File Nos. 811-4871
33-9452
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. 14 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 14 [X]
(Check appropriate box or boxes.)
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
(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)
X on November 8, 1995 pursuant to paragraph (b)
----
---- 60 days after filing pursuant to paragraph (a)(i)
---- on (date) pursuant to paragraph (a)(i)
---- 75 days after filing pursuant to paragraph (a)(ii)
---- on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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 July 31, 1995 was filed on September 27,
1995.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 5
5 Management of the Fund 10
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 20
7 Purchase of Securities Being Offered 11
8 Redemption or Repurchase 16
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-24
13 Investment Objectives and Policies B-2
14 Management of the Fund B-8
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-11
Services
NOTE: * Omitted since answer is negative or inapplicable.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation B-22
18 Capital Stock and Other Securities B-24
19 Purchase, Redemption and Pricing B-13, B-16,
of Securities Being Offered B-20
20 Tax Status *
21 Underwriters B-14
22 Calculations of Performance Data B-22
23 Financial Statements B-41
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS NOVEMBER 8, 1995
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
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GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. ITS GOAL IS TO MAXIMIZE CURRENT INCOME EXEMPT FROM
FEDERAL AND STATE OF CALIFORNIA INCOME TAXES TO THE EXTENT CONSISTENT WITH
THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY THE FUND.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THE FUND'S SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS
AS DESCRIBED HEREIN. BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A AND
CLASS B SHARES. CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO
THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS B SHARES
BEAR CERTAIN COSTS PURSUANT TO A PLAN ADOPTED IN ACCORDANCE WITH RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED NOVEMBER 8, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO
THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR
CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.............. 3
CONDENSED FINANCIAL INFORMATION ............ 4
YIELD INFORMATION........................... 4
DESCRIPTION OF THE FUND..................... 5
MANAGEMENT OF THE FUND...................... 10
HOW TO BUY FUND SHARES...................... 11
SHAREHOLDER SERVICES........................ 13
HOW TO REDEEM FUND SHARES................... 16
DISTRIBUTION PLAN........................... 18
SHAREHOLDER SERVICES PLANS.................. 19
DIVIDENDS, DISTRIBUTIONS AND TAXES.......... 19
GENERAL INFORMATION......................... 20
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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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This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
CLASS A CLASS B
SHARES SHARES
------ -----
<S> <C> <C> <C>
Management Fees..................................................... .50% .50%
12b-1 Fees.......................................................... None .20%
Other Expenses...................................................... .13% .38%
Total Fund Operating Expenses....................................... .63% 1.08%
EXAMPLE:
You would pay the following
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period:
1 Year $ 6 $ 11
3 Years $20 $ 34
5 Years $35 $ 60
10 Years $79 $132
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- --------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Other Expenses for Class B are based on amounts for Class A for the
Fund's last fiscal year. Certain Service Agents (as defined below) may charge
their clients direct fees for effecting transactions in Fund shares; such
fees are not reflected in the foregoing table. See "Management of the Fund,"
"How to Buy Fund Shares," "Distribution Plan" and "Shareholder Services
Plans."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes for Class A are included in the Statement of Additional Information,
available upon request. No financial information is available for Class B
shares, which had not been offered as of the date of the financial
statements.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a Class 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>
<CAPTION>
YEAR ENDED JULY 31,
-----------------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993 1994 1995
------ ----- ----- ---- ---- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.... $1.0000 $1.0000 $.9994 $.9992 $.9996 $1.0000 $1.0000 $1.0000 $.9998
------ ------- ------ ------ ------ ------- ------ ------- ------
INVESTMENT OPERATIONS:
Investment income_net ........... .0163 .0452 .0533 .0578 .0517 .0359 .0243 .0225 .0310
Net realized and unrealized
gain (loss) on investments..... -- (.0006) (.0002) .0004 .0004 -- -- (.0002 (.0001)
------ ------- ------ ------ ------ ------- ------ ------- ------
TOTAL FROM INVESTMENT OPERATIONS.... .0163 .0446 .0531 .0582 .0521 .0359 .0243 .0223 .0309
------ ------- ------ ------ ------ ------- ------ ------- ------
DISTRIBUTIONS:
Dividends from investment income-net.. (.0163 (.0452) (.0533) (.0578) (.0517) (.0359) (.0243) (.0225)(.0310)
Dividends from net realized
gain on investments........ -- -- -- -- -- -- -- -- --
------ ------- ------ ------ ------ ------- ------ ------- ------
TOTAL DISTRIBUTIONS............... (.0163) (.0452) (.0533) (.0578) (.0517) (.0359) (.0243) (.0225)(.0310)
------ ------- ------ ------ ------ ------- ------ ------- ------
Net asset value, end of year...... $1.0000 $.9994 $.9992 $.9996 $1.0000 $1.0000 $1.0000 $.9998 $.9997
======= ===== ====== ====== ======= ======= ======= ====== ======
TOTAL INVESTMENT RETURN............. 4.16%(2) 4.62% 5.46% 5.93% 5.29% 3.65% 2.46% 2.27% 3.14%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets........ -_ .50% .76% .07% .02% .20% .33% .33% .52%
Ratio of net investment income
to average net assets...... 4.06%(2) 4.48% 5.29% 5.78% 5.08% 3.59% 2.43% 2.24% 3.07%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation (limited to the
expense limitation provision of
the Management Agreement)......... 1.50%(2) .21% -- .65% .59% .41% .30% .28% .11%
Net Assets, end of year
(000's Omitted).. $32,328 $109,037 $77,372 $281,909 $538,978 $549,383 $608,534 $699,105 $463,404
- -------------
(1) From March 10, 1987 (commencement of operations) to July 31, 1987.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Page 4
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund ReportRegistration Mark, Morningstar, Inc.
and other industry publications.
DESCRIPTION OF THE FUND
GENERAL _ By this Prospectus, two classes of shares of the Fund are being
offered_Class A shares and Class B shares (each such class being referred to
as a "Class"). The Classes are identical, except for the services offered to
and expenses borne by each Class. Class B shares bear certain costs pursuant
to a distribution plan adopted by the Fund's Board of Trustees. See
"Distribution Plan" and "Shareholder Services Plans." In addition, Class B
shares are charged directly for sub-accounting services provided by Service
Agents at the annual rate of .05% of the value of the average daily net
assets of Class B. The sub-accounting fee paid by Class B, together with
amounts payable pursuant to the Distribution Plan and Shareholder Services
Plan, will cause Class B to have a higher expense ratio and to pay lower
dividends than Class A. You should consult your Service Agent to determine
which Class is offered by the Service Agent.
INVESTMENT OBJECTIVE _ The Fund's goal is to maximize current income exempt
from Federal and State of California income taxes to the extent consistent
with the preservation of capital and the maintenance of liquidity. To
accomplish this goal, the Fund invests primarily in debt securities of the
State of California, its political subdivisions, authorities and
corporations, the interest from which is, in the opinion of bond counsel to
the issuer, exempt from Federal and State of California personal income taxes
(collectively, "California Municipal Obligations"). To the extent acceptable
California Municipal Obligations are at any time unavailable for investment
by the Fund, the Fund will invest temporarily in other debt securities the
interest from which is, in the opinion of bond counsel to the issuer, exempt
from Federal, but not State of California, income tax. The Fund's investment
objective cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. There can be no assurance that the Fund's investment objective
will be achieved. Securities in which the Fund will invest may not earn as
high a level of current income as long-term or lower quality securities which
generally have less liquidity, greater market risk and more fluctuation in
market value.
MUNICIPAL OBLIGATIONS _ Debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax
("Municipal Obligations") generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax exempt
industrial development bonds, in most cases, are revenue bonds that 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 install-
Page 5
ment purchase contracts for property or equipment issued by municipalities.
Municipal Obligations bear fixed, floating or variable rates of interest.
MANAGEMENT POLICIES _ It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations. Under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in California Municipal Obligations and the remainder may be
invested in securities that are not California Municipal Obligations and
therefore may be subject to California income taxes. See "Risk
Factors_Investing in California Municipal Obligations" below, and "Dividends,
Distributions and Taxes."
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 Trustees. The nationally recognized
statistical rating organizations currently rating investments of the type the
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch") and
their rating criteria are described in Appendix B 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 for which the
interest is paid from revenues of similar types of projects. As a result, the
Fund may be subject to greater risk as compared to a fund that does not
follow this practice.
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 purposes of the alternative minimum tax. Where
a regulated investment company receives such interest, a proportionate share
of any exempt-interest dividend paid by the investment company may be treated
as such a preference item to shareholders. The Fund may invest without
limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
The Fund may purchase floating and variable rate demand notes 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. The interest
rates on
Page 6
these obligations fluctuate from time to time. These obligations permit daily
changes in the amounts 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, it 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 otherwise will be collateralized by
U.S. Government securities. For certain participation interests, the Fund
will have the right to demand payment, on not more than seven days' notice,
for all or any part of the Fund's participation interest in the Municipal
Obligation, plus accrued interest. As to these instruments, the Fund intends
to exercise its right to demand payment only upon a default under the terms
of the Municipal Obligation, as needed to provide liquidity to meet
redemptions, or to maintain or improve the quality of its investment
portfolio.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement)
having a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing
or similar agent at or near the commencement of such period, that would cause
the securities, coupled with the tender option, to trade at par on the date
of such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the issuer of the
underlying Municipal Obligation, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a default in
payment of principal or interest on the underlying Municipal Obligations and
for other reasons.
The Fund may 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
Page 7
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.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's
net assets could be adversely affected.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
short-term investments ("Taxable Investments") consisting of: notes of
issuers having, at the time of purchase, a quality rating within the two
highest grades of Moody's, S&P or Fitch; obligations of the U.S. Government,
its agencies or instrumentalities; commercial paper rated not lower than P-2
by Moody's, A-2 by S&P or F-2 by Fitch; certificates of deposit of U.S.
domestic banks, including foreign branches of domestic banks, with assets of
one billion dollars or more; time deposits; bankers' acceptances and other
short-term bank obligations; and repurchase agreements in respect of any of
the foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments. If the Fund purchases Taxable
Investments, it will value them using the amortized cost method and comply
with the provisions of Rule 2a-7 relating to purchases of taxable
instruments. When the Fund has adopted a temporary defensive position,
including when acceptable California Municipal Obligations are unavailable
for investment by the Fund, in excess of 35% of the Fund's net assets may be
invested in securities that are not exempt from California income tax. 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; and (ii) invest up to 25% of its total assets in the securities
of issuers in any industry, provided that there is no such limitation on
investments in Municipal Obligations and, for temporary defensive purposes,
in securities issued by domestic banks and obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities. This paragraph
describes fundamental policies that cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940) of
the Fund's outstanding voting shares. See "Investment Objective and
Management Policies_Investment Restrictions" in the Statement of Additional
Information.
RISK FACTORS _ INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS _ You should
consider carefully the special risks inherent in the Fund's investment in
California Municipal Obligations. These risks result from certain amendments
to the California Constitution and other statutes that limit the taxing and
spending authority of California governmental entities, as well as from the
general financial condition of the State of California. From mid-1990 to late
1993, the State suffered a recession with the worst
Page 8
economic, fiscal and budget conditions since the 1930s. As a result, the
State has experienced recurring budget deficits for four of the last five
fiscal years ending with 1991-92.The State had an operating surplus of
approximately $109 million in 1992-93, and $836 million in 1993-94. However,
at June 30, 1994, according to California's Department of Finance, the
State's Special Fund for Economic Uncertainties had an accumulated deficit,
on a budget basis, of approximately $1.8 billion. A further consequence of
the large budget imbalances over the last three fiscal years has been that
the State depleted its available cash resources and has had to use a series
of external borrowings to meet its cash needs. To meet its cash flow needs in
the 1994-95 fiscal year, the State issued, in July and August 1994, $4.0
billion of revenue anticipation warrants and $3.0 billion of revenue
anticipation notes. As a result of the deterioration in the State's budget
and cash situation, between October 1991 and July 1994, the rating on the
State's general obligation bonds was reduced by S&P from AAA to A, by Moody's
from Aaa to A1 and by Fitch from AAA to A. These and other factors may have
the effect of impairing the ability of the issuers of California Municipal
Obligations to pay interest on, or repay the principal of, such California
Municipal Obligations. You should obtain and review a copy of the Statement
of Additional Information which more fully sets forth these and other risk
factors.
OTHER 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 value 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
securities, 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/pur-
Page 9
chase 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 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.
The Fund's classification as a "non-diversified" investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act of
1940. A "diversified" investment company is required by the Investment
Company Act of 1940 generally to invest, with respect to 75% of its total
assets, not more than 5% of such assets in the securities of a single issuer.
However, the Fund intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Code, which requires that,
at the end of each quarter of its taxable year, (i) at least 50% of the
market value of the Fund's total assets be invested in cash, U.S. Government
securities, the securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of the value of
the Fund's total assets, and (ii) not more than 25% of the value of its total
assets be invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies). Since a relatively high percentage of the Fund's assets may be inv
ested in the obligations of a limited number of issuers, the Fund's portfolio
securities may be more susceptible to any single economic, political or
regulatory occurrence than the portfolio securities of a diversified
investment company.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time as
the Fund, available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of August 31, 1995, The Dreyfus Corporation managed or administered
approximately $80 billion in assets for more than 1.8 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's 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 pro-
Page 10
vides 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 $209 billion in assets as of September 30, 1995,
including approximately $80 billion in proprietary mutual fund assets. As of
September 30, 1995, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $717 billion in assets, including approximately $55 billion in
mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .50 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of lowering the
overall expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The Fund will
not pay The Dreyfus Corporation at a later time for any amounts it may waive,
nor will the Fund reimburse The Dreyfus Corporation for any amounts it may
assume. For the fiscal year ended July 31, 1995, the Fund paid The Dreyfus
Corporation a management fee at the effective annual rate of .39 of 1% of the
value of the Fund's average daily net assets pursuant to an undertaking in
effect.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service Agents
in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor's ultimate parent company is Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares may be purchased only by clients of certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers"), and other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service Agents") that
have entered into service agreements with the Distributor. For shareholders
who purchased Fund shares from the Distributor, the Distributor will act as
Service Agent. Share certificates are issued only upon your written request.
No certificates are issued for fractional shares. It is not recommended that
the Fund be used as a vehicle for Keogh, IRA or other qualified plans. The
Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which has made an aggregate minimum initial
purchase for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing, the minimum initial investment is $1,000. For full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their
Page 11
Fund account, the minimum initial investment is $50. The Fund reserves
the right to vary further the initial and subsequent investment minimum
requirements at any time.
You may purchase Fund shares by check or wire or through the
TELETRANSFER privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application indicating
which Class of shares is being purchased. For subsequent investments, your
Fund account number should appear on the check and an investment slip should
be enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105, Newark,
New Jersey 07101-0105. Neither initial nor subsequent investments should be
made by third party check. Purchase orders may be delivered in person only to
the Dreyfus Financial Center located in the lobby of 200 Park Avenue,
New York, New York. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900052163/General
California Municipal Money Market Fund_Class A, or DDA #8900252316/General
California Municipal Money Market Fund_Class B, for purchase of Fund shares
in your name. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will be
permitted until the Account Application is received. You may obtain further
information about remitting funds in this manner from your bank. All payments
should be made in U.S. dollars and, to avoid fees and delays, should be drawn
only on U.S. banks. A charge will be imposed if any check used for investment
in your account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Fund shares also may be purchased through AUTOMATIC Asset Builder,
the Government Direct Deposit Privilege and Payroll Savings Plan described
under "Shareholder Services." These services enable you to make regularly
scheduled investments and may provide you with a convenient way to invest for
long-term financial goals. You should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect an investor
against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees for servicing. These fees would be in
addition to any amounts which might be received under the Fund's Distribution
Plan. Service Agents may receive different levels of compensation for selling
different Classes of shares. You should consult your Service Agent in this
regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent. If you do not
remit Federal Funds, your payment must be converted into Federal Funds. This
usually occurs within
Page 12
one business day of receipt of a bank wire and within two business days of
receipt of a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal Reserve System may
take considerably longer to convert into Federal Funds. Prior to receipt of
Federal Funds, your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day that the New York Stock Exchange is open for
business. Net asset value per share 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 Statement of
Additional Information.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions 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 Fund shares declared on that day if the telephone order is placed by 12:00
Noon, New York time, and Federal Funds are received by 4:00 p.m., New York
time, on that day.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
TELETRANSFER PRIVILEGE _ You may purchase Fund shares (minimum $500, maximum
$150,000 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between the bank account designated in one of these documents
and your Fund account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of shares by telephoning 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of the Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this service, you
should consult your Service Agent or call 1-800-645-6561 to determine if it
is available and whether any conditions are imposed on its use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a current value of at least
the
Page 13
minimum initial investment required for the fund into which the exchange
is being made. The ability to issue exchange instructions by telephone is
given to all Fund shareholders automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request, signed by all shareholders on the
account, or by a separate signed Shareholder Services Form, also available by
calling 1-800-645-6561. If you have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306. See "How to Redeem
Fund Shares_Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, TELETRANSFER Privilege, and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must notify
the Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The availability of Fund Exchanges may
be modified or terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE _ Auto-Exchange Privilege enables you to invest
regularly (on a semi-monthly, monthly, quarterly or annual basis), in
exchange for shares of the Fund, in shares of other funds in the Dreyfus
Family of Funds of which you are currently an investor. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain an Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
Page 14
AUTOMATIC ASSET BUILDERRegistration Mark _ AUTOMATIC Asset Builder permits
you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares are purchased
by transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the specified
amount, and Fund shares will be purchased, once a month, on either the first
or fifteenth day, or twice a month, on both days. Only an account maintained
at a domestic financial institution which is an Automated Clearing House
member may be so designated. To establish an AUTOMATIC Asset Builder account,
you must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form from your Service Agent or by calling
1-800-645-6561. You may cancel your participation in this Privilege or change
the amount of purchase at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671,
and the notification will be effective three business days following receipt.
The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Government Direct Deposit Privilege
enables you to purchase Fund shares (minimum of $100 and maximum of $50,000
per transaction) by having Federal salary, Social Security, or certain
veterans', military or other payments from the Federal government automaticall
y deposited into your Fund account. You may deposit as much of such payments
as you elect. To enroll in Government Direct Deposit, you must file with the
Transfer Agent a completed Direct Deposit Sign-Up Form for each type of
payment that you desire to include in the Privilege. The appropriate form may
be obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in the Privilege. You may elect at any time to
terminate your participation by notifying in writing the appropriate Federal
agency. Further, the Fund may terminate your participation upon 30 days'
notice to you.
PAYROLL SAVINGS PLAN _ Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by the
Fund in shares of another fund in the Dreyfus Family of Funds of which you
are a shareholder. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced sales
load. See "Shareholder Services" in the Statement of Additional Information.
Dividend ACH permits you to transfer electronically dividends or dividends
and capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The
Page 15
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
To select a new fund after cancellation, you must submit a new Dividend
Options Form. Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are available only
for existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dividend Sweep. The Fund may modify
or terminate these privileges at any time or charge a service fee. No such
fee currently is contemplated.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from the Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. To open a Quarterly Distribution Plan, contact the Transfer
Agent. The Plan may be ended at any time by you, the Fund or the Transfer
Agent. Shares for which certificates have been issued must be presented
before redemption under the Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which share certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Service Agents
may charge their clients a nominal fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may
be more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY
SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR REDEMPTION
WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER PURCHASE OR
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED
BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME
ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL
OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
Page 16
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, the Check Redemption Privilege, or, if you have
checked the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form with the
Transfer Agent, through the Wire Redemption Privilege, the Telephone
Redemption Privilege or the TELETRANSFER Privilege or, if you are a client of
a Selected Dealer, through the Selected Dealer. If you have given your
Service Agent authority to instruct the Transfer Agent to redeem shares and
to credit the proceeds of such redemptions to a designated account at your
Service Agent, you may redeem shares only in this manner and in accordance
with the regular redemption procedure described below. If you wish to use the
other redemption methods described below, you must arrange with your Service
Agent for delivery of the required application(s) to the Transfer Agent.
Other redemption procedures may be in effect for clients of certain Service
Agents. The Fund makes available to certain large institutions the ability to
issue redemption instructions through compatible computer facilities. TheFund
reserves the right to refuse any request made by wire or telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate any
redemption Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your Service Agent, and reasonably believed by the Transfer
Agent to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to the Dreyfus Financial Center located in the lobby
of 200 Park Avenue, New York, New York. THESE REQUESTS WILL BE FORWARDED TO
THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call the telephone number listed under "General
Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
Page 17
CHECK REDEMPTION PRIVILEGE _ You may request on the Account Application,
Shareholder Services Form or by later written request that the Fund provide
Redemption Checks drawn on the Fund's account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or more. Redemption
Checks should not be used to close your account. Redemption Checks are free,
but the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor the Redemption
Check because of insufficient funds or other valid reason. You should date
your Redemption Checks with the current date when you write them. Please do
not postdate your Redemption Checks. If you do, the Transfer Agent will
honor, upon presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day) made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire. Shares for which certificates have been issued
are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares for which certificates have been issued are not eligible for this
Privilege.
TELETRANSFER PRIVILEGE _ You may request by telephone that redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request, or at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the TELETRANSFER Privilege for transfer to their
bank account not more than $250,000 within any 30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by telephoning 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. Shares issued in certificate
form are not eligible for this Privilege.
DISTRIBUTION PLAN
(CLASS B ONLY)
Under the Distribution Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund directly bears, with respect to
Class B, the costs of preparing, printing and distributing prospectuses and
statements of additional information and of implementing and operating the
Distribution Plan. In addition, the Fund reimburses the Distributor for
payments made to third parties for distributing (within the meaning of Rule
12b-1) Class B shares at an aggregate annual rate of up to .20 of 1% of the
value of the average daily net assets of Class B.
Page 18
SHAREHOLDER SERVICES PLANS
CLASS A _ The Fund has adopted a Shareholder Services Plan with respect to
Class A pursuant to which the Fund reimburses Dreyfus Service Corporation, a
wholly-owned subsidiary of The Dreyfus Corporation, an amount not to exceed
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
CLASS B _ The Fund has adopted a Shareholder Services Plan with respect to
Class B pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class B shares a fee at the annual rate of
.25 of 1% of the value of the average daily net assets of Class B. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the maintenan
ce of such shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Dividends usually
are paid on the last calendar day of each month, and are automatically
reinvested in additional Fund shares at net asset value or, at your option,
paid in cash. The Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. If you redeem all shares
in your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends will be paid to you along
with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid once a year, but
the Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will not
make distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to a Class will be borne
exclusively by such Class. Class B shares will receive lower per share
dividends than Class A shares because of the higher expenses borne by Class
B. See "Annual Fund Operating Expenses."
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal or California personal income taxes. To the extent that you are
obligated to pay state or local taxes outside of the State of California,
dividends earned by an investment in the Fund may represent taxable income.
Dividends derived from Taxable Investments, together with distributions from
any net realized short-term securities gains and all or a portion of any
gains realized from the sale or other disposition of certain market discount
bonds, are subject to Federal income tax as ordinary income whether or not
reinvested. Distributions from net realized long-term securities gains of the
Fund generally are taxable as long-term capital gains for Federal income tax
purposes if you are a citizen or resident of the United States. The Code
provides that the net capital gain of an indi-
Page 19
vidual generally will not be subject to Federal income tax at a rate in
excess of 28%. Under the Code, interest on indebtedness incurred or continued
to purchase or carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible. No dividend paid by the Fund will qualify for
the dividends received deduction allowable to certain U.S. corporations.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by Fund shareholders from their gross income for Federal
income tax purposes, the Fund may purchase specified private activity bonds,
the interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax as well
as a component in computing the corporate environmental tax or (iii) a factor
in determining the extent to which a shareholder's Social Security benefits
are taxable. If the Fund purchases such securities, the portion of the Fund's
dividends related thereto will not necessarily be tax exempt to an investor
who is subject to the alternative minimum tax and/or tax on Social Security
benefits and may cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividend as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
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 July 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.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust (the "Trust Agreement") dated September l9, 1986, and
commenced operations on March l0, 1987. On March 19, 1990, the Fund's name
was changed from General California Tax Exempt Money Market Fund to General
California Municipal Money Market Fund. 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 _ Class A
Page 20
and Class B. Each share has one vote and shareholders will vote in the
aggregate and not by Class, except as otherwise required by law.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, 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
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations, a possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying such liability
will be entitled to reimbursement from the general assets of the Fund. The
Fund intends to conduct its operations in such a way so as to avoid, as far
as possible, ultimate liability of the shareholders for liabilities of the
Fund. As discussed 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 your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or by calling toll free 1-800-645-6561.
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 21
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Page 23
DREYFUS
General California
Municipal Money
Market Fund
Prospectus
(LION LOGO)
Copy Rights 1995 Dreyfus Service Corporation
573p15110895
Registration Mark
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
CLASS A AND CLASS B
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
NOVEMBER 8, 1995
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of General California Municipal Money
Market Fund (the "Fund"), dated November 8, 1995, as it may be
revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call toll free 1-
800-645-6561.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . .B-8
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . .B-11
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . .B-13
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . .B-14
Shareholder Services Plans. . . . . . . . . . . . . . . . . . . . . . .B-15
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . .B-16
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . . .B-18
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . .B-20
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . .B-21
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . .B-22
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-23
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . .B-24
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . . .B-24
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-25
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-37
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . .B-41
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . .B-51
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 July
31, 1995*, computed on a monthly basis, was as follows:
Moody's Investors Standard & Poor's
Service, Inc. Corporation Percentage
("Moody's") or ("S&P") of Value
________________ ________________ ________
MIG 1/VMIG 1, P-1 SP-1+/SP-1, A-1+/A-1 90.7%
MIG 2/VMIG 2, P-2 SP-2, A-2 .5%
Aaa/Aa AAA/AA 5.4%
Not Rated Not Rated 3.4%
______
100.0%
======
_______________________________
* The Fund also uses Fitch Investors Service, Inc. ("Fitch")
as an additional nationally recognized statistical rating
organization. As of July 31, 1995, none of the Fund's
investments were rated by Fitch.
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 obli-
gations, obtaining funds for general operating expenses and lend-
ing such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are is-
sued 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, con-
vention or trade show facilities, airport, mass transit, indus-
trial, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas,
electricity, or sewage or solid waste disposal. The interest
paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the
size of such issues. Such obligations are considered to be Muni-
cipal 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 obligations 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 obligations 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.
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,
including fees paid under the Fund's Distribution Plan with
respect to Class B only, will have the effect of reducing the
yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special
risks not ordinarily associated with Municipal Obligations.
Although lease obligations do not constitute general obligations
of the municipality for which the municipality's taxing power is
pledged, a lease obligation ordinarily is backed by the
municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease
obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is
appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease obligations are secured by the leased
property, disposition of the property in the event of foreclosure
might prove difficult. The Fund will seek to minimize these
risks by investing only in those lease obligations that (1) are
rated in one of the two highest categories for debt obligations
by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation
was rated only by one such organization) or (2) if unrated, are
purchased principally from the issuer or domestic banks or other
responsible third parties, in each case only if the seller shall
have entered into an agreement with the Fund providing that the
seller or other responsible third party will either remarket or
repurchase the lease obligation within a short period after
demand by the Fund. The staff of the Securities and Exchange
Commission currently considers certain lease obligations to be
illiquid. Accordingly, not more than 10% of the value of the
Fund's net assets will be invested in lease obligations that are
illiquid and in other illiquid securities. See "Investment
Restriction No. 11" below.
The Fund will not purchase tender option bonds unless
(a) the demand feature applicable thereto is exercisable by the
Fund within 13 months of the date of such purchase upon no more
than 30 days' notice and thereafter is exercisable by the Fund no
less frequently than annually upon no more than 30 days' notice
and (b) at the time of such purchase, the Manager reasonably
expects (i) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying
Municipal Obligations at the time of the next tender fee
adjustment and (ii) that the circumstances which might entitle
the grantor of a tender option to terminate the tender option
would not occur prior to the time of the next tender opportunity.
At the time of each tender opportunity, the Fund will exercise
the tender option with respect to any tender option bonds unless
the Manager reasonably expects, (x) based upon its assessment of
current and historical interest rate trends, that short-term tax
exempt rates will not exceed the stated interest rate on the
underlying Municipal Obligations at the time of the next tender
fee adjustment, and (y) that the circumstances which might
entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender
opportunity. The Fund will exercise the tender feature with
respect to tender option bonds, or otherwise dispose of its
tender option bonds, prior to the time the tender option is
scheduled to expire pursuant to the terms of the agreement under
which the tender option is granted. The Fund otherwise will
comply with the provisions of Rule 2a-7 in connection with the
purchase of tender option bonds, including, without limitation,
the requisite determination by the Board of Trustees that the
tender option bonds in question meet the quality standards
described in Rule 2a-7, which, in the case of a tender option
bond subject to a conditional demand feature, would include a
determination that the security has received both the required
short-term and long-term quality rating or is determined to be of
comparable quality. In the event of a default of the Municipal
Obligation underlying a tender option bond, or the termination of
the tender option agreement, the Fund would look to the maturity
date of the underlying security for purposes of compliance with
Rule 2a-7 and, if its remaining maturity was greater than
thirteen months, the Fund would sell the security as soon as
would be practicable. The Fund will purchase tender option bonds
only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not
adversely affect the tax exempt status of the underlying
Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund.
Based on the tender option bond agreement, the Fund expects to be
able to value the tender option bond at par; however, the value
of the instrument will be monitored to assure that it is valued
at fair value.
Ratings of Municipal Obligations. If, subsequent to its
purchase by the Fund, (a) an issue of rated Municipal Obligations
ceases to be rated in the highest rating category by at least two
rating organizations (or one rating organization if the
instrument was rated by only one such organization) or the Fund's
Board determines that it is no longer of comparable quality or
(b) the Manager becomes aware that any portfolio security not so
highly rated or any unrated security has been given a rating by
any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly
whether such security presents minimal credit risk and will cause
the Fund to take such action as it determines is in the best
interest of the Fund and its shareholders; provided that the
reassessment required by clause (b) is not required if the
portfolio security is disposed of or matures within five business
days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or
Fitch for Municipal Obligations may change as a result of changes
in such organizations or their rating systems, the Fund will
attempt to use comparable ratings as standards for its
investments in accordance with the investment policies contained
in the 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 may be relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Manager
also will evaluate these securities and the creditworthiness of
the issuers of such securities.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the
Securities Act of 1933, as amended, for certain restricted
securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures
approved by the Fund's Board 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.
In a repurchase agreement, the Fund buys, and the seller
agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement
thereby determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is secured by
the value of the underlying security. The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of
the Securities and Exchange Commission to be loans by the Fund.
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. Repurchase agreements could involve risks in the event of
a default or insolvency of the other party to the agreement,
including possible delays or restrictions upon the Fund's ability
to dispose of the underlying securities.
Risk Factors--Investing in California Municipal Obligations.
Investors should consider carefully the special risks inherent in
the Fund's investment in California Municipal Obligations. These
risks result from certain amendments to the California
Constitution and other statues that limit the taxing and spending
authority of California governmental entities, as well as from
the general financial condition of the State of California. From
mid-1990 to late 1933, the State suffered a recession with the
worst economic, fiscal and budget conditions since the 1930's.
As a result, the State has experienced recurring budget deficits
for four of the last five fiscal years ending with 1991-92. The
State had an operating surplus of approximately $109 million in
1992-1993 and $836 million in 1993-1994. However at June 30,
1994, according to California's Department of Finance, the
State's Special Fund for Economic Uncertainties had an
accumulated deficit, on a budget basis, of approximately $1.8
billion. A further consequence of the large budget imbalances
over the last three fiscal years has been that the State depleted
its available cash resources and has had to use a series of
external borrowings to meet its cash needs. To meet its cash
flow needs in the 1994-95 fiscal year, the State issued, in July
and August 1994, $4.0 billion of revenue anticipation warrants
and $3.0 billion of revenue anticipation notes. As a result of
the deterioration in the State's budget and cash situation
between October 1991 and July 1994, the rating on the State's
general obligation bonds was reduced by S&P from AAA to A, by
Moody's from Aaa to A1 and by Fitch from AAA to A. These and
other factors may have the effect of impairing the ability of the
issuers of California Municipal Obligations to pay interest on,
or repay principal of, such California Municipal Obligations.
Investors should review Appendix A which sets forth additional
information relating to investing in California Municipal
Obligations.
Investment Restrictions. The Fund has adopted the following
investment restrictions numbered 1 through 9, as fundamental
policies, which cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940,
as amended (the "Act")) of the Fund's outstanding voting shares.
Investment restrictions numbered 10 and 11 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 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 25% of its total assets in the
securities of issuers in any single industry; provided that there
shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, securities
issued by domestic banks and obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities.
8. Invest in companies for the purpose of exercising
control.
9. Invest in securities of other investment companies,
except as they may be acquired as part of a merger, consolidation
or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its
assets, except to the extent necessary to secure permitted
borrowings.
11. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid if, in the aggregate, more than 10%
of the value of the Fund's net assets would be so invested.
For purposes of Investment Restriction No. 7, 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 interests of the Fund and its
shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
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. Each 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
CLIFFORD L. ALEXANDER, JR., Trustee. President of Alexander &
Associates, Inc., a management consulting firm. From 1977
to 1981, Mr. Alexander served as Secretary of the Army and
Chairman of the Board of the Panama Canal Company, and from
1975 to 1977, he was a member of the Washington, D.C. law
firm of Verner, Liipfert, Bernhard, McPherson and Alexander.
He is a director of American Home Products Corp., The Dun &
Bradstreet Corporation, MCI Communications Corporation,
Mutual of America Life Insurance Company and Equitable
Resources, Inc., a producer and distributor of natural gas
and crude petroleum. He is 62 years old and his address is
400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Trustee. Shad Professor of Law, New York University School
of Law. Professor Davis has been a member of the New York University
law faculty since 1983. Prior to that time, she served for three
years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and non-
profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. She is 52 years old and her address is c/o
New York University School of Law, 249 Sullivan Street, New York,
New York 10011.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995,
Chairman of the Board of various funds in the Dreyfus Family
of Funds. For more than five years prior thereto, he was
President, a director and, until August 24, 1994, Chief
Operating Officer of the Manager and Executive Vice
President and a director of Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager and, until August 24,
1994, the Fund's distributor. From August 24, 1994 to
December 31, 1994, he was a director of Mellon Bank
Corporation. He is Chairman of the Board of The Noel Group,
Inc., a venture capital company; a trustee of Bucknell
University; and a director of The Muscular Dystrophy
Association, HealthPlan Services Corporation, Belding
Heminway, Inc., a manufacturer and marketer of industrial
threads, specialty yarns, home furnishings and fabrics,
Curtis Industries, Inc., a national distributor of security
products, chemicals and automotive and other hardware,
Simmons Outdoor Corporation, and Staffing Resources, Inc.
He is 52 years old and his address is 200 Park Avenue, New
York, New York 10166.
ERNEST KAFKA, Trustee. A physician engaged in private practice
specializing in the psychoanalysis of adults and
adolescents. Since 1981, he has served as an Instructor at
the New York Psychoanalytic Institute and, prior thereto,
held other teaching positions. He is Associate Clinical
Professor of Psychiatry at Cornell Medical School. For more
than the past five years, Dr. Kafka has held numerous
administrative positions including President of The New York
Psychoanalytic Society, and has published many articles on
subjects in the field of psychoanalysis. He is 62 years old
and his address is 23 East 92nd Street, New York, New York
10028.
SAUL B. KLAMAN, Trustee. Chairman and Chief Executive Officer of
SBK Associates, which provides research and consulting
services to financial institutions. Dr. Klaman was
President of the National Association of Mutual Savings
Banks until November 1983, President of the National Council
of Savings Institutions until June 1985, Vice Chairman of
Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992.
He also served as an Economist to the Board of Governors of
the Federal Reserve System and on several Presidential
Commissions, and has held numerous consulting and advisory
positions in the fields of economics and housing finance.
He is 75 years old and his address is 431-B Dedham Street,
The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Trustee. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for
Operations of New York City from September 1979 until March
1984 and Commissioner of the Department of Housing
Preservation and Development of New York City from February
1978 to September 1979. Mr. Leventhal was an associate and
then a member of the New York law firm of Poletti Freidin
Prashker Feldman and Gartner from 1974 to 1978. He was
Commissioner of Rent and Housing Maintenance for New York
City from 1972 to 1973. Mr. Leventhal serves as Chairman of
Citizens Union, which strives to reform and modernize City
and State government. He is 52 years old and his address is
70 Lincoln Center Plaza, New York, New York 10023-6583.
For so long as the Fund's plans described in the sections captioned
"Distribution Plan" and "Shareholder Services Plans" 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.
Ordinarily, no meetings of shareholders 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
shareholders of record of not less than 10% of the Fund's outstanding
shares.
The Fund typically pays its Trustees an annual retainer and a per
meeting fee and reimburses them for their expenses. Emeritus Board members
are entitled to receive an annual retainer and a per meeting fee of one-
half the amount paid to them as Board members. The Chairman of the Board
receives an additional 25% of such compensation. The aggregate amount of
compensation paid to each Trustee by the Fund for the fiscal year ended
July 31, 1995, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total compensation) for the year
ended December 31, 1994 were as follows:
<TABLE>
<CAPTION>
(5) Total
(3) Pension or Compensation from
(2) Aggregate Retirement Benefits (4) Estimated Annual Fund and Fund
(1) Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Member
<S> <C> <C> <C> <C>
Clifford L. Alexander $4,000 none none $ 73,210 (17)
Peggy C. Davis $3,750 none none $ 61,751 (15)
Joseph S. DiMartino $4,375** none none $445,000*** (93)
Ernest Kafka $4,000 none none $ 61,001 (15)
Saul B. Klaman $3,750 none none $ 61,751 (15)
Nathan Leventhal $3,750 none none $ 61,751 (15)
________________________
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $227 for all Trustees as
a group.
** Estimated amount for the fiscal year ending July 31, 1996.
*** Estimated amount for the year ending December 31, 1995.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., the ultimate parent company of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray. He is 31 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 34 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. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was Assistant
Vice President in the Mutual Fund Accounting Department of the
Manager. He is 60 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 October 11, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of 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. The Agreement was
approved by shareholders on August 3, 1994, and was last approved by the
Board of Trustees, including a majority of the Trustees who are not
"interested persons" of any party to the Agreement, at a meeting held on
September 28, 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 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; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional Sales;
William F. Glavin, Jr., Vice President-Corporate Development; Henry D.
Gottmann, Vice President-Retail Sales and Service; Mark, N. Jacobs, Vice
President-Legal and Secretary; Daniel C. Maclean, Vice President and
General Counsel; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting;
Andrew S. Wasser, Vice President-Information Services; Katherine C.
Wickham, Vice President-Human Resources; Maurice Bendrihem, Controller;
Elvira Oslapas, Assistant Secretary; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Trustees. The Manager is responsible for investment decisions,
and provides the Fund with portfolio managers who are authorized by the
Board of 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 and securities analysts who provide research services for the Fund
as well as for other funds advised by the Manager. All purchases and sales
are reported for the Trustees' review at the meeting subsequent to such
transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include, without limitation: taxes, interest,
loan commitment fees, interest and distributions paid on securities sold
short, brokerage fees and commissions, if any, fees of Trustees who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend and 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 shareholders, costs of
shareholder reports and meetings, and any extraordinary expenses. Class B
also bears certain distribution expenses in accordance with a written plan
and also bears certain costs associated with implementing and operating
such plan. See "Distribution Plan."
The Manager maintains office facilities on behalf of the Fund and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. For the fiscal years ended
July 31, 1993, 1994 and 1995, the management fees payable amounted to
$3,057,145, $3,474,588 and $2,730,063, respectively, which amounts were
reduced by $1,834,287, $1,968,729 and $624,410, respectively, pursuant to
undertakings in effect, resulting in net fees paid to the Manager of
$1,222,858 in fiscal 1993, $1,505,859 in fiscal 1994 and $2,105,653 in
fiscal 1995.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed 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 daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of 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 dated August 24, 1994. The Distributor also acts
as distributor for the other funds in the Dreyfus Family of Funds and for
certain other investment companies. In some states, certain financial
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
Using Federal Funds. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund
may attempt to notify the investor upon receipt of checks drawn on banks
that are not members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer of a
securities dealer ("Selected Dealer") and his order to purchase Fund shares
is paid for other than in Federal Funds, the Selected Dealer, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with sufficient Federal Funds or a cash balance in
his brokerage account with a Selected Dealer will become effective on the
day that the order, including Federal Funds, is received by the Transfer
Agent.
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 A.M. and 4:00 P.M., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open. Such purchases will be credited to the shareholder's Fund account on
the next bank business day. To qualify to use the Tele- Transfer
Privilege, the initial payment for purchase of Fund shares must be drawn
on, and redemption proceeds paid to, the same bank and account as are
designated on the Account Application or Shareholder Services Form on file.
If the proceeds of a particular redemption are to be wired to an account at
any other bank, the request must be in writing and signature-guaranteed.
See "Redemption of Fund Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
DISTRIBUTION PLAN
(CLASS B ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution 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 "Plan") with respect to Class B pursuant to which
the Fund reimburses the Distributor for payments made to third parties for
distributing Class B shares. The Fund's Board of Trustees believes that
there is a reasonable likelihood that the Plan will benefit the Fund and
holders of Class B shares.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that it may not
be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without approval by the holders of Class
B shares and that other 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 and have no direct or indirect
financial interest in the operation of the Plan or in any agreements
entered into in connection with the Plan, by vote cast in person at a
meeting called for the purpose of considering such amendments. The Plan is
subject to annual approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Plan. The Plan was so
approved at a meeting held on July 19, 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 or in any of the related agreements or by vote of a majority of the
holders of Class B shares.
SHAREHOLDER SERVICES PLANS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plans."
The Fund has adopted a Shareholder Services Plan with respect to Class
A pursuant to which the Fund reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or
maintaining Class A shareholder accounts. The Fund also has adopted a
Shareholder Services Plan with respect to Class B pursuant to which the
Fund pays the Distributor for the provision of certain services to the
holders of Class B shares. Under the Plans, 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. Under the Shareholder Services Plan for Class B, the
Distributor may make payments to certain financial institutions, Selected
Dealers and other industry professionals (collectively, "Service Agents")
in respect of these services.
A quarterly report of the amounts expended under each Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Trustees for their review. In addition, each
Shareholder Services Plan provides that material amendments of the
Shareholder Services 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 Shareholder Services Plan or in any agreements entered into in
connection with such Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. Each Shareholder Services 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 Shareholder Services
Plan. Each Shareholder Services 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 Shareholder
Services Plan or in any related agreements.
During the fiscal year ended July 31, 1995, the Fund was charged an
aggregate $246,384 pursuant to the Shareholder Services Plan with respect
to Class A. The Shareholder Services Plan with respect to Class B had not
been implemented as of such date.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Account Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although election of
this Privilege creates only a shareholder-transfer agent relationship with
the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor or a representative of the investor's Service Agent and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Fund will
initiate payment for shares redeemed pursuant to this Privilege on the same
business day if the Transfer Agent receives the redemption request in
proper form prior to 12:00 Noon, New York time, on such day; otherwise, the
Fund will initiate payment on the next business day. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form, or to a correspondent bank if the
investor's bank is not a member of the Federal Reserve System. Fees
ordinarily are imposed by such bank and are borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
_______________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested.
Redemption proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "Purchase of Fund Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor, and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call the telephone numbers listed on the cover.
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 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.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load, and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account numbers.
To request an exchange, an investor, or an investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the Account
Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, or a
representative of the investor's Service Agent, and reasonably believed by
the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
personal retirement plans, the shares exchanged must have a current value
of at least $100.
Auto-Exchange Privilege. Auto-Exchange Privilege permits an investor
to purchase, in exchange for shares of the Fund, shares of another fund in
the Dreyfus Family of Funds. This Privilege is available only for existing
accounts. Shares will be exchanged on the basis of relative net asset
value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified
if his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange Transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
The Fund Exchanges service and the Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of another fund in the Dreyfus Family of
Funds of which the investor is a shareholder. Shares of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds that are
offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
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 values the Fund's investments based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications of values from
dealers; and general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If such
deviation exceeds 1/2 of 1%, the Board of Trustees promptly will consider
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.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
Class B shares had not been offered as of the date of the financials
and, therefore, no yield figures are provided for Class B.
For the seven-day period ended July 31, 1995, the Fund's yield was
3.10% and its effective yield was 3.15%. Yield is computed in accordance
with a standardized method which involves determining the net change in the
value of a hypothetical pre-existing Fund account having a balance of one
share at the beginning of a seven calendar day period for which yield is to
be quoted, dividing the net change by the value of the account at the
beginning of the period to obtain the base period return, and annualizing
the results (i.e., multiplying the base period return by 365/7). The net
change in the value of the account reflects the value of additional shares
purchased with dividends declared on the original share and any such
additional shares and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Fund's average account
size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising that sum to
a power equal to 365 divided by 7, and subtracting 1 from the result.
Based upon a combined 1995 Federal and California effective tax rate
of 46.24%, and a yield of 3.10% for the seven-day period ended July 31,
1995, the Fund's tax equivalent yield for this period was 5.77%. 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 and State of California marginal personal income tax rates
presently in effect. For Federal personal income tax purposes, a 39.60%
tax rate has been used. For California personal income tax purposes an
11.00% tax rate has been used. The tax equivalent figure, however, does
not include the potential effect of local (including, but not limited to,
county, district or city) taxes, if any, 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, including those relating to or arising from actual or proposed tax
legislation. From time to time, advertising materials for the Fund may
also refer to statistical or other information concerning trends relating
to investment companies, as compiled by industry associations such as the
Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily
are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases and
sales, although the price paid usually includes an undisclosed compensation
to the dealer acting as agent. The prices paid to underwriters of
newly-issued securities usually include a concession paid by the issuer to
the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
TAX MATTERS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the fiscal year ended July 31, 1994 and the Fund intends
to continue to so qualify, if such qualification is in the best interests
of its shareholders. The term "regulated investment company" does not
imply the supervision of management or investment practices or policies by
any government agency.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of Federal tax exempt
obligations, then the Fund may designate and pay Federal exempt-interest
dividends from interest earned on all such tax exempt obligations. Such
exempt-interest dividends may be excluded by shareholders of the Fund from
their gross income for Federal income tax purposes. Dividends derived from
Taxable Investments, together with distributions from any net realized
short-term securities gains, generally are taxable as ordinary income for
Federal income tax purposes whether or not reinvested. Distributions from
net realized long-term securities gains generally are taxable as long-term
capital gains to a shareholder who is a citizen or resident of the United
States, whether or not reinvested and regardless of the length of time the
shareholder has held his shares.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of obligations which, when
held by an individual, the interest therefrom is exempt from California
personal income tax, and if the Fund qualifies as a management company
under the California Revenue and Taxation Code, then the Fund will be
qualified to pay dividends to its shareholders that are exempt from
California personal income tax (but not from California franchise tax)
("California exempt-interest dividends"). However, the total amount of
California exempt-interest dividends paid by the Fund to a non-corporate
shareholder with respect to any taxable year cannot exceed such
shareholder's pro rata share of interest received by the Fund during such
year that is exempt from California taxation less any expenses and
expenditures deemed to have been paid from such interest.
For shareholders subject to the California personal income tax,
exempt-interest dividends derived from California Municipal Obligations
will not be subject to the California personal income tax. Distributions
from net realized short-term capital gains to California resident
shareholders will be subject to the California personal income tax
distributed by the Fund as ordinary income. Distributions from net
realized long-term capital gains may constitute long-term capital gains for
individual California resident shareholders. Unlike under Federal tax law,
the Fund's shareholders will not be subject to California personal income
tax, or receive a credit for California taxes paid by the Fund, on
undistributed capital gains. In addition, California tax law does not
consider any portion of the exempt-interest dividends paid an item of tax
preference for the purpose of computing the California alternative minimum
tax.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Code.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-
assessable. Fund shares have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of 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 A
RISK FACTORS - INVESTING
IN CALIFORNIA MUNICIPAL OBLIGATIONS
Certain California (the "State") constitutional amendments,
legislative measures, executive orders, civil actions and voter
initiatives, as well as the general financial condition of the State, could
adversely affect the ability of issuers of California Municipal Obligations
to pay interest and principal on such obligations. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State of California (the
"State") and various local agencies, available as of the date of this
Statement of Additional Information. While the Fund has not independently
verified such information, it has no reason to believe that such
information is not correct in all material respects.
Recent Developments. From mid-1990 to late 1993, the State suffered a
recession with the worst economic, fiscal and budget conditions since the
1930s. Construction, manufacturing (especially aerospace), exports and
financial services, among others, were all severely affected. Job losses
were the worst of any post-war recession. Unemployment reached 10.1% in
January 1994, but fell sharply to 7.7% in October and November 1994.
According to the State's Department of Finance, recovery from the recession
in California began in 1994.
The recession seriously affected State tax revenues, which basically
mirror economic conditions. It also caused increased expenditures for
health and welfare programs. The State has also been facing a structural
imbalance in its budget with the largest programs supported by the General
Fund (K-12 schools and community colleges, health and welfare, and
corrections) growing at rates higher than the growth rates for the
principal revenue sources of the State General Fund. As a result, the
State experienced recurring budget deficits in the late 1980s and early
1990s. The State Controller reported that expenditures exceeded revenues
for four of the five fiscal years ending with 1991-92. The State had an
operating surplus of approximately $109 million in 1992-93 and $836 million
in 1993-94. However, at June 30, 1994, according to the Department of
Finance, the State's Special Fund for Economic Uncertainties ("SFEU") still
had a deficit, on a budget basis, of approximately $1.8 billion.
The accumulated budget deficits over the past several years, together
with expenditures for school funding which have not been reflected in the
budget, and reduction of available internal borrowable funds, have combined
to significantly deplete the State's cash resources to pay its ongoing
expenses. In order to meet its cash needs, the State has had to rely for
several years on a series of external borrowings, including borrowings past
the end of a fiscal year. Such borrowings are expected to continue in
future fiscal years. To meet its cash flow needs in the 1994-95 fiscal
year the State issued, in July and August 1994, $4.0 billion of revenue
anticipation warrants which mature on April 25, 1996, and $3.0 billion of
revenue anticipation notes which matured on June 28, 1995.
As a result of the deterioration in the State's budget and cash
situation, the rating agencies reduced the State's credit ratings. Between
October 1991 and July 1994, the rating on the State's general obligation
bonds was reduced by S&P from "AAA" to "A," by Moody's from "Aaa" to "A1"
and by Fitch from "AAA" to "A."
The 1994-95 Fiscal Year Budget (as updated in the January 10, 1995
Governor's Budget) is projected to have $42.4 billion of General Fund
revenues and transfers and $41.7 billion of budgeted expenditures. In
addition, the 1994-95 Budget Act anticipates deferring retirement of about
$1 billion of the accumulated budget deficit to the 1995-96 fiscal year
when it is intended to be fully retired by June 30, 1996.
The Governor's Budget for 1995-96 proposes General Fund revenues and
transfers of $42.5 billion and expenditures of $41.7 billion, which would
leave a balance of approximately $92 million in the budget reserve, the
SFEU, at June 30, 1996 after repayment of the accumulated budget deficits.
The Budget proposal is based on a number of assumptions, including receipt
of $830 million from the Federal government to offset costs of undocumented
and refugee immigrants.
On December 6, 1994, Orange County, California (the "County"),
together with its pooled investment funds (the "Funds") filed for
protection under Chapter 9 of the Federal Bankruptcy Code, after reports
that the Funds had suffered significant market losses in their investments,
causing a liquidity crisis for the Funds and the County. More than 180
other public entities, most of which, but not all, are located in the
County, were also depositors in the Funds. As of mid-January 1995,
following a restructuring of most of the Funds' assets to increase their
liquidity and reduce their exposure to interest rate increases, the County
estimated the Funds' loss at about $1.69 billion, or about 23% of their
initial deposits of approximately $7.5 billion. Many of the entities which
deposited monies in the Funds, including the County, are facing cash flow
difficulties because of the bankruptcy filing and may be required to reduce
programs or capital projects. This also may effect their ability to meet
their outstanding obligations.
The State has no existing obligation with respect to any outstanding
obligations or securities of the County or any of the other participating
entities. However, in the event the County is unable to maintain county
administered State programs because of insufficient resources, it may be
necessary for the State to intervene, but the State cannot presently
predict what, if any, action may occur.
On January 17, 1994, an earthquake of the magnitude of an estimated
6.8 on the Richter Scale struck Los Angeles causing significant damage to
public and private structures and facilities. Although some individuals
and businesses suffered losses totaling in the billions of dollars, the
overall effect of the earthquake on the regional and State economy is not
expected to be serious.
State Finances. State moneys are segregated into the General Fund and
approximately 600 Special Funds. The General Fund consists of the revenues
received into the State Treasury and earnings from State investments, which
are not required by law to be credited to any other fund. The General Fund
is the principal operating fund for the majority of governmental activities
and is the depository of most major State revenue sources.
The SFEU is funded with General Fund revenues and was established to
protect the State from unforeseen reduced levels of revenues and/or
unanticipated expenditure increases. Amounts in the SFEU may be
transferred by the Controller as necessary to meet cash needs of the
General Fund. The Controller is required to return moneys so transferred
without payment of interest as soon as there are sufficient moneys in the
General Fund. For budgeting and accounting purposes, any appropriation
made from the SFEU is deemed an appropriation from the General Fund. For
year-end reporting purposes, the Controller is required to add the balance
in the SFEU to the balance in the General Fund so as to show the total
monies then available for General Fund purposes.
Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June
30, 1994, the General Fund had outstanding loans in the aggregate principal
amount of $5.2 billion, which consisted of $4.0 billion of internal loans
to the General Fund from the SFEU and other Special Funds and $1.2 billion
of external loans represented by the 1994 revenue anticipation warrants.
Articles XIIIA and XIIIB to the State Constitution and Other Revenue
Law Changes. Prior to 1977, revenues of the State government experienced
significant growth primarily as a result of inflation and continuous
expansion of the tax base of the State. In 1978, State voters approved an
amendment to the State Constitution known as Proposition 13, which added
Article XIIIA to the State Constitution, reducing ad valorem local property
taxes by more than 50%. In addition, Article XIIIA provides that
additional taxes may be levied by cities, counties and special districts
only upon approval of not less than a two-thirds vote of the "qualified
electors" of such district, and requires not less than a two-thirds vote of
each of the two houses of the State Legislature to enact any changes in
State taxes for the purpose of increasing revenues, whether by increased
rate or changes in methods of computation.
Primarily as a result of the reductions in local property tax revenues
received by local governments following the passage of Proposition 13, the
Legislature undertook to provide assistance to such governments by
substantially increasing expenditures from the General Fund for that
purpose beginning in the 1978-79 fiscal year. In recent years, in addition
to such increased expenditures, the indexing of personal income tax rates
(to adjust such rates for the effects of inflation), the elimination of
certain inheritance and gift taxes and the increase of exemption levels for
certain other such taxes had a moderating impact on the growth in State
revenues. In addition, the State has increased expenditures by providing a
variety of tax credits, including renters' and senior citizens' credits and
energy credits.
The State is subject to an annual "appropriations limit" imposed by
Article XIIIB of the State Constitution adopted in 1979. Article XIIIB
prohibits the State from spending "appropriations subject to limitation" in
excess of the appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes," which consist
of tax revenues, and certain other funds, including proceeds from
regulatory licenses, user charges or other fees to the extent that such
proceeds exceed "the cost reasonably borne by such entity in providing the
regulation, product or service." One of the exclusions from these
limitations is "debt service" (defined as "appropriations required to pay
the cost of interest and redemption charges, including the funding of any
reserve or sinking fund required in connection therewith, on indebtedness
existing or legally authorized as of January 1, 1979 or on bonded
indebtedness thereafter approved" by the voters). In addition,
appropriations required to comply with mandates of courts or the Federal
government and, pursuant to Proposition 111 enacted in June 1990,
appropriations for qualified capital outlay projects and appropriations of
revenues derived from any increase in gasoline taxes and motor vehicle
weight fees above January 1, 1990 levels are not included as appropriations
subject to limitation. In addition, a number of recent initiatives were
structured or proposed to create new tax revenues dedicated to certain
specific uses, with such new taxes expressly exempted from the Article
XIIIB limits (e.g., increased cigarette and tobacco taxes enacted by
Proposition 99 in 1988). The appropriations limit also may be exceeded in
cases of emergency. However, unless the emergency arises from civil
disturbance or natural disaster declared by the Governor, and the
appropriations are approved by two-thirds of the Legislature, the
appropriations limit for the next three years must be reduced by the amount
of the excess.
The State's appropriations limit in each year is based on the limit
for the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable,
for any transfer of financial responsibility of providing services to or
from another unit of government. The measurement of change in population
is a blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the appropriations limit is tested over
consecutive two-year periods. Any excess of the aggregate "proceeds of
taxes" received over such two-year periods above the combined
appropriations limits for those two years is divided equally between
transfers to K-14 districts and refunds to taxpayers.
As originally enacted in 1979, the State's appropriations limit was
based on its 1978-79 fiscal year authorizations to expend proceeds of taxes
and was adjusted annually to reflect changes in cost of living and
population (using different definitions, which were modified by Proposition
111). Commencing with the 1991-92 fiscal year, the State's appropriations
limit is adjusted annually based on the actual 1986-87 limit, and as if
Proposition 111 had been in effect. The State Legislature has enacted
legislation to implement Article XIIIB which defines certain terms used in
Article XIIIB and sets forth the methods for determining the State's
appropriations limit. Government Code Section 7912 requires an estimate of
the State's appropriations limit to be included in the Governor's Budget,
and thereafter to be subject to the budget process and established in the
Budget Act.
For the 1990-91 fiscal year, the State appropriations limit was $32.7
billion, and appropriations subject to limitation were $7.51 billion under
the limit. The limit for the 1991-92 fiscal year was $34.2 billion, and
appropriations subject to limitations were $3.8 billion under the limit.
The limit for the 1992-93 fiscal year was $35.01 billion, and the
appropriations subject to limitation were $7.53 billion under the limit.
The limit for the 1993-94 fiscal year was $36.60 billion, and the
appropriations subject to limitation were $6.55 billion under the limit.
The estimated limit for the 1994-95 fiscal year is $37.55 billion, and the
appropriations subject to limitations are estimated to be $6.05 billion
under the limit.
In November 1988, State voters approved Proposition 98, which changed
State funding of public education below the university level and the
operation of the State's appropriations limit, primarily by guaranteeing K-
14 schools a minimum share of General Fund revenues. Under Proposition 98
(as modified by Proposition 111, which was enacted in June 1990), K-14
schools are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the prior year,
adjusted for changes in the cost of living (measured as in Article XIIIB by
reference to California per capita personal income) and enrollment ("Test
2"), or (c) a third test, which would replace the second test in any year
when the percentage growth in per capita General Fund revenues from the
prior year plus .5% is less than the percentage growth in California per
capita personal income ("Test 3"). Under "Test 3," schools would receive
the amount appropriated in the prior year adjusted for changes in
enrollment and per capita General Fund revenues, plus an additional small
adjustment factor. If "Test 3" is used in any year, the difference between
"Test 3" and "Test 2" would become a "credit" to schools which would be the
basis of payments in future years when per capita General Fund revenue
growth exceeds per capita personal income growth.
Proposition 98 permits the Legislature by two-thirds vote of both
houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3%
of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the Article
XIIIB limit to K-14 schools.
The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.4 billion for K-14 schools pursuant to
Proposition 98. During the course of the fiscal year, revenues proved to
be substantially below expectations. By the time the Governor's Budget was
introduced in January 1992, it became clear that per capita growth in
General Fund revenues for 1991-92 would be far smaller than the growth in
California per capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by applying
"Test 3" rather than "Test 2."
In response to the changing revenue situation and to fully fund the
Proposition 98 guarantee in both the 1991-92 and 1992-93 fiscal years
without exceeding it, the Legislature enacted several bills as part of the
1992-93 budget package which responded to the fiscal crisis in education
funding. Fiscal year 1991-92 Proposition 98 appropriations for K-14
schools were reduced by $1.083 billion. In order to not adversely impact
cash received by school districts, however, a short-term loan was
appropriated from the non-Proposition 98 State General Fund. The
Legislature then appropriated $16.6 billion to K-14 schools for 1992-93
(the minimum guaranteed by Proposition 98), but designated $1.083 billion
of this amount to "repay" the prior year loan, thereby reducing cash
outlays in 1992-93 by that amount. In addition to reducing the 1991-92
fiscal year appropriations for K-14 schools by $1.083 billion and
converting the amount to a loan (the "inter-year adjustment"), Chapter 703,
Statutes of 1992 also made an adjustment to "Test 1," based on the
additional $1.2 billion of local property taxes that were shifted to
schools and community colleges. The "Test 1" percentage changed from 40%
to 37%. Additionally, Chapter 703 contained a provision that if an
appellate court should determine that the "Test 1" recalculation or the
inter-year adjustment is unconstitutional, unenforceable or invalid,
Proposition 98 would be suspended for the 1992-93 fiscal year, with the
result that K-14 schools would receive the amount intended by the 1992-93
Budget Act compromise.
The State Controller stated in October 1992 that, because of a
drafting error in Chapter 703, he could not implement the $1.083 billion
reduction of the 1991-92 school funding appropriation, which was part of
the inter-year adjustment. The Legislature untimely enacted corrective
legislation as part of the 1993-94 Budget package to implement the $1.083
billion inter-year adjustment as originally intended.
In the 1992-93 Budget Act, a new loan of $732 million was made to K-12
schools in order to maintain per-average daily attendance ("ADA") funding
at the same level as 1991-92, at $4,187. An additional loan of $241
million was made to community college districts. These loans are to be
repaid from future Proposition 98 entitlements. (The teachers'
organization lawsuit discussed above also seeks to declare invalid the
provision making the $732 million a loan "repayable" from the future years'
Proposition 98 funds). Including both State and local funds, and adjusting
for the loans and repayments, on a cash basis, total Proposition 98 K-12
funding in 1992-93 increased to $21.5 billion, 2.4% more than the amount in
1992-93 ($21.0 billion).
Based on revised State tax revenues and estimated decreased reported
pupil enrollment, the 1993-94 Budget Act projected that the 1992-93
Proposition 98 Budget Act appropriations of $16.6 billion exceeded a
revised minimum guarantee by $313 million. As a result, the 1993-94 Budget
Act reverted $25 million in 1992-93 appropriations to the General Fund.
Limiting the reversion to this amount ensures that per ADA funding for
general purposes will remain at the prior year level of $4,217 per pupil.
The 1993-94 Governor's Budget subsequently proposed deficiency funding of
$121 million for school apportionments and special education, increasing
funding per pupil in 1992-93 to $4,244. The 1993-94 Budget Act also
designated $98 million in 1992-93 appropriations toward satisfying prior
years' guarantee levels, an obligation that resulted primarily from
updating State tax revenues for 1991-92, and designates $190 million as a
loan repayable from 1993-94 funding.
The 1993-94 Budget Act projected the Proposition 98 minimum funding
level at $13.5 billion based on the "Test 3" calculation where the
guarantee is determined by the change in per capita growth in General Fund
revenues, which are projected to decrease on a year-over-year basis. This
amount also takes into account increased property taxes transferred to
school districts from other local governments.
Legislation accompanying the 1993-94 Budget Act (Chapter 66/93)
provided a new loan of $609 million to K-12 schools in order to maintain
per ADA funding at $4,217 and a loan of $178 million to community colleges.
These loans have been combined with the K-14 1992-93 loans into one loan
totalling $1.760 billion. Repayment of this loan would be from future
years' Proposition 98 entitlements, and would be conditioned on maintaining
current funding levels per pupil for K-12 schools and community colleges.
Chapter 66 also adjusted the "Test 1" percentage to 35% to reflect the
property tax shift among local government agencies.
The 1994-95 Budget Act appropriated $14.4 billion of Proposition 98
funds for K-14 schools based on Test 2. This exceeds the minimum
Proposition 98 guarantee by $8 million to maintain K-12 funding per pupil
at $4,217. Based upon updated State revenues, growth rates and inflation
factors, the 1994-95 Budget Act appropriated an additional $286 million
within Proposition 98 for the 1993-94 fiscal year, to reflect a need in
appropriations for school districts and county offices of education, as
well as an anticipated deficiency in special education fundings. These and
other minor appropriation adjustments increase the 1993-94 Proposition 98
guarantee to $13.8 billion, which exceeds the minimum guarantee in that
year by $272 million and provides per pupil funding of $4,225.
The 1995-96 Governor's Budget adjusts the 1993-94 minimum guarantee to
reflect changes in enrollment and inflation, and 1993-94 Proposition 98
appropriations were increased to $14.1 billion, primarily to reflect
changes in the statutory continuous appropriation for apportionments. The
revised appropriations now exceed the minimum guarantee by $32 million.
This appropriation level still provides per-pupil funding of $4,225.
The 1994-95 Proposition 98 minimum guarantee also has been adjusted
for changes in factors described above, and is now calculated to be $14.9
billion. Within the minimum guarantee, the dollars per pupil have been
maintained at the prior year's level; consequently, the 1994-95 minimum
guarantee now includes a loan repayment of $135 million, and the per-pupil
funding increases to $4,231.
The 1995-96 Governor's Budget proposes to appropriate $15.9 billion of
Proposition 98 funds to K-14 to meet the guarantee level. Included within
the guarantee is a loan repayment of $379 million for the combined
outstanding loans of $1.76 billion. Funding per pupil is estimated to
increase by $61 over 1994-95 to $4,292.
Sources of Tax Revenue. The California personal income tax, which in
1993-94 contributed about 44% of General Fund revenues, is closely modeled
after the Federal income tax law. It is imposed on net taxable income
(gross income less exclusions and deductions). The tax is progressive with
rates ranging from 1% to 11%. Personal, dependent, and other credits are
allowed against the gross tax liability. In addition, taxpayers may be
subject to an alternative minimum tax ("AMT") which is much like the
Federal AMT. This is designed to ensure that excessive use of tax
preferences does not reduce taxpayers' liabilities below some minimum
level. Legislation enacted in July 1991 added two new marginal tax rates,
at 10% and 11%, effective for tax years 1991 through 1995. After 1995, the
maximum personal income tax rate is scheduled to return to 9.3%, and the
AMT rate is scheduled to drop from 8.5% to 7%.
The personal income tax is adjusted annually by the change in the
consumer price index to prevent taxpayers from being pushed into higher tax
brackets without a real increase in income.
The sales tax is imposed upon retailers for the privilege of selling
tangible personal property in California. Most retail sales and leases are
subject to the tax. However, exemptions have been provided for certain
essentials such as food for home consumption, prescription drugs, gas,
electricity and water. Sales tax accounted for about 35% of General Fund
revenue in 1993-94. Bank and corporation tax revenues comprised about 12%
of General Fund revenue in 1993-94. In 1989, Proposition 99 added a 25
cents per pack excise tax on cigarettes, and a new equivalent excise tax on
other tobacco products. Legislation enacted in 1993 added an additional 2
cents per pack for the purpose of funding breast cancer research.
General Financial Condition of the State. In the years following
enactment of the Federal Tax Reform Act of 1986, and conforming changes to
the State's tax laws, taxpayer behavior became more difficult to predict,
and the State experienced a series of fiscal years in which revenue came in
significantly higher or lower than original estimates. The 1989-90 fiscal
year ended with revenues below estimates and the SFEU was fully depleted by
June 30, 1990. This date essentially coincided with the date of the most
recent recession, and the State subsequently accumulated a budget deficit
in the SFEU approaching $2.8 billion at its peak. The State's budget
problems in recent years also have been caused by a structural imbalance
which has been identified by the current and previous Administrations. The
largest General Fund programs -- K-14 education, health, welfare and
corrections -- were increasing faster than the revenue base, driven by the
State's rapid population increases.
Starting in the 1990-91 fiscal year, each budget required multibillion
dollar actions to bring projected revenues and expenditures into balance
and to close large "budget gaps" which were identified. The Legislature
and Governor eventually agreed on significant cuts in program expenditures,
some transfers of program responsibilities and funding from the State to
local governments, revenue increases (particularly in the 1991-92 fiscal
year budget), and various one-time adjustments and accounting changes.
However, as the recession took hold and deepened after the summer of 1990,
revenues dropped sharply and expenditures for health and welfare programs
increased as job losses mounted, so that the State ended each of the 1990-
91 and 1991-92 fiscal years with an unanticipated deficit in the budget
reserve, the SFEU, as compared to projected positive balances.
As a result of the revenue shortfalls accumulating for the previous
two fiscal years, the Controller in April 1992 indicated that cash
resources (including borrowing from Special Funds) would not be sufficient
to meet all General Fund obligations due on June 30 and July 1, 1992. On
June 25, 1992, the Controller issued $475 million of 1992 Revenue
Anticipation Warrants (the "1992 Warrants") in order to provide funds to
cover all necessary payments from the General Fund at the end of the 1991-
92 fiscal year and on July 1, 1992. The 1992 Warrants were paid on July 24,
1992. In addition to the 1992 Warrants, the Controller reported that as of
June 30, 1992, the General Fund had borrowed $1.336 billion from the SFEU
and $4.699 billion from other Special Funds, using all but about $183
million of borrowable cash resources.
To balance the 1992-93 Governor's Budget, program reductions totalling
$4.365 billion and a revenue and transfer increase of $872 million were
proposed for the 1991-92 and 1992-93 fiscal years. Economic performance in
the State continued to be sluggish after the 1992-93 Governor's Budget was
prepared. By the time of the "May Revision," issued on May 20, 1992, the
Administration estimated that the 1992-93 Budget needed to address a gap of
about $7.9 billion, much of which was needed to repay the accumulated
budget deficits of the previous two years.
The severity of the budget actions needed led to a long delay in
adopting the budget. With the failure to enact a budget by July 1, 1992,
the State had no legal authority to pay many of its vendors until the
budget was passed. Starting on July 1, 1992, the Controller was required
to issue "registered warrants" in lieu of normal warrants backed by cash to
pay many State obligations. Available cash was used to pay
constitutionally mandated and priority obligations, such as debt service on
bonds and revenue anticipation warrants. Between July 1 and September 4,
1992, the Controller issued an aggregate of approximately $3.8 billion of
registered warrants payable from the General Fund, all of which were called
for redemption by September 4, 1992 following enactment of the 1992-93
Budget Act and issuance by the State of $3.3 billion of interim notes.
The Legislature enacted the 1992-93 Budget Bill on August 29, 1992,
and it was signed by the Governor on September 2, 1992. The 1992-93 Budget
Act provided for expenditures of $57.4 billion and consisted of General
Fund expenditures of $40.8 billion and Special Fund and Bond Fund
expenditures of $16.6 billion. The Department of Finance estimated a
balance in the SFEU of $28 million on June 30, 1993.
The $7.9 billion budget gap was closed primarily through cuts in the
program expenditures (principally for health and welfare programs, aid to
schools and support for higher education), together with some increases in
revenues from accelerated collections and changes in tax laws to confirm to
Federal law changes, and a variety of on-time inter-fund transfers and
deferrals. The other major component of the budget compromise was a law
requiring local governments to transfer a total of $1.3 billion to K-12
school and community college districts, thereby reducing by that amount
General Fund support for those districts under Proposition 98.
In May 1993, the Department of Finance projected that the General Fund
would end the fiscal year on June 30, 1993 with an accumulated budget
deficit of about $2.8 billion, and a negative fund balance of about $2.2
billion (the difference being certain reserves for encumbrances and school
funding costs). As a result, the State issued $5 billion of revenue
anticipation notes and warrants.
The Governor's 1993-94 Budget, introduced on January 8, 1993, proposed
General Fund expenditures of $37.3 billion, with projected revenues of
$39.9 billion. It also proposed Special Fund expenditures of $12.4 billion
and Special Fund revenues of $12.1 billion. The 1993-94 fiscal year
represented the third consecutive year the Governor and the Legislature
were faced with a very difficult budget environment, requiring revenue
actions and expenditure cuts totaling billions of dollars to produce a
balanced budget. To balance the budget in the face of declining revenues,
the Governor proposed a series of revenue shifts from local government,
reliance on increased Federal aid and reductions in state spending.
The "May Revision" of the Governor's Budget, released on May 20, 1993,
indicated that the revenue projections of the January Budget Proposal were
tracking well, with the full year 1992-93 about $80 million higher than the
January projection. Personal income tax revenue was higher than projected,
sales tax was close to target, and bank and corporation taxes were lagging
behind projections. The May Revision projected the State would have an
accumulated deficit of about $2.75 billion by June 30, 1993. The Governor
proposed to eliminate this deficit over an 18-month period. He also agreed
to retain the 0.5% sales tax scheduled to expire June 30 for a six-month
period, dedicated to local public safety purposes, with a November election
to determine a permanent extension. Unlike previous years, the Governor's
Budget and May Revision did not calculate a "gap" to be closed, but rather
set forth revenue and expenditure forecasts and proposals designed to
produce a balanced budget.
The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71 million
in spending. With enactment of the Budget Act, the State carried out its
regular cash flow borrowing program for the fiscal year, which included the
issuance of approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues were the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991 -- a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available revenues.
The Budget also included Special Fund expenditures of $12.1 billion, a 4.2%
increase.
The 1993-94 Budget Act contained no General Fund tax/revenue increases
other than a two year suspension of the renters' tax credit.
Administration reports during the course of the 1993-94 fiscal year
indicated that while economic recovery appeared to have started in the
second half of the fiscal year, recessionary conditions continued longer
than had been anticipated when the 1993-94 Budget Act was adopted.
Overall, revenues for the 1993-94 fiscal year were about $800 million lower
than original projections, and expenditures were about $780 million higher,
primarily because of higher health and welfare caseloads, lower property
taxes which require greater State support for K-14 education to make up to
shortfall, and lower than anticipated Federal government payments for
immigration-related costs. The reports in May and June 1994, indicated that
revenues in the second half of the 1993-94 fiscal year were very close to
the projections made in the Governor's Budget of January 10, 1994, which
was consistent with a slow turn around in the economy.
The Department of Finance's July 1994 Bulletin, which included final
June receipts, reported that June revenues were $114 million (2.5%) above
projection, with final end-of-year results at $377 million (about 1%) above
the May Revision projections. Part of this result was due to the end-of-
year adjustments and reconciliations. Personal income tax and sales tax
continued to track projections. The largest factor in the higher than
anticipated revenues was from bank and corporation taxes, which were $140
million (18.4%) above projection in June.
During the 1993-94 fiscal year, the State implemented the Deficit
Retirement Plan, which was part of the 1993-94 Budget Act, by issuing $1.2
billion of revenue anticipation warrants in February 1994 that matured
December 21, 1994. This borrowing reduced the cash deficit at the end of
the 1993-94 fiscal year. Nevertheless, because of the $1.5 billion
variance from the original 1993-94 Budget Act assumptions, the General Fund
ended the fiscal year at June 30, 1994 carrying forward an accumulated
deficit of approximately $1.8 billion.
Because of the revenue shortfall and the State's reduced internal
borrowable cash resources, in addition to the $1.2 billion of revenue
anticipation warrants issued as part of the Deficit Retirement Plan, the
State issued an additional $2.0 billion of revenue anticipation warrants
that matured July 26, 1994, which were needed to fund the State's
obligations and expenses through the end of the 1993-94 fiscal year.
The 1994-95 fiscal year represented the fourth consecutive year the
Governor and Legislature were faced with a very difficult budget
environment to produce a balanced budget. Many program cost and budgetary
adjustments had already been made in the last three years. The Governor's
Budget Proposal, as updated in May and June 1994, recognized that the
accumulated deficit could not be repaid in one year, and proposed a two-
year solution. The budget proposal set forth revenue and expenditure
forecasts and revenue and expenditure proposals which estimated operating
surpluses for the budget for both 1994-95 and 1995-96, and lead to the
elimination of the accumulated budget deficit, estimated at about $1.8
billion at June 30, 1994, by June 30, 1996.
The 1994-95 Budget Act, signed by the Governor on July 8, 1994,
projected revenues and transfers of $41.9 billion, $2.1 billion higher than
revenues in 1993-94. This reflected the Administration's forecast of an
improving economy. Also included in this figure was the projected receipt
of about $360 million from the Federal government to reimburse the State's
cost of incarcerating undocumented immigrants, most of which eventually was
not received.
The 1994-95 Budget Act projected Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues.
The 1994-95 Budget Act projected General Fund expenditures of $40.9
billion, an increase of $1.6 billion over the 1993-94 fiscal year. The
1994-95 Budget Act also projected Special Fund expenditures of $13.7
billion, a 5.4% increase over 1993-94 fiscal year estimated expenditures.
The 1994-95 Budget Act contained no tax increases. Under legislation
enacted for the 1993-94 Budget Act, the renters' tax credit was suspended
for two years (1993 and 1994). A ballot proposition to permanently restore
the renters' tax credit after 1995 failed at the June 1994 election. The
Legislature enacted a further one-year suspension of the renters' tax
credit, for 1995, saving about $390 million in the 1995-96 fiscal year.
The 1994-95 Budget Act assumed that the State would use a cash flow
borrowing program in 1994-95 which combines one-year notes and two-year
warrants, which were issued. Issuance of the warrants allows the State to
defer repayment of approximately $1.0 billion of its accumulated budget
deficit into the 1995-96 fiscal year. The Budget Adjustment Law enacted
along with the 1994-95 Budget Act is designed to ensure that the warrants
will be repaid in the 1995-96 fiscal year.
The Department of Finance Bulletin for April 1995 reported that
General Fund revenues for March 1995 were $28 million, or 1.1%, below
forecast, and that year-to-date General Fund revenues were $110 million, or
0.4%, below forecast.
Initial analysis of the Federal fiscal year 1995 budget by the
Department of Finance indicates that about $98 million was appropriated for
California to offset costs of incarceration of undocumented and refugee
immigrants, less than the $356 million which was assumed in the State's
1994-95 Budget Act.
For the first time in four years, the State enters the upcoming 1995-
96 fiscal year with strengthening revenues based on an improving economy.
On January 10, 1995, the Governor presented his 1995-96 Fiscal Year Budget
Proposal (the "Proposed Budget"). The Proposed Budget estimates General
Fund revenues and transfers of $42.5 billion (an increase of 0.2% over
1994-95). This nominal increase from 1994-95 fiscal year reflects the
Governor's realignment proposal and the first year of his tax cut proposal.
Without these two proposals, General Fund revenues would be projected at
approximately $43.8 billion, or an increase of 3.3% over 1994-95.
Expenditures are estimated at $41.7 billion (essentially unchanged from
1994-95). Special Fund revenues are estimated at $13.5 billion (10.7%
higher than 1994-95) and Special Fund expenditures are estimated at $13.8
billion (12.2% higher than 1994-95). The Proposed Budget projects that the
General Fund will end the fiscal year at June 30, 1996 with a budget
surplus in SFEU of about $92 million, or less than 1% of General Fund
expenditures, and will have repaid all of the accumulated budget deficits.
Recent Economic Trends. Revised employment data indicate that
California's recession ended in 1993, and following a period of stability,
a solid recovery is now underway. The State's unemployment rate fell
sharply last year, from 10.1% in January to 7.7% in October and November
1994. The gap between the national and California jobless rates narrowed
from 3.4 percentage points at the beginning of 1994 to an average of 2
percentage points in October and November 1994. The number of unemployed
Californians fell by nearly 400,000 during the year, while civilian
employment increased more than 300,000 in 1994.
Other indicators, including retail sales, homebuilding activity,
existing home sales and bank lending volume all confirm the State's
recovery.
Personal income was severely affected by the Northridge Earthquake,
which reduced the first quarter 1994 figure by $22 billion at an annual
rate, reflecting the uninsured damage to residences and unincorporated
businesses. As a result, personal income growth for all of 1994 was about
4.2%. However, excluding the Northridge effects, growth would have been in
excess of 5%. Personal income is expected to grow 6.6% for 1995.
APPENDIX B
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature of and provisions
of the obligation; and (3) protection afforded by, and relative position
of, the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
The AA rating may be modified by the addition of a plus or minus sign to
show relative standing within the category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Bonds in the Aa category which Moody's
believes possess the strongest investment attributes are designated by the
symbol Aa1.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example, may
be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a wide range of financial
markets and assured sources of alternate liquidity.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issuer, 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 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.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have 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>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS-100.0% AMOUNT VALUE
_______ _______
<S> <C> <C>
CALIFORNIA-99.3%
Anaheim, COP, VRDN, Refunding 3.60% (Insured; AMBAC) (a).................... $ 12,900,000 $ 12,900,000
Anaheim Housing Authority, MFHR, VRDN, Refunding (Villas at Anaheim Hill)
3.95% (LOC; National Bank of Canada) (a,b).............................. 8,850,000 8,850,000
California Department of Water Resource, Water Systems Revenue, VRDN
(Central Valley Project):
3.65%, Series, N-V2 (LOC; Canadian Imperial Bank of Commerce) (a,b)... 14,000,000 14,000,000
3.70%, Series, N-V1 (LOC; Canadian Imperial Bank of Commerce) (a,b)... 14,000,000 14,000,000
California Health Facilities Financing Authority, Revenue, VRDN:
(Catholic Health Care) 3.65%, Series C
(Insured; MBIA and LOC; Morgan Guaranty Trust Co.) (a,b).............. 5,500,000 5,500,000
(Saint Francis Medical Center)
3.65%, Series E (Insured; MBIA and LOC; Rabobank) (a,b)............... 5,000,000 5,000,000
(Scirpps Memorial Hospital):
3.65%, Series A (Insured; MBIA and LOC; Morgan Guaranty Trust Co.) (a,b) 5,400,000 5,400,000
3.65%, Series B (Insured; MBIA and LOC; Morgan Guaranty Trust Co.) (a,b) 17,700,000 17,700,000
California Housing Finance Agency:
Home Mortgage Revenue 4.60%, Series E, 2/1/96 (Insured; FGIC)........... 5,740,000 5,740,000
Multi-Family Revenue, Refunding, VRDN:
3.70%, Series B (Corp. Guaranty; Federal National Mortgage Association) (a) 5,600,000 5,600,000
3.70%, Series C (Corp. Guaranty; Federal National Mortgage Association) (a) 5,400,000 5,400,000
California Pollution Control Financing Authority:
PCR:
CP, Refunding (Pacific Gas and Electric):
2.85%, Series E, 8/10/95 (LOC; Morgan Guaranty Trust Co.) (b)..... 3,000,000 3,000,000
3.65%, Series A, 10/25/95 (LOC; Swiss Bank Corp.) (b)............. 14,630,000 14,630,000
VRDN (Southern California Edison)
4.15%, Series A (Corp. Guaranty; Southern California Edison) (a).. 3,500,000 3,500,000
VRDN:
RRR:
(Delano Project) 3.90% (LOC; ABN-Amro Bank) (a,b)................. 5,700,000 5,700,000
(Honey Lake Power Co. Project) 3.90% (LOC; Banque Nationale de Paris) (a,b) 4,000,000 4,000,000
Refunding:
(Ultra Power Rocklin Project) 3.95%, Series A (LOC; Bank of America) (a,b) 16,400,000 16,400,000
(Ultra Power Rocklin Project) 3.95%, Series B (LOC; Bank of America) (a,b) 6,100,000 6,100,000
SWDR:
(Colmac Energy Project) 3.70%, Series A (LOC; Swiss Bank Corp.) (a,b) 6,500,000 6,500,000
(Shell Oil Co. Martinez Project) 4% (Corp. Guaranty; Shell Oil Co.) (a) 8,100,000 8,100,000
California School Cash Reserve Program Authority, Notes 4.75%, Series A, 7/3/96 10,000,000 10,088,694
California Statewide Community Development Authority, VRDN:
Apartment Development Revenue, Refunding
4.35%, Series A-7 (Corp. Guaranty; Federal National Mortgage Association) (a) 6,500,000 6,500,000
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
CALIFORNIA (CONTINUED)
California Statewide Community Development Authority, VRDN (continued):
Multi-Family Revenue (Canyon Creek Apartments)
4.30%, Series C (Corp. Guaranty; Federal National Mortgage Association) (a) $ 11,800,000 $ 11,800,000
Solid Waste Facilities Revenue
(Chevron USA Inc. Project) 4% (Corp. Guaranty; Chevron USA Inc.) (a).. 3,700,000 3,700,000
City of Camarillo, MFHR, VRDN (Heritage Park)
3.80%, Series A (Corp. Guaranty; Federal National Mortgage Association) (a) 7,000,000 7,000,000
Golden Empire Schools Financing Authority, VRDN
(Kern High School District) 3.70%, Series A (LOC: Canadian Imperial Bank of
Commerce and National Westminster Bank) (a,b)........................... 7,500,000 7,500,000
City of Hayward Housing Authority, Multi-Family Revenue, Refunding, VRDN
(Barrington Hills) 4.20%, Series A (Corp. Guaranty; Federal National
Mortgage Association) (a)............................................... 13,550,000 13,550,000
Huntington Beach, MFHR, VRDN:
(Five Points Seniors Project) 3.85%, Series A (LOC; Wells Fargo Bank) (a,b) 3,100,000 3,100,000
(Mercury Savings and Loan Village)
4.25%, Series A (LOC; Resolution Funding Corp.) (a,b)................. 6,000,000 6,000,000
Irwindale, IDR, VRDN (Toys "R" Us Inc. Project) 3.875% (LOC; Bankers Trust) (a,b) 3,000,000 3,000,000
Kern County, TAN 4.50%, 7/2/96.............................................. 5,000,000 5,027,801
Los Angeles, MFHR, VRDN:
(Beverly Park Apartments) 3.85%, Series A (LOC; Barclays Bank) (a,b).... 9,600,000 9,600,000
(Loans To Lender Program):
4.05%, Series A (LOC; Federal Home Loan Banks) (a,b).................. 4,500,000 4,500,000
4.05%, Series B (LOC; Federal Home Loan Banks) (a,b).................. 7,500,000 7,500,000
(Lucas Studios Project) 3.95%, Series D (LOC; Bank of America) (a,b).... 3,655,000 3,655,000
(Oakwood Apartments) 3.80%, Series B (LOC; Sumitomo Bank) (a,b)......... 9,655,000 9,655,000
(Studio Colony) 3.75%, Series C (LOC; Industrial Bank of Japan) (a,b)... 9,650,000 9,650,000
Los Angeles County, TRAN 4.50%, 7/1/96 (LOC: Bank of America, Credit Suisse,
Morgan Guaranty Trust Co., Swiss Bank Corp., Union Bank of Switzerland
and
West Deutsche Landesbank) (b)........................................... 15,000,000 15,100,370
Los Angeles County Metropolitan Transportation Authority, VRDN:
Revenue (General Union Station Gateway)
3.75%, Series A (LOC: FSA and Societe Generale) (a,b)................. 7,000,000 7,000,000
Sales Tax Revenue, Refunding, VRDN (Property C)
3.70%, Series A (Insured; MBIA and SBPA; Industrial Bank of Japan) (a) 25,200,000 25,200,000
Los Angeles Unified School District, TRAN 4.50%, 7/3/96..................... 19,625,000 19,762,259
Paramount, MFHR, VRDN (Mercury Savings and Loan Triangle Project)
4.25%, Series A (LOC; Resolution Funding Corp.) (a,b)................... 9,000,000 9,000,000
Sacramento County, MFHR, VRDN
3.90%, Series C (LOC; Dai-Ichi Kangyo Bank) (a,b)....................... 2,400,000 2,400,000
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
CALIFORNIA (CONTINUED)
Sacramento County Housing Authority, MFHR, VRDN (Stone Creek Apartments
Project)
3.95%, Series L (LOC; First Interstate Bank of California) (a,b)........ $ 5,450,000 $ 5,450,000
San Bernardino:
COP, 3.90% (LOC; Sumitomo Trust and Banking Co.) (a,b).................. 12,000,000 12,000,000
TRAN 4.50%, 7/5/96
(LOC: Banque Nationale de Paris and Toronto Dominion) (b)............. 10,000,000 10,048,987
San Diego, IDR, CP (San Diego Gas & Electric)
3.05%, 9/11/95 (Corp. Guaranty; San Diego Gas & Electric)............... 8,750,000 8,750,000
San Diego County, MFHR, VRDN (Country Hills Apartments)
3.70%, Series A (Corp. Guaranty; Federal National Mortgage Association) (a) 5,400,000 5,400,000
San Diego Housing Authority, MFHR, VRDN (Nobel Court Apartments)
3.80% (LOC; Citibank) (a,b)............................................. 4,000,000 4,000,000
San Dimas Redevelopment Agency Industrial Development Authority, IDR, VRDN
(French Co. Project) 4.15% (LOC; Credit Commercial de France) (a,b)..... 4,200,000 4,200,000
San Francisco City and County Redevelopment Agency, Multi-Family Revenue,
VRDN
(Bayside Village Project):
3.65%, Series A (LOC; Industrial Bank of Japan) (a,b)................. 6,000,000 6,000,000
3.65%, Series B (LOC; Industrial Bank of Japan) (a,b)................. 8,400,000 8,400,000
San Francisco City and County Redevelopment Financing Authority, Revenue,
Refunding VRDN (Yerba-Buena Gardens) 3.80% (LOC; Bank of Tokyo) (a,b)... 5,000,000 5,000,000
Simi Valley, MFHR, Refunding, VRDN 3.65%, Series A (LOC; Bank of America) (a,b) 5,900,000 5,900,000
Vacaville, MFMR, VRDN (Quail Run)
3.70%, Series A (Corp. Guaranty; Federal National Mortgage Association) (a) 3,000,000 3,000,000
U.S. RELATED-.7%
Commonwealth of Puerto Rico Government Development Bank, Refunding, VRDN
3.45% (LOC; Credit Suisse) (a,b)........................................ 3,000,000 3,000,000
----------
TOTAL INVESTMENTS (cost $449,458,111)....................................... $449,458,111
===========
</TABLE>
<TABLE>
<CAPTION>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation MFMR Multi-Family Mortgage Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit TAN Tax Anticipation Notes
MBIA Municipal Bond Investors Assurance TRAN Tax and Revenue Anticipation Notes
Insurance Corporation VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- ------- --------------- -------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 92.5%
Aaa/Aa (d) AAA/AA (d) 4.5
Not Rated (e) Not Rated (e) 3.0
-----
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 July 31, 1995, 62.2% of the Fund's
net assets are backed by letters of credit issued by domestic banks,
foreign banks and government agencies.
(c) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(d) Notes which are not MIG or SP rated are represented by bond ratings
of the issuers.
(e) Securities which, while not rated by Moody's and Standard & Poor's,
respectively, 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.
(f) At July 31, 1995, the Fund had $172,650,000 (37.3% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from housing projects.
See notes to financial statements.
<TABLE>
<CAPTION>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $449,458,111
Cash.................................................................... 12,606,172
Interest receivable..................................................... 1,689,243
Prepaid expenses........................................................ 70,276
---------
463,823,802
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $200,359
Accrued expenses and other liabilities.................................. 219,690 420,049
------- --------
NET ASSETS.................................................................. $463,403,753
===========
REPRESENTED BY:
Paid-in capital......................................................... $463,552,152
Accumulated net realized (loss) on investments.......................... (148,399)
----------
NET ASSETS at value applicable to 463,552,152 shares outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized) $463,403,753
============
NET ASSET VALUE, offering and redemption price per share
($463,403,753 / 463,552,152 shares)..................................... $1.00
=====
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $19,589,688
EXPENSES:
Management fee-Note 2(a).............................................. $2,730,063
Shareholder servicing costs-Note 2(b)................................. 556,440
Custodian fees........................................................ 52,302
Professional fees..................................................... 46,246
Prospectus and shareholders' reports.................................. 23,869
Trustees' fees and expenses-Note 2(c)................................. 22,778
Registration fees..................................................... 10,340
Miscellaneous......................................................... 19,997
-------
3,462,035
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 624,410
--------
TOTAL EXPENSES.................................................. 2,837,625
---------
INVESTMENT INCOME-NET....................................................... 16,752,063
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (28,743)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $16,723,320
=========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
-------------------
1994 1995
------ -----
<S> <C> <C>
OPERATIONS:
Investment income-net............................................... $ 15,589,793 $ 16,752,063
Net realized (loss) on investments.................................. (111,389) (28,743)
--------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 15,478,404 16,723,320
--------- ---------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................... (15,589,793) (16,752,063)
--------- ---------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold....................................... 2,518,641,419 1,802,148,457
Dividends reinvested................................................ 14,582,815 15,289,984
Cost of shares redeemed............................................. (2,442,541,575) (2,053,110,924)
--------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS.............................. 90,682,659 (235,672,483)
--------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS....................... 90,571,270 (235,701,226)
NET ASSETS:
Beginning of year................................................... 608,533,709 699,104,979
--------- ----------
End of year......................................................... $ 699,104,979 $ 463,403,753
============ ============
See notes to financial statements.
</TABLE>
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated November 8, 1995.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. 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 charge. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of 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.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $122,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to July 31, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through July 31, 1995 which are treated for Federal income tax purposes,
as arising in fiscal 1995. If not applied, $8,200 of the carryover expires in
fiscal 2002 and $113,800 expires in fiscal 2003.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At July 31, 1995, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed 1 1/2% of the average value of the Fund's net
assets for any full fiscal year. However, during the year ended July 31,
1995, the Manager had undertaken to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate expenses exceeded specified
annual percentages of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $624,410 for the
year ended July 31, 1995.
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be less
than the amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the year ended
July 31, 1995, the Fund was charged an aggregate of $246,384 pursuant to the
Shareholder Services 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 $2,500 and an attendance fee of $250 per meeting.
The Chairman of the Board receives an additional 25% of such compensation.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities of
General California Municipal Money Market Fund, including the statement of
investments, as of July 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 July 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 General California Municipal Money Market Fund at July 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 and Young LLP signature logo]
New York, New York
September 1, 1995
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Financial Highlights for the period from March 10,
1987 (commencement of operations) to July 31, 1987 and for
each of the eight years ended July 31, 1995.
Included in Part B of the Registration Statement:
Statement of Investments--July 31, 1995
Statement of Assets and Liabilities--July 31, 1995
Statement of Operations--year ended July 31, 1995
Statement of Changes in Net Assets--for each of the two
years ended July 31, 1994 and July 31, 1995
Notes to Financial Statements
Reports of Ernst & Young LLP, Independent Auditors,
dated September 1, 1995
Schedule Nos. I through VIII 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) of Post-
Effective Amendment No. 13 to the Registration Statement on Form
N-1A, filed on July 28, 1995.
(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of Post-Effective Amendment No. 13 to the Registration Statement
on Form N-1A, filed on July 28, 1995.
(5) Management Agreement is incorporated by reference to Exhibit (5)
of Post-Effective Amendment No. 12 to the Registration Statement
on Form N-1A, filed on September 29, 1994.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1A, filed on September 29, 1994.
(6)(b) Forms of Shareholder Services Plan Agreements are incorporated by
reference to Exhibit (6)(b) of Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed on July 28, 1995.
(6)(c) Forms of Distribution Plan Agreements are incorporated by
reference to Exhibit (6)(c) of Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed on July 28, 1995.
(8)(a) Amended and Restated Custody Agreement.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
(8)(b) of Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1A, filed on September 29, 1994.
(9)(a) Registrant's Shareholder Services Plan for Class A is incorporated
by reference to Exhibit (9)(a) of Post-Effective Amendment No. 13
to the Registration Statement on Form N-1A, filed on July 28,
1995.
(9)(b) Registrant's Shareholder Services Plan for Class B is incorporated
by reference to Exhibit (9)(b) of Post-Effective Amendment No. 13
to the Registration Statement on Form N-1A, filed on July 28,
1995.
(10) Opinion and consent of Registrant's counsel.
(11) Consent of Independent Auditors.
(15) Distribution Plan is incorporated by reference to Exhibit (15) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on July 28, 1995.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 11 to
the Registration Statement on Form N-1A, filed on September 29,
1993.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan is incorporated by reference to Exhibit (18) of
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed on July 28, 1995.
Other Exhibits
(a) Except with respect to the Power of Attorney for Joseph
S. DiMartino, which is incorporated by reference to
Other Exhibits (a) of Post-Effective Amendment No. 13 to
the Registration Statement on From N-1A, filed on July
28, 1995, Powers of Attorney are incorporated by
reference to Other Exhibits (a) of Post-Effective
Amendment No. 12 to the Registration Statement on Form
N-1A, filed on September 29, 1994.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 12 to
the Registration Statement on Form N-1A, filed on
September 29, 1994.
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 October 11, 1995
Class A Class B
Shares of Beneficial Interest ------- -------
(par value $.001) 7060 1
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
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 27 of Part C of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on November 20, 1986.
Reference is also made to the Distribution Agreement incorporated
by reference to Exhibit (6) of Post-Effective Amendment No. 12 to
the Registration Statement on Form N-1A, filed on September 29,
1994.
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 and manager for sponsored investment companies
registered under the Investment Company Act of 1940 and as an
investment adviser to institutional and individual accounts.
Dreyfus also serves as sub-investment adviser to and/or
administrator of other investment companies. Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, serves primarily
as a registered broker-dealer of shares of investment companies
sponsored by Dreyfus and of other investment companies for which
Dreyfus acts as investment adviser, sub-investment adviser or
administrator. Dreyfus 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****
Mellon Bank, N.A.****
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*****
Vice Chairman of the Board:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President and Chief Mellon Bank Corporation****
Operating Officer The Boston Company*****
Deputy Director:
Mellon Trust****
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****
President:
Boston Safe Deposit and Trust Company*****
STEPHEN E. CANTER Former Chairman and Chief Executive Officer:
Vice Chairman and Kleinwort Benson Investment Management
Chief Investment Officer, Americas Inc.*
and a Director Director:
The Dreyfus Trust Company++
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*****
Laurel Capital Advisors****
Boston Group Holdings, Inc.
Executive Vice President:
Mellon Bank, N.A.****
Boston Safe Deposit & Trust*****
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Director:
Dreyfus Precious Metals, Inc.*;
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, Inc.***;
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
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.*****
Dreyfus Service Corporation*
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, Inc.*
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 Acquisition Corporation*;
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director, Vice President and Treasurer:
Lion Management, Inc.*;
Director:
The Dreyfus Trust Company++;
Secretary:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
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
MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
Legal and Secretary Secretary:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation
Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
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 131 Second Street, Lewes,
Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ 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) Dreyfus Edison Electric Index Fund, Inc.
18) Dreyfus Florida Intermediate Municipal Bond Fund
19) Dreyfus Florida Municipal Money Market Fund
20) Dreyfus Growth and Value Funds, Inc.
21) The Dreyfus Fund Incorporated
22) Dreyfus Global Bond Fund, Inc.
23) Dreyfus Global Growth, L.P. (A Strategic Fund)
24) Dreyfus GNMA Fund, Inc.
25) Dreyfus Government Cash Management
26) Dreyfus Growth and Income Fund, Inc.
27) Dreyfus Growth Opportunity Fund, Inc.
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Equity Fund, Inc.
33) Dreyfus Investors GNMA Fund
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) The Dreyfus/Laurel Investment Series
38) Dreyfus Life and Annuity Index Fund, Inc.
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus Michigan Municipal Money Market Fund, Inc.
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus Ohio Municipal Money Market Fund, Inc.
59) Dreyfus 100% U.S. Treasury Intermediate Term Fund
60) Dreyfus 100% U.S. Treasury Long Term Fund
61) Dreyfus 100% U.S. Treasury Money Market Fund
62) Dreyfus 100% U.S. Treasury Short Term Fund
63) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
64) Dreyfus Pennsylvania Municipal Money Market Fund
65) Dreyfus Short-Intermediate Government Fund
66) Dreyfus Short-Intermediate Municipal Bond Fund
67) Dreyfus Short-Term Income Fund, Inc.
68) The Dreyfus Socially Responsible Growth Fund, Inc.
69) Dreyfus Strategic Growth, L.P.
70) Dreyfus Strategic Income
71) Dreyfus Strategic Investing
72) Dreyfus Tax Exempt Cash Management
73) The Dreyfus Third Century Fund, Inc.
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 Government Securities Money Market Fund, Inc.
81) General Money Market Fund, Inc.
82) General Municipal Bond Fund, Inc.
83) General Municipal Money Market Fund, Inc.
84) General New York Municipal Bond Fund, Inc.
85) General New York Municipal Money Market Fund
86) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
87) Peoples Index Fund, Inc.
88) Peoples S&P MidCap Index Fund, Inc.
89) Premier Insured Municipal Bond Fund
90) Premier California Municipal Bond Fund
91) Premier Capital Growth Fund, Inc.
92) Premier Global Investing, Inc.
93) Premier GNMA Fund
94) Premier Growth Fund, Inc.
95) Premier Municipal Bond Fund
96) Premier New York Municipal Bond Fund
97) 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
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
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. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 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 certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York on
the 3rd day of November, 1995.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
BY: /s/Marie E. Connolly*
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, 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 (Principal 11/03/95
Marie E. Connolly Executive Officer)
/s/Joseph F. Tower, III* Assistant Treasurer 11/03/95
Joseph F. Tower, III (Principal Accounting
and Financial Officer)
/s/Joseph S. DiMartino* Chairman of the Board 11/03/95
Joseph S. DiMartino of Trustees
/s/Clifford L. Alexander, Jr.* Trustee 11/03/95
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Trustee 11/03/95
Peggy C. Davis
/s/Ernest Kakfa* Trustee 11/03/95
Ernest Kafka
/s/Saul B. Klaman* Trustee 11/03/95
Saul B. Klaman
/s/Nathan Leventhal* Trustee 11/03/95
Nathan Leventhal
*BY:
Eric B. Fischman,
Attorney-in-Fact
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
EXHIBIT INDEX
Item No. Exhibit Page No.
(8)(a) Amended and Restated Custody Agreement
(10) Opinion and Consent of Registrant's
Counsel
(11) Consent of Independent Auditors
(17) Financial Data Schedule
AMENDED AND RESTATED CUSTODY AGREEMENT
Amended and Restated Custody Agreement made as of August 18, 1989
between GENERAL CALIFORNIA TAX EXEMPT MONEY MARKET FUND, a business trust
organized and existing under the laws of the Commonwealth of Massachusetts,
having its principal office and place of business at 666 Old Country Road,
Garden City, New York 11530 (hereinafter called the "Fund"), and THE BANK
OF NEW YORK, a New York corporation authorized to do a banking business,
having its principal office and place of business at 48 Wall Street, New
York, New York 10015 (hereinafter called the "Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth
the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the Treasurer,
the Controller or any other person, whether or not any such person is an
Officer or employee of the Fund, duly authorized by the Trustees of the
Fund to give Oral Instructions and Written Instructions on behalf of the
Fund and listed in the Certificate annexed hereto as Appendix A or such
other Certificate as may be received by the Custodian from time to time.
2. "Available Balance" shall mean for any given day during a
calendar year the aggregate amount of Federal Funds held in the Fund's
custody account(s) at The Bank of New York, or its successors, as of the
close of such day or, if such day is not a business day, the close of the
preceding business day.
3. "Bankruptcy" shall mean with respect to a party such party's
making a general assignment, arrangement or composition with or for the
benefit of its creditors, or instituting or having instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or the entry of
an order for relief under the Federal bankruptcy law or any other relief
under any bankruptcy or insolvency law or other similar law affecting
creditors' rights, or if a petition is presented for the winding up or
liquidation of the party or a resolution is passed for its winding up or
liquidation, or it seeks, or becomes subject to, the appointment of an
administrator, receiver, trustee, custodian or other similar official for
it or for all or substantially all of its assets or its taking any action
in furtherance of, or indicating its consent to approval of, or
acquiescence in, any of the foregoing.
4. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and Federal agency securities, its
successor or successors and its nominee or nominees.
5. "Call Option" shall mean an exchange traded option with
respect to Securities other than Stock Index Options, Futures Contracts and
Futures Contract Options entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to purchase from the
writer thereof the specified underlying Securities.
6. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given
to the Custodian, which is actually received by the Custodian and signed on
behalf of the Fund by any two Officers of the Fund.
7. "Clearing Member" shall mean a registered broker-dealer which
is a clearing member under the rules of O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an investment
company, or any broker-dealer reasonably believed by the Custodian to be
such a clearing member.
8. "Collateral Account" shall mean a segregated account so
denominated and pledged to the Custodian as security for, and in
consideration of, the Custodian's issuance of (a) any Put Option guarantee
letter or similar document described in paragraph 8 of Article V herein, or
(b) any receipt described in Article V or VIII herein.
9. "Consumer Price Index" shall mean the U.S. Consumer Price
Index, all items and all urban consumers, U.S. city average 1982-84 equals
100, as first published without seasonal adjustment by the Bureau of Labor
Statistics, the Department of Labor, without regard to subsequent revisions
or corrections by such Bureau.
10. "Covered Call Option" shall mean an exchange traded option
entitling the holder, upon timely exercise and payment of the exercise
price, as specified therein, to purchase from the writer thereof the
specified Securities (excluding Futures Contracts) which are owned by the
writer thereof and subject to appropriate restrictions.
11. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission, its successor or successors and its nominee or nominees,
provided the Custodian has received a certified copy of a resolution of the
Fund's Trustees specifically approving deposits in DTC. The term
"Depository" shall further mean and include any other person authorized to
act as a depository under the Investment Company Act of 1940, its successor
or successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Fund's Trustees specifically
approving deposits therein by the Custodian.
12. "Earnings Credit" shall mean for any given day during a
calendar year the product of (a) the Federal Funds Rate for such date minus
.25%, and (b) 82% of the Available Balance.
13. "Federal Funds" shall mean immediately available same day
funds.
14. "Federal Funds Rate" shall mean, for any day, the Federal
Funds (Effective) interest rate so denominated as published in Federal
Reserve Statistical Release H.IS (519) and applicable to such day and each
succeeding day which is not a business day.
15. "Financial Futures Contract" shall mean the firm commitment
to buy or sell fixed income securities, including, without limitation, U.S.
Treasury Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank
certificates of deposit, and Eurodollar certificates of deposit, during a
specified month at an agreed upon price.
16. "Futures Contract" shall mean a Financial Futures Contract
and/or Stock Index Futures Contracts.
17. "Futures Contract Option" shall mean an option with respect
to a Futures Contract.
18. "Margin Account" shall mean a segregated account in the name
of a broker, dealer, futures commission merchant or Clearing Member, or in
the name of the Fund for the benefit of a broker, dealer, futures
commission merchant or Clearing Member, or otherwise, in accordance with an
agreement between the Fund, the Custodian and a broker, dealer, futures
commission merchant or Clearing Member (a "Margin Account Agreement"),
separate and distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from time to time
in connection with such transactions as the Fund may from time to time
determine. Securities held in the Book-Entry System or the Depository
shall be deemed to have been deposited in, or withdrawn from, a Margin
Account upon the Custodian's effecting an appropriate entry on its books
and records.
19. "Merger" shall mean (a) with respect to the Fund, the
consolidation or amalgamation with, merger into, or transfer of all or
substantially all of its assets to, another entity, where the Fund is not
the surviving entity, and (b) with respect to the Custodian, any
consolidation or amalgamation with, merger into, or transfer of all or
substantially all of its assets to, another entity, except for any such
consolidation, amalgamation, merger or transfer of assets between the
Custodian and The Bank of New York Company, Inc. or any subsidiary thereof,
or the Irving Bank Corporation or any subsidiary thereof, provided that the
surviving entity agrees to be bound by the terms of this Agreement.
20. "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and
interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, certificates of deposit and
bankers' acceptances, repurchase and reverse repurchase agreements with
respect to the same and bank time deposits, where the purchase and sale of
such securities normally requires settlement in Federal funds on the same
date as such purchase or sale.
21. "O.C.C." shall mean Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934,
its successor or successors, and its nominee or nominees.
22. "Officers" shall be deemed to include the President, any
Vice President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons duly
authorized by the Trustees of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in
the Certificate annexed hereto as Appendix B or such other Certificate as
may be received by the Custodian from time to time.
23. "Option" shall mean a Call Option, Covered Call Option,
Stock Index Option and/or a Put Option.
24. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person
reasonably believed by the Custodian to be an Authorized Person.
25. "Put Option" shall mean an exchange traded option with
respect to Securities other than Stock Index Options, Futures Contracts,
and Futures Contract Options entitling the holder, upon timely exercise and
tender of the specified underlying Securities, to sell such Securities to
the writer thereof for the exercise price.
26. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which the Fund sells Securities and agrees to repurchase such
Securities at a described or specified date and price.
27. "Security" shall be deemed to include, without limitation,
Money Market Securities, Call Options, Put Options, Stock Index Options,
Stock Index Futures Contracts, Stock Index Futures Contract Options,
Financial Futures Contracts, Financial Futures Contract Options, Reverse
Repurchase Agreements, common stock and other instruments or rights having
characteristics similar to common stocks, preferred stocks, debt
obligations issued by state or municipal governments and by public
authorities (including, without limitation, general obligation bonds,
revenue bonds and industrial bonds and industrial development bonds),
bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights
to receive, purchase, sell or subscribe for the same, or evidencing or
representing any other rights or interest therein, or any property or
assets.
28. "Segregated Security Account" shall mean an account
maintained under the terms of this Agreement as a segregated account, by
recordation or otherwise, within the custody account in which certain
Securities and/or other assets of the Fund shall be deposited and withdrawn
from time to time in accordance with Certificates received by the Custodian
in connection with such transactions as the Fund may from time to time
determine.
29. "Shares" shall mean the shares of beneficial interest of the
Fund, each of which, in the case of a Fund having Series, is allocated to a
particular Series.
30. "Stock Index Futures Contract" shall mean a bilateral
agreement pursuant to which the parties agree to take or make delivery of
an amount of cash equal to a specified dollar amount times the difference
between the value of a particular stock index at the close of the last
business day of the contract and the price at which the futures contract is
originally struck.
31. "Stock Index Option" shall mean an exchange traded option
entitling the holder, upon timely exercise, to receive an amount of cash
determined by reference to the difference between the exercise price and
the value of the index on the date of exercise.
32. "Written Instructions" shall mean written communications
actually received by the Custodian from an Authorized Person or from a
person reasonably believed by the Custodian to be an Authorized Person by
telex or any other such system whereby the receiver of such communications
is able to verify by codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as
custodian of all the Securities and moneys at any time owned by the Fund
during the period of this Agreement, except that (a) if the Custodian fails
to provide for the custody of any of the Fund's Securities and moneys
located or to be located outside the United States in a manner satisfactory
to the Fund, the Fund shall be permitted to arrange for the custody of such
Securities and moneys located or to be located outside the United States
other than through the Custodian at rates to be negotiated and borne by the
Fund and (b) if the Custodian fails to continue any existing sub-custodial
or similar arrangements on substantially the same terms as exist on the
date of this Agreement, the Fund shall be permitted to arrange for such or
similar services other than through the Custodian at rates to be negotiated
and borne by the Fund. The Custodian shall not charge the Fund for any
such terminated services after the date of such termination.
2. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article
and in Article VIII, the Fund will deliver or cause to be delivered to the
Custodian all Securities and all moneys owned by it, including cash
received for the issuance of its shares, at any time during the period of
this Agreement. The Custodian will not be responsible for such Securities
and such moneys until actually received by it. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where such
credits have been previously made and moneys are not finally collected.
The Fund shall deliver to the Custodian a certified resolution of the
Trustees of the Fund approving, authorizing and instructing the Custodian
on a continuous and on-going basis to deposit in the Book-Entry System all
Securities eligible for deposit therein and to utilize the Book-Entry
System to the extent possible in connection with its performance hereunder,
including, without limitation, in connection with settlements of purchases
and sales of Securities, loans of Securities, and deliveries and returns of
Securities collateral. Prior to a deposit of Securities of the Fund in the
Depository the Fund shall deliver to the Custodian a certified resolution
of the Trustees of the Fund approving, authorizing and instructing the
Custodian on a continuous and on-going basis until instructed to the
contrary by a Certificate actually received by the Custodian to deposit in
the Depository all Securities eligible for deposit therein and to utilize
the Depository to the extent possible in connection with its performance
hereunder, including, without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities, and deliveries and
returns of Securities collateral. Securities and moneys of the Fund
deposited in either the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the Custodian
acts in a fiduciary or representative capacity. Prior to the Custodian's
accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options as provided in this
Agreement, the Custodian shall have received a certified resolution of the
Fund's Board of Trustees approving, authorizing and instructing the
Custodian on a continuous and on-going basis, until instructed to the
contrary by a Certificate actually received by the Custodian, to accept,
utilize and act in accordance with such confirmations as provided in this
Agreement.
2. The Custodian shall credit to a separate account in the name
of the Fund all moneys received by it for the account of the Fund, and
shall disburse the same only:
(a) In payment for Securities purchased, as provided in Article
IV hereof;
(b) In payment of dividends or distributions, as provided in
Article XI hereof;
(c) In payment of original issue or other taxes, as provided in
Article XII hereof;
(d) In payment for Shares redeemed by it, as provided in Article
XII hereof;
(e) Pursuant to Certificates setting forth the name and address
of the person to whom the payment is to be made, and the purpose for which
payment is to be made; or
(f) In payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian, as provided in Article XV hereof.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund with confirmations and a summary of all
transfers to or from the account of the Fund during said day. Where
Securities are transferred to the account of the Fund, the Custodian shall
also by book-entry or otherwise identify as belonging to the Fund a
quantity of Securities in a fungible bulk of Securities registered in the
name of the Custodian (or its nominee) or shown on the Custodian's account
on the books of the Book-Entry System or the Depository. At least monthly
and from time to time, the Custodian shall furnish the Fund with a detailed
statement of the Securities and moneys held for the Fund under this
Agreement.
4. Except as otherwise provided in paragraph 7 of this Article
and in Article VIII, all Securities held for the Fund, which are issued or
issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that form; all other
Securities held for the Fund may be registered in the name of the Fund, in
the name of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Fund agrees to furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee or in the
name of the Book-Entry System or the Depository, any Securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund. The Custodian shall hold all such
Securities which are not held in the Book-Entry System or in the Depository
in a separate account in the name of the Fund physically segregated at all
times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless
otherwise instructed to the contrary by a Certificate, the Custodian by
itself, or through the use of the Book-Entry System or the Depository with
respect to Securities therein deposited, shall with respect to all
Securities held for the Fund in accordance with this Agreement:
(a) Collect all income due or payable and, in any event, if the
Custodian receives a written notice from the Fund specifying that an amount
of income should have been received by the Custodian within the last 90
days, the Custodian will provide a conditional payment of income within 60
days from the date the Custodian received such notice, unless the Custodian
reasonably concludes that such income was not due or payable to the Fund,
provided that the Custodian may reverse any such conditional payment upon
its reasonably concluding that all or any portion of such income was not
due or payable, and provided further that the Custodian shall not be liable
for failing to collect on a timely basis the full amount of income due or
payable in respect of a "floating rate instrument" or "variable rate
instrument" (as such terms are defined under Rule 2a-7 under the Investment
Company Act of 1940, as amended) if it has acted in good faith, without
negligence or willful misconduct.
(b) Present for payment and collect the amount payable upon such
Securities which are called, but only if either (i) the Custodian receives
a written notice of such call, or (ii) notice of such call appears in one
or more of the publications listed in Appendix C annexed hereto, which may
be amended at any time by the Custodian upon five business days' prior
notification to the Fund;
(c) Present for payment and collect the amount payable upon all
Securities which may mature;
(d) Surrender Securities in temporary form for definitive
Securities;
(e) Execute, as Custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of
the Fund all rights and similar securities issued with respect to any
Securities held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or the
Depository, shall:
(a) Execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any Securities
may be exercised;
(b) Deliver any Securities held for the Fund in exchange for
other Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of
any corporation, or the exercise of any conversion privilege;
(c) Deliver any Securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund
and take such other steps as shall be stated in said order to be for the
purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund; and
(e) Present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which
may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, Option or Futures Contract
Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or
certificates are available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the availability of
any such instrument or certificate. Prior to such availability, the
Custodian shall comply with Section 17(f) of the Investment Company Act of
1940, as amended, in connection with the purchase, sale, settlement,
closing out or writing of Futures Contracts, Options or Futures Contract
Options by making payments or deliveries specified in Certificates received
by the Custodian in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer or futures
commission merchant of a statement or confirmation reasonably believed by
the Custodian to be in the form customarily used by brokers, dealers, or
futures commission merchants with respect to such Futures Contracts,
Options or Futures Contract Options, as the case may be, confirming that
such Security is held by such broker, dealer or futures commission
merchant, in book-entry form or otherwise, in the name of the Custodian (or
any nominee of the Custodian) as custodian for the Fund, provided, however,
that payments to or deliveries from the Margin Account shall be made in
accordance with the terms and conditions of the Margin Account Agreement.
Whenever any such instruments or certificates are available, the Custodian
shall, notwithstanding any provision in this Agreement to the contrary,
make payment for any Futures Contract, Option or Futures Contract Option
for which such instruments or such certificates are available only against
the delivery to the Custodian of such instrument or such certificate, and
deliver any Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by
the Custodian of payment therefor. Any such instrument or certificate
delivered to the Custodian shall be held by the Custodian hereunder in
accordance with, and subject to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN OPTIONS,
FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS
1. Promptly after each purchase of Securities by the Fund, other
than a purchase of any Option, Futures Contract, Futures Contract Option or
Reverse Repurchase Agreement, the Fund shall deliver to the Custodian (i)
with respect to each purchase of Securities which are not Money Market
Securities, a Certificate, and (ii) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such purchase: (a) the name
of the issuer and the title of the Securities; (b) the number of shares or
the principal amount purchased and accrued interest, if any; (c) the date
of purchase and settlement; (d) the purchase price per unit; (e) the total
amount payable upon such purchase; (f) the name of the person from whom or
the broker through whom the purchase was made, and the name of the clearing
broker, if any; and (g) the name of the broker to which payment is to be
made. The Custodian shall, upon receipt of Securities purchased by or for
the Fund, pay out of the moneys held for the account of the Fund the total
amount payable to the person from whom, or the broker through whom, the
purchase was made, provided that the same conforms to the total amount
payable as set forth in such Certificate, Oral Instructions or Written
Instructions.
2. Promptly after each sale of Securities by the Fund, other
than a sale of any Option, Futures Contract, Futures Contract Option or
Reverse Repurchase Agreement, the Fund shall deliver to the Custodian (i)
with respect to each sale of Securities which are not Money Market
Securities, a Certificate, and (ii) with respect to each sale of Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such sale: (a) the name of
the issuer and the title of the Security; (b) the number of shares or
principal amount sold, and accrued interest, if any; (c) the date of sale;
(d) the sale price per unit; (e) the total amount payable to the Fund upon
such sale; (f) the name of the broker through whom or the person to whom
the sale was made, and the name of the clearing broker, if any; and (g) the
name of the broker to whom the Securities are to be delivered. The
Custodian shall deliver the Securities upon receipt of the total amount
payable to the Fund upon such sale, provided that the same conforms to the
total amount payable as set forth in such Certificate, Oral Instructions or
Written Instructions. Subject to the foregoing, the Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the
Fund shall deliver to the Custodian a Certificate specifying with respect
to each Option purchased: (a) the type of Option (put or call); (b) the
name of the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index to which
such Option relates and the number of Stock Index Options purchased; (c)
the expiration date; (d) the exercise price; (e) the dates of purchase and
settlement; (f) the total amount payable by the Fund in connection with
such purchase; (g) the name of the Clearing Member through which such
Option was purchased; and (h) the name of the broker to whom payment is to
be made. The Custodian shall pay, upon receipt of a Clearing Member's
statement confirming the purchase of such Option held by such Clearing
Member for the account of the Custodian (or any duly appointed and
registered nominee of the Custodian) as custodian for the Fund, out of
moneys held for the account of the Fund, the total amount payable upon such
purchase to the Clearing Member through whom the purchase was made,
provided that the same conforms to the total amount payable as set forth in
such Certificate.
2. Promptly after the sale of any Option purchased by the Fund
pursuant to paragraph 1 hereof, the Fund shall deliver to the Custodian a
Certificate specifying with respect to each such sale: (a) the type of
Option (put or call); (b) the name of the issuer and the title and number
of shares subject to such Option or, in the case of a Stock Index Option,
the stock index to which such Option relates and the number of Stock Index
Options sold; (c) the date of sale; (d) the sale price; (e) the date of
settlement; (f) the total amount payable to the Fund upon such sale; and
(g) the name of the Clearing Member through which the sale was made. The
Custodian shall consent to the delivery of the Option sold by the Clearing
Member which previously supplied the confirmation described in preceding
paragraph l of this Article with respect to such Option against payment to
the Custodian of the total amount payable to the Fund, provided that the
same conforms to the total amount payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Call
Option: (a) the name of the issuer and the title and number of shares
subject to the Call Option; (b) the expiration date; (c) the date of
exercise and settlement; (d) the exercise price per share; (e) the total
amount to be paid by the Fund upon such exercise; and (f) the name of the
Clearing Member through which such Call Option was exercised. The
Custodian shall, upon receipt of the Securities underlying the Call Option
which was exercised, pay out of the moneys held for the account of the Fund
the total amount payable to the Clearing Member through whom the Call
Option was exercised, provided that the same conforms to the total amount
payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the name of the issuer and the title and number of shares
subject to the Put Option; (b) the expiration date; (c) the date of
exercise and settlement; (d) the exercise price per share; (e) the total
amount to be paid to the Fund upon such exercise; and (f) the name of the
Clearing Member through which such Put Option was exercised. The Custodian
shall, upon receipt of the amount payable upon the exercise of the Put
Option, deliver or direct the Depository to deliver the Securities,
provided the same conforms to the amount payable to the Fund as set forth
in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index
Option purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option: (a) the type of Stock Index Option (put or call); (b)
the number of Options being exercised; (c) the stock index to which such
Option relates; (d) the expiration date; (e) the exercise price; (f) the
total amount to be received by the Fund in connection with such exercise;
and (g) the Clearing Member from which such payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Covered Call Option: (a) the name of the issuer and the
title and number of shares for which the Covered Call Option was written
and which underlie the same; (b) the expiration date; (c) the exercise
price; (d) the premium to be received by the Fund; (e) the date such
Covered Call Option was written; and (f) the name of the Clearing Member
through which the premium is to be received. The Custodian shall deliver
or cause to be delivered, in exchange for receipt of the premium specified
in the Certificate with respect to such Covered Call Option, such receipts
as are required in accordance with the customs prevailing among Clearing
Members dealing in Covered Call Options and shall impose, or direct the
Depository to impose, upon the underlying Securities specified in the
Certificate such restrictions as may be required by such receipts.
Notwithstanding the foregoing, the Custodian has the right, upon prior
written notification to the Fund, at any time to refuse to issue any
receipts for Securities in the possession of the Custodian and not
deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and
described in the preceding paragraph of this Article is exercised, the Fund
shall promptly deliver to the Custodian a Certificate instructing the
Custodian to deliver, or to direct the Depository to deliver, the
Securities subject to such Covered Call Option and specifying: (a) the
name of the issuer and the title and number of shares subject to the
Covered Call Option; (b) the Clearing Member to whom the underlying
Securities are to be delivered; and (c) the total amount payable to the
Fund upon such delivery. Upon the return and/or cancellation of any
receipts delivered pursuant to paragraph 6 of this Article, the Custodian
shall deliver, or direct the Depository to deliver, the underlying
Securities as specified in the Certificate for the amount to be received as
set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
such Put Option: (a) the name of the issuer and the title and number of
shares for which the Put Option is written and which underlie the same; (b)
the expiration date; (c) the exercise price; (d) the premium to be received
by the Fund; (e) the date such Put Option is written; (f) the name of
the Clearing Member through which the premium is to be received and to whom
a Put Option guarantee letter is to be delivered; (g) the amount of cash,
and/or the amount and kind of Securities, any, to be deposited in the
Segregated Security Account; and (h) the amount of cash and/or the amount
and kind of Securities to be deposited into the Collateral Account. The
Custodian shall, after making the deposits into the Collateral Account
specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the Certificate
against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Custodian shall be under no obligation
to issue any Put Option guarantee letter or similar document if it is
unable to make any of the representations contained therein.
9. Whenever a Put Option written by the Fund and described in
the preceding paragraph is exercised, the Fund shall promptly deliver to
the Custodian a Certificate specifying: (a) the name of the issuer and
title and number of shares subject to the Put Option; (b) the Clearing
Member from which the underlying Securities are to be received; (c) the
total amount payable by the Fund upon such delivery; (d) the amount of cash
and/or the amount and kind of Securities to be withdrawn from the
Collateral Account; and (e) the amount of cash and/or the amount and kind
of Securities, if any, to be withdrawn from the Segregated Security
Account. Upon the return and/or cancellation of any Put Option guarantee
letter or similar document issued by the Custodian in connection with such
Put Option, the Custodian shall pay out of the moneys held for the account
of the Fund the total amount payable to the Clearing Member specified in
the Certificate as set forth in such Certificate, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Stock Index Option: (a) whether such Stock Index Option is
a put or a call; (b) the number of Options written; (c) the stock index to
which such Option relates; (d) the expiration date; (e) the exercise price;
(f) the Clearing Member through which such Option was written; (g) the
premium to be received by the Fund; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the Segregated
Security Account; (i) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Collateral Account; and (j) the
amount of cash and/or the amount and kind of Securities, if any, to be
deposited in a Margin Account, and the name in which such account is to be
or has been established. The Custodian shall, upon receipt of the premium
specified in the Certificate, make the deposits, if any, into the
Segregated Security Account specified in the Certificate, and either (1)
deliver such receipts, if any, which the Custodian has specifically agreed
to issue, which are in accordance with the customs prevailing among
Clearing Members in Stock Index Options and make the deposits into the
Collateral Account specified in the Certificate, or (2) make the deposits
into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and
described in the preceding paragraph of this Article is exercised, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Stock Index Option: (a) such information as may be
necessary to identify the Stock Index Option being exercised; (b) the
Clearing Member through which such Stock Index Option is being exercised;
(c) the total amount payable upon such exercise, and whether such amount is
to be paid by or to the Fund; (d) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Margin Account; and (e) the
amount of cash and/or amount and kind of Securities, if any, to be
withdrawn from the Segregated Security Account and the amount of cash
and/or the amount and kind of Securities, if any, to be withdrawn from the
Collateral Account. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Custodian shall pay to the Clearing Member specified in the Certificate the
total amount payable, if any, as specified therein.
12. Whenever the Fund purchases any Option identical to a
previously written Option described in paragraphs 6, 8 or 10 of this
Article in a transaction expressly designated as a "Closing Purchase
Transaction" in order to liquidate its position as a writer of an Option,
the Fund shall promptly deliver to the Custodian a Certificate specifying
with respect to the Option being purchased: (a) that the transaction is a
Closing Purchase Transaction; (b) the name of the issuer and the title and
number of shares subject to the Option, or, in the case of a Stock Index
Option, the stock index to which such Option relates and the number of
Options held; (c) the exercise price; (d) the premium to be paid by the
Fund; (e) the expiration date; (f) the type of Option (put or call); (g)
the date of such purchase; (h) the name of the Clearing Member to which the
premium is to be paid; and (i) the amount of cash and/or the amount and
kind of Securities, if any, to be withdrawn from the Collateral Account, a
specified Margin Account or the Segregated Security Account. Upon the
Custodian's payment of the premium and the return and/or cancellation of
any receipt issued pursuant to paragraphs 6, 8 or 10 of this Article with
respect to the Option being liquidated through the Closing Purchase
Transaction, the Custodian shall remove, or direct the Depository to
remove, the previously imposed restrictions on the Securities underlying
the Call Option.
13. Upon the expiration or exercise of, or consummation of a
Closing Purchase Transaction with respect to, any Option purchased or
written by the Fund and described in this Article, the Custodian shall
delete such Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and upon the return and/or cancellation
of any receipts issued by the Custodian, shall make such withdrawals from
the Collateral Account, the Margin Account and/or the Segregated Security
Account as may be specified in a Certificate received in connection with
such expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the
Fund shall deliver to the Custodian a Certificate specifying with respect
to such Futures Contract (or with respect to any number of identical
Futures Contract(s)): (a) the category of Futures Contract (the name of
the underlying stock index or financial instrument); (b) the number of
identical Futures Contracts entered into; (c) the delivery or settlement
date of the Futures Contract(s); (d) the date the Futures Contract(s) was
(were) entered into and the maturity date; (e) whether the Fund is buying
(going long) or selling (going short) on such Futures Contract(s); (f) the
amount of cash and/or the amount and kind of Securities, if any, to be
deposited in the Segregated Security Account; (g) the name of the broker,
dealer or futures commission merchant through which the Futures Contract
was entered into; and (h) the amount of fee or commission, if any, to be
paid and the name of the broker, dealer or futures commission merchant to
whom such amount is to be paid. The Custodian shall make the deposits, if
any, to the Margin Account in accordance with the terms and conditions of
the Margin Account Agreement. The Custodian shall make payment of the fee
or commission, if any, specified in the Certificate and deposit in the
Segregated Security Account the amount of cash and/or the amount and kind
of Securities specified in said Certificate.
2. (a) Any variation margin payment or similar payment required
to be made by the Fund to a broker, dealer or futures commission merchant
with respect to an outstanding Futures Contract shall be made by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
(b) Any variation margin payment or similar payment from a
broker, dealer or futures commission merchant to the Fund with respect to
an outstanding Futures Contract shall be received and dealt with by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder
is retained by the Fund until delivery or settlement is made on such
Futures Contract, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the Futures Contract; (b) with respect to a Stock Index
Futures Contract, the total cash settlement amount to be paid or received,
and with respect to a Financial Futures Contract, the Securities and/or
amount of cash to be delivered or received; (c) the broker, dealer or
futures commission merchant to or from which payment or delivery is to be
made or received; and (d) the amount of cash and/or Securities to be
withdrawn from the Segregated Security Account. The Custodian shall make
the payment or delivery specified in the Certificate and delete such
Futures Contract from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Custodian hereunder, the Fund shall
deliver to the Custodian a Certificate specifying: (a) the items of
information required in a Certificate described in paragraph 1 of this
Article, and (b) the Futures Contract being offset. The Custodian shall
make payment of the fee or commission, if any, specified in the Certificate
and delete the Futures Contract being offset from the statements delivered
to the Fund pursuant to paragraph 3 of Article III herein, and make such
withdrawals from the Segregated Security Account as may be specified in
such Certificate. The withdrawals, if any, to be made from the Margin
Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by
the Fund, the Fund shall deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the type of Futures
Contract Option (put or call); (b) the type of Futures Contract and such
other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option purchased; (c) the expiration date;
(d) the exercise price; (e) the dates of purchase and settlement; (f) the
amount of premium to be paid by the Fund upon such purchase; (g) the name
of the broker or futures commission merchant through which such option was
purchased; and (h) the name of the broker or futures commission merchant to
whom payment is to be made. The Custodian shall pay the total amount to be
paid upon such purchase to the broker or futures commission merchant
through whom the purchase was made, provided that the same conforms to the
amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to
each such sale: (a) the type of Futures Contract Option (put or call); (b)
the type of Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract Option;
(c) the date of sale; (d) the sale price; (e) the date of settlement; (f)
the total amount payable to the Fund upon such sale; and (g) the name of
merchant through which the sale was made. The Custodian shall consent to
the cancellation of the Futures Contract Option being closed against
payment to the Custodian of the total amount payable to the Fund, provided
the same conforms to the total amount payable as set forth in such
Certificate.
3. Whenever a Futures Contract Option purchased by the Fund
pursuant to paragraph 1 is exercised by the Fund, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the particular
Futures Contract Option (put or call) being exercised; (b) the type of
Futures Contract underlying the Futures Contract Option; (c) the date of
exercise; (d) the name of the broker or futures commission merchant through
which the Futures Contract Option is exercised; (e) the net total amount,
if any, payable by the Fund; (f) the amount, if any, to be received by the
Fund; and (g) the amount of cash and/or the amount and kind of Securities
to be deposited in the Segregated Security Account. The Custodian shall
make the payments, if any, and the deposits, if any, into the Segregated
Security Account as specified in the Certificate. The deposits, if any, to
be made to the Margin Account shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Futures Contract Option: (a) the type of Futures Contract
Option (put or call); (b) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract underlying
the Futures Contract Option; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the name of the
broker or futures commission merchant through which the premium is to be
received; and (g) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in the Segregated Security Account.
The Custodian shall, upon receipt of the premium specified in the
Certificate, make the deposits into the Segregated Security Account, if
any, as specified in the Certificate. The deposits, if any, to be made to
the Margin Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which
is a call is exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the particular Futures Contract Option
exercised; (b) the type of Futures Contract underlying the Futures Contract
Option; (c) the name of the broker or futures commission merchant through
which such Futures Contract Option was exercised; (d) the net total amount,
if any, payable to the Fund upon such exercise; (e) the net total amount,
if any, payable by the Fund upon such exercise; and (f) the amount of cash
and/or the amount and kind of Securities to be deposited in the Segregated
Security Account. The Custodian shall, upon its receipt of the net total
amount payable to the Fund, if any, specified in such Certificate make the
payments, if any, and the deposits, if any, into the Segregated Security
Account as specified in the Certificate. The deposits, if any, to be made
to the Margin Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written by the
Fund and which is a Put Option is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the particular
Futures Contract Option exercised; (b) the type of Futures Contract
underlying such Futures Contract Option; (c) the name of the broker or
futures commission merchant through which such Futures Contract Option is
exercised; (d) the net total amount, if any, payable to the Fund upon such
exercise; (e) the net total amount, if any, payable by the Fund upon such
exercise; and (f) the amount and kind of Securities and/or cash to be
withdrawn from or deposited in the Segregated Security Account, if any.
The Custodian shall, upon its receipt of the net total amount payable to
the Fund, if any, specified in the Certificate, make the payments, if any,
and the deposits, if any, into the Segregated Security Account as specified
in the Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
7. Whenever the Fund purchases any Futures Contract Option
identical to a previously written Futures Contract Option described in this
Article in order to liquidate its position as a writer of such Futures
Contract Option, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to the Futures Contract Option being
purchased: (a) that the transaction is a closing transaction; (b) the type
of Futures Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract Option; (c)
the exercise price; (d) the premium to be paid by the Fund; (e) the
expiration date; (f) the name of the broker or futures commission merchant
to which the premium is to be paid; and (g) the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the Segregated
Security Account. The Custodian shall effect the withdrawals from the
Segregated Security Account specified in the Certificate. The withdrawals,
if any, to be made from the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin Account
Agreement.
8. Upon the expiration or exercise of, or consummation of a
closing transaction with respect to, any Futures Contract Option written or
purchased by the Fund and described in this Article, the Custodian shall
(a) delete such Futures Contract Option from the statements delivered to
the Fund pursuant to paragraph 3 of Article III herein, and (b) make such
withdrawals from, and/or, in the case of an exercise, such deposits into,
the Segregated Security Account as may be specified in a Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be
made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise
of a Futures Contract Option described in this Article shall be subject to
Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sale, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the name of the issuer and the
title of the Security; (b) the number of shares or principal amount sold,
and accrued interest or dividends, if any; (c) the dates of the sale and
settlement; (d) the sale price per unit; (e) the total amount credited to
the Fund upon such sales, if any; (f) the amount of cash and/or the amount
and kind of Securities, if any, which are to be deposited in a Margin
Account and the name in which such Margin Account has been or is to be
established; (g) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in a Segregated Security Account; and
(h) the name of the broker through which such short sale was made. The
Custodian shall upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon such sale, if
any, as specified in the Certificate is held by such broker for the account
of the Custodian (or any nominee of the Custodian) as custodian of the
Fund, issue a receipt or make the deposits into the Margin Account and the
Segregated Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the
Fund shall promptly deliver to the Custodian a Certificate specifying with
respect to each such closing-out: (a) the name of the issuer and the title
of the Security; (b) the number of shares or the principal amount, and
accrued interest or dividends, if any, required to effect such closing-out
to be delivered to the broker; (c) the dates of the closing-out and
settlement; (d) the purchase price per unit; (e) the net total amount
payable to the Fund upon such closing-out; (f) the net total amount payable
to the broker upon such closing-out; (g) the amount of cash and the amount
and kind of Securities to be withdrawn, if any, from the Margin Account;
(h) the amount of cash and/or the amount and kind of Securities, if any, to
be withdrawn from the Segregated Security Account; and (i) the name of the
broker through which the Fund is effecting such closing-out. The Custodian
shall, upon receipt of the net total amount payable to the Fund upon such
closing-out and the return and/or cancellation of the receipts, if any,
issued by the custodian with respect to the short sale being closed-out,
pay out of the moneys held for the account of the Fund to the broker the
net total amount payable to the broker, and make the withdrawals from the
Margin Account and the Segregated Security Account, as the same are
specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse Repurchase
Agreement with respect to Securities and money held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate or in the
event such Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions or Written Instructions specifying: (a) the
total amount payable to the Fund in connection with such Reverse Repurchase
Agreement; (b) the broker or dealer through or with which the Reverse
Repurchase Agreement is entered; (c) the amount and kind of Securities to
be delivered by the Fund to such broker or dealer; (d) the date of such
Reverse Repurchase Agreement; and (e) the amount of cash and/or the amount
and kind of Securities, if any, to be deposited in a Segregated Security
Account in connection with such Reverse Repurchase Agreement. The
Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate, Oral Instructions or Written Instructions
make the delivery to the broker or dealer, and the deposits, if any, to the
Segregated Security Account, specified in such Certificate, Oral
Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement
described in paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money
Market Security, a Certificate, Oral Instructions or Written Instructions
to the Custodian specifying: (a) the Reverse Repurchase Agreement being
terminated; (b) the total amount payable by the Fund in connection with
such termination; (c) the amount and kind of Securities to be received by
the Fund in connection with such termination; (d) the date of termination;
(e) the name of the broker or dealer with or through which the Reverse
Repurchase Agreement is to be terminated; and (f) the amount of cash and/or
the amount and kind of Securities to be withdrawn from the Segregated
Security Account. The Custodian shall, upon receipt of the amount and kind
of Securities to be received by the Fund specified in the Certificate, Oral
Instructions or Written Instructions, make the payment to the broker or
dealer, and the withdrawals, if any, from the Segregated Security Account,
specified in such Certificate, Oral Instructions or Written Instructions.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits
to, or withdrawals from, a Segregated Security Account as specified in a
Certificate received by the Custodian. Such Certificate shall specify the
amount of cash and/or the amount and kind of Securities to be deposited in,
or withdrawn from, the Segregated Security Account. In the event that the
Fund fails to specify in a Certificate the name of the issuer, the title
and the number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn from, a
Segregated Securities Account, the Custodian shall be under no obligation
to make any such deposit or withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or Clearing
Member in whose name, or for whose benefit, the account was established as
specified in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin Account
shall be dealt with in accordance with the terms and conditions of the
Margin Account Agreement.
4. The Custodian shall have a continuing lien and security
interest in and to any property at any time held by the Custodian in any
Collateral Account described herein. In accordance with applicable law,
the Custodian may enforce its lien and realize on any such property
whenever the Custodian has made payment or delivery pursuant to any Put
Option guarantee letter or similar document or any receipt issued hereunder
by the Custodian. In the event the Custodian should realize on any such
property net proceeds which are less than the Custodian's obligations under
any Put Option guarantee letter or similar document or any receipt, such
deficiency shall be a debt owed the Custodian by the Fund within the scope
of Article XIII herein.
5. On each business day, the custodian shall furnish the Fund
with a statement with respect to each Margin Account in which money or
Securities are held specifying as of the close of business on the previous
business day: (a) the name of the Margin Account; (b) the amount and kind
of Securities held therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker, dealer or
futures commission merchant specified in the name of a Margin Account a
copy of the statement furnished the Fund with respect to such Margin
Account.
6. Promptly after the close of business on each business day in
which cash and/or Securities are maintained in a Collateral Account, the
Custodian shall furnish the Fund with a Statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind
of Securities held therein. No later than the close of business next
succeeding the delivery to the Fund of such statement, the Fund shall
furnish to the Custodian a Certificate or Written Instructions specifying
the then market value of the securities described in such statement. In
the event such then market value is indicated to be less than the
Custodian's obligation with respect to any outstanding Put Option,
guarantee letter or similar document, the Fund shall promptly specify in a
Certificate the additional cash and/or Securities to be deposited in such
Collateral Account to eliminate such deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
The Fund shall furnish to the Custodian a copy of the
resolution of the Trustees, certified by the Secretary or any Assistant
Secretary, either (i) setting forth the date of the declaration of a
dividend or distribution, the date of payment thereof, the record date as
of which shareholders entitled to payment shall be determined, the amount
payable per share to the shareholders of record as of that date and the
total amount payable to the Dividend Agent of the Fund on the payment date,
or (ii) authorizing the declaration of dividends and distributions on a
daily basis and authorizing the Custodian to rely on Oral Instructions,
Written Instructions or a Certificate setting forth the date of the
declaration of such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment shall be
determined, the amount payable per share to the shareholders of record as
of that date and the total amount payable to the Dividend Agent on the
payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions or Certificate, as the case may be, the
Custodian shall pay out of the moneys held for the account of the Fund the
total amount payable to the Dividend Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES OF BENEFICIAL INTEREST
1. Whenever the Fund shall sell any of its Shares, it shall
deliver to the Custodian a Certificate duly specifying:
(a) The number of Shares sold, trade date, and price; and
(b) The amount of money to be received by the Custodian for the
sale of such Shares.
2. Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the account of the Fund.
3. Upon issuance of any of the Fund's Shares in accordance with
the foregoing provisions of this Article, the Custodian shall pay, out of
the money held for the account of the Fund, all original issue or other
taxes required to be paid by the Fund in connection with such issuance upon
the receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund shall
hereafter redeem any of its Shares, it shall furnish to the Custodian a
Certificate specifying:
(a) The number of Shares redeemed; and
(b) The amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent of an advice setting
forth the number of Shares received by the Transfer Agent for redemption
and that such Shares are valid and in good form for redemption, the
Custodian shall make payment to the Transfer Agent out of the moneys held
for the account of the Fund of the total amount specified in the
Certificate issued pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption
of any of the Fund's Shares, whenever its Shares are redeemed pursuant to
any check redemption privilege which may from time to time be offered by
the Fund, the Custodian, unless otherwise instructed by a Certificate,
shall, upon receipt of an advice from the Fund or its agent setting forth
that the redemption is in good form for redemption in accordance with the
check redemption procedure, honor the check presented as part of such check
redemption privilege out of the money held in the account of the Fund for
such purposes.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds
on behalf of the Fund which results in an overdraft because the moneys held
by the Custodian for the account of the Fund shall be insufficient to pay
the total amount payable upon a purchase of Securities as set forth in a
Certificate or Oral Instructions issued pursuant to Article IV, or which
results in an overdraft for some other reason, or if the Fund is for any
other reason indebted to the Custodian (except a borrowing for investment
or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of paragraph
2 of this Article XIII), such overdraft or indebtedness shall be deemed to
be a loan made by the Custodian to the Fund payable on demand and shall
bear interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to the Federal
Funds Rate plus 1/2%, such rate to be adjusted on the effective date of any
change in such Federal Funds Rate but in no event to be less than 6% per
annum, except that any overdraft resulting from an error by the Custodian
shall bear no interest. Any such overdraft or indebtedness shall be
reduced by an amount equal to the total of all amounts due the Fund which
have not been collected by the Custodian on behalf of the Fund when due
because of the failure of the Custodian to make timely demand or
presentment for payment. In addition, the Fund hereby agrees that the
Custodian shall have a continuing lien and security interest in and to any
property at any time held by it for the benefit of the Fund or in which the
Fund may have an interest which is then in the Custodian's possession or
control or in possession or control of any third party acting in the
Custodian's behalf. The Fund authorizes the Custodian, in its sole
discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of account standing
to the Fund's credit on the Custodian's books. For purposes of this
Section 1 of Article XIII, "overdraft" shall mean a negative Available
Balance.
2. The Fund will cause to be delivered to the Custodian by any
bank (including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities as collateral for such borrowings, a
notice or undertaking in the form currently employed by any such bank
setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver
to the Custodian a Certificate specifying with respect to each such
borrowing: (a) the name of the bank; (b) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Fund, or other loan agreement; (c)
the time and date, if known, on which the loan is to be entered into; (d)
the date on which the loan becomes due and payable; (e) the total amount
payable to the Fund on the borrowing date; (f) the market value of
Securities to be delivered as collateral for such loan, including the name
of the issuer, the title and the number of shares or the principal amount
of any particular Securities; and (g) a statement specifying whether such
loan is for investment purposes or for temporary or emergency purposes and
that such loan is in conformance with the Investment Company Act of 1940
and the Fund's prospectus. The Custodian shall deliver on the borrowing
date specified in a Certificate the specified collateral and the executed
promissory note, if any, against delivery by the lending bank of the total
amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the Certificate. The Custodian may, at the
option of the lending bank, keep such collateral in its possession, but
such collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. The Custodian
shall deliver such Securities as additional collateral as may be specified
in a Certificate to collateralize further any transaction described in this
paragraph. The Fund shall cause all Securities released from collateral
status to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be tendered to
it. In the event that the Fund fails to specify in a Certificate the name
of the issuer, the title and number of shares or the principal amount of
any particular Securities to be delivered as collateral by the Custodian,
the Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XIV
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its Declaration of
Trust and as disclosed in its most recent and currently effective
prospectus to lend its portfolio Securities, within 24 hours after each
loan of portfolio Securities the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect to each
such loan: (a) the name of the issuer and the title of the Securities; (b)
the number of shares or the principal amount loaned; (c) the date of loan
and delivery; (d) the total amount to be delivered to the Custodian against
the loan of the Securities, including the amount of cash collateral and the
premium, if any, separately identified; and (e) the name of the broker,
dealer or financial institution to which the loan was made. The Custodian
shall deliver the Securities thus designated to the broker, dealer or
financial institution to which the loan was made upon receipt of the total
amount designated as to be delivered against the loan of Securities. The
Custodian may accept payment in connection with a delivery otherwise than
through the Book-Entry System or Depository only in the form of a certified
or bank cashier's check payable to the order of the Fund or the Custodian
drawn on New York Clearing House funds and may deliver Securities in
accordance with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by
the Fund, the Fund shall deliver or cause to be delivered to the Custodian
a Certificate specifying with respect to each such loan termination and
return of Securities: (a) the name of the issuer and the title of the
Securities to be returned; (b) the number of shares or the principal amount
to be returned; (c) the date of termination; (d) the total amount to be
delivered by the Custodian (including the cash collateral for such
Securities minus any offsetting credits as described in said Certificate);
and (e) the name of the broker, dealer or financial institution from which
the Securities will be returned. The Custodian shall receive all
Securities returned from the broker, dealer, or financial institution to
which such Securities were loaned and upon receipt thereof shall pay, out
of the moneys held for the account of the Fund, the total amount payable
upon such return of Securities as set forth in the Certificate.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, either hereunder
or under any Margin Account Agreement, except for any such loss or damage
arising out of its own negligence or willful misconduct. The Custodian
may, with respect to questions of law arising hereunder or under any Margin
Account Agreement, apply for and obtain the advice and opinion of counsel
to the Fund or of its own counsel, at the expense of the Fund, and shall be
fully protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. The Custodian shall be
liable to the Fund for any loss or damage resulting from the use of the
Book-Entry System or any Depository arising by reason of any negligence,
misfeasance or willful misconduct on the part of the Custodian or any of
its employees or agents.
2. Without limiting the generality of the foregoing, the
Custodian shall be under no obligation to inquire into, and shall not be
liable for:
(a) The validity of the issue of any Securities purchased, sold
or written by or for the Fund, the legality of the purchase, sale or
writing thereof, or the propriety of the amount paid or received therefor;
(b) The legality of the issue or sale of any of the Fund's
Shares, or the sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any of the Fund's Shares,
or the propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any dividend
by the Fund;
(e) The legality of any borrowing by the Fund using Securities
as collateral;
(f) The legality of any loan of portfolio Securities pursuant
to Article XIV of this Agreement, nor shall the Custodian be under any
duty or obligation to see to it that any cash collateral delivered to it
by a broker, dealer or financial institution or held by it at any time as
a result of such loan of portfolio Securities of the Fund is adequate
collateral for the Fund against any loss it might sustain as a result of
such loan. The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify the
Fund that the amount of such cash collateral held by it for the Fund is
sufficient collateral for the Fund, but such duty or obligation shall be
the sole responsibility of the Fund. In addition, the Custodian shall be
under no duty or obligation to see that any broker, dealer or financial
institution to which portfolio Securities of the Fund are lent pursuant to
Article XIV of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund during the
period of such loan or at the termination of such loan, provided, however,
that the Custodian shall promptly notify the Fund in the event that such
dividends or interest are not paid and received when due; or
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Segregated Security Account or
Collateral Account in connection with transactions by the Fund. In
addition, the Custodian shall be under no duty or obligation to see that
any broker, dealer, futures commission merchant or Clearing Member makes
payment to the Fund of any variation margin payment or similar payment
which the Fund may be entitled to receive from such broker, dealer, futures
commission merchant or Clearing Member, to see that any payment received by
the Custodian from any broker, dealer, futures commission merchant or
Clearing Member is the amount the Fund is entitled to receive, or to notify
the Fund of the Custodian's receipt or non-receipt of any such payment;
provided however that the Custodian, upon the Fund's written request,
shall, as Custodian, demand from any broker, dealer, futures commission
merchant or Clearing Member identified by the Fund the payment of any
variation margin payment or similar payment that the Fund asserts it is
entitled to receive pursuant to the terms of a Margin Account Agreement or
otherwise from such broker, dealer, futures commission merchant or Clearing
Member.
3. The Custodian shall not be liable for, or considered to be
the Custodian of, any money, whether or not represented by any check, draft
or other instrument for the payment of money, received by it on behalf of
the Fund until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing the Fund's
interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be
liable for ascertaining or acting upon any calls, conversions, exchange,
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository, unless the Custodian shall have actually
received timely notice from the Depository. In no event shall the
Custodian have any responsibility or liability for the failure of the
Depository to collect, or for the late collection or late crediting by the
Depository of any amount payable upon Securities deposited in the
Depository which may mature or be redeemed, retired, called or otherwise
become payable. However, upon receipt of a Certificate from the Fund of an
overdue amount on Securities held in the Depository, the Custodian shall
make a claim against the Depository on behalf of the Fund, except that the
Custodian shall not be under any obligation to appear in, prosecute or
defend any action, suit or proceeding in respect to any Securities held by
the Depository which in its opinion may involve it in expense or liability,
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to the Fund from the
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by the Transfer Agent of the Fund of any amount paid by the
Custodian to the Transfer Agent of the Fund in accordance with this
Agreement.
6. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount, if the Securities upon
which such amount is payable are in default, or if payment is refused after
due demand or presentation, unless and until (i) it shall be directed to
take such action by a Certificate and (ii) it shall be assured to its
satisfaction of reimbursement of its costs and expenses in connection with
any such action.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as Sub-Custodian or Sub-Custodians,
including, but not limited to, banking institutions located in foreign
countries, of Securities and moneys at any time owned by the Fund, upon
terms and conditions approved in a Certificate, which shall, if requested
by the Custodian, be accompanied by an approving resolution of the Fund's
Board of Trustees adopted in accordance with Rule 17f-5 under the
Investment Company Act of 1940, as amended.
8. The Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for
the account of the Fund are such as properly may be held by the Fund under
the provisions of its Declaration of Trust.
9. (a) The Custodian shall be entitled to receive and the Fund
agrees to pay to the Custodian all reasonable out-of-pocket expenses and
such compensation and fees as are specified on Schedule A hereto. The
Custodian shall not deem amounts payable in respect of foreign custodial
services to be out-of-pocket expenses, it being the parties' intention that
all fees for such services shall be as set forth on Schedule B hereto and
shall be provided for the term of this Agreement without any automatic or
unilateral increase. The Custodian shall have the right to unilaterally
increase the figures on Schedule A on or after March 1, 1991 and on or
after each succeeding March 1 thereafter by an amount equal to 50% of the
increase in the Consumer Price Index for the calendar year ending on the
December 31 immediately preceding the calendar year in which such March 1
occurs, provided, however, that during each such annual period commencing
on a March 1, the aggregate increase during such period shall not be in
excess of 10%. Any increase by the Custodian shall be specified in a
written notice delivered to the Fund at least thirty days prior to the
effective date of the increase. The Custodian may charge such compensation
and any expenses incurred by the Custodian in the performance of its duties
pursuant to such agreement against any money held by it for the account of
the Fund. The Custodian shall also be entitled to charge against any money
held by it for the account of the Fund the amount of any loss, damage,
liability or expense, including counsel fees, for which it shall be
entitled to reimbursement under the provisions of this Agreement. The
expenses which the Custodian may charge against the account of the Fund
include, but are not limited to, the expenses of Sub-Custodians and foreign
branches of the Custodian incurred in settling outside of New York City
transactions involving the purchase and sale of Securities of the Fund.
(b) The Fund shall receive a credit for each calendar month
against such compensation and fees of the Custodian as may be payable by
the Fund with respect to such calendar month in an amount equal to the
aggregate of its Earnings Credit for such calendar month. In no event may
any Earnings Credits be carried forward to any fiscal year other than the
fiscal year in which it was earned, or, unless permitted by applicable law,
transferred to, or utilized by, any other person or entity, provided that
any such transferred Earnings Credit can be used only to offset
compensation and fees of the Custodian for services rendered to such
transferee and cannot be used to pay the Custodian's out-of-pocket
expenses. For purposes of this subsection (b), the Fund is permitted to
transfer Earnings Credits only to The Dreyfus Corporation, its affiliates
and/or any investment company now or in the future sponsored by The Dreyfus
Corporation or any of its affiliates or for which The Dreyfus Corporation
or any of its affiliates acts as the sole investment adviser or as the
principal distributor, and Daiwa Money Fund Inc. For purposes of this
subsection (b), a fiscal year shall mean the twelve-month period commencing
on the effective date of this Agreement and on each anniversary thereof.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by the
Custodian and reasonably believed by the Custodian to be a Certificate.
The Custodian shall be entitled to rely upon any Oral Instructions and any
Written Instructions actually received by the Custodian pursuant to Article
IV or XI hereof. The Fund agrees to forward to the Custodian a Certificate
or facsimile thereof, confirming such Oral Instructions or Written
Instructions in such manner so that such Certificate or facsimile thereof
is received by the Custodian, whether by hand delivery, telex or otherwise,
by the close of business of the same day that such Oral Instructions or
Written Instructions are given to the Custodian. The Fund agrees that the
fact that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or enforceability
of the transactions hereby authorized by the Fund. The Fund agrees that
the Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions,
provided such instructions reasonably appear to have been received from an
Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by
the Custodian to be given in accordance
with the terms and conditions of any Margin Account Agreement. Without
limiting the generality of the foregoing, the Custodian shall be under no
duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained in any
such instrument or other notice including, without limitation, any
specification of any amount to be paid to a broker, dealer, futures
commission merchant or Clearing Member.
12. The books and records pertaining to the Fund which are in
the possession of the Custodian shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by the
Investment Company Act of 1940, as amended, and other applicable securities
laws and rules and regulations. The Fund, or the Fund's authorized
representatives, shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request of the
Fund, copies of any such books and records shall be provided by the
Custodian to the Fund or the Fund's authorized representative at the Fund's
expense.
13. The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal accounting control of
the Book-Entry System or the Depository, or O.C.C., and with such reports
on its own systems of internal accounting control as the Fund may
reasonably request from time to time.
14. The Fund agrees to indemnify the Custodian against and save
the Custodian harmless from all liability, claims, losses and demands
whatsoever, including attorney's fees, howsoever arising or incurred
because of or in connection with the Custodian's payment or non-payment of
checks pursuant to paragraph 6 of Article XII as part of any check
redemption privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this Agreement, the
Custodian may deliver and receive Securities, and receipts with respect to
such Securities, and arrange for payments to be made and received by the
Custodian in accordance with the customs prevailing from time to time among
brokers or dealers in such Securities.
16. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set
forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. (a) Except as provided in subparagraphs (b), (c) and (d)
herein, neither party may terminate this Agreement until the earlier of the
following: (i) August 31, 1993, and (ii) the third anniversary of the
earliest date on which none of the companies listed on Schedule C hereto is
a transfer agency customer of the Custodian. Any such termination may be
effected only by the terminating party giving to the other party a notice
in writing specifying the date of such termination, which shall be not less
than two hundred seventy (270) days after the date of giving of such
notice.
(b) The Fund may at any time terminate this Agreement if
the Custodian has materially breached its obligations under this Agreement
and such breach has remained uncured for a period of thirty days after the
Custodian's receipt from the Fund of written notice specifying such breach.
(c) Either party, immediately upon written notice to the
other party, may terminate this Agreement upon the Merger or Bankruptcy of
the other party.
(d) The Fund may at any time terminate this Agreement if
the Custodian has materially breached its obligations under the "Amendment
to Transfer Agency Agreements" dated August 18, 1989 and has not cured such
breach as promptly as practicable and in any event within seven days of its
receipt of written notice of such breach, provided that the Custodian shall
not be permitted to cure any such material breach arising from the willful
misconduct of the Custodian.
In the event notice of termination is given by the Fund, it shall
be accompanied by a copy of a resolution of the Trustees of the Fund,
certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not less
than $2,000,000 aggregate capital, surplus and undivided profits. In the
event notice of termination is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a copy of a
resolution of its Trustees, certified by the Secretary or any Assistant
Secretary, designating a successor custodian or custodians. In the absence
of such designation by the Fund, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. Upon the date
set forth in such notice, this Agreement shall terminate and the Custodian
shall, upon receipt of a notice of acceptance by the successor custodian,
on that date deliver directly to the successor custodian all Securities and
moneys then owned by the Fund and held by it as Custodian, after deducting
all fees, expenses and other amounts for the payment or reimbursement of
which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall, upon
the date specified in the notice of termination of this Agreement and upon
the delivery by the Custodian of all Securities (other than Securities held
in the Book-Entry System which cannot be delivered to the Fund) and moneys
then owned by the Fund, be deemed to be its own custodian, and the
Custodian shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement, other than the duty with respect to Securities
held in the Book-Entry System, in any Depository or by a Clearing Member
which cannot be delivered to the Fund, to hold such Securities hereunder in
accordance with this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two
of the present Officers of the Fund under its seal, setting forth the names
and the signatures of the present Authorized Persons. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event
that any such present Authorized Person ceases to be an Authorized Person
or in the event that other or additional Authorized Persons are elected or
appointed. Until such new Certificate shall be received, the Custodian
shall be fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized Persons as
set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two
of the present Officers of the Fund under its seal, setting forth the names
and the signatures of the present Officers of the Fund. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Fund, or in the event
that other or additional Officers are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to
it at its offices at 90 Washington Street, New York, New York 10015, or at
such other place as the Custodian may from time to time designate in
writing.
4. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund, shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at its office
at 666 Old Country Road, Garden City, New York 11530, or at such other
place as the Fund may from time to time designate in writing.
5. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the same
formality as this Agreement and approved by a resolution of the Trustees of
the Fund.
6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without
the written consent of the Custodian, or by the Custodian without the
written consent of the Fund, authorized or approved by a resolution of its
Trustees.
7. This Agreement shall be construed in accordance
with the laws of the State of New York.
8. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
9. This Agreement shall not be effective on the date hereof and
instead shall become effective on January 1, 1990. When effective, this
Agreement shall supersede the then-existing Custody Agreement between the
parties hereto.
10. This Agreement has been executed on behalf of the Fund by
the undersigned Officer of the Fund in his capacity as an Officer of the
Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any Trustee,
Officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized, and
their respective corporate seals to be hereunto affixed, as of the day and
year first above written.
General California Tax Exempt Money Market Fund
By: /s/ John Pyburn
John Pyburn, Treasurer
Attest:
/s/ Robert I. Frenkel
THE BANK OF NEW YORK
By: /s/ Donald L. Colby
Donald L. Colby
Attest:
/s/ Robert W. Viets
Appendix A
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN
ACCOUNT FOR PORTFOLIO SECURITIES
TRANSACTIONS
Group I Group II
Paul R. Casti, Jr., Thomas Durante, Paul Casti, Jr.
Jean Farley, Gregory Gruber, Jeffrey Nachman
Paul Molloy, Jeffrey N. Nachman, Philip Toia
James Windels, Frank Greene, Lawrence Kash
Phyllis Meiner, James Meo, Paul Snyder
Claudia Hyacinthe, Joseph Darcy, Joseph Connolly
A. Paul Disdier, Karen Hand, Gregory Gruber
Stephen Kris, Richard Moynihan, Jean Farley
Jill Shaffro, L. Lawrence Troutman, Thomas Durante
Sam Weinstock and Monica Wieboldt James Windels
Paul Molloy
Cash Account
1. Fees payable to The Bank of New York pursuant to written
agreement with the Fund for services rendered in its
capacity as Custodian or agent of the Fund, or to The
Shareholder Services Group, Inc. in its capacity as Transfer
Agent or agent of the Fund:
Two (2) signatures required, one of which must be from
Group II, except that no individual shall be authorized
to sign more than once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either Group
I or Group II, or both such Groups, except that no
individual shall be authorized to sign more than once.
3. Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be from
Group II, except that no individual shall be authorized
to sign more than once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or Group
II, including any one of the following: Paul R. Casti,
Jr., James Windels, Jeffrey N. Nachman, Joseph
Connolly, Philip Toia or Paul Snyder, except that no
individual shall be authorized to sign more than once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the following:
Joseph Connolly, Philip Toia, Paul Snyder, Paul R.
Casti, Jr., Thomas Durante, Jean Farley, Gregory
Gruber, Paul Molloy, Jeffrey N. Nachman, James Windels,
James Meo, Michael Werbowyj, Arthur Weinger, Elizabeth
Etienne, Maryann Baumgardt, John Delise, Josephine
Manna, Claudia Hyacinthe, Joseph Darcy, A. Paul
Disdier, Karen Hand, Stephen Kris, Richard Moynihan,
Jill Shaffro, L. Lawrence Troutman, Sam Weinstock,
Laura Sanderson and Monica Wieboldt.
GENERAL CALIFORNIA TAX EXEMPT MONEY MARKET FUND
AMENDED AND RESTATED CUSTODY AGREEMENT
APPENDIX B
The undersigned Officers of the Fund do hereby certify that the
following individuals, whose specimen signatures are on file with The Bank
of New York, have been duly elected or appointed by the Fund's Board to the
position set forth opposite their names and have qualified therefor:
Name Position
Richard J. Moynihan President and Investment Officer
A. Paul Disdier Vice President and Investment Officer
Karen M. Hand Vice President and Investment Officer
Stephen C. Kris Vice President and Investment Officer
L. Lawrence Troutman Vice President and Investment Officer
Samuel J. Weinstock Vice President and Investment Officer
Monica S. Wieboldt Vice President and Investment Officer
Daniel C. Maclean Vice President
John J. Pyburn Treasurer
Mark N. Jacobs Secretary
Steven F. Newman Assistant Secretary
Christine Pavalos Assistant Secretary
Robert R. Mullery Assistant Secretary
Jeffrey N. Nachman Controller
Joseph S. DiMartino Investment Officer
Howard Stein Investment Officer
/s/ Mark N. Jacobs /s/John S. Pyburn
Title: Title:
AMENDED AND RESTATED CUSTODY AGREEMENT
APPENDIX C
The following are designated publications for purposes of
paragraph 5(b) of Article III:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
Schedule A
The fees payable to the Custodian with respect to securities held
in domestic custody are annexed hereto.
GENERAL CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Domestic Custody Fees
Basic Fee: 1/100th of 1% of the first $500,000,000, and 1/200th of 1%
on the excess over $500,000,000 per annum of the total market
value of domestic securities held.
Custodial Transactions:
$13.00 for each receipt and delivery of securities -
DTC book entry (excluding sub-custodian book entry).
$40.00 for any receipt, delivery or redemption of a Euro
Dollar CD for which BNY's London branch is utilized for
settlement and safekeeping.
$20.00 for physical, same-day Fed Funds, physical puts, and
sub-custodian book entry.
$200.00 for the collection of interest on securities held in
"street name."
Schedule B
The fees payable to the Custodian with respect to securities held in
foreign custody are as set forth in a letter dated August 10, 1989 from
Masao Yamaguchi of The Bank of New York to Kevin Flood of Dreyfus Service
Corporation, a copy of which is annexed hereto.
The above foreign custody fees apply to the following Global Custody
Network countries:
1. Australia 12. Japan
2. Austria 13. Luxembourg
3. Belgium 14. Malasia
4. Canada 15. Netherlands
5. Denmark 16. New Zealand
6. Finland 17. Norway
7. France 18. Singapore
8. Germany 19. Spain
9. Hong Kong 20. Sweden
10. Ireland 21. Switzerland
11. Italy 22. United Kingdom
August 10, 1989
Mr. Kevin Flood
Senior Vice President
The Dreyfus Corporation
222 Broadway, 7th Floor
New York, NY
Re: Global Custodian Fees
Dear Kevin:
This letter is to confirm our discussion regarding our
Global Custody fee schedule. The fees will be calculated on a
relationship basis with no annual minimum.
. Safekeeping/Income Collection/Capital Changes/Tax
Reclamation/Daily Report/Monthly Summary
16 basis points per annum on the market value of
securities held for all of your funds in our sub-custodian
network, up to $250 MM.
15 basis points on the next $250 MM.
14 basis points on the next $250 MM.
12 basis points on the excess.
. Securities Settlements
$35 per transaction - includes our processing and
the sub-custodians.
. Out-of-Pocket Expense
Telex, swift, telephone, securities registration,
etc., are in addition to the above.
. We can provide centralized foreign exchange
services.
The above fee schedule is applicable to the 22 countries
listed on Attachment I. Please note that expansion into other
more emerging markets/countries is possible, but would be covered
under a separate agreement.
If your are in agreement with this fee schedule, please sign
and return the enclosed copy of this letter.
Sincerely,
/s/Masao Yamaguchi
Approved by:
Kevin Flood
Date:
MY:to
cc: The Bank of New York Dreyfus
F. Ricciardi J. Nachman
[LETTERHEAD OF STROOCK & STROOCK & LAVAN]
EXHIBIT 10
November 5, 1986
General California Tax Exempt
Money Market Fund
666 Old Country Road
Garden City, New York 11530
Gentlemen:
We have acted as counsel to General California Tax Exempt Money
Market Fund (the "Fund") in connection with the preparation of a
Registration Statement on Form N-1A, Registration No. 33-9452 (the
"Registration Statement"), covering shares of beneficial interest (the
"Shares") of the Fund.
We have examined copies of the Agreement and Declaration of Trust
and By-Laws of the Fund, the Registration Statement and such other
documents, records, papers, statutes and authorities as we deemed necessary
to form a basis for the opinion hereinafter expressed. In our examination
of such material, we have assumed the genuineness of all signatures and the
conformity to original documents of all copies submitted to us. As to
various questions of fact material to such opinion, we have relied upon
statements and certificates of officers and representatives of the Fund and
others.
Attorneys involved in the preparation of this opinion are
admitted only to the bar of the State of New York. As to various questions
arising under the laws of the Commonwealth of Massachusetts, we have relied
on the opinion of Messrs. Ropes & Gray, a copy of which is attached hereto.
Qualifications set forth in their opinion are deemed incorporated herein.
Based upon the foregoing, we are of the opinion that the Shares
of the Fund to be issued in accordance with the terms of the offering as
set forth in the Prospectus included as part of the Registration Statement,
when so issued and paid for, will constitute validly authorized and issued
Shares, fully paid and non-assessable by the Fund.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the Prospectus
included in the Registration Statement, and to the filing of this opinion
as an exhibit to any application made by or on behalf of the Fund or any
Distributor or dealer in connection with the registration and qualification
of the Fund or its Shares under the securities laws of any state or
jurisdiction. In giving such permission, we do not admit hereby that we
come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN
[LETTERHEAD OF ROPES & GRAY]
November 5, 1986
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004
Gentlemen:
We are furnishing this opinion in connection with the proposed offer
and sale from time to time by General California Tax Exempt Money Market
Fund, a Massachusetts business trust (the "Trust"), of an indefinite number
of shares of beneficial interest (the "Shares") of the Trust pursuant to
the Trust's Registration Statement on Form N-1A under the Securities Act of
1933.
We are familiar with the action taken by the Trustees of the Trust to
authorize the issuance of the Shares. We have examined the Trust's records
of Trustee action, its By-Laws and its Agreement and Declaration of Trust,
as amended to date, on file at the Office of the Secretary of State of The
Commonwealth of Massachusetts. We have examined copies of such
Registration Statement in the form filed with the Securities and Exchange
Commission, and such other documents as we deem necessary for the purposes
of this opinion.
We assume that, upon sale of the Shares, the Trust will receive the
net asset value thereof. We also assume that, in connection with any offer
and sale of the Shares, the Trust will take proper steps to effect
compliance with applicable federal and state laws regulating offerings and
sales of securities.
Based upon the foregoing, we are of the opinion that the Trust is
authorized to issue an unlimited number of Shares, and that, when the
Shares are issued and sold and the authorized consideration therefor is
received by the Trust, they will be validly issued, fully paid and
nonassessable by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the obligations of the
Trust. However, the Agreement and Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation, or
instrument entered into or executed by the Trust or the Trustees. The
Agreement and Declaration of Trust provides for indemnification out of the
Trust property for all loss and expense of any shareholder held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its
obligations.
We consent to the filing of this opinion as an exhibit to the
aforesaid Registration Statement.
Very truly yours,
Ropes & Gray
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 September 1, 1995, in this Registration Statement (Form N-1A 33-
9452) of General California Municipal Money Market Fund.
ERNST & YOUNG LLP
New York, New York
October 27, 1995
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<MULTIPLIER> 1000
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</TABLE>
