File No. 2-89275
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. 16 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 16 [ X ]
(Check appropriate box or boxes.)
Dreyfus Tax Exempt Cash Management
(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
Daniel C. Maclean III, 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)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on June 1, 1995 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.
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended January 31, 1995 was filed on March 23,
1995.
Dreyfus Tax Exempt Cash Management
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 2
3 Condensed Financial Information 3
4 General Description of Registrant 4
5 Management of the Fund 9
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 10
7 Purchase of Securities Being Offered 10
8 Redemption or Repurchase 11
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
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10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-16
13 Investment Objectives and Policies B-2
14 Management of the Fund B-4
15 Control Persons and Principal B-7
Holders of Securities
16 Investment Advisory and Other B-7
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
Dreyfus Tax Exempt Cash Management
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-14
18 Capital Stock and Other Securities B-15
19 Purchase, Redemption and Pricing B-9
of Securities Being Offered
20 Tax Status *
21 Underwriters B-9
22 Calculations of Performance Data B-15
23 Financial Statements B-17
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS JUNE 1, 1995
DREYFUS TAX EXEMPT CASH MANAGEMENT
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DREYFUS TAX EXEMPT CASH MANAGEMENT (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL
FUND. ITS GOAL IS TO PROVIDE INVESTORS WITH AS HIGH A LEVEL OF CURRENT INCOME
EXEMPT FROM FEDERAL INCOME TAX AS IS CONSISTENT WITH THE PRESERVATION OF
CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
THE FUND IS DESIGNED FOR INSTITUTIONAL INVESTORS, PARTICULARLY BANKS,
ACTING FOR THEMSELVES OR IN A FIDUCIARY, ADVISORY, AGENCY, CUSTODIAL OR
SIMILAR CAPACITY. FUND SHARES MAY NOT BE PURCHASED DIRECTLY BY INDIVIDUALS,
ALTHOUGH INSTITUTIONS MAY PURCHASE SHARES FOR ACCOUNTS MAINTAINED BY
INDIVIDUALS. SUCH INSTITUTIONS HAVE AGREED TO TRANSMIT COPIES OF THIS
PROSPECTUS TO EACH INDIVIDUAL OR ENTITY FOR WHOSE ACCOUNT THE INSTITUTION
PURCHASES FUND SHARES, TO THE EXTENT REQUIRED BY LAW.
BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A SHARES AND CLASS B
SHARES. CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE
SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS B BEARS
CERTAIN COSTS PURSUANT TO A SERVICE PLAN ADOPTED IN ACCORDANCE WITH RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940. INVESTORS CAN INVEST, REINVEST OR
REDEEM SHARES AT ANY TIME WITHOUT CHARGE OR PENALTY IMPOSED BY THE FUND.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT ADVISER.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
---------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
AN INVESTOR SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JUNE 1, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-554-4611. WHEN TELEPHONING, ASK FOR OPERATOR 666.
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MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.................... 2
CONDENSED FINANCIAL INFORMATION................... 3
YIELD INFORMATION................................. 4
DESCRIPTION OF THE FUND........................... 5
MANAGEMENT OF THE FUND............................ 9
HOW TO BUY FUND SHARES............................ 10
INVESTOR SERVICES................................. 11
HOW TO REDEEM FUND SHARES......................... 11
SERVICE PLAN...................................... 12
SHAREHOLDER SERVICES PLAN......................... 13
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 13
GENERAL INFORMATION............................... 15
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
CLASS A CLASS B
SHARES SHARES
<S> <C> <C>
Management Fees...................................................... .20% .20%
12b-1 Fees (distribution and servicing).............................. --- .25%
Total Fund Operating Expenses........................................ .20% .45%
EXAMPLE:
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
CLASS A CLASS B
SHARES SHARES
1 YEAR................................. $ 2 $ 5
3 YEARS................................ $ 6 $14
5 YEARS................................ $11 $25
10 YEARS............................... $26 $57
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by the Fund, and therefore
indirectly by investors, the payment of which will reduce investors' return
on an annual basis. Unless The Dreyfus Corporation gives the Fund's investors
at least 90 days' notice to the contrary, The Dreyfus Corporation, and not
the Fund, will be liable for Fund expenses (exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of the necessary
state securities commissions) extraordinary expenses) other than the
following expenses, which will be borne by the Fund: (i) the management fee
payable by the Fund monthly at the annual rate of .20 of 1% of the Fund's
average daily net assets and (ii) as to Class B shares only, payments made
pursuant to the Fund's Service Plan at the annual rate of .25 of 1% of the
value of the average daily net assets of Class B. Institutions and certain
Service Agents (as defined below) effecting transactions in Fund shares for
the accounts of their clients may charge their clients direct fees in
connection with such transactions; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares,"
"Service Plan" and "Shareholder Services Plan."
Page 2
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Beneficial Interest outstanding, total investment return, ratios to
average net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
CLASS A SHARES
-----------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
-----------------------------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of year $1.0000 $.9996 $.9995 $.9988 $ .9988 $ .9987 $ .9994 $.9998 $1.0000 $1.0001
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net....... .0468 .0449 .0442 .0515 .0617 .0570 .0417 .0279 .0226 .0278
Net realized and unrealized gain
(loss) on investments........ (.0004) (.0001) (.0007) --- (.0001) .0007 .0004 .0002 .0001 (.0001)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS.................. .0464 .0448 .0435 .0515 .0616 .0577 .0421 .0281 .0227 .0277
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment
income-net.................. (.0468) (.0449) (.0442) (.0515) (.0617) (.0570) (.0417) (.0279) (.0226) (.0278)
Dividends from net realized gain
on investments.............. --- --- --- --- --- --- --- --- --- (.0001)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS......... --- --- --- --- --- (.0570) (.0417) (.0279) (.0226) (.0279)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year $ .9996 $ .9995 $ .9988 $ .9988 $ .9987 $ .9994 $ .9998 $1.0000 $1.0001 $ .9999
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN....... 5.35%(2)4.58% 4.52% 5.27% 6.35% 5.85% 4.25% 2.83% 2.29% 2.83%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets .20%(2) .20% .20% .20% .20% .20% .20% .20% .20% .20%
Ratio of net investment income to
average net assets.......... 5.57%(2)4.38% 4.41% 5.20% 6.15% 5.70% 4.16% 2.77% 2.26% 2.73%
Decrease reflected in above expense
ratios due to undertaking by
The Dreyfus Corporation..... .12%(2) .04% .03% .03% .04% .03% .05% .04% .04% ---
Net Assets, end of year
(000's Omitted) $404,441$839,388$1,029,739$1,006,193$1,147,753$1,905,522$1,668,671$1,838,786$1,739,787$1,299,301
----------------------
(1) From March 12, 1985 (commencement of operations) to January 31, 1986.
(2)Annualized.
</TABLE>
Page 3
<TABLE>
CLASS B SHARES
--------------------------
YEAR ENDED JANUARY 31,
--------------------------
1994(1) 1995
-------- --------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year............................... $1.0000 $1.0000
-------- --------
INVESTMENT OPERATIONS:
Investment income-net............................................ .0011 .0253
Net realized and unrealized gain (loss) on investments........... --- (.0001)
-------- --------
TOTAL FROM INVESTMENT
OPERATIONS....................................................... .0011 .0252
-------- --------
DISTRIBUTIONS:
Dividends from investment income-net............................. (.0011) (.0253)
Dividends from net realized gain
on investments................................................... --- ---
-------- --------
TOTAL DISTRIBUTIONS.............................................. (.0011) (.0253)
Net asset value, end of year..................................... $1.0000 $.9999
======== ========
TOTAL INVESTMENT RETURN 1.83%(2) 2.57%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .45%(2) .45%
Ratio of net investment income to average net assets 1.87%(2) 2.74%
Decrease reflected in above expense
ratios due to undertaking by The Dreyfus Corporation --- ---
Net Assets, end of year (000's Omitted).......................... $ 1 $47,427
-------------------------
(1)From January 10, 1994 (commencement of initial offering) to January 31, 1994.
(2)Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund." Both yield
figures also take into account any applicable distribution and service fees.
As a result, at any given time, the performance of Class B should be expected
to be lower than that of Class A. See "Service Plan."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, IBC/Donoghue's Money
Fund Report, Morningstar, Inc. and other industry publications.
Page 4
DESCRIPTION OF THE FUND
GENERAL -- By this Prospectus, two classes of shares of the Fund are being
offered -- Class A shares and Class B shares (each such class being referred
to as a "Class"). The Classes are identical, except that Class B shares are
subject to an annual distribution and service fee at the rate of .25% of the
value of the average daily net assets of Class B. The fee is payable for
advertising, marketing and distributing Class B shares and for ongoing
personal services relating to Class B shareholder accounts and services
related to the maintenance of such shareholder accounts pursuant to a Service
Plan adopted in accordance with Rule 12b-1 under the Investment Company Act
of 1940. See "Service Plan." The distribution and service fee paid by Class B
will cause such Class to have a higher expense ratio and to pay lower
dividends than Class A.
WHEN USED IN THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL
INFORMATION, THE TERMS "INVESTOR" AND "SHAREHOLDER" REFER TO THE INSTITUTION
PURCHASING FUND SHARES AND DO NOT REFER TO ANY INDIVIDUAL OR ENTITY FOR WHOSE
ACCOUNT THE INSTITUTION MAY PURCHASE FUND SHARES. Such institutions have
agreed to transmit copies of this Prospectus and all relevant Fund materials,
including proxy materials, to each individual or entity for whose account the
institution purchases Fund shares, to the extent required by law.
INVESTMENT OBJECTIVE -- The Fund's goal is to provide investors with as high
a level of current income exempt from Federal income tax as is consistent
with the preservation of capital and the maintenance of liquidity. To
accomplish this goal, the Fund invests principally in Municipal Obligations
(as described below). The Fund's investment objective cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940) of the Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be achieved. Securities
in which the Fund invests may not earn as high a level of current income as
long-term or lower quality securities which generally have less liquidity,
greater market risk and more fluctuation in market value.
MUNICIPAL OBLIGATIONS -- Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax exempt
industrial development bonds, in most cases, are revenue bonds and generally
do not carry the pledge of the credit of the issuing municipality, but
generally are guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues. Municipal Obligations
include municipal lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued by municipalities.
Municipal Obligations bear fixed, floating or variable rates of interest.
MANAGEMENT POLICIES -- It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940, certain requirements of which are summarized as follows. In
accordance with Rule 2a-7, the Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in U.S. dollar
denominated securities determined in accordance with procedures established
by the Board of Trustees to present minimal credit risks and which are rated
in one of the two highest rating categories for debt obligations by at least
two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated only by one such organization) or,
if unrated, are of comparable quality as determined in accordance with
procedures established by the Board of
Page 5
Trustees. Moreover, the Fund will
purchase commercial paper, or other instruments having only commercial paper
ratings, only if the security is rated in the highest rating category by at
least one nationally recognized statistical rating organization or, if unrated
, of comparable quality as determined in accordance with procedures
established by the Board of Trustees. The nationally recognized statistical
rating organizations currently rating instruments of the type the Fund may
purchase are Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch") and their
rating criteria are described in the Appendix to the Fund's Statement of
Additional Information. For further information regarding the amortized cost
method of valuing securities, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information. There can be no assurance that
the Fund will be able to maintain a stable net asset value of $1.00 per
share.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security also
would affect the other securities; for example, securities the interest upon
which is paid from revenues of similar types of projects, or securities whose
issuers are located in the same state. As a result, the Fund may be subject
to greater risk as compared to a fund that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company will be
treated as such a preference item to shareholders. The Fund will invest no
more than 20% of the value of its net assets in Municipal Obligations the
interest from which gives rise to a preference item for the purpose of the
alternative minimum tax and, except for temporary defensive purposes, in
other investments subject to Federal income tax.
The Fund may purchase floating and variable rate demand notes and
bonds, which are tax exempt obligations ordinarily having stated maturities
in excess of 13 months, but which permit the holder to demand payment of
principal at any time, or at specified intervals not exceeding 13 months, in
each case upon not more than 30 days' notice. Variable rate demand notes
include master demand notes which are obligations that permit the Fund to
invest fluctuating amounts, at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
permit daily changes in the amount borrowed. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Use of letters of credit or other credit support arrangements will not
adversely affect the tax exempt status of these obligations. Because these
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. The Dreyfus Corporation, on behalf
of the Fund, will consider on an ongoing basis the creditworthiness of the
issuers of the floating and variable rate demand obligations in the Fund's
portfolio.
The Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the Fund
an undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated, or has been given a rating below that
which otherwise is permissible for purchase by the Fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank that the Board of Trustees has determined meets the prescribed quality
standards for banks set forth below, or the payment obligation other-
Page 6
wise will
be collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. As to these instruments,
the Fund intends to exercise its right to demand payment only upon a default
under the terms of the Municipal Obligation, as needed to provide liquidity
to meet redemptions, or to maintain or improve the quality of its investment
portfolio. A participation interest will not be purchased by the Fund unless
it receives an opinion of counsel to the effect that the interest received
through the participation interest is exempt from Federal income tax.
The Fund may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, the Fund
obligates a broker, dealer or bank to repurchase at the Fund's option
specified securities at a specified price and, in this respect, stand-by
commitments are comparable to put options. The exercise of a stand-by
commitment therefore is subject to the ability of the seller to make payment
on demand. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The Fund may pay for stand-by commitments if such action is
deemed necessary, thus increasing to a degree the cost of the underlying
Municipal Obligation and similarly decreasing such security's yield to
investors. Gains realized in connection with stand-by commitments will be
taxable.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price that the Fund deems representative of their value, the value of the
Fund's net assets could be adversely affected.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the Fund's net assets) or for
temporary defensive purposes, the Fund may invest in taxable short-term
investments ("Taxable Investments") consisting of: notes of issuers having,
at the time of purchase, a quality rating within the two highest grades of
Moody's, S&P or Fitch; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper rated not lower than P-1 by Moody's, A-l
by S&P or F-1 by Fitch; certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of one billion
dollars or more; time deposits, bankers' acceptances and other short-term
bank obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income earned
by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments and Municipal Obligations the interest
from which gives rise to a preference item for the purpose of the alternative
minimum tax. 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. Taxable
Investments are more fully described in the Statement of Additional
Information, to which reference hereby is made.
CERTAIN FUNDAMENTAL POLICIES -- The Fund may (i) borrow money from banks, but
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While borrowings exceed
5% of the Fund's total assets, the Fund will not make any additional
investments; (ii) invest up to 5% of its total assets in the obligations of
any issuer, except that up to 25% of the value of the Fund's total assets may
be invested (subject to the provisions of Rule 2a-7), and obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities may
be purchased, without regard to any such limitation; and (iii) invest up to
25% of its total assets in the securities of
Page 7
issuers in any industry, provided that there is no such limitation on
investments in Municipal Obligations or in obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. This paragraph
describes fundamental policies that cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting shares. See "Investment Objective and
Management Policies--Investment Restrictions" in the Statement of Additional
Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES -- The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii)invest up to 10% of its net assets in
repurchase agreements providing for settlements in more than seven days after
notice and in other illiquid securities. See "Investment Objective and
Management Policies -- Investment Restrictions"in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS -- Even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations. The values
of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities.
New issues of Municipal Obligations usually are offered on a
when-issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate that
will be received on the Municipal Obligations are fixed at the time the Fund
enters into the commitment. The Fund will make commitments to purchase such
Municipal Obligations only with the intention of actually acquiring the securi
ties, but the Fund may sell these securities before the settlement date if it
is deemed advisable, although any gain realized on such sale would be
taxable. The Fund will not accrue income in respect of a when-issued security
prior to its stated delivery date. No additional when-issued commitments will
be made if more than 20% of the value of the Fund's net assets would be so
committed.
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value (both
generally changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Municipal Obligations purchased
on a when-issued basis may expose the Fund to risk because they may experience
such fluctuations prior to their actual delivery. Purchasing Municipal
Obligations on a when-issued basis can involve the additional risk that the
yield available in the market when the delivery takes place actually may be
higher than that obtained in the transaction itself. A segregated account of
the Fund consisting of cash, cash equivalents or U.S. Government securities
or other high quality liquid debt securities at least equal at all times to
the amount of the when-issued commitments will be established and maintained
at the Fund's custodian bank. Purchasing Municipal Obligations on a
when-issued basis when the Fund is fully or almost fully invested may result
in greater potential fluctuation in the value of the Fund's net assets and
its net asset value per share.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of 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
Page 8
the availability of Municipal Obligations for investment by the Fund so as to
adversely affect Fund shareholders, the Fund would reevaluate its investment
objective and policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that would
treat a type of Municipal Obligation as taxable, the Fund would treat such
security as a permissible Taxable Investment within the applicable limits set
forth herein.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time as
the Fund, available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of February 28, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for more than 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $72
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
For the fiscal year ended Jaunary 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .20 of 1% of the
value of the Fund's average daily net assets.
Unless The Dreyfus Corporation gives the Fund's investors at least 90
days' notice to the contrary, The Dreyfus Corporation, and not the Fund, will
be liable for Fund expenses (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be borne by the Fund: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the Fund's average daily
net assets and (ii) as to Class B shares only, payments made pursuant to the
Fund's Service Plan at the annual rate of .25 of 1% of the value of the
average daily net assets of Class B. See "Service Plan." The Fund will not
reimburse The Dreyfus Corporation for any amounts it may bear.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
Page 9
HOW TO BUY FUND SHARES
The Fund is designed for institutional investors, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity. Fund shares may not be purchased directly by individuals,
although institutions may purchase shares for accounts maintained by
individuals. Generally, each investor will be required to open a single
master account with the Fund for all purposes. In certain cases, the Fund may
request investors to maintain separate master accounts for shares held by the
investor (i) for its own account, for the account of other institutions and
for accounts for which the institution acts as a fiduciary, and (ii) for
accounts for which the investor acts in some other capacity. An institution
may arrange with the Transfer Agent for sub-accounting services and will be
charged directly for the cost of such services.
The minimum initial investment is $10,000,000, unless: (a) the
investor has invested at least $10,000,000 in the aggregate among the Fund,
Dreyfus Cash Management, Dreyfus Cash Management Plus, Inc., Dreyfus
Government Cash Management, Dreyfus Municipal Cash Management Plus, Dreyfus
New York Municipal Cash Management, Dreyfus Treasury Cash Management and
Dreyfus Treasury Prime Cash Management; or (b) the investor has, in the
opinion of Dreyfus Institutional Services Division, adequate intent and
availability of funds to reach a future level of investment of $10,000,000
among the funds identified above. There is no minimum for subsequent
purchases. The initial investment must be accompanied by the Fund's Account
Application. Share certificates are issued only upon the investor's written
request. No certificates are issued for fractional shares. The Fund reserves
the right to reject any purchase order. It is not recommended that the fund
be used as a vehicle for Keogh, IRA or other qualified retirement plans.
Fund shares may be purchased by wire, by telephone or through
compatible computer facilities. All payments should be made in U.S. dollars
and, to avoid fees and delays, should be drawn only on U.S. banks. For
instructions concerning purchases and to determine whether their computer
facilities are compatible with the Fund's, investors should call one of the
telephone numbers listed under "General Information" in this Prospectus.
Management understands that some financial institutions, securities
dealers and other industry professionals (collectively, "Service Agents") and
other institutions may charge their clients fees in connection with purchases
for the accounts of their clients. These fees would be in addition to any
amounts which might be received under the Service Plan. Service Agents may
receive different levels of compensation for selling different classes of
shares. Each Service Agent has agreed to transmit to its clients a schedule
of such fees.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks in the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Custodian. If an investor does not
remit Federal Funds, its 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, the investor's money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open for business.
Net asset value per share of each class is computed by dividing the value of
the Fund's net assets represented by such class (i.e., the value of its
assets less liabilities) by the total number of shares of such class
outstanding. See "Determination of Net Asset Value" in the Fund's Statement
of Additional Information.
Except in the case of telephone orders, investors whose payments are
received in or converted into Federal Funds by 12:00 Noon, New York time, by
the Custodian will receive the dividend declared that day. Investors whose
payments are received in or converted into Federal Funds after 12:00 Noon,
New York time, by the Custodian will begin to accrue dividends on the
following business day.
Investors may telephone orders for purchase of the Fund's shares.
These orders will become effective at the price determined at 12:00 Noon, New
York time, and the shares purchased will receive the dividend on
Page 10
Fund shares declared on that day if the telephone order is placed by 12:00
Noon, New York time, and Federal Funds are received by 4:00 p.m., New York
time, on that day.
Federal regulations require that an investor provide a certified
Taxpayer Identification Number ("TIN"), upon opening or reopening an account.
See "Dividends, Distributions and Taxes" and the Fund's Account Application
for further information concerning this requirement. Failure to furnish a
certified TIN to the Fund could subject an investor to a $50 penalty imposed
by the Internal Revenue Service (the "IRS").
INVESTOR SERVICES
FUND EXCHANGES -- An investor may purchase, in exchange for Class A or Class
B shares of the Fund, Class A or Class B shares of Dreyfus Cash Management,
Dreyfus Cash Management Plus, Inc., Dreyfus Government Cash Management,
Dreyfus Municipal Cash Management Plus, Dreyfus New York Municipal Cash
Management, Dreyfus Treasury Cash Management and Dreyfus Treasury Prime Cash
Management, which have different investment objectives that may be of
interest to investors. Upon an exchange into a new account, the following
investor services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Redemption by Wire or Telephone, Redemption
Through Compatible Computer Facilities and the dividend/capital gain
distribution option selected by the investor.
To request an exchange, exchange instructions must be given in
writing or by telephone. See "How to Redeem Fund Shares_Procedures." Before
any exchange, the investor must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling one of the telephone numbers listed
under "General Information." Shares will be exchanged at the net asset value
next determined after receipt of an exchange request in proper form. The excha
nge of shares of one fund for shares of another fund is treated for Federal
income tax purposes as a sale of the shares given in exchange by the investor
and, therefore, an exchanging investor may realize a taxable gain or loss. No
fees currently are charged investors directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge investors a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
investors.
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for Class A or Class B shares of the Fund, in Class A or
Class B shares of Dreyfus Cash Management, Dreyfus Cash Management Plus,
Inc., Dreyfus Government Cash Management, Dreyfus Municipal Cash Management
Plus, Dreyfus New York Municipal Cash Management, Dreyfus Treasury Cash
Management or Dreyfus Treasury Prime Cash Management, if the investor holds
shares of such funds prior to the exchange. The amount an investor
designates, which can be expressed either in terms of a specific dollar or
share amount, will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule that the investor has selected. Shares
will be exchanged at the then-current net asset value. The right to exercise
this Privilege may be modified or cancelled by the Fund or the Transfer
Agent. An investor may modify or cancel the exercise of this Privilege at any
time by writing to Dreyfus Institutional Services Division, EAB Plaza, 144
Glenn Curtiss Boulevard, 8th Floor, Uniondale, New York 11556-0144. The Fund
may charge a service fee for the use of this Privilege. No such fee currently
is contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the investor and, therefore, an exchanging investor may realize a
taxable gain or loss. For more information concerning this Privilege and the
funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call one of the telephone numbers
listed under "General Information."
HOW TO REDEEM FUND SHARES
GENERAL -- Investors may request redemption of shares at any time and the
shares will be redeemed at the next determined net asset value.
The Fund imposes no charges when shares are redeemed. Service agents
or other institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any share certificates representing Fund
Page 11
shares being redeemed must be submitted with the redemption request. The value
of the shares redeemed may be more or less than their original cost, depending
upon the Fund's then current net asset value.
If a request for redemption is received in proper form by Dreyfus
Institutional Services Division by 12:00 Noon, New York time, the proceeds of
the redemption, if transfer by wire is requested, ordinarily will be
transmitted in Federal Funds on the same day and the shares will not receive
the dividend declared on that day. If the request is received later that day
by Dreyfus Institutional Services Division, the shares will receive the
dividend on the Fund's shares declared on that day and the proceeds of
redemption, if wire transfer is requested, ordinarily will be transmitted in
Federal Funds on the next business day.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by Dreyfus Institutional Services Division of a
redemption request in proper form, except as provided by the rules of the
Securities and Exchange Commission.
PROCEDURES -- Investors may redeem Fund shares by wire or telephone, or
through compatible computer facilities as described below.
If an investor selects a telephone redemption privilege or telephone
exchange privilege (which is granted automatically unless the investor
refuses it), the investor authorizes the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be an
authorized representative of the investor, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal identificat
ion, to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Transfer Agent or its agents by
telephone to request a redemption or exchange of Fund shares. In such cases,
investors should consider using the other redemption procedures described
herein.
REDEMPTION BY WIRE OR TELEPHONE -- Investors may redeem Fund shares by wire
or telephone. The redemption proceeds will be paid by wire transfer.
Investors can redeem shares by telephone by calling one of the telephone
numbers listed under "General Information". The Fund reserves the right to
refuse any request made by wire or telephone and may limit the amount
involved or the number of telephone redemptions. This procedure may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
redeeming shares by wire. Shares for which certificates have been issued may
not be redeemed by wire or telephone.
REDEMPTION THROUGH COMPATIBLE COMPUTER FACILITIES -- The Fund makes available
to institutions the ability to redeem shares through compatible computer
facilities. Investors desiring to redeem shares in this manner should call
one of the telephone numbers listed under "General Information" to determine
whether their computer facilities are compatible and to receive instructions
for redeeming shares in this manner.
SERVICE PLAN
(Class B Only)
Class B shares are subject to a Service Plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Service Plan,
the Fund (a) reimburses the Distributor for distributing Class B shares and
(b) pays The Dreyfus Corporation, Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing Class B shares and
for providing certain services relating to Class B 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 ("Servicing"), at an aggregate annual rate of .25 of 1% of the value
of the average daily net assets of Class B. Each of the Distributor and
Dreyfus may pay one or more Service Agents a fee in respect of the Fund's
Class B shares owned by shareholders with whom the Service Agent is the
dealer or holder of record. Each of the Distributor and Dreyfus determines
the amounts, if any,
Page 12
to be paid to Service Agents under the Service Plan and
the basis on which such payments are made. The fee payable for Servicing is
intended to be a "service fee" as defined in Article III, Section 26 of the
NASD Rules of Fair Practice. The fees payable under the Service Plan are
payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
(Class A Only)
Class A shares are subject to a Shareholder Services Plan pursuant to
which the Fund has agreed to reimburse Dreyfus Service Corporation an amount
not to exceed an annual rate of .25 of 1% of the value of the average daily
net assets of Class A for certain allocated expenses of providing personal
services to, and/or maintaining accounts of, Class A shareholders. 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. Pursuant to an undertaking by The
Dreyfus Corporation described under "Management of the Fund," The Dreyfus
Corporation, and not the Fund, currently reimburses Dreyfus Service
Corporation for any such allocated expenses.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange or the Transfer Agent is open for
business. Fund shares begin earning income dividends on the day the purchase
order is effective. The Fund's earnings for Saturdays, Sundays and holidays
are declared as dividends on the prior business day. Dividends usually are
paid on the last calendar day of each month, and are automatically reinvested
in additional Fund shares at net asset value or, at the investor's option,
paid in cash. If an investor redeems all shares in its account at any time
during the month, all dividends to which the investor is entitled will be
paid along with the proceeds of the redemption. Distributions from net
realized securities gains, if any, generally are declared and paid once a
year, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. Investors may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to Class A or Class B
will be borne exclusively by such Class. Class B shares will receive lower
per share dividends than Class A shares because of the higher expenses borne
by Class B. See "Annual Fund Operating Expenses."
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal income tax (i.e., exempt-interest dividends). Dividends derived from
Taxable Investments, together with distributions from any net realized
short-term securities gains and all or a portion of any gains realized from
the sale or other disposition of certain market discount bonds, paid by the
Fund are taxable as ordinary income whether received in cash or reinvested in
Fund shares, if the beneficial holder of Fund shares is a citizen or resident
of the United States. No dividend paid by the Fund will qualify for the
dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund
generally are taxable as long-term capital gains for Federal income tax
purposes if the beneficial holder of Fund shares is a citizen or resident of
the United States, regardless of how long shareholders have held their Fund
shares and whether such distributions are received in cash or reinvested in
Fund shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Under the Code, interest on indebtedness incurred or continued to
purchase or carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible. Dividends and distributions may be subject to
certain state and local taxes.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by beneficial
Page 13
holders of Fund shares from their gross income for Federal income tax
purposes, the Fund may purchase specified private activity bonds, the
interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax, as well
as a component in computing the corporate environmental tax, or (iii) a factor
in determining the extent to which the Social Security benefits of a
beneficial holder of Fund shares are taxable. If the Fund purchases such
securities, the portion of the Fund's dividends related thereto will not
necessarily be tax exempt to a beneficial holder of Fund shares who is subject
to the alternative minimum tax and/or tax on Social Security benefits and may
cause a beneficial holder to be subject to such taxes.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund with respect to Fund shares
beneficially owned by a foreign person generally are subject to U.S.
nonresident withholding tax at the rate of 30%, unless the foreign person
claims the benefit of a lower rate specified in a tax treaty. Distributions
from net realized long-term securities gains paid by the Fund with respect to
Fund shares beneficially owned by a foreign person, generally will not be
subject to U.S. nonresident withholding tax. However, such distributions may
be subject to backup withholding, as described below, unless the foreign
person certifies his non-U.S. residency status.
Notice as to the tax status of an investor's dividends and
distributions will be mailed to such investor annually. Each investor also
will receive periodic summaries of such investor's account which will include
information as to dividends and distributions from securities gains, if any,
paid during the year. These statements set forth the dollar amount of income
exempt from Federal tax and the dollar amount, if any, subject to Federal
tax. These dollar amounts will vary depending on the size and length of time
of the investor's investment in the Fund. If the Fund pays dividends derived
from taxable income, it intends to designate as taxable the same percentage
of the day's dividend as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or in
terest income on a Federal income tax return. Furthermore, the IRS may notify
the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended January 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
Each investor should consult its tax adviser regarding specific
questions as to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on January 27, 1984, and
commenced operations on March 12, 1985. On May 22, 1987 the Fund was
reorganized as an unincorporated business trust under the laws of the
Commonwealth of Massachusetts. The Fund is authorized to issue an unlimited
number of shares of beneficial interest, par value $.001 per share. The
Fund's shares are classified into two classes. Each share
Page 14
has one vote and
shareholders will vote in the aggregate and not by class except as otherwise
required by law or with respect to any matter which affects only one class.
Holders of Class B shares only, however, will be entitled to vote on matters
submitted to shareholders pertaining to the Service Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust (the "Trust Agreement") 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's 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
Trustees intend to conduct the operations of the Fund in such a way so as to
avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Fund. As described under "Management of the Fund" in the
Statement of Additional Information, the Fund ordinarily will not hold
shareholder meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose of voting to
remove Trustees.
The Transfer Agent maintains a record of each investor's ownership
and sends confirmations and statements of account.
Investor inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or, in the case of
institutional investors, by calling in New York State 1-718-895-1650;
outside New York State call toll free 1-800-346-3621. Individuals or entities
for whom institutions may purchase or redeem Fund shares should call toll
free 1-800-554-4611.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will perform only administrative and shareholder servicing
functions. While the matter is not free from doubt, the Fund's Board of
Trustees believes that such laws should not preclude a bank from acting on
behalf of clients as contemplated by this Prospectus. However, judicial or
administrative decisions or interpretations of such laws, as well as changes
in either Federal or state statutes or regulations relating to the
permissible activities of banks and their subsidiaries or affiliates, could
prevent a bank from continuing to perform all or part of the activities
contemplated by this Prospectus. If a bank were prohibited from so acting,
its shareholder clients would be permitted to remain Fund shareholders and
alternative means for continuing the servicing of such shareholders would be
sought. In such event, changes in the operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other services then being provided
by the bank. The Fund does not expect that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 15
__________________________________________________________________________
DREYFUS TAX EXEMPT CASH MANAGEMENT
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 1, 1995
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Tax Exempt Cash Management (the "Fund"), dated June 1, 1995, as
it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or, in the case of institutional
investors, call the following numbers:
Outside New York State -- Call Toll Free 1-800-346-3621
In New York State -- Call 1-718-895-1650
Individuals or entities for whom institutions may purchase or redeem
Fund shares may write to the Fund at the above address or call toll free
1-800-554-4611 to obtain a copy of the Fund's Prospectus.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . B-7
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . B-11
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . B-12
Service Plan (Class B Only) . . . . . . . . . . . . . . . . . . . . . B-13
Shareholder Services Plan (Class A Only). . . . . . . . . . . . . . . B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . B-15
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . B-16
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . B-17
Investor Services . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . B-18
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . B-19
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . . B-20
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . B-25
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . B-36
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended January 31, 1995,
computed on a monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
------------- ------------- ----------- ---------
F-1 MIG 1 SP-1 95.4%
F-2 MIG 2 SP-2 2.3%
AAA/AA Aaa/Aa AAA/AA 1.7%
Not Rated Not Rated Not Rated .6%
-------
100.0%
========
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity, or solid waste or sewage disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months,
but which permit the holder to demand payment of principal at any time, or
at specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligation plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940 (the "Act"), the identification of the issuer of Municipal
Obligations depends on the terms and conditions of the security. When the
assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating
the subdivision and the security is backed only by the assets and revenues
of the subdivision, such subdivision would be deemed to be the sole
issuer. Similarly, in the case of an industrial development bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then such non-governmental user would be deemed to be the sole
issuer. If, however, in either case, the creating government or some
other entity guarantees a security, such a guaranty would be considered a
separate security and will be treated as an issue of such government or
other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The Fund will
seek to minimize these risks by investing only in those lease obligations
that (1) are rated in one of the highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was
rated by only one such organization) or (2) if unrated, are purchased
principally from the issuer or domestic banks or other responsible third
parties, in each case only if the seller shall have entered into an
agreement with the Fund providing that the seller or other responsible
third party will either remarket or repurchase the municipal lease within
a short period after demand by the Fund. The staff of the Securities and
Exchange Commission currently considers certain lease obligations to be
illiquid. Accordingly, not more than 10% of the value of the Fund's net
assets will be invested in lease obligations that are illiquid and in
other securities that are illiquid. See "Investment Restriction No. 12"
below.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated
in the highest rating category by at least two rating organizations (or
one rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such organiza-
tions or their rating systems, the Fund will attempt to use comparable
ratings as standards for its investments in accordance with the investment
policies contained in the Fund's Prospectus and this Statement of
Additional Information. The ratings of Moody's, S&P and Fitch represent
their opinions as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.
Although these ratings may be an initial criterion for selection of port-
folio investments, the Manager also will evaluate these securities and the
creditworthiness of the issuers of such securities based upon financial
and other available information.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of Trustees.
Because it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the Fund's Board
of Trustees has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.
To the extent that, for a period of time, qualified institutional buyers
cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level
of illiquidity in the Fund's portfolio during such period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, for example, Government
National Mortgage Association pass-through certificates, are supported by
the full faith and credit of the U.S. Treasury; others, such as those of
the Federal Home Loan Banks, by the right of the issuer to borrow from the
U.S. Treasury; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association, only by
the credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. Interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government-
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally
are limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank
obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
will have custody of, and will hold in a segregated account, securities
acquired by the Fund under a repurchase agreement. Repurchase agreements
are considered by the staff of the Securities and Exchange Commission to
be loans by the Fund. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, the Fund will enter into repurchase
agreements only with domestic banks with total assets in excess of one
billion dollars or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest, and will require that additional securities
be deposited with it if the value of the securities purchased should
decrease below resale price. The Manager will monitor on an ongoing basis
the value of the collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by the Fund in connection
with the sale of the securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
realization on the securities by the Fund may be delayed or limited. The
Fund will consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 10 as fundamental policies. These
restrictions cannot be changed without approval by the holders of a
majority (as defined in the Act) of the Fund's outstanding voting shares.
Investment restrictions numbered 11 and 12 are not fundamental policies
and may be changed by vote of a majority of the Fund's Trustees at any
time. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Fund's
Prospectus.
2. Borrow money, except from banks for temporary or emergency (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. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of
Municipal Obligations directly from an issuer for its own portfolio
to take advantage of the lower purchase price available.
5. 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.
6. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to
above and in the Fund's Prospectus.
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. 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 banks and
obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
9. Purchase more than 10% of the voting securities of any issuer
(this restriction applies only with respect to 75% of the Fund's
assets) or invest in companies for the purpose of exercising control.
10. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or
acquisition of assets.
11. Pledge, hypothecate, mortgage 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.
Notwithstanding Investment Restriction Nos. 1, 5 and 11, the Fund
reserves the right to enter into interest rate futures contracts, and
municipal bond index futures contracts, and any options that may be
offered in respect thereof, subject to the restrictions then in effect of
the Securities and Exchange Commission and the Commodity Futures Trading
Commission and to the receipt or taking, as the case may be, of
appropriate consents, approvals and other actions from or by those
regulatory bodies. In any event, no such contracts or options will be
entered into until a general description of the terms thereof are set
forth in a subsequent prospectus and statement of additional information,
the Registration Statement with respect to which has been filed with the
Securities and Exchange Commission and has become effective.
For purposes of Investment Restriction No. 8, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. The Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees of the Fund
*DAVID W. BURKE, Trustee. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Mr. Burke was Vice President and
Chief Administrative Officer of the Manager. From 1977 to 1990, Mr.
Burke was involved in the management of national television news, as
Vice President and Executive Vice President of ABC News, and
subsequently as President of CBS News. Mr. Burke also is a Board
member of 50 other funds in the Dreyfus Family of Funds. He is 58
years old and his address is 200 Park Avenue, New York, New York
10166.
ISABEL P. DUNST, Trustee. Partner in the law firm of Hogan & Hartson
since 1990. From 1986 to 1990, Deputy General Counsel of the United
States Department of Health and Human Services. She is also a
Trustee of the Clients' Security Fund of the District of Columbia Bar
and a Trustee of Temple Sinai. Ms. Dunst also is a Board member of 7
other funds in the Dreyfus Family of Funds. She is 47 years old and
her address is c/o Hogan & Hartson, Columbia Square, 555 Thirteenth
Street, N.W., Washington,D.C. 20004-1109.
LYLE E. GRAMLEY, Trustee. Consulting economist since June 1992 and Senior
Staff Vice President and Chief Economist of Mortgage Bankers
Association of America from 1985 to May 1992. Since February 1993, a
director of CWM Mortgage Holding, Inc. From 1980 to 1985, member of
the Board of Governors of the Federal Reserve System. Mr. Gramley
also is a Board member of 7 other funds in the Dreyfus Family of
Funds. He is 63 years old and his address is 12901 Three Sisters
Road, Potomac, Maryland 20854.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. From January 1981 to
January 1993, Mr. Rudman served as a United States Senator from the
State of New Hampshire. Since January 1993, Mr. Rudman has served as
a director of Chubb Corporation and the Raytheon Corporation. Since
1988, Mr. Rudman has served as a trustee of Boston College and since
1986 as a member of the Senior Advisory Board of the Institute of
Politics of the Kennedy School of Government at Harvard University.
Mr. Rudman also served as Deputy Chairman of the President's Foreign
Intelligence Advisory Board. From January 1993 to December 1994, Mr.
Rudman had served as Vice Chairman of the Federal Reserve Bank of
Boston. Mr. Rudman also is a Board member of 17 other funds in the
Dreyfus Family of Funds. He is 64 years old and his address is 1615
L Street, N.W., Suite 1300, Washington D.C. 20036.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Each Trustee was elected at a meeting of shareholders held on August
5, 1995. No further shareholder meetings will be held for the purpose of
electing Trustees unless and until such time as less than a majority of
the Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Under the Act, shareholders of record of not less
than two-thirds of the outstanding shares of the Fund may remove a Trustee
through a declaration in writing or by vote cast in person or by proxy at
a meeting called for that purpose. The Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
holders of record of not less than 10% of the Fund's outstanding shares.
Trustees are entitled to receive an annual retainer and a per meeting
attendance fee and reimbursement of their expenses. The aggregate amount
of compensation paid to each Trustee by the Fund for the fiscal year ended
January 31, 1995, and by all other funds in the Dreyfus Family of Funds
for which such person is a Board member for the year ended December 31,
1994, were as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual From the Fund
Name of Board Compensation From Accrued as Part of Benefits Upon and Fund Complex Paid
Member by Fund(1)(2) Fund's Expenses Retirement to Board Member
_________________ ________________ ___________________ ________________ _________________
<S> <C> <C> <C> <C>
David W. Burke $2,323 none none $36,311(3)
Isabel P. Dunst $6,000 none none $40,692(4)
Lyle E. Gramley $6,000 none none $40,692(4)
Warren B. Rudman $6,000 none none $76,544(5)
__________________________________
(1) Amount does not include reimbursed expenses for attending Board meetings, which amounted to $433 for all Trustees as a
group.
(2) Pursuant to an undertaking by the Manager, the aggregate compensation payable to each Trustee by the Fund was paid by
Manager and not the Fund.
(3) $8,413 of this amount was paid by the Manager pursuant to undertakings by the Manager.
(4) Pursuant to undertakings by the Manager, the total compensation payable by the Fund and Fund Complex to the Board members
was paid by the Manager.
(5) $46,942 of this amount was paid by the Manager pursuant to undertakings by the Manager.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer and a Director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., a wholly-owned subsidiary of The
Boston Company, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President -
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray, and prior to August 1990, he was employed
as an Associate at Sidley & Austin. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was manager of the High Performance Fabric Division
of Springs Industries Inc. He is 33 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 30 years old.
JOSEPH F. TOWER, III, Assistant Treasurer. Treasurer and Chief Financial
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From July 1988 to
August 1994, he was employed by The Boston Company, Inc. where he
held various management positions in the Corporate Finance and
Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor
and an officer of other investment companies advised or administered
by Manager. From 1984 to July 1994, he was an Assistant Vice
President in the Mutual Fund Accounting Department of the Manager.
He is 59 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts. She is 50 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992,
he was a mutual fund accountant, for The Boston Company Advisors,
Inc. He is 28 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on March 7, 1995.
The following shareholders are known by the Fund to own of record 5%
or more of the Fund's Class A shares of beneficial interest outstanding on
March 7, 1995: (1) Central Fidelity Bank, Variable Note Desk, 1021 E.
Cary Street, Richmond, VA 23219-4000 (8.06%); (2) Patterson & Company c/o
PNB Penn Mutual Insurance Building, 530 Walnut Street, Philadelphia, PA
19172-002 (6.28%); (3) Saxon and Company c/o PNC Bank, P.O. Box 7780-1888,
Philadelphia, PA 19182-1888 (5.34%); and (4) First Interstate Bank of
Oregon, P.O. Box 2971, Portland, OR 97208-2971 (5.7%). The following
shareholders are known by the Fund to own of record 5% or more of the
Fund's Class B shares of beneficial interest outstanding on March 7, 1995:
(1) Bankers Trust Company as TTEE FBO International Paper Company, 4
Albany Street, 4th Floor, New York, NY 10006-1515 (51.64%); (2) Barnett
Bank of Jacksonville, P.O. Box 45147, Jacksonville, FL 32232-5147
(21.23%); (3) Southwest Bank of Texas N.A., 4295 San Felipe Street,
Houston, TX 77027-2915 (7.74%); and (4) First Bank North, 101 West
Stephenson Street, Freeport, IL 61032-4221 (6.47%). 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 Act)
of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994, with the Fund, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Trustees who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval.
Shareholders approved the Agreement on August 5, 1994 and the Board of
Trustees, including a majority of the Trustees who are not "interested
persons" of any party to the Agreement, last voted to renew the Agreement
at a meeting held on May 24, 1994. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Trustees or by vote of
the holders of a majority of the Fund's outstanding voting shares, or, on
not less than 90 days' notice, by the Manager. The Agreement will
terminate automatically in the event of its assignment (as defined in the
Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Philip Toia, Vice Chairman--Operations and
Administration; Paul H. Snyder, Vice President and Chief Financial
Officer; Daniel C. Maclean III, Vice President and General Counsel;
Barbara Casey, Vice President--Retirement Services; Henry D. Gottmann,
Vice President--Retail; Elie M. Genadry, Vice President--Wholesale; Mark
N. Jacobs, Vice President--Fund Legal and Compliance and Secretary;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Diane Coffey,
Vice President--Corporate Communications; Katherine C. Wickham, Vice
President--Human Resources; William F. Glavin, Jr., Vice President--
Product Management; Andrew S. Wasser, Vice President--Information
Services; Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Trustees. The Manager is responsible for investment
decisions, and provides the Fund with portfolio managers who are
authorized by the Trustees to execute purchases and sales of securities.
The Fund's portfolio managers are Joseph P. Darcy, A. Paul Disdier, Karen
M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L.
Lawrence Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The
Manager also maintains a research department with a professional staff of
portfolio managers securities analysts who provide research services for
the Fund as well as for other funds advised by the Manager. All purchases
and sales are reported for the Trustees' review at the meeting subsequent
to such transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for its services, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .20 of 1% of the
value of the Fund's average daily net assets, as provided in the
Agreement. All fees and expenses are accrued daily and deducted before
declaration of dividends to investors. The management fees payable for
the fiscal years ended January 31, 1993 and 1994 were $3,607,051 and
$3,663,999, respectively, which amounts were reduced pursuant to an
undertaking by the Manager, resulting in net management fees paid for such
fiscal years of $2,919,270 and $2,978,463, respectively. The management
fees paid by the Fund for the fiscal year ended January 31, 1995 was
$2,972,503.
Unless the Manager gives the Fund's investors at least 90 days'
notice to the contrary, the Manager, and not the Fund, will be liable for
those expenses of the Fund (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be Fund expenses: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the Fund's average
daily net assets and (ii) as to Class B shares only, payments made at the
annual rate of .25 of 1% of the value of the average daily net assets of
Class B, pursuant to the Fund's Service Plan. See "Service Plan."
In addition, the Agreement provides that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1 1/2% of the value of the Fund's average net assets
for the 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 on a daily
basis, and reconciled and effected or paid, as the case may be, on a
monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn
on banks that are not members of the Federal Reserve System as to the
possible delay in conversion into Federal Funds and may attempt to arrange
for a better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial institution and
his order to purchase Fund shares is paid for other than in Federal Funds,
the securities dealer, bank or other financial institution, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Custodian. An order for the purchase of Fund shares
placed by an investor with a sufficient Federal Funds or cash balance in
his brokerage account with a securities dealer, bank or other financial
institution will become effective on the day that the order, including
Federal Funds, is received by the Custodian. In some states, banks
or other financial institutions effecting transactions in Fund shares may
be required to register as dealers pursuant to state law.
SERVICE PLAN
(CLASS B ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 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 Fund's Board of Trustees
has adopted such a plan (the "Service Plan") with respect to the Fund's
Class B shares, pursuant to which the Fund reimburses the Distributor for
distributing Class B shares and pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate
of either of them (collectively "Dreyfus") for advertising and marketing
Class B shares and for the provision of certain services to the holders of
Class B shares. Under the Service Plan, the Distributor and Dreyfus may
make payments to certain financial institutions, securities dealers and
other financial industry professionals (collectively, "Service Agents") in
respect to these services. The Fund's Board of Trustees believes that
there is a reasonable likelihood that the Service Plan will benefit the
Fund and the holders of Class B shares.
A quarterly report of the amounts expended under the Service Plan,
and the purposes for which such expenditures were incurred, must be made
to the Trustees for their review. In addition, the Service Plan provides
that it may not be amended to increase materially the costs which holders
of Class B shares may bear pursuant to the Service Plan without the
approval of the holders of Class B shares and that other material
amendments of the Service Plan must be approved by the Board of Trustees,
and by the Trustees who are not "interested persons" (as defined in the
Act) of the Fund and have no direct or indirect financial interest in the
operation of the Service Plan or in any agreements entered into in
connection with the Service Plan, by vote cast in person at a meeting
called for the purpose of considering such amendments. The Service Plan
is subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Service Plan. The
Service Plan was so approved by the Trustees at a meeting held on May 24,
1994. The Service Plan may be terminated at any time by vote of a
majority of the Trustees who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Service Plan
or in any agreements entered into in connection with the Service Plan or
by vote of the holders of a majority of Class B shares.
For the period February 1, 1994 through August 23, 1994, the Fund
paid Dreyfus Service Corporation, as the Fund's distributor during such
period, pursuant to a Rule 12b-1 plan which was terminated on August 24,
1994, $23,939, of which approximately $23,796 was for distributing Class B
shares and approximately $143 was for advertising and marketing Class B
shares and for Services provided to Class B shareholders. For the period
August 24, 1994 through January 31, 1995, the Fund paid pursuant to the
Service Plan, $38,667, of which $38,200 was paid to the Distributor as
reimbursement for distributing Class B shares, and $467 was paid to
Dreyfus for advertising and marketing Class B shares and for providing
services to Class B shareholders.
SHAREHOLDER SERVICES PLAN
(CLASS A ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund has agreed to reimburse the Dreyfus Service
Corporation for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts with respect to Class A shares
only. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services related
to the maintenance of shareholder accounts.
A quarterly report of the accounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Trustees, and by
the Trustees who are not "interested persons" (as defined in the Act) of
the Fund or the Manager and have no direct or indirect financial interest
in the operation of the Plan, by vote cast in person at a meeting called
for the purpose of considering such amendments. The Plan is subject to
annual approval by such vote of the Trustees cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was last approved
at a meeting held on March 1, 1995. The Plan is terminable at any time by
vote of a majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Plan.
For the fiscal year ended January 31, 1995, no amounts were paid by
the Fund, with respect to Class A shares, under the Shareholder Services
Plan pursuant to an undertaking by the Manager.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Redemption by Wire or Telephone. By using this procedure, the
investor authorizes the Transfer Agent, to act on wire or telephone
redemption instructions from any person representing himself or herself to
be an authorized representative of the investor, and reasonably believed
by the Transfer Agent to be genuine. Ordinarily, the Fund will initiate
payment for shares redeemed pursuant to this procedure on the same
business day if Dreyfus Institutional Services Division receives the
redemption request in proper form prior to 12:00 Noon, New York time, on
such day; otherwise the Fund will initiate payment on the next business
day. Such payment will be made to a bank that is a member of the Federal
Reserve System.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
________________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
Redemption Commitment. The 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, the Board of Trustees 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 sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed
for the purpose of purchases and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Board of Trustees,
at such intervals as it deems appropriate, to determine whether the Fund's
net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review are obtained from an
independent pricing service (the "Service") approved by the Board of
Trustees. The Service will value the Fund's investments based on methods
which include consideration 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 the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will consider
promptly what action, if any, will be initiated. In the event the Board
of Trustees determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it regards
as necessary and appropriate including: selling portfolio instruments
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations or market
equivalents.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to
that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms and may be selected based upon their sales of Fund shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INVESTOR SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Investor
Services."
Fund Exchanges. By using the Telephone Exchange Privilege, the
investor authorizes the Transfer Agent to act on exchange instructions
from any person representing himself or herself to be an authorized
representative of the investor and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to limitations as
to the amount involved or the number of telephone exchanges permitted.
Shares will be exchanged at the net asset value next determined after
receipt of an exchange request in proper form. Shares in certificate form
are not eligible for telephone exchange.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of Dreyfus Cash Management, Dreyfus Cash Management Plus, Inc.,
Dreyfus Government Cash Management, Dreyfus Municipal Cash Management
Plus, Dreyfus New York Municipal Cash Management, Dreyfus Treasury Cash
Management or Dreyfus Treasury Prime Cash Management. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value. Enrollment in or modification or
cancellation of this Privilege is effective three business days following
notification by the investor. An investor will be notified if its account
falls below the amount designated under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares in certificate form are not eligible for this
Privilege.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to investors resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
The Fund reserves the right to reject any exchange request in whole
or in part. The availability of Fund Exchanges or the Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice
to investors.
DIVIDENDS, DISTRIBUTION AND TAXES
The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of the
any gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Internal Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended January 31, 1995, yield and effective
yield of Class A shares were 3.58% and 3.64%, respectively, and of Class B
share were 3.33% and 3.38%, respectively. 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 the
shareholder's account, in proportion to the length of the base period and
the Fund's average account size, but does not include realized gains and
losses or unrealized appreciation and depreciation. Effective yield is
computed by adding 1 to the base period return (calculated as described
above), raising that sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.
Based upon a 1995 Federal tax rate of 39.6%, the Fund's tax
equivalent yield for the seven-day period ended January 31, 1995 was 5.93%
and 5.51% for Class A and Class B shares, respectively. Tax equivalent
yield is computed by dividing that portion of the yield or effective yield
(calculated as described above) which is tax exempt by 1 minus a stated
tax rate and adding the quotient to that portion, if any, of the yield of
the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
The tax equivalent figure, however, does not include the potential effect
of any state or local (including, but not limited to, county, district or
city) taxes, including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rates or yields.
Each investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
Yields will fluctuate and are not necessarily representative of
future results. Each investor should remember that yield is a function of
the type and quality of the instruments in the portfolio, portfolio
maturity and operating expenses. An investor's principal in the Fund is
not guaranteed. See "Determination of Net Asset Value" for a discussion
of the manner in which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and are not indicative of the
Fund's past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, or actual or proposed tax legislation. From time to time,
advertising materials for the Fund may also refer to statistical or other
information concerning trends relating to investment companies, as
compiled by industry associations such as the Investment Company
Institute.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
nonassessable. Fund shares have no preemptive, subscription or conversion
rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
In early 1974, the Manager commenced offering the first money market
fund to be widely offered on a retail basis, Dreyfus Liquid Assets, Inc.
Money market mutual funds have subsequently grown into a multibillion
dollar industry.
The Fund is a member of the Family of Dreyfus Cash Management Funds
which are designed to meet the needs of an array of institutional
investors. As of March 7, 1995, the total net assets of the Dreyfus Cash
Management Funds amounted to approximately $16.5 billion.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of S&P's, 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 and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign designation to show relative standing within the category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+) sign
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 payment. Issues in
this category are delineated with the numbers 1, 2 and 3 to indicate the
relative degree of safety. Paper rated A-1 indicates that the degree of
safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to show relative standing within the major rating
categories, except in the Aaa category. The modifier 1 indicates a ranking
for the security in the higher end of a rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating category.
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, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns an MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper 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 (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues carrying this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Rating. 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.
<TABLE>
<CAPTION>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS--100.0% AMOUNT VALUE
---------------- --------------
<S> <C> <C>
ALASKA--1.6%
Alaska Housing Finance Corp., VRDN
3.70%, Series C (Investment Agreement; Swiss Bank Corp.) (a)............ $ 21,000,000 $ 21,000,000
ARIZONA--1.1%
Maricopa County Pollution Control Corp., PCR, Refunding, VRDN
(Arizona Public Service Co.):
3.80%, Series B (LOC; Morgan Guaranty Trust Co.) (a,b)................ 8,000,000 8,000,000
3.80%, Series D (a)................................................... 6,900,000 6,900,000
CALIFORNIA--10.7%
State of California, RAN 5%, Series A, 6/28/95.............................. 33,300,000 33,427,442
California Public Capital Improvements Financing Authority, Revenue
(Pooled Project) 4.25%, Series C, 3/15/95 (LOC; National Westminster Bank) (b) 10,000,000 10,000,000
California School Cash Reserve Program Authority, Notes 4.50%, Series A, 7/5/95 25,000,000 25,076,156
Los Angeles County, TRAN 4.50%, 6/30/95..................................... 10,000,000 10,025,543
Los Angeles Unified School District, TRAN 4.50%, 7/10/95.................... 24,175,000 24,266,421
San Bernadino County, Board of Education, TRAN 4.25%, 7/28/95............... 29,650,000 29,690,005
Southern California Public Power Authority, Transmission Project Revenue,
Refunding,
VRDN (Southern Transmission)
3.25% (Insured; AMBAC and LOC; Swiss Bank Corp.) (a,b).................. 10,000,000 10,000,000
COLORADO--.8%
City and County of Denver, MFHR, Refunding, VRDN (Parliament Apartments
Project)
4.30% (LOC; Connecticut General Life Insurance Co.) (a,b)............... 10,800,000 10,800,000
CONNECTICUT--1.9%
State of Connecticut, VRDN:
Economic Recovery Notes 3.60%, Series B (SBPA: Canadian Imperial Bank of
Commerce, Industrial Bank of Japan and National Westminster Bank) (a). 7,700,000 7,700,000
Special Tax Obligation Revenue (Transportation Infrastructure-1)
3.65% (LOC; Industrial Bank of Japan) (a,b)........................... 12,800,000 12,800,000
Connecticut Development Authority, PCR, Refunding, VRDN (Connecticut Light
and
Power Co. Project) 3.60%, Series A (LOC; Deutsche Bank) (a,b)........... 5,000,000 5,000,000
DELAWARE--2.3%
Delaware Economic Development Authority, Revenue, VRDN
(Hospital Billing Collection):
3.60%, Series A (Insured; MBIA) (a)................................... 9,700,000 9,700,000
3.60%, Series B (Insured; MBIA) (a)................................... 10,000,000 10,000,000
3.60%, Series C (Insured; MBIA) (a)................................... 11,700,000 11,700,000
DISTRICT OF COLUMBIA--3.8%
District of Columbia, Refunding, VRDN:
3.90%, Series A-1 (LOC; Sumitomo Bank) (a,b)............................ 11,400,000 11,400,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
DISTRICT OF COLUMBIA (CONTINUED)
District of Columbia, Refunding, VRDN (continued):
3.90%, Series A-3 (LOC; Bank of Tokyo) (a,b)............................ $ 15,100,000 $ 15,100,000
3.90%, Series A-5 (LOC; Mitsubishi Bank) (a,b).......................... 24,800,000 24,800,000
FLORIDA--3.4%
Dade County Housing Finance Authority, MFMR, VRDN (Flamingo Plaza Apartments)
3.60%, Series 18 (LOC; The Bank of New York) (a,b)...................... 9,000,000 9,000,000
Orange County School District, RAN:
3.75%, Series A, 4/6/95................................................. 6,000,000 6,005,401
3.75%, Series B, 4/6/95................................................. 19,000,000 19,017,104
Pasco County Industrial Development Authority, Revenue, VRDN
(Woodhaven Partners Limited Project) 4% (LOC; Kredietbank) (a,b)........ 8,800,000 8,800,000
Pinellas County Health Facilities Authority, Revenue, Refunding, VRDN
(Pooled Hospital Loan Program) 4.05% (LOC; Chemical Bank) (a,b)......... 2,000,000 2,000,000
GEORGIA--.5%
Georgia Hospital Financing Authority, Revenue, VRDN (Georgia Pooled Hospital
Loan Program) 4.05% (LOC; First Union National Bank) (a,b).............. 6,700,000 6,700,000
ILLINOIS--5.4%
Chicago O'Hare International Airport, Revenue, VRDN (American Airlines):
3.90%, Series C (LOC; Sanwa Bank) (a,b)................................. 6,700,000 6,700,000
3.90%, Series D (LOC; Sanwa Bank) (a,b)................................. 5,500,000 5,500,000
Glendale Heights, Multi-Family Revenue, VRDN (Glendale Lake Project)
3.65% (LOC; Citibank) (a,b)............................................. 15,745,000 15,745,000
State of Illinois, GO Notes 4.75%, 5/15/95.................................. 15,000,000 15,032,129
Illinois Development Finance Authority, Revenue, Refunding, VRDN (Olin Corp.
Project)
3.85%, Series A (LOC; Credit Suisse) (a,b).............................. 6,400,000 6,400,000
Illinois Health Facilities Authority, Revenue, VRDN:
(Resurrection Health Care Systems) 4% (LOC: Comerica Bank, First Chicago
Bank,
La Salle National Bank and National Bank of Detroit) (a,b)............ 15,600,000 15,600,000
(SSM Health Care Project) 3.25%, Series A (LOC; Industrial Bank of Japan) (a,b) 7,100,000 7,100,000
KENTUCKY--.4%
Kentucky Association of Counties, Reinsurance Trust Revenue, VRDN
3.95% (LOC; Hong Kong Shanghai Banking Corp.) (a,b)..................... 5,300,000 5,300,000
LOUISIANA--2.8%
Jefferson Parish Hospital Service District No. 2, HR, VRDN 3.70% (Insured; FGIC) (a) 9,000,000 9,000,000
Louisiana Offshore Terminal Authority, Deepwater Port Revenue, Refunding,
VRDN
(Loop-First Convention) 3.80% (LOC; Union Bank of Switzerland) (a,b).... 18,000,000 18,000,000
Orleans Levee District, VRDN (Capital Recovery Funding Program)
3.70%, Series A (LOC; Fuji Bank) (a,b).................................. 10,000,000 10,000,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
MAINE--2.4%
Orrington, RRR, VRDN (Penobscott Energy Recovery Co. Project)
3.475%, Series A (LOC: Bank of Nova Scotia, Bankers Trust, Canadian
Imperial Bank
of Commerce, Long-Term Credit Bank of Japan and Toronto Dominion Bank) (a,b) $ 32,345,000 $ 32,345,000
MASSACHUSETTS--.8%
Massachusetts Health and Educational Facilities Authority, Revenue, VRDN
(Capital Assets Program) 3.30%, Series D (Insured; MBIA) (a)............ 10,200,000 10,200,000
MICHIGAN--2.1%
Michigan Higher Education Facilities Authority, Revenue, VRDN
(Aces-Pooled Financing Project) 3.10% (BPA; Comerica Bank and Insured; MBIA) (a) 300,000 300,000
Michigan Hospital Finance Authority, VRDN (Hospital Equipment Loan Program)
3.55% (LOC; Manufacturers National Bank) (a,b).......................... 12,300,000 12,300,000
Michigan Housing Development Authority, Limited Obligation Revenue, VRDN
(Laurel Valley) 3.50% (LOC; National Westminster Bank) (a,b)............ 5,900,000 5,900,000
Michigan Strategic Fund, PCR, Refunding, VRDN (Consumers Power Project)
3.80%, Series A (LOC; Union Bank of Switzerland) (a,b).................. 9,800,000 9,800,000
MINNESOTA--1.5%
Minnesota Housing Finance Agency, Single Family Mortgage
5.25%, Series F, 1/16/96 (GIC; Societe Generale)........................ 20,000,000 20,000,000
MISSOURI--.8%
Cole County Industrial Development Authority, Industrial Revenue, VRDN
(Mobine Manufacturing Co. Project) 4.125% (LOC; Fuji Bank) (a,b)........ 2,940,000 2,940,000
Missouri Health and Educational Facilities Authority, Health Facilities
Revenue, VRDN
(SSM Health Care Project) 3.25%, Series A (LOC; Industrial Bank of Japan) (a,b) 7,200,000 7,200,000
NEBRASKA--2.3%
Nebraska Higher Education Loan Program Inc., Revenue, VRDN (Student Loan
Program)
3.60%, Series C (Insured; MBIA) (a)..................................... 27,340,000 27,340,000
Nebraska Investment Finance Authority, HR, VRDN (Depreciation Assets)
3.70%, Series A (Insured; FGIC) (a)..................................... 2,920,000 2,920,000
NEW JERSEY--5.2%
State of New Jersey, TRAN 5%, 6/15/95....................................... 60,000,000 60,224,337
New Jersey Housing and Mortgage Finance Agency, Revenue
4.20%, 9/29/95 (GIC; Bayerishe Landesbank).............................. 9,790,000 9,790,000
NEW MEXICO--1.3%
City of Farmington, PCR, Refunding, VRDN (Arizona Public Service Co.
Project)
3.80%, Series B (LOC; Barclays Bank) (a,b).............................. 13,700,000 13,700,000
Hurley, PCR, VRDN (Kennecott Sante Fe) 3.80% (Guaranteed by; British Petroleum) (a) 4,300,000 4,300,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
NEW YORK--16.2%
City of New York:
RAN 4.75%, 6/30/95...................................................... $ 14,050,000 $ 14,086,895
TAN 4.25%, 2/15/95...................................................... 32,600,000 32,606,690
VRDN:
4%, Series A-7 (LOC; Morgan Guaranty Trust Co.) (a,b)................. 14,300,000 14,300,000
4.10%, Subseries E-2 (LOC; Industrial Bank of Japan) (a,b)............ 4,600,000 4,600,000
4.10%, Subseries E-5 (LOC; Sumitomo Bank) (a,b)....................... 14,400,000 14,400,000
New York City Industrial Development Agency, Civil Facility Revenue, VRDN
(Children's Oncology Society-Ronald McDonald House)
3.35% (LOC; Barclays Bank) (a,b)........................................ 5,000,000 5,000,000
New York City Trust, Cultural Resources Revenue, VRDN
(American Musuem of Natural History)
3.35%, Series B (Insured; MBIA and SBPA; Credit Suisse) (a)............. 6,900,000 6,900,000
New York State Dormitory Authority, Revenues, VRDN (Metropolitan Museum of
Art)
3.40%, Series A (Guaranteed by; Metropolitan Musuem of Art) (a)......... 10,900,000 10,900,000
New York State Local Government Assistance Corp., VRDN:
3.35%, Series B (LOC: Credit Suisse and Swiss Bank Corp.) (a,b)......... 18,700,000 18,700,000
3.40% Series A (LOC: Credit Suisse, Swiss Bank Corp. and Union Bank of
Switzerland) (a,b).................................................... 39,500,000 39,500,000
New York State Medical Care Facilities Finance Agency, Revenue, VRDN
(Pooled Loan Equipment Program) 2.85% (LOC; Chemical Bank) (a,b)........ 35,700,000 35,700,000
Suffolk County, TAN 5.25%, 8/15/95 (LOC; West Deutsche Landesbank) (b)...... 20,000,000 20,046,835
OHIO--.2%
Cincinnati and Hamilton County Port Authority, IDR, VRDN (Multi-Color Corp.
Project)
3.25% (LOC; PNC Bank of Ohio) (a,b)..................................... 3,000,000 3,000,000
OREGON--2.8%
Klamath Falls, Electric Revenue (Salt Caves-Hydroelectric)
3.75%, Series A, 5/2/95 (Escrowed in; U.S. Treasury Bills).............. 29,000,000 29,000,000
Port Morrow, Revenue, Refunding, VRDN (Portland General Electric Boardman
Project)
3.85% (LOC; Industrial Bank of Japan) (a,b)............................. 8,900,000 8,900,000
PENNSYLVANIA--4.5%
Commonwealth of Pennsylvania, TAN 4.75%, 6/30/95............................ 39,000,000 39,123,429
City of Philadelphia, TRAN
4.75%, 6/15/95 (LOC; Canadian Imperial Bank of Commerce) (b)............ 8,500,000 8,525,569
Philadelphia Hospitals and Higher Education Facilities Authority,
HR, Refunding, VRDN (Pennsylvania Hospital)
3.70%, Series B (Insured; FGIC and BPA; Pittsburgh National Bank) (a)... 7,000,000 7,000,000
Washington County Authority, Lease Revenue, VRDN (Higher Education Pooled
Equipment Lease Project) 3.70%, Series 1985A (LOC; Sanwa Bank) (a,b).... 5,800,000 5,800,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
SOUTH CAROLINA--.3%
Sumter County, Industrial Revenue, VRDN (Bendix Corp. Project)
4% (LOC; Sumitomo Bank) (a,b)........................................... $ 4,000,000 $ 4,000,000
TEXAS--12.5%
Dallas County, Revenue 3.60%, Series C, 6/15/95 (SBPA; Sanwa Bank).......... 10,200,000 10,200,000
El Paso Health Facilities Development Corp., Revenue, VRDN
(Providence Memorial Hospital) 4.05% (LOC; Fuji Bank) (a,b)............. 12,600,000 12,600,000
Greater East Texas Higher Education Authority Inc., Student Loan Revenue,
Refunding,
VRDN 3.55%, Series A (LOC; Student Loan Marketing Association) (a,b).... 21,000,000 21,000,000
Harris County Health Facilities Development Corp., VRDN:
HR:
(Memorial Hospital Systems Project) 2.90% (LOC; Societe Generale) (a,b) 10,900,000 10,900,000
(Texas Children's Hospital) 3.50%, Series B (LOC; Bank of America) (a,b) 8,300,000 8,300,000
Special Facilities Revenue (Texas Medical Center Project) 4.05% (Insured; MBIA) (a) 4,000,000 4,000,000
City of Houston, VRDN:
Certificates of Obligation
3.50%, Series A (Liquidity Facility;
Morgan Guaranty Trust Co.) (a)........................................ 8,400,000 8,400,000
Public Improvement 3.50%, Series A
(Liquidity Facility; Morgan Guaranty Trust Co.) (a)................... 6,400,000 6,400,000
State of Texas, TRAN 5%, 8/31/95............................................ 60,000,000 60,228,569
Texas Health Facilities Development Corp., HR, VRDN (North Texas Pooled
Health)
3.45%, Series 85A (LOC; Citibank) (a,b)................................. 18,700,000 18,700,000
Texas Municipal Power Agency, Revenue, CP
3.70%, 3/10/95 (Revolving Credit: Bank of America, Canadian Imperial Bank
of Commerce and Morgan Guaranty Trust Co.).............................. 6,725,000 6,725,000
UTAH--2.6%
Salt Lake County, PCR, Refunding, VRDN (Service Station Holdings Project)
3.80% (Guaranteed by; British Petroleum) (a)............................ 34,200,000 34,200,000
VERMONT--2.4%
State of Vermont, CP 4.20%, Series C, 3/13/95
(Revolving Credit; Toronto Dominion Bank)............................... 31,400,000 31,400,000
VIRGINIA--3.6%
Fairfax County Industrial Development Authority, Revenue, VRDN
(Fairfax Hospital Association) 3.65%, Series A (LOC; Dai-Ichi Kangyo Bank) (a,b) 13,200,000 13,200,000
Henrico County Industrial Development Authority, Health Facility, VRDN
(Hermitage Project) 4.25% (LOC; Nations Bank of Virginia) (a,b)......... 35,400,000 35,400,000
WASHINGTON--2.3%
Washington Housing Finance Commission, Non-Profit Housing Revenue, VRDN
(Emerald Heights Project) 4.20% (LOC; Banque Paribas) (a,b)............. 8,300,000 8,300,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
WASHINGTON (CONTINUED)
Washington Public Power Supply System, Revenue, Refunding, VRDN
(Nuclear Project No.3) 3.55%, Series 3A-3 (LOC; National Westminster Bank) (a,b) $ 22,600,000 $ 22,600,000
WISCONSIN--1.5%
City of Milwaukee, RAN 3.50%, Series A, 2/23/95............................. 20,000,000 20,005,850
----------------
TOTAL INVESTMENTS (cost $1,337,193,375)..................................... $1,337,193,375
===============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
BPA Bond Purchase Agreement MFMR Multi-Family Mortgage Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RAN Revenue Anticipation Notes
GIC Guaranteed Investment Contract RRR Resources Recovery Revenue
GO General Obligation SBPA Standby Bond Purchase Agreement
HR Hospital Revenue TAN Tax Anticipation Notes
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
MBIA Municipal Bond Investors Assurance
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
--------- --------- -------------------- -----------------------
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 97.1%
F2 VMIG2/MIG2, P2 SP2, A2 2.4
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) .2
Not Rated (f) Not Rated (f) Not Rated (f) .3
--------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At January 31, 1995, 47.7% of the
Fund's net assets are backed by letters of credit issued by domestic
banks, foreign banks, corporations and Government Agencies.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond
ratings of the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board of Trustees to be of
comparable quality to those rated securities in which the Fund may
invest.
See notes to financial statements.
<TABLE>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value_Note 1(a)........................... $1,337,193,375
Interest receivable..................................................... 11,542,139
----------------
1,348,735,514
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 163,328
Due to Custodian........................................................ 1,834,902
Due to Distributor...................................................... 9,670 2,007,900
------------ --------------
NET ASSETS ................................................................ $1,346,727,614
==============
REPRESENTED BY:
Paid-in capital......................................................... $1,346,904,960
Accumulated net realized (loss) on investments.......................... (177,346)
----------------
NET ASSETS at value......................................................... $1,346,727,614
==============
Shares of Beneficial Interest Outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 1,299,474,666
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 47,430,294
==============
NET ASSET VALUE per share:
Class A Shares
($1,299,301,275 / 1,299,474,666 shares)............................... $1.00
=====
Class B Shares
($47,426,339 / 47,430,294 shares)..................................... $1.00
=====
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $43,539,780
EXPENSES:
Management fee_Note 2(a).............................................. $2,972,503
Distribution fees (Class B Shares)_Note 2(b).......................... 62,606
------------
TOTAL EXPENSES.................................................... 3,035,109
-------------
INVESTMENT INCOME--NET...................................................... 40,504,671
NET REALIZED (LOSS) ON INVESTMENTS.......................................... (177,346)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $40,327,325
===========
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
--------------------------------------
1994 1995
------------------ -----------------
<S> <C> <C>
OPERATIONS:
Investment income_net............................................... $ 41,428,601 $ 40,504,671
Net realized gain (loss) on investments............................. 118,355 (177,346)
Net unrealized (depreciation) on investments for the year........... (24,221) ___
------------------ -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 41,522,735 40,327,325
------------------ -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A Shares.................................................... (41,428,601) (39,819,339)
Class B Shares.................................................... ___ (685,332)
Net realized gain on investments:
Class A Shares.................................................... ___ (110,083)
Class B Shares.................................................... ___ (1,393)
------------------ -----------------
TOTAL DIVIDENDS............................................... (41,428,601) (40,616,147)
------------------ -----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A Shares.................................................... 14,041,812,260 10,802,933,482
Class B Shares.................................................... 501 125,274,442
Dividends reinvested:
Class A Shares.................................................... 6,662,571 6,851,313
Class B Shares.................................................... ___ 431,015
Cost of shares redeemed:
Class A Shares.................................................... (14,147,568,464) (11,249,985,511)
Class B Shares.................................................... ___ (78,275,664)
------------------ -----------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS (99,093,132) (392,770,923)
------------------ -----------------
TOTAL (DECREASE) IN NET ASSETS.............................. (98,998,998) (393,059,745)
NET ASSETS:
Beginning of year................................................... 1,838,786,357 1,739,787,359
------------------ -----------------
End of year......................................................... $ 1,739,787,359 $ 1,346,727,614
================== ================
See notes to financial statements.
</TABLE>
DREYFUS TAX EXEMPT CASH MANAGEMENT
FINANCIAL HIGHLIGHTS
Reference is made to page 3 and 4 of the Fund's Prospectus dated June 1,
1995.
See notes to financial statements.
DREYFUS TAX EXEMPT CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
The Fund offers both Class A and Class B shares. Class B shares are
subject to a Service Plan adopted pursuant to Rule 12b-1 under the Act. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and original issue discounts on investments, is
earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified
cost basis.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $177,000
available for Federal income tax purposes to be applied against future net
securities profits, if any realized subsequent to January 31, 1995. If not
applied, the carryover expires in fiscal 2003.
At January 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS TAX EXEMPT CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .20 of 1% of the average
daily value of the Fund's net assets and is payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage commissions and extraordinary expenses, exceed 1 1/2%
of the average value of the Fund's net assets for any full fiscal year.
Currently, due to an undertaking, the Manager, and not the Fund, is
liable for all expenses of the Fund (excluding certain expenses as described
above) other than management fee, and with respect to the Fund's Class B
shares, Rule 12b-1 Service Plan expenses.
The Manager may modify the existing undertaking provided that the Fund's
shareholders are given 90 days prior notice.
(B) On August 5, 1994, Fund shareholders approved a revised Class B
Service Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to
the Plan, effective August 24, 1994, the Fund reimburses the Distributor for
distributing the Fund's Class B shares. The Fund also pays The Dreyfus
Corporation and Dreyfus Service Corporation, and their affiliates
(collectively "Dreyfus") for advertising and marketing relating to the Fund's
Class B shares and for providing certain services relating to Class B sharehol
der accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts, at an aggregate annual rate of .25 of 1%
of the value of the Fund's Class B shares average daily net assets. Both the
Distributor and Dreyfus may pay one or more service Agents a fee in respect
of the Fund's Class B shares owned by the shareholders with whom the Service
Agent has a servicing relationship or for whom the Service Agent is the
dealer or holder of record. Both the Distributor and Dreyfus determine the
amounts, if any, to be paid to the Service Agents under the Plan and the
basis on which such payments are made. The fees payable under the Plan are
payable without regard to actual expenses incurred.
During the period from February 1, 1994 through August 23, 1994, the
Fund's Service Plan ("prior Class B Service Plan") provided that the Fund pay
Dreyfus Service Corporation at an annual rate of .25 of 1% of the value of
the Fund's Class B shares average daily net assets, for costs and expenses in
connection with advertising, marketing and distributing Class B shares and
for providing certain services to holders of Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended January 31, 1995, $38,667 was charged to the Fund
pursuant to the Plan and $23,939 was charged to the Fund pursuant to the
prior Class B Service Plan.
(C) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives an annual fee of $3,000 and an attendance fee of $500 per meeting.
DREYFUS TAX EXEMPT CASH MANAGEMENT
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS TAX EXEMPT CASH MANAGEMENT
We have audited the accompanying statement of assets and liabilities of
Dreyfus Tax Exempt Cash Management, including the statement of investments,
as of January 31, 1995, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of January 31, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Tax Exempt Cash Management at January 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
March 7, 1995
Dreyfus Tax Exempt Cash Management
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from March 12,
1985 (commencement of operations) to January 31, 1986 and for
each of the nine years in the period ended January 31, 1995, and
with respect to Class B shares for the period from January 10,
1994 (commencement of initial offering) to January 31, 1994 and
for the one year period ended January 31, 1995.
Included in Part B of the Registration Statement:
Statement of Investments--January 31, 1995.
Statement of Assets and Liabilities--January 31, 1995.
Statement of Operations--year ended January 31, 1995.
Statement of Changes in Net Assets--for each of the
years ended January 31, 1994 and 1995.
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors, dated
March 7, 1995.
All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1)(b) of Post-
Effective Amendment No. 13 to the Registration Statement on Form
N-1A, filed on September 30, 1993.
(2) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A, filed on March 24, 1987.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 3 to the Registration Statement on Form N-1A, filed
on March 24, 1987.
(5) Management Agreement.
(6) Distribution Agreement.
(8)(a) Amended and Restated Custody Agreement is incorporated by
reference to Exhibit 8(a) of Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A, filed on March 24, 1987.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A, filed on March 24, 1987.
(9) Shareholders Service Plan.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 3 to the
Registration Statement on Form N-1A, filed on March 24, 1987.
(11) Consent of Independent Auditors.
(15) Service Plan.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit 16 of Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A, filed on May 27, 1994.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Power of Attorney of Trustees.
(b) Power of Attorney of Officer.
(c) Certificate of Assistant Secretary.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of March 7, 1995
______________ _____________________________
Shares of Beneficial Interest
(par value $.001)
Class A Shares 1765
Class B Shares 19
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a trustee, officer, underwriter
or affiliated person of the Registrant is insured or indemnified in
any manner against any liability which may be incurred in such
capacity, other than insurance provided by any trustee, officer,
affiliated person or underwriter for their own protection, is
incorporated by reference to Item 27 of Part C of Pre-Effective
Amendment No. 3 to the Registration Statement on Form N-1A, filed
on March 24, 1987.
Reference is also made to the Distribution Agreement attached
hereto as Exhibit (6).
Item 28. 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, manager and distributor 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
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
DAVID B. TRUMAN Former Director:
(cont'd) Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
World Balanced Fund+++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation
Operating Officer,
and a Director
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Director:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++'
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company+++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization*;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
PAUL H. SNYDER Director:
Vice President-Finance Pennsylvania Economy League
and Chief Financial Philadelphia, Pennsylvania;
Officer Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Dreyfus Service Corporation*
Director and Vice President:
Financial Executives Institute,
Philadelphia Chapter
Philadelphia, Pennsylvania
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
HENRY D. GOTTMANN Executive Vice President:
Vice President-Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals*;
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President- Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-Fund Lion Management, Inc.*;
Legal and Compliance, Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ 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 One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) The Dreyfus/Laurel Investment Series
40) The Dreyfus Leverage Fund, Inc.
41) Dreyfus Life and Annuity Index Fund, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund, Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Intermediate Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
65) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Treasury Cash Management
75) Dreyfus Treasury Prime Cash Management
76) Dreyfus Variable Investment Fund
77) Dreyfus-Wilshire Target Funds, Inc.
78) Dreyfus Worldwide Dollar Money Market Fund, Inc.
79) General California Municipal Bond Fund, Inc.
80) General California Municipal Money Market Fund
81) General Government Securities Money Market Fund, Inc.
82) General Money Market Fund, Inc.
83) General Municipal Bond Fund, Inc.
84) General Municipal Money Market Fund, Inc.
85) General New York Municipal Bond Fund, Inc.
86) General New York Municipal Money Market Fund
87) Pacific American Fund
88) Peoples Index Fund, Inc.
89) Peoples S&P MidCap Index Fund, Inc.
90) Premier Insured Municipal Bond Fund
91) Premier California Municipal Bond Fund
92) Premier GNMA Fund
93) Premier Growth Fund, Inc.
94) Premier Municipal Bond Fund
95) Premier New York Municipal Bond Fund
96) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Operating Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Associate Vice President
General Counsel and Assistant
Secretary
Lynn H. Johnson+ Vice President None
Ruth D. Leibert++ Assistant Vice President Assistant
Secretary
Paul D. Furcinito++ Assistant Vice President Assistant
Secretary
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Vice President Vice President
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant 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, 1995.
Dreyfus Tax Exempt Cash Management
BY: /s/Marie E. Connolly*
Marie E. Connolly, 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/Marie E. Connolly* President and Treasurer
Marie E. Connolly (Principal Executive 3/29/95
Officer, Financial and
Accounting Officer)
/s/David W. Burke* Trustee 3/29/95
David W. Burke
/s/Isabel P. Dunst* Trustee 3/29/95
Isabel P. Dunst
/s/Lyle E. Gramley* Trustee 3/29/95
Lyle E. Gramley
/s/Warren B. Rudman* Trustee 3/29/95
Warren B. Rudman
*BY: __________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
ITEM Page
(5) Management Agreement. . . . . . . . . . .
(6) Distribution Agreement. . . . . . . . .
(11) Consent of Ernst & Young LLP, Independent
Auditors . . . . . . . . . . . . . . . . .
(15) Service Plan Auditors . . . . . . . . .
(16) Schedules of Computation of Performance Data
for Class A and Class B shares . . . . . .. .
Other Exhibit:
(a) Power of Attorney of Directors
(b) Power of Attorney of Officers
(c) Certificate of Assistant Secretary
MANAGEMENT AGREEMENT
DREYFUS TAX EXEMPT CASH MANAGEMENT
August 24, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and
reinvesting the same in investments of the type and in
accordance
with the limitations specified in its charter documents and in
its Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be
submitted to you, and in such manner and to such extent as from
time to time may be approved by the Fund's Board. The Fund
desires to employ you to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons
may be officers or employees who are employed by both you and
the
Fund. The compensation of such person or persons shall be paid
by you and no obligation may be incurred on the Fund's behalf in
any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of the Fund's
portfolio in accordance with the Fund's investment objectives
and
policies as stated in its Prospectus and Statement of Additional
Information as from time to time in effect. In connection
therewith, you will obtain and provide investment research and
will supervise the Fund's investments and conduct a continuous
program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. You will furnish to the Fund
such statistical information, with respect to the investments
which the Fund may hold or contemplate purchasing, as the Fund
may reasonably request. The Fund wishes to be informed of
important developments materially affecting its portfolio and
shall expect you, on your own initiative, to furnish to the Fund
from time to time such information
as you may believe appropriate
for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to the Fund's
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of the Fund's shares;
and generally assist in all aspects of the Fund's operations.
You shall have the right, at your expense, to engage other
entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund
hereunder and the Fund agrees
as an inducement to your undertaking the same that you shall not
be liable hereunder for any error of judgment or mistake of law
or for any loss suffered by the Fund, provided that nothing
herein shall be deemed to protect or purport to protect you
against any liability to the Fund or to its security holders to
which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
your duties hereunder, or by reason of
your reckless disregard of
your obligations and duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the annual rate of .20 of 1% of the value of
the Fund's average daily net assets. Net asset value shall be
computed on such days and at such time or times as described in
the Fund's then-current Prospectus and Statement of Additional
Information. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be pro-
rated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you,
the
value of the Fund's net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of the Fund's net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid
on securities sold short, brokerage fees
and commissions, if any,
fees of Board members who are not your officers, directors or
employees or holders of 5% or more of your outstanding voting
securities, Securities and Exchange Commission fees and state
Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs
attributable to investor services
(including, without limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and
any extraordinary expenses.
If in any fiscal year the aggregate expenses of the
Fund (including fees pursuant to this Agreement, but excluding
interest, taxes, brokerage and, with the
prior written consent of
the necessary state securities commissions, extraordinary
expenses) exceed 1-1/2% of the average value of the Fund's net
assets for the fiscal year, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense. Your
obligation pursuant hereto will be limited to the amount of your
fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the
case
may be, on a monthly basis.
The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other
managed
accounts, and the Fund has no objection to your so acting,
provided that when the purchase or sale of securities of the
same
issuer is suitable for the investment objectives of two or more
companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a
manner believed by you to be equitable to each company or
account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by the Fund or the
size of the position obtainable for
or disposed of by the Fund.
In addition, it is understood
that the persons employed
by you to assist in the performance
of your duties hereunder will
not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss
suffered by the Fund in connection
with the matters to which this Agreement relates, except for a
loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or
from
reckless disregard by you of your obligations and duties under
this Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.
This Agreement shall continue until June 11, 1995, and
thereafter shall continue automatically for successive annual
periods ending on June 11th of each year, 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 Fund's outstanding voting
securities, provided that in either event its continuance also
is
approved by a majority of the Fund's 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, by the Fund's
Board or by vote of holders of a majority of the Fund's shares
or, upon not less than 90 days' notice, by you. This Agreement
also will terminate automatically in the event of its assignment
(as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations,
business trusts, 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 investment advisory
or other agreements with such other entities. If you cease to
act as the Fund's investment adviser, the Fund agrees that, at
your request, 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.
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 Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS TAX EXEMPT CASH
MANAGEMENT
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
DISTRIBUTION AGREEMENT
DREYFUS TAX EXEMPT CASH MANAGEMENT
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
August 24, 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agree-
ments 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 Securi-
ties 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 there-
under. As used in this agreement the terms "registration state-
ment" 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 amend-
ment 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 Securi-
ties 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 there-
with) which you, your officers and directors, or any such con-
trolling 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 control-
ling 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 con-
trols the Fund within the meaning of Section 15 of the Securi-
ties 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 there-
with) 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 pro-
spectus, 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 amend-
ments 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 pro-
spectus 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 registra-
tion 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, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. 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. Exclusivity
So long as you act as the distributor of Shares, you
shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
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 Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
DREYFUS TAX EXEMPT CASH MANAGEMENT
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
EXHIBIT A
Reapproval Date Reapproval Day
June 11, 1996 June 11th
Dreyfus Tax Exempt Cash Management
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-captioned
investment company (the "Fund") adopt a Shareholder Services Plan (the
"Plan") under which the Fund would reimburse Dreyfus Service Corporation
("DSC") for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts to (a) shareholders of each series
of the Fund or class of Fund shares set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time, or (b) if no series or classes
are set forth on such Exhibit, shareholders of the Fund. The Plan is not
to be adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Act"), and the fee under the Plan is intended to be
a "service fee" as defined in Article III, Section 26 (a "Service Fee"),
of the NASD Rules of Fair Practice (the "NASD Rules").
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such information as
it deemed necessary to an informed determination as to whether a written
plan should be implemented and has considered such pertinent factors as it
deemed necessary to form the basis for a decision to use Fund assets for
such purposes.
In voting to approve the implementation of such a plan, the
Board has concluded, in the exercise of its reasonable business judgment
and in light of applicable fiduciary duties, that there is a reasonable
likelihood that the plan set forth below will benefit the Fund and its
shareholders.
The Plan: The material aspects of this Plan are as follows:
1. The Fund shall reimburse DSC an amount not to exceed an
annual rate of .25 of 1% of the value of the Fund's average daily net
assets for its allocated expenses of providing personal services to
shareholders and/or maintaining shareholder accounts; provided that, at no
time, shall the amount paid to DSC under this Plan, together with amounts
otherwise paid by the Fund, or each series or class identified on Exhibit
A, as a Service Fee under the NASD Rules, exceed the maximum amount then
payable under the NASD Rules as a Service Fee. The amount of such
reimbursement shall be based on an expense allocation methodology prepared
by DSC annually and approved by the Fund's Board or on any other basis
from time to time deemed reasonable by the Fund's Board.
2. For the purposes of determining the fees payable under this
Plan, the value of the net assets of the Fund or the net assets
attributable to each series or class of Fund shares identified on Exhibit
A, shall be computed in the manner specified in the Fund's charter
documents for the computation of the value of the Fund's net assets.
3. The Board shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to this Plan. The report
shall state the purpose for which the amounts were expended.
4. This Plan will become effective immediately upon approval
by a majority of the Board members, including a majority of the Board
members who are not "interested persons" (as defined in the Act) of the
Fund and have no direct or indirect financial interest in the operation of
this Plan or in any agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the purpose of
voting on the approval of this Plan.
5. This Plan shall continue for a period of one year from its
effective date, unless earlier terminated in accordance with its terms,
and thereafter shall continue automatically for successive annual periods,
provided such continuance is approved at least annually in the manner
provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board, provided
that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph 4 hereof.
7. This Plan is terminable without penalty at any time by vote
of a majority of the Board members who are not "interested persons" (as
defined in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into
in connection with this Plan.
8. For Funds that are Massachusetts business trusts or
Delaware Limited Partnerships: The obligations hereunder and under any
related Plan 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.
Dated: , 199_
EXHIBIT A
[Name of Series or Class] Fee
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated March 7, 1995, in this Registration Statement (Form N-1A 2-89275)
of Dreyfus Tax Exempt Cash Management.
ERNST & YOUNG LLP
New York, New York
March 27, 1995
DREYFUS TAX EXEMPT CASH MANAGEMENT
SERVICE PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Service Plan
(the "Plan") relating to its Class B shares in accordance with
Rule 12b-1, promulgated under the Investment Company Act of
1940, as amended (the "Act"). Under the Plan, the Fund would
(a) reimburse the Fund's distributor (the "Distributor") for
distributing the Fund's Class B shares (the payments in this
clause (a) being referred to as "Distributor Payments") and
(b) pay The Dreyfus Corporation, Dreyfus Service Corporation and
any affiliate of either of them (collectively, "Dreyfus") for
advertising and marketing relating to the Fund's Class B shares
and for providing certain services relating to Class B
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
("Servicing") (the payments in this clause (b) being referred to
as "Dreyfus Payments"). If this proposal is to be implemented,
the Act and said Rule 12b-1 require that a written plan
describing all material aspects of the proposed financing be
adopted by the Fund.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets attributable to
the Fund's Class B shares for such purposes.
In voting to approve the implementation of such a plan,
the Board members have concluded, in the exercise of their
reasonable business judgment and in light of their respective
fiduciary duties, that there is a reasonable likelihood that the
plan set forth below will benefit the Fund and holders of its
Class B shares.
The Plan: The material aspects of this Plan are as
follows:
1. (a) The aggregate annual fee the Fund may pay
under this Plan for Distributor Payments and Dreyfus Payments is
.25 of 1% of the value of the Fund's average daily net assets
attributable to Class B (the "Aggregate Amount").
(b) The Fund shall reimburse the Distributor in
respect of Distributor Payments an amount not to exceed an
annual rate of .25 of 1% of the value of the average daily net
assets attributable to Class B for such year (the "Distributor
Amount").
(c) The Fund shall pay Dreyfus in respect of
Dreyfus Payments an annual fee equal to the difference between
the Aggregate Amount and the Distributor Amount for such year.
(d) Each of the Distributor and Dreyfus may pay
one or more securities dealers, financial institutions (which
may include banks) or other industry professionals, such as
investment advisers, accountants and estate planning firms
(severally, a "Service Agent"), a fee in respect of the Fund's
Class B shares owned by investors with whom the Service Agent
has a Servicing relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and
Dreyfus shall determine the amounts to be paid to the Service
Agents to which it will make payments under this Plan and the
basis on which such payments will be made. Payments to a
Service Agent are subject to compliance by the Service Agent
with the terms of any related Plan agreement between the Service
Agent and the Distributor or Dreyfus, as the case may be. The
fee payable for Servicing is intended to be a "service fee" as
defined in Article III, Section 26 of the NASD Rules of Fair
Practice.
2. For the purposes of determining the fees payable
under this Plan, the value of the Fund's net assets attributable
to Class B shall be computed in the manner specified in the
Fund's charter documents as then in effect for the computation
of the value of the Fund's net assets attributable to such
Class.
3. The Fund's Board shall be provided, at least
quarterly, with a written report of all amounts expended
pursuant to this Plan. The report shall state the purpose for
which the amounts were expended.
4. This Plan will become effective upon the later to
occur of (i) the consummation of the transactions contemplated
by the Amended and Restated Agreement and Plan of Merger dated
as of December 5, 1993 by and among Mellon Bank Corporation,
Mellon Bank, N.A., XYZ Sub Corporation and The Dreyfus
Corporation or (ii) approval by (a) holders of a majority of the
Fund's outstanding Class B shares, and (b) a majority of the
Board members, including a majority of the Board members who are
not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. This Plan may be amended at any time by the Fund's
Board, provided that (a) any amendment to increase materially
the costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval by a vote of the holders of a
majority of the Fund's outstanding Class B shares, and (b) any
material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph 4(b)
hereof.
7. This Plan is terminable without penalty at any
time by (a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, or (b) vote of the holders of a majority of the
Fund's outstanding Class B shares.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund and shall not be binding upon any Board
member, officer or shareholder of the Fund individually.
Dated: May 24, 1994
Other Exhibit
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Frederick C. Dey, Eric B.
Fischman, Ruth D. Leibert and John E. Pelletier 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 Dreyfus Tax Exempt Cash Management (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.
August 29, 1994
/s/David W. Burke
David W. Burke
/s/Isabel P. Dunst
Isabel P. Dunst
/s/Lyle E. Gramley
Lyle E. Gramley
/s/Warren B. Rudman
Warren B. Rudman
Other Exhibit
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Frederick C. Dey, Eric B.
Fischman, Ruth D. Leibert and John E. Pelletier 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 Dreyfus Tax Exempt Cash Management (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.
January 10, 1995
_________________________________
Marie E. Connolly, President
OTHER EXHIBIT (c)
DREYFUS TAX EXEMPT CASH MANAGEMENT
Certificate of Assistant Secretary
The undersigned, Eric B. Fischman Vice President and Assistant
Secretary of Dreyfus Tax Exempt Cash Management (the "Fund"), hereby
certifies that set forth below is a copy of the resolution adopted by the
Fund's Board of Trustees authorizing the signing by Frederick C. Dey, Eric
B. Fischman, Ruth D. Leibert and John Pelletier 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 Frederick C. Dey, Eric B. Fischman, Ruth
D. Leibert and John Pelletier 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 24, 1995.
_________________________________
Eric B. Fischman
Vice President and Assistant Secretary
(SEAL)
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