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PROSPECTUS JANUARY 31, 1995
DREYFUS CASH MANAGEMENT PLUS, INC.
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DREYFUS CASH MANAGEMENT PLUS, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL
FUND. ITS GOAL IS TO PROVIDE INVESTORS WITH AS HIGH A LEVEL OF CURRENT INCOME
AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF
LIQUIDITY.
THE FUND IS DESIGNED FOR INSTITUTIONAL INVESTORS, PARTICULARLY BANKS,
ACTING FOR THEMSELVES OR IN A FIDUCIARY, ADVISORY, AGENCY, CUSTODIAL OR
SIMILAR CAPACITY. FUND SHARES MAY NOT BE PURCHASED DIRECTLY BY INDIVIDUALS,
ALTHOUGH INSTITUTIONS MAY PURCHASE SHARES FOR ACCOUNTS MAINTAINED BY
INDIVIDUALS. SUCH INSTITUTIONS HAVE AGREED TO TRANSMIT COPIES OF THIS
PROSPECTUS TO EACH INDIVIDUAL OR ENTITY FOR WHOSE ACCOUNT THE INSTITUTION
PURCHASES FUND SHARES, TO THE EXTENT REQUIRED BY LAW.
BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A AND CLASS B SHARES.
CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES
OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS B BEARS CERTAIN COSTS
PURSUANT TO A SERVICE PLAN ADOPTED IN ACCORDANCE WITH RULE 12B-1 UNDER THE
INVESTMENT COMPANY ACT OF 1940. INVESTORS CAN INVEST, REINVEST OR REDEEM
SHARES AT ANY TIME WITHOUT CHARGE OR PENALTY IMPOSED BY THE FUND.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT ADVISER.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
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THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
AN INVESTOR SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JANUARY 31, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO
THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR
CALL 1-800-554-4611. WHEN TELEPHONING, ASK FOR OPERATOR 666.
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MUTUAL FUND SHARES ARE NOT DEPOSITS OF OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.................... 2
CONDENSED FINANCIAL INFORMATION................... 3
YIELD INFORMATION................................. 3
DESCRIPTION OF THE FUND........................... 4
MANAGEMENT OF THE FUND............................ 8
HOW TO BUY FUND SHARES............................ 9
INVESTOR SERVICES................................. 10
HOW TO REDEEM FUND SHARES......................... 11
SERVICE PLAN...................................... 12
SHAREHOLDER SERVICES PLAN......................... 12
DIVIDENDS, DISTRIBUTIONS AND TAXES................ 12
GENERAL INFORMATION............................... 14
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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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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<TABLE>
Class A Class B
Shares Shares
------- -------
<S> <C> <C>
Management Fees ....................................................................... .20% .20%
12b-1 Fees (distribution and servicing)................................................ ._ .25%
Total Fund Operating Expenses.......................................................... .20% .45%
Example:
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
Class A Class B
Shares Shares
------- -------
1 YEAR....................................... $ 2 $ 5
3 YEARS...................................... $ 6 $14
5 YEARS...................................... $11 $25
10 YEARS..................................... $26 $57
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY
AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by the Fund, and therefore
indirectly by investors, the payment of which will reduce investors' return
on an annual basis. Unless The Dreyfus Corporation gives the Fund's investors
at least 90 days' notice to the contrary, The Dreyfus Corporation, and not
the Fund, will be liable for Fund expenses (exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of the necessary
state securities commissions) extraordinary expenses) other than the
following expenses, which will be borne by the Fund: (i) the management fee
payable by the Fund monthly at the annual rate of .20 of 1% of the value of
the Fund's average daily net assets and (ii) as to Class B shares only,
payments made pursuant to the Fund's Service Plan at the annual rate of .25
of 1% of the value of the average daily net assets of Class B. Institutions
and certain Service Agents (as defined below) effecting transactions in Fund
shares for the accounts of their clients may charge their clients direct fees
in connection with such transactions; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares," "Serv
ice Plan" and "Shareholder Services Plan."
Page 2
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
CLASS A SHARES CLASS B SHARES
--------------------------------------------------------------------------- YEAR
YEAR ENDED SEPTEMBER 30, ENDED
-------------------------------------------------------------------------SEPTEMBER 30
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA: 1988(1) 1989 1990 1991 1992 1993 1994 1994
------- -------- ------- ------- ------- ------ ------- ------
Net asset value, beginning of year.. $1.0000 $ .9994 $ .9999 $ .9999 $ .9999 $1.0000 $1.0000 $1.0000
------- -------- ------- ------- ------- ------ ------- ------
INVESTMENT OPERATIONS:
Investment income-net............... .0714 .0910 .0832 .0675 .0431 .0316 .0359 .0245
Net realized gain (loss) on investments (.0006) .0005 -_ -_ .0001 -_ (.0005)(.0003)
------- -------- ------- ------- ------- ------ ------- ------
TOTAL FROM INVESTMENT OPERATIONS.. .0708 .0915 .0832 .0675 .0432 .0316 .0354 .0242
------- -------- ------- ------- ------- ------ ------- ------
DISTRIBUTIONS;
Dividends from investment income-net (.0714) (.0910) (.0832) (.0675) (.0431) (.0316) (.0359)(.0245)
------- -------- ------- ------- ------- ------ ------- ------
Net asset value, end of year........ $ .9994 $ .9999 $ .9999 $ .9999 $1.0000 $1.0000 $ .9995 $.9997
======== ======== ======== ======== ======= ======= ======= ======
TOTAL INVESTMENT RETURN................. 7.45%(3) 9.49% 8.65% 6.97% 4.39% 3.20% 3.65% 3.61%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .20%(3) .20% .20% .20% .20% .20% .20% .45%(3)
Ratio of net investment income to
average net assets 7.13%(3) 9.35% 8.29% 6.62% 4.36% 3.15% 3.49% 4.00%(3)
Decrease reflected in above expense
ratios due to undertaking
by The Dreyfus Corporation .07%(3) .07% .04% .04% .05% .04% .01% -_
Net Assets, end of year (000's Omitted) $125,266 $728,832 $1,177,475 $1,780,058 $2,300,382 $3,003,344 $1,893,485 $6,087
- ---------------------
(1) From October 6, 1987 (commencement of operations) to September 30, 1988.
(2) From January 24, 1994 (commencement of initial offering) to September 30, 1994.
(3) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund." Both yield
figures also take into account any applicable distribution and service fees.
As a result, at any given time, the performance of Class B should be expected
to be lower than that of Class A. See "Service Plan."
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, IBC/Donoghue's Money
Fund Report, Morningstar, Inc. and other industry publications.
Page 3
DESCRIPTION OF THE FUND
GENERAL -- By this Prospectus, two classes of shares of the Fund are being
offered -- Class A shares and Class B shares (each such class being referred
to as a "Class"). The Classes are identical, except that Class B shares are
subject to an annual distribution and service fee at the rate of .25% of the
value of the average daily net assets of Class B. The fee is payable for
advertising, marketing and distributing the Fund's Class B shares and for
ongoing personal services relating to Class B shareholder accounts and
services related to the maintenance of such shareholder accounts pursuant to
a Service Plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940. See "Service Plan." The distribution and service fee
paid by Class B will cause Class B to have a higher expense ratio and to pay
lower dividends than Class A.
WHEN USED IN THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL
INFORMATION, THE TERMS "INVESTOR" AND "SHAREHOLDER" REFER TO THE INSTITUTION
PURCHASING FUND SHARES AND DO NOT REFER TO ANY INDIVIDUAL OR ENTITY FOR WHOSE
ACCOUNT THE INSTITUTION MAY PURCHASE FUND SHARES. Such institutions have
agreed to transmit copies of this Prospectus and all relevant Fund materials,
including proxy materials, to each individual or entity for whose account the
institution purchases Fund shares, to the extent required by law.
INVESTMENT OBJECTIVE -- The Fund's goal is to provide investors with as high
a level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved. Securities in which the Fund invests may not earn as high a level
of current income as long-term or lower quality securities which generally
have less liquidity, greater market risk and more fluctuation in market
value.
MANAGEMENT POLICIES -- To achieve its goal, the Fund invests in short-term
money market obligations, including securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, U.S. dollar denominated
time deposits, certificates of deposit, banker's acceptances and other
short-term obligations issued by domestic banks, foreign branches of domestic
banks, foreign subsidiaries of domestic banks, domestic and foreign branches
of foreign banks and thrift institutions, repurchase agreements, and high qual
ity domestic and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of interest. In
addition, the Fund is permitted to lend portfolio securities and enter into
reverse repurchase agreements to the extent described below. During normal
market conditions, at least 25% of the Fund's total assets will be invested
in bank obligations. See "Risk Factors" below.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940, certain requirements of which are summarized below.
In accordance with Rule 2a-7, the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 13 months or less and invest only
in U.S. dollar denominated securities determined in accordance with
procedures established by the Board of Directors to present minimal credit
risks and which are rated in one of the two highest rating categories for
debt obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated only by
one such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Board of
Directors. Moreover, the Fund will purchase only instruments so rated in the
highest rating category or, if unrated, of comparable quality as determined
in accordance with procedures established by the Board of Directors. The
nationally recognized statistical rating organizations currently rating instru
ments of the type the Fund may purchase are Moody's Investors Service, Inc.,
Standard & Poor's Corporation, Duff & Phelps Credit Rating Co., Fitch
Investors Service, Inc., IBCA Limited and IBCA Inc. and Thomson BankWatch,
Inc. and their rating criteria are described in the Appendix to the Fund's
Statement of Additional Information.
Page 4
In addition, the Fund will not invest more than 5% of its total
assets in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts issued by, a single issuer,
except that (i) the Fund may invest more than 5% of its total assets in a
single issuer for a period of up to three business days in certain limited
circumstances, (ii) the Fund may invest in obligations issued or guaranteed
by the U.S. Government without any such limitation, and (iii) the limitation
with respect to puts does not apply to unconditional puts if no more than 10%
of the Fund's total assets is invested in securities issued or guaranteed by
the issuer of the unconditional put. As to each security, these percentages
are measured at the time the Fund purchases the security. For further
information regarding the amortized cost method of valuing securities, see
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information. There can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share.
PORTFOLIO SECURITIES -- Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the 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 relationshi
p of rates. While the U.S. Government provides financial support to such U.S.
Government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank or thrift institution to repay funds deposited with it
for a specified period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits 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. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper purchased by
the Fund will consist only of direct obligations issued by domestic and
foreign entities. The other corporate obligations in which the Fund may
invest consist of high quality U.S. dollar denominated short-term bonds and
notes (including variable amount master demand notes) issued by corporations,
including banks.
The Fund may purchase floating and variable rate demand notes, which
are obligations ordinarily having stated maturities in excess of 13 months,
but which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each case upon not more than
30 days' notice. Variable rate demand notes include master demand notes which
are obligations that permit the Fund to
Page 5
invest fluctuating amounts at varying
rates of interest, pursuant to directarrangements between the Fund, as lender,
and the borrower. These notes permit daily changes in the amounts borrowed.
As mutually agreed between the parties, the Fund may increase or decrease the
amount under the notes, and the borrower may repay without
penalty the outstanding principal amount of the obligations plus accrued
interest. 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. Such obligations frequently are not rated by credit
rating agencies and, if not so rated, the Fund may invest in them only if The
Dreyfus Corporation determines that at the time of the investment the
obligations are of comparable quality to the other obligations in which the
Fund may invest. The Dreyfus Corporation, on behalf of the Fund, will
consider on an ongoing basis the creditworthiness of the issuers of the
floating and variable rate demand obligations in the Fund's portfolio.
The Fund also may purchase unsecured promissory notes ("Notes") which
are not readily marketable and have not been registered under the Securities
Act of 1933, provided such investments are consistent with the Fund's goal.
The Fund may invest up to 10% of the value of its net assets in
securities in 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, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed 331/3%
of the value of the Fund's total assets. In connection with such loans, the
Fund will receive collateral consisting of cash, U.S. Government securities
or irrevocable letters of credit issued by financial institutions. Such
collateral will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The Fund can
increase its income through the investment of such collateral. The Fund
continues to be entitled to payments in amounts equal to the interest or
other distributions payable on the loaned securities and receives interest on
the amount of the loan. Such loans will be terminable at any time upon
specified notice. The Fund might experience risk of loss if the institution
with which it has engaged in a portfolio loan transaction breaches its
agreement with the Fund.
The Fund may borrow for temporary or emergency purposes and for
investment purposes on a secured basis through entering into reverse
repurchase agreements with banks, brokers or dealers. Reverse repurchase
agreements involve the transfer by the Fund of an underlying debt instrument
in return for cash proceeds based on a percentage of the value of the
security. The Fund retains record ownership of the security and the right to
receive interest and principal payments on the security. The Fund will use the
proceeds of reverse repurchase agreements only to make investments which
generally either mature or have a demand feature to resell to the issuer at a
date simultaneous with or prior to expiration of the reverse repurchase
agreement. At an agreed upon future date, the Fund repurchases the security,
at principal, plus accrued interest. In certain types of agreements, there is
no agreed upon repurchase date and interest payments are calculated daily,
often based on the prevailing overnight repurchase rate. The Fund will
maintain in a segregated custodian account cash, cash equivalents or U.S.
Government securities or other high quality liquid debt securities at least
equal to the aggregate amount of its reverse repurchase obligations, plus
accrued interest, in certain cases, in accordance with releases promulgated
by the Securities and Exchange Commission. The Securities and Exchange
Commission views reverse repurchase agreement transactions as collateralized
borrowings by the Fund, and,
Page 6
pursuant to the Investment Company Act of 1940,
the Fund must maintain continuous asset coverage (that is, total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of
the amount borrowed. If the 300% asset coverage should decline as a result of
market fluctuations or other reasons, the Fund may be required to sell some
of its portfolio holdings within three days to reduce the debt and restore
the 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time. As a result of these
transactions, the Fund is exposed to greater potential fluctuations in the
value of its assets and its net asset value per share. Interest costs on the
money borrowed may exceed the return received on the securities purchased.
The Fund's Board of Directors has considered the risks to the Fund and its
shareholders which may result from the entry into reverse repurchase
agreements and has determined that the entry into such agreements is
consistent with the Fund's investment objective and management policies.
CERTAIN FUNDAMENTAL POLICIES -- The Fund (i) may borrow money, but only (a)
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 and (b) in
connection with the entry into reverse repurchase agreements to the extent
described under "Portfolio Securities" above. While borrowings described in
clause (a) exceed 5% of the value of the Fund's total assets, the Fund will
not make any additional investments; (ii) may invest up to 5% of the value of
its total assets in the obligations of any issuer, except that up to 25% of
the value of the Fund's total assets may be invested (subject to the
provisions of Rule 2a-7), and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities may be purchased, without
regard to any such limitation; and (iii) will invest, under normal market cond
itions, at least 25% of its total assets in securities issued by banks and
may invest up to 25% of its total assets in the securities of issuers in any
other industry, provided that there is no limitation on investments in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies that cannot
be changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares. See
"Investment Objective and Management Policies _ Investment Restrictions" in
the Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES -- The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 10% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
days after notice and in other illiquid securities. See "Investment Objective
and Management Policies -- Investment Restrictions" in the Statement of
Additional Information.
RISK FACTORS -- To the extent the Fund's investments are concentrated in the
banking industry, the Fund will have correspondingly greater exposure to the
risk factors which are characteristic of such investments. Sustained
increases in interest rates can adversely affect the availability or
liquidity and cost of capital funds for a bank's lending activities, and a
deterioration in general economic conditions could increase the exposure to
credit losses. In addition, the value of and the investment return on the
Fund's shares could be affected by economic or regulatory developments in or
related to the banking industry, which industry also is subject to the
effects of the concentration of loan portfolios in leveraged transactions and
in particular businesses, and competition within the banking industry as well
as with other types of financial institutions. The Fund, however, will seek
to minimize its exposure to such risks by investing only in debt securities
which are determined to be of highest quality.
Since the Fund's portfolio may contain securities issued by foreign
branches of domestic banks, foreign subsidiaries of domestic banks, domestic
and foreign branches of foreign banks, and commercial paper issued by foreign
issuers, the Fund may be subject to additional investment risks with respect
to such securities that are different in some respects from those incurred by
a fund which invests only in debt obligations of U.S. domestic issuers,
although such obligations may be higher yielding when compared to the
securities of U.S. domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities, the possible
establishment of exchange con-
Page 7
trols or the adoption of other foreign
governmental restrictions which might adversely affect the payment of
principal and interest on these securities and the possible seizure or
nationalization of foreign deposits.
OTHER INVESTMENT CONSIDERATIONS -- The Fund attempts to increase yields by
trading to take advantage of short-term market variations. This policy is
expected to result in high portfolio turnover but should not adversely affect
the Fund since the Fund usually does not pay brokerage commissions when it
purchases short-term obligations. The value of the portfolio securities held
by the Fund will vary inversely to changes in prevailing interest rates.
Thus, if interest rates have increased from the time a security was
purchased, such security, if sold, might be sold at a price less than its
cost. Similarly, if interest rates have declined from the time a security was
purchased, such security, if sold, might be sold at a price greater than its
purchase cost. In either instance, if the security was purchased at face
value and held to maturity, no gain or loss would be realized.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, money market instruments at the same time as the Fund, available
investments or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of October 31, 1994, The Dreyfus Corporation managed or administered
approximately $73 billion in assets for more than 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$201 billion in assets as of September 30, 1994, including approximately $76
billion in mutual fund assets. As of September 30, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $659 billion in assets, including
approximately $108 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 .20 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
September 30, 1994, the Fund paid The Dreyfus Corporation a management fee at
the effective annual rate of .19 of 1% of the value of the Fund's average
daily net assets pursuant to an undertaking by The Dreyfus Corporation then
in effect. For the period from January 24, 1994 (commencement of initial
offering of Class B shares) through September 30, 1994, the effective annual
rate of the management fee was .20 of 1% of the value of the Fund's average
daily net assets.
Unless The Dreyfus Corporation gives the Fund's investors at least 90
days' notice to the contrary, The Dreyfus Corporation, and not the Fund, will
be liable for Fund expenses (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be borne by the Fund: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the value of the Fund's
average daily net
Page 8
assets and (ii) as to Class B shares only, payments made
pursuant to the Fund's Service Plan at the annual rate of .25 of 1% of the
value of the average daily net assets of Class B. See "Service Plan." The
Fund will not reimburse The Dreyfus Corporation for any amounts it may bear.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of Institutional Administration
Services, Inc., a provider of mutual fund administration services, the parent
company of which is the 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, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, is the Fund's Sub-custodian (the
"Sub-custodian").
HOW TO BUY FUND SHARES
The Fund is designed for institutional investors, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity. Fund shares may not be purchased directly by individuals,
although institutions may purchase shares for accounts maintained by
individuals. Generally, each investor will be required to open a single
master account with the Fund for all purposes. In certain cases, the Fund may
request investors to maintain separate master accounts for shares held by the
investor (i) for its own account, for the account of other institutions and
for accounts for which the institution acts as a fiduciary, and (ii) for
accounts for which the investor acts in some other capacity. An institution
may arrange with the Transfer Agent for sub-accounting services and will be
charged directly for the cost of such services.
The minimum initial investment is $10,000,000, unless: (a) the
investor has invested at least $10,000,000 in the aggregate among the Fund,
Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus
Municipal Cash Management Plus, Dreyfus New York Municipal Cash Management,
Dreyfus Tax Exempt Cash Management, Dreyfus Treasury Cash Management and
Dreyfus Treasury Prime Cash Management; or (b) the investor has, in the
opinion of Dreyfus Institutional Services Division, a division of Dreyfus Serv
ice Corporation, adequate intent and availability of funds to reach a future
level of investment of $10,000,000 among the funds identified above. There is
no minimum for subsequent purchases. The initial investment must be
accompanied by the Fund's Account Application. Stock certificates are issued
only upon the investor's written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order.
Management understands that some financial institutions, securities
dealers and other industry professionals (collectively, "Service Agents") and
other institutions may charge their clients fees in connection with purchases
for the accounts of their clients. These fees would be in addition to any
amounts which might be received under the Service Plan. Service Agents may
receive different levels of compensation for selling different Classes of
shares. Each Service Agent has agreed to transmit to its clients a schedule
of such fees.
Fund shares may be purchased by wire, by telephone or through
compatible computer facilities. All payments should be made in U.S. dollars
and, to avoid fees and delays, should be drawn only on U.S. banks. To place
an order by telephone, investors should telephone Dreyfus Institutional
Services Division at one of the following telephone numbers: in New York
State call 1-718-895-1650; outside New York State call 1-800-346-3621. For
instructions concerning purchases and to determine whether their computer
facilities are compatible with the Fund's, investors also may call one of the
telephone numbers listed above.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks in the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Custodian or by the Sub-custodian,
as described below, or by any agent or entity subject to the direction of
such agents. If an investor does not remit Federal Funds, its payment must be
converted into Federal Funds. This usually occurs within one business day of
receipt of a bank wire and within two business days of receipt of a check
drawn on a member bank of the
Page 9
Federal Reserve System. Checks drawn on banks
which are not members of the Federal Reserve System may take considerably
longer to convert into Federal Funds. Prior to receipt of Federal Funds, the
investor's money will not be invested.
The Fund's net asset value per share is determined twice each
business day: at 12:00 Noon, New York time/9:00 a.m., California time, and as
of the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time/ 1:00 p.m., California time) on each day
the New York Stock Exchange or the Custodian is open for business. Net asset
value per share of each Class is computed by dividing the value of the Fund's
net assets represented by such Class (i.e., the value of its assets less
liabilities) by the total number of shares of such Class outstanding. See
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information.
Except in the case of telephone orders, investors whose payments are
received in or converted into Federal Funds by 12:00 Noon, New York time, by
the Custodian or received in Federal Funds by 12:00 Noon, California time, by
the Sub-custodian, will receive the dividend declared that day. Investors
whose payments are received in or converted into Federal Funds after 12:00
Noon, New York time, by the Custodian, or received in Federal Funds after
12:00 Noon, California time, by the Sub-custodian, will begin to accrue
dividends on the following business day.
A telephone order placed in New York will become effective at the
price determined at 12:00 Noon, New York time, and the shares purchased will
receive the dividend on Fund shares declared on that day if such order is
placed by 12:00 Noon, New York time, and Federal Funds are received by the
Custodian by 4:00 p.m., New York time, on that day. A telephone order placed
in California will become effective at the price determined at 1:00 p.m.,
California time, and the shares purchased will receive the dividend on Fund
shares declared on that day if such order is placed by 12:00 Noon, California
time, and Federal Funds are received by the Sub-custodian by 3:00 p.m.,
California time, on that day.
Federal regulations require that an investor provide a certified
Taxpayer Identification Number ("TIN") upon opening or reopening an account.
See "Dividends, Distributions and Taxes" and the Fund's Account Application
for further information concerning this requirement. Failure to furnish a
certified TIN to the Fund could subject the shareholder to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").
INVESTOR SERVICES
FUND EXCHANGES -- An investor may purchase, in exchange for Class A or Class
B shares of the Fund, shares of Dreyfus Cash Management, Dreyfus Government
Cash Management, Dreyfus Municipal Cash Management Plus, Dreyfus New York
Municipal Cash Management, Dreyfus Tax Exempt Cash Management, Dreyfus
Treasury Cash Management and Dreyfus Treasury Prime Cash Management, which
have different investment objectives that may be of interest to investors.
Upon an exchange into a new account, the following shareholder services and pr
ivileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is being made: Telephone Exchange
Privilege, Redemption by Wire or Telephone, Redemption Through Compatible
Computer Facilities and the dividend/capital gain distribution option
selected by the investor.
To request an exchange, exchange instructions must be given in
writing or by telephone. See "How to Redeem Fund Shares _ Procedures." Before
any exchange, the investor must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being made.
Prospectuses and further information about the Fund exchanges may be obtained
by calling one of the numbers listed under "General Information." Shares will
be exchanged at the net asset value next determined after receipt of an
exchange request in proper form. The exchange of shares of one fund for
shares of another fund is treated for Federal income tax purposes as a sale
of the shares given in exchange by the investor and, therefore, an exchanging
investor may realize a taxable gain or loss. No fees currently are charged
investors directly in connection with exchanges, although the Fund reserves
the right, upon not less than 60 days' written notice, to charge investors a
nominal fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may
Page 10
be modified or terminated at any time upon notice to investors.
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for Class A or Class B shares of the Fund, in shares of
Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus
Municipal Cash Management Plus, Dreyfus New York Municipal Cash Management,
Dreyfus Tax Exempt Cash Management, Dreyfus Treasury Cash Management or
Dreyfus Treasury Prime Cash Management, if the investor is currently an
investor in one of these funds. The amount an investor designates, which can
be expressed either in terms of a specific dollar or share amount, will be
exchanged automatically on the first and/or fifteenth of the month according
to the schedule that the investor has selected. Shares will be exchanged at
the then-current net asset value. The right to exercise this Privilege may be
modified or cancelled by the Fund or the Transfer Agent. An investor may
modify or cancel the exercise of this Privilege at any time by writing to the
Dreyfus Institutional Services Division, EAB Plaza, 144 Glenn Curtiss
Boulevard, 8th Floor, Uniondale, New York 11556-0144. The Fund may charge a
service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the investor and, therefore, an exchanging investor may realize a
taxable gain or loss. For more information concerning this Privilege and the
funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call in New York State
1-718-895-1650; outside New York State call toll free 1-800-346-3621.
HOW TO REDEEM FUND SHARES
GENERAL -- Investors may request redemption of their shares at any time and
the shares will be redeemed at the next determined net asset value.
The Fund imposes no charges when shares are redeemed. Service Agents
or other institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any stock certificates representing Fund shares
being redeemed must be submitted with the redemption request. The value of
the shares redeemed may be more or less than their original cost, depending
upon the Fund's then-current net asset value.
If a request for redemption is received in proper form in New York by
12:00 Noon, New York time, or in Los Angeles by 12:00 Noon, California time,
the proceeds of the redemption, if transfer by wire is requested, ordinarily
will be transmitted in Federal Funds on the same day and the shares will not
receive the dividend declared on that day. If the request is received later
that day in New York or Los Angeles, the shares will receive the dividend on
the Fund's shares declared on that day and the proceeds of redemption, if
wire transfer is requested, ordinarily will be transmitted in Federal Funds
on the next business day.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission.
PROCEDURES -- Investors may redeem Fund shares by wire or telephone, or
through compatible computer facilities as described below.
An investor may redeem Fund shares by telephone if the investor has
checked the appropriate box on the Fund's Account Application or has filed a
Shareholder Services Form with the Transfer Agent. If an investor selects a
telephone redemption privilege or telephone exchange privilege (which is
granted automatically unless the investor refuses it), the investor
authorizes the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be an authorized representative of
the investor, and reasonably believed by the Transfer Agent to be genuine.
The Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if they do not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. The Fund or the Transfer Agent will not be liable
for following telephone instructions reasonably believed to be genuine.
Page 11
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Fund or its agent by telephone to
request a redemption or exchange of Fund shares. In such cases, investors
should consider using the other redemption procedures described herein.
REDEMPTION BY WIRE OR TELEPHONE -- Investors may redeem Fund shares by wire
or telephone. The redemption proceeds will be paid by wire transfer.
Investors can redeem shares by telephone by calling 1-718-895-1650 in New
York State or 1-800-346-3621 outsideNew York State. The Fund reserves the
right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
redeeming shares by wire. Shares for which certificates have been issued may
not be redeemed by wire or telephone.
REDEMPTION THROUGH COMPATIBLE COMPUTER FACILITIES -- The Fund makes available
to institutions the ability to redeem shares through compatible computer
facilities. Investors desiring to redeem shares in this manner should call
one of the telephone numbers listed under "General Information" in this
Prospectus to determine whether their computer facilities are compatible and
to receive instructions for redeeming shares in this manner.
SERVICE PLAN
(Class B Only)
Class B shares are subject to a Service Plan adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940. Under the Service Plan, the
Fund (a) reimburses the Distributor for distributing Class B shares and (b)
pays The Dreyfus Corporation, Dreyfus Service Corporation , a wholly-owned
subsidiary of The Dreyfus Corporation, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing Class B shares and
for providing certain services relating to Class B shareholder accounts, such
as answering shareholder inquiries regarding the Fund and providing reports
and other information, and services related to the maintenance of shareholder
accounts ("Servicing"), at an aggregate annual rate of .25 of 1% of the value
of the average daily net assets of Class B. Each of the Distributor and
Dreyfus may pay one or more Service Agents a fee in respect of the Fund's
Class B shares owned by shareholders with whom the Service Agent has a
Servicing relationship or for whom the Service Agent is the dealer or holder
of record. Each of the Distributor and Dreyfus determines the amounts, if
any, to be paid to Service Agents under the Service Plan and the basis on
which such payments are made. The fee payable for Servicing is intended to be
a "service fee" as defined in Article III, Section 26 of the NASD Rules of
Fair Practice. The fees payable under the Service Plan are payable without
regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
(Class A Only)
Class A shares are subject to a Shareholder Services Plan pursuant to
which the Fund has agreed to reimburse Dreyfus Service Corporation an amount
not to exceed an annual rate of .25 of 1% of the value of the average daily
net assets of Class A for certain allocated expenses of providing personal
services to, and/or maintaining accounts of, Class A shareholders. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. Pursuant to an undertaking by The
Dreyfus Corporation described under "Management of the Fund," The Dreyfus
Corporation, and not the Fund, currently reimburses Dreyfus Service
Corporation for any such allocated expenses.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange or the Transfer Agent is open for
business. Fund shares begin earning income dividends on the day the purchase
order is effective. Dividends usually are paid on the last calendar day of
each month, and are automatically reinvested in additional Fund shares at net
asset value or, at the investor's option, paid in cash. The Fund's earnings
for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. If an investor redeems all shares in its account at
any time during the month, all dividends to which the
Page 12
investor is entitled
are paid along with the proceeds of the redemption. Distributions from net
realized securities gains, if any, generally are declared and paid once a
year, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. Investors may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to Class A or Class B
will be borne exclusively by such Class. Class B shares will receive lower
per share dividends than Class A shares because of the higher expenses borne
by Class B. See "Annual Fund Operating Expenses."
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and gains
from the sale or other disposition of certain market discount bonds, paid by
the Fund are taxable as ordinary income, whether received in cash or
reinvested in Fund shares, if the owner of Fund shares is a citizen or
resident of the United States. No dividend paid by the Fund will qualify for
the dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund, if
any, generally are taxable as long-term capital gains for Federal income tax
purposes regardless of how long the owner of the Fund shares has held the
shares and whether such distributions are received in cash or reinvested in
additional Fund shares if the owner of Fund shares is a citizen or resident
of the United States. The Code provides that the net capital gain of an
individual generally will not be subject to Federal income tax at a rate in
excess of 28%. Dividends and distributions may be subject to certain state
and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and gains from
the sale or other disposition of certain market discount bonds, paid by the Fu
nd with respect to Fund shares beneficially owned by a foreign person
generally are subject to U.S. nonresident withholding taxes at the rate of
30%, unless the foreign person claims the benefit of a lower rate specified
in a tax treaty. Distributions from net realized long-term securities gains
paid by the Fund with respect to Fund shares beneficially owned by a foreign
person generally will not be subject to U.S. nonresident withholding tax.
However, such distributions may be subject to backup withholding, as
described below, unless the foreign person certifies his non-U.S. residency
status.
Notice as to the tax status of dividends and distributions will be
mailed to investors annually. Each investor also will receive periodic
summaries of such investor's account which will include information as to
dividends and distributions from securities gains, if any, paid during the
year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended September 30, 1994 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
Page 13
the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
Each investor should consult its tax adviser regarding specific
questions as to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on August 12, 1987, and
commenced operations on October 6, 1987. The Fund is authorized to issue 15
billion shares of Common Stock, par value $.001 per share. The Fund's shares
are classified into two classes. Each share has one vote and shareholders
will vote in the aggregate and not by class except as to any matter which
affects only one class or as otherwise required by law. Holders of Class B
shares only will be entitled to vote on matters submitted to shareholders
pertaining to the Service Plan.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for purposes of removing a Director from office and the holders
of at least 25% of such shares may require the Fund to hold a special meeting
of shareholders for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's outstanding
voting shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of each investor's ownership
and sends confirmations and statements of account.
Investor inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or, in the case of
institutional investors, by calling in New York State 1-718-895-1650;
outside New York State call toll free 1-800-346-3621. Individuals or entities
for whom institutions may purchase or redeem Fund shares should call toll
free 1-800-554-4611.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will perform only administrative and shareholder servicing
functions. While the matter is not free from doubt, the Fund's Board of
Directors believes that such laws should not preclude a bank from acting on
behalf of clients as contemplated by this Prospectus. However, judicial or
administrative decisions or interpretations of such laws, as well as changes
in either Federal or state statutes or regulations relating to the
permissible activities of banks and their subsidiaries or affiliates, could
prevent a bank from continuing to perform all or part of the activities
contemplated by this Prospectus. If a bank were prohibited from so acting,
its shareholder clients would be permitted to remain Fund shareholders and
alternative means for continuing the servicing of such shareholders would be
sought. In such event, changes in the operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other services then being provided
by the bank. The Fund does not expect that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 14
DREYFUS CASH MANAGEMENT PLUS, INC.
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 31, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Cash Management Plus, Inc. (the "Fund"), dated January 31, 1995, as
it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or, in the case of institutional investors,
call the following numbers:
Outside New York State -- Call Toll Free 1-800-346-3621
In New York State -- Call 1-718-895-1650
Individuals or entities for whom institutions may purchase or redeem
Fund shares may write to the Fund at the above address or call toll free 1-
800-554-4611 to obtain a copy of the Fund's Prospectus.
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . . B-5
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . B-8
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . B-10
Service Plan (Class B Only) . . . . . . . . . . . . . . . . . . . . . . . B-10
Shareholder Services Plan (Class A Only). . . . . . . . . . . . . . . . . B-11
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . B-12
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . . B-13
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Investor Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . . B-15
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . . B-16
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . . . . B-16
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . B-20
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . B-28
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."
Portfolio Securities.
Bank Obligations. Domestic commercial banks organized under Federal
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System only
if they elect to join. In addition, state banks whose certificates of
deposit ("CDs") may be purchased by the Fund are insured by the Bank
Insurance Fund administered by the FDIC (although such insurance may not be
of material benefit to the Fund, depending on the principal amount of the
CDs of each bank held by the Fund) and are subject to Federal examination
and to a substantial body of Federal law and regulation. As a result of
Federal or state laws and regulations, domestic branches of domestic banks
whose CDs may be purchased by the Fund are, among other things, generally
required to maintain specified levels of reserves, are limited in the
amounts which they can loan to a single borrower and are subject to other
regulation designed to promote financial soundness. However, not all of
such laws and regulations apply to the foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign subsidiaries
of domestic banks and domestic and foreign branches of foreign banks, such
as CDs and time deposits ("TDs"), may be general obligations of the parent
banks in addition to the issuing branch, or may be limited by the terms of a
specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and other
taxes on interest income. Foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements that
apply to domestic banks, such as mandatory reserve requirements, loan
limitations, and accounting, auditing and financial recordkeeping
requirements. In addition, less information may be publicly available about
a foreign branch of a domestic bank or about a foreign bank than about a
domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal or state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may or may not be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal and State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
The Fund may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, whose deposits are insured by the FDIC, provided the Fund purchases
any such CD in a principal amount of not more than $100,000, which amount
would be fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the FDIC. Interest payments on such a CD are
not so insured. The Fund will not own more than one such CD per such
issuer.
Repurchase Agreements. The Fund's custodian or subcustodian 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 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 the resale price.
The Manager will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the repurchase price. The Fund will
consider on an ongoing basis the creditworthiness of the institutions with
which it enters into repurchase agreements.
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 Directors. 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 Directors
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.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund can
increase its income through the investment of the cash collateral. For the
purposes of this policy, the Fund considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by banks whose
securities meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 33-1/3% of the value of the
Fund's total assets. From time to time, the Fund may return to the borrower
and/or a third party, which is unaffiliated with the Fund, and which is
acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in connection
with the loan. These conditions may be subject to future modification.
Investment Restrictions
The Fund has adopted the investment restrictions numbered 1 through 11
as fundamental policies. These restrictions 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 12 and 13 are not fundamental
policies and may be changed by vote of a majority of the Fund's Directors at
any time. The Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds, or industrial revenue bonds.
2. Borrow money, except (i) 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 and (ii) in connection with the entry into reverse
repurchase agreements to the extent described in the Fund's Prospectus.
While borrowings described in clause (i) exceed 5% of the value of the
Fund's total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options or combinations thereof.
5. Underwrite the securities of other issuers.
6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
7. Make loans to others except through the purchase of debt
obligations referred to in the Prospectus and except that the Fund
may lend its portfolio securities in an amount not to exceed
33-1/3% of the value of its total assets. Any loans of portfolio
securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Directors.
8. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of
any other issuer, except that up to 25% of the value of the Fund's
total assets may be invested without regard to any such
limitations. Notwithstanding the foregoing, to the extent
required by the rules of the Securities and Exchange Commission,
the Fund will not invest more than 5% of its assets in the
obligations of any one bank.
9. Invest less than 25% of its total assets in securities issued by
banks or invest more than 25% in the securities of issuers in any
other industry, provided that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Notwithstanding
the foregoing, for temporary defensive purposes the Fund may
invest less than 25% of its assets in bank obligations.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition
of assets.
12. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are
illiquid if, in the aggregate, more than 10% of the value of the
Fund's net assets would be so invested.
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 that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its stockholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. The Director who is deemed to be an "interested person" of
the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
*DAVID W. BURKE, Director. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Mr. Burke was Vice President and
Chief Administrative Officer of the Manager. During the period 1977 to
1990, Mr. Burke was involved in the management of the national
television news, as Vice-President and Executive Vice President of ABC
News, and subsequently as President of CBS News. His address is 200
Park Avenue, New York, New York 10166.
ISABEL P. DUNST, Director. Partner in the law firm of Hogan & Hartson since
1990. From 1986 to 1990, Deputy General Counsel of the United States
Department of Health and Human Services. She is also a Trustee of the
Clients Security Fund of the District of Columbia Bar and a Trustee of
Temple Sinai. Her address is c/o Hogan & Hartson, Columbia Square, 555
Thirteenth Street, N.W., Washington, D.C. 20004-1109.
LYLE E. GRAMLEY, Director. Consulting economist since June 1992 and Senior
Staff Vice President and Chief Economist of Mortgage Bankers
Association of America from 1985 to May 1992. Since February 1993, a
director of CWM Mortgage Holdings, Inc. Investments. From 1980 to
1985, member of the Board of Governors of the Federal Reserve System.
His address is 12901 Three Sisters Road, Potomac, Maryland 20854.
WARREN B. RUDMAN, Director. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. From January 1981 to January
1993, Mr. Rudman served as a United States Senator from the State of
New Hampshire. Also, since January 1993, Mr. Rudman has served as Vice
Chairman of the Federal Reserve Bank of Boston and as a director of
Chubb Corporation and the Raytheon Company. He has served as Vice
Chairman of the President's Foreign Intelligence Advisory Board since
January 1993. Since 1988, Mr. Rudman has served as a trustee of Boston
College and since 1986 as a member of the Senior Advisory Board of the
Institute of Politics of the Kennedy School of Government at Harvard
University. His address is 1615 L Street, N.W., Suite 1300,
Washington, D.C. 20036.
Each of the "non-interested" Directors also is a trustee of Dreyfus
Cash Management, Dreyfus Government Cash Management, Dreyfus Municipal Cash
Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus Tax
Exempt Cash Management, Dreyfus Treasury Cash Management and Dreyfus
Treasury Prime Cash Management. Mr. Rudman is also a trustee of Dreyfus
BASIC U.S. Government Money Market Fund, Dreyfus California Intermediate
Municipal Bond Fund, Dreyfus Connecticut Intermediate Municipal Bond Fund,
Dreyfus Massachusetts Intermediate Municipal Bond Fund, Dreyfus Pennsylvania
Intermediate Municipal Bond Fund, Dreyfus New Jersey Intermediate Municipal
Bond Fund, Dreyfus Strategic Income and Dreyfus Strategic Investing, and a
director of Dreyfus BASIC Money Market Fund, Inc. and Dreyfus Strategic
Governments Income, Inc.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the
Directors of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Directors who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Directors,
other than fees and expenses to Directors who are not "interested persons"
of the Fund, which totalled $4,233 for the fiscal year ended September 30,
1994 for such Directors as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer and a Director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., a wholly-owned subsidiary of The
Boston Company, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President -
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray, and prior to August 1990, he was employed as
an Associate at Sidley & Austin.
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.
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.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice President 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.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From 1984 to July 1994, he was an Assistant Vice President in
the Mutual Fund Accounting Department of the Manager.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager and, from January 1990 to January 1992, he
was a mutual fund accountant for The Boston Company Advisors, Inc.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's common stock outstanding on November 15, 1994.
The following shareholders are known by the Fund to own of record 5% or
more of the Fund's Class A shares outstanding on November 15, 1994: (1) IBM
Tax Deferred Savings Plan, 1 Wall Street, 5th Floor, New York, NY 10286-0001
(6.4%); and (2) Sears Roebuck Acceptance Corporation, 3711 Kennett Pike,
Greenville, DE 19807-2102 (5.5%).
The following shareholders are known by the Fund to own of record 5% or
more of the Fund's Class B shares outstanding on November 15, 1994: (1)
Bost & Company, 1 Cabot Road #28-003B, Medford, MA 02155-5158 (46.2%); (2)
Thomas Rutherfoord Inc., P.O. Box 12748, Roanoke, VA 24028-2748 (14.4%); (3)
Valwood Improvement Authority, Interest and Sinking Fund, 143 Valwood
Parkway, Suite 160, Carrollton, TX 75006 (14.3%); (4) Crestar Bank, 19th
Floor, 919 E. Main Street, Richmond, VA 23219-4625 (5.5%); (5) Allstate
International Inc., 1 Commerce Drive, Cranford, NJ 07016-3508 (5.3%); and
(6) Valwood Construction, 143 Valwood Parkway, Suite 160, Carrollton, Tx
75006-6888 (5.1%). A shareholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may been deemed a
"control person" (as defined in the Act) of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board of
Directors or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance also is approved by a majority of the Directors who are not
"interested persons" (as defined in the Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. Shareholders approved the Agreement on August 5, 1994 and the
Board of Directors, including a majority of the Directors who are not
"interested persons" of any party to the Agreement, approved the Agreement
at a meeting held on May 24, 1994. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Directors 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; Julian M.
Smerling, Vice Chairman of the Board of Directors; Robert E. Riley,
President, Chief Operating Officer and a director; W. Keith Smith, Vice
Chairman and a director; Lawrence S. Kash, Vice Chairman--Distribution and
a director; Paul H. Synder, Vice President and Chief Financial Officer;
Daniel C. Maclean III, Vice President and General Counsel; Barbara Casey,
Vice President--Retirement Services; Henry D. Gottman, Vice President--
Retail; Elie M. Genadry, Vice President--Wholesale; Mark N. Jacobs, Vice
President--Fund Legal and Compliance and Secretary; Jeffrey N. Nachman, Vice
President--Mutual Fund Accounting; Diane Coffey, Vice President--Corporate
Communications; Philip L. Toia, Vice Chairman--Operations and
Administration; Katherine C. Wickham, Vice President--Human Resources;
Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions,
and provides the Fund with portfolio managers who are authorized by the
Board of Directors to execute purchases and sales of securities. The Fund's
portfolio managers are Robert P. Fort Jr., Garitt Kono, Bernard W. Kiernan,
Jr. and Patricia A. Larkin. The Manager also maintains a research
department with a professional staff of 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 Board's review at the
meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the Fund and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services. 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 under the Agreement, the
Fund has agreed to pay the Manager a monthly management fee at the annual
rate of .20 of 1% of the value of the Fund's average daily net assets. All
fees and expenses are accrued daily and deducted before declaration of
dividends to investors. The management fees payable for the fiscal years
ended September 30, 1992, 1993 and 1994 were $5,182,289, $7,263,870 and
$5,287,681, respectively. These amounts were reduced pursuant to an
undertaking by the Manager, resulting in net management fees paid for such
fiscal years of $3,990,101, $5,735,796 and $4,898,028, respectively.
Unless the Manager gives the Fund's investors at least 90 days' notice
to the contrary, the Manager, and not the Fund, will be liable for Fund
expenses (exclusive of taxes, brokerage, interest on borrowings and (with
the prior written consent of the necessary state securities commissions)
extraordinary expenses) other than the following expenses, which will be
borne by the Fund: (i) the management fee payable by the Fund monthly at the
annual rate of .20 of 1% of the value of the Fund's average daily net assets
and (ii) as to Class B shares only, payments made pursuant to the Fund's
Service Plan at the annual rate of .25 of 1% of the value of the average
daily net assets of Class B. See "Service Plan."
In addition, the Agreement provides that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the management
fee, exceed 1 1/2% of the value of the Fund's average net assets for the fiscal
year, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense. Such
deduction or payment, if any, will be estimated on a daily basis, and
reconciled and effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund
may attempt to notify the investor upon receipt of checks drawn on banks
that are not members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his order to
purchase Fund shares is paid for other than in Federal Funds, the securities
dealer, bank or other financial institution, acting on behalf of its
customer, will complete the conversion into, or itself advance, Federal
Funds generally on the business day following receipt of the customer order.
The order is effective only when so converted and received by the Custodian
or Sub-Custodian. An order for the purchase of Fund shares placed by an
investor with a sufficient Federal Funds or cash balance in his brokerage
account with a securities dealer, bank or other financial institution will
become effective on the day that the order, including Federal Funds, is
received by the Custodian or Sub-Custodian. In some states, banks or other
financial institutions effecting transactions in Fund shares may be required
to register as dealers pursuant to state law.
SERVICE PLAN
(CLASS B ONLY)
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Service Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the Act provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a plan
adopted in accordance with the Rule. The Fund's Board of Directors has
adopted such a plan (the "Service Plan") with respect to the Fund's Class B
shares. Pursuant to the Service Plan, the Fund (a) reimburses the
Distributor for distributing Class B shares and (b) pays the Manager,
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, and
any affiliate of either of them (collectively, "Dreyfus"), for advertising
and marketing Class B shares and for the providing of certain services to
the holders of Class B shares. Under the Service Plan, the Distributor and
Dreyfus may make payments to certain financial institutions, securities
dealers and other financial industry professionals (collectively, "Service
Agents") in respect to these services. The Fund's Board of Directors
believes that there is a reasonable likelihood that the Service Plan will
benefit the Fund and the holders of Class B shares.
A quarterly report of the amounts expended under the Service Plan, and
the purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Service Plan provides that it
may not be amended to increase materially the costs which holders of Class B
shares may bear pursuant to the Service Plan without the approval of the
holders of Class B shares and that other material amendments of the Service
Plan must be approved by the Board of Directors and by the Directors who are
not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in the operation of the Service Plan
or in any agreements entered into in connection with the Service Plan, by
vote cast in person at a meeting called for the purpose of considering such
amendments. The Service Plan is subject to annual approval by such vote of
the Directors cast in person at a meeting called for the purpose of voting
on the Service Plan. The Service Plan was so approved by the Directors at a
meeting held on May 24, 1994. The Service Plan may be terminated at any
time by vote of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the operation of the
Service Plan or in any agreements entered into in connection with the
Service Plan or by vote of the holders of a majority of Class B shares.
For the period January 24, 1994 (commencement of the initial offering
of Class B shares) through September 30, 1994, a total of $4,401 was charged
to the Fund, with respect to Class B shares, pursuant to the Service Plan.
SHAREHOLDER SERVICES PLAN
(CLASS A ONLY)
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services
Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund has agreed to reimburse the Dreyfus Service Corporation
for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts with respect to Class A shares only. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of Class A shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund or the Manager and have no direct or indirect financial interest in
the operation of the Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Directors cast in person at a meeting called
for the purpose of voting on the Plan. The Plan is terminable at any time
by vote of a majority of the Directors who are not "interested persons" and
have no direct or indirect financial interest in the operation of the Plan.
For the period October 1, 1993 through January 23, 1994, $214,322 was
chargeable to the Fund, with respect to Class A shares, pursuant to the
Shareholder Services Plan. For the period January 24, 1994 through
September 30, 1994, the Fund was not charged under the Shareholder Service
Plan pursuant to an undertaking by the Manager.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
Redemption by Wire or Telephone. By using this procedure, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be an
authorized representative of the investor, and reasonably believed by the
Transfer Agent to be genuine. Ordinarily, the Fund will initiate payment
for shares redeemed pursuant to this procedure on the same business day if
the Dreyfus Institutional Services Division receives the redemption request
in proper form in New York by Noon, New York time, or Los Angeles by Noon,
California time, on such day; otherwise, the Fund will initiate payment on
the next business day. Redemption proceeds will be transferred by Federal
Reserve wire only to a bank that is a member of the Federal Reserve System.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
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 inform the operator of the Transfer
Agent's answer back sign.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholders 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 Directors reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an emergency
or any time a cash distribution would impair the liquidity of the Fund to
the detriment of 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 investors.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the instrument.
The Board of Directors has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of purchases and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board of Directors, at such
intervals as it deems appropriate, to determine whether the Fund's net asset
value per share calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. In such
review, investments for which market quotations are readily available will
be valued at the most recent bid price or yield equivalent for such
securities or for securities of comparable maturity, quality and type, as
obtained from one or more of the major market makers for the securities to
be valued. Other investments and assets will be valued at fair value as
determined in good faith by the Board of Directors.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Directors. If such
deviation exceeds 1/2 of 1%, the Board of Directors will consider promptly
what action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, it has agreed to
take such corrective action as it regards as necessary and appropriate
including: selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital gains;
redeeming shares in kind; or establishing a net asset value by using
available market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or from an underwriter or a market maker for the securities. Usually no
brokerage commissions are paid by the Fund for such purchases. Purchases
from underwriters of portfolio securities may include a concession paid by
the issuer to the underwriter and the purchase price paid to, and sales
price received from, market makers for the securities may reflect the spread
between the bid and asked price. No brokerage commissions have been paid by
the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms and may be
selected based upon their sales of Fund shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses of
its research department.
INVESTOR SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Investor Services."
Fund Exchanges. By using the Telephone Exchange Privilege, the
investor authorizes the Dreyfus Service Corporation or the Transfer Agent to
act on exchange instructions from any person representing himself or herself
to be an authorized representative of the investor and reasonably believed
by the Dreyfus Institutional Services Division to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares will be exchanged at the
net asset value next determined after receipt of an exchange request in
proper form. Shares in certificate form are not eligible for telephone
exchange.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for shares of the Fund, shares of Dreyfus
Cash Management, Dreyfus Government Cash Management, Dreyfus Municipal Cash
Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus Tax
Exempt Cash Management, Dreyfus Treasury Cash Management and Dreyfus
Treasury Prime Cash Management. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value. Enrollment in or modification or cancellation of this
Privilege is effective three business days following receipt of notification
by the investor. An investor will be notified if its account falls below
the amount designated under this Privilege. In this case, an investor's
account will fall to zero unless additional investments are made in excess
of the designated amount prior to the next Auto-Exchange transaction.
Shares issued in certificate form are not eligible for this Privilege.
Fund exchanges and the Dreyfus Auto-Exchange Privilege are available to
investors resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.
The Fund reserves the right to reject any exchange request in whole or
in part. The Fund exchanges service or Dreyfus Auto-Exchange Privilege may
be modified or terminated at any time upon notice to investors.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Internal
Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Yield Information."
For the seven-day period ended September 30, 1994, yield and effective
yield on Class A shares were 4.64% and 4.75%, respectively, and for Class B
shares were 4.39% and 4.49%, respectively. Yield is computed in accordance
with a standardized method which involves determining the net change in the
value of a hypothetical pre-existing Fund account having a balance of one
share at the beginning of a seven calendar day period for which yield is to
be quoted, dividing the net change by the value of the account at the
beginning of the period to obtain the base period return, and annualizing
the results (i.e., multiplying the base period return by 365/7). The net
change in the value of the account reflects the value of additional shares
purchased with dividends declared on the original share and any such
additional shares and fees that may be charged to the shareholder's account,
in proportion to the length of the base period and the Fund's average
account size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising that sum to
a power equal to 365 divided by 7, and subtracting 1 from the result.
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.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and nonassessable.
Fund shares have no preemptive, subscription or conversion rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
In early 1974, the Manager commenced offering the first money market
fund to be widely offered on a retail basis, Dreyfus Liquid Assets, Inc.
Money market mutual funds have subsequently grown into a multi-billion
dollar industry.
The Fund is a member of the Family of Dreyfus Cash Management Funds
which are designed to meet the needs of an array of institutional investors.
As of October 31, 1994, the total net assets of the Dreyfus Family of Cash
Management Funds amounted to approximately $14 billion.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL AND
INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
acts as custodian of the Fund's investments. 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. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, serves as a sub-custodian of the
Fund's investments. The Bank of New York, The Shareholder Services Group,
Inc. and First Interstate Bank of California have no part in determining the
investment policies of the Fund or which portfolio securities are to be
purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Descriptions of the highest commercial paper, bond and other short- and
long-term rating categories assigned by Standard & Poor's Corporation
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, Inc. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper Ratings and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus sign (+) designation.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor.
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated A1+
are supported by the highest capacity for timely repayment.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment.
Bond Ratings and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligation and possess an extremely strong capacity to pay principal and
interest.
Bonds rated Aaa are judged by Moody's to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all
standards and, together with the Aaa group, they comprise what are generally
known as high-grade bonds.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable and suitable for investment by trustees and fiduciary
institutions and liable to but slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such
stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt.
Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly.
Obligations rated AA by IBCA have a very low expectation of investment
risk.]
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.
IBCA also assigns a rating to certain international and U.S. banks. An
IBCA bank rating represents IBCA's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks long- and short-term ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties, and such
ratings are considered by IBCA to be a prime factor in its assessment of
credit risk. Individual Ratings, which range in gradations from A through
E, represent IBCA's assessment of a bank's economic merits and address the
question of how the bank would be viewed if it were entirely independent and
could not rely on support from state authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country in
which the bank is domiciled.
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1994
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-18.8% AMOUNT VALUE
------------- ------------
<S> <C> <C>
Bank of Tokyo Ltd. (Yankee)
5.12%,1/30/95........................................................... $ 25,000,000 $ 25,000,000
Dai-Ichi Kangyo Bank Ltd. (Yankee)
3.46%,10/28/94.......................................................... 50,000,000 49,999,817
Industrial Bank of Japan Ltd. (Yankee)
5.13%,1/27/95........................................................... 37,000,000 37,000,000
Mitsubishi Bank Ltd. (Yankee)
3.46%,10/24/94.......................................................... 60,000,000 60,000,000
Norinchukin Bank (London)
3.45%,10/28/94.......................................................... 10,000,000 10,000,790
Sumitomo Bank Ltd.
3.61%-5.30%,12/13/94-3/10/95............................................ 105,000,000 104,997,184
SwedBank (Yankee)
3.75%-5.02%,11/3/94-1/13/95............................................. 70,000,000 69,999,785
----------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $356,997,576)..................................................... $ 356,997,576
==============
BANKERS' ACCEPTANCES-.5%
Dai-Ichi Kangyo Bank Ltd.
4.88%-5.16%,11/25/94-1/13/95
(cost $9,890,389)....................................................... $ 10,000,000 $ 9,890,389
==============
COMMERCIAL PAPER-23.6%
Bear Stearns Companies Inc.
5.21%,1/20/95........................................................... $ 50,000,000 $ 49,216,833
Credito Italiano (DE) Inc.
5.09%,11/30/94.......................................................... 15,000,000 14,873,750
Den Danske Corp. Inc.
5.11%,1/27/95........................................................... 25,000,000 24,590,278
Ford Motor Credit Co.
4.83%-4.88%,11/16/94-11/18/94........................................... 65,000,000 64,593,334
General Electric Capital Corp.
4.84%-5.12%,10/11/94-1/26/95............................................ 100,000,000 98,670,900
General Electric Capital Services Inc.
5.11%, 3/10/95.......................................................... 15,000,000 14,672,000
General Motors Acceptance Corp.
4.67%-5.11%,10/04/94-1/10/95............................................ 30,000,000 29,783,833
Generale Bank Inc.
5.23%,1/13/95........................................................... 25,000,000 24,628,778
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1994
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
------------- ------------
National Australia Funding (DE) Inc.
5.11%,1/26/95........................................................... $ 10,000,000 $ 9,837,500
Nations Bank Corp.
5.18%,1/18/95........................................................... 40,000,000 39,388,389
NYNEX Corp.
5.12%-5.15%,1/10/95-1/12/95............................................. 30,000,000 29,571,592
ORIX America Inc.
5.23%,1/20/95(a)........................................................ 3,500,000 3,444,963
Paine Webber Group Inc.
5.29%, 2/8/95........................................................... 20,000,000 19,628,056
Salomon Inc.
5.35%,12/21/94.......................................................... 25,000,000 24,703,000
--------------
TOTAL COMMERCIAL PAPER
(cost $447,603,206)..................................................... $ 447,603,206
==============
CORPORATE NOTES-13.6%
Bear Stearns Companies Inc.
5.06%-5.15%, 8/25/95-9/14/95(b)......................................... $ 50,000,000$ 50,000,000
Goldman Sachs Group L.P.
5.40%, 3/10/95(b)....................................................... 50,000,000 50,000,000
Lehman Brothers Holdings Inc.
5.24%-5.40%,1/13/95-9/01/95(b).......................................... 97,000,000 97,000,000
Merrill Lynch & Co. Inc.
5.25%,10/04/94(b)....................................................... 7,000,000 7,000,000
Westdeutsche Landesbank Girozentrale
3.80%,1/11/95(b)........................................................ 55,000,000 54,983,401
--------------
TOTAL CORPORATE NOTES
(cost $258,983,401)..................................................... $ 258,983,401
==============
PROMISSORY NOTES-2.9%
Goldman Sachs Group L.P.
5.06%-5.25%,1/9/95-3/3/95
(cost $55,000,000)...................................................... $ 55,000,000 $ 55,000,000
==============
SHORT TERM BANK NOTES-5.9%
Comerica Bank
3.45%,10/18/94.......................................................... $ 63,000,000$ 62,997,334
First National Bank of Chicago
5.00%,10/31/94(b)....................................................... 50,000,000 50,000,000
--------------
TOTAL SHORT TERM BANK NOTES
(cost $112,997,334)..................................................... $ 112,997,334
==============
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1994
PRINCIPAL
U.S. GOVERNMENT AGENCIES-23.4% AMOUNT VALUE
------------- ------------
Federal Farm Credit Banks, Consolidated Systemwide,
Floating Rate Bonds
5.05%,9/30/96(b)........................................................ $ 20,000,000 $ 20,000,000
Federal Home Loan Banks, Consolidated Systemwide,
Floating Rate Bonds
5.30%-5.33%,1/31/97-2/3/97(b)........................................... 150,000,000 149,977,777
Federal National Mortgage Association, Consolidated Systemwide,
Floating Rate Bonds
5.20%-5.23%,10/4/96-2/14/97(b).......................................... 200,000,000 200,000,000
Federal National Mortgage Association, Discount Notes
3.54%-3.60%,10/20/94-11/22/94........................................... 75,000,000 74,783,554
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $444,761,331)..................................................... $ 444,761,331
==============
TIME DEPOSITS-12.1%
Bayerische Vereinsbank AG (Cayman)
5.00%,10/3/94........................................................... $ 80,000,000$ 80,000,000
Berliner Handels-und Frankfurter Bank AG (Cayman)
5.13%,10/3/94........................................................... 80,000,000 80,000,000
Credit Agricole USA Inc. (Cayman)
5.50%,10/3/94........................................................... 50,000,000 50,000,000
Republic National Bank of New York (London)
4.81%,10/3/94........................................................... 18,864,000 18,864,000
----------
TOTAL TIME DEPOSITS
(cost $228,864,000)..................................................... $ 228,864,000
==============
TOTAL INVESTMENTS
(cost $1,915,097,237)................................................... 100.8% $ 1,915,097,237
====== ===============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.8%) $ (15,525,031)
====== ===============
NET ASSETS ................................................................ 100.0% $1,899,572,206
====== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Backed by irrevocable bank letter of credit.
(b) Variable interest rate - subject to periodic change.
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $1,915,097,237
Interest receivable..................................................... 12,925,146
Prepaid expenses........................................................ 17,940
----------
1,928,040,323
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 340,916
Due to Custodian........................................................ 28,125,978
Accrued expenses........................................................ 1,223 28,468,117
------------- ------------
NET ASSETS ................................................................ $1,899,572,206
==============
REPRESENTED BY:
Paid-in capital......................................................... $1,900,556,751
Accumulated net realized (loss) on investments.......................... (984,545)
----------
NET ASSETS at value......................................................... $1,899,572,206
==============
Shares of Common Stock outstanding:
Class A Shares
(15 billion shares of $.001 par value shares authorized).............. 1,894,467,994
==============
Class B Shares
(15 billion shares of $.001 par value shares authorized).............. 6,088,757
==============
NET ASSET VALUE per share:
Class A Shares
($1,893,485,419 / 1,894,467,994 shares)............................... $1.00
=====
Class B Shares
($6,086,787 / 6,088,757 shares)....................................... $1.00
=====
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $97,658,447
EXPENSES:
Management fee-Note 2(a).............................................. $5,287,681
Shareholder servicing costs-Note 2(c)................................. 214,322
Custodian fees........................................................ 120,004
Registration fees..................................................... 16,767
Professional fees..................................................... 16,218
Distribution fees (Class B shares)-Note 2(b).......................... 4,401
Directors' fees and expenses-Note 2(d)................................ 4,233
Prospectus and shareholders' reports.................................. 3,506
Miscellaneous......................................................... 14,603
----------
5,681,735
Less-reduction in management fee due to
undertaking-Note 2(a)............................................. 389,653
----------
TOTAL EXPENSES.................................................. 5,292,082
----------
INVESTMENT INCOME-NET....................................................... 92,366,365
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (956,312)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $91,410,053
===========
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
---------------------------------
1993 1994
-------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 114,410,274 $ 92,366,365
Net realized gain (loss) on investments.............................. 51,835 (956,312)
-------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 114,462,109 91,410,053
-------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares..................................................... (114,410,274) (92,295,952)
Class B shares..................................................... -- (70,413)
-------------- -------------
TOTAL DIVIDENDS................................................ (114,410,274) (92,366,365)
-------------- -------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A shares..................................................... 53,505,416,859 31,741,072,296
Class B shares..................................................... -- 16,083,958
Dividends reinvested:
Class A shares..................................................... 17,286,764 18,340,378
Class B shares..................................................... -- 69,835
Cost of shares redeemed:
Class A shares..................................................... (52,819,793,558) (32,868,317,086)
Class B shares..................................................... -- (10,065,036)
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS........................................... 702,910,065 (1,102,815,655)
-------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................. 702,961,900 (1,103,771,967)
NET ASSETS:
Beginning of year.................................................... 2,300,382,273 3,003,344,173
-------------- -------------
End of year.......................................................... $ 3,003,344,173 $ 1,899,572,206
=============== ===============
See notes to financial statements.
</TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
FINANCIAL HIGHLIGHTS
Reference is made to Page 3 of the Fund's Prospectus dated January 31, 1995.
See notes to financial statements.
DREYFUS CASH MANAGEMENT PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so.
On July 14, 1993, the Fund's Board of Trustees approved an amendment to
the Fund's Agreement and Declaration of Trust to provide for the issuance of
additional classes of shares of the Fund. The amendment was approved by Fund
shareholders on January 6, 1994. Effective January 24, 1994, existing Fund
shares were classified as Class A shares and an umlimited number of Class B
shares were authorized. The Fund began offering both Class A and Class B
shares on January 24, 1994. Class B shares are subject to a Service Plan
adopted pursuant to Rule 12b-1 under the Act. Other differences between the
two Classes include the services offered to and the expenses borne by each
Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends from investment income-net on each business day. Such dividends
are paid monthly. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $74,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1994. The
carryover does not include net realized securities losses from November 1,
1993 through September 30, 1994 which are treated, for Federal income tax
purposes, as arising in fiscal 1995. If not applied, $22,000 of the carryover
expires in fiscal 1997, $4,000 expires in fiscal 1999, $2,000 expires in
fiscal 2000 and $46,000 expires in fiscal 2002.
DREYFUS CASH MANAGEMENT PLUS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At September 30, 1994, 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 .20 of 1% of the average
daily value of the Fund's net assets and is payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage and extraordinary expenses, exceed 1 1/2% of the
average value of the Fund's net assets for any full fiscal year. However, the
Manager had undertaken from October 1, 1993 through January 23, 1994 to
reduce the management fee paid by, or bear such excess expenses of the Fund,
to the extent that the Fund's aggregate expenses (excluding certain expenses
as described above) exceed an annual rate of .20 of 1% of the average daily
value of the Fund's net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $389,653 for the period from October 1, 1993
through January 23, 1994.
Effective January 24, 1994, the Manager, and not the Fund, is liable for
those expenses of the Fund (excluding certain expenses as described above)
other than management fee, and with respect to the Fund's Class B shares,
Rule 12b-1 Service Plan expenses.
The Manager may modify the existing undertaking provided that the Fund's
shareholders are given 90 days prior notice.
(B) On August 5, 1994, Fund shareholders approved the adoption of a new
Class B Service Plan (the "Plan") pursuant to Rule 12b-1 under the Act.
Pursuant to the Plan, effective August 24, 1994, the Fund reimburses the
Distributor for distributing the Fund's Class B shares. The Fund also pays
The Dreyfus Corporation and Dreyfus Service Corporation, and their affiliates
(collectively "Dreyfus") for advertising and marketing relating to the Fund's
Class B shares and for providing certain services relating to Class B
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts ("Servicing"), at an aggregate annual
rate of .25 of 1% of the value of the Fund's average daily net assets. Both
the Distributor and Dreyfus may pay one or more Service Agents a fee in
respect of the Fund's Class B shares owned by the shareholders with whom the
Service Agent has a Servicing relationship or for whom the Service Agent is
the dealer or holder of record. Both the Distributor and Dreyfus determine
the amounts, if any, to be paid to the Service Agents under the Plan and the
basis on which such payments are made. The fees payable under the Plan are pay
able without regard to actual expenses incurred.
During the period from January 24, 1994, through August 24, 1994, the
Fund's Service Plan ("Prior Class B Service Plan") provided that the Fund pay
Dreyfus Service Corporation at an annual rate of .25 of 1% of the value of
the Fund's Class B shares average daily net assets, for costs and expenses in
connection with advertising, marketing and distributing Class B shares and
for providing certain services to holders of Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the period ended September 30, 1994, $669 was charged to the Fund
pursuant to the Plan and $3,732 was charged to the Fund pursuant to the Prior
Class B Service Plan.
DREYFUS CASH MANAGEMENT PLUS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) Pursuant to the Fund's Shareholder Services Plan ("Class A
Shareholder Service 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 period from October 1, 1993 through January 23, 1994,
the Fund was charged an aggregate of $214,322 pursuant to the Class A
Shareholder Services Plan.
(D) Prior to August 24, 1994 certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $3,000 and an attendance fee of $500 per meeting.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CASH MANAGEMENT PLUS, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Cash Management Plus, Inc., including the statement of investments,
as of September 30, 1994, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1994, by correspondence with the custodia
n. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Cash Management Plus, Inc. at September 30, 1994, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
New York, New York Ernst & Young LLP
November 8, 1994
