the State defendants liable under 42 USC ss.1983 and the
Equal Educational Opportunity Act, 20 USC ss.ss.1701, et seq., for the unlawful
dual school system, because the State, inter alia, had taken no action to force
the school district to desegregate despite its actual or constructive knowledge
of de jure segregation. By order dated October 8, 1997, the District Court held
that vestiges of the prior segregated school system continued to exist and that,
based on the State's conduct in creating and maintaining that system, the State
is liable for eliminating segregation and its vestiges in Yonkers and must fund
a remedy to accomplish that goal. Yonkers presented a proposed educational
improvement plan (EIP II) to eradicate these vestiges of segregation. The
October 8, 1997 order of the District Court ordered that EIP II be implemented
and directed that, within 10 days of the entry of the order, the State make
available to Yonkers $450,000 to support planning activities to prepare the EIP
II budget for 1998-99 and the accompanying capital facilities plan. A final
judgment to implement EIP II was entered on October 14, 1997. On November 7,
1997, the State appealed that judgment to the Second Circuit. The appeal is
pending. Additionally, the Court adopted a requirement that the State pay to
Yonkers approximately $9.85 million as its pro rata share of the funding of EIP
I for the 1996-97 school year. The requirement for State funding of EIP I was
reduced to an order on December 2, 1997 and reduced to a judgment on February
10, 1998. The State appealed that order to the Second Circuit on December 31,
1997 and amended the notice of appeal after entry of the judgment. By decision
dated June 22, 1999, as discussed below, the Second Circuit affirmed the
District Court's order requiring the State to pay one-half of the cost of EIP I
for the 1996-97 school year and remanded the case to the District Court for
further proceedings consistent with its decision.
On June 15, 1998, the District Court issued an opinion setting forth the
formula for the allocation of the costs of EIP I and EIP II between the State
and the City for the school years 1997-98 through 2005-06. That opinion was
reduced to an order on July 27, 1998. The order directed the State to pay $37.5
million by August 1, 1998 for estimated EIP costs for the 1997-98 school year.
The State made this payment, as directed. On August 24, 1998, the State appealed
that order to the Second Circuit. The city of Yonkers and the Yonkers Board of
Education cross appealed to the Second Circuit from that order. By stipulation
of the parties approved by the Second Circuit on November 19, 1998, the appeals
from the July 27, 1998 order were withdrawn without prejudice to reinstatement
upon determination of the State's appeal of the October 14, 1997 judgment
discussed above.
On April 15, 1999, the District Court issued two additional orders. The
first order directed the State to pay to Yonkers an additional $11.3 million by
May 1, 1999, as the State's remaining share of EIP costs for the 1997-98 school
year. The second order directed the State to pay to Yonkers $69.1 million as its
share of the estimated EIP costs for the 1998-99 school year. The State made
both payments on April 30, 1999.
In a decision dated June 22, 1999, the Second Circuit found no basis for
the District Court's findings that vestiges of a dual system continued to exist
in Yonkers and reversed the order directing the implementation of EIP II. The
Second Circuit also affirmed the District Court's order requiring the State to
pay one-half of the cost of EIP I for the 1996-97 school year and remanded the
case to the District Court for further proceedings consistent with its decision.
On July 2, 1999 the NAACP filed a petition for rehearing of the June 22, 1999
decision before the Second Circuit, en banc. The State has joined in the City of
Yonker's motion to stay further implementation of EIP II pending the decision on
the petition for rehearing. By order dated August 5, 1999, the Second Circuit
granted the motion staying further implementation of EIP II pending appeal.
On July 27, 1999, the City of Yonkers moved in the District Court to
modify the July 27, 1998 order to require the State to make payments for EIP
expenses each month from July 1999 through April 2000 of $9.22 million per month
instead of paying $92.2 million by May 1, 2000. By memorandum and order dated
July 29, 1999, the District Court denied this motion.
APPENDIX F
Set forth below, as to each share Class of each Fund, as applicable, are
those shareholders known by the Fund to own of record 5% or more of a Class of
shares of the Fund outstanding as of March 1, 2000
GOVERNMENT MONEY FUND
Class A: As of March 1, 2000, there were no shareholders who owned 5% or
more of the Class A shares of the Government Money Fund.
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit of
Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of record
42.9273%;
Stifel Nicolaus & Co. Inc., for the Exclusive Benefit of Customers,
500 N. Broadway, Saint Louis, MO 63102-2110 - owned of record
27.0307%;
First Albany Corporation, Attn.: Treasury Management, 30 South Pearl
Street, P.O. 52, Albany, New York 12201-0052 - owned of record
13.4033%;
Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, California 94111-02702 -
owned of record 8.3374%.
TREASURY MONEY FUND
Class A: Premier Mutual Fund Services, Inc., c/o Funds Distributor, Inc.,
Attn: Elizabeth Keeley, 60 State Street, Suite 1300, Boston, MA
02109-1800 - owned of record 100.0%.
Class B: First Albany Corporation, Attn: Treasury Management, 30 South
Pearl Street, P.O. Box 52, Albany, NY 12201-0052 - owned of record
79.3623%;
Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit of
Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of record
11.1603%;
Premier Mutual Fund Services, Inc., c/o Funds Distributor, Inc.,
Attn: Elizabeth Keeley, 60 State Street, Suite 1300, Boston, MA
02109-1800 - owned of record 9.4774%.
MONEY FUND
Class A: The Bank of New York, As Agent for Imclone Systems Incorporated,
Attn: Paul Goldstein, 180 Varick Street, Floor 7, New York, NY
10014-4604 - owned of record 19.8035%;
Leap Wireless International, Inc., Attn: Stephen P. Dhanens, 10307
Pacific Center Ct., San Diego, CA 92121-4340 - owned of record
8.7494%.
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit of
Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of record
39.3212%;
First Albany Corporation, Attn: Treasury Management, 30 South Pearl
Street, P.O. Box 52, Albany, New York 12201-0052 - owned of record
20.0760%;
Banc of America Securities LLC, Money Market Fund Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 17.6979%.
Stifel Nicolaus & Co. Inc. for the Exclusive Benefit of Customers,
500 N. Broadway, Saint Louis, MO 63102-2110 - owned of record
17.0499%;
CALIFORNIA MUNICIPAL FUND
Class A: Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 23.7507%;
John Thomas Chambers, Mountain View, CA 94043-1201 - owned of record
7.0319%.
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit of
Customers, P.O. Box 572, Milwaukee, WI 53201-0672 - owned of record
65.6065%;
Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 19.1885%;
Stifel Nicolas & Co. Inc. for the Exclusive Benefit of Customers,
500 N. Broadway, Saint Louis, MO 63102-2110 - owned of record
10.9252%.
MINNESOTA MUNICIPAL FUND
Class A: MBCIC, c/o Mellon Bank, Attn. Michael Botsford, 919 N. Market
Street, Wilmington, DE 19801-3023 - owned of record 97.1047%
Class B: Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 92.9016%;
Robert W. Baird & Co., Omnibus account for the Exclusive Benefit of
Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of record
6.8568%.
NATIONAL MUNICIPAL FUND
Class A: Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 28.1884%.
Class B: Robert W. Baird & Co., Omnibus Accounts for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 62.8066%;
Stifel Nicolaus & Co. Inc. for the Exclusive Benefit of Customers,
500 N. Broadway, Saint Louis, MO 63102-2110 - owned of record
14.8423%;
Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 8.7363%;
George K. Baum & Company, Attn. Ron Frazier, Special Custody
Account for the Exclusive Benefit of Customers, 120 W. 12th Street,
Kansas City, MO 64105-1917 - owned of record 7.5621%.
NEW YORK MUNICIPAL FUND
Class A: As of March 1, 2000, there were no shareholders who owned 5% or
more of the Class A shares of the New York Municipal Fund.
Class B: Banc of America Securities LLC, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 94111-2702 - owned of
record 49.331%;
First Albany Corporation, Attn.: Treasury Management, 30 South
Pearl Street, P.O. Box 52, Albany, NY 12201-0052 - owned of record
46.643%.
- --------------------------------------------------------------------------------
GENERAL MONEY MARKET FUND, INC.
GENERAL TREASURY PRIME MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND
CLASS X SHARES
STATEMENT OF ADDITIONAL INFORMATION
APRIL 1, 2000
- --------------------------------------------------------------------------------
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus for Class X shares of General Money Market Fund, Inc. (the "Money
Fund"), General Treasury Prime Money Market Fund (the "Treasury Money Fund") and
General Municipal Money Market Fund (the "National Municipal Fund") (each, a
"Fund" and collectively, the "Funds"), dated April 1, 2000, as it may be revised
from time to time. To obtain a copy of the Prospectus for Class X shares of a
Fund, please write to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call one of the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1396
Outside the U.S. -- Call 516-794-5452
The most recent Annual and Semi-Annual Report to Shareholders of each Fund
are separate documents supplied with this Statement of Additional Information,
and the financial statements, accompanying notes and reports of independent
auditors appearing in the Annual Report are incorporated by reference into this
Statement of Additional Information. When requesting a copy of this Statement of
Additional Information, you will receive the report(s) for the Fund(s) in which
you are a shareholder.
EACH FUND IS A SEPARATE INVESTMENT PORTFOLIO WITH OPERATIONS AND RESULTS
THAT ARE UNRELATED TO THOSE OF THE OTHER FUND. THE TREASURY MONEY FUND IS A
SEPARATE SERIES OF GENERAL GOVERNMENT SECURITIES MONEY MARKET FUNDS, INC. (THE
"GOVERNMENT COMPANY"). THE NATIONAL MUNICIPAL FUND IS A SEPARATE SERIES OF
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC. (THE "MUNICIPAL COMPANY"). THIS
COMBINED STATEMENT OF ADDITIONAL INFORMATION HAS BEEN PROVIDED FOR YOUR
CONVENIENCE TO PROVIDE YOU WITH THE OPPORTUNITY TO CONSIDER THREE INVESTMENT
CHOICES IN ONE DOCUMENT.
TABLE OF CONTENTS
Page
Description of the Funds...................................................B-3
Management of the Funds....................................................B-19
Management Arrangements....................................................B-23
How to Buy Shares..........................................................B-26
Distribution Plan..........................................................B-29
Shareholder Services Plan..................................................B-30
How to Redeem Shares.......................................................B-31
Shareholder Services.......................................................B-34
Determination of Net Asset Value...........................................B-37
Dividends, Distributions and Taxes.........................................B-38
Yield Information..........................................................B-39
Portfolio Transactions.....................................................B-41
Information About the Funds................................................B-42
Counsel and Independent Auditors...........................................B-42
Year 2000 Issues...........................................................B-43
Appendix A.................................................................B-44
Appendix B.................................................................B-47
Appendix C.................................................................B-51
DESCRIPTION OF THE FUNDS
Each of the Money Fund, the Government Company and the Municipal Company is
a Maryland corporation formed on April 8, 1982, April 8, 1982 and May 15, 1981,
respectively. Each Fund is an open-end management investment company, known as a
money market mutual fund. Each Fund is a diversified fund, which means that,
with respect to 75% of its total assets, the Fund will not invest more than 5%
of its assets in the securities of any single issuer.
The Dreyfus Corporation (the "Manager") serves as each Fund's investment
adviser.
Dreyfus Service Corporation (the "Distributor") is the distributor of each
Fund's shares.
Certain Portfolio Securities
The following information supplements and should be read in conjunction
with the Funds' Prospectus.
U.S. Government Securities. (MONEY FUND AND TREASURY MONEY FUND) The
Treasury Money Fund only invests in securities issued or guaranteed by the U.S.
Government. The Money Fund may invest in securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, which include Treasury
securities that differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the Treasury;
others by the right of the issuer to borrow from the Treasury; others by
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others 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 currently 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.
Repurchase Agreements. (MONEY FUND) The Money Fund may enter into
repurchase agreements. In a repurchase agreement, the Fund buys, and the seller
agrees to repurchase, a security at a mutually agreed upon time and price
(usually within seven days). The repurchase agreement thereby determines the
yield during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. 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 entering into them. Repurchase agreements
could involve risks in the event of a default or insolvency of the other party
to the agreement, including possible delays or restrictions upon the Fund's
ability to dispose of the underlying securities. 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 $1
billion, 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 the resale
price.
Bank Obligations. (MONEY FUND) The Money Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of domestic
banks, domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions.
Certificates of deposit ("CDs") are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits ("TDs") 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.
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 the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
As a result of Federal and state laws and regulations, domestic banks
whose CDs may be purchased by the Fund are, among other things, generally
required to maintain specified levels of reserves, and are subject to other
supervision and regulation designed to promote financial soundness. Domestic
commercial banks organized under Federal law are supervised and examined by the
Comptroller of the Currency and are required to be members of the Federal
Reserve System and to have their deposits insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In addition, state banks
whose CDs may be purchased by the Money Fund are insured by the Bank Insurance
Fund administered by the FDIC (although such insurance may not be of material
benefit to the Fund, depending upon the principal amount of the CDs of each bank
held by the Fund) and are subject to Federal examination and to a substantial
body of Federal law and regulation. However, not all of such laws and
regulations apply to the foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks may be general
obligations of the parent banks in addition to the issuing branch, or may be
limited by the terms of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal and
interest on the obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. These foreign branches and subsidiaries are
not necessarily subject to the same or similar regulatory requirements as apply
to domestic banks, such as mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements. In addition, less
information may be publicly available about a foreign branch of a domestic bank
or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal and state regulation
as well as governmental action in the country in which the foreign bank has its
head office. A domestic branch of a foreign bank with assets in excess of $1
billion may be subject to reserve requirements imposed by the Federal Reserve
System or by the state in which the branch is located if the branch is licensed
in that state.
In addition, Federal branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may be required to:
(1) pledge to the regulator, by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from time to time by
the appropriate regulatory authority; and (2) maintain assets within the state
in an amount equal to a specified percentage of the aggregate amount of
liabilities of the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal or State Branches generally
must be insured by the FDIC if such branches take deposits of less than
$100,000.
In view of the foregoing factors associated with the purchase of CDs and
TDs issued by foreign branches of domestic banks, by foreign subsidiaries of
domestic banks, by foreign branches of foreign banks or by domestic branches of
foreign banks, the Manager carefully evaluates such investments on a
case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan associations
and similar thrift institutions with less than $1 billion in assets, the
deposits of which are insured by the FDIC, provided the Fund purchases any such
CD in a principal amount of no more than $100,000, which amount would be fully
insured by the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC. Interest payments on such a CD are not insured by the
FDIC. The Fund will not own more than one such CD per such issuer.
Commercial Paper. (MONEY FUND) The Money Fund may purchase commercial
paper consisting 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, including banks.
Floating and Variable Rate Obligations. (MONEY FUND) The Money Fund 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 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 amounts 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.
Participation Interests. (MONEY FUND) The Money 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
Manager must have determined that the instrument is of comparable quality to
those instruments in which the Fund may invest.
Asset-Backed Securities. (MONEY FUND) The Money Fund may purchase
asset-backed securities, which are securities issued by special purpose entities
whose primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash flows
generated by the assets backing the securities and, in certain cases, supported
by letters of credit, surety bonds or other forms of credit or liquidity
enhancements. The value of these asset-backed securities also may be affected by
the creditworthiness of the servicing agent for the pool of assets, the
originator of the loans or receivables or the financial institution providing
the credit support.
Municipal Obligations. (NATIONAL MUNICIPAL FUND) The National Municipal
Fund will invest at least 80% of the value of its net assets (except when
maintaining a temporary defensive position) in 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, in the opinion of bond counsel to the
issuer, is 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. Certain
Municipal Obligations are subject to redemption at a date earlier than their
stated maturity pursuant to call options, which may be separated from the
related Municipal Obligation and purchased and sold separately.
For the purpose of diversification under the Investment Company Act of
1940, as amended (the "1940 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.
Certain Tax Exempt Obligations. (NATIONAL MUNICIPAL FUND) The National Municipal
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.
Derivative Products. (National Municipal Fund) The National Municipal Fund may
purchase various derivative products whose value if tied to underlying Municipal
Obligations. The Fund will purchase only those derivative products that are
consistent with its investment objective and policies and comply with the
quality, maturity and diversification standards of Rule 2a-7 under the 1940 Act.
The principal types of derivative products are described below.
(1) Tax Exempt Participation Interests. Tax exempt participation interests
give the Fund an undivided interest in a Municipal Obligation in the proportion
that the Fund's participation interest bears to the total principal amount of
the Municipal Obligation. Participation interests may have fixed, floating or
variable rates of interest, and are frequently backed by an irrevocable letter
of credit or guarantee of a bank.
(2) Tender Option Bonds. Tender option bonds grant the holder an option to
tender an underlying Municipal Obligation at par plus accrued interest at
specified intervals to a financial institution that acts as a liquidity
provider. The holder of a tender option bond effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt rate.
(3) Custodial Receipts. In a typical custodial receipt arrangement, an
issuer of a Municipal Obligation deposits it with a custodian in exchange for
two classes of custodial receipts. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest rate is
adjusted and ownership changes. The other class's interest rate also is
adjusted, but inversely to changes in the interest rate of the first class.
(4) Structured Notes. Structured notes typically are purchased in
privately negotiated transactions from financial institutions. When the Fund
purchases a structured note, it will make a payment of principal to the
counterparty. Some structured notes have a guaranteed repayment of principal
while others place a portion (or all) of the principal at risk. The possibility
of default by the counterparty or its credit provider may be greater for
structured notes than for other types of money market instruments.
Stand-By Commitments. (NATIONAL MUNICIPAL FUND) The National Municipal 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 its 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.
Ratings of Municipal Obligations. (NATIONAL MUNICIPAL FUND) The National
Municipal Fund may invest only in those Municipal Obligations which are rated in
one of the two highest rating categories for debt obligations by at least two
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 Fund's Board.
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings as of the fiscal year ended November
30, 1999, computed on a monthly basis, was as follows:
Percentage
of Value
Moody's Standard & National
Fitch IBCA, or Investors or Poor's Municipal
Inc. ("Fitch") Service, Inc. Ratings Group Fund
("Moody's") ("S&P")
---------------- ---------------- -------------- --------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 94.2%
F2+/F2 VMIG/MIG2, P2 SP2+/SP2 -
AAA/AA Aaa/Aa AAA/AA 2.3%
Not Rated Not Rated Not Rated 3.5%*
-------
100.0%
___________________________
* Included in the not rated category are securities which, while not rated,
have been determined by the Manager to be of comparable quality to
securities in the VMIG1/MIG1 or SP-1+/SP-1 rating categories.
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 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
(collectively, the "Rating Agencies") for Municipal Obligations may change as a
result of changes in such organizations or its rating system, the Fund will
attempt to use comparable ratings as standards for its investments in accordance
with its stated investment policies contained in the Fund's Prospectus and this
Statement of Additional Information. The ratings of the Rating Agencies
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.
Taxable Investments. (NATIONAL MUNICIPAL FUND) 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 National Municipal 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 a Ratings Agency;
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. 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 the value of its total assets will
be invested in any one category of Taxable Investments.
Investment Companies. (NATIONAL MUNICIPAL FUND) The National Municipal
Fund may invest in securities issued by other investment companies to the extent
consistent with its investment objective. Under the 1940 Act, the Fund's
investment in such securities, subject to certain exceptions, currently is
limited to (i) 3% of the total voting stock of any one investment company, (ii)
5% of the Fund's total assets with respect to any one investment company and
(iii) 10% of the Fund's total assets in the aggregate. Investments in the
securities of other investment companies may involve duplication of advisory
fees and certain other expenses.
Illiquid Securities. (ALL FUNDS) Each Fund may invest up to 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. These securities may include securities that are not readily
marketable, such as 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.
Investment Techniques
In addition to the principal investment strategies discussed in the Funds'
Prospectus, the Funds also may engage in the investment techniques described
below.
Borrowing Money. (ALL FUNDS) Each Fund may borrow money from banks for
temporary or emergency (not leveraging) purposes in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While such borrowings exceed 5% of the value of a
Fund's total assets, the Fund will not make any additional investments.
Forward Commitments. (NATIONAL MUNICIPAL FUND) The National Municipal 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 receivable on a forward commitment or when-issued security are
fixed when the Fund enters into the commitment, but the Fund does not make
payment until it receives delivery from the counterparty. The Fund will commit
to purchase such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities before the settlement date if
it is deemed advisable. The Fund will segregate permissible liquid assets at
least equal at all times to the amount of the purchase commitment.
Municipal Obligations and other securities purchased on a forward
commitment or when-issued basis are subject to changes in value (generally
changing in the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of
interest rates. Securities purchased on a forward commitment or when-issued
basis may expose the Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. Purchasing securities on a forward commitment or when-issued
basis when the Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net asset
value per share.
Investment Considerations and Risks
Bank Securities. (MONEY FUND) To the extent the Money 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 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.
Foreign Securities. (MONEY FUND) Since the Money Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches 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. Such
risks include possible future political and economic developments, seizure or
nationalization of foreign deposits, imposition of foreign withholding taxes on
interest income payable on the securities, establishment of exchange controls or
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest on these securities.
Investing in Municipal Obligations. (NATIONAL MUNICIPAL FUND) The National
Municipal 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.
Certain municipal lease/purchase obligations in which the National
Municipal 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 Manager 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 Internal Revenue Code of 1986, as amended (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 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.
Simultaneous Investments. (ALL FUNDS) Investment decisions for each Fund
are made independently from those of other investment companies advised by the
Manager. If, however, such other investment companies desire to invest in, or
dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Fund or the price paid or received by the
Fund.
Investment Restrictions
MONEY FUND. The Money Fund's investment objective is a fundamental policy,
which cannot be changed without approval by the holders of a majority (as
defined in the 1940 Act) of the Fund's outstanding voting shares. In addition,
the Money Fund has adopted investment restrictions numbered 1 through 12 as
fundamental policies. Investment restriction number 13 is not a fundamental
policy and may be changed by vote of a majority of the Fund's Board members at
any time. The Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds, municipal
bonds or industrial revenue bonds (except through the purchase of debt
obligations referred to in the Fund's Prospectus and this Statement of
Additional Information).
2. Borrow money, except from banks 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.
3. Pledge its assets, except in an amount up to 15% of the value of its
total assets but only to secure borrowings for temporary or emergency purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities, commodities,
or oil and gas interests.
8. Make loans to others (except through the purchase of debt obligations
referred to in the Fund's Prospectus and this Statement of Additional
Information).
9. Invest more than 15% of its assets in the obligations of any one bank,
or invest more than 5% of its assets in the commercial paper of any one issuer.
Notwithstanding the foregoing, to the extent required by the rules of the
Securities and Exchange Commission, the Fund will not invest more than 5% of its
assets in the obligations of any one bank.
10. Invest less than 25% of its assets in securities issued by banks or
invest more than 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.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
13. 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.
* * * * *
TREASURY MONEY FUND. The Treasury Money Fund's investment objective is a
fundamental policy, which cannot be changed without approval by the holders of a
majority (as defined in the 1940 Act) of the Fund's outstanding voting shares.
In addition, the Treasury Money Fund has adopted investment restrictions
numbered 1 through 9 as fundamental policies. Investment restrictions numbered
10 and 11 are not fundamental policies and may be changed by vote of a majority
of the Fund's Board members at any time. The Treasury Money Fund may not:
1. Invest in commodities.
2. Borrow money, except 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.
3. Purchase or sell securities on margin.
4. Issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act).
5. Act as underwriter of securities of other issuers, except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
6. Purchase, hold or deal in real estate, or oil, gas, or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest in or deal in real estate.
7. Make loans to others, except through the purchase of debt obligations.
8. Invest more than 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
without regard to any such limitations. This restriction does not apply to the
purchase of U.S. Government securities.
9. Invest more than 25% of its assets in the securities of issuers in any
industry, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government.
10. Pledge, mortgage, hypothecate or otherwise encumber its assets, except
to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements.
* * * * *
NATIONAL MUNICIPAL FUND. The National Municipal Fund's investment
objective is a fundamental policy, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. In addition, the National Municipal Fund has adopted investment
restrictions numbered 1 through 7 as fundamental policies. Investment
restriction numbered 8 through 12 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The
National Municipal Fund may not:
1. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% of the value of the Fund's
total assets.
2. Act as underwriter of securities of other issues, except (i) the Fund
may bid separately or as a part of a group for the purchase of Municipal
Obligations directly from an issuer forits own portfolio to take advantage of
the lower purchase price available, and (ii) to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities.
3. 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.
4. Lend any security or make loans to others, if, as a result, more than
33-1/3% of its total assets would be lent to others, except that this limitation
does not apply to the purchase of qualified debt obligations and the entry into
repurchase agreements.
5. 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, for defensive purposes, securities issued by banks
and obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
6. Purchase more than 10% of the voting securities of any
issuer. This restriction applies only with respect to 75% of the Fund's total
assets.
7. Invest more than 15% of its assets in the obligations of any one bank or
invest more than 5% of its assets in the obligations of any other insurer,
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 limitations.
Notwithstanding the foregoing, to the extent required by the rules of the
Securities and Exchange Commission, the Fund will not invest more than 5% of its
assets in the obligations of any one bank, except that up to 25% of the value of
the Fund's total assets may be invested without regard to such limitation.
8. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
to the extent necessary to secure permitted borrowing and in connection with the
purchase of securities on a when-issued or forward commitment basis.
9. Sell securities short or purchase securities on margin.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
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.
* * * * *
NATIONAL MUNICIPAL FUND. For purposes of Investment Restriction No. 7 for
the Fund, 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.
ALL FUNDS. If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a change
in values or assets will not constitute a violation of such restriction.
MANAGEMENT OF THE FUNDS
Each Fund's Board is responsible for the management and supervision of the
Fund. The Board approves all significant agreements between the Fund and those
companies that furnish services to the Fund. These companies are as follows:
The Dreyfus Corporation.....................Investment Adviser
Dreyfus Service Corporation.................Distributor
Dreyfus Transfer, Inc.......................Transfer Agent
The Bank of New York........................Custodian
Board members and officers of each Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below.
Board Members of the Funds
JOSEPH S. DiMARTINO, Since January 1995, Chairman of the Board of various funds
in the Dreyfus Family of Funds. He also is a director of The Muscular
Dystrophy Association, HealthPlan Services Corporation, a provider of
marketing, administrative and risk management services to health and other
benefit programs, Carlyle Industries, Inc. (formerly, Belding Heminway
Company, Inc.), a button packager and distributor, Century Business
Services, Inc. (formerly, International Alliance Services, Inc.), a
provider of various outsourcing functions for small and medium sized
companies, and QuikCAT.com, Inc., a private company engaged in the
development of high speed movement, routing, storage and encryption of data
across cable, wireless and all other modes of data transport. For more than
five years prior to January 1995, he was President, a director and, until
August 1994, Chief Operating Officer of the Manager and Executive Vice
President and a director of the distributor. From August 1994 until
December 31, 1994, he was a director of Mellon Bank Corporation. He is 56
years old and his address is 200 Park Avenue, New York, New York 10166.
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander served
as Secretary of the Army and Chairman of the Board of the Panama Canal
Company, and from 1975 to 1977, he was a member of the Washington, D.C. law
firm of Verner, Liipfert, Bernhard, McPherson and Alexander. He is a
director of American Home Products Corporation, IMS Health, a service
provider of marketing information and information technology, The Dun &
Bradstreet Corporation, MCI WorldCom and Mutual of America Life Insurance
Company. He is 66 years old and his address is 400 C Street, N.E.,
Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York University School
of Law. Professor Davis has been a member of the New York University law
faculty since 1983. Prior to that time, she served for three years as a
judge in the courts of New York State; was engaged for eight years in the
practice of law, working in both corporate and non-profit sectors; and
served for two years as a criminal justice administrator in the government
of the City of New York. She writes and teaches in the fields of evidence,
constitutional theory, family law, social sciences and the law, legal
process and professional methodology and training. She is 57 years old and
her address is c/o New York University School of Law, 40 Washington Square
South, New York, New York 10012.
ERNEST KAFKA, Board Member. A physician engaged in private practice specializing
in the psychoanalysis of adults and adolescents. Since 1981, he has served
as an Instructor at the New York Psychoanalytic Institute and, prior
thereto, held other teaching positions. He is Associate Clinical Professor
of Psychiatry at Cornell Medical School. For more than the past five years,
Dr. Kafka has held numerous administrative positions and has published many
articles on subjects in the field of psychoanalysis. He is 67 years old and
his address is 23 East 92nd Street, New York, New York 10128.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York City
from September 1979 until March 1984 and Commissioner of the Department of
Housing Preservation and Development of New York City from February 1978 to
September 1979. Mr. Leventhal was an associate and then a member of the New
York law firm of Poletti Freidin Prashker Feldman and Gartner from 1974 to
1978. He was Commissioner of Rent and Housing Maintenance for New York City
from 1972 to 1973. Mr. Leventhal served as Chairman of Citizens Union, an
organization which strives to reform and modernize city and state
government from June 1994 until June 1997. He is 57 years old and his
address is 70 Lincoln Center Plaza, New York, New York 10023-6583.
Each Fund has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Fund, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Fund for election to the
Fund's Board.
Each 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 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 each Fund indicated below for the fiscal year ended
November 30, 1999, and by all funds in the Dreyfus Family of Funds for which
such person is a Board member (the number of which is set forth in parenthesis
next to each Board member's total compensation) * for the year ended December
31, 1999, are set forth below.
Total Compensation
Aggregate From Funds and
Compensation Fund Complex Paid
Name of Board Member and Fund From the Fund** to Board Member
- ----------------------------- ------------------ ---------------
JOSEPH S. DiMARTINO
$642,177 (189)
Money Fund $6,250
National Municipal Fund*** $6,250
CLIFFORD L. ALEXANDER, JR.
$85,378 (43)
Money Fund $5,000
National Municipal Fund*** $5,000
PEGGY C. DAVIS
Money Fund $5,000 $68,378 (29)
National Municipal Fund*** $5,000
ERNEST KAFKA
$68,378 (29)
Money Fund $5,000
National Municipal Fund*** $5,000
SAUL B. KLAMAN****
$68,378 (29)
Money Fund $5,000
National Municipal Fund*** $5,000
NATHAN LEVENTHAL
$68,378 (29)
Money Fund $5,000
National Municipal Fund*** $5,000
- -------------------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund Complex, including the Funds, for which the Board
members serve.
** Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,092 for the Money Fund and $1,575 for the Municipal
Company, for all Board members as a group.
*** Represents aggregate amount paid by the Municipal Company, of which the
National Municipal Fund is a series.
**** Emeritus Board member as of January 18, 2000.
Officers of the Funds
STEPHEN E. CANTER, President. President, Chief Operating Officer, Chief
Investment Officer and a distributor of the Manager, and an officer of
other investment companies advised and administered by the Manager. Mr.
Canter also is a Director or an Executive Committee Member of the other
investment management subsidiaries of Mellon Financial Corporation, each
of which is an affiliate of the Manager. He is 54 years old.
MARK N. JACOBS, Vice President. Vice President, Secretary and General Counsel of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 53 years old.
JOSEPH CONNOLLY, Vice President and Treasurer. Director - Mutual Fund Accounting
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 42 years old.
STEVEN F. NEWMAN, Secretary. Associate General Counsel and Assistant Secretary
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 50 years old.
MICHAEL A. ROSENBERG, Assistant Secretary. Associate General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. He is 40 years old.
JANETTE E. FARRAGHER, Assistant Secretary. Assistant General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. She is 37 years old.
MICHAEL CONDON, Assistant Treasurer. Senior Treasury Manager of the Manager, and
an officer of other investment companies advised and administered by the
Manager. He is 38 years old.
The address of each officer of the Funds is 200 Park Avenue, New York, New
York 10166.
Each Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on March 1, 2000.
Set forth in "Appendix C" to this Statement of Additional Information are
the shareholders known by each Fund (as indicated) to own of record 5% or more
of such Fund's Class X shares outstanding on March 1, 2000. A shareholder who
beneficially owns, directly or indirectly, more than 25% of the Fund's voting
securities may be deemed a "controlled person" (as defined in the 1940 Act) of
the Fund.
MANAGEMENT ARRANGEMENTS
Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. 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.
The Manager provides management services pursuant to separate Management
Agreements (respectively, the "Agreement") between the Company and the Manager.
As to each Fund, the Agreement is subject to annual approval by (i) the Fund's
Board or (ii) vote of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the continuance
also is approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. As to each Fund, the Agreement is terminable without penalty, on 60
days' notice, by the Fund's Board or by vote of the holders of a majority of the
Fund's shares or, upon not less than 90 days' notice, by the Manager. Each
Agreement will terminate automatically, as to the relevant Fund, in the event of
its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment Officer
and a director; Thomas F. Eggers, Vice Chairman--Institutional and a director;
Lawrence S. Kash, Vice Chairman and a director; J. David Officer, Vice Chairman
and a director; Ronald P. O'Hanley III, Vice Chairman; William T. Sandalls, Jr.,
Executive Vice President; Stephen R. Byers, Senior Vice President; Mark N.
Jacobs, Vice President, General Counsel and Secretary; Diane P. Durnin, Vice
President--Product Development; Patrice M. Kozlowski, Vice President--Corporate
Communications; Mary Beth Leibig, Vice President--Human Resources; Ray Van Cott,
Vice President--Information Systems; Theodore A. Schachar, Vice President--Tax;
Wendy Strutt, Vice President; Richard Terres, Vice President; William H.
Maresca, Controller; James Bitetto, Assistant Secretary; Steven F. Newman,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt, Steven G. Elliot,
Martin C. McGuinn, Richard W. Sabo and Richard F. Syron, directors.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan, and commercial banking or other relationships with the issuers of
securities purchased by a Fund. The Manager has informed the Funds that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager's Code of Ethics (the "Code") subjects its employees' personal
securities transactions to various restrictions to ensure that such trading does
not disadvantage any fund advised by the Manager. In that regard, portfolio
managers and other investment personnel of the Manager must preclear and report
their personal securities transactions and holdings, which are reviewed for
compliance with the Code, and are also subject to the oversight of Mellon's
Investment Ethics Committee. Portfolio managers and other investment personnel
of the Manager who comply with the Code's preclearance and disclosure
procedures, and the requirements of the Committee, may be permitted to purchase,
sell or hold securities which also may be or are held in fund(s) they manage or
for which they otherwise provide investment advice.
The Manager manages each Fund's portfolio of investments in accordance with
the stated policies of the Fund, subject to the approval of the Fund's Board.
The Manager is responsible for investment decisions and provides each Fund with
portfolio managers who are authorized by the Board to execute purchases and
sales of securities. The portfolio managers of the Money Fund and the Treasury
Money Fund are Bernard W. Kiernan, Patricia A. Larkin, James G. O'Connor and
Thomas Riordan. The portfolio managers of the National Municipal Fund are Joseph
P. Darcy, A. Paul Disdier, Douglas J. Gaylor, Joseph Irace, Colleen Meehand,
Richard J. Moynihan, W. Michael Petty, Jill C. Shaffro, Scott Sprauer, 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 each Fund and for other funds advised
by the Manager.
The Manager maintains office facilities on behalf of each Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fee paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures using its own resources, as it from time to time deems appropriate.
All expenses incurred in the operation of a Fund are borne by such Fund,
except to the extent specifically assumed by the Manager. The expenses borne by
each Fund include without limitation: taxes, interest, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of the
Manager, Securities and Exchange Commission fees, state Blue Sky qualification
fees, charges of custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside auditing and
legal expenses, costs of maintaining the Fund's existence, investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholder reports and 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. Each Fund
bears certain expenses in accordance with separate written plans and also bears
certain costs associated with implementing and operating such plans. See
"Distribution Plan" and "Shareholder Services Plan."
As compensation for the Manager's services under the Agreement, each Fund
has agreed to pay the Manager a monthly management fee at the annual rate of
0.50% of the value of the Fund's average daily net assets. All fees and expenses
are accrued daily and deducted before declaration of dividends to investors. Set
forth below are the total amounts paid by each Fund indicated below to the
Manager for each Fund's last three fiscal years, including for the Money Fund,
which changed its fiscal year end to November 30, the ten-month period ended
November 30, 1997:
<TABLE>
<CAPTION>
Ten-Month Period
Fiscal Year Ended November 30, Ended November 30, Fiscal Year Ended January 31,
------------------------------ ------------------ -----------------------------
1999 1998 1997 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Money Fund $17,915,496 $13,222,636 $7,091,891 $5,285,812
</TABLE>
Fiscal Year Ended November 30,
------------------------------
1999 1998 1997
---- ---- ----
National Municipal
Fund $3,259,585 $3,038,316 $2,127,041
The Treasury Money Fund has not completed its first fiscal year.
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest and
(with the prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed 1-1/2% of the
average market value of the net assets of such Fund for that fiscal year, the
Fund may deduct from the payment to be made to the Manager under the Agreement,
or the Manager will bear, such excess expense. Such deduction or payment, if
any, will be estimated daily and reconciled and effected or paid, as the case
may be, on a monthly basis. As to each Fund, no such deduction or payment was
required for the most recent fiscal year end.
As to each Fund, the aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Fund's net assets increases.
Distributor. The Distributor, a wholly-owned subsidiary of the Manager
located at 200 Park Avenue, New York, New York 10166, serves as each Fund's
distributor on a best efforts basis pursuant to an agreement which is renewable
annually.
The Distributor may pay dealers a fee based on the amount invested through
such dealers in certain Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs, or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 10% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and reserves the right to
cease paying these fees at any time. The Distributor will pay such fees from
its own funds, other than amounts received from the Fund, including past profits
or any other source available to it.
Transfer and Dividend Disbursing Agent and Custodian. Dreyfus Transfer,
Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager, P.O. Box
9671, Providence, Rhode Island 02940-9671, is each Fund's transfer and dividend
disbursing agent. Under a separate transfer agency agreement with each Fund, the
Transfer Agent arranges for the maintenance of shareholder account records for
the Fund, the handling of certain communications between shareholders and the
Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee from each Fund
computed on the basis of the number of shareholder accounts it maintains for
such Fund during the month, and is reimbursed for certain out-of-pocket
expenses.
The Bank of New York (the "Custodian"), 100 Church Street, New York, New
York 10286, is each Fund's custodian. The Custodian has no part in determining
the investment policies of the Fund or which securities are to be purchased or
sold by the Fund. Under a separate custody agreement with each Fund, the
Custodian holds the Fund's securities and keeps all necessary accounts and
records. For its custody services, the Custodian receives a monthly fee from
each Fund based on the market value of the Fund's assets held in custody and
receives certain securities transactions charges.
HOW TO BUY SHARES
You may buy Class X shares only if you establish an Auto-Exchange Account
pursuant to which the Class X shares purchased will be exchanged for Class B
shares of up to five designated Dreyfus Premier funds within two years of your
initial purchase of Class X shares.
Each Fund's 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. For shareholders who purchase Fund
shares from the Distributor, the Distributor will act as Service Agent. Stock
certificates are issued only upon your written request. No certificates are
issued for fractional shares. Each Fund reserves the right to reject any
purchase order.
The minimum initial investment in each Fund is $2,500, or $1,000 if you
are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund for
its customers of $2,500. Subsequent investments must be at least $100. For the
Money Fund and Treasury Money Fund, however, the minimum initial investment is
$750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal
IRAs for a non-working spouse, Roth IRAs, IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") and rollover IRAs) and 403(b)(7) Plans with
only one participant and $500 for Dreyfus-sponsored Education IRAs, with no
minimum for subsequent purchases. It is not recommended that the National
Municipal Fund be used as a vehicle for Keogh, IRA or other qualified plans. The
initial investment must be accompanied by the Account Application. For full-time
or part-time employees of the Manager or any of its affiliates or subsidiaries,
directors of the Manager, Board members of a Fund advised by the Manager,
including members of each 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 Manager or any of its affiliates or subsidiaries who
elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Money Fund reserves the
right to offer Fund shares without regard to minimum purchase requirements to
employees participating in certain qualified and non-qualified employee benefit
plans or other programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund. Each Fund reserves the
right to vary further the initial and subsequent investment minimum requirements
at any time.
Service Agents may receive different levels of compensation for selling
different classes of shares. Management understands that some Service Agents may
impose certain conditions on their clients which are different from those
described in the Funds' Prospectus and this Statement of Additional Information,
and, to the extent permitted by applicable regulatory authority, may charge
their clients direct fees. You should consult your Service Agent in this regard.
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 or other authorized
entity in written or 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 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. 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."
MONEY FUND AND TREASURY MONEY FUND--Each of these Funds determines its net asset
value per share twice each day the New York Stock Exchange or the Transfer Agent
is open for business: as of 5:00 p.m., Eastern time, and as of 8:00 p.m.,
Eastern time.
If your payments are received in or converted into Federal Funds by 12:00
Noon, Eastern time, by the Transfer Agent 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, Eastern 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. A
telephone order placed with the Distributor or its designee in New York will
become effective at the price determined at 5:00 p.m., Eastern time, and the
shares purchased will receive the dividend on Fund shares declared on that day,
if such order is placed with the Distributor or its designee in New York by 5:00
p.m., Eastern time, and Federal Funds are received by 6:00 p.m., Eastern time,
on that day. A telephone order placed with the Distributor or its designee in
New York after 5:00 p.m., Eastern time, but by 8:00 p.m., Eastern time, on a
given day will become effective at the price determined at 8:00 p.m., Eastern
time, on that day, and the shares purchased will begin to accrue dividends on
the next business day, if Federal Funds are received by 11:00 a.m., Eastern
time, on the next business day.
NATIONAL MUNICIPAL FUND--The National Municipal Fund determines its net asset
value per share three times each day the New York Stock Exchange or the Transfer
Agent is open for business: as of 12:00 Noon, Eastern time, as of 2:00 p.m.,
Eastern time, and as of 8:00 p.m., Eastern time.
If your payments are received in or converted into Federal Funds by 4:00
p.m., Eastern time, on a business day, you will receive the dividend declared
that day. If your payments are received in or converted into Federal Funds after
4:00 p.m., Eastern time, 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, or 2:00 p.m., Eastern
time, depending on when the order is accepted on a given day, and the shares
purchased will receive the dividend on Fund shares declared on that day, if the
telephone order is placed with the Distributor or its designee by 2:00 p.m.,
Eastern time, and Federal Funds are received at 4:00 p.m., Eastern time, on that
day. A telephone order placed with the Distributor or its designee in New York
after 2:00 p.m., Eastern time, but by 8:00 p.m., Eastern time, on a given day
will become effective at the price determined at 8:00 p.m., Eastern time, on
that day, and the shares purchased will begin to accrue dividends on the next
business day, if Federal Funds are received by 11:00 a.m., Eastern time, on the
next business day.
Using Federal Funds. The Transfer Agent or the Fund may attempt to notify
you 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 you are a
customer of a Selected Dealer and your order to purchase Fund shares is paid for
other than in Federal Funds, the Selected Dealer, acting on your behalf, will
complete the conversion into, or itself advance, Federal Funds, generally on the
business day following receipt of your order. The order is effective only when
so converted and received by the Transfer Agent. If you have sufficient Federal
Funds or a cash balance in your brokerage account with a Selected Dealer, your
order to purchase Fund shares will become effective on the day that the order,
including Federal Funds, is received by the Transfer Agent.
Reopening an Account. You may reopen an account with a minimum investment
of $100 without filing a new Account Application during the calendar year the
account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
DISTRIBUTION PLAN
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange Commission
under the 1940 Act provides, among other things, that an investment company may
bear expenses of distributing its shares only pursuant to a plan adopted in
accordance with the Rule. The Board of each Fund has adopted a distribution plan
with respect to Class X (each, a "Plan"). Under the Plan, the Fund pays the
Distributor a fee at the annual rate of 0.25% of the value of the Fund's average
daily net assets attributable to Class X for distributing Class X shares. Each
Fund's Board believes that there is a reasonable likelihood that the Plan will
benefit the Fund and holders of Class X shares.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the Fund's
Board for its review. In addition, the Plan provides that it may not be amended
to increase materially the costs which the Fund may bear for distribution
pursuant to the Plan without shareholder approval and that other material
amendments of the Plan must be approved by the Fund's Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Fund or the Manager and have no direct or indirect financial interest in the
operation of the Plan or in any related agreements entered into in connection
with 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 Board members cast in person at a meeting called for the purpose of
voting on the Plan. Each Plan is terminable at any time by vote of a majority of
the Fund's Board members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Plan or in any of the
related agreements or by vote of a majority of the holders of Class X shares.
From June 1, 1999 through March 21, 2000, Premier Mutual Fund Services,
Inc. ("Premier") acted at the Funds' distributor and received payments under the
Plans. Set forth below are the total amounts paid by each of the Money Fund and
National Municipal Fund to Premier pursuant to its Distribution Plan with
respect to Class X for the period from June 1, 1999 (commencement of initial
offering) through November 30, 1999:
Total Amount Paid
Name of Fund Pursuant
To the Distribution Plan
Money Fund $339
Class X
National Municipal Fund $2
Class X
The Treasury Money Fund has not completed its first fiscal year.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a Shareholder Services Plan with respect to Class X
pursuant to which the Fund pays the Distributor for the provision of certain
services to the holders of Class X shares a fee at the annual rate of 0.25% of
the value of the Fund's average daily net assets attributable to Class X. Under
the Shareholder Services Plan, 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. As to each Fund,
under the Shareholders Services Plan, the Distributor may make payments to
Service Agents in respect of these services.
A quarterly report of the amounts expended under the Shareholder Services
Plan, and the purposes for which such expenditures were incurred, must be made
to the Fund's Board for its review. In addition, the Shareholder Services Plan
provides that material amendments must be approved by the Fund's Board, and by
the Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the operation
of the Shareholder Services Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. The Shareholder Services Plan is
subject to annual approval by such vote of its Board members cast in person at a
meeting called for the purpose of voting on the Shareholder Services Plan. Each
Shareholder Services Plan is terminable at any time by vote of a majority of the
Board members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan.
Set forth below are the total amounts paid by each Fund pursuant to its
Shareholder Services Plan for Class X, for the period from June 1, 1999
(commencement of initial offering) through November 30, 1999:
Total Amount Paid
Name of Fund Pursuant to Shareholder
and Class Services Plan
- --------- -----------------------
Money Fund $330
Class X
National $1
Municipal Fund
Class X
HOW TO REDEEM SHARES
Contingent Deferred Sales Charge. A contingent deferred sales charge
(CDSC) payable to the Distributor is imposed on any redemption of Class X shares
which reduces the current net asset value of your Class X shares to an amount
which is lower than the dollar amount of all payments by you for the purchase of
Class X shares of the Fund held by you at the time of redemption.
If the aggregate value of Class X shares redeemed has declined below their
original cost as a result of the Fund's performance, a CDSC may be applied to
the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge will
depend on the number of years for the time you purchased the Class X shares
until the time of redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase of Class X
shares, all payments during a month will be aggregated and deemed to have been
made on the first day of the month.
THE TERMS AND TIME PERIODS CONTAINED IN THIS SECTION ARE APPLICABLE TO
CLASS B SHARES OF THE DREYFUS PREMIER FUNDS INTO WHICH CLASS X SHARES MUST BE
EXCHANGED PURSUANT TO THE DREYFUS AUTO-EXCHANGE PRIVILEGE.
The following table sets forth the rates of the CDSC for Class X shares
(and Class B shares of the Dreyfus Premier funds for which Class X shares may be
exchanged):
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
First............................... 4.00
Second.............................. 4.00
Third............................... 3.00
Fourth.............................. 3.00
Fifth............................... 2.00
Sixth............................... 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
For example, with respect to Class B shares of the selected Dreyfus Premier
funds, it will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net asset value of
Class B shares above the total amount of payments for the purchase of Class B
shares made during the preceding six years; then of amounts representing the
cost of shares purchased six years prior to the redemption; and finally, of
amounts representing the cost of shares held for the longest period of time
within the applicable six-year period.
Waiver of CDSC. The CDSC applicable to Class X shares (and Class B shares
of the selected Dreyfus Premier funds) may be waived in connection with (a)
redemptions made within one year after the death or disability, as defined in
Section 72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger, acquisition of
assets or otherwise, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 70 1/2 in the case of an IRA
or Keogh plan or custodial account pursuant to Section 403(b) of the Code, and
(e) redemptions pursuant to the Automatic Withdrawal Plan (offered only in
Dreyfus Premier funds). If the Fund's Board determines to discontinue the waiver
of the CDSC, the disclosure herein will be revised appropriately. Any Fund
shares subject to a CDSC which were purchased prior to the termination of such
waiver will have the CDSC waived as provided in the Fund's Prospectus or
Statement of Additional Information at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you must
notify the Transfer Agent or your Service Agent must notify the Distributor. Any
such qualification is subject to confirmation of your entitlement.
Conversion to Class A Shares of Dreyfus Premier Funds. Approximately six
years after the date of purchase of Class X shares, the Class B shares of the
Dreyfus Premier funds received in exchange for your Class X shares automatically
will convert to Class A shares of the Dreyfus Premier fund, based on the
relative net asset values for shares of each such Class. Class B shares of the
Dreyfus Premier funds that have been acquired through the reinvestment of
dividends and distributions will be converted on a pro rata basis together with
other Class B shares, in the proportion that a shareholder's shares converting
to Class A shares bears to the total Class B shares of the Dreyfus Premier funds
not acquired through the reinvestment of dividends and distributions.
Wire Redemption Privilege. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions from
any person representing himself or herself to be you or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, each Fund will initiate payment for shares redeemed pursuant to this
Privilege on the same business day if the Transfer Agent receives a redemption
request in proper form prior to 5:00 p.m., New York time, on such day; otherwise
the Fund will initiate payment on the next business day. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by you on the Account Application or the
Shareholder Services Form, or to a correspondent bank if your bank is not a
member of the Federal Reserve System. Fees ordinarily are imposed by such bank
and borne by the investor. Immediate notification by the correspondent bank to
your bank is necessary to avoid a delay in crediting the funds to your bank
account.
If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code which
may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
If you do not have direct access to telegraphic equipment, you may have
the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171, toll
free. You should advise the operator that the above transmittal code must be
used and should also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to receive 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."
Redemption Through a Selected Dealer. If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by the
Transfer Agent or its designee by 12:00 Noon, New York time, with respect to the
National Municipal Fund, or 5:00 p.m., New York time, with respect to the Money
Fund 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 after such
time, but by 8:00 p.m., New York time, the redemption request will be effective
on that day, the shares will receive the dividend declared on that day and the
proceeds of redemption ordinarily will be transmitted in Federal Funds on the
next business day. If a redemption request is received after 8:00 p.m., New York
time, the redemption request will be effective on the next business day. It is
the responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to your
account with the Selected Dealer.
Stock Certificates; Signatures. Any certificates representing Fund shares
to be redeemed must be submitted with the redemption request. Written redemption
requests must be signed by each shareholder, including each holder of a joint
account, and each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed. The Transfer
Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock 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. Each Fund has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of the Fund's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In the case of
requests for redemption in excess of such amount, each Fund's Board 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 the existing shareholders. In such
event, the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sells such securities, brokerage charges might be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or the
date of payment postponed (a) during any period when the New York Stock Exchange
is closed (other than customary weekend and holiday closings), (b) when trading
in the markets a Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of a 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 a Fund's shareholders.
SHAREHOLDER SERVICES
Fund Exchanges. Clients of certain Service Agents may purchase, in
exchange for Class X shares of a Fund, Class B shares of certain Dreyfus Premier
funds, or shares of certain other funds managed or administered by the Manager,
to the extent such shares are offered for sale in such client's state of
residence. Shares of other funds purchased by exchange will be purchased on the
basis of relative net asset value per share as follows:
A. Exchanges for shares of funds offered without a sales load will be
made without a sales load.
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 for
shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds acquired
by a previous exchange from shares purchased with a sales load, and
additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold
with a sales load (referred to herein as "Offered Shares"), but if the
sales load applicable to the Offered Shares exceeds the maximum sales
load that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be deducted.
E. Shares of funds subject to a contingent deferred sales charge ("CDSC")
that are exchanged for shares of another fund will be subject to the
higher applicable CDSC of the two funds, and for purposes of
calculating CDSC rates and conversion periods, if any, will be deemed
to have been held since the date the shares being exchanged were
initially purchased.
To accomplish an exchange under item D above, your Service Agent acting on
your behalf must notify the Transfer Agent of your prior ownership of fund
shares and your account number.
To request an exchange, your Service Agent acting on your behalf must give
exchange instructions to the Transfer Agent. No fees currently are charged
shareholders directly in connection with exchanges, although each Fund reserve
the right, upon not less than 60 days' written notice, to charge shareholders a
nominal administrative fee in accordance with rules promulgated by the
Securities and Exchange Commission.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.
Dreyfus Auto-Exchange Privilege. The Dreyfus Auto-Exchange Privilege
permits you to purchase, in exchange for shares of a Fund, Class B shares of up
to five designated Dreyfus Premier funds of which you are a shareholder. This
Privilege is available only for existing accounts. Shares will be exchanged on
the basis of relative net asset value as described above under "Fund Exchanges."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by you. You will be notified if your
account falls below the amount designated to be exchanged under this Privilege.
In this case, your account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible for
this Privilege. Exchanges of IRA shares may be made between IRA accounts and
from regular accounts to IRA accounts, but not from IRA accounts to regular
accounts. With respect to all other retirement accounts, exchanges may be made
only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
legally may 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. Each 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.
Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, paid by a Fund in shares of one or more of the Dreyfus Premier funds you
have selected for auto-exchange. Shares of the Dreyfus Premier funds purchased
pursuant to this privilege will be purchased on the basis of relative net asset
value per share as follows:
A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds offered without
a sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund that charges a sales load
may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), but if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are being
swept (without giving effect to any reduced loads), the difference
will be deducted.
D. Dividends and distributions paid by a fund may be invested in shares
of other funds that impose a contingent deferred sales charge
("CDSC") and the applicable CDSC, if any, will be imposed upon
redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from each Fund to a designated
bank account. Only an account maintained at a domestic financial institution
which is an ACH member may be so designated. Banks may charge a fee for this
service.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. (MONEY
FUND AND TREASURY MONEY FUND) Each of the Money Fund and Treasury Money Fund
makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In addition,
these Funds make available Keogh Plans, IRAs (including regular IRAs, spousal
IRAs for a non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education
IRAs) and 403(b)(7) Plans. Plan support services also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan, a
403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares. All
fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of receipt
of funds.
You should read the prototype retirement plans and the applicable form of
custodial agreement for further details as to eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
Amortized Cost Pricing. The valuation of each 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.
Each Fund's Board has established, as a particular responsibility within
the overall duty of care owed to the Fund's shareholders, procedures reasonably
designed to stabilize the Fund's price per share as computed for the purpose of
purchases and redemptions at $1.00. Such procedures include review of the Fund's
portfolio holdings by the Board, at such intervals as it may deem 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. In such review, investments for which market quotations are
readily available will be valued at the most recent bid price or yield
equivalent for such securities or for securities of comparable maturity, quality
and type, as obtained from one or more of the major market makers for the
securities to be valued. Other investments and assets, to the extent a Fund is
permitted to invest in such instruments, will be valued at fair value as
determined in good faith by the Board. With respect to the National Municipal
Fund, market quotations and market equivalents used in the Board's review are
obtained from an independent pricing service (the "Service") approved by the
Board. The Service values the National Municipal Fund's investments based on
methods which include considerations of: yields or prices of municipal
obligations 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 a 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 Fund's Board. If such deviation exceeds
1/2 of 1%, the Board promptly will consider what action, if any, will be
initiated. In the event a Fund's Board 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 and Transfer Agent Closings. The holidays (as
observed) on which both the New York Stock Exchange and the Transfer Agent are
closed currently are: New Year's Day, Martin Luther King Jr. Day, Presidents'
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management believes that each Fund (except the Treasury Money Fund) has
qualified for the fiscal year ended November 30, 1999 as a "regulated investment
company" under the Code. It is expected that the Treasury Money Fund will
qualify as a regulated investment company under the Code. Each Fund intends to
continue to so qualify if such qualification is in the best interests of its
shareholders. 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. If the Fund did not qualify as a regulated
investment company, it would be treated for tax purposes as an ordinary
corporation subject to Federal income tax.
Each Fund ordinarily declares dividends from its net investment income on
each day the New York Stock Exchange or, for the Money Fund and Treasury Money
Fund only, 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 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. 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.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividend or distribution and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
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.
With respect to the National Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of Federal tax exempt obligations, then the Fund may designate
and pay Federal exempt-interest dividends from interest earned on all such tax
exempt obligations. Such exempt-interest dividends may be excluded by
shareholders of the Fund from their gross income for Federal income tax
purposes. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains, generally are
taxable as ordinary income for Federal income tax purposes whether or not
reinvested. Distributions from net realized long-term securities gains generally
are taxable as long-term capital gains to a shareholder who is a citizen or
resident of the United States, whether or not reinvested and regardless of the
length of time the shareholder has held his shares.
YIELD INFORMATION
For the seven-day period ended November 30, 1999, the yield and effective
yield for Class X shares of each Fund were as follows:
Name of Fund Yield Effective Yield
Money Fund 4.67% / 4.61%* 4.78% / 4.72%*
National Municipal Fund 2.88% /2.85%* 2.92% / 2.89%*
- ------------------
* Net absorbed expenses.
The Treasury Money Fund has not completed its first fiscal year and,
therefore, no performance data has been provided for the Fund.
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. Both yield figures take into account any
applicable distribution and shareholder service fees.
As to the National Municipal Fund, 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. Based
upon a 1999 Federal tax rate of 39.60%, the tax equivalent yield for the
seven-day period ended November 30, 1999 for Class X shares of the National
Municipal Fund was as follows;
Name of Fund Tax Equivalent Yield
- ------------ --------------------
National Municipal Fund 4.77% / 4.72%*
Class X
- -----------------------
* Net of absorbed expenses.
The tax equivalent yields noted above for the National Municipal Fund
represent the application of the highest Federal marginal personal income tax
rate in effect. The tax equivalent figures, however, do not include the
potential effect of any state or local (including, but not limited to, county,
district or city) taxes, including applicable surcharges. You should consult
your tax adviser, and consider your 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. You should remember that yield is a function of the type and quality of
the instruments in the portfolio, portfolio maturity and operating expenses.
Your principal in a Fund is not guaranteed. See "Determination of Net Asset
Value" for a discussion of the manner in which a Fund's price per share is
determined.
From time to time, the National Municipal 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 being
representative of the Fund's past or future performance.
From time to time, advertising materials for a Fund may refer to or
discuss then-current or past economic conditions, developments and/or events, or
actual or proposed tax legislation, and may refer to statistical or other
information concerning trends relating to investment companies, as compiled by
industry associations such as the Investment Company Institute.
From time to time, advertising materials may refer to studies performed by
the Manager or its affiliates, such as "The Dreyfus Tax Informed Investing
Study" or "The Dreyfus Grade Investment Comparison Study (1996 & 1997)" or such
other studies.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer or
from an underwriter or a market maker for the securities. Usually no brokerage
commissions, as such, are paid by a Fund for such purchases. Purchases from
underwriters of portfolio securities include a concession paid by the issuer to
the underwriter and the purchase price paid to, and sales price received from,
market makers for the securities may include the spread between the bid and
asked price. No brokerage commissions have been paid by any Fund to date.
Transactions are allocated to various dealers by the portfolio managers of
a Fund 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 and may be selected based
upon their sales of shares of a Fund or other funds advised by the Manager or
its affiliates.
Research services furnished by brokers through which a 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 Manager's opinion that the receipt and study of such
services should not reduce the overall expenses of its research department.
INFORMATION ABOUT THE FUNDS
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund shares
have equal rights as to dividends and in liquidation. Shares have no preemptive
or subscription rights and are freely transferable.
The Treasury Money Fund is a separate series of the Government Company.
The National Municipal Fund is a separate series of the Municipal Company. Rule
18f-2 under the 1940 Act provides that any matter required to be submitted under
the provisions of the 1940 Act or applicable state law or otherwise to the
holders of the outstanding voting securities of an investment company, such as
the Government Company or the Municipal Company, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2 further
provides that a series shall be deemed to be affected by a matter unless it is
clear that the interests of each series in the matter are identical or that the
matter does not affect any interest of such series. The Rule exempts the
selection of independent accountants and the election of Board members from the
separate voting requirements of the Rule.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for each 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, 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. Fund
shareholders may remove a Board member by the affirmative vote of a majority of
the Fund's outstanding voting shares. In addition, the Board will call a meeting
of shareholders for the purpose of electing Board members if, at any time, less
than a majority of the Board members then holding office have been elected by
shareholders.
Each Fund sends annual and semi-annual financial statements to all its
shareholders.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for each Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Funds' Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of each Fund.
YEAR 2000 ISSUES
Each Fund could be adversely affected if the computer systems used by the
Manager and the Fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Manager
has taken steps designed to avoid year 2000-related problems in its systems and
to monitor the readiness of other service providers. In addition, issuers of
securities in which each Fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the Fund's
investments and its share price.
APPENDIX A
(MONEY FUND ONLY)
Description of the two highest commercial paper, bond and other short- and
long-term rating categories assigned by Standard & Poor's Ratings Group ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), Fitch IBCA, Inc. ("Fitch"), Duff &
Phelps Credit Rating Co. ("Duff"), and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign (+)
designation. Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
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 of funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issues rated Prime-2 (P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1 is regarded as having the strongest
degree of assurance for timely payment. The rating Fitch-2 (Very Good Grade) is
the second highest commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly less in degree than the strongest
issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
The rating TBW-1 is the highest short-term obligation rating assigned by
BankWatch. Obligations rated TBW-1 are regarded as having the strongest capacity
for timely repayment. Obligations rated TBW-2 are supported by a strong capacity
for timely repayment, although the degree of safety is not as high as for issues
rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade obligations
and possess an extremely strong capacity to pay principal and interest. Bonds
rated AA by S&P are judged by S&P to have a very strong capacity to pay
principal and interest and, in the majority of instances, differ only in small
degrees from issues rated AAA. The rating AA may be modified by the addition of
a plus or minus sign to show relative standing within the rating category.
Bonds rated Aaa by Moody's are judged to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all standards
and, together with the Aaa group they comprise what are generally known as
high-grade bonds. Bonds rated Aa are rated lower than Aaa bonds because margins
of protection may not be as large or fluctuations of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger. Moody's applies numerical modifiers 1, 2
and 3 in the Aa rating category. The modifier 1 indicates a ranking for the
security in the higher end of this rating category, the modifier 2 indicates a
mid-range ranking, and the modifier 3 indicates a ranking in the lower end of
the rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to slight market fluctuation other than through changes
in the money rate. The prime feature of an AAA bond is a showing of earnings
several times or many times interest requirements, with such stability of
applicable earnings that safety is beyond reasonable question whatever changes
occur in conditions. Bonds rated AA by Fitch are judged by Fitch to be of safety
virtually beyond question and are readily salable, whose merits are not unlike
those of the AAA class, but whose margin of safety is less strikingly broad. The
issue may be the obligation of a small company, strongly secured but influenced
as to rating by the lesser financial power of the enterprise and more local type
of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than Treasury
debt. Bonds rated AA are considered by Duff to be of high credit quality with
strong protection factors. Risk is modest but may vary slightly from time to
time because of economic conditions.
Fitch also assigns a rating to certain international and U.S. banks. A
Fitch bank rating represents Fitch's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, Fitch uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, Fitch assigns
banks Long- and Short-Term Ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradation from 1 through 5, address the
question of whether the bank would receive support from central banks or
shareholders if it experienced difficulties, and such ratings are considered by
Fitch to be a prime factor in its assessment of credit risk. Individual Ratings,
which range in gradations from A through E, represent Fitch's assessment of a
bank's economic merits and address the question of how the bank would be viewed
if it were entirely independent and could not rely on support from state
authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch examines
all segments of the organization including, where applicable, the holding
company, member banks or associations, and other subsidiaries. In those
instances where financial disclosure is incomplete or untimely, a qualified
rating (QR) is assigned to the institution. BankWatch also assigns, in the case
of foreign banks, a country rating which represents an assessment of the overall
political and economic stability of the country in which the bank is domiciled.
APPENDIX B
(NATIONAL MUNICIPAL FUND ONLY)
Description of certain 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.
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 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.
Bonds in the Aa category which Moody's believes possess the strongest investment
attributes are designated by the symbol Aa1.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment of
short-term promissory obligations, and ordinarily will be evidenced by leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers rated Prime-2 (P-2) have a strong ability for repayment of senior
short-term debt obligations. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
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
difference 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, you 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.
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 operating
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 a rating symbol to indicate the
relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond ratings 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 payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
APPENDIX C
Set forth below, as to Class X shares of each Fund, as applicable, are
those shareholders known by the Fund to own of record 5% or more of a class of
shares of the Fund outstanding as of March 1, 2000.
MONEY FUND
Dreyfus Trust Co., Custodian, FBO Margaret E. Fuller, under IRA Rollover
Plan, Baltimore, MD 21228-2214 - owned of record 9.9082%;
Dreyfus Trust Co., Custodian, FBO James W. Parker, under IRA Rollover Plan,
Kalamazoo, MI 49009-9103 - owned of record 40.6779%;
Dreyfus Trust Co., Custodian, FBO James W. Parker, under IRA Rollover Plan,
Kalamazoo, MI 49009-9103 - owned of record 14.9019%.
NATIONAL MUNICIPAL FUND
The Trottwood Corp., Attn: Maurice Bendheim, New York, New York 10166-0099-
owned of record 99.5032%.
TREASURY MONEY FUND
Premier Mutual Fund Services, Inc., c/o Funds Distributors, Inc., Attn.:
Elizabeth Keeley, 60 State Street, Suite 1300, Boston, MA 02109-1800 - owned of
record 100.00%.
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
PART C. OTHER INFORMATION
-------------------------
Item 23. Exhibits.
- ------- ----------
(a)(1) Registrant's Articles of Incorporation are incorporated by reference
to Exhibit (1)(a) of Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
Registrant's Articles of Amendment and Articles Supplementary are
incorporated by reference to Exhibits (1)(b) and (1)(c), respectively,
to Post-Effective Amendment No. 30 to the Registration Statement on
Form N-1A, filed on April 28, 1998.
(a)(2) Articles of Amendment.
(a)(3) Articles Supplementary.
(b) Registrant's By-Laws, as amended.
(d) Management Agreement is incorporated by reference to Exhibit (5) to
Post-Effective Amendment No. 30 to the Registration Statement on Form
N-1A, filed on April 28, 1998.
(e) Forms of Distribution Agreement and Service Agreements.
(g) Amended and Restated Custody Agreement is incorporated by reference to
Exhibit (8)(a) to Post-Effective Amendment No. 20 to the Registration
Statement on Form N-1A, filed on March 29, 1995. Forms of
Sub-Custodian Agreements are incorporated by reference to Exhibit 8(b)
of Post-Effective Amendment No. 18 to the Registration Statement on
Form N-1A, effective on February 25, 1994.
(h) Shareholder Services Plans, with respect to Class A, is incorporated
by reference to Exhibit (9)(a) to Post-Effective Amendment No. 30 to
the Registration Statement on Form N-1A, filed on April 28, 1998.
Shareholder Services Plan, with respect to Class B and Class X, is
incorporated by reference to exhibit (h)(2) to Post-Effective
Amendment No. 33 filed on April 30, 1999.
(i) Opinion and Consent of Registrant's Counsel is incorporated by
reference to Exhibit (10) to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(j) Consent of Independent Auditors.
(m) Rule 12b-1 Distribution Plan, with respect to Class B, is incorporated
by reference to Exhibit (15)(b) to Post-Effective Amendment No. 30 to
the Registration Statement on Form N-1A, filed on April 28, 1998. Rule
12b-1 Distribution Plan, with respect to Class X, is incorporated by
reference to Exhibit (m)(2) to Post-Effective Amendment No. 33 to the
Registration Statement on Form N-1A, filed on April 30, 1999.
(n) Rule 18f-3 Plan, as revised.
(p) Code of Ethics.
Item 23. Exhibits (continued).
- ------- ------------------
Other Exhibits
(a) Powers of Attorney of the Board members and officers.
(b) Certificate of Secretary.
Item 24. Persons Controlled by or under Common Control with Registrant
- ------- -------------------------------------------------------------
Not Applicable.
Item 25. Indemnification
- ------- ---------------
Reference is made to Article SEVENTH of the Registrant's Articles
of Incorporation incorporated by reference to Exhibit (1)(a) of
Post-Effective Amendment No. 20 to the Registration Statement on
Form N-1A filed on March 29, 1995 and to Section 2-418 of the
Maryland General Corporation Law. The application of these
provisions is limited by Article VIII of the Registrant's By-Laws,
as amended filed as Exhibit (b) hereto and by the following
undertaking set forth in the rules promulgated by the Securities and
Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement which is
attached hereto as Exhibit (e).
Item 26. Business and Other Connections of Investment Adviser
- ------- ----------------------------------------------
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser and manager for sponsored investment companies
registered under the Investment Company Act of 1940 and as an
investment adviser to institutional and individual accounts. Dreyfus
also serves as sub-investment adviser to and/or administrator of
other investment companies. Dreyfus Service Corporation, a
wholly-owned subsidiary of Dreyfus, serves primarily as a registered
broker-dealer of shares of investment companies sponsored by Dreyfus
and of other investment companies for which Dreyfus acts as
investment adviser, sub-investment adviser or administrator. Dreyfus
Investment Advisers, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ITEM 26. Business and Other Connections of Investment Adviser (continued)
- ----------------------------------------------------------------------------------
Officers and Directors of Investment Adviser
--------------------------------------------
Name and Position
With Dreyfus Other Businesses Position Held Dates
- ----------------- ---------------- ------------- -----
CHRISTOPHER M. CONDRON Franklin Portfolio Associates, Director 1/97 - Present
Chairman of the Board and LLC*
Chief Executive Officer
TBCAM Holdings, Inc.* Director 10/97 - Present
President 10/97 - 6/98
Chairman 10/97 - 6/98
The Boston Company Director 1/98 - Present
Asset Management, LLC* Chairman 1/98 - 6/98
President 1/98 - 6/98
The Boston Company President 9/95 - 1/98
Asset Management, Inc.* Chairman 4/95 - 1/98
Director 4/95 - 1/98
Franklin Portfolio Holdings, Inc.* Director 1/97 - Present
Certus Asset Advisors Corp.** Director 6/95 - Present
Mellon Capital Management Director 5/95 - Present
Corporation***
Mellon Bond Associates, LLP+ Executive Committee 1/98 - Present
Member
Mellon Bond Associates+ Trustee 5/95 - 1/98
Mellon Equity Associates, LLP+ Executive Committee 1/98 - Present
Member
Mellon Equity Associates+ Trustee 5/95 - 1/98
Boston Safe Advisors, Inc.* Director 5/95 - Present
President 5/95 - Present
Mellon Bank, N.A. + Director 1/99 - Present
Chief Operating Officer 3/98 - Present
President 3/98 - Present
Vice Chairman 11/94 - 3/98
Mellon Financial Corporation+ Chief Operating Officer 1/99 - Present
President 1/99 - Present
Director 1/98 - Present
Vice Chairman 11/94 - 1/99
Founders Asset Management, Chairman 12/97 - Present
LLC**** Director 12/97 - Present
The Boston Company, Inc.* Vice Chairman 1/94 - Present
Director 5/93 - Present
Laurel Capital Advisors, LLP+ Executive Committee 1/98 - 8/98
Member
Laurel Capital Advisors+ Trustee 10/93 - 1/98
Boston Safe Deposit and Trust Director 5/93 - Present
Company*
The Boston Company Financial President 6/89 - 1/97
Strategies, Inc. * Director 6/89 - 1/97
MANDELL L. BERMAN Self-Employed Real Estate Consultant, 11/74 - Present
Director 29100 Northwestern Highway Residential Builder and
Suite 370 Private Investor
Southfield, MI 48034
BURTON C. BORGELT DeVlieg Bullard, Inc. Director 1/93 - Present
Director 1 Gorham Island
Westport, CT 06880
Mellon Financial Corporation+ Director 6/91 - Present
Mellon Bank, N.A. + Director 6/91 - Present
Dentsply International, Inc. Director 2/81 - Present
570 West College Avenue
York, PA
Quill Corporation Director 3/93 - Present
Lincolnshire, IL
STEPHEN R. BYERS Dreyfus Service Corporation++ Senior Vice President 3/00 - Present
Director of Investments
Gruntal & Co., LLC Executive Vice President 5/97 - 11/99
New York, NY Partner 5/97 - 11/99
Executive Committee 5/97 - 11/99
Member
Board of Directors 5/97 - 11/99
Member
Treasurer 5/97 - 11/99
Chief Financial Officer 5/97 - 6/99
STEPHEN E. CANTER Dreyfus Investment Chairman of the Board 1/97 - Present
President, Chief Operating Advisors, Inc.++ Director 5/95 - Present
Officer, Chief Investment President 5/95 - Present
Officer, and Director
Newton Management Limited Director 2/99 - Present
London, England
Mellon Bond Associates, LLP+ Executive Committee 1/99 - Present
Member
Mellon Equity Associates, LLP+ Executive Committee 1/99 - Present
Member
Franklin Portfolio Associates, Director 2/99 - Present
LLC*
Franklin Portfolio Holdings, Inc.* Director 2/99 - Present
The Boston Company Asset Director 2/99 - Present
Management, LLC*
TBCAM Holdings, Inc.* Director 2/99 - Present
Mellon Capital Management Director 1/99 - Present
Corporation***
Founders Asset Management, Member, Board of 12/97 - Present
LLC**** Managers
Acting Chief Executive 7/98 - 12/98
Officer
The Dreyfus Trust Company+++ Director 6/95 - Present
Chairman 1/99 - Present
President 1/99 - Present
Chief Executive Officer 1/99 - Present
THOMAS F. EGGERS Dreyfus Service Corporation++ Chief Executive Officer 3/00 - Present
Vice Chairman - Institutional and Chairman of the
And Director Board
Executive Vice President 4/96 - 3/00
Director 9/96 - Present
Founders Asset Management, Member, Board of 2/99 - Present
LLC**** Managers
Dreyfus Investment Advisors, Inc. Director 1/00 - Present
Dreyfus Service Organization, Director 3/99 - Present
Inc.++
Dreyfus Insurance Agency of Director 3/99 - Present
Massachusetts, Inc. +++
Dreyfus Brokerage Services, Inc. Director 11/97 - 6/98
401 North Maple Avenue
Beverly Hills, CA.
STEVEN G. ELLIOTT Mellon Financial Corporation+ Senior Vice Chairman 1/99 - Present
Director Chief Financial Officer 1/90 - Present
Vice Chairman 6/92 - 1/99
Treasurer 1/90 - 5/98
Mellon Bank, N.A.+ Senior Vice Chairman 3/98 - Present
Vice Chairman 6/92 - 3/98
Chief Financial Officer 1/90 - Present
Mellon EFT Services Corporation Director 10/98 - Present
Mellon Bank Center, 8th Floor
1735 Market Street
Philadelphia, PA 19103
Mellon Financial Services Director 1/96 - Present
Corporation #1 Vice President 1/96 - Present
Mellon Bank Center, 8th Floor
1735 Market Street
Philadelphia, PA 19103
Boston Group Holdings, Inc.* Vice President 5/93 - Present
APT Holdings Corporation Treasurer 12/87 - Present
Pike Creek Operations Center
4500 New Linden Hill Road
Wilmington, DE 19808
Allomon Corporation Director 12/87 - Present
Two Mellon Bank Center
Pittsburgh, PA 15259
Collection Services Corporation Controller 10/90 - 2/99
500 Grant Street Director 9/88 - 2/99
Pittsburgh, PA 15258 Vice President 9/88 - 2/99
Treasurer 9/88 - 2/99
Mellon Financial Company+ Principal Exec. Officer 1/88 - Present
Chief Executive Officer 8/87 - Present
Director 8/87 - Present
President 8/87 - Present
Mellon Overseas Investments Director 4/88 - Present
Corporation+
Mellon Financial Services Treasurer 12/87 - Present
Corporation # 5+
Mellon Financial Markets, Inc.+ Director 1/99 - Present
Mellon Financial Services Director 1/99 - Present
Corporation #17
Fort Lee, NJ
Mellon Mortgage Company Director 1/99 - Present
Houston, TX
Mellon Ventures, Inc. + Director 1/99 - Present
LAWRENCE S. KASH Dreyfus Investment Director 4/97 - 12/99
Vice Chairman Advisors, Inc.++
Dreyfus Brokerage Services, Inc. Chairman 11/97 - 2/99
401 North Maple Ave. Chief Executive Officer 11/97 - 2/98
Beverly Hills, CA
Dreyfus Service Corporation++ Director 1/95 - 2/99
President 9/96 - 3/99
Dreyfus Precious Metals, Inc.+++ Director 3/96 - 12/98
President 10/96 - 12/98
Dreyfus Service Director 12/94 - 3/99
Organization, Inc.++ President 1/97 - 3/99
Seven Six Seven Agency, Inc. ++ Director 1/97 - 4/99
Dreyfus Insurance Agency of Chairman 5/97 - 3/99
Massachusetts, Inc.++++ President 5/97 - 3/99
Director 5/97 - 3/99
The Dreyfus Trust Company+++ Chairman 1/97 - 1/99
President 2/97 - 1/99
Chief Executive Officer 2/97 - 1/99
Director 12/94 - Present
The Dreyfus Consumer Credit Chairman 5/97 - 6/99
Corporation++ President 5/97 - 6/99
Director 12/94 - 6/99
Founders Asset Management, Member, Board of 12/97 - 12/99
LLC**** Managers
The Boston Company Advisors, Chairman 12/95 - 1/99
Inc. Chief Executive Officer 12/95 - 1/99
Wilmington, DE President 12/95 - 1/99
The Boston Company, Inc.* Director 5/93 - 1/99
President 5/93 - 1/99
Mellon Bank, N.A.+ Executive Vice President 6/92 - Present
Laurel Capital Advisors, LLP+ Chairman 1/98 - 8/98
Executive Committee 1/98 - 8/98
Member
Chief Executive Officer 1/98 - 8/98
President 1/98 - 8/98
Laurel Capital Advisors, Inc. + Trustee 12/91 - 1/98
Chairman 9/93 - 1/98
President and CEO 12/91 - 1/98
Boston Group Holdings, Inc.* Director 5/93 - Present
President 5/93 - Present
Boston Safe Deposit & Trust Co.+ Director 6/93 - 1/99
Executive Vice President 6/93 - 4/98
MARTIN G. MCGUINN Mellon Financial Corporation+ Chairman 1/99 - Present
Director Chief Executive Officer 1/99 - Present
Director 1/98 - Present
Vice Chairman 1/90 - 1/99
Mellon Bank, N. A. + Chairman 3/98 - Present
Chief Executive Officer 3/98 - Present
Director 1/98 - Present
Vice Chairman 1/90 - 3/98
Mellon Leasing Corporation+ Vice Chairman 12/96 - Present
Mellon Bank (DE) National Director 4/89 - 12/98
Association
Wilmington, DE
Mellon Bank (MD) National Director 1/96 - 4/98
Association
Rockville, Maryland
J. DAVID OFFICER Dreyfus Service Corporation++ President 3/00 - Present
Vice Chairman Executive Vice President 5/98 - 3/00
And Director Director 3/99 - Present
Dreyfus Service Organization, Director 3/99 - Present
Inc.++
Dreyfus Insurance Agency of Director 5/98 - Present
Massachusetts, Inc.++++
Dreyfus Brokerage Services, Inc. Chairman 3/99 - Present
401 North Maple Avenue
Beverly Hills, CA
Seven Six Seven Agency, Inc.++ Director 10/98 - Present
Mellon Residential Funding Corp. + Director 4/97 - Present
Mellon Trust of Florida, N.A. Director 8/97 - Present
2875 Northeast 191st Street
North Miami Beach, FL 33180
Mellon Bank, NA+ Executive Vice President 7/96 - Present
The Boston Company, Inc.* Vice Chairman 1/97 - Present
Director 7/96 - Present
Mellon Preferred Capital Director 11/96 - 1/99
Corporation*
RECO, Inc.* President 11/96 - Present
Director 11/96 - Present
The Boston Company Financial President 8/96 - 6/99
Services, Inc.* Director 8/96 - 6/99
Boston Safe Deposit and Trust Director 7/96 - Present
Company* President 7/96 - 1/99
Mellon Trust of New York Director 6/96 - Present
1301 Avenue of the Americas
New York, NY 10019
Mellon Trust of California Director 6/96 - Present
400 South Hope Street
Suite 400
Los Angeles, CA 90071
Mellon United National Bank Director 3/98 - Present
1399 SW 1st Ave., Suite 400
Miami, Florida
Boston Group Holdings, Inc.* Director 12/97 - Present
Dreyfus Financial Services Corp. + Director 9/96 - Present
Dreyfus Investment Services Director 4/96 - Present
Corporation+
RICHARD W. SABO Founders Asset Management President 12/98 - Present
Director LLC**** Chief Executive Officer 12/98 - Present
Prudential Securities Senior Vice President 07/91 - 11/98
New York, NY Regional Director 07/91 - 11/98
RICHARD F. SYRON Thermo Electron President 6/99 - Present
Director 81 Wyman Street Chief Executive Officer 6/99 - Present
Waltham, MA 02454-9046
American Stock Exchange Chairman 4/94 - 6/99
86 Trinity Place Chief Executive Officer 4/94 - 6/99
New York, NY 10006
RONALD P. O'HANLEY Franklin Portfolio Holdings, Inc.* Director 3/97 - Present
Vice Chairman
Franklin Portfolio Associates, Director 3/97 - Present
LLC*
Boston Safe Deposit and Trust Executive Committee 1/99 - Present
Company* Member
Director 1/99 - Present
The Boston Company, Inc.* Executive Committee 1/99 - Present
Member 1/99 - Present
Director
Buck Consultants, Inc.++ Director 7/97 - Present
Newton Asset Management LTD Executive Committee 10/98 - Present
(UK) Member
London, England Director 10/98 - Present
Mellon Asset Management Non-Resident Director 11/98 - Present
(Japan) Co., LTD
Tokyo, Japan
TBCAM Holdings, Inc.* Director 10/97 - Present
The Boston Company Asset Director 1/98 - Present
Management, LLC*
Boston Safe Advisors, Inc.* Chairman 6/97 - Present
Director 2/97 - Present
Pareto Partners Partner Representative 5/97 - Present
271 Regent Street
London, England W1R 8PP
Mellon Capital Management Director 2/97 -Present
Corporation***
Certus Asset Advisors Corp.** Director 2/97 - Present
Mellon Bond Associates; LLP+ Trustee 1/98 - Present
Chairman 1/98 - Present
Mellon Equity Associates; LLP+ Trustee 1/98 - Present
Chairman 1/98 - Present
Mellon-France Corporation+ Director 3/97 - Present
Laurel Capital Advisors+ Trustee 3/97 - Present
MARK N. JACOBS Dreyfus Investment Director 4/97 - Present
General Counsel, Advisors, Inc.++ Secretary 10/77 - 7/98
Vice President, and
Secretary The Dreyfus Trust Company+++ Director 3/96 - Present
The TruePenny Corporation++ President 10/98 - Present
Director 3/96 - Present
Dreyfus Service Director 3/97 - 3/99
Organization, Inc.++
WILLIAM H. MARESCA The Dreyfus Trust Company+++ Chief Financial Officer 3/99 - Present
Controller Treasurer 9/98 - Present
Director 3/97 - Present
Dreyfus Service Corporation++ Chief Financial Officer 12/98 - Present
Dreyfus Consumer Credit Corp. ++ Treasurer 10/98 - Present
Dreyfus Investment Treasurer 10/98 - Present
Advisors, Inc. ++
Dreyfus-Lincoln, Inc. Vice President 10/98 - Present
4500 New Linden Hill Road
Wilmington, DE 19808
The TruePenny Corporation++ Vice President 10/98 - Present
Dreyfus Precious Metals, Inc. +++ Treasurer 10/98 - 12/98
The Trotwood Corporation++ Vice President 10/98 - Present
Trotwood Hunters Corporation++ Vice President 10/98 - Present
Trotwood Hunters Site A Corp. ++ Vice President 10/98 - Present
Dreyfus Transfer, Inc. Chief Financial Officer 5/98 - Present
One American Express Plaza,
Providence, RI 02903
Dreyfus Service Treasurer 3/99 - Present
Organization, Inc.++ Assistant Treasurer 3/93 - 3/99
Dreyfus Insurance Agency of Assistant Treasurer 5/98 - Present
Massachusetts, Inc.++++
WILLIAM T. SANDALLS, JR. Dreyfus Transfer, Inc. Chairman 2/97 - Present
Executive Vice President One American Express Plaza,
Providence, RI 02903
Dreyfus Service Corporation++ Director 1/96 - Present
Executive Vice President 2/97 - Present
Chief Financial Officer 2/97 - 12/98
Dreyfus Investment Director 1/96 - Present
Advisors, Inc.++ Treasurer 1/96 - 10/98
Dreyfus-Lincoln, Inc. Director 12/96 - Present
4500 New Linden Hill Road President 1/97 - Present
Wilmington, DE 19808
Seven Six Seven Agency, Inc.++ Director 1/96 - 10/98
Treasurer 10/96 - 10/98
The Dreyfus Consumer Director 1/96 - Present
Credit Corp.++ Vice President 1/96 - Present
Treasurer 1/97 - 10/98
The Dreyfus Trust Company +++ Director 1/96 - Present
Dreyfus Service Organization, Treasurer 10/96 - 3/99
Inc.++
Dreyfus Insurance Agency of Director 5/97 - 3/99
Massachusetts, Inc.++++ Treasurer 5/97 - 3/99
Executive Vice President 5/97 - 3/99
DIANE P. DURNIN Dreyfus Service Corporation++ Senior Vice President - 5/95 - 3/99
Vice President - Product Marketing and Advertising
Development Division
PATRICE M. KOZLOWSKI NONE
Vice President - Corporate
Communications
MARY BETH LEIBIG NONE
Vice President -
Human Resources
THEODORE A. SCHACHAR Dreyfus Service Corporation++ Vice President -Tax 10/96 - Present
Vice President - Tax
The Dreyfus Consumer Credit Chairman 6/99 - Present
Corporation ++ President 6/99 - Present
Dreyfus Investment Advisors, Vice President - Tax 10/96 - Present
Inc.++
Dreyfus Precious Metals, Inc. +++ Vice President - Tax 10/96 - 12/98
Dreyfus Service Organization, Vice President - Tax 10/96 - Present
Inc.++
WENDY STRUTT None
Vice President
RICHARD TERRES None
Vice President
RAYMOND J. VAN COTT Mellon Financial Corporation+ Vice President 7/98 - Present
Vice-President -
Information Systems
Computer Sciences Corporation Vice President 1/96 - 7/98
El Segundo, CA
JAMES BITETTO The TruePenny Corporation++ Secretary 9/98 - Present
ASSISTANT SECRETARY
Dreyfus Service Corporation++ Assistant Secretary 8/98 - Present
Dreyfus Investment Assistant Secretary 7/98 - Present
Advisors, Inc.++
Dreyfus Service Assistant Secretary 7/98 - Present
Organization, Inc.++
STEVEN F. NEWMAN Dreyfus Transfer, Inc. Vice President 2/97 - Present
Assistant Secretary One American Express Plaza Director 2/97 - Present
Providence, RI 02903 Secretary 2/97 - Present
Dreyfus Service Secretary 7/98 - Present
Organization, Inc.++ Assistant Secretary 5/98 - 7/98
* The address of the business so indicated is One Boston Place, Boston, Massachusetts, 02108.
** The address of the business so indicated is One Bush Street, Suite 450, San Francisco, California 94104.
*** The address of the business so indicated is 595 Market Street, Suite 3000, San Francisco, California 94105.
**** The address of the business so indicated is 2930 East Third Avenue, Denver, Colorado 80206.
+ The address of the business so indicated is One Mellon Bank Center, Pittsburgh, Pennsylvania 15258.
++ The address of the business so indicated is 200 Park Avenue, New York, New York 10166.
+++ The address of the business so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
++++ The address of the business so indicated is 53 State Street, Boston, Massachusetts 02109.
</TABLE>
Item 27. Principal Underwriters
- -------- ----------------------
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or exclusive
distributor:
1) Dreyfus A Bonds Plus, Inc.
2) Dreyfus Appreciation Fund, Inc.
3) Dreyfus Balanced Fund, Inc.
4) Dreyfus BASIC GNMA Fund
5) Dreyfus BASIC Money Market Fund, Inc.
6) Dreyfus BASIC Municipal Fund, Inc.
7) Dreyfus BASIC U.S. Government Money Market Fund
8) Dreyfus California Intermediate Municipal Bond Fund
9) Dreyfus California Tax Exempt Bond Fund, Inc.
10) Dreyfus California Tax Exempt Money Market Fund
11) Dreyfus Cash Management
12) Dreyfus Cash Management Plus, Inc.
13) Dreyfus Connecticut Intermediate Municipal Bond Fund
14) Dreyfus Connecticut Municipal Money Market Fund, Inc.
15) Dreyfus Florida Intermediate Municipal Bond Fund
16) Dreyfus Florida Municipal Money Market Fund
17) Dreyfus Founders Funds, Inc.
18) The Dreyfus Fund Incorporated
19) Dreyfus Global Bond Fund, Inc.
20) Dreyfus Global Growth Fund
21) Dreyfus GNMA Fund, Inc.
22) Dreyfus Government Cash Management Funds
23) Dreyfus Growth and Income Fund, Inc.
24) Dreyfus Growth and Value Funds, Inc.
25) Dreyfus Growth Opportunity Fund, Inc.
26) Dreyfus Debt and Equity Funds
27) Dreyfus Index Funds, Inc.
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Preferred Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Funds, Inc.
34) Dreyfus Investment Grade Bond Funds, Inc.
35) Dreyfus Investment Portfolios
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus MidCap Index Fund
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Municipal Cash Management
54) Dreyfus New York Tax Exempt Bond Fund, Inc.
55) Dreyfus New York Tax Exempt Intermediate Bond Fund
56) Dreyfus New York Tax Exempt Money Market Fund
57) Dreyfus U.S. Treasury Intermediate Term Fund
58) Dreyfus U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Premier California Municipal Bond Fund
64) Dreyfus Premier Equity Funds, Inc.
65) Dreyfus Premier International Funds, Inc.
66) Dreyfus Premier GNMA Fund
67) Dreyfus Premier Worldwide Growth Fund, Inc.
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Equity Funds
72) Dreyfus Short-Intermediate Government Fund
73) Dreyfus Short-Intermediate Municipal Bond Fund
74) The Dreyfus Socially Responsible Growth Fund, Inc.
75) Dreyfus Stock Index Fund
76) Dreyfus Tax Exempt Cash Management
77) The Dreyfus Premier Third Century Fund, Inc.
78) Dreyfus Treasury Cash Management
79) Dreyfus Treasury Prime Cash Management
80) Dreyfus Variable Investment Fund
81) Dreyfus Worldwide Dollar Money Market Fund, Inc.
82) General California Municipal Bond Fund, Inc.
83) General California Municipal Money Market Fund
84) General Government Securities Money Market Funds, Inc.
85) General Money Market Fund, Inc.
86) General Municipal Bond Fund, Inc.
87) General Municipal Money Market Funds, Inc.
88) General New York Municipal Bond Fund, Inc.
89) General New York Municipal Money Market Fund
<TABLE>
<CAPTION>
(b) Positions and
Name and principal Offices with
Business address Positions and offices with the Distributor Registrant
- ---------------- ------------------------------------------ ----------
<S> <C> <C>
(b)
Thomas F. Eggers * Chief Executive Officer and Chairman of the None
Board
J. David Officer * President and Director None
Stephen Burke * Executive Vice President None
Charles Cardona * Executive Vice President None
Anthony DeVivio ** Executive Vice President None
David K. Mossman ** Executive Vice President None
Jeffrey N. Nachman *** Executive Vice President and Chief Operations None
Officer
William T. Sandalls, Jr. * Executive Vice President and Director None
Wilson Santos ** Executive Vice President and Director of None
Client Services
William H. Maresca * Chief Financial Officer None
Ken Bradle ** Senior Vice President None
Stephen R. Byers * Senior Vice President None
Frank J. Coates * Senior Vice President None
Joseph Connolly * Senior Vice President Vice President
and Treasurer
William Glenn * Senior Vice President None
Michael Millard ** Senior Vice President None
Mary Jean Mulligan ** Senior Vice President None
Bradley Skapyak * Senior Vice President None
Jane Knight * Chief Legal Officer and Secretary None
Stephen Storen * Chief Compliance Officer None
Jeffrey Cannizzaro * Vice President - Compliance None
Maria Georgopoulos * Vice President - Facilities Management None
William Germenis Vice President - Compliance None
Walter T. Harris * Vice President None
Janice Hayles * Vice President None
Hal Marshall * Vice President - Compliance None
Paul Molloy * Vice President None
Theodore A. Schachar * Vice President - Tax None
James Windels * Vice President None
James Bitetto * Assistant Secretary None
* Principal business address is 200 Park Avenue, New York, NY 10166.
** Principal business address is 144 Glenn Curtiss Blvd., Uniondale, NY
11556-0144.
*** Principal business address is 401 North Maple Avenue, Beverly Hills,
CA 90210.
</TABLE>
Item 28. Location of Accounts and Records
- ------- --------------------------------
1. The Bank of New York
100 Church Street
New York, New York 10286
2. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 29. Management Services
- ------- -------------------
Not Applicable
Item 30. Undertakings
- ------- ------------
None
SIGNATURES
-------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, and
State of New York on the 29th day of March, 2000.
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
BY: /s/Stephen E. Canter*
---------------------
Stephen E. Canter, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated.
Signatures Title Date
/s/Stephen E. Canter* President 03/29/00
- ------------------------------
Stephen E. Canter
/s/Joseph Connolly* Vice President and Treasurer 03/29/00
- ------------------------------
Joseph Connolly
/s/Joseph S. DiMartino* Chairman of the Board 03/29/00
- ------------------------------ of Directors
Joseph S. DiMartino
/s/Clifford L. Alexander, Jr.* Director 03/29/00
- ------------------------------
Clifford L. Alexander
/s/Peggy C. Davis* Director 03/29/00
- ------------------------------
Peggy C. Davis
/s/Ernest Kafka* Director 03/29/00
- ------------------------------
Ernest Kafka
/s/Nathan Leventhal* Director 03/29/00
- ------------------------------
Nathan Leventhal*
*BY: /s/Janette E. Farragher
----------------------
Janette E. Farragher,
Attorney-in-Fact
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
INDEX OF EXHIBITS
(a)(2) Articles of Amendment.
(a)(3) Articles Supplementary.
(b) Registrant's By-Laws, as amended.
(e) Forms of Distribution Agreement and Service Agreements.
(j) Consent of Independent Auditors.
(n) Rule 18f-3 Plan, as revised.
(p) Code of Ethics.
Other Exhibits
(a) Powers of Attorney of the Board members and Officers.
(b) Certificate of Assistant Secretary.
ARTICLES OF AMENDMENT
General Municipal Money Market Funds, Inc., a Maryland corporation
having its principal office in the State of Maryland in Baltimore, Maryland
(hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby amended by reducing
the par value of each share of Common Stock of the Corporation as set forth in
Article FIFTH of the Articles of Incorporation (or elsewhere in the charter) to
a par value of one tenth of one cent ($.001) each and reducing the aggregate par
value of the Common Stock of the Corporation to $20,500,000.
SECOND: These Articles of Amendment were approved by at least a
majority of the entire Board of Directors of the Corporation and are limited to
changes expressly authorized by Section 2-605 of Title 2 of the Maryland General
Corporation Law to be made without action by the stockholders of the
Corporation.
The undersigned Vice President of the Corporation acknowledges these
Articles of Amendment to be the corporate act of the Corporation and states
that, to the best of such officer's knowledge, information and belief, the
matters and facts set forth in these Articles with respect to the authorization
and approval of the amendment of the Corporation's charter are true in all
material respects, and that this statement is made under the penalties of
perjury.
IN WITNESS WHEREOF, General Municipal Money Market Funds, Inc.
has caused this instrument to be signed in its name and on its behalf by its
Vice President, and witnessed by its Assistant Secretary, on the ___ day of
- ------, ----.
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
By:__________________________
Stephanie D. Pierce,
Vice President
WITNESS:
- -----------------------------
Elba Vasquez,
Assistant Secretary
ARTICLES SUPPLEMENTARY
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC., a Maryland corporation
having its principal office in the State of Maryland at 300 East Lombard Street,
Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: The aggregate number of shares of Common Stock that the
Corporation has authority to issue is increased by five hundred million
(500,000,000) shares of Common Stock, $.01 par value per share, with an
aggregate par value of five million dollars ($5,000,000), all of which shall be
classified as shares of Class X Common Stock of General Municipal Money Market
Fund (the "Fund" and, together with the other investment portfolios of the
Corporation, the "Funds").
SECOND: The shares of Class X Common Stock of the Fund have the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as set forth in Article FIFTH of the Corporation's Articles of
Incorporation and shall be subject to all provisions of the Corporation's
Charter relating to stock of the Corporation generally, and to the following:
(1) The assets attributable to the Class X shares of the Fund shall
be invested in the same investment portfolio as the assets attributable to the
Class A and Class B shares of the Fund, together with the assets attributable to
any other class of shares of the Fund hereafter established.
(2) The proceeds of the redemption of Class X shares of the Fund may
be reduced by the amount of any contingent deferred sales charge, liquidating
charge, or other charge (which charges may vary within and among the classes)
payable on such redemption pursuant to the terms of issuance of such shares, all
in accordance with the Investment Company Act of 1940, as amended, and
applicable rules and regulations of the National Association of Securities
Dealers, Inc. (the "NASD").
(3) At such times as may be determined by the Board of Directors (or
with the authorization of the Board of Directors, by the officers of the
Corporation) in accordance with the Investment Company Act of 1940, as amended,
applicable rules and regulations thereunder, and applicable rules and
regulations of the NASD and reflected in the Corporation's registration
statement, Class X shares of the Fund will be converted automatically into Class
A shares of the Fund based on the relative net asset values of such classes at
the time of conversion, subject, however, to any conditions of conversion that
may be imposed by the Board of Directors (or with the authorization of the Board
of Directors, by the officers of the Corporation) and reflected in the
Corporation's registration statement.
THIRD: Immediately before the increase in the aggregate number of
shares as set forth in the Article FIRST hereof, the Corporation was authorized
to issue twenty billion (20,000,000,000) shares of stock, all of which were
shares of Common Stock, with a par value of one cent ($.01) per share, and an
aggregate par value of two hundred million dollars ($200,000,000), classified as
follows:
Fund/Class Shares Authorized
General Minnesota Municipal Money Market Fund/
Class A shares 2,000,000,000
Class B shares 2,000,000,000
General Municipal Money Market Fund/
Class A shares 15,000,000,000
Class B shares 1,000,000,000
---------------
Total 20,000,000,000
FOURTH: As hereby increased and classified, the total number of
shares of stock which the Corporation has authority to issue is twenty billion
five hundred million (20,500,000,000) shares, all of which are shares of Common
Stock, with a par value of one cent ($.01) per share, having an aggregate par
value of two hundred five million dollars ($205,000,000), classified as follows:
Fund/Class Shares Authorized
General Minnesota Municipal Money Market Fund/
Class A shares 2,000,000,000
Class B shares 2,000,000,000
General Municipal Money Market Fund/
Class A shares 15,000,000,000
Class B shares 1,000,000,000
Class X shares 500,000,000
---------------
Total 20,500,000,000
FIFTH: The Corporation is registered as an open-end investment
company under the Investment Company Act of 1940, as amended.
SIXTH: The Board of Directors of the Corporation increased the total
number of shares of capital stock that the Corporation has authority to issue
pursuant to Section 2-105(c) of the Maryland General Corporation Law and
classified the increased shares pursuant to authority provided in the
Corporation's Charter.
The Undersigned Vice President acknowledges these Articles
Supplementary to be the corporate act of the Corporation and states that to the
best of such officer's knowledge, information and belief, the matters and facts
with respect to authorization and approval set forth in these Articles are true
in all material respects and that this statement is made under penalties of
perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its Vice President
and witnessed by its Assistant Secretary on _______________, 1999.
GENERAL MUNICIPAL MONEY MARKET
FUNDS, INC.
By: ____________________________________
------------------------------------,
Vice President
Witness:
- -------------------------------
- -------------------------------,
Assistant Secretary
BY-LAWS
OF
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
(A Maryland Corporation)
-----------
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing shares
of stock shall set forth thereon the statements prescribed by Section 2-211 of
the Maryland General Corporation Law ("General Corporation Law") and by any
other applicable provision of law and shall be signed by the Chairman of the
Board or the President or a Vice President and countersigned by the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be
sealed with the corporate seal. The signatures of any such officers may be
either manual or facsimile signatures and the corporate seal may be either
facsimile or any other form of seal. In case any such officer who has signed
manually or by facsimile any such certificate ceases to be such officer before
the certificate is issued, it nevertheless may be issued by the corporation with
the same effect as if the officer had not ceased to be such officer as of the
date of its issue.
No certificate representing shares of stock shall be issued for any
share of stock until such share is fully paid, except as otherwise authorized in
Section 2-206 of the General Corporation Law.
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Board of Directors may require, in its discretion, the owner
of any such certificate or the owner's legal representative to give bond, with
sufficient surety, to the corporation to indemnify it against any loss or claim
that may arise by reason of the issuance of a new certificate.
The Board of Directors at any time may discontinue the issuance of
certificates representing shares of stock and by written notice to each
stockholder, may require the surrender of certificates of stock to the
corporation for cancellation. Such surrender and cancellation shall not affect
the ownership of stock in the corporation.
2. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares of stock, if any, transfers of shares of stock of the
corporation shall be made only on the stock transfer books of the corporation by
the record holder thereof or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the corporation or with a
transfer agent or a registrar, if any, and on surrender of the certificate or
certificates, if any, for such shares of stock properly endorsed and the payment
of all taxes due thereon.
3. RECORD DATE FOR STOCKHOLDERS. The Board of Directors may fix, in
advance, a date as the record date for the purpose of determining stockholders
entitled to notice of, or to vote at, any meeting of stockholders, or
stockholders entitled to receive payment of any dividend or the allotment of any
rights or in order to make a determination of stockholders for any other proper
purpose. Such date, in any case, shall be not more than 90 days, and in case of
a meeting of stockholders not less than 10 days, prior to the date on which the
meeting or particular action requiring such determination of stockholders is to
be held or taken. In lieu of fixing a record date, the Board of Directors may
provide that the stock transfer books shall be closed for a stated period but
not to exceed 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of, or to vote at, a meeting of
stockholders, such books shall be closed for at least 10 days immediately
preceding such meeting. If no record date is fixed and the stock transfer books
are not closed for the determination of stockholders: (1) The record date for
the determination of stockholders entitled to notice of, or to vote at, a
meeting of stockholders shall be at the close of business on the day on which
the notice of meeting is mailed or the day 30 days before the meeting, whichever
is the closer date to the meeting; and (2) The record date for the determination
of stockholders entitled to receive payment of a dividend or an allotment of any
rights shall be at the close of business on the day on which the resolution of
the Board of Directors declaring the dividend or allotment of rights is adopted,
provided that the payment or allotment date shall not be more than 60 days after
the date on which the resolution is adopted.
4. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share of stock" or "shares of stock" or "stockholder" or
"stockholders" refers to an outstanding share or shares of stock and to a holder
or holders of record of outstanding shares of stock when the corporation is
authorized to issue only one class of shares of stock and said reference also is
intended to include any outstanding share or shares of stock and any holder or
holders of record of outstanding shares of stock of any class or series upon
which or upon whom the Charter confers such rights where there are two or more
classes or series of shares or upon which or upon whom the General Corporation
Law confers such rights notwithstanding that the Charter may provide for more
than one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder.
5. STOCKHOLDER MEETINGS.
ANNUAL MEETINGS. If a meeting of the stockholders of the
corporation is required by the Investment Company Act of 1940, as amended, to
elect the directors, then there shall be submitted to the stockholders at such
meeting the question of the election of directors, and a meeting called for that
purpose shall be designated the annual meeting of stockholders for that year. In
other years in which no action by stockholders is required for the aforesaid
election of directors, no annual meeting need be held.
SPECIAL MEETINGS. Special stockholder meetings for any purpose
may be called by the Board of Directors or the President and shall be called by
the Secretary for the purpose of removing a Director whenever the holders of
shares entitled to at least ten percent of all the votes entitled to be cast at
such meeting shall make a duly authorized request that such meeting be called.
The Secretary shall call a special meeting of stockholders for all other
purposes whenever the holders of shares entitled to at least a majority of all
the votes entitled to be cast at such meeting shall make a duly authorized
request that such meeting be called. Such request shall state the purpose of
such meeting and the matters proposed to be acted on thereat, and no other
business shall be transacted at any such special meeting. The Secretary shall
inform such stockholders of the reasonably estimated costs of preparing and
mailing the notice of the meeting, and upon payment to the corporation of such
costs, the Secretary shall give notice in the manner provided for below.
PLACE AND TIME. Stockholder meetings shall be held at such
place, either within the State of Maryland or at such other place within the
United States, and at such date or dates as the directors from time to time may
fix.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written or
printed notice of all meetings shall be given by the Secretary and shall state
the time and place of the meeting. The notice of a special meeting shall state
in all instances the purpose or purposes for which the meeting is called.
Written or printed notice of any meeting shall be given to each stockholder
either by mail or by presenting it to the stockholder personally or by leaving
it at his or her residence or usual place of business not less than 10 days and
not more than 90 days before the date of the meeting, unless any provisions of
the General Corporation Law shall prescribe a different elapsed period of time,
to each stockholder at his or her address appearing on the books of the
corporation or the address supplied by the stockholder for the purpose of
notice. If mailed, notice shall be deemed to be given when deposited in the
United States mail addressed to the stockholder at his or her post office
address as it appears on the records of the corporation with postage thereon
prepaid. Whenever any notice of the time, place or purpose of any meeting of
stockholders is required to be given under the provisions of these by-laws or of
the General Corporation Law, a waiver thereof in writing, signed by the
stockholder and filed with the records of the meeting, whether before or after
the holding thereof, or actual attendance or representation at the meeting shall
be deemed equivalent to the giving of such notice to such stockholder. The
foregoing requirements of notice also shall apply, whenever the corporation
shall have any class of stock which is not entitled to vote, to holders of stock
who are not entitled to vote at the meeting, but who are entitled to notice
thereof and to dissent from any action taken thereat.
QUORUM. At any meeting of stockholders, the presence in person
or by proxy of stockholders entitled to cast one-third of the votes thereat
shall constitute a quorum. In the absence of a quorum, the stockholders present
in person or by proxy, by majority vote and without notice other than by
announcement, may adjourn the meeting from time to time, but not for a period
exceeding 120 days after the original record date until a quorum shall attend.
ADJOURNED MEETINGS. A meeting of stockholders convened on the
date for which it was called (including one adjourned to achieve a quorum as
provided in the paragraph above) may be adjourned from time to time without
further notice to a date not more than 120 days after the original record date,
and any business may be transacted at any adjourned meeting which could have
been transacted at the meeting as originally called.
CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting: the President, a Vice President or, if none of the foregoing
is in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation or, in his or her absence, an
Assistant Secretary, shall act as secretary of every meeting, but if neither the
Secretary nor an Assistant Secretary is present the chairman of the meeting
shall appoint a secretary of the meeting.
PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a stockholder
is entitled to participate, whether for the purposes of determining the
stockholder's presence at a meeting, or whether by waiving notice of any
meeting, voting or participating at a meeting, expressing consent or dissent
without a meeting or otherwise. Every proxy shall be executed in writing by the
stockholder or by his or her duly authorized attorney-in-fact or be in such
other form as may be permitted by the General Corporation Law, including
documents conveyed by electronic transmission and filed with the Secretary of
the corporation. A copy, facsimile transmission or other reproduction of the
writing or transmission may be substituted for the original writing or
transmission for any purpose for which the original transmission could be used.
No unrevoked proxy shall be valid after 11 months from the date of its
execution, unless a longer time is expressly provided therein. The placing of a
stockholder's name on a proxy pursuant to telephonic or electronically
transmitted instructions obtained pursuant to procedures reasonably designed to
verify that such instructions have been authorized by such stockholder shall
constitute execution of such proxy by or on behalf of such stockholder.
INSPECTORS OF ELECTION. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath to execute faithfully the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting or any stockholder, the inspector or inspectors, if
any, shall make a report in writing of any challenge, question or matter
determined by him or them and execute a certificate of any fact found by him or
them.
VOTING. Each share of stock shall entitle the holder thereof
to one vote, except in the election of directors, at which each said vote may be
cast for as many persons as there are directors to be elected. Except for
election of directors, a majority of the votes cast at a meeting of
stockholders, duly called and at which a quorum is present, shall be sufficient
to take or authorize action upon any matter which may come before a meeting,
unless more than a majority of votes cast is required by the corporation's
Articles of Incorporation. A plurality of all the votes cast at a meeting at
which a quorum is present shall be sufficient to elect a director.
6. INFORMAL ACTION. Any action required or permitted to be taken at
a meeting of stockholders may be taken without a meeting if a consent in
writing, setting forth such action, is signed by all the stockholders entitled
to vote on the subject matter thereof and any other stockholders entitled to
notice of a meeting of stockholders (but not to vote thereat) have waived in
writing any rights which they may have to dissent from such action and such
consent and waiver are filed with the records of the corporation.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of
the corporation shall be managed under the direction of a Board of
Directors. The use of the phrase "entire board" herein refers to the total
number of directors which the corporation would have if there were no
vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be a natural
person of full age. A director need not be a stockholder, a citizen of the
United States or a resident of the State of Maryland. The initial Board of
Directors shall consist of one person. Thereafter, the number of directors
constituting the entire board shall never be less than three or the number of
stockholders, whichever is less. At any regular meeting or at any special
meeting called for that purpose, a majority of the entire Board of Directors may
increase or decrease the number of directors, provided that the number thereof
shall never be less than three or the number of stockholders, whichever is less,
nor more than twelve and further provided that the tenure of office of a
director shall not be affected by any decrease in the number of directors.
3. ELECTION AND TERM. The first Board of Directors shall consist of
the director named in the Articles of Incorporation and shall hold office until
the first meeting of stockholders or until his or her successor has been elected
and qualified. Thereafter, directors who are elected at a meeting of
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until their successors have been
elected and qualified. Newly created directorships and any vacancies in the
Board of Directors, other than vacancies resulting from the removal of directors
by the stockholders, may be filled by the Board of Directors, subject to the
provisions of the Investment Company Act of 1940, as amended. Newly created
directorships filled by the Board of Directors shall be by action of a majority
of the entire Board of Directors then in office. All vacancies to be filled by
the Board of Directors may be filled by a majority of the remaining members of
the Board of Directors, although such majority is less than a quorum thereof.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board of
Directors shall fix, except that the first meeting of a newly elected Board of
Directors shall be held as soon after its election as the directors conveniently
may assemble.
PLACE. Meetings shall be held at such place within or
without the State of Maryland as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called
by or at the direction of the President or of a majority of the directors
in office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Whenever any notice
of the time, place or purpose of any meeting of directors or any committee
thereof is required to be given under the provisions of the General Corporation
Law or of these by-laws, a waiver thereof in writing, signed by the director or
committee member entitled to such notice and filed with the records of the
meeting, whether before or after the holding thereof, or actual attendance at
the meeting shall be deemed equivalent to the giving of such notice to such
director or such committee member.
QUORUM AND ACTION. A majority of the entire Board of Directors
shall constitute a quorum except when a vacancy or vacancies prevents such
majority, whereupon a majority of the directors in office shall constitute a
quorum, provided such majority shall constitute at least one-third of the entire
Board and, in no event, less than two directors. A majority of the directors
present, whether or not a quorum is present, may adjourn a meeting to another
time and place. Except as otherwise specifically provided by the Articles of
Incorporation, the General Corporation Law or these by-laws, the action of a
majority of the directors present at a meeting at which a quorum is present
shall be the action of the Board of Directors.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if
any and if present and acting, or the President or any other director
chosen by the Board, shall preside at all meetings.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be
removed for cause or without cause by the stockholders, who may elect a
successor or successors to fill any resulting vacancy or vacancies for the
unexpired term of the removed director or directors.
6. COMMITTEES. The Board of Directors may appoint from among its
members an Executive Committee and other committees composed of one or more
directors and may delegate to such committee or committees, in the intervals
between meetings of the Board of Directors, any or all of the powers of the
Board of Directors in the management of the business and affairs of the
corporation to the extent permitted by law. In the absence of any member of any
such committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of Directors to act in
the place of such absent member.
7. INFORMAL ACTION. Any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if a written consent to such action is signed by all members
of the Board of Directors or any such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of the Board or any
such committee.
Members of the Board of Directors or any committee designated
thereby may participate in a meeting of such Board or committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
ARTICLE III
OFFICERS
The corporation may have a Chairman of the Board and shall have a
President, a Secretary and a Treasurer, who shall be elected by the Board of
Directors, and may have such other officers, assistant officers and agents as
the Board of Directors shall authorize from time to time. Any two or more
offices, except those of President and Vice President, may be held by the same
person, but no person shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law to be executed,
acknowledged or verified by two or more officers.
Any officer or agent may be removed by the Board of Directors
whenever, in its judgment, the best interests of the corporation will be served
thereby.
ARTICLE IV
PRINCIPAL OFFICE - RESIDENT AGENT - STOCK LEDGER
The address of the principal office of the corporation in the State
of Maryland prescribed by the General Corporation Law is 300 East Lombard
Street, c/o The Corporation Trust Incorporated, Baltimore, Maryland 21202. The
name and address of the resident agent in the State of Maryland prescribed by
the General Corporation Law are: The Corporation Trust Incorporated, 300 East
Lombard Street, Baltimore, Maryland 21202.
The corporation shall maintain, at its principal office in the State
of Maryland prescribed by the General Corporation Law or at the business office
or an agency of the corporation, an original or duplicate stock ledger
containing the names and addresses of all stockholders and the number of shares
of each class held by each stockholder. Such stock ledger may be in written form
or any other form capable of being converted into written form within a
reasonable time for visual inspection.
ARTICLE V
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and shall be in such form and contain such other words and/or
figures as the Board of Directors shall determine or the law require.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation or any series thereof shall be
fixed, and shall be subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
The power to make, alter, amend and repeal the by-laws is vested
exclusively in the Board of Directors of the corporation.
ARTICLE VIII
INDEMNIFICATION
1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation shall
indemnify its directors to the fullest extent that indemnification of directors
is permitted by the law. The corporation shall indemnify its officers to the
same extent as its directors and to such further extent as is consistent with
law. The corporation shall indemnify its directors and officers who while
serving as directors or officers also serve at the request of the corporation as
a director, officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan to the same extent as its directors and, in the case of officers,
to such further extent as is consistent with law. The indemnification and other
rights provided by this Article shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. This Article shall not protect any such
person against any liability to the corporation or any stockholder thereof to
which such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct").
2. ADVANCES. Any current or former director or officer of the
corporation seeking indemnification within the scope of this Article shall be
entitled to advances from the corporation for payment of the reasonable expenses
incurred by him in connection with the matter as to which he is seeking
indemnification in the manner and to the fullest extent permissible under the
General Corporation Law. The person seeking indemnification shall provide to the
corporation a written affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the corporation has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (a) the person seeking
indemnification shall provide a security in form and amount acceptable to the
corporation for his or her undertaking; (b) the corporation is insured against
losses arising by reason of the advance; or (c) a majority of a quorum of
directors of the corporation who are neither "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended, nor parties
to the proceeding ("disinterested non-party directors"), or independent legal
counsel, in a written opinion, shall have determined, based on a review of facts
readily available to the corporation at the time the advance is proposed to be
made, that there is reason to believe that the person seeking indemnification
will ultimately be found to be entitled to indemnification.
3. PROCEDURE. At the request of any person claiming indemnification
under this Article, the Board of Directors shall determine, or cause to be
determined, in a manner consistent with the General Corporation Law, whether the
standards required by this Article have been met. Indemnification shall be made
only following: (a) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (b) in the absence of such a decision,
a reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct by (i) the vote of
a majority of a quorum of disinterested non-party directors or (ii) an
independent legal counsel in a written opinion.
4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and agents who
are not officers or directors of the corporation may be indemnified, and
reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940, as amended.
5. OTHER RIGHTS. The Board of Directors may make further provision
consistent with law for indemnification and advance of expenses to directors,
officers, employees and agents by resolution, agreement or otherwise. The
indemnification provided by this Article shall not be deemed exclusive of any
other right, with respect to indemnification or otherwise, to which those
seeking indemnification may be entitled under any insurance or other agreement
or resolution of stockholders or disinterested non-party directors or otherwise.
6. AMENDMENTS. References in this Article are to the General
Corporation Law and to the Investment Company Act of 1940 as from time to time
amended. No amendment of the by-laws shall affect any right of any person under
this Article based on any event, omission or proceeding prior to the amendment.
Dated: April 8, 1982
Amended: December 31, 1999
DISTRIBUTION AGREEMENT
[NAME OF FUND]
200 Park Avenue
New York, New York 10166
March 22, 2000
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the above-named investment company (the "Fund") has
agreed that you shall be, for the period of this agreement, the distributor of
(a) shares of each Series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes of this
agreement the term "Shares" shall mean the authorized shares of the relevant
Series, if any, and otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by,
and in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended, and will transmit promptly any
orders received by you for purchase or redemption of Shares to the Transfer and
Dividend Disbursing Agent for the Fund of which the Fund has notified you in
writing.
1.2 You agree to use your best efforts to solicit orders for the sale
of Shares. It is contemplated that you will enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by abnormal circumstances of any kind, the
Fund's officers may decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such orders and to
make such sales and the Fund shall advise you promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Fund hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders; provided, however,
that nothing contained herein shall be deemed to require the Fund to pay any of
the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of the Fund's officers in connection with
the qualification of Shares for sale in such states as you may designate to the
Fund and the Fund may approve, and the Fund agrees to pay all expenses which may
be incurred in connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this agreement, all other
expenses incurred by you in connection with the sale of Shares as contemplated
in this agreement.
1.7 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to the Fund or
any relevant Series and the Shares as you may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such information, when so
signed by the Fund's officers, shall be true and correct. The Fund also shall
furnish you upon request with: (a) semi-annual reports and annual audited
reports of the Fund's books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings statements prepared by
the Fund, (c) a monthly itemized list of the securities in the Fund's or, if
applicable, each Series' portfolio, (d) monthly balance sheets as soon as
practicable after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition as you may
reasonably request.
1.8 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been carefully prepared in
conformity with the requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this agreement the
terms "registration statement" and "prospectus" shall mean any registration
statement and prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and Exchange
Commission and any amendments and supplements thereto which at any time shall
have been filed with said Commission. The Fund represents and warrants to you
that any registration statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said Commission; that
all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes effective will include an 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 not misleading. The Fund may
but shall not be obligated to propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus as, in the light of future developments, may, in the opinion of
the Fund's counsel, be necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from you to do so, you may,
at your option, terminate this agreement or decline to make offers of the Fund's
securities until such amendments are made. The Fund shall not file any amendment
to any registration statement or supplement to any prospectus without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
1.9 The Fund authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of Shares. The
Fund agrees to indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon any
untrue statement, or alleged untrue statement, of a material fact contained in
any registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Fund's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or prospectus in reliance
upon and in conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being notified of any action
brought against you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed to the Fund at
its address set forth above within ten days after the summons or other first
legal process shall have been served. The failure so to notify the Fund of any
such action shall not relieve the Fund from any liability which the Fund may
have to the person against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or alleged omission, otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
1.9. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by you. In the event the Fund elects to assume the defense of any such suit and
retain counsel of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Fund does not elect to assume the defense of any
such suit, or in case you do not approve of counsel chosen by the Fund, the Fund
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. The Fund's indemnification agreement
contained in this paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of you, your officers and directors, or
any controlling person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to your benefit, to the benefit of
your several officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors. The Fund agrees
promptly to notify you of the commencement of any litigation or proceedings
against the Fund or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Fund, its officers or Board members, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting from such claims
or demands, shall arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished in writing by
you to the Fund specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its officers and Board
members, and any such controlling person, as aforesaid, is expressly conditioned
upon your being notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification to be given by
letter or telegram addressed to you at your address set forth above within ten
days after the summons or other first legal process shall have been served. You
shall have the right to control the defense of such action, with counsel of your
own choosing, satisfactory to the Fund, if such action is based solely upon such
alleged misstatement or omission on your part, and in any other event the Fund,
its officers or Board members, or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action. The failure so to notify you of any such action shall not relieve you
from any liability which you may have to the Fund, its officers or Board
members, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10. This agreement of
indemnity will inure exclusively to the Fund's benefit, to the benefit of the
Fund's officers and Board members, and their respective estates, and to the
benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any litigation or
proceedings against you or any of your officers or directors in connection with
the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the Fund under any
of the provisions of this agreement and no orders for the purchase or sale of
such Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Fund's obligation to repurchase any Shares from any shareholder
in accordance with the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the registration
statement or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the effectiveness of
the registration statement or prospectus then in effect or the
initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any
statement of a material fact made in the registration statement or
prospectus then in effect or which requires the making of a change in
such registration statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and Exchange
Commission with respect to any amendments to any registration
statement or prospectus which may from time to time be filed with the
Securities and Exchange Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you shall be
offered for sale at a price per share (the "offering price") approximately equal
to (a) their net asset value (determined in the manner set forth in the Fund's
charter documents) plus (b) a sales charge, if any and except to those persons
set forth in the then-current prospectus, which shall be the percentage of the
offering price of such Shares as set forth in the Fund's then-current
prospectus. The offering price, if not an exact multiple of one cent, shall be
adjusted to the nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred sales charge as
set forth in the Fund's then-current prospectus. You shall be entitled to
receive any sales charge or contingent deferred sales charge in respect of the
Shares. Any payments to dealers shall be governed by a separate agreement
between you and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the "Reapproval Date")
set forth on Exhibit A hereto (and, if the Fund has Series, a separate
Reapproval Date shall be specified on Exhibit A for each Series), and thereafter
shall continue automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A hereto, provided such
continuance is specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may be, provided that
in either event its continuance also is approved by a majority of the Board
members who are not "interested persons" (as defined in said Act) of any party
to this agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This agreement is terminable without penalty, on 60
days' notice, (a) by vote of holders of a majority of the Fund's or, as to any
relevant Series, such Series' outstanding voting securities, or (b) by the
Fund's Board as to the Fund or the relevant Series, as the case may be, or (c)
by you. This agreement also will terminate automatically, as to the Fund or
relevant Series, as the case may be, in the event of its assignment (as defined
in said Act).
4. Miscellaneous
[4.1] The Fund recognizes that from time to time your directors,
officers, and employees may serve as trustees, directors, partners, officers,
and employees of other business trusts, corporations, partnerships, or other
entities (including other investment companies) and that such other entities may
include the name "Dreyfus" as part of their name, and that your corporation or
its affiliates may enter into distribution or other agreements with such other
entities. If you cease to act as the distributor of the Fund's shares or if The
Dreyfus Corporation or any of its affiliates ceases to act as the Fund's
investment adviser, the Fund agrees that, at the request of The Dreyfus
Corporation, the Fund will take all necessary action to change the name of the
Fund to a name not including "Dreyfus" in any form or combination of words.
4.2 (For MBTs only) This agreement has been executed on behalf of the
Fund by the undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this agreement shall only be binding upon the assets
and property of the Fund and shall not be binding upon any Trustee, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with your
understanding and indicate your any acceptance hereof by signing below,
whereupon it shall become a binding agreement between us.
Very truly yours,
[NAME OF FUND]
By: _______________________
Accepted:
DREYFUS SERVICE CORPORATION
By:_______________________________
EXHIBIT A**
Reapproval Date Reapproval Day
[Name of Series] [Reapproval Date] [Reapproval Day]
**No changes will be made to a Fund's current Reapproval Date or Day.
BANK AFFILIATED BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We are a broker-dealer registered with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We
desire to make available to our customers shares of beneficial interest or
common stock of open-end registered investment companies managed, advised or
administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as a "Fund" and collectively as the
"Funds"). You are the principal underwriter (as such term is defined in the
Investment Company Act of 1940, as amended) of the offering of shares of the
Funds and the exclusive agent for the continuous distribution of such shares
pursuant to the terms of a Distribution Agreement between you and each Fund.
Unless the context otherwise requires, as used herein the term "Prospectus"
shall mean the prospectus and related statement of additional information (the
"Statement of Additional Information") incorporated therein by reference (as
amended or supplemented) of each of the respective Funds included in the then
currently effective registration statement (or post-effective amendment thereto)
of each such Fund, as filed with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. With respect to any and all transactions in the shares of any Fund pursuant
to this Agreement, it is understood and agreed in each case that: (a) we
shall be acting solely as agent for the account of our customer; (b) each
transaction shall be initiated solely upon the order of our customer; (c) you
shall execute transactions only upon receiving instructions from us acting as
agent for our customer; (d) as between us and our customer, our customer will
have full beneficial ownership of all Fund shares; and (e) each transaction
shall be for the account of our customer and not for our account. We
represent and warrant to you that (a) we will have full right, power and
authority to effect transactions (including, without limitation, any
purchases, exchanges and redemptions) in Fund shares on behalf of all
customer accounts provided by us to you or to any transfer agent as such term
is defined in the Prospectus of each Fund (the "Transfer Agent"); and (b) we
have taken appropriate verification measures to ensure transactions are in
compliance with all applicable laws and regulations concerning foreign
exchange controls and money laundering.
2. All orders for the purchase of any Fund shares shall be executed at the then
current public offering price per share (i.e., the net asset value per share
plus the applicable sales charge, if any) and all orders for the redemption
of any Fund shares shall be executed at the net asset value per share less
the applicable deferred sales charge, redemption fee or similar charge or
fee, if any, in each case as described in the Prospectus of such Fund. The
minimum initial purchase order and minimum subsequent purchase order shall be
as set forth in the Prospectus of such Fund. All orders are subject to
acceptance or rejection by you at your sole discretion. Unless otherwise
mutually agreed in writing, each transaction shall be promptly confirmed in
writing directly to the customer on a fully disclosed basis and a copy of
each confirmation shall be sent simultaneously to us. You reserve the right,
at your discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of shares of any or all of the Funds.
3. In ordering shares of any Fund, we shall rely solely and conclusively on the
representations contained in the Prospectus of such Fund. We agree that we
shall not make shares of any Fund available to our customers except in
compliance with all applicable federal and state laws, and the rules,
regulations, requirements and conditions of all applicable regulatory and
self-regulatory agencies or authorities. We agree that we shall not purchase
any Fund shares, as agent for any customer, unless we deliver or cause to be
delivered to such customer, at or prior to the time of such purchase, a copy
of the Prospectus of such Fund, or unless such customer has acknowledged
receipt of the Prospectus of such Fund. We further agree to obtain from each
customer for whom we act as agent for the purchase of Fund shares any
taxpayer identification number certification and such other information as
may be required from time to time under the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations promulgated thereunder, and to
provide you or your designee with timely written notice of any failure to
obtain such taxpayer identification number certification or other
information in order to enable the implementation of any required
withholding. We will be responsible for the proper instruction and training
of all sales personnel employed by us. Unless otherwise mutually agreed in
writing, you shall deliver or cause to be delivered to each of the customers
who purchases shares of any of the Funds through us pursuant to this
Agreement copies of all annual and interim reports, proxy solicitation
materials and any other information and materials relating to such Funds and
prepared by or on behalf of you, the Fund or its investment adviser,
custodian, Transfer Agent or dividend disbursing agent for distribution to
each such customer. You agree to supply us with copies of the Prospectus,
Statement of Additional Information, annual reports, interim reports, proxy
solicitation materials and any such other information and materials relating
to each Fund in reasonable quantities upon request.
4. We shall not make any representations concerning any Fund shares other than
those contained in the Prospectus of such Fund or in any promotional
materials or sales literature furnished to us by you or the Fund. We shall
not furnish or cause to be furnished to any person or display or publish any
information or materials relating to any Fund (including, without
limitation, promotional materials and sales literature, advertisements,
press releases, announcements, statements, posters, signs or other similar
materials), except such information and materials as may be furnished to us
by you or the Fund, and such other information and materials as may be
approved in writing by you. In making Fund shares available to our customers
hereunder, or in providing investment advice regarding such shares to our
customers, we shall at all tim.es act in compliance with the Interagency
Statement on Retail Sales of Nondeposit Investment Products issued by The
Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of the Comptroller of the Currency, and
the Office of Thrift Supervision (February 15, 1994) or any successor
interagency requirements as in force at the time such services are provided.
5. In determining the amount of any reallowance payable to us hereunder, you
reserve the right to exclude any sales which you reasonably determine are
not made in accordance with the terms of the applicable Fund Prospectuses or
the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge, customers may
be entitled to a reduction in the sales charge on purchases made under a
letter of intent ("Letter of Intent") in accordance with the Fund
Prospectus. In such a case, our reallowance will be paid based upon the
reduced sales charge, but an adjustment to the reallowance will be made in
accordance with the Prospectus of the applicable Fund to reflect actual
purchases of the customer if such customer's Letter of Intent is not
fulfilled. The sales charge and/or reallowance may be changed at any time in
your sole discretion upon written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of
each Fund sold with a sales charge, a reduced sales charge may be applicable
with respect to customer accounts through a right of accumulation under
which customers are permitted to purchase shares of a Fund at the then
current public offering price per share applicable to the total of (i) the
dollar amount of shares then being purchased plus (ii) an amount equal to
the then current net asset value or public offering price originally paid
per share, whichever is higher, of the customer's combined holdings of the
shares of such Fund and of any other open-end registered investment company
as may be permitted by the applicable Fund Prospectus. In such case, we
agree to furnish to you or the Transfer Agent sufficient information to
permit your confirmation of qualification for a reduced sales charge, and
acceptance of the purchase order is subject to such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to
advise you promptly at your request as to amounts of any and all purchases
of Fund shares made by us, as agent for our customers, qualifying for a
reduced sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the liquidation
of shares of one open-end registered investment company managed, advised or
administered by The Dreyfus Corporation or its subsidiaries or affiliates in
the shares of another open-end registered investment company managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates) shall, where available, be made subject to and in accordance
with the terms of each relevant Fund's Prospectus.
(e) Unless at the time of transmitting an order we advise you or the
Transfer Agent to the contrary, the shares ordered will be deemed to be the
total holdings of the specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus and
Service Plan, Shareholder Services Plan, Distribution Plan or other similar
plan, if any, we understand that you may pay to certain financial
institutions, securities dealers and other industry professionals with which
you have entered into an agreement in substantially the form annexed hereto
as Appendix A, B or C (or such other form as may be approved from time to
time by the board of directors, or trustees or managing general partners of
the Fund) such fees as may be determined by you in accordance with such
agreement for shareholder, administrative or distribution-related services as
described therein.
8. The procedures relating to all orders and the handling thereof will be
subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be accepted.
We agree to place orders with you immediately for the same number of shares
and at the same price as any orders we receive from our customers. We shall
not withhold placing orders received from customers so as to profit ourselves
as a result of such withholding by a change in the net asset value from that
used in determining the offering price to such customers, or otherwise;
provided, however, that the foregoing shall not prevent the purchase of
shares of any Fund by us for our own bona fide investment. We agree that: (a)
we shall not effect any transactions (including, without limitation, any
purchases, exchanges and redemptions) in any Fund shares registered in the
name of, or beneficially owned by, any customer unless such customer has
granted us full right, power and authority to effect such transactions on
such customer's behalf, and (b) you, each Fund, the Transfer Agent and your
and their respective officers, directors, trustees, managing general
partners, agents, employees and affiliates shall not be liable for, and shall
be fully indemnified and held harmless by us from and against, any and all
claims, demands, liabilities and expenses (including, without limitation,
reasonable attorneys' fees) which may be incurred by you or any of the
foregoing persons entitled to indemnification from us hereunder arising out
of or in connection with the execution of any transactions in Fund shares
registered in the name of, or beneficially owned by, any customer in reliance
upon any oral or written instructions reasonably believed to be genuine and
to have been given by or on behalf of us.
9. (a) We agree to remit on behalf of our customers the purchase price for
purchase orders of any Fund shares placed by us in accordance with the terms
of the Prospectus of the applicable Fund. On or before the settlement date of
each purchase order for shares of any Fund, we shall either (i) remit to an
account designated by you with the Transfer Agent an amount equal to the then
current public offering price of the shares of such Fund being purchased less
our reallowance, if any, with respect to such purchase order as determined by
you in accordance with the terms of the applicable Fund Prospectus, or (ii)
remit to an account designated by you with the Transfer Agent an amount equal
to the then current public offering price of the shares of such Fund being
purchased without deduction for our reallowance, if any, with respect to such
purchase order as determined by you in accordance with the terms of the
applicable Fund Prospectus, in which case our reallowance, if any, shall be
payable to us by you on at least a monthly basis. If payment for any purchase
order is not received in accordance with the terms of the applicable Fund
Prospectus, you reserve the right, without notice, to cancel the sale and to
hold us responsible for any loss sustained as a result thereof.
(b) If any shares sold to us as agent for our customers under the terms
of this Agreement are sold with a sales charge and are redeemed for the
account of the Fund or are tendered for redemption within seven (7) business
days after the date of purchase: (i) we shall forthwith refund to you the
full reallowance received by us on the sale; and (ii) you shall forthwith pay
to the Fund your portion of the sales charge on the sale which had been
retained by you and shall also pay to the Fund the amount refunded by us.
10. Certificates for shares sold to us as agent for our customers hereunder
shall only be issued in accordance with the terms of each Fund's Prospectus
upon our customers' specific request and, upon such request, shall be
promptly delivered to our customers by the Transfer Agent unless other
arrangements are made by us. However, in making delivery of such share
certificates to our customers, the Transfer Agent shall have adequate time to
clear any checks drawn for the payment of Fund shares.
11. Each party hereby represents and warrants to the other party that: (a) it is
a corporation, partnership or other entity duly organized and validly
existing in good standing under the laws of the jurisdiction in which it was
organized; (b) it is duly registered as a broker-dealer with the Securities
and Exchange Commission and, to the extent required, with applicable state
agencies or authorities having jurisdiction over securities matters, and it
is a member of the National Association of Securities Dealers, Inc. (the
"NASD"); (c) it will comply with all applicable federal and state laws, and
the rules, regulations, requirements and conditions of all applicable
regulatory and self-regulatory agencies or authorities in the performance of
its duties and responsibilities hereunder; (d) the execution and delivery of
this Agreement and the performance of the transactions contemplated hereby
have been duly authorized by all necessary action, and all other
authorizations and approvals (if any) required for its lawful execution and
delivery of this Agreement and its performance hereunder have been obtained;
and (e) upon execution and delivery by it, and assuming due and valid
execution and delivery by the other party, this Agreement will constitute a
valid and binding agreement, enforceable in accordance with its terms. Each
party agrees to provide the other party with such information and access to
appropriate records as may be reasonably required to verify its compliance
with the provisions of this Agreement.
12. You agree to inform us, upon our request, as to the states in which you
believe the shares of the Funds have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such
states, but you shall have no obligation or responsibility as to our right to
make shares of any Funds available to our customers in any jurisdiction. We
agree to notify you immediately in the event of (a) our expulsion or
suspension from the NASD, or (b) our violation of any applicable federal or
state law, rule, regulation, requirement or condition arising out of or in
connection with this Agreement, or which may otherwise affect in any material
way our ability to act in accordance with the terms of this Agreement. Our
expulsion from the NASD will automatically terminate this Agreement
immediately without notice. Our suspension from the NASD for violation of any
applicable federal or state law, rule, regulation, requirement or condition
will terminate this Agreement effective immediately upon your written notice
of termination to us.
13. (a) You agree to indemnify, defend and hold us, our several officers and
directors, and any person who controls us within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which we, our officers and
directors, or any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising out of or
based upon (i) any breach of any representation, warranty or covenant made by
you herein, or (ii) any failure by you to perform your obligations as set
forth herein, or (iii) any untrue statement, or alleged untrue statement, of
a material fact contained in any Registration Statement or any Prospectus, or
arising out of or based upon any omission, or alleged omission, to state a
material fact required to be stated in either any Registration Statement or
any Prospectus, or necessary to make the statements in any thereof not
misleading; provided, however, that your agreement to indemnify us, our
officers and directors, and any such controlling person shall not be deemed
to cover any claims, demands, liabilities or expenses arising out of any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to you or the Fund by us
specifically for use in the preparation thereof. Your agreement to indemnify
us, our officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of any action
brought against our officers or directors, or any such controlling person,
such notification to be given by letter or by telecopier, telex, telegram or
similar means of same day delivery received by you at your address as
specified in Paragraph 18 of this Agreement within seven (7) days after the
summons or other first legal process shall have been served. The failure so
to notify you of any such action shall not relieve you from any liability
which you may have to the person against whom such action is brought by
reason of any such breach, failure or untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of your indemnity
agreement contained in this Paragraph 1 3(a). You will be entitled to assume
the defense of any suit brought to enforce any such claim, demand, liability
or expense. In the event that you elect to assume the defense of any such
suit and retain counsel, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them; but
in case you do not elect to assume the defense of any such suit, you will
reimburse us, our officers and directors, and any controlling persons named
as defendants in such suit, for the fees and expenses of any counsel retained
by us and/or them. Your indemnification agreement contained in this Paragraph
1 3(a) shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to indemnification
pursuant to this Paragraph 13(a), and shall survive the delivery of any Fund
shares and termination of this Agreement. This agreement of indemnity will
inure exclusively to the benefit of the persons entitled to indemnification
from you pursuant to this Agreement and their respective estates, successors
and assigns.
(b) We agree to indemnify, defend and hold you and your several officers
and directors, and each Fund and its several officers and directors or
trustees or managing general partners, and any person who controls you and/or
each Fund within the meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which you and your several officers and directors, or
the Fund and its officers and directors or trustees or managing general
partners, or any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising out of or
based upon (i) any breach of any representation, warranty or covenant made by
us herein, or (ii) any failure by us to perform our obligations as set forth
herein, or (iii) any untrue, or alleged untrue, statement of a material fact
contained in the information furnished in writing by us to you or any Fund
specifically for use in such Fund's Registration Statement or Prospectus, or
used in the answers to any of the items of the Registration Statement or in
the corresponding statements made in the Prospectus, or arising out of or
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by us to you or the
Fund and required to be stated in such answers or necessary to make such
information not misleading. Our agreement to indemnify you and your officers
and directors, and the Fund and its officers and directors or trustees or
managing general partners, and any such controlling person, as aforesaid, is
expressly conditioned upon our being notified of any action brought against
any person or entity entitled to indemnification hereunder, such notification
to be given by letter or by telecopier, telex, telegram or similar means of
same day delivery received by us at our address as specified in Paragraph 18
of this Agreement within seven (7) days after the summons or other first
legal process shall have been served. The failure so to notify us of any such
action shall not relieve us from any liability which we may have to you or
your officers and directors, or to the Fund or its officers and directors or
trustees or managing general partners, or to any such controlling person, by
reason of any such breach, failure or untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of our indemnity
agreement contained in this Paragraph 13(b). We will be entitled to assume
the defense of any suit brought to enforce any such claim, demand, liability
or expense. In the event that we elect to assume the defense of any such suit
and retain counsel, the defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by any of them; but in
case we do not elect to assume the defense of any such suit, we will
reimburse you and your officers and directors, and the Fund and its officers
and directors or trustees or managing general partners, and any controlling
persons named as defendants in such suit, for the fees and expenses of any
counsel retained by you and/or them. Our indemnification agreements contained
in Paragraph 8 above, Paragraph 16 below and this Paragraph 13(b) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any person entitled to indemnification pursuant to
Paragraph 8 above, Paragraph 16 below or this Paragraph 13(b), and shall
survive the delivery of any Fund shares and termination of this Agreement.
Such agreements of indemnity will inure exclusively to the benefit of the
persons entitled to indemnification hereunder and their respective estates,
successors and assigns.
14. The names and addresses and other information concerning our customers are
and shall remain our sole property, and neither you nor your affiliates shall
use such names, addresses or other information for any purpose except in
connection with the performance of your duties and responsibilities hereunder
and except for servicing and informational mailings relating to the Funds.
Notwithstanding the foregoing, this Paragraph 14 shall not prohibit you or
any of your affiliates from utilizing for any purpose the names, addresses or
other information concerning any of our customers if such names, addresses or
other h~formation are obtained in any manner other than from us pursuant to
this Agreement. The provisions of this Paragraph 14 shall survive the
termination of this Agreement.
15. We agree to serve as a service agent or to provide distribution assistance,
in accordance with the terms of the Form of Service Agreement annexed hereto
as Appendix A, Form of Shareholder Services Agreement annexed hereto as
Appendix B, and/or Form of Distribution Plan Agreement annexed hereto as
Appendix C, as applicable, for all of our customers who purchase shares of
any and all Funds whose Prospectuses provide therefor. By executing this
Agreement, each of the parties hereto agrees to be bound by all terms,
conditions, rights and obligations set forth in the forms of agreement
annexed hereto and further agrees that such forms of agreement supersede any
and all prior service agreements or other similar agreements between the
parties hereto relating to any Fund or Funds. It is recognized that certain
parties may not be permitted to collect distribution fees under the Form of
Distribution Plan Agreement annexed hereto, and if we are such a party, we
will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed hereto as
Appendix D, we agree that you, each Fund with respect to which you permit us
to exercise an expedited redemption privilege, the transfer agent of each
such Fund, and your and their respective officers, directors or trustees or
managing general partners, agents, employees and affiliates shall not be
liable for and shall be fully indemnified and held harmless by us from and
against any and all claims, demands, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) arising out of or in
connection with any expedited redemption payments made in reliance upon the
information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the respective
parties hereunder shall be considered to constitute an exclusive arrangement,
or to create a partnership, association or joint venture between you and us.
Neither party hereto shall be, act as, or represent itself as, the agent or
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of, or on behalf of, the
other party. This Agreement is not intended to, and shall not, create any
rights against either party hereto by any third party solely on account of
this Agreement. Neither party hereto shall use the name of the other party in
any manner without the other party's prior written consent, except as
required by any applicable federal or state law, rule, regulation,
requirement or condition, and except pursuant to any promotional programs
mutually agreed upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all notices required or
permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by
telecopier, telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to you shall be given or sent to you at your offices
located at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
shown below.
19. This Agreement shall become effective only when accepted and signed by you,
and may be terminated at any time by either party hereto upon 15 days' prior
written notice to the other party. This Agreement, including the Appendices
hereto, may be amended by you upon 15 days' prior written notice to us, and
such amendment shall be deemed accepted by us upon the placement of any order
for the purchase of Fund shares or the acceptance of a fee payable under this
Agreement, including the Appendices hereto, after the effective date of any
such amendment. This Agreement may not be assigned by us without your prior
written consent. This Agreement constitutes the entire agreement and
understanding between the parties hereto relating to the subject matter
hereof and supersedes any and all prior agreements between the parties hereto
relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, without giving effect to principles
of conflicts of laws.
Very truly yours,
Firm Name (Please Print or Type)
Address
Date: By:
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to
Dreyfus Service Corporation. Upon acceptance one countersigned
copy will be returned to you for your files.
Accepted:
DREYFUS SERVICE CORPORATION
Date: By:
Authorized Signature
<PAGE>
APPENDIX A
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and
redemption transactions; providing periodic statements and/or reports
showing a client's account balance and integrating such statements with
those of other transactions and balances in the client's other accounts
serviced by us; arranging for bank wires; and providing such other
information and services as you reasonably may request, to the extent we are
permitted by applicable statute, rule or regulation. In this regard, if we
are a subsidiary or affiliate of a federally chartered and supervised bank
or other banking organization, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws, rules, regulations or
requirements governing, among other things, the conduct of our activities.
As such, we are restricted in the activities we may undertake and for which
we may be paid and, therefore, intend to perform only those activities as
are consistent with our statutory and regulatory obligations. We represent
and warrant to, and agree with you, that the compensation payable to us
hereunder, together with any other compensation payable to us by clients in
connection with the investment of their assets in shares of the Funds, will
be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
subsidiary or an affiliate of a federally supervised bank or thrift
institution, we agree that in providing services hereunder we shall at all
times act in compliance with the Interagency Statement on Retail Sales of
Nondeposit Investment Products issued by The Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, the
Office of the Comptroller of the Currency, and the Office of Thrift
Supervision (February 15, 1994) or any successor interagency requirements as
in force at the time such services are provided. We shall have no authority
to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
For all Funds as to which Board approval of this Agreement is required, such
continuance must be approved specifically at least annually by a vote of a
majority of (i) the Fund's Board of Directors and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval. For any Fund as
to which Board approval of this Agreement is required, this Agreement is
terminable without penalty, at any time, by a majority of the Fund's
Directors who are not "interested persons" (as defined in the Act) and have
no direct or indirect financial interest in this Agreement or, upon not more
than 60 days' written notice, by vote of holders of a majority of the Fund's
shares. As to all Funds, this Agreement is terminable without penalty upon
15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of Additional
Information. We understand that any payments pursuant to this Agreement
shall be paid only so long as this Agreement and such Plan are in effect. We
agree that no Director, officer or shareholder of the Fund shall be liable
individually for the performance of the obligations hereunder or for any
such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX B
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1.We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and
redemption transactions; providing periodic statements and/or reports
showing a client's account balance and integrating such statements with
those of other transactions and balances in the client's other accounts
serviced by us; arranging for bank wires; and providing such other
information and services as you reasonably may request, to the extent we are
permitted by applicable statute, rule or regulation. In this regard, if we
are a subsidiary or affiliate of a federally chartered and supervised bank
or other banking organization, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws, rules, regulations or
requirements governing, among other things, the conduct of our activities.
As such, we are restricted in the activities we may undertake and for which
we may be paid and, therefore, intend to perform only those activities as
are consistent with our statutory and regulatory obligations. We represent
and warrant to, and agree with you, that the compensation payable to us
hereunder, together with any other compensation payable to us by clients in
connection with the investment of their assets in shares of the Funds, will
be properly disclosed by us to our clients, will be authorized by our
clients and will not result in an excessive or unauthorized fee to us.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent. We
agree that in the event an issue pertaining to a Fund's Shareholder Services
Plan is submitted for shareholder approval, we will vote any Fund shares
held for our own account in the same proportion as the vote of those shares
held for our clients' accounts.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
subsidiary or an affiliate of a federally supervised bank or thrift
institution, we agree that in providing services hereunder we shall at all
times act in compliance with the Interagency Statement on Retail Sales of
Nondeposit Investment Products issued by The Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, the
Office of the Comptroller of the Currency, and the Office of Thrift
Supervision (February 15, 1994) or any successor interagency requirements as
in force at the time such services are provided. We shall have no authority
to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons" (as defined in the Act)
and have no direct or indirect financial interest in this Agreement. This
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative functions
contemplated herein by you as to any or all of the Funds, this Agreement
shall be terminable effective upon receipt of notice thereof by us. This
Agreement also shall terminate automatically in the event of its assignment
(as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We understand
that any payments pursuant to this Agreement shall be paid only so long as
this Agreement and such Plan are in effect. We agree that no Director,
officer or shareholder of the Fund shall be liable individually for the
performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX C
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you with respect to our providing
distribution assistance relating to shares of certain mutual fund(s) managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates (hereinafter referred to individually as the "Fund" and collectively
as the "Funds"). You are the principal underwriter as defined in the Investment
Company Act of 1940, as amended (the "Act"), and the exclusive agent for the
continuous distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1.We agree to provide distribution assistance in connection with the sale of
shares of the Funds. In this regard, if we are a subsidiary or affiliate of
a federally chartered and supervised bank or other banking organization, you
recognize that we may be subject to the provisions of the Glass-Steagall Act
and other laws, rules, regulations or requirements governing, among other
things, the conduct of our activities. As such, we are restricted in the
activities we may undertake and for which we may be paid and, therefore,
intend to perform only those activities as are consistent with our statutory
and regulatory obligations. We represent and warrant to, and agree with you,
that the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment of
their assets in shares of the Funds, will be properly disclosed by us to our
clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing services hereunder. We
shall transmit promptly to clients all communications sent to us for
transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
subsidiary or an affiliate of a federally supervised bank or thrift
institution, we agree that in providing services hereunder we shall at all
times act in compliance with the Interagency Statement on Retail Sales of
Nondeposit Investment Products issued by The Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation, the
Office of the Comptroller of the Currency, and the Office of Thrift
Supervision (February 15, 1994) or any successor interagency requirements as
in force at the time such services are provided. We shall have no authority
to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons" (as defined in the Act)
and have no direct or indirect financial interest in this Agreement or, upon
not more than 60 days' written notice, by vote of holders of a majority of
the Fund's shares. This Agreement is terminable without penalty upon 15
days' notice by either party. In addition, you may terminate this Agreement
as to any or all Funds immediately, without penalty, if the present
investment adviser of such Fund(s) ceases to serve the Fund(s) in such
capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
distribution functions contemplated herein by you as to any or all of the
Funds, this Agreement shall be terminable effective upon receipt of notice
thereof by us. This Agreement also shall terminate automatically in the
event of its assignment (as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted pursuant
to Rule 12b- 1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are in
effect. We agree that no Director, officer or shareholder of the Fund shall
be liable individually for the performance of the obligations hereunder or
for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX D
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Firm identified below which desires
to exercise expedited redemption privileges with respect to shares of certain
mutual funds managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates, which shares are registered in the name of, or
beneficially owned by, the customers of such Firm.
(PLEASE PRINT OR TYPE)
NAME OF BANK
STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Firm.
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
ACCOUNT NAME ACCOUNT NUMBER
STREET ADDRESS CITY STATE ZIP CODE
BANK AGREEMENT
(Fully Disclosed Basis)
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We are a "bank" (as such term is defined in Section 3(a)(6) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") ). We desire to make
available to our customers shares of beneficial interest or common stock of
open-end registered investment companies managed, advised or administered by The
Dreyfus Corporation or its subsidiaries or affiliates (hereinafter referred to
individually as a "Fund" and collectively as the "Funds"). You are the principal
underwriter (as such term is defined in the Investment Company Act of 1940, as
amended) of the offering of shares of the Funds and the exclusive agent for the
continuous distribution of such shares pursuant to the terms of a Distribution
Agreement between you and each Fund. Unless the context otherwise requires, as
used herein the term "Prospectus" shall mean the prospectus and related
statement of additional information ("Statement of Additional Information")
incorporated therein by reference (as amended and supplemented) of each of the
respective Funds included in the then currently effective registration statement
(or post-effective amendment thereto) of each such Fund, as filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. With respect to any and all transactions in the shares of any Fund pursuant
to this Agreement, it is understood and agreed in each case that: (a) we
shall be acting solely as agent for the account of our customer; (b) each
transaction shall be initiated solely upon the order of our customer; (c) you
shall execute transactions only upon receiving instructions from us acting as
agent for our customer; (d) as between us and our customer, our customer will
have full beneficial ownership of all Fund shares; and (e) each transaction
shall be for the account of our customer and not for our account. Each
transaction shall be without recourse to us provided that we act in
accordance with the terms of this Agreement. We represent and warrant to you
that (a) we will have full right, power and authority to effect transactions
(including, without limitation, any purchases, exchanges and redemptions) in
Fund shares on behalf of all customer accounts provided by us to you or to
any transfer agent as such term is defined in the Prospectus of each Fund
(the "Transfer Agent"); and (b) we have taken appropriate verification
measures to ensure transactions are in compliance with all applicable laws
and regulations concerning foreign exchange controls and money laundering.
2. All orders for the purchase of any Fund shares shall be executed at the then
current public offering price per share (i.e., the net asset value per share
plus the applicable sales charge, if any) and all orders for the redemption
of any Fund shares shall be executed at the net asset value per share less
the applicable deferred sales charge, redemption fee or similar charge or
fee, if any, in each case as described in the Prospectus of such Fund. The
minimum initial purchase order and minimum subsequent purchase order shall be
as set forth in the Prospectus of such Fund. All orders are subject to
acceptance or rejection by you at your sole discretion. Unless otherwise
mutually agreed in writing, each transaction shall be promptly confirmed in
writing directly to the customer on a fully disclosed basis and a copy of
each confirmation shall be sent simultaneously to us. You reserve the right,
at your discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of shares of any or all of the Funds.
3. In ordering shares of any Fund, we shall rely solely and conclusively on the
representations contained in the Prospectus of such Fund. We agree that we
shall not make shares of any Fund available to our customers except in
compliance with all applicable federal and state laws, and the rules,
regulations and requirements of applicable regulatory agencies or
authorities. We agree that we shall not purchase any Fund shares, as agent
for any customer, unless we deliver or cause to be delivered to such
customer, at or prior to the time of such purchase, a copy of the Prospectus
of such Fund, or unless such customer has acknowledged receipt of the
Prospectus of such Fund. We further agree to obtain from each customer for
whom we act as agent for the purchase of Fund shares any taxpayer
identification number certification and such other information as may be
required from time to time under the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated thereunder, and to
provide you or your designee with timely written notice of any failure to
obtain such taxpayer identification number certification or other information
in order to enable the implementation of any required withholding. We will be
responsible for the proper instruction and training of all sales personnel
employed by us. Unless otherwise mutually agreed in writing, you shall
deliver or cause to be delivered to each of the customers who purchases
shares of any of the Funds through us pursuant to this Agreement copies of
all annual and interim reports, proxy solicitation materials and any other
information and materials relating to such Funds and prepared by or on behalf
of you, the Fund or its investment adviser, custodian, Transfer Agent or
dividend disbursing agent for distribution to each such customer. You agree
to supply us with copies of the Prospectus, Statement of Additional
Information, annual reports, interim reports, proxy solicitation materials
and any such other information and materials relating to each Fund in
reasonable quantities upon request.
4. We shall not make any representations concerning any Fund shares other than
those contained in the Prospectus of such Fund or in any promotional
materials or sales literature furnished to us by you or the Fund. We shall
not furnish or cause to be furnished to any person or display or publish any
information or materials relating to any Fund (including, without
limitation, promotional materials and sales literature, advertisements,
press releases, announcements, statements, posters, signs or other similar
materials), except such information and materials as may be furnished to us
by you or the Fund, and such other information and materials as may be
approved in writing by you. In making Fund shares available to our customers
hereunder, or in providing investment advice regarding such shares to our
customers, we shall at all times act in compliance with the Interagency
Statement on Retail Sales of Nondeposit Investment Products issued by The
Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of the Comptroller of the Currency, and
the Office of Thrift Supervision (February 15, 1994) or any successor
interagency requirements as in force at the time such services are provided.
5. In determining the amount of any reallowance payable to us hereunder, you
reserve the right to exclude any sales which you reasonably determine are
not made in accordance with the terms of the applicable Fund Prospectuses or
the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge, customers may
be entitled to a reduction in sales charge on purchases made under a letter
of intent ("Letter of Intent") in accordance with the Fund Prospectus. In
such case, our reallowance will be paid based upon the reduced sales charge,
but an adjustment will be made as described in the Prospectus of the
applicable Fund to reflect actual purchases of the customer if he should
fail to fulfill his Letter of Intent. The sales charge and/or reallowance
may be changed at any time in your sole discretion upon written notice to
us.
(b) Subject to and in accordance with the terms of the Prospectus of each
Fund sold with a sales charge, a reduced sales charge may be applicable with
respect to customer accounts through a right of accumulation under which
customers are permitted to purchase shares of a Fund at the then current
public offering price per share applicable to the total of (i) the dollar
amount of shares then being purchased plus (ii) an amount equal to the then
current net asset value or public offering price originally paid per share,
whichever is higher, of the customer's combined holdings of the shares of
such Fund and of any other open-end registered investment company as may be
permitted by the applicable Fund Prospectus. In such case, we agree to
furnish to you or the Transfer Agent sufficient information to permit your
confirmation of qualification for a reduced sales charge, and acceptance of
the purchase order is subject to such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to advise
you promptly at your request as to amounts of any and all purchases of Fund
shares made by us, as agent for our customers, qualifying for a reduced
sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the liquidation of
shares of one open-end registered investment company managed, advised or
administered by The Dreyfus Corporation or its subsidiaries or affiliates in
the shares of another open-end registered investment company managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates) shall, where available, be made subject to and in accordance
with the terms of each Fund's Prospectus.
(e)Unless at the time of transmitting an order we advise you to the
contrary, the shares ordered will be deemed to be the total holdings of the
specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus and
Service Plan, Shareholder Services Plan, Distribution Plan or other similar
plan, if any, we understand that you may pay to certain financial
institutions, securities dealers and other industry professionals with which
you have entered into an agreement in substantially the form annexed hereto
as Appendix A, B, or C (or such other form as may be approved from time to
time by the board of directors or trustees or managing general partners of
the Fund) such fees as may be determined by you in accordance with such
agreement for shareholder, administrative or distribution-related services
as described therein.
8. The procedures relating to all orders and the handling thereof will be
subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be
accepted. We agree to place orders with you immediately for the same number
of shares and at the same price as any orders we receive from our customers.
We shall not withhold placing orders received from customers so as to profit
ourselves as a result of such withholding by a change in the net asset value
from that used in determining the offering price to such customers, or
otherwise; provided, however, that the foregoing shall not prevent the
purchase of shares of any Fund by us for our own bona fide investment. We
agree that: (a) we shall not effect any transactions (including, without
limitation, any purchases, exchanges and redemptions) in any Fund shares
registered in the name of, or beneficially owned by, any customer unless
such customer has granted us full right, power and authority to effect such
transactions on such customer's behalf, and (b) you, each Fund, the Transfer
Agent and your and their respective officers, directors, trustees, managing
general partners, agents, employees and affiliates shall not be liable for,
and shall be fully indemnified and held harmless by us from and against, any
and all claims, demands, liabilities and expenses (including, without
limitation, reasonable attorneys' fees) which may be incurred by you or any
of the foregoing persons entitled to indemnification from us hereunder
arising out of or in connection with the execution of any transactions in
Fund shares registered in the name of, or beneficially owned by, any
customer in reliance upon any oral or written instructions reasonably
believed to be genuine and to have been given by or on behalf of us.
9. (a) We agree to pay for purchase orders of any Fund shares placed by us in
accordance with the terms of the Prospectus of the applicable Fund. On or
before the settlement date of each purchase order for shares of any Fund, we
shall either (i) remit to an account designated by you with the Transfer
Agent an amount equal to the then current public offering price of the
shares of such Fund being purchased less our reallowance, if any, with
respect to such purchase order as determined by you in accordance with the
terms of the applicable Fund Prospectus, or (ii) remit to an account
designated by you with the Transfer Agent an amount equal to the then
current public offering price of the shares of such Fund being purchased
without deduction for our reallowance, if any, with respect to such purchase
order as determined by you in accordance with the terms of the applicable
Fund Prospectus, in which case our reallowance, if any, shall be payable to
us by you on at least a monthly basis. If payment for any purchase order is
not received in accordance with the terms of the applicable Fund Prospectus,
you reserve the right, without notice, to cancel the sale and to hold us
responsible for any loss sustained as a result thereof.
(b) If any shares sold to us as agent for our customers under the terms of
this Agreement are sold with a sales charge and are redeemed for the account
of the Fund or are tendered for redemption within seven (7) days after the
date of purchase: (i) we shall forthwith refund to you the full reallowance
received by us on the sale; and (ii) you shall forthwith pay to the Fund
your portion of the sales charge on the sale which had been retained by you
and shall also pay to the Fund the amount refunded by us.
10. Certificates for shares sold to us as agent for our customers hereunder
shall only be issued in accordance with the terms of each Fund's Prospectus
upon our customers' specific request and, upon such request, shall be
promptly delivered to our customers by the Transfer Agent unless other
arrangements are made by us. However, in making delivery of such share
certificates to our customers, the Transfer Agent shall have adequate time
to clear any checks drawn for the payment of Fund shares.
11. We hereby represent and warrant to you that: (a) we are a "bank" as such
term is defined in Section 3(a)(6) of the Exchange Act; (b) we are a duly
organized and validly existing "bank" in good standing under the laws of the
jurisdiction in which we were organized; (c) all authorizations (if any)
required for our lawful execution of this Agreement and our performance
hereunder have been obtained; and (d) upon execution and delivery by us, and
assuming due and valid execution and delivery by you, this Agreement will
constitute a valid and binding agreement, enforceable against us in
accordance with its terms. We agree to give written notice to you promptly
in the event that we shall cease to be a "bank" as such term is defined in
Section 3(a)(6) of the Exchange Act. In such event, this Agreement shall be
automatically terminated upon such written notice.
12. You agree to inform us, upon our request, as to the states in which you
believe the shares of the Funds have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such
states, but you shall have no obligation or responsibility as to our right
to make shares of any Funds available to our customers in any jurisdiction.
We agree to comply with all applicable federal and state laws, rules,
regulations and requirements relating to the performance of our duties and
responsibilities hereunder.
13. (a) You agree to indemnify, defend and hold us, our several officers and
directors, and any person who controls us within the meaning of Section 15
of the Securities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which we, our officers
and directors, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or otherwise,
arising out of or based upon (i) any breach of any representation, warranty
or covenant made by you herein, or (ii) any failure by you to perform your
obligations as set forth herein, or (iii) any untrue statement, or alleged
untrue statement, of a material fact contained in any Registration Statement
or any Prospectus, or arising out of or based upon any omission, or alleged
omission, to state a material fact required to be stated in either any
Registration Statement or any Prospectus, or necessary to make the
statements in any thereof not misleading; provided, however, that your
agreement to indemnify us, our officers and directors, and any such
controlling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission made in any Registration
Statement or Prospectus in reliance upon and in conformity with written
information furnished to you or the Fund by us specifically for use in the
preparation thereof. Your agreement to indemnify us, our officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon your being notified of any action brought against our
officers or directors, or any such controlling person, such notification to
be given by letter or by telecopier, telex, telegram or similar means of
same day delivery received by you at your address as specified in Paragraph
18 of this Agreement within seven (7) days after the summons or other first
legal process shall have been served. The failure so to notify you of any
such action shall not relieve you from any liability which you may have to
the person against whom such action is brought by reason of any such breach,
failure or untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement contained in
this Paragraph 1 3(a). You will be entitled to assume the defense of any
suit brought to enforce any such claim, demand, liability or expense. In the
event that you elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case you
do not elect to assume the defense of any such suit, you will reimburse us,
our officers and directors, or any controlling persons named as defendants
in such suit, for the fees and expenses of any counsel retained by us or
them. Your indemnification agreement contained in this Paragraph 1 3(a)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to indemnification
pursuant to this Paragraph 13(a), and shall survive the delivery of any Fund
shares and termination of this Agreement. This agreement of indemnity will
inure exclusively to the benefit of the persons entitled to indemnification
from you pursuant to this Agreement and their respective estates, successors
and assigns.
(b) We agree to indemnify, defend and hold you and your several officers
and directors, and each Fund and its several officers and directors or
trustees or managing general partners, and any person who controls you
and/or each Fund within the meaning of Section 15 of the Securities Act of
1933, as amended, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred
in connection therewith) which you and your several officers and directors,
or the Fund and its officers and directors or trustees or managing general
partners, or any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising out of or
based upon (i) any breach of any representation, warranty or covenant made
by us herein, or (ii) any failure by us to perform our obligations as set
forth herein, or (iii) any untrue, or alleged untrue, statement of a
material fact contained in the information furnished in writing by us to you
or any Fund specifically for use in such Fund's Registration Statement or
Prospectus, or used in the answers to any of the items of the Registration
Statement or in the corresponding statements made in the Prospectus, or
arising out of or based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished in writing by us
to you or the Fund and required to be stated in such answers or necessary to
make such information not misleading. Our agreement to indemnify you and
your officers and directors, and the Fund and its officers and directors or
trustees, and any such controlling person, as aforesaid, is expressly
conditioned upon our being notified of any action brought against any person
or entity entitled to indemnification hereunder, such notification to be
given by letter or by telecopier, telex, telegram or similar means of same
day delivery received by us at our address as specified in Paragraph 18 of
this Agreement within seven (7) days after the summons or other first legal
process shall have been served. The failure so to notify us of any such
action shall not relieve us from any liability which we may have to you or
your officers and directors, or the Fund or its officers and directors or
trustees or managing general partners, or to any such controlling person, by
reason of any such breach, failure or untrue, or alleged untrue, statement
or omission, or alleged omission, otherwise than on account of our indemnity
agreement contained in this Paragraph 13(b). Our indemnification agreements
contained in Paragraph 8 above, Paragraph 16 below and this Paragraph 13(b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to indemnification
pursuant to Paragraph 8 above, Paragraph 16 below or this Paragraph 13(b),
and shall survive the delivery of any Fund shares and termination of this
Agreement. Such agreements of indemnity will inure exclusively to the
benefit of the persons entitled to indemnification hereunder and their
respective estates, successors and assigns.
14. The names and addresses and other information concerning our customers are
and shall remain our sole property, and neither you nor your affiliates
shall use such names, addresses or other information for any purpose except
in connection with the performance of your duties and responsibilities
hereunder and except for servicing and informational mailings relating to
the Funds. Notwithstanding the foregoing, this Paragraph 14 shall not
prohibit you or any of your affiliates from utilizing for any purpose the
names, addresses or other information concerning any of our customers if
such names, addresses or other information are obtained in any manner other
than from us pursuant to this Agreement. The provisions of this Paragraph 14
shall survive the termination of this Agreement.
15. We agree to serve as a service agent, in accordance with the terms of the
Form of Service Agreement annexed hereto as Appendix A, Form of Shareholder
Services Agreement annexed hereto as Appendix B, and/or Form of Distribution
Plan Agreement annexed hereto as Appendix C, as applicable, for all of our
customers who purchase shares of any and all Funds whose Prospectuses
provide therefor. By executing this Agreement, each of the parties hereto
agrees to be bound by all terms, conditions, rights and obligations set
forth in the forms of agreements annexed hereto and further agrees that such
forms of agreement supersede any and all prior service agreements or other
similar agreements between the parties hereto, relating to any Fund or
Funds. It is recognized that certain parties may not be permitted to collect
distribution fees under the Form of Distribution Plan Agreement annexed
hereto, and if we are such a party, we will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed hereto as
Appendix D, we agree that you, each Fund with respect to which you permit us
to exercise an expedited redemption privilege, the Transfer Agent of each
such Fund, and your and their respective officers, directors or trustees or
managing general partners, agents, employees and affiliates shall not be
liable for and shall be fully indemnified and held harmless by us from and
against any and all claims, demands, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) arising out of or in
connection with any expedited redemption payments made in reliance upon the
information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the respective
parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture
between you and us. Neither party hereto shall be, act as, or represent
itself as, the agent or representative of the other, nor shall either party
have the right or authority to assume, create or incur any liability or any
obligation of any kind, express or implied, against or in the name of, or on
behalf of, the other party. This Agreement is not intended to, and shall
not, create any rights against either party hereto by any third party solely
on account of this Agreement. Neither party hereto shall use the name of the
other party in any manner without the other party's prior written consent,
except as required by any applicable federal or state law, rule, regulation
or requirement, and except pursuant to any promotional programs mutually
agreed upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all notices required or
permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by
telecopier, telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to you shall be given or sent to you at your offices,
located at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
shown below.
19. This Agreement shall become effective only when accepted and signed by you,
and may be terminated at any time by either party hereto upon 15 days' prior
written notice to the other party. This Agreement may be amended by you upon
15 days' prior written notice to us, and such amendment shall be deemed
accepted by us upon the placement of any order for the purchase of Fund
shares or the acceptance of a fee payable under this Agreement, including
the Appendices hereto, after the effective date of any such amendment. This
Agreement may not be assigned by us without your prior written consent. This
Agreement constitutes the entire agreement and understanding between the
parties hereto relating to the subject matter hereof and supersedes any and
all prior agreements between the parties hereto relating to the subject
matter hereof.
20. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, without giving effect to principles
of conflicts of laws.
Very truly yours,
Firm Name (Please Print or Type)
Address
Date: By:
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to Dreyfus Service
Corporation. Upon acceptance one countersigned copy will be returned to you
for your files.
Accepted:
DREYFUS SERVICE CORPORATION
Date: By:
Authorized Signature
<PAGE>
APPENDIX A
TO BANK AGREEMENT
FORM OF SERVICE AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and
redemption transactions; providing periodic statements and/or reports
showing a client's account balance and integrating such statements with
those of other transactions and balances in the client's other accounts
serviced by us; arranging for bank wires; and providing such other
information and services as you reasonably may request, to the extent we are
permitted by applicable statute, rule or regulation. In this regard, if we
are a federally chartered and supervised bank or other banking organization,
you recognize that we may be subject to the provisions of the Glass-Steagall
Act and other laws, rules, regulations or requirements governing, among
other things, the conduct of our activities. As such, we are restricted in
the activities we may undertake and for which we may be paid and, therefore,
intend to perform only those activities as are consistent with our statutory
and regulatory obligations. We represent and warrant to, and agree with you,
that the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment of
their assets in shares of the Funds, will be properly disclosed by us to our
clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
federally supervised bank or thrift institution, we agree that, in providing
services hereunder, we shall at all times act in compliance with the
Interagency Statement on Retail Sales of Nondeposit Investment Products
issued by The Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision (February 15, 1994) or any
successor interagency requirements as in force at the time such services are
provided. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
For all Funds as to which Board approval of this Agreement is required, such
continuance must be approved specifically at least annually by a vote of a
majority of (i) the Fund's Board of Directors and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval. For any Fund as
to which Board approval of this Agreement is required, this Agreement is
terminable without penalty, at any time, by a majority of the Fund's
Directors who are not "interested persons" (as defined in the Act) and have
no direct or indirect financial interest in this Agreement or upon not more
than 60 days' written notice, by vote of holders of a majority of the Fund's
shares. As to all Funds, this Agreement is terminable without penalty upon
15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of Additional
Information. We understand that any payments pursuant to this Agreement
shall be paid only so long as this Agreement and such Plan are in effect. We
agree that no Director, officer or shareholder of the Fund shall be liable
individually for the performance of the obligations hereunder or for any
such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX B
TO BANK AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds. The terms and conditions of this Agreement
are as follows:
1. We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: assisting clients in changing dividend options, account
designations and addresses; performing sub-accounting; establishing and
maintaining shareholder accounts and records; processing purchase and
redemption transactions; providing periodic statements and/or reports
showing a client's account balance and integrating such statements with
those of other transactions and balances in the client's other accounts
serviced by us; arranging for bank wires; and providing such other
information and services as you reasonably may request, to the extent we are
permitted by applicable statute, rule or regulation. In this regard, if we
are a federally chartered and supervised bank or other banking organization,
you recognize that we may be subject to the provisions of the Glass-Steagall
Act and other laws, rules, regulations, or requirements governing, among
other things, the conduct of our activities. As such, we are restricted in
the activities we may undertake and for which we may be paid and, therefore,
intend to perform only those activities as are consistent with our statutory
and regulatory obligations. We represent and warrant to, and agree with you,
that the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment of
their assets in shares of the Funds, will be properly disclosed by us to our
clients, will be authorized by our clients and will not result in an
excessive or unauthorized fee to us.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent. We
agree that in the event an issue pertaining to a Fund's Shareholder Services
Plan is submitted for shareholder approval, we will vote any Fund shares
held for our own account in the same proportion as the vote of those shares
held for our clients' accounts.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
federally supervised bank or thrift institution, we agree that, in providing
services hereunder, we shall at all times act in compliance with the
Interagency Statement on Retail Sales of Nondeposit Investment Products
issued by The Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision (February 15, 1994) or any
successor interagency requirements as in force at the time such services are
provided. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons" (as defined in the Act)
and have no direct or indirect financial interest in this Agreement. This
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative functions
contemplated herein by you as to any or all of the Funds, this Agreement
shall be terminable effective upon receipt of notice thereof by us. This
Agreement also shall terminate automatically in the event of its assignment
(as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We understand
that any payments pursuant to this Agreement shall be paid only so long as
this Agreement and such Plan are in effect. We agree that no Director,
officer or shareholder of the Fund shall be liable individually for the
performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principle s of conflict of
laws.
<PAGE>
APPENDIX C
TO BANK AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you with respect to our providing
distribution assistance relating to shares of certain mutual fund(s) managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates (hereinafter referred to individually as the "Fund" and collectively
as the "Funds"). You are the principal underwriter as defined in the Investment
Company Act of 1940, as amended (the "Act"), and the exclusive agent for the
continuous distribution of shares of the Funds. The terms and conditions of this
Agreement are as follows:
1. We agree to provide distribution assistance in connection with the sale of
the shares of the Funds. In this regard, if we are a federally chartered and
supervised bank or other banking organization, you recognize that we may be
subject to the provisions of the Glass-Steagall Act and other laws, rules,
regulations or requirements governing, among other things, the conduct of
our activities. As such, we are restricted in the activities we may
undertake and for which we may be paid and, therefore, intend to perform
only those activities as are consistent with our statutory and regulatory
obligations. We represent and warrant to, and agree with you, that the
compensation payable to us hereunder, together with any other compensation
payable to us by clients in connection with the investment of their assets
in shares of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing services hereunder. We
shall transmit promptly to clients all communications sent to us for
transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. If we are a
federally supervised bank or thrift institution, we agree that, in providing
services hereunder, we shall at all times act in compliance with the
Interagency Statement on Retail Sales of Nondeposit Investment Products
issued by The Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of the Comptroller of the
Currency, and the Office of Thrift Supervision (February 15, 1994) or any
successor interagency requirements as in force at the time such services are
provided. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons" (as defined in the Act)
and have no direct or indirect financial interest in this Agreement or, upon
not more than 60 days' written notice, by vote of holders of a majority of
the Fund's shares. This Agreement is terminable without penalty upon 15
days' notice by either party. In addition, you may terminate this Agreement
as to any or all Funds immediately, without penalty, if the present
investment adviser of such Fund(s) ceases to serve the Fund(s) in such
capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
distribution functions contemplated herein by you as to any or all of the
Funds, this Agreement shall be terminable effective upon receipt of notice
thereof by us. This Agreement also shall terminate automatically in the
event of its assignment (as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted pursuant
to Rule 12b- 1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are in
effect. We agree that no Director, officer or shareholder of the Fund shall
be liable individually for the performance of the obligations hereunder or
for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX D
TO BANK AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Bank identified below which desires
to exercise expedited redemption privileges with respect to shares of certain
mutual funds managed, advised or administered by The Dreyfus Corporation or its
affiliates, which shares are registered in the name of, or beneficially owned
by, the customers of such Bank.
(PLEASE PRINT OR TYPE)
NAME OF BANK
STREET ADDRESS CITY STATE ZIP
CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Firm.
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
ACCOUNT NAME ACCOUNT NUMBER
STREET ADDRESS CITY STATE ZIP
CODE
BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We desire to enter into an Agreement with you for the sale of shares of
beneficial interest or common stock of open-end registered investment companies
managed, advised or administered by The Dreyfus Corporation or its subsidiaries
or affiliates (hereinafter referred to individually as a "Fund" and collectively
as the "Funds"), for which you are the principal underwriter, as such term is
defined in the Investment Company Act of 1940, as amended, and for which you are
the exclusive agent for the continuous distribution of shares pursuant to the
terms of a Distribution Agreement between you and each Fund. Unless the context
otherwise requires, as used herein the term "Prospectus" shall mean the
prospectus and related statement of additional information (the "Statement of
Additional Information") incorporated therein by reference (as amended or
supplemented) of each of the respective Funds included in the then currently
effective registration statement (or post-effective amendment thereto) of each
such Fund, as filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby agreed
that our respective rights and obligations shall be as follows:
1. In all sales of Fund shares to the public, we shall act as dealer for our
own account and in no transaction shall we have any authority to act as
agent for any Fund, for you or for any other dealer.
2. All orders for the purchase of any Fund shares shall be executed at the then
current public offering price per share (i.e., the net asset value per share
plus the applicable sales charge, if any) and all orders for the redemption
of any Fund shares shall be executed at the net asset value per share, less
the applicable deferred sales charge, redemption fee, or similar charge or
fee, if any, in each case as described in the Prospectus of such Fund. The
minimum initial purchase order and minimum subsequent purchase order shall
be as set forth in the Prospectus of such Fund. All orders are subject to
acceptance or rejection by you at your sole discretion. Unless otherwise
mutually agreed in writing, each transaction shall be promptly confirmed in
writing directly to the customer on a fully disclosed basis and a copy of
each confirmation shall be sent simultaneously to us. You reserve the right,
at your discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of shares of any or all of the Funds. We warrant
and represent that we have taken appropriate verification measures to ensure
transactions are in compliance with all applicable laws and regulations
concerning foreign exchange controls and money laundering.
3. In ordering shares of any Fund, we shall rely solely and conclusively on the
representations contained in the Prospectus of such Fund. We agree that we
shall not offer or sell shares of any Fund except in compliance with all
applicable federal and state securities laws, and the rules, regulations,
requirements and conditions of all applicable regulatory and self-regulatory
agencies or authorities. In connection with offers to sell and sales of
shares of each Fund, we agree to deliver or cause to be delivered to each
person to whom any such offer or sale is made, at or prior to the time of
such offer or sale, a copy of the Prospectus and, upon request, the
Statement of Additional Information of such Fund. We further agree to obtain
from each customer to whom we sell Fund shares any taxpayer identification
number certification and such other information as may be required from time
to time under the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations promulgated thereunder, and to provide you or your
designee with timely written notice of any failure to obtain such taxpayer
identification number certification or other information in order to enable
the implementation of any required withholding. We will be responsible for
the proper instruction and training of all sales personnel employed by us.
Unless otherwise mutually agreed in writing, you shall deliver or cause to
be delivered to each of the customers who purchases shares of any of the
Funds from or through us pursuant to this Agreement copies of all annual and
interim reports, proxy solicitation materials and any other information and
materials relating to such Funds and prepared by or on behalf of you, the
Fund or its investment adviser, custodian, transfer agent or dividend
disbursing agent for distribution to each such customer. You agree to supply
us with copies of the Prospectus, Statement of Additional Information,
annual reports, interim reports, proxy solicitation materials and any such
other information and materials relating to each Fund in reasonable
quantities upon request.
4. We shall not make any representations concerning any Fund shares other than
those contained in the Prospectus of such Fund or in any promotional
materials or sales literature furnished to us by you or the Fund. We shall
not furnish or cause to be furnished to any person or display or publish any
information or materials relating to any Fund (including, without
limitation, promotional materials and sales literature, advertisements,
press releases, announcements, statements, posters, signs or other similar
materials), except such information and materials as may be furnished to us
by you or the Fund, and such other information and materials as may be
approved in writing by you.
5. In determining the amount of any dealer reallowance payable to us hereunder,
you reserve the right to exclude any sales which you reasonably determine
are not made in accordance with the terms of the applicable Fund
Prospectuses or the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge, customers may
be entitled to a reduction in the sales charge on purchases made under a
letter of intent ("Letter of Intent") in accordance with the Fund
Prospectus. In such a case, our dealer reallowance will be paid based upon
the reduced sales charge, but an adjustment to the dealer reallowance will
be made in accordance with the Prospectus of the applicable Fund to reflect
actual purchases of the customer if such customer's Letter of Intent is not
fulfilled. The sales charge and/or dealer reallowance may be changed at any
time in your sole discretion upon written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of each
Fund sold with a sales charge, a reduced sales charge may be applicable with
respect to customer accounts through a right of accumulation under which
customers are permitted to purchase shares of a Fund at the then current
public offering price per share applicable to the total of (i) the dollar
amount of shares then being purchased plus (ii) an amount equal to the then
current net asset value or public offering price originally paid per share,
whichever is higher, of the customer's combined holdings of the shares of
such Fund and of any other open-end registered investment company as may be
permitted by the applicable Fund Prospectus. In such case, we agree to
furnish to you or the transfer agent, as such term is defined in the
Prospectus of each Fund (the "Transfer Agent"), sufficient information to
permit your confirmation of qualification for a reduced sales charge, and
acceptance of the purchase order is subject to such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to advise
you promptly at your request as to amounts of any and all sales by us to the
public qualifying for a reduced sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the liquidation of
shares of one open-end registered investment company managed, advised or
administered by The Dreyfus Corporation or its subsidiaries or affiliates in
the shares of another open-end registered investment company managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates) shall, where available, be made subject to and in accordance
with the terms of each relevant Fund's Prospectus.
(e) Unless at the time of transmitting an order we advise you or the
Transfer Agent to the contrary, the shares ordered will be deemed to be the
total holdings of the specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus and
Service Plan, Shareholder Services Plan, Distribution Plan or similar plan,
if any, we understand that you may pay to certain financial institutions,
securities dealers and other industry professionals with which you have
entered into an agreement in substantially the form annexed hereto as
Appendix A, B or C (or such other form as may be approved from time to time
by the board of directors, trustees or managing general partners of the
Fund) such fees as may be determined by you in accordance with such
agreement for shareholder, administrative or distribution-related services
as described therein.
8. The procedures relating to all orders and the handling thereof will be
subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be
accepted. We agree to place orders with you immediately for the same number
of shares and at the same price as any orders we receive from our customers.
We shall not withhold placing orders received from customers so as to profit
ourselves as a result of such withholding by a change in the net asset value
from that used in determining the offering price to such customers, or
otherwise. We agree that: (a) we shall not effect any transactions
(including, without limitation, any purchases, exchanges and redemptions) in
any Fund shares registered in the name of, or beneficially owned by, any
customer unless such customer has granted us full right, power and authority
to effect such transactions on such customer's behalf, and (b) you, each
Fund, the Transfer Agent and your and their respective officers, directors,
trustees, managing general partners, agents, employees and affiliates shall
not be liable for, and shall be fully indemnified and held harmless by us
from and against, any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys' fees) which may be
incurred by you or any of the foregoing persons entitled to indemnification
from us hereunder arising out of or in connection with the execution of any
transactions in Fund shares registered in the name of, or beneficially owned
by, any customer in reliance upon any oral or written instructions
reasonably believed to be genuine and to have been given by or on behalf of
us.
9. (a) We agree to pay for purchase orders for Fund shares placed by us in
accordance with the terms of the Prospectus of the applicable Fund. On or
before the settlement date of each purchase order for shares of any Fund, we
shall either (i) remit to an account designated by you with the Transfer
Agent an amount equal to the then current public offering price of the
shares of such Fund being purchased less our dealer reallowance, if any,
with respect to such purchase order as determined by you in accordance with
the terms of the applicable Fund Prospectus, or (ii) remit to an account
designated by you with the Transfer Agent an amount equal to the then
current public offering price of the shares of such Fund being purchased
without deduction for our dealer reallowance, if any, with respect to such
purchase order as determined by you in accordance with the terms of the
applicable Fund Prospectus, in which case our dealer reallowance, if any,
shall be payable to us on at least a monthly basis. If payment for any
purchase order is not received in accordance with the terms of the
applicable Fund Prospectus, you reserve the right, without notice, to cancel
the sale and to hold us responsible for any loss sustained as a result
thereof.
(b) If any shares sold to us under the terms of this Agreement are sold with
a sales charge and are redeemed for the account of the Fund or are tendered
for redemption within seven (7) business days after the date of purchase:
(i) we shall forthwith refund to you the full dealer reallowance received by
us on the sale; and (ii) you shall forthwith pay to the Fund your portion of
the sales charge on the sale which had been retained by you and shall also
pay to the Fund the amount refunded by us.
10. Certificates for shares sold to us hereunder shall only be issued in
accordance with the terms of each Fund's Prospectus upon our customer's
specific request and, upon such request, shall be promptly delivered to us
by the Transfer Agent unless other arrangements are made by us. However, in
making delivery of such share certificates to us, the Transfer Agent shall
have adequate time to clear any checks drawn for the payment of Fund shares.
11. Each party hereby represents and warrants to the other party that: (a) it is
a corporation, partnership or other entity duly organized and validly
existing in good standing under the laws of the jurisdiction in which it was
organized; (b) it is duly registered as a broker-dealer with the Securities
and Exchange Commission and, to the extent required, with applicable state
agencies or authorities having jurisdiction over securities matters, and it
is a member of the National Association of Securities Dealers, Inc. (the
"NASD"); (c) it will comply with all applicable federal and state laws, and
the rules, regulations, requirements and conditions of all applicable
regulatory and self-regulatory agencies or authorities in the performance of
its duties and responsibilities hereunder; (d) the execution and delivery of
this Agreement and the performance of the transactions contemplated hereby
have been duly authorized by all necessary action, and all other
authorizations and approvals (if any) required for its lawful execution and
delivery of this Agreement and its performance hereunder have been obtained;
and (e) upon execution and delivery by it, and assuming due and valid
execution and delivery by the other party, this Agreement will constitute a
valid and binding agreement, enforceable in accordance with its terms. Each
party agrees to provide the other party with such information and access to
appropriate records as may be reasonably required to verify its compliance
with the provisions of this Agreement.
12. You agree to inform us, upon our request, as to the states in which you
believe the shares of the Funds have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such
states, but you shall have no obligation or responsibility as to our right
to sell shares in any jurisdiction. We agree to notify you immediately in
the event of (a) our expulsion or suspension from the NASD, or (b) our
violation of any applicable federal or state law, rule, regulation,
requirement or condition arising out of or in connection with this
Agreement, or which may otherwise affect in any material way our ability to
act as a dealer in accordance with the terms of this Agreement. Our
expulsion from the NASD will automatically terminate this Agreement
immediately without notice. Our suspension from the NASD for violation of
any applicable federal or state law, rule, regulation, requirement or
condition will terminate this Agreement effective immediately upon your
written notice of termination to us.
13. (a) You agree to indemnify, defend and hold us, our several officers and
directors, and any person who controls us within the meaning of Section 15
of the Securities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which we, our officers
and directors, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or otherwise,
arising out of or based upon (i) any breach of any representation, warranty
or covenant made by you herein, or (ii) any failure by you to perform your
obligations as set forth herein, or (iii) any untrue statement, or alleged
untrue statement, of a material fact contained in any Registration Statement
or any Prospectus, or arising out of or based upon any omission, or alleged
omission, to state a material fact required to be stated in either any
Registration Statement or any Prospectus, or necessary to make the
statements in any thereof not misleading; provided, however, that your
agreement to indemnify us, our officers and directors, and any such
controlling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission made in any Registration
Statement or Prospectus in reliance upon and in conformity with written
information furnished to you or the Fund by us specifically for use in the
preparation thereof. Your agreement to indemnify us, our officers and
directors, and any such controlling person, as aforesaid, is expressly
conditioned upon your being notified of any action brought against our
officers or directors, or any such controlling person, such notification to
be given by letter or by telecopier, telex, telegram or similar means of
same day delivery received by you at your address as specified in Paragraph
18 of this Agreement within seven (7) days after the summons or other first
legal process shall have been served. The failure so to notify you of any
such action shall not relieve you from any liability which you may have to
the person against whom such action is brought by reason of any such breach,
failure or untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement contained in
this Paragraph 13(a). You will be entitled to assume the defense of any suit
brought to enforce any such claim, demand, liability or expense. In the
event that you elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case you
do not elect to assume the defense of any such suit, you will reimburse us,
our officers and directors, and any controlling persons named as defendants
in such suit, for the fees and expenses of any counsel retained by us and/or
them. Your indemnification agreement contained in this Paragraph 13(a) shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to indemnification
pursuant to this Paragraph 13(a), and shall survive the delivery of any Fund
shares and termination of this Agreement. This agreement of indemnity will
inure exclusively to the benefit of the persons entitled to indemnification
from you pursuant to this Agreement and their respective estates, successors
and assigns.
(b) We agree to indemnify, defend and hold you and your several officers and
directors, and each Fund and its several officers and directors or trustees
or managing general partners, and any person who controls you and/or each
Fund within the meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which you and your several officers and directors, or
the Fund and its officers and directors or trustees or managing general
partners, or any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising out of or
based upon (i) any breach of any representation, warranty or covenant made
by us herein, or (ii) any failure by us to perform our obligations as set
forth herein, or (iii) any untrue, or alleged untrue, statement of a
material fact contained in the information furnished in writing by us to you
or any Fund specifically for use in such Fund's Registration Statement or
Prospectus, or used in the answers to any of the items of the Registration
Statement or in the corresponding statements made in the Prospectus, or
arising out of or based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished in writing by us
to you or the Fund and required to be stated in such answers or necessary to
make such information not misleading. Our agreement to indemnify you and
your officers and directors, and the Fund and its officers and directors or
trustees or managing general partners, and any such controlling person, as
aforesaid, is expressly conditioned upon our being notified of any action
brought against any person or entity entitled to indemnification hereunder,
such notification to be given by letter or by telecopier, telex, telegram or
similar means of same day delivery received by us at our address as
specified in Paragraph 18 of this Agreement within seven (7) days after the
summons or other first legal process shall have been served. The failure so
to notify us of any such action shall not relieve us from any liability
which we may have to you or your officers and directors, or to the Fund or
its officers and directors or trustees or managing general partners, or to
any such controlling person, by reason or any such breach, failure or
untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of our indemnity agreement contained in this
Paragraph 13(b). We shall be entitled to assume the defense of any suit
brought to enforce any such claim, demand, liability or expense. In the
event that we elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case we
do not elect to assume the defense of any such suit, we will reimburse you
and your officers and directors, and the Fund and its officers and directors
or trustees or managing general partners, and any controlling persons named
as defendants in such suit, for the fees and expenses of any counsel
retained by you and/or them. Our indemnification agreements contained in
Paragraph 8 above, Paragraph 16 below and this Paragraph 13(b) shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any person entitled to indemnification pursuant to
Paragraph 8 above, Paragraph 16 below or this Paragraph 1 3(b), and shall
survive the delivery of any Fund shares and termination of this Agreement.
Such agreements of indemnity will inure exclusively to the benefit of the
persons entitled to indemnification hereunder and their respective estates,
successors and assigns.
14. The names and addresses and other information concerning our customers are
and shall remain our sole property, and neither you nor your affiliates
shall use such names, addresses or other information for any purpose except
in connection with the performance of your duties and responsibilities
hereunder and except for servicing and informational mailings relating to
the Funds. Notwithstanding the foregoing, this Paragraph 14 shall not
prohibit you or any of your affiliates from utilizing for any purpose the
names, addresses or other information concerning any of our customers if
such names, addresses or other information are obtained in any manner other
than from us pursuant to this Agreement. The provisions of this Paragraph 14
shall survive the termination of this Agreement.
15. We agree to serve as a service agent or to provide distribution assistance,
in accordance with the terms of the Form of Service Agreement annexed hereto
as Appendix A, Form of Shareholder Services Agreement annexed hereto as
Appendix B, and/or Form of Distribution Plan Agreement annexed hereto as
Appendix C, as applicable, for all of our customers who purchase shares of
any and all Funds whose Prospectuses provide therefor. By executing this
Agreement, each of the parties hereto agrees to be bound by all terms,
conditions, rights and obligations set forth in the forms of agreement
annexed hereto and further agrees that such forms of agreement supersede any
and all prior service agreements or other similar agreements between the
parties hereto relating to any Fund or Funds. It is recognized that certain
parties may not be permitted to collect distribution fees under the Form of
Distribution Plan Agreement annexed hereto, and if we are such a party, we
will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed hereto as
Appendix D, we agree that you, each Fund with respect to which you permit us
to exercise an expedited redemption privilege, the Transfer Agent of each
such Fund, and your and their respective officers, directors or trustees or
managing general partners, agents, employees and affiliates shall not be
liable for and shall be fully indemnified and held harmless by us from and
against any and all claims, demands, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) arising out of or in
connection with any expedited redemption payments made in reliance upon the
information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the respective
parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture
between you and us. Neither party hereto shall be, act as, or represent
itself as, the agent or representative of the other, nor shall either party
have the right or authority to assume, create or incur any liability or any
obligation of any kind, express or implied, against or in the name of, or on
behalf of, the other party. This Agreement is not intended to, and shall
not, create any rights against either party hereto by any third party solely
on account of this Agreement. Neither party hereto shall use the name of the
other party in any manner without the other party's prior written consent,
except as required by any applicable federal or state law, rule, regulation,
requirement or condition, and except pursuant to any promotional programs
mutually agreed upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all notices required or
permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by
telecopier, telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to you shall be given or sent to you at your offices,
located at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
shown below.
19. This Agreement shall become effective only when accepted and signed by you,
and may be terminated at any time by either party hereto upon 15 days' prior
written notice to the other party. This Agreement, including the Appendices
hereto, may be amended by you upon 15 days' prior written notice to us, and
such amendment shall be deemed accepted by us upon the placement of any
order for the purchase of Fund shares or the acceptance of a fee payable
under this Agreement, including the Appendices hereto, after the effective
date of any such amendment. This Agreement may not be assigned by us without
your prior written consent. This Agreement constitutes the entire agreement
and understanding between the parties hereto relating to the subject matter
hereof and supersedes any and all prior agreements between the parties
hereto relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, without giving effect to principles
of conflicts of laws.
Very truly yours,
Name of Broker or Dealer (Please Print or Type)
Address
Date: _____________________________ By:
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to
Dreyfus Service Corporation. Upon acceptance one countersigned
copy will be returned to you for your files.
Accepted:
DREYFUS SERVICE CORPORATION
Date: _____________________________ By:
Authorized Signature
<PAGE>
APPENDIX A
TO BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: answering client inquiries about the Funds; assisting clients in
changing dividend options, account designations and addresses; performing
subaccounting; establishing and maintaining shareholder accounts and
records; processing purchase and redemption transactions; investing client
account cash balances automatically in shares of one or more of the Funds;
providing periodic statements and/or reports showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by us; arranging for bank
wires; and providing such other information and services as you reasonably
may request, to the extent we are permitted by applicable statute, rule or
regulation. We represent and warrant to, and agree with you, that the
compensation payable to us hereunder, together with any other compensation
payable to us by clients in connection with the investment of their assets
in shares of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
For all Funds as to which Board approval of this Agreement is required, such
continuance must be approved specifically at least annually by a vote of a
majority of (i) the Fund's Board of Directors and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval. For any Fund as
to which Board approval of this Agreement is required, this Agreement is
terminable without penalty, at any time, by a majority of the Fund's
Directors who are not "interested persons" (as defined in the Act) and have
no direct or indirect financial interest in this Agreement or, upon not more
than 60 days' written notice, by vote of holders of a majority of the Fund's
shares. As to all Funds, this Agreement is terminable without penalty upon
15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of Additional
Information. We understand that any payments pursuant to this Agreement
shall be paid only so long as this Agreement and such Plan are in effect. We
agree that no Director, officer or shareholder of the Fund shall be liable
individually for the performance of the obligations hereunder or for any
such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX B
TO BROKER-DEALER AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders of, and
administering shareholder accounts in, certain mutual fund(s) managed, advised
or administered by The Dreyfus Corporation or its subsidiaries or affiliates
(hereinafter referred to individually as the "Fund" and collectively as the
"Funds"). You are the principal underwriter as defined in the Investment Company
Act of 1940, as amended (the "Act"), and the exclusive agent for the continuous
distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our clients
who own shares of the Funds ("clients"), which services may include, without
limitation: assisting clients in changing dividend options, account
designations and addresses; performing subaccounting; establishing and
maintaining shareholder accounts and records; processing purchase and
redemption transactions; providing periodic statements and/or reports
showing a client's account balance and integrating such statements with
those of other transactions and balances in the client's other accounts
serviced by us; arranging for bank wires; and providing such other
information and services as you reasonably may request, to the extent we are
permitted by applicable statute, rule or regulation. We represent and
warrant to, and agree with you, that the compensation payable to us
hereunder, together with any other compensation payable to us by clients in
connection with the investment of their assets in shares of the Funds, will
be properly disclosed by us to our clients, will be authorized by our
clients and will not result in an excessive or unauthorized fee to us. We
will act solely as agent for, upon the order of, and for the account of, our
clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing information and services
to each Fund's shareholders, and to assist you in servicing accounts of
clients. We shall transmit promptly to clients all communications sent to us
for transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent. We
agree that in the event an issue pertaining to a Fund's Shareholder Services
Plan is submitted for shareholder approval, we will vote any Fund shares
held for our own account in the same proportion as the vote of those shares
held for our clients' accounts.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons" (as defined in the Act)
and have no direct or indirect financial interest in this Agreement. This
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative functions
contemplated herein by you as to any or all of the Funds, this Agreement
shall be terminable effective upon receipt of notice thereof by us. This
Agreement also shall terminate automatically in the event of its assignment
(as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We understand
that any payments pursuant to this Agreement shall be paid only so long as
this Agreement and such Plan are in effect. We agree that no Director,
officer or shareholder of the Fund shall be liable individually for the
performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telex, telecopier, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX C
TO BROKER-DEALER AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Dreyfus Service Corporation
200 Park Avenue
New York, New York 10166
Gentlemen:
We wish to enter into an Agreement with you with respect to our providing
distribution assistance relating to shares of certain mutual fund(s) managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates (hereinafter referred to individually as the "Fund" and collectively
as the "Funds"). You are the principal underwriter as defined in the Investment
Company Act of 1940, as amended (the "Act"), and the exclusive agent for the
continuous distribution of shares of the Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide distribution assistance in connection with the sale of
shares of the Funds. We represent and warrant to, and agree with you, that
the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment of
their assets in shares of the Funds, will be properly disclosed by us to our
clients.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and
facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial for providing services hereunder. We
shall transmit promptly to clients all communications sent to us for
transmittal to clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are authorized
to make any representation concerning shares of any Fund, except those
contained in the then current Prospectus for such Fund, copies of which will
be supplied by you to us in reasonable quantities upon request. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to suspend the
sale of shares or withdraw the sale of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective for a Fund only
when approved by vote of a majority of (i) the Fund's Board of Directors or
Trustees or Managing General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii) Directors who are not
"interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year next
following the date of execution, and thereafter shall continue automatically
for successive annual periods ending on the last day of each calendar year.
Such continuance must be approved specifically at least annually by a vote
of a majority of (i) the Fund's Board of Directors and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, at any time, by a majority of the
Fund's Directors who are not "interested persons (as defined in the Act) and
have no direct or indirect financial interest in this Agreement, or upon not
more than 60 days' written notice, by vote of holders of a majority of the
Fund's shares. This Agreement is terminable without penalty upon 15 days'
notice by either party. In addition, you may terminate this Agreement as to
any or all Funds immediately, without penalty, if the present investment
adviser of such Fund(s) ceases to serve the Fund(s) in such capacity, or if
you cease to act as distributor of such Fund(s). Notwithstanding anything
contained herein, if we fail to perform the distribution functions
contemplated herein by you as to any or all of the Funds, this Agreement
shall be terminable effective upon receipt of notice thereof by us. This
Agreement also shall terminate automatically in the event of its assignment
(as defined in the Act).
7. In consideration of the services and facilities described herein, we shall
be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted pursuant
to Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are in
effect. We agree that no Director, officer or shareholder of the Fund shall
be liable individually for the performance of the obligations hereunder or
for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and
self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal representative of
the other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party.
10. All notices required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first class mail, return
receipt requested, or by telecopier, telex, telegram or similar means of
same day delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to you shall be given or
sent to you at 200 Park Avenue, New York, New York 10166, Attention: General
Counsel, and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal laws of
the State of New York, without giving effect to principles of conflict of
laws.
<PAGE>
APPENDIX D
TO BROKER-DEALER AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Firm identified below which desires
to exercise expedited redemption privileges with respect to shares of certain
mutual funds managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates, which shares are registered in the name of, or
beneficially owned by, the customers of such Firm.
(PLEASE PRINT OR TYPE)
NAME OF FIRM
STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Firm.
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
ACCOUNT NAME ACCOUNT NUMBER
STREET ADDRESS CITY STATE ZIP CODE
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Counsel and Independent Auditors" and to the use of
our reports on General Minnesota Municipal Money Market Fund and General
Municipal Money Market Fund dated January 5, 2000, which are incorporated
by reference, in this Registration Statement (Form N-1A No. 2-77767) of
General Municipal Money Market Funds, Inc.
ERNST & YOUNG LLP
New York, New York
March 23, 2000
THE DREYFUS FAMILY OF FUNDS
(General Family of Funds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"1940 Act"), requires that the Board of an investment company desiring to offer
multiple classes pursuant to said Rule adopt a plan setting forth the separate
arrangement and expense allocation of each class, and any related conversion
features or exchange privileges.
The Board, including a majority of the non-interested Board members,
of each of the investment companies, or series thereof, listed on Schedule A
attached hereto (each, a "Fund") which desires to offer multiple classes has
determined that the following plan is in the best interests of each class
individually and the Fund as a whole:
1. Class Designation: Fund shares shall be divided into Class A,
Class B and Class X, except as otherwise indicated on Schedule A attached
hereto.
2. Differences in Services: The services offered to shareholders of
each Class shall be substantially the same, except for certain services provided
to each Class pursuant to separate plans adopted by the Fund's Board and except
that the Automatic Withdrawal Plan and the Checkwriting Privilege shall be
available only to holders of Class A or Class B shares.
3. Differences in Distribution Arrangements: Shares
of each Class shall be offered at net asset value.
Class A shares of each Fund listed on Schedule B attached hereto
shall be subject to annual payments for distributing Class A shares and
servicing shareholder accounts at the rate of up to .20% of the value of the
average daily net assets of Class A pursuant to a Service Plan adopted in
accordance with Rule 12b-1 under the 1940 Act.
Class B shares of each Fund shall be subject to annual payments for
distributing Class B shares at the rate of up to .20% of the value of the
average daily net assets of Class B pursuant to a Distribution Plan adopted in
accordance with Rule 12b-1 under the 1940 Act. Class B shares shall be charged
directly for sub-accounting services at the annual rate of .05% of the value of
the average daily net assets of Class B.
Class X shares of each Fund offering such Class shall be subject to a
contingent deferred sales charge (a "CDSC"), as such term is defined under the
Conduct Rules of the National Association of Securities Dealers, Inc. (the
"NASD"), and to payments for distributing Class X shares at the rate of .25% of
the value of the average daily net assets of Class X pursuant to a Distribution
Plan adopted in accordance with Rule 12b-1 under the 1940 Act. The amount of and
provisions relating to the CDSC are set forth on Schedule C attached hereto.
Each Class of shares shall be subject to a separate Shareholder
Services Plan. Under the respective Shareholder Services Plan, Class A shares
shall be subject to payments in an amount not to exceed an annual rate of .25%
of the value of the average daily net assets of Class A, and each of Class B and
Class X shares shall be subject to an annual service fee at the rate of .25% of
the value of the average daily net assets of Class B and Class X, respectively.
The fee payable pursuant to each Shareholder Services Plan is intended to be a
"service fee" as defined under the Conduct Rules of the NASD.
4. Expense Allocation: The following expenses shall be allocated, to
the extent practicable, on a Class-by-Class basis: (a) fees under the Service
Plan, if any, Distribution Plans and Shareholder Services Plans; (b) printing
and postage expenses related to preparing and distributing materials, such as
shareholder reports, prospectuses and proxies, to current shareholders of a
specific Class; (c) Securities and Exchange Commission and Blue Sky registration
fees incurred by a specific Class; (d) the expense of administrative personnel
and services as required to support the shareholders of a specific Class; (e)
litigation or other legal expenses relating solely to a specific Class; (f)
transfer agent fees identified by the Fund's transfer agent as being
attributable to a specific Class; and (g) Board members' fees incurred as a
result of issues relating to a specific Class.
5. Exchange Privileges: Class X shares of a Fund shall be
exchangeable only for Class X shares of another Fund or for Class B shares of a
Dreyfus Premier fund and shares of certain other Classes of other investment
companies managed or administered by The Dreyfus Corporation or its affiliates
as specified from time to time. Shares of each other Class shall be exchangeable
only for shares of certain other investment companies specified from time to
time.
Dated: July 19, 1995
Amended: April 14, 1999
As Revised: November 15, 1999
SCHEDULE A
General California Municipal Money Market Fund
Class A
Class B
General Government Securities Money Market Funds, Inc.
--General Government Securities Money Market Fund
Class A
Class B
--General Treasury Prime Money Market Fund
Class A
Class B
Class X
General Money Market Fund, Inc.
Class A
Class B
Class X
General Municipal Money Market Funds, Inc.
--General Minnesota Municipal Money Market Fund
Class A
Class B
--General Municipal Money Market Fund
Class A
Class B
Class X
General New York Municipal Money Market Fund
Class A
Class B
SCHEDULE B
General Government Securities Money Market Funds, Inc.
--General Government Securities Money Market Fund
--General Treasury Prime Money Market Fund
General Money Market Fund, Inc.
SCHEDULE C
Contingent Deferred Sales Charge--Class X Shares--A CDSC payable to the Fund's
Distributor shall be imposed on any redemption of Class X shares which reduces
the current net asset value of such Class X shares to an amount which is lower
than the dollar amount of all payments by the redeeming shareholder for the
purchase of Class X shares of the Fund held by such shareholder at the time of
redemption. No CDSC shall be imposed to the extent that the net asset value of
the Class X shares redeemed does not exceed (i) the current net asset value of
Class X shares acquired through reinvestment of dividends or capital gain
distributions, plus (ii) increases in the net asset value of the shareholder's
Class X shares above the dollar amount of all payments for the purchase of Class
X shares of the Fund held by such shareholder at the time of redemption.
If the aggregate value of the Class X shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC may be
applied to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
shall depend on the number of years from the time the shareholder purchased the
Class X shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the purchase
of Class X shares, all payments during a month shall be aggregated and deemed to
have been made on the first day of the month. The following table sets forth the
rates of the CDSC:
CDSC as a % of
Year Since Amount Invested
Purchase Payment or Redemption
Was Made
Proceeds
First......................... 4.00
Second........................ 4.00
Third......................... 3.00
Fourth........................ 3.00
Fifth......................... 2.00
Sixth......................... 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation shall be made in a manner that results in the lowest possible rate.
Therefore, it shall be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net asset value of
Class X shares above the total amount of payments for the purchase of Class X
shares made during the preceding six years; then of amounts representing the
cost of shares purchased six years prior to the redemption; and finally, of
amounts representing the cost of shares held for the longest period of time
within the applicable six-year period.
Waiver of CDSC--The CDSC shall be waived in connection with (a) redemptions made
within one year after the death or disability, as defined in Section 72(m)(7) of
the Internal Revenue Code of 1986, as amended (the "Code"), of the shareholder,
(b) redemptions by employees participating in 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 Fund's Distributor exceeds one million dollars,
(c) redemptions as a result of a combination of any investment company with the
Fund by merger, acquisition of assets or otherwise, (d) a distribution following
retirement under a tax-deferred retirement plan or upon attaining age 70-1/2 in
the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b)
of the Code, and (e) redemptions pursuant to any systematic withdrawal plan as
described in the Fund's prospectus. Any Fund shares subject to a CDSC which were
purchased prior to the termination of such waiver shall have the CDSC waived as
provided in the Fund's prospectus at the time of the purchase of such shares.
CONFIDENTIAL INFORMATION AND
SECURITIES TRADING POLICY
<TABLE>
<CAPTION>
<S> <C> <C>
CONTENTS
Page
- ------------------------------
INTRODUCTION .................................................... 1
PART I
APPLICABLE TO ALL ASSOCIATES
SECTION ONE
CONFIDENTIAL INFORMATION............................ 2
-Types of Confidential Information.................. 2
-Rules for Protecting Confidential Information...... 3
-Supplemental Procedures............................ 4
SECTION TWO
INSIDER TRADING AND TIPPING......................... 5
-Legal Prohibitions................................. 5
-Mellon's Policy.................................... 6
SECTION THREE
RESTRICTIONS ON THE FLOW OF INFORMATION
WITHIN MELLON (THE "CHINESE WALL").................. 7
-Rules for Maintaining the Chinese Wall............. 7
-Reporting Receipt of Material Nonpublic
Information........................................ 8
-Functions "Above the Wall"......................... 9
-Supplemental Procedures............................ 9
SECTION FOUR
RESTRICTIONS ON TRANSACTIONS IN MELLON
SECURITIES..........................................10
-Beneficial Ownership...............................11
SECTION FIVE
RESTRICTIONS ON TRANSACTIONS IN OTHER
SECURITIES..........................................12
SECTION SIX
CLASSIFICATION OF ASSOCIATES........................14
-Insider Risk Associate.............................14
-Investment Associate...............................15
-Other Associate....................................15
PART II
APPLICABLE TO INSIDER
RISK ASSOCIATES ONLY ....................................................16
-Prohibition on Investments in Securities of
Financial Services Organizations...................16
-Conflict of Interest...............................17
-Preclearance for Personal Securities
Transactions.......................................17
-Personal Securities Transactions Reports...........19
-Confidential Treatment.............................19
PART III
APPLICABLE TO INVESTMENT
ASSOCIATES ONLY ....................................................20
-Special Standards of Conduct for
Investment Associates..............................20
-Preclearance for Personal Securities
Transactions.......................................21
-Personal Securities Transactions Reports...........23
-Confidential Treatment.............................24
PART IV
APPLICABLE TO OTHER
ASSOCIATES ONLY ....................................................25
-Preclearance for Personal Securities
Transactions.......................................25
-Personal Securities Transactions Reports...........25
-Restrictions on Transactions in Other
Securities.........................................25
-Confidential Treatment.............................26
PART V
APPLICABLE TO NONMANAGEMENT
BOARD MEMBERS ....................................................27
-Nonmanagement Board Member.........................27
-Standards of Conduct for Nonmanagement
Board Member.......................................27
-Preclearance for Personal Securities
Transactions.......................................28
-Personal Securities Transactions Reports...........29
-Confidential Treatment.............................29
GLOSSARY Definitions.........................................30
INDEX OF EXHIBITS ....................................................33
</TABLE>
INTRODUCTION
- ------------------------------
Mellon Bank Corporation ("Mellon") and its associates, and
the registered investment companies for which The Dreyfus
Corporation ("Dreyfus") and/or Mellon serves as investment
adviser, sub-investment adviser or administrator, are
subject to certain laws and regulations governing the use
of confidential information and personal securities
trading. Mellon has developed this Confidential Information
and Securities Trading Policy (the "Policy") to establish
specific standards to promote compliance with applicable
laws. Further, the Policy is intended to protect Mellon's
business secrets and proprietary information as well as
that of its customers and any entity for which it acts in a
fiduciary capacity.
The Policy set forth procedures and limitations which
govern the personal securities transactions of every Mellon
associate and certain other individuals associated with the
registered investment companies for which Dreyfus and/or
Mellon serves as investment adviser, sub-investment adviser
or administrator. The Policy is designed to reinforce
Mellon's reputation for integrity by avoiding even the
appearance of impropriety in the conduct of Mellon's
business.
Associates should be aware that they may be held personally
liable for any improper or illegal acts committed during
the course of their employment, and that "ignorance of the
law" is not a defense. Associates may be subject to civil
penalties such as fines, regulatory sanctions including
suspensions, as well as criminal penalties.
Associates outside the United States are also subject to
applicable laws of foreign jurisdictions, which may differ
substantially from U.S. law and which may subject such
associates to additional requirements. Such associates must
comply with applicable requirements of pertinent foreign
laws as well as with the provisions of the Policy. To the
extent any particular portion of the Policy is inconsistent
with foreign law, associates should consult the General
Counsel or the Manager of Corporate Compliance.
Any provision of this Policy may be waived or exempted at
the discretion of the Manager of Corporate Compliance. Any
such waiver or exemption will be evidenced in writing and
maintained in the Risk Management and Compliance
Department.
Associates must read the Policies and MUST COMPLY
with them. Failure to comply with the provisions
of the Policies may result in the imposition of
serious sanctions, including but not limited to
disgorgement of profits, dismissal, substantial
personal liability and referral to law enforcement
agencies or other regulatory agencies. Associates
should retain the Policies in their records for
future reference. Any questions regarding the
Policies should be referred to the Manager of
Corporate Compliance or his/her designee.
PART I - APPLICABLE TO ALL ASSOCIATES
- ------------------------------
SECTION ONE
CONFIDENTIAL INFORMATION
As an associate you may receive information about Mellon,
its customers and other parties that, for various reasons,
should be treated as confidential. All associates are
expected to strictly comply with measures necessary to
preserve the confidentiality of information.
TYPES OF CONFIDENTIAL INFORMATION - Although it is
impossible to provide an exhaustive list of information
that should remain confidential, the following are examples
of the general types of confidential information that
associates might receive in the ordinary course of carrying
out their job responsibilities.
o Information Obtained from Business Relations - An associate
might receive confidential information regarding customers
or other parties with whom Mellon has business
relationships. If released, such information could have a
significant effect on their operations, their business
reputations or the market price of their securities.
Disclosing such information could expose both the associate
and Mellon to liability for damages.
o Mellon Financial Information - An associate might receive
financial information regarding Mellon before such
information has been disclosed to the public. It is the
policy of Mellon to disclose all material corporate
information to the public in such a manner that all those
who are interested in Mellon and its securities have equal
access to the information. Disclosing such information to
unauthorized persons could subject both the associate and
Mellon to liability under the federal securities laws.
o Mellon Proprietary Information - Certain nonfinancial
information developed by Mellon - such as business plans,
customer lists, methods of doing business, computer
software, source codes, databases and related documentation
- constitutes valuable Mellon proprietary information.
Disclosure of such information to unauthorized persons
could harm, or reduce a benefit to, Mellon and could result
in liability for both the associate and Mellon.
o Mellon Examination Information - Banks and certain other
Mellon subsidiaries are periodically examined by regulatory
agencies. Certain reports made by those regulatory agencies
are the property of those agencies and are strictly
confidential. Giving information from these reports to
anyone not officially connected with Mellon is a criminal
offense.
o Portfolio Management Information - Portfolio management
information relating to investment accounts or funds
managed by Mellon or Dreyfus, including investment
decisions or strategies developed for the benefit of
investment companies advised by Dreyfus, is for the benefit
of such account or fund. Disclosure or exploitation of such
information by an associate in an unauthorized manner may
cause detriment to such accounts or funds and may subject
the associate to liability under the federal securities
laws.
RULES FOR PROTECTING CONFIDENTIAL INFORMATION - The
following are some basic rules to follow to protect
confidential information.
o Limited Communication to Outsiders - Confidential
information should not be communicated to anyone outside
Mellon, except to the extent they need to know the
information in order to provide necessary services to
Mellon.
o Limited Communication to Insiders - Confidential
information should not be communicated to other associates,
except to the extent they need to know the information to
fulfill their job responsibilities and their knowledge of
the information is not likely to result in misuse or a
conflict of interest. In this regard, Mellon has
established specific restrictions with respect to material
nonpublic information in order to separate and insulate
different functional areas and personnel within Mellon.
Please refer to Section Three, "Restrictions on The Flow of
Information Within Mellon" (The "Chinese Wall").
o Corporate Use Only - Confidential information should be
used only for Corporate purposes. Under no circumstances
may an associate use it, directly or indirectly, for
personal gain or for the benefit of any outside party who
is not entitled to such information.
o Other Customers - Where appropriate, customers should be
made aware that associates will not disclose to them other
customers' confidential information or use the confidential
information of one customer for the benefit of another.
o Notification of Confidentiality - When confidential
information is communicated to any person, either inside or
outside Mellon, they should be informed of the
information's confidential nature and the limitations on
its further communication.
o Prevention of Eavesdropping - Confidential matters should
not be discussed in public or in places, such as in
building lobbies, restaurants or elevators, where
unauthorized persons may overhear. Precautions, such as
locking materials in desk drawers overnight, stamping
material "Confidential" and delivering materials in sealed
envelopes, should be taken with written materials to ensure
they are not read by unauthorized persons.
o Data Protection - Data stored on personal computers and
diskettes should be properly secured to ensure they are not
accessed by unauthorized persons. Access to computer files
should be granted only on a need-to-know basis. At a
minimum, associates should comply with applicable Mellon
policies on electronic data security.
o Confidentiality Agreements - Confidentiality agreements to
which Mellon is a party must be complied with in addition
to, but not in lieu of, this Policy. Confidentiality
agreements that deviate from commonly used forms should be
reviewed in advance by the Legal Department.
o Contact with the Public - All contacts with institutional
shareholders or securities analysts about Mellon must be
made through the Investor Relations Division of the Finance
Department. All contacts with the media and all speeches or
other public statements made on behalf of Mellon or about
Mellon's businesses must be cleared in advance by Corporate
Affairs. In speeches and statements not made on behalf of
Mellon, care should be taken to avoid any implication that
Mellon endorses the views expressed.
SUPPLEMENTAL PROCEDURES - Mellon entities, departments,
divisions and groups should establish their own
supplemental procedures for protecting confidential
information, as appropriate. These procedures may include:
o establishing records retention and destruction policies;
o using code names;
o limiting the staffing of confidential matters (for example,
limiting the size of working groups and the use of
temporary employees, messengers and word processors); and
o requiring written confidentiality agreements from certain
associates.
Any supplemental procedures should be used only to protect
confidential information and not to circumvent appropriate
reporting and recordkeeping requirements.
SECTION TWO
INSIDER TRADING AND TIPPING
LEGAL PROHIBITIONS - Federal securities laws generally
prohibit the trading of securities while in possession of
"material nonpublic" information regarding the issuer of
those securities (insider trading). Any person who passes
along the material nonpublic information upon which a trade
is based (tipping) may also be liable.
"Material" - Information is material if there is a
substantial likelihood that a reasonable investor would
consider it important in deciding whether to buy, sell or
hold securities. Obviously, information that would affect
the market price of a security would be material. Examples
of information that might be material include:
o a proposal or agreement for a merger, acquisition or
divestiture, or for the sale or purchase of substantial
assets;
o tender offers, which are often material for the party
making the tender offer as well as for the issuer of the
securities for which the tender offer is made;
o dividend declarations or changes;
o extraordinary borrowings or liquidity problems;
o defaults under agreements or actions by creditors,
customers or suppliers relating to a company's credit
standing;
o earnings and other financial information, such as large
or unusual write-offs, write-downs, profits or losses;
o pending discoveries or developments, such as new products,
sources of materials, patents, processes, inventions or
discoveries of mineral deposits;
o a proposal or agreement concerning a financial
restructuring;
o a proposal to issue or redeem securities, or a
development with respect to a pending issuance or
redemption of securities;
o a significant expansion or contraction of operations;
o information about major contracts or increases or
decreases in orders;
o the institution of, or a development in, litigation or a
regulatory proceeding;
o developments regarding a company's senior management;
o information about a company received from a director of
that company; and
o information regarding a company's possible noncompliance
with environmental protection laws.
This list is not exhaustive. All relevant circumstances
must be considered when determining whether an item of
information is material.
"Nonpublic" - Information about a company is nonpublic if
it is not generally available to the investing public.
Information received under circumstances indicating that it
is not yet in general circulation and which may be
attributable, directly or indirectly, to the company or its
insiders is likely to be deemed nonpublic information.
If an associate can refer to some public source to show
that the information is generally available (that is,
available not from inside sources only) and that enough
time has passed to allow wide dissemination of the
information, the information is likely to be deemed public.
While information appearing in widely accessible sources -
such as newspapers - becomes public very soon after
publication, information appearing in less accessible
sources - such as regulatory filings - may take up to
several days to be deemed public. Similarly, highly complex
information might take longer to become public than would
information that is easily understood by the average
investor.
MELLON'S POLICY - Associates who possess material nonpublic
information about a company - whether that company is
Mellon, another Mellon entity, a Mellon customer or
supplier, or other company - may not trade in that
company's securities, either for their own accounts or for
any account over which they exercise investment discretion.
In addition, associates may not recommend trading in those
securities and may not pass the information along to
others, except to associates who need to know the
information in order to perform their job responsibilities
with Mellon. These prohibitions remain in effect until the
information has become public.
Associates who have investment responsibilities should take
appropriate steps to avoid receiving material nonpublic
information. Receiving such information could create severe
limitations on their ability to carry out their
responsibilities to Mellon's fiduciary customers.
Associates managing the work of consultants and temporary
employees who have access to the types of confidential
information described in this Policy are responsible for
ensuring that consultants and temporary employees are aware
of Mellon's policy and the consequences of noncompliance.
Questions regarding Mellon's policy on material nonpublic
information, or specific information that might be subject
to it, should be referred to the General Counsel.
SECTION THREE
RESTRICTIONS ON THE FLOW OF
INFORMATION WITHIN MELLON
(THE "CHINESE WALL")
As a diversified financial services organization, Mellon
faces unique challenges in complying with the prohibitions
on insider trading and tipping of material nonpublic
information and misuse of confidential information. This is
because one Mellon unit might have material nonpublic
information about a company while other Mellon units may
have a desire, or even a fiduciary duty, to buy or sell
that company's securities or recommend such purchases or
sales to customers. To engage in such broad-ranging
financial services activities without violating laws or
breaching Mellon's fiduciary duties, Mellon has established
a "Chinese Wall" policy applicable to all associates. The
"Chinese Wall" separates the Mellon units or individuals
that are likely to receive material nonpublic information
(Potential Insider Functions) from the Mellon units or
individuals that either trade in securities - for Mellon's
account or for the accounts of others - or provide
investment advice (Investment Functions).
Examples of Potential Insider Functions - Potential Insider
Functions include, among others, certain commercial
lending, corporate finance, and credit policy areas.
Insider Risk Associates (see Section Six, "Insider Risk
Associates") should consider themselves to be in Potential
Insider Functions unless their particular job
responsibilities clearly indicate otherwise.
Examples of Investment Functions - Investment Functions
include, among others, securities sales and trading,
investment management and advisory services, investment
research and various trust or fiduciary functions.
RULES FOR MAINTAINING THE "CHINESE WALL" - Without the
prior approval of the General Counsel, material nonpublic
information obtained by anyone in a Potential Insider
Function should not be communicated to anyone in an
Investment Function. To reduce the risk of material
nonpublic information being communicated, communications
between these associates in these functions must be limited
to the maximum extent consistent with valid business needs.
Particular rules -
o File Restrictions - Associates in Investment Functions must
not have access to commercial credit files, corporate
finance files, or any other Potential Insider Function
files that might contain material nonpublic information.
All such files that contain material nonpublic information
should be marked as "Confidential" and, if feasible,
segregated from nonconfidential files.
o Electronic Data - Associates in Investment Functions must
not have access to personal computer or word processing
files of associates in Potential Insider Functions.
o Meetings - Associates in Investment Functions must not
attend meetings between customers and associates in
Potential Insider Functions unless appropriate steps have
been taken to ensure that material nonpublic information
will not be disclosed or discussed.
o Committee Service - Without the prior approval of the
General Counsel, associates other than those "Above the
Wall" (see page 9) must not serve simultaneously on a
committee having responsibility for any Investment Function
and a committee having responsibility for any Potential
Insider Function.
o Information Requests - Requests for nonmaterial information
or public information across the "Chinese Wall" should be
made in writing to an appropriate associate in the
applicable area. Associates sending or receiving such a
request should resolve any questions regarding the
materiality or nonpublic nature of the requested
information by consulting their department head, who will
contact the General Counsel, as appropriate.
o Information Backflow - Associates should take care to avoid
inadvertent backflow of information that may be interpreted
as the prohibited communication of material nonpublic
information. For example, the mere fact that someone in a
Potential Insider Function, such as a mergers and
acquisitions specialist, requests information from an
associate in an Investment Function could give the latter
person a clue as to possible material developments
affecting a customer.
o Customers - Associates in Investment Functions must not
state or imply to customers that associates making
decisions or recommendations will have the benefit of
information from Mellon's Potential Insider Functions. When
appropriate, associates should inform customers of Mellon's
"Chinese Wall" policy.
o Conflicts of Interest - Associates should not receive or
pass on any information that would create an undue risk of
Mellon or any associate having a conflict of interest or
breaching a fiduciary obligation.
REPORTING RECEIPT OF MATERIAL NONPUBLIC INFORMATION -
Associates in Investment Functions who receive any
suspected material nonpublic information must report such
receipt promptly to their department or entity head. A
department or entity head who receives information believed
to be material and nonpublic should report the matter
promptly to the General Counsel. If the General Counsel
determines that the information is material and nonpublic,
the affected department or entity will:
o immediately suspend all trading in the securities of the
issuer to which the information applies, as well as all
recommendations with respect to such securities. The
suspension will remain in effect as long as the information
remains both material and nonpublic.
O notify the General Counsel before resuming transactions or
recommendations in the affected securities. The General
Counsel will advise as to possible further steps, including
ascertaining the validity and nonpublic nature of the
information with the issuer of the securities; requesting
the issuer of the securities, or other appropriate parties,
to disseminate the information promptly to the public if
the information is valid and nonpublic; and publishing the
information.
In certain circumstances, the department or entity head may
be able to demonstrate conclusively that the receipt of the
material nonpublic information has been confined to an
individual or small group of individuals and that measures
other than those described above will comparably reduce the
likelihood of trading on the basis of the information.
These measures might include temporarily relieving
individuals of responsibility for any Investment Functions
and preventing any contact between those individuals and
associates in Investment Functions. In these circumstances,
the department head, with the approval of the General
Counsel, may take those measures rather than the measures
described above.
FUNCTIONS "ABOVE THE WALL" - Some functions at Mellon are
deemed to be "Above the Wall." For example, members of
senior management, Auditing, Risk Management and
Compliance, and the Legal Department will typically need to
have access to information on both sides of the "Chinese
Wall" to carry out their job responsibilities. These
individuals cannot rely on the procedural safeguards of the
"Chinese Wall" and, therefore, need to be particularly
careful to avoid any improper use or dissemination of
material nonpublic information.
SUPPLEMENTAL PROCEDURES - As appropriate, certain Mellon
departments or areas, such as Mellon Trust, should
establish their own procedures to reduce the possibility of
information being communicated to associates who should not
have access to that information.
SECTION FOUR
RESTRICTIONS ON TRANSACTIONS
IN MELLON SECURITIES
Associates who engage in transactions involving Mellon
securities should be aware of their unique responsibilities
with respect to such transactions arising from the
employment relationship and should be sensitive to even the
appearance of impropriety.
The following restrictions apply to all transactions in
Mellon's publicly traded securities occurring in the
associate's own account and in all other accounts over
which the associate could be expected to exercise influence
or control (see provisions under "Beneficial Ownership"
below for a more complete discussion of the accounts to
which these restrictions apply). These restrictions are to
be followed in addition to any restrictions that apply to
particular officers or directors (such as restrictions
under Section 16 of the Securities Exchange Act of 1934).
o Short Sales - Short sales of Mellon securities by
associates are prohibited.
o Sales Within 60 Days of Purchase - Sales of Mellon
securities within 60 days of acquisition are prohibited.
For purposes of the 60-day holding period, securities will
be deemed to be equivalent if one is convertible into the
other, if one entails a right to purchase or sell the
other, or if the value of one is expressly dependent on the
value of the other (e.g., derivative securities).
In cases of extreme hardship, associates (other than senior
management) may obtain permission to dispose of Mellon
securities acquired within 60 days of the proposed
transaction, provided the transaction is pre-cleared with
the Manager of Corporate Compliance and any profits earned
are disgorged in accordance with procedures established by
senior management. The Manager of Corporate Compliance
reserves the right to suspend the 60-day holding period
restriction in the event of severe market disruption.
o Margin Transactions - Purchases on margin of Mellon's
publicly traded securities by associates is prohibited.
Margining Mellon securities in connection with a cashless
exercise of an employee stock option through the Human
Resources Department is exempt from this restriction.
Further, Mellon securities may be used to collateralize
loans or the acquisition of securities other than those
issued by Mellon.
o Option Transactions - Option transactions involving
Mellon's publicly traded securities are prohibited.
Transactions under Mellon's Long-Term Incentive Plan or
other associate option plans are exempt from this
restriction.
o Major Mellon Events - Associates who have knowledge of
major Mellon events that have not yet been announced are
prohibited from buying and selling Mellon's publicly traded
securities before such public announcements, even if the
associate believes the event does not constitute material
nonpublic information.
o Mellon Blackout Period - Associates are prohibited from
buying or selling Mellon's publicly traded securities
during a blackout period, which begins the 16th day of the
last month of each calendar quarter and ends three business
days after Mellon publicly announces the financial results
for that quarter. In cases of extreme hardship, associates
(other than senior management) may request permission from
the Manager of Corporate Compliance to dispose of Mellon
securities during the blackout period.
BENEFICIAL OWNERSHIP - The provisions discussed above apply
to transactions in the associate's own name and to all
other accounts over which the associate could be expected
to exercise influence or control, including:
o accounts of a spouse, minor children or relatives to whom
substantial support is contributed;
o accounts of any other member of the associate's household
(e.g., a relative living in the same home);
o trust accounts for which the associate acts as trustee or
otherwise exercises any type of guidance or influence;
o Corporate accounts controlled, directly or indirectly, by
the associate;
o arrangements similar to trust accounts that are established
for bona fide financial purposes and benefit the associate;
and
o any other account for which the associate is the beneficial
owner (see Glossary for a more complete legal definition of
"beneficial owner").
SECTION FIVE
RESTRICTIONS ON TRANSACTIONS
IN OTHER SECURITIES
Purchases or sales by an associate of the securities of
issuers with which Mellon does business, or other third
party issuers, could result in liability on the part of
such associate. Associates should be sensitive to even the
appearance of impropriety in connection with their personal
securities transactions. Associates should refer to the
provisions under "Beneficial Ownership" (Section Four,
"Restrictions on Transactions in Mellon Securities"), which
are equally applicable to the following provisions.
The Mellon Code of Conduct contains certain restrictions on
investments in parties that do business with Mellon.
Associates should refer to the Code of Conduct and comply
with such restrictions in addition to the restrictions and
reporting requirements set forth below.
The following restrictions apply to all securities
transactions by associates:
o Credit or Advisory Relationship - Associate may not buy or
sell securities of a company if they are considering
granting, renewing or denying any credit facility to that
company or acting as an adviser to that company with
respect to its securities. In addition, lending associates
who have assigned responsibilities in a specific industry
group are not permitted to trade securities in that
industry. This prohibition does not apply to transactions
in securities issued by open-end investment companies.
o Customer Transactions - Trading for customers and Mellon
accounts should always take precedence over associates'
transactions for their own or related accounts.
o Front Running - Associates may not engage in "front
running," that is, the purchase or sale of securities for
their own accounts on the basis of their knowledge of
Mellon's trading positions or plans.
o Initial Public Offerings - Mellon prohibits its associates
from acquiring any securities in an initial public offering
("IPO").
o Margin Transactions - Margin trading is a highly leveraged
and relatively risky method of investing that can create
particular problems for financial services employees. For
this reason, all associates are urged to avoid margin
trading.
Prior to establishing a margin account, the associate must
obtain the written permission of the Manager of Corporate
Compliance. Any associate having a margin account prior to
the effective date of this Policy must notify the Manager
of Corporate Compliance of the existence of such account.
All associates having margin accounts, other than described
below, must designate the Manager of Corporate Compliance
as an interested party on that account. Associates must
ensure that the Manager of Corporate Compliance promptly
receives copies of all trade confirmations and statements
relating to the account directly from the broker. If
requested by a brokerage firm, please contact the Manager
of Corporate Compliance to obtain a letter (sometimes
referred to as a "407 letter") granting permission to
maintain a margin account. Trade confirmations and
statements are not required on margin accounts established
at Dreyfus Investment Services Corporation for the sole
purpose of cashless exercises of employee stock options. In
addition, products may be offered by a broker/dealer that,
because of their characteristics, are considered margin
accounts but have been determined by the Manager of
Corporate Compliance to be outside the scope of this Policy
(e.g., a Cash Management Account which provides overdraft
protection for the customer). Any questions regarding the
establishment, use and reporting of margin accounts should
be directed to the Manager of Corporate Compliance.
Examples of an instruction letter to a broker are shown in
Exhibits B1 and B2.
o Material Nonpublic Information - Associates possessing
material nonpublic information regarding any issuer of
securities must refrain from purchasing or selling
securities of that issuer until the information becomes
public or is no longer considered material.
o Naked Options, Excessive Trading - Mellon discourages all
associates from engaging in short-term or speculative
trading, in trading naked options, in trading that could be
deemed excessive or in trading that could interfere with an
associate's job responsibilities.
o Private Placements - Associates are prohibited from
acquiring any security in a private placement unless they
obtain the prior written approval of the Preclearance
Compliance Officer (applicable only to Investment
Associates), the Manager of Corporate Compliance and the
associate's department head. Approval must be given by all
appropriate aforementioned persons for the acquisition to
be considered approved. After receipt of the necessary
approvals and the acquisition, associates are required to
disclose that investment when they participate in any
subsequent consideration of an investment in the issuer for
an advised account. Final decision to acquire such
securities for an advised account will be subject to
independent review.
o Scalping - Associates may not engage in "scalping," that
is, the purchase or sale of securities for their own or
Mellon's accounts on the basis of knowledge of customers'
trading positions or plans or Mellon's forthcoming
investment recommendations.
o Short-Term Trading - Associates are discouraged from
purchasing and selling, or from selling and purchasing, the
same (or equivalent) securities within 60 calendar days.
With respect to Investment Associates only, any profits
realized on such short-term trades must be disgorged in
accordance with procedures established by senior
management.
SECTION SIX
CLASSIFICATION OF ASSOCIATES
Associates are engaged in a wide variety of activities for
Mellon. In light of the nature of their activities and the
impact of federal and state laws and the regulations
thereunder, the Policy imposes different requirements and
limitations on associates based on the nature of their
activities for Mellon. To assist the associates in
complying with the requirements and limitations imposed on
them in light of their activities, associates are
classified into one of three categories: Insider Risk
Associate, Investment Associate and Other Associate.
Appropriate requirements and limitations are specified in
the Policy based upon the associate's classification.
INSIDER RISK ASSOCIATE -
You are considered to be an Insider Risk Associate if you
are:
o employed in any of the following departments or functional
areas, however named, of a Mellon entity other than Dreyfus
(see Glossary for definition of "Dreyfus"):
<TABLE>
<CAPTION>
<S> <C>
- Auditing - International
- Capital Markets - Leasing
- Corporate Affairs - Legal
- Credit Policy - Mellon Business Credit
- Credit Recovery - Middle Market
- Credit Review - Portfolio and Funds Management
- Domestic Corporate Banking - Risk Management and Compliance
- Finance - Strategic Planning
- Institutional Banking - Wholesale, Administration and
Operations
</TABLE>
O a member of the Mellon Senior Management Committee,
provided that those members of the Mellon Senior Management
Committee who have management responsibility for fiduciary
activities or who routinely have access to information
about customers' securities transactions are considered to
be Investment Associates and are subject to those
provisions of the Policy pertaining to Investment
Associates;
o employed by a broker/dealer subsidiary of a Mellon
entity other than Dreyfus;
o an associate in the Stock Transfer business unit and have
been specifically designated as an Insider Risk Associate
by the Manager of Corporate Compliance; or
o an associate specifically designated as an Insider Risk
Associate by the Manager of Corporate Compliance.
INVESTMENT ASSOCIATE -
You are considered to be an Investment Associate if you
are:
o a member of Mellon's Senior Management Committee who, as
part of his/her usual duties, has management responsibility
for fiduciary activities or routinely has access to
information about customers' securities transactions;
o a Dreyfus associate;
o an associate of a Mellon entity registered under the
Investment Advisers Act of 1940;
o employed in the trust area of Mellon and:
- have the title of Vice President, First Vice President
or Senior Vice President; or
- have access to material, confidential information
regarding securities transactions by or on behalf of
Mellon customers; or
o an associate specifically designated as an Investment
Associate by the Manager of Corporate Compliance.
OTHER ASSOCIATE -
You are considered to be an Other Associate if you are an
associate of Mellon Bank Corporation or any of its direct
or indirect subsidiaries who is not either an Insider Risk
Associate or an Investment Associate.
PART II - APPLICABLE TO INSIDER
RISK ASSOCIATES ONLY
- ------------------------------
PROHIBITION ON INVESTMENTS IN SECURITIES OF FINANCIAL
SERVICES ORGANIZATIONS
You are prohibited from acquiring any security issued by a
financial services organization if you are:
o a member of the Mellon Senior Management Committee. For
purposes of this restriction only, this prohibition also
applies to those members of the Mellon Senior Management
Committee who are considered Investment Associates.
o employed in any of the following departments of a Mellon
entity other than Dreyfus (see Glossary for definition of
"Dreyfus"):
- Strategic Planning - Finance
- Institutional Banking - Legal
o an associate specifically designated by the Manager of
Corporate Compliance and informed that this prohibition is
applicable to you.
Financial Services Organizations - The term "security
issued by a financial services organization" includes any
security issued by:
<TABLE>
<CAPTION>
<S> <C>
- Commercial Banks - Bank Holding Companies
(other than Mellon) (other than Mellon)
- Thrifts - Savings and Loan Associations
- Insurance Companies - Broker/Dealers
- Investment Advisory Companies - Transfer Agents
- Shareholder Servicing - Other Depository
Companies Institutions
</TABLE>
The term "securities issued by a financial services
organization" DOES NOT INCLUDE securities issued by mutual
funds, variable annuities or insurance policies. Further,
for purposes of determining whether a company is a
financial services organization, subsidiaries and parent
companies are treated as separate issuers.
Effective Date - The foregoing restrictions will be
effective upon adoption of this Policy. Securities of
financial services organizations properly acquired before
the later of the effective date of this Policy or the date
of hire may be maintained or disposed of at the owner's
discretion.
Additional securities of a financial services organization
acquired through the reinvestment of the dividends paid by
such financial services organization through a dividend
reinvestment program (DRIP) are not subject to this
prohibition, provided your election to participate in the
DRIP predates the later of the effective date of this
Policy or date of hire. Optional cash purchases through a
DRIP are subject to this prohibition.
Within 30 days of the later of the effective date of this
Policy or date of becoming subject to this prohibition, all
holdings of securities of financial services organizations
must be disclosed in writing to the Manager of Corporate
Compliance. Periodically, you will be asked to file an
updated disclosure of all your holdings of securities of
financial services organizations.
CONFLICT OF INTEREST - No Insider Risk Associate may engage
in or recommend any securities transaction that places, or
appears to place, his or her own interests above those of
any customer to whom investment services are rendered,
including mutual funds and managed accounts, or above the
interests of Mellon.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - All
Insider Risk Associates must notify the Manager of
Corporate Compliance in writing and receive preclearance
before they engage in any purchase or sale of a security.
Insider Risk Associates should refer to the provisions
under "Beneficial Ownership" (Section Four, "Restrictions
on Transactions in Mellon Securities"), which are equally
applicable to these provisions.
Exemptions from Requirement to Preclear - Preclearance is
not required for the following transactions:
O purchases or sales of Exempt Securities (see Glossary);
o purchases or sales of municipal bonds;
o purchases or sales effected in any account over which an
associate has no direct or indirect control over the
investment decision-making process (e.g., nondiscretionary
trading accounts). Nondiscretionary trading accounts may
only be maintained, without being subject to preclearance
procedures, when the Manager of Corporate Compliance, after
a thorough review, is satisfied that the account is truly
nondiscretionary;
o transactions that are non-volitional on the part of an
associate (such as stock dividends);
o the sale of stock received upon the exercise of an
associate stock option if the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human
Resources Department (for which the Human Resources
Department will forward information to the Manager of
Corporate Compliance);
o the automatic reinvestment of dividends under a DRIP
(preclearance is required for optional cash purchases under
a DRIP);
o purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to
the extent such rights were acquired from such issuer;
o sales of rights acquired from an issuer, as described
above; and/or
O those situations where the Manager of Corporate Compliance
determines, after taking into consideration the particular
facts and circumstances, that prior approval is not
necessary.
Requests for Preclearance - All requests for preclearance
for a securities transaction shall be submitted to the
Manager of Corporate Compliance by completing a
Preclearance Request Form (see Exhibit C1).
The Manager of Corporate Compliance will notify the Insider
Risk Associate whether the request is approved or denied,
without disclosing the reason for such approval or denial.
Notifications may be given in writing or verbally by the
Manager of Corporate Compliance to the Insider Risk
Associate. A record of such notification will be maintained
by the Manager of Corporate Compliance. However, it shall
be the responsibility of the Insider Risk Associate to
obtain a written record of the Manager of Corporate
Compliance's notification within 24 hours of such
notification. The Insider Risk Associate should retain a
copy of this written record.
As there could be many reasons for preclearance being
granted or denied, Insider Risk Associates should not infer
from the preclearance response anything regarding the
security for which preclearance was requested.
Although making a preclearance request does not obligate an
Insider Risk Associate to do the transaction, it should be
noted that:
o preclearance authorization will expire at the end of the
third business day after it is received (the day
authorization is granted is considered the first business
day);
O preclearance requests should not be made for a
transaction that the Insider Risk Associate does not
intend to make; and
o Insider Risk Associates should not discuss with anyone
else, inside or outside Mellon, the response they received
to a preclearance request.
Every Insider Risk Associate must follow these procedures
or risk serious sanctions, including dismissal. If you have
any questions about these procedures you should consult the
Manager of Corporate Compliance. Interpretive issues that
arise under these procedures shall be decided by, and are
subject to the discretion of, the Manager of Corporate
Compliance.
Restricted List - The Manager of Corporate Compliance will
maintain a list (the "Restricted List") of companies whose
securities are deemed appropriate for implementation of
trading restrictions for Insider Risk Associates.
Restricted List(s) will not be distributed outside of the
Risk Management and Compliance Department. From time to
time, such trading restrictions may be appropriate to
protect Mellon and its Insider Risk Associates from
potential violations, or the appearance of violations, of
securities laws. The inclusion of a company on the
Restricted List provides no indication of the advisability
of an investment in the company's securities or the
existence of material nonpublic information on the company.
Nevertheless, the contents of the Restricted List will be
treated as confidential information to avoid unwarranted
inferences.
To assist the Manager of Corporate Compliance in
identifying companies that may be appropriate for inclusion
on the Restricted List, the department heads of sections in
which Insider Risk Associates are employed will inform the
Manager of Corporate Compliance in writing of any companies
they believe should be included on the Restricted List,
based upon facts known or readily available to such
department heads. Although the reasons for inclusion on the
Restricted List may vary, they could typically include the
following:
o Mellon is involved as a lender, investor or adviser in a
merger, acquisition or financial restructuring involving
the company;
o Mellon is involved as a selling shareholder in a public
distribution of the company's securities;
o Mellon is involved as an agent in the distribution of the
company's securities;
o Mellon has received material nonpublic information on the
company;
o Mellon is considering the exercise of significant
creditors' rights against the company; or
o The company is a Mellon borrower in Credit Recovery.
Department heads of sections in which Insider Risk
Associates are employed are also responsible for notifying
the Manager of Corporate Compliance in writing of any
change in circumstances making it appropriate to remove a
company from the Restricted List.
PERSONAL SECURITIES TRANSACTIONS REPORTS
o Brokerage Accounts - All Insider Risk Associates are
required to instruct their brokers to submit directly to
the Manager of Corporate Compliance copies of all trade
confirmations and statements relating to their account. An
example of an instruction letter to a broker is contained
in Exhibit B1.
o Report of Transactions in Mellon Securities - Insider Risk
Associates must also report in writing to the Manager of
Corporate Compliance within ten calendar days whenever they
purchase or sell Mellon securities if the transaction was
not through a brokerage account as described above.
Purchases and sales of Mellon securities include the
following:
DRIP Optional Cash Purchases - Optional cash purchases
under Mellon's Dividend Reinvestment and Common Stock
Purchase Plan (the "Mellon DRIP").
Stock Options - The sale of stock received upon the
exercise of an associate stock option unless the sale is
part of a "netting of shares" or "cashless exercise"
administered by the Human Resources Department (for which
the Human Resources Department will forward information to
the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under
the DRIP, changes in elections under Mellon's Retirement
Savings Plan, the receipt of stock under Mellon's
Restricted Stock Award Plan and the receipt or exercise of
options under Mellon's Long-Term Profit Incentive Plan are
not considered purchases or sales for the purpose of this
reporting requirement.
An example of a written report to the Manager of Corporate
Compliance is contained in Exhibit A.
CONFIDENTIAL TREATMENT
THE MANAGER OF CORPORATE COMPLIANCE WILL USE HIS OR HER
BEST EFFORTS TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE,
ALL PERSONAL SECURITIES TRANSACTION REPORTS AND ALL REPORTS
OF SECURITIES HOLDINGS ARE TREATED AS "PERSONAL AND
CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE AVAILABLE
FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND BY
OTHER PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO
EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
PART III - APPLICABLE TO
INVESTMENT ASSOCIATES ONLY
- ------------------------------
Because of their particular responsibilities, Investment
Associates are subject to different preclearance and
personal securities reporting requirements as discussed
below.
SPECIAL STANDARDS OF CONDUCT FOR INVESTMENT ASSOCIATES
Conflict of Interest - No Investment Associate may
recommend a securities transaction for a Mellon customer to
whom a fiduciary duty is owed, or for Mellon, without
disclosing any interest he or she has in such securities or
issuer (other than an interest in publicly traded
securities where the total investment is equal to or less
than $25,000), including:
o any direct or indirect beneficial ownership of any
securities of such issuer;
o any contemplated transaction by the Investment Associate in
such securities;
o any position with such issuer or its affiliates; and
o any present or proposed business relationship between such
issuer or its affiliates and the Investment Associate or
any party in which the Investment Associate has a
beneficial ownership interest (see "Beneficial Ownership"
in Section Four, "Restrictions On Transactions in Mellon
Securities").
Portfolio Information - No Investment Associate may divulge
the current portfolio positions, or current or anticipated
portfolio transactions, programs or studies, of Mellon or
any Mellon customer to anyone unless it is properly within
his or her job responsibilities to do so.
Material Nonpublic Information - No Investment Associate
may engage in or recommend a securities transaction, for
his or her own benefit or for the benefit of others,
including Mellon or its customers, while in possession of
material nonpublic information regarding such securities.
No Investment Associate may communicate material nonpublic
information to others unless it is properly within his or
her job responsibilities to do so.
Short-Term Trading - Any Investment Associate who purchases
and sells, or sells and purchases, the same (or equivalent)
securities within any 60-calendar-day period is required to
disgorge all profits realized on such transaction in
accordance with procedures established by senior
management. For this purpose, securities will be deemed to
be equivalent if one is convertible into the other, if one
entails a right to purchase or sell the other, or if the
value of one is expressly dependent on the value of the
other (e.g., derivative securities).
Additional Restrictions For Dreyfus Associates and
Associates of Mellon Entities Registered Under The
Investment Advisers Act of 1940 ONLY ("40 Act
Associates")
o Outside Activities - No 40 Act associate may serve on the
board of directors/trustees or as a general partner of any
publicly traded company (other than Mellon) without the
prior approval of the Manager of Corporate Compliance.
o Gifts - All 40 Act associates are prohibited from accepting
gifts from outside companies, or their representatives,
with an exception for gifts of (1) a de minimis value and
(2) an occasional meal, a ticket to a sporting event or the
theater, or comparable entertainment for the 40 Act
associate and, if appropriate, a guest, which is neither so
frequent nor extensive as to raise any question of
impropriety. A gift shall be considered de minimis if it
does not exceed an annual amount per person fixed
periodically by the National Association of Securities
Dealers, which is currently $100 per person.
o Blackout Period - 40 Act associates will not be given
clearance to execute a transaction in any security that is
being considered for purchase or sale by an affiliated
investment company, managed account or trust, for which a
pending buy or sell order for such affiliated account is
pending, and for two business days after the transaction in
such security for such affiliated account has been
effected. This provision does not apply to transactions
effected or contemplated by index funds.
In addition, portfolio managers for the investment
companies are prohibited from buying or selling a security
within seven calendar days before and after such investment
company trades in that security. Any violation of the
foregoing will require the violator to disgorge all profit
realized with respect to such transaction.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - All
Investment Associates must notify the Preclearance
Compliance Officer (see Glossary) in writing and receive
preclearance before they engage in any purchase or sale of
a security.
Exemptions from Requirement to Preclear - Preclearance is
not required for the following transactions:
o purchases or sales of "Exempt Securities" (see Glossary);
o purchases or sales effected in any account over which an
associate has no direct or indirect control over the
investment decision-making process (i.e., nondiscretionary
trading accounts). Nondiscretionary trading accounts may
only be maintained, without being subject to preclearance
procedures, when the Preclearance Compliance Officer, after
a thorough review, is satisfied that the account is truly
nondiscretionary;
O transactions which are non-volitional on the part of an
associate (such as stock dividends);
o the sale of stock received upon the exercise of an
associate stock option if the sale is part of a "netting of
shares" or "cashless exercise" administered by the Human
Resources Department (for which the Human Resources
Department will forward information to the manager of
Corporate Compliance);
o purchases which are part of an automatic reinvestment of
dividends under a DRIP (Preclearance is required for
optional cash purchases under a DRIP);
o purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to
the extent such rights were acquired from such issuer;
o sales of rights acquired from an issuer, as described
above; and/or
o those situations where the Preclearance Compliance Officer
determines, after taking into consideration the particular
facts and circumstances, that prior approval is not
necessary.
Requests for Preclearance - All requests for preclearance
for a securities transaction shall be submitted to the
Preclearance Compliance Officer by completing a
Preclearance Request Form. (Investment Associates other
than Dreyfus associates are to use the Preclearance Request
Form shown as Exhibit C1. Dreyfus associates are to use the
Preclearance Request Form shown as Exhibit C2.)
The Preclearance Compliance Officer will notify the
Investment Associate whether the request is approved or
denied without disclosing the reason for such approval or
denial.
Notifications may be given in writing or verbally by the
Preclearance Compliance Officer to the Investment
Associate. A record of such notification will be maintained
by the Preclearance Compliance Officer. However, it shall
be the responsibility of the Investment Associate to obtain
a written record of the Preclearance Compliance Officer's
notification within 24 hours of such notification. The
Investment Associate should retain a copy of this written
record.
As there could be many reasons for preclearance being
granted or denied, Investment Associates should not infer
from the preclearance response anything regarding the
security for which preclearance was requested.
Although making a preclearance request does not obligate an
Investment Associate to do the transaction, it should be
noted that:
o preclearance authorization will expire at the end of the
day on which preclearance is given;
o preclearance requests should not be made for a transaction
that the Investment Associate does not intend to make; and
o Investment Associates should not discuss with anyone else,
inside or outside Mellon, the response the Investment
Associate received to a preclearance request.
Every Investment Associate must follow these procedures or
risk serious sanctions, including dismissal. If you have
any questions about these procedures, consult the
Preclearance Compliance Officer. Interpretive issues that
arise under these procedures shall be decided by, and are
subject to the discretion of, the Manager of Corporate
Compliance.
Restricted List - Each Preclearance Compliance Officer will
maintain a list (the "Restricted List") of companies whose
securities are deemed appropriate for implementation of
trading restrictions for Investment Associates in their
area. From time to time, such trading restrictions may be
appropriate to protect Mellon and its Investment Associates
from potential violations, or the appearance of violations,
of securities laws. The inclusion of a company on the
Restricted List provides no indication of the advisability
of an investment in the company's securities or the
existence of material nonpublic information on the company.
Nevertheless, the contents of the Restricted List will be
treated as confidential information in order to avoid
unwarranted inferences.
In order to assist the Preclearance Compliance Officer in
identifying companies that may be appropriate for inclusion
on the Restricted List, the head of the
entity/department/area in which Investment Associates are
employed will inform the appropriate Preclearance
Compliance Officer in writing of any companies that they
believe should be included on the Restricted List based
upon facts known or readily available to such department
heads.
PERSONAL SECURITIES TRANSACTIONS REPORTS
o Brokerage Accounts - All Investment Associates are required
to instruct their brokers to submit directly to the Manager
of Corporate Compliance copies of all trade confirmations
and statements relating to their account. Examples of
instruction letters to a broker are contained in Exhibits
B1 and B2.
o Report of Transactions in Mellon Securities - Investment
Associates must also report in writing to the Manager of
Corporate Compliance within ten calendar days whenever they
purchase or sell Mellon securities if the transaction was
not through a brokerage account as described above.
Purchases and sales of Mellon securities include the
following:
DRIP Optional Cash Purchases - Optional cash purchases
under Mellon's Dividend Reinvestment and Common Stock
Purchase Plan (the "Mellon DRIP").
Stock Options - The sale of stock received upon the
exercise of an associate stock option unless the sale is
part of a "netting of shares" or "cashless exercise"
administered by the Human Resources Department (for which
the Human Resources Department will forward information to
the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under
the DRIP, changes in elections under Mellon's Retirement
Savings Plan, the receipt of stock under Mellon's
Restricted Stock Award Plan, and the receipt or exercise of
options under Mellon's Long-Term Profit Incentive Plan are
not considered purchases or sales for the purpose of this
reporting requirement.
An example of a written report to the Manager of Corporate
Compliance is contained in Exhibit A.
o Statement of Securities Holdings - Within ten days of
receiving this Policy and on an annual basis thereafter,
all Investment Associates must submit to the Manager of
Corporate Compliance a statement of all securities in which
they presently have any direct or indirect beneficial
ownership other than Exempt Securities, as defined in the
Glossary. Investment Associates should refer to "Beneficial
Ownership" in Section Four, "Restrictions on Transactions
in Mellon Securities," which is also applicable to
Investment Associates. Such statements should be in the
format shown in Exhibit D. The annual report must be
submitted by January 31 and must report all securities
holdings other than Exempt Securities. The annual statement
of securities holdings contains an acknowledgment that the
Investment Associate has read and complied with this
Policy.
o Special Requirement with Respect to Affiliated Investment
Companies - The portfolio managers, research analysts and
other Investment Associates specifically designated by the
Manager of Corporate Compliance are required within ten
calendar days of receiving this Policy (and by no later
than ten calendar days after the end of each calendar
quarter) to report every transaction in the securities
issued by an affiliated investment company occurring in an
account in which the Investment Associate has a beneficial
ownership interest. The quarterly reporting requirement may
be satisfied by notifying the Manager of Corporate
Compliance of the name of the investment company, account
name and account number for which such quarterly reports
must be submitted.
CONFIDENTIAL TREATMENT
THE PRECLEARANCE COMPLIANCE OFFICER WILL USE HIS OR HER
BEST EFFORTS TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE,
ALL PERSONAL SECURITIES TRANSACTION REPORTS AND ALL REPORTS
OF SECURITIES HOLDINGS ARE TREATED AS "PERSONAL AND
CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE AVAILABLE
FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES, AND BY
OTHER PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO
EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
DOCUMENTS RECEIVED FROM DREYFUS ASSOCIATES ARE ALSO
AVAILABLE FOR INSPECTION BY THE BOARDS OF DIRECTORS OF
DREYFUS AND BY THE BOARDS OF DIRECTORS (OR TRUSTEES OR
MANAGING GENERAL PARTNERS, AS APPLICABLE) OF THE INVESTMENT
COMPANIES MANAGED OR ADMINISTERED BY DREYFUS.
PART IV - APPLICABLE TO
OTHER ASSOCIATES ONLY
- ------------------------------
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS - Except
for private placements, Other Associates are permitted to
engage in personal securities transactions without
obtaining prior approval from the Manager of Corporate
Compliance (for preclearance of private placements, use the
Preclearance Request Form shown as Exhibit C1.)
PERSONAL SECURITIES TRANSACTIONS REPORTS - Other Associates
are not required to report their personal securities
transactions other than margin transactions and
transactions involving Mellon securities as discussed
below. Other Associates are required to instruct their
brokers to submit directly to the Manager of Corporate
Compliance copies of all confirmations and statements
pertaining to margin accounts. Examples of an instruction
letter to a broker are shown in Exhibit B1.
Report of Transactions in Mellon Securities - Other
Associates must report in writing to the Manager of
Corporate Compliance within ten calendar days whenever they
purchase or sell Mellon securities. Purchases and sales of
Mellon securities include the following:
o DRIP Optional Cash Purchases - Optional cash purchases
under Mellon's Dividend Reinvestment and Common Stock
Purchase Plan (the "Mellon DRIP").
o Stock Options - The sale of stock received upon the
exercise of an associate stock option unless the sale is
part of a "netting of shares" or "cashless exercise"
administered by the Human Resources Department (for which
the Human Resources Department will forward information to
the Manager of Corporate Compliance).
It should be noted that the reinvestment of dividends under
the DRIP, changes in elections under Mellon's Retirement
Savings Plan, the receipt of stock under Mellon's
Restricted Stock Award Plan and the receipt or exercise of
options under Mellon's Long-Term Profit Incentive Plan are
not considered purchases or sales for the purpose of this
reporting requirement.
An example of a written report to the Manager of Corporate
Compliance is contained in Exhibit A.
RESTRICTIONS ON TRANSACTIONS IN OTHER SECURITIES
Margin Transactions - Prior to establishing a margin
account, Other Associates must obtain the written
permission of the Manager of Corporate Compliance. Other
Associates having a margin account prior to the effective
date of this Policy must notify the Manager of Corporate
Compliance of the existence of such account.
All associates having margin accounts, other than described
below, must designate the Manager of Corporate Compliance
as an interested party on each account. Associates must
ensure that the Manager of Corporate Compliance promptly
receives copies of all trade confirmations and statements
relating to the accounts directly from the broker. If
requested by a brokerage firm, please contact the Manager
of Corporate Compliance to obtain a letter (sometimes
referred to as a "407 letter") granting permission to
maintain a margin account. Trade confirmations and
statements are not required on margin accounts established
at Dreyfus Investment Services Corporation for the sole
purpose of cashless exercises of Mellon employee stock
options. In addition, products may be offered by a
broker/dealer that, because of their characteristics, are
considered margin accounts but have been determined by the
Manager of Corporate Compliance to be outside the scope of
this Policy (e.g., a Cash Management account which provides
overdraft protection for the customer). Any questions
regarding the establishment, use and reporting of margin
accounts should be directed to the Manager of Corporate
Compliance. An example of an instruction letter to a broker
is shown in Exhibit B1.
Private Placements - Other Associates are prohibited from
acquiring any security in a private placement unless they
obtain the prior written approval of the Manager of
Corporate Compliance and the Associate's department head.
Approval must be given by both of the aforementioned
persons for the acquisition to be considered approved.
As there could be many reasons for preclearance being
granted or denied, Other Associates should not infer from
the preclearance response anything regarding the security
for which preclearance was requested.
Although making a preclearance request does not obligate an
Other Associate to do the transaction, it should be noted
that:
o preclearance authorization will expire at the end of the
third business day after it is received (the day
authorization is granted is considered the first business
day);
o preclearance requests should not be made for a transaction
that the Other Associate does not intend to make; and
o Other Associates should not discuss with anyone else,
inside or outside Mellon, the response they received to a
preclearance request.
Every Other Associate must follow these procedures or risk
serious sanctions, including dismissal. If you have any
questions about these procedures you should consult the
Manager of Corporate Compliance. Interpretive issues that
arise under these procedures shall be decided by, and are
subject to the discretion of, the Manager of Corporate
Compliance.
CONFIDENTIAL TREATMENT
THE MANAGER OF CORPORATE COMPLIANCE WILL USE HIS OR HER
BEST EFFORTS TO ASSURE THAT ALL REQUESTS FOR PRECLEARANCE,
ALL PERSONAL SECURITIES TRANSACTION REPORTS AND ALL REPORTS
OF SECURITIES HOLDINGS ARE TREATED AS "PERSONAL AND
CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE AVAILABLE
FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND OTHER
PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO
EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
PART V - APPLICABLE TO
NONMANAGEMENT BOARD MEMBER
- ------------------------------
NONMANAGEMENT BOARD MEMBER -
You are considered to be a Nonmanagement Board Member if
you are:
o a director of Dreyfus who is not also an officer or
employee of Dreyfus ("Dreyfus Board Member"); or
o a director, trustee or managing general partner of any
investment company who is not also an officer or employee
of Dreyfus ("Mutual Fund Board Member").
The term "Independent" Mutual Fund Board Member means those
Mutual Fund Board Members who are not deemed "interested
persons" of an investment company, as defined by the
Investment Company Act of 1940, as amended.
STANDARDS OF CONDUCT FOR NONMANAGEMENT BOARD MEMBER
Outside Activities - Nonmanagement Board Members are
prohibited from:
o accepting nomination or serving as a director, trustee or
managing general partner of an investment company not
advised by Dreyfus, without the express prior approval of
the board of directors of Dreyfus and the board of
directors/trustees or managing general partners of the
pertinent Dreyfus-managed fund(s) for which a Nonmanagement
Board Member serves as a director, trustee or managing
general partner;
o accepting employment with or acting as a consultant to any
person acting as a registered investment adviser to an
investment company without the express prior approval of
the board of directors of Dreyfus;
o owning Mellon securities if the Nonmanagement Board Member
is an "Independent" Mutual Fund Board Member, (since that
would destroy his or her "independent" status); and/or
o buying or selling Mellon's publicly traded securities
during a blackout period, which begins the 16th day of the
last month of each calendar quarter and ends three business
days after Mellon publicly announces the financial results
for that quarter.
Insider Trading and Tipping - The provisions set forth in
Section Two, "Insider Trading and Tipping," are applicable
to Nonmanagement Board Members.
Conflict of Interest - No Nonmanagement Board Member may
recommend a securities transaction for Mellon, Dreyfus or
any Dreyfus-managed fund without disclosing any interest he
or she has in such securities or issuer thereof (other than
an interest in publicly traded securities where the total
investment is less than or equal to $25,000), including:
o any direct or indirect beneficial ownership of any
securities of such issuer;
o any contemplated transaction by the Nonmanagement Board
Member in such securities;
o any position with such issuer or its affiliates; and
o any present or proposed business relationship between such
issuer or its affiliates and the Nonmanagement Board Member
or any party in which the Nonmanagement Board Member has a
beneficial ownership interest (see "Beneficial Ownership",
Section Four, "Restrictions on Transaction in Mellon
Securities").
Portfolio Information - No Nonmanagement Board Member may
divulge the current portfolio positions, or current or
anticipated portfolio transactions, programs or studies, of
Mellon, Dreyfus or any Dreyfus-managed fund, to anyone
unless it is properly within his or her responsibilities as
a Nonmanagement Board Member to do so.
Material Nonpublic Information - No Nonmanagement Board
Member may engage in or recommend any securities
transaction, for his or her own benefit or for the benefit
of others, including Mellon, Dreyfus or any Dreyfus-managed
fund, while in possession of material nonpublic
information. No Nonmanagement Board Member may communicate
material nonpublic information to others unless it is
properly within his or her responsibilities as a
Nonmanagement Board Member to do so.
PRECLEARANCE FOR PERSONAL SECURITIES TRANSACTIONS -
Nonmanagement Board Members are permitted to engage in
personal securities transactions without obtaining prior
approval from the Preclearance Compliance Officer.
PERSONAL SECURITY TRANSACTIONS REPORTS -
o "Independent" Mutual Fund Board Members - Any "Independent"
Mutual Fund Board Members, as defined above, who effects a
securities transaction where he or she knew, or in the
ordinary course of fulfilling his or her official duties
should have known, that during the 15-day period
immediately preceding or after the date of such
transaction, the same security was purchased or sold, or
was being considered for purchase or sale by Dreyfus
(including any investment company or other account managed
by Dreyfus), are required to report such personal
securities transaction. In the event a personal securities
transaction report is required, it must be submitted to the
Preclearance Compliance Officer not later than ten days
after the end of the calendar quarter in which the
transaction to which the report relates was effected. The
report must include the date of the transaction, the title
and number of shares or principal amount of the security,
the nature of the transaction (e.g., purchase, sale or any
other type of acquisition or disposition), the price at
which the transaction was effected and the name of the
broker or other entity with or through whom the transaction
was effected. This reporting requirement can be satisfied
by sending a copy of the confirmation statement regarding
such transactions to the Preclearance Compliance Officer
within the time period specified. Notwithstanding the
foregoing, personal securities transaction reports are not
required with respect to any securities transaction
described in "Exemption from the Requirement to Preclear"
in Part III.
o Dreyfus Board Members and "Interested" Mutual Fund Board
Members - Dreyfus Board Members and Mutual Fund Board
Members who are "interested persons" of an investment
company, as defined by the Investment Company Act of 1940,
are required to report their personal securities
transactions. Personal securities transaction reports are
required with respect to any securities transaction other
than those described in "Exemptions from Requirement to
Preclear" on Page 21. Personal securities transaction
reports are required to be submitted to the Preclearance
Compliance Officer not later than ten days after the end of
the calendar quarter in which the transaction to which the
report relates was effected. The report must include the
date of the transaction, the title and number of shares or
principal amount of the security, the nature of the
transaction (e.g., purchase, sale or any other type of
acquisition or disposition), the price at which the
transaction was effected and the name of the broker or
other entity with or through whom the transaction was
effected. This reporting requirement can be satisfied by
sending a copy of the confirmation statement regarding such
transactions to the Preclearance Compliance Officer within
the time period specified.
CONFIDENTIAL TREATMENT
THE PRECLEARANCE COMPLIANCE OFFICER WILL USE HIS OR HER
BEST EFFORTS TO ASSURE THAT ALL PERSONAL SECURITIES
TRANSACTION REPORTS ARE TREATED AS "PERSONAL AND
CONFIDENTIAL." HOWEVER, SUCH DOCUMENTS WILL BE AVAILABLE
FOR INSPECTION BY APPROPRIATE REGULATORY AGENCIES AND OTHER
PARTIES WITHIN AND OUTSIDE MELLON AS ARE NECESSARY TO
EVALUATE COMPLIANCE WITH OR SANCTIONS UNDER THIS POLICY.
GLOSSARY
- ------------------------------
DEFINITIONS
o APPROVAL - written consent or written notice of
nonobjection.
o ASSOCIATE - any employee of Mellon Bank Corporation or its
direct or indirect subsidiaries; does not include outside
consultants or temporary help.
o BENEFICIAL OWNERSHIP - securities owned of record or held
in the associate's name are generally considered to be
beneficially owned by the associate.
Securities held in the name of any other person are deemed
to be beneficially owned by the associate if by reason of
any contract, understanding, relationship, agreement or
other arrangement, the associate obtains therefrom benefits
substantially equivalent to those of ownership, including
the power to vote, or to direct the disposition of, such
securities. Beneficial ownership includes securities held
by others for the associate's benefit (regardless of record
ownership), e.g. securities held for the associate or
members of the associate's immediate family, defined below,
by agents, custodians, brokers, trustees, executors or
other administrators; securities owned by the associate,
but which have not been transferred into the associate's
name on the books of the company; securities which the
associate has pledged; or securities owned by a corporation
that should be regarded as the associate's personal holding
corporation. As a natural person, beneficial ownership is
deemed to include securities held in the name or for the
benefit of the associate's immediate family, which includes
the associate's spouse, the associate's minor children and
stepchildren and the associate's relatives or the relatives
of the associate's spouse who are sharing the associate's
home, unless because of countervailing circumstances, the
associate does not enjoy benefits substantially equivalent
to those of ownership. Benefits substantially equivalent to
ownership include, for example, application of the income
derived from such securities to maintain a common home,
meeting expenses that such person otherwise would meet from
other sources, and the ability to exercise a controlling
influence over the purchase, sale or voting of such
securities. An associate is also deemed the beneficial
owner of securities held in the name of some other person,
even though the associate does not obtain benefits of
ownership, if the associate can vest or revest title in
himself at once, or at some future time.
In addition, a person will be deemed the beneficial owner
of a security if he has the right to acquire beneficial
ownership of such security at any time (within 60 days)
including but not limited to any right to acquire: (1)
through the exercise of any option, warrant or right; (2)
through the conversion of a security; or (3) pursuant to
the power to revoke a trust, nondiscretionary account or
similar arrangement.
With respect to ownership of securities held in trust,
beneficial ownership includes ownership of securities as a
trustee in instances where either the associate as trustee
or a member of the associate's "immediate family" has a
vested interest in the income or corpus of the trust, the
ownership by the associate of a vested beneficial interest
in the trust and the ownership of securities as a settlor
of a trust in which the associate as the settlor has the
power to revoke the trust without obtaining the consent of
the beneficiaries. Certain exemptions to these trust
beneficial ownership rules exist, including an exemption
for instances where beneficial ownership is imposed solely
by reason of the associate being settlor or beneficiary of
the securities held in trust and the ownership, acquisition
and disposition of such securities by the trust is made
without the associate's prior approval as settlor or
beneficiary. "Immediate family" of an associate as trustee
means the associate's son or daughter (including any
legally adopted children) or any descendant of either, the
associate's stepson or stepdaughter, the associate's father
or mother or any ancestor of either, the associate's
stepfather or stepmother and his spouse.
To the extent that stockholders of a company use it as a
personal trading or investment medium and the company has
no other substantial business, stockholders are regarded as
beneficial owners, to the extent of their respective
interests, of the stock thus invested or traded in. A
general partner in a partnership is considered to have
indirect beneficial ownership in the securities held by the
partnership to the extent of his pro rata interest in the
partnership. Indirect beneficial ownership is not, however,
considered to exist solely by reason of an indirect
interest in portfolio securities held by any holding
company registered under the Public Utility Holding Company
Act of 1935, a pension or retirement plan holding
securities of an issuer whose employees generally are
beneficiaries of the plan and a business trust with over 25
beneficiaries.
Any person who, directly or indirectly, creates or uses a
trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement or device with the purpose or
effect of divesting such person of beneficial ownership as
part of a plan or scheme to evade the reporting
requirements of the Securities Exchange Act of 1934 shall
be deemed the beneficial owner of such security.
The final determination of beneficial ownership is a
question to be determined in light of the facts of a
particular case. Thus, while the associate may include
security holdings of other members of his family, the
associate may nonetheless disclaim beneficial ownership of
such securities.
o "CHINESE WALL" POLICY - procedures designed to restrict the
flow of information within Mellon from units or individuals
who are likely to receive material nonpublic information to
units or individuals who trade in securities or provide
investment advice. (see pages 12-14).
o CORPORATION - Mellon Bank Corporation.
o DREYFUS - The Dreyfus Corporation and its subsidiaries.
o DREYFUS ASSOCIATE - any employee of Dreyfus; does not
include outside consultants or temporary help.
o EXEMPT SECURITIES - Exempt Securities are defined as:
- securities issued or guaranteed by the United States
government or agencies or instrumentalities;
- bankers' acceptances;
- bank certificates of deposit and time deposits;
- commercial paper;
- repurchase agreements; and
- securities issued by open-end investment companies.
o GENERAL COUNSEL - General Counsel of Mellon Bank
Corporation or any person to whom relevant authority is
delegated by the General Counsel.
o INDEX FUND - an investment company which seeks to mirror
the performance of the general market by investing in the
same stocks (and in the same proportion) as a broad-based
market index.
o INITIAL PUBLIC OFFERING (IPO) - the first offering of a
company's securities to the public.
o INVESTMENT COMPANY - a company that issues securities that
represent an undivided interest in the net assets held by
the company. Mutual funds are investment companies that
issue and sell redeemable securities representing an
undivided interest in the net assets of the company.
o MANAGER OF CORPORATE COMPLIANCE - - the associate within
the Risk Management and Compliance Department of Mellon
Bank Corporation who is responsible for administering the
Confidential Information and Securities Trading Policy, or
any person to whom relevant authority is delegated by the
Manager of Corporate Compliance.
o MELLON - Mellon Bank Corporation and all of its direct and
indirect subsidiaries.
o NAKED OPTION - an option sold by the investor which
obligates him or her to sell a security which he or she
does not own.
o NONDISCRETIONARY TRADING ACCOUNT - an account over which
the associated person has no direct or indirect control
over the investment decision-making process.
o OPTION - a security which gives the investor the right but
not the obligation to buy or sell a specific security at a
specified price within a specified time.
o PRECLEARANCE COMPLIANCE OFFICER - a person designated by
the Manager of Corporate Compliance, to administer, among
other things, associates' preclearance request for a
specific business unit.
o PRIVATE PLACEMENT - an offering of securities that is
exempt from registration under the Securities Act of 1933
because it does not constitute a public offering.
o SENIOR MANAGEMENT COMMITTEE - the Senior Management
Committee of Mellon Bank Corporation.
o SHORT SALE - the sale of a security that is not owned by
the seller at the time of the trade.
INDEX OF EXHIBITS
- ------------------------------
EXHIBIT A SAMPLE REPORT TO MANAGER OF CORPORATE COMPLIANCE
EXHIBIT B SAMPLE INSTRUCTION LETTER TO BROKER
EXHIBIT C PRECLEARANCE REQUEST FORM
EXHIBIT D PERSONAL SECURITIES HOLDINGS FORM
<PAGE>
EXHIBIT A
- ------------------------------
SAMPLE REPORT TO MANAGER OF CORPORATE COMPLIANCE
- --------------------------------------------------------------------------------
MELLON INTEROFFICE
MEMORANDUM
Date: From: Associate
To: Manager, Corporate Compliance Dept:
Aim #:
Aim #: 151-4342 Phone:
Fax:
- --------------------------------------------------------------------------------
RE: REPORT OF SECURITIES TRADE
Type of Associate: ____________ Insider Risk
____________ Investment
____________ Other
Type of Security: ____________ Mellon Bank Corporation
____________ Mellon Bank Corporation - optional
cash purchases under Dividend
Reinvestment and Common Stock
Purchase Plan
____________ Mellon Bank Corporation - exercise
of an employee stock option
Attached is a copy of the confirmation slip for a securities trade I
engaged in on _____________________, 19xx.
or
On _____________________, 19xx, I (purchased/sold)__________________
shares of ___________________________ through (broker). I will
arrange to have a copy of the confirmation slip for this trade
delivered to you as soon as possible.
<PAGE>
EXHIBIT B1
- ------------------------------
FOR NON-DREYFUS ASSOCIATES
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm
noted above, please be advised that the Risk Management and
Compliance Department of Mellon Bank should be noted as an
"Interested Party" with respect to my accounts. They should,
therefore, be sent copies of all trade confirmations and account
statements relating to my account.
Please send the requested documentation ensuring the account
holder's name appears on all correspondence to:
Manager, Corporate Compliance
Mellon Bank
P.O. Box 3130
Pittsburgh, PA 15230-3130
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Manager, Corporate Compliance (151-4342)
<PAGE>
EXHIBIT B2
- ------------------------------
FOR DREYFUS ASSOCIATES
Date
Broker ABC
Street Address
City, State ZIP
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm
noted above, please be advised that the Risk Management and
Compliance Department of Dreyfus Corporation should be noted as an
"Interested Party" with respect to my accounts. They should,
therefore, be sent copies of all trade confirmations and account
statements relating to my account.
Please send the requested documentation ensuring the account
holder's name appears on all correspondence to:
Compliance Officer at The Dreyfus Corporation
200 Park Avenue
Legal Department
New York, NY 10166
Thank you for your cooperation in this request.
Sincerely yours,
Associate
cc: Dreyfus Compliance
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
EXHIBIT C1
- ------------------------------
PRECLEARANCE REQUEST FORM Non Dreyfus Associates
====================================================================================================
To: Manager, Corporate Compliance 151-4342 (All Insider and Other Associates)
Designated Preclearance Compliance Officer (All Investment Associates excluding Dreyfus)
- ----------------------------------------------------------------------------------------------------
Associate Name: Title: Date:
- ----------------------------------------------------------------------------------------------------
Phone #: AIM #: Social Security #: Department:
- ----------------------------------------------------------------------------------------------------
====================================================================================================
ACCOUNT INFORMATION
- ----------------------------------------------------------------------------------------------------
Account Name: Account Number: Name of Broker/Bank:
- ----------------------------------------------------------------------------------------------------
Relationship to registered owner(s) (if other than associate)
- ----------------------------------------------------------------------------------------------------
I hereby request approval to execute the following trade in the above account:
====================================================================================================
TRANSACTION DETAIL
- ----------------------------------------------------------------------------------------------------
Buy: Sell: Security/Contract: No. of Shares:
- ----------------------------------------------------------------------------------------------------
If sale, date acquired: Margin Transaction: Initial Public Offering: Private Placement:
/ / Yes / / Yes / / Yes
- ----------------------------------------------------------------------------------------------------
====================================================================================================
DISCLOSURE STATEMENT
- ----------------------------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge, neither I nor the registered account holder is
(1) attempting to benefit personally from any existing business relationship between the issuer and
Mellon or any Mellon-related fund or affiliate; (2) engaging in any manipulative or deceptive
trading activity; (3) in possession of any material non-public information concerning the security
to which is request relates.
- ----------------------------------------------------------------------------------------------------
Associate Signature: Date:
- ----------------------------------------------------------------------------------------------------
====================================================================================================
COMPLIANCE OFFICER USE ONLY
- ----------------------------------------------------------------------------------------------------
Approved: Disapproved: Authorized Signatory: Date:
- ----------------------------------------------------------------------------------------------------
Comments:
- ----------------------------------------------------------------------------------------------------
Note: This preclearance will lapse at the end of the day on __________________, 19__.
If you decide not to effect the trade, please notify me.
- ----------------------------------------------------------------------------------------------------
Date: By:
- ----------------------------------------------------------------------------------------------------
<PAGE>
EXHIBIT C2
- ------------------------------
PRECLEARANCE REQUEST FORM Dreyfus Associates Only
====================================================================================================
To: Dreyfus Compliance Officer
- ----------------------------------------------------------------------------------------------------
Associate Name: Title: Date:
- ----------------------------------------------------------------------------------------------------
Phone #: AIM #: Social Security #: Department:
- ----------------------------------------------------------------------------------------------------
====================================================================================================
ACCOUNT INFORMATION
- ----------------------------------------------------------------------------------------------------
Account Name: Account Number: Name of Broker/Bank:
- ----------------------------------------------------------------------------------------------------
Relationship to registered owner(s) (if other than associate)
- ----------------------------------------------------------------------------------------------------
I hereby request approval to execute the following trade in the above account:
====================================================================================================
TRANSACTION DETAIL
- ----------------------------------------------------------------------------------------------------
Buy: Sell: Security/Contract: Symbol:
- ----------------------------------------------------------------------------------------------------
Amount: Current Market Price: If sale, date acquired: Margin Transaction:
- ----------------------------------------------------------------------------------------------------
Is this a New Issue? Is this a Private Placement?
/ / Yes / / No / / Yes / / No
- ----------------------------------------------------------------------------------------------------
Reason for Transaction, identify source:
- ----------------------------------------------------------------------------------------------------
====================================================================================================
DISCLOSURE STATEMENT
- ----------------------------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge, neither I nor the registered account holder is
(1) attempting to benefit personally from any existing business relationship between the issuer and
Mellon or any Mellon-related fund or affiliate; (2) engaging in any manipulative or deceptive
trading activity; (3) in possession of any material non-public information concerning the security
to which is request relates.
- ----------------------------------------------------------------------------------------------------
Associate Signature: Date:
- ----------------------------------------------------------------------------------------------------
====================================================================================================
COMPLIANCE OFFICER USE ONLY
- ----------------------------------------------------------------------------------------------------
Approved: Disapproved: Authorized Signatory: Date:
- ----------------------------------------------------------------------------------------------------
Comments:
- ----------------------------------------------------------------------------------------------------
Note: This preclearance will lapse at the end of the day on __________________, 19__.
If you decide not to effect the trade, please notify me.
- ----------------------------------------------------------------------------------------------------
Date: By:
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT D1
- ------------------------------
Return to: Manager, Corporate Compliance
Mellon Bank
P.O. Box 3130
Pittsburgh, PA 15230-3130
STATEMENT OF SECURITY HOLDINGS
As of
1. List of all securities in which you, your immediate family, any other
member of your immediate household, or any trust or estate of which you
or your spouse is a trustee or fiduciary or beneficiary, or of which your
minor child is a beneficiary, or any person for whom you direct or effect
transactions under a power of attorney or otherwise, maintain a
beneficial ownership - (see Glossary in Policy). If none, write NONE.
Securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities, bankers' acceptances, bank certificates of deposit and
time deposits, commercial paper, repurchase agreements and shares of
registered investment companies need not be listed. IF YOUR LIST IS
EXTENSIVE, PLEASE ATTACH A COPY OF THE MOST RECENT STATEMENT FROM YOUR
BROKER(S), RATHER THAN LIST THEM ON THIS FORM.
-----------------------------------------------------------------------------
NAME OF SECURITY TYPE OF SECURITY AMOUNT OF SHARES
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
2. List the names and addresses of any broker/dealers holding accounts in
which you have a beneficial interest, including the name of your
registered representative (if applicable), the account registration and
the relevant account numbers. If none, write NONE.
-----------------------------------------------------------------------------
BROKER/ ADDRESS NAME OF ACCOUNT ACCOUNT
DEALER REGISTERED REGISTRATION NUMBER(S)
REPRESENTATIVE
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
I certify that the statements made by me on this form are true, complete and
correct to the best of my knowledge and belief, and are made in good faith. I
acknowledge I have read, understood and complied with the Confidential
Information and Securities Trading Policy.
-----------------------------------------------------------------------------
Date: Printed Name:
-----------------------------------------------------------------------------
Signature:
-----------------------------------------------------------------------------
<PAGE>
EXHIBIT D2
- ------------------------------
Return to: Compliance Officer at the Dreyfus Corporation
200 Park Avenue
Legal Department
New York, NY 10166
STATEMENT OF SECURITY HOLDINGS
As of
1. List of all securities in which you, your immediate family, any other
member of your immediate household, or any trust or estate of which you
or your spouse is a trustee or fiduciary or beneficiary, or of which your
minor child is a beneficiary, or any person for whom you direct or effect
transactions under a power of attorney or otherwise, maintain a
beneficial interest. If none, write NONE. Securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities, bankers'
acceptances, bank certificates of deposit and time deposits, commercial
paper, repurchase agreements and shares of registered investment
companies need not be listed. IF YOUR LIST IS EXTENSIVE, PLEASE ATTACH A
COPY OF THE MOST RECENT STATEMENT FROM YOUR BROKER(S), RATHER THAN LIST
THEM ON THIS FORM.
-----------------------------------------------------------------------------
NAME OF SECURITY TYPE OF SECURITY AMOUNT OF SHARES
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
2. List the names and addresses of any broker/dealers holding accounts in
which you have a beneficial interest, including the name of your
registered representative (if applicable), the account registration and
the relevant account numbers. If none, write NONE.
-----------------------------------------------------------------------------
BROKER/ ADDRESS NAME OF ACCOUNT ACCOUNT
DEALER REGISTERED REGISTRATION NUMBER(S)
REPRESENTATIVE
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
I certify that the statements made by me on this form are true, complete and
correct to the best of my knowledge and belief, and are made in good faith. I
acknowledge I have read, understood and complied with the Confidential
Information and Securities Trading Policy.
-----------------------------------------------------------------------------
Date: Printed Name:
-----------------------------------------------------------------------------
Signature:
-----------------------------------------------------------------------------
Item 24.(b)
Other Exhibits (a)
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Mark N. Jacobs, Steven F.
Newman, Michael A. Rosenberg, John B. Hammalian, Jeff Prusnofsky, Robert R.
Mullery, Janette E. Farragher, and Mark Kornfeld, and each of them, with full
power to act without the other, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her, and
in his or her name, place and stead, in any and all capacities (until revoked in
writing) to sign any and all amendments to the Registration Statement of General
Municipal Money Market Funds, Inc. (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 or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
/s/ Clifford L. Alexander March 16, 2000
- ---------------------------------------
Clifford L. Alexander
/s/ Peggy C. Davis March 16, 2000
- ------------------------------------------
Peggy C. Davis
/s/ Joseph S. DiMartino March 16, 2000
- --------------------------------------
Joseph S. DiMartino
/s/ Ernest Kafka March 16, 2000
- ------------------------------------------
Ernest Kafka
/s/ Nathan Leventhal March 16, 2000
- ---------------------------------------
Nathan Leventhal
POWER OF ATTORNEY
The undersigned hereby each constitute and appoint Mark N. Jacobs, Steven
F. Newman, Michael A. Rosenberg, Jeff Prusnofsky, Robert R. Mullery, Janette
Farragher, Mark Kornfeld, and John B. Hammalian, and each of them, with full
power to act without the other, her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for her, and in her name,
place and stead, in any and all capacities (until revoked in writing) to sign
any and all amendments to the Registration Statement of each Fund enumerated on
Exhibit A hereto (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 or her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
/s/ Stephen E. Canter March 22, 2000
Stephen E. Canter
President
/s/ Joseph W. Connolly March 22, 2000
Joseph W. Connolly
Vice President and Treasurer
EXHIBIT A
1) Dreyfus A Bonds Plus, Inc.
2) Dreyfus Appreciation Fund, Inc.
3) Dreyfus Balanced Fund, Inc.
4) Dreyfus BASIC GNMA Fund
5) Dreyfus BASIC Money Market Fund, Inc.
6) Dreyfus BASIC Municipal Fund, Inc.
7) Dreyfus BASIC U.S. Government Money Market Fund
8) Dreyfus California Intermediate Municipal Bond Fund
9) Dreyfus California Tax Exempt Bond Fund, Inc.
10) Dreyfus California Tax Exempt Money Market Fund
11) Dreyfus Cash Management
12) Dreyfus Cash Management Plus, Inc.
13) Dreyfus Connecticut Intermediate Municipal Bond Fund
14) Dreyfus Connecticut Municipal Money Market Fund, Inc.
15) Dreyfus Florida Intermediate Municipal Bond Fund
16) Dreyfus Florida Municipal Money Market Fund
17) Dreyfus Founders Funds, Inc.
18) The Dreyfus Fund Incorporated
19) Dreyfus Global Bond Fund, Inc.
20) Dreyfus Global Growth Fund
21) Dreyfus GNMA Fund, Inc.
22) Dreyfus Government Cash Management Funds
23) Dreyfus Growth and Income Fund, Inc.
24) Dreyfus Growth and Value Funds, Inc.
25) Dreyfus Growth Opportunity Fund, Inc.
26) Dreyfus Debt and Equity Funds
27) Dreyfus Index Funds, Inc.
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Preferred Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Funds, Inc.
34) Dreyfus Investment Grade Bond Funds, Inc.
35) Dreyfus Investment Portfolios
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus MidCap Index Fund
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Municipal Cash Management
54) Dreyfus New York Tax Exempt Bond Fund, Inc.
55) Dreyfus New York Tax Exempt Intermediate Bond Fund
56) Dreyfus New York Tax Exempt Money Market Fund
57) Dreyfus U.S. Treasury Intermediate Term Fund
58) Dreyfus U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Premier California Municipal Bond Fund
64) Dreyfus Premier Equity Funds, Inc.
65) Dreyfus Premier International Funds, Inc.
66) Dreyfus Premier GNMA Fund
67) Dreyfus Premier Worldwide Growth Fund, Inc.
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Equity Funds
72) Dreyfus Short-Intermediate Government Fund
73) Dreyfus Short-Intermediate Municipal Bond Fund
74) The Dreyfus Socially Responsible Growth Fund, Inc.
75) Dreyfus Stock Index Fund
76) Dreyfus Tax Exempt Cash Management
77) The Dreyfus Premier Third Century Fund, Inc.
78) Dreyfus Treasury Cash Management
79) Dreyfus Treasury Prime Cash Management
80) Dreyfus Variable Investment Fund
81) Dreyfus Worldwide Dollar Money Market Fund, Inc.
82) General California Municipal Bond Fund, Inc.
83) General California Municipal Money Market Fund
84) General Government Securities Money Market Funds, Inc.
85) General Money Market Fund, Inc.
86) General Municipal Bond Fund, Inc.
87) General Municipal Money Market Funds, Inc.
88) General New York Municipal Bond Fund, Inc.
89) General New York Municipal Money Market Fund
ITEM 24.(b)
OTHER EXHIBIT (b)
GENERAL MUNICIPAL MONEY MARKET FUNDS, INC.
Certificate of Assistant Secretary
The undersigned, Janette E. Farragher, Assistant Secretary of General
Municipal Money Market Funds, Inc. (the "Fund"), hereby certifies that set forth
below is a copy of the resolution adopted by the Fund's Board authorizing the
signing by Mark N. Jacobs, Steven F. Newman, Michael A. Rosenberg, John B.
Hammalian, Jeff Prusnofsky, Robert R. Mullery, Janette E. Farragher, and Mark
Kornfeld on behalf of the proper officers of the Fund pursuant to a power of
attorney:
RESOLVED, that the Registration Statement and any
and all amendments and supplements thereto, may be
signed by any one of Mark N. Jacobs, Steven F.
Newman, Michael A. Rosenberg, John B. Hammalian,
Jeff Prusnofsky, Robert R. Mullery, Janette E.
Farragher, and Mark Kornfeld as the
attorney-in-fact for the proper officers of the
Fund, with full power of substitution and
resubstitution; and that the appointment of each of
such persons as such attorney-in-fact, hereby is
authorized and approved; and that such
attorneys-in-fact; and each of them, shall have
full power and authority to do and perform each and
every act and thing requisite and necessary to be
done in connection with such Registration Statement
and any and all amendments and supplements thereto,
as fully to all intents and purposes as the
officer, for whom he or she is acting as
attorney-in-fact, might or could do in person.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Fund on March 29, 2000.
/s/ Janette E. Farragher
---------------------------
Janette E. Farragher,
Assistant Secretary
(SEAL)
