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PROSPECTUS FEBRUARY 1, 1996
AS REVISED JULY 3, 1996
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. THE FUND'S INVESTMENT OBJECTIVE 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.
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 FEBRUARY 1, 1996,
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. THE SECURITIES AND
EXCHANGE COMMISSION MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS
THE STATEMENT OF ADDITIONAL INFORMATION, MATERIALS INCORPORATED BY REFERENCE
AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, 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 144.
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. ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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TABLE OF CONTENTS
<TABLE>
PAGE PAGE
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES.............. 2 INVESTOR SERVICES...................... 8
CONDENSED FINANCIAL INFORMATION............. 3 HOW TO REDEEM FUND SHARES.............. 9
YIELD INFORMATION........................... 4 SERVICE PLAN........................... 10
DESCRIPTION OF THE FUND..................... 4 SHAREHOLDER SERVICES PLAN.............. 10
MANAGEMENT OF THE FUND...................... 6 DIVIDENDS, DISTRIBUTIONS AND TAXES..... 10
HOW TO BUY FUND SHARES...................... 7 GENERAL INFORMATION.................... 12
APPENDIX............................... 13
</TABLE>
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
CLASS A CLASS B
SHARES SHARES
<S> <C> <C> <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 costs and expenses borne by the Fund, the payment of which
will reduce investors' annual return. 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," "Service Plan" and "Shareholder Services Plan."
Page 2
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of 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
--------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------------------
PER SHARE DATA: 1988(1) 1989 1990 1991 1992 1993 1994 1995
-------- ------- ------ ------ ----- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $1.0000 $.9994 $.9999 $.9999 $.9999 $1.0000 $1.0000 $.9995
------ ------- ------ ------ ------ ------ ----- ------
INVESTMENT OPERATIONS:
Investment income-net............... .0714 .0910 .0832 .0675 .0431 .0316 .0359 .0571
Net realized gain (loss) on investments.. (.0006) .0005 -_ -_ .0001 -_ (.0005) .0003
------ ------- ------ ------ ------ ------ ----- ------
TOTAL FROM INVESTMENT OPERATIONS.. .0708 .0915 .0832 .0675 .0432 .0316 .0354 .0574
------ ------- ------ ------ ------ ------ ----- ------
DISTRIBUTIONS:
Dividends from investment income-net.. (.0714) (.0910) (.0832) (.0675) (.0431) (.0316) (.0359)(.0571)
------ ------- ------ ------ ------ ------ ----- ------
Net asset value, end of year........ $.9994 $.9999 $.9999 $.9999 $1.0000 $1.0000 $.9995 $.9998
======== ======== ====== ======= ======= ====== ====== ======
TOTAL INVESTMENT RETURN................. 7.45%(2) 9.49% 8.65% 6.97% 4.39% 3.20% 3.65% 5.86%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... .20%(2) .20% .20% .20% .20% .20% .20% .20%
Ratio of net investment income to
average net assets........ 7.13%(2) 9.35% 8.29% 6.62% 4.36% 3.15% 3.49% 5.81%
Decrease reflected in above expense ratios due to
undertaking by The Dreyfus Corporation.... 07%(2) .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$4,404,989
(1) From October 6, 1987 (commencement of operations) to September 30, 1988.
(2) Annualized.
</TABLE>
<TABLE>
CLASS B SHARES
--------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------
1994(1) 1995
-------- --------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year................................... $1.0000 $.9997
-------- --------
Investment Operations:
Investment income-net.............................................. .0245 .0546
Net realized gain (loss) on investments........................... (.0003) .0003
-------- --------
Total from Investment Operations..................................... .0242 .0549
-------- --------
Distributions:
Dividends from investment income-net.................................... (.0245) (.0546)
-------- --------
Net asset value, end of year............................................ $.9997 $1.0000
======== ========
TOTAL INVESTMENT RETURN....................................................... 3.61%(2) 5.61%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....................................... .45%(2) .45%
Ratio of net investment income to average net assets.......................... 4.00%(2) 5.66%
Net Assets, end of year (000's omitted)....................................... $6,087 $352,499
- ------------------
(1) From January 24, 1994 (commencement of initial offering) to September 30, 1994.
(2) Annualized.
</TABLE>
Page 3
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 ReportRegistration Mark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, two classes of shares of the Fund are being
offered _ Class A shares and Class B shares (each such class being referred
to as a "Class"). The Classes are identical, except 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, as amended (the "1940 Act"). 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 investment objective 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. It cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) 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
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 sub-
Page 4
sidiaries or foreign branches of domestic banks, domestic and foreign branches
of foreign banks and thrift institutions, repurchase agreements, and high
quality domestic and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of interest. See
"Appendix_Certain Portfolio Securities." In addition, the Fund is permitted to
lend portfolio securities and enter into reverse repurchase agreements. See
"Appendix_Investment Techniques." During normal market conditions, at least
25% of the Fund's total assets will be invested in bank obligations. See
"Investment Considerations and Risks" 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 1940 Act, 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 Fund's Board 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. 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 Fund's Board. The nationally recognized
statistical rating organizations currently rating instruments of the type the
Fund may purchase are Moody's Investors Service, Inc., Standard & Poor's
Ratings Group, a division of The McGraw-Hill Companies, Inc., Duff & Phelps
Credit Rating Co., Fitch Investors Service, L.P., IBCA Limited and IBCA Inc.
and Thomson BankWatch, Inc. and their rating criteria are described in the
"Appendix" to the Statement of Additional Information.
In addition, the Fund will not invest more than 5% of its total
assets in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts issued by, a single issuer,
except that (i) the Fund may invest more than 5% of its total assets in a
single issuer for a period of up to three business days in certain limited
circumstances, (ii) the Fund may invest in obligations issued or guaranteed
by the U.S. Government without any such limitation, and (iii) the limitation
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 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.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- 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.
BANK SECURITIES -- To the extent the Fund's investments are concentrated in
the banking industry, the Fund will have correspondingly greater exposure to
the risk factors which are characteristic of such investments. Sustained
increases in interest rates can adversely affect the availability or
liquidity and cost of capital funds for a bank's lending activities, and a
deterioration in general economic conditions could increase the exposure to
credit losses. In addition, the value of and the investment return on the
Fund's shares could be
Page 5
affected by economic or regulatory developments in or related to the banking
industry, which industry also is subject to the effects of competition within
the banking industry as well as with other types of financial institutions.
The Fund, however, will seek to minimize its exposure to such risks by
investing only in debt securities which are determined to be of highest
quality.
FOREIGN SECURITIES -- Since the Fund's portfolio may contain securities
issued by foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, and commercial paper issued
by foreign issuers, the Fund may be subject to additional investment risks
with respect to 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 controls 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.
SIMULTANEOUS INVESTMENTS -- 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, 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
INVESTMENT ADVISER -- 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 December 31, 1995, The Dreyfus Corporation
managed or administered approximately $81 billion in assets for more than 1.7
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 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
$209 billion in assets as of September 30, 1995, including approximately $80
billion in proprietary mutual fund assets. As of September 30, 1995, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $717 billion in assets,
including approximately $55 billion in mutual fund assets.
For the fiscal year ended September 30, 1995, the Fund paid The
Dreyfus Corporation a monthly management fee at the annual rate of .20 of 1%
of the value of the Fund's average daily net assets.
Unless The Dreyfus Corporation gives the Fund's investors at least 90
days' notice to the contrary, The Dreyfus Corporation, and not the Fund, will
be liable for Fund expenses (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be borne by the Fund: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the 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
Page 6
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.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian. First Interstate
Bank of California, 707 Wilshire Boulevard, Los Angeles, California 90017, is
the Fund's Sub-custodian (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
Institutional Short Term Treasury Fund, 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 Service 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. Investors should consult their Service Agents in this regard.
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, or to determine whether their computer facilities are
compatible with the Fund's, investors should telephone Dreyfus Institutional
Services Division at one of the telephone numbers listed under "General
Information" in this Prospectus.
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 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.
Page 7
The Fund's net asset value per share is determined as of 5:00 p.m.,
New York time/2:00 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 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 5:00 p.m., New York time, and the shares purchased will
receive the dividend on Fund shares declared on that day if such order is
placed by 5:00 p.m., New York time, and Federal Funds are received by the
Custodian by 6:00 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 4:00 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 Institutional Short Term Treasury Fund, 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 a
ccount, the following shareholder services and privileges, 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 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. No fees
currently are charged investors directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge investors a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
investors. See "Dividends, Distributions and Taxes."
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
Institutional Short Term Treasury Fund, 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
Page 8
investor designates, which can be expressed either in terms of
a specific dollar or share amount, will be exchanged automatically on the
first and/or fifteenth of the month according to the schedule that the
investor has selected. Shares will be exchanged at the then-current net asset
value. The right to exercise this Privilege may be modified or cancelled by
the Fund or the Transfer Agent. An investor may modify or cancel the exercise
of this Privilege at any time by writing to Dreyfus Institutional Services
Division, EAB Plaza, 144 Glenn Curtiss Boulevard, 8th Floor, Uniondale, New
York 11556-0144. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. For more information
concerning this Privilege and the funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization Form, please
call one of the telephone numbers listed under "General Information." See
"Dividends, Distributions and Taxes."
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
5:00 p.m., 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 Dreyfus Institutional Services Division of a
redemption request in proper form, except as provided by the rules of the
Securities and Exchange Commission.
PROCEDURES
Investors may redeem Fund shares by wire or telephone, or through
compatible computer facilities as described below.
If an investor selects a telephone redemption privilege or telephone
exchange privilege (which is granted automatically unless the investor
refuses it), the investor authorizes the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be an
authorized representative of the investor, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
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. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Fund or its agents by telephone to
request a redemption or exchange of Fund shares. In such cases, investors
should consider using the other redemption procedures described herein.
REDEMPTION BY WIRE OR TELEPHONE -- Investors may redeem Fund shares by wire
or telephone. The redemption proceeds will be paid by wire transfer.
Investors can redeem shares by telephone by calling one of the telephone
numbers listed under "General Information." The Fund reserves the right to
refuse any request made by wire or telephone and may limit the amount
involved or the number of telephone redemptions. This procedure may be
modified or terminated at any time by the Transfer Agent or the Fund. The
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.
Page 9
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
Dreyfus Institutional Services Division at one of the telephone numbers
listed under "General Information" to determine whether their computer
facilities are compatible and to receive instructions for redeeming shares in
this manner.
SERVICE PLAN
(Class B Only)
Class B shares are subject to a Service Plan adopted pursuant to Rule
12b-1 under the 1940 Act. 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. The Dreyfus Corporation, and not the
Fund, currently reimburses Dreyfus Service Corporation for any such allocated
expenses. See "Management of the Fund."
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 investor is entitled
are paid along with the proceeds of the redemption. An omnibus accountholder
may indicate in a partial redemption request that a portion of any accrued
dividends to which such account is entitled belongs to an underlying
accountholder who has redeemed all shares in his or her account, and such
portion of the accrued dividends will be paid to the accountholder 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 1940 Act. The
Fund will not make distributions from net realized securities gains unless
capital loss carryovers, if any, have
Page 10
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 in 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.
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.
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, 1995 as a "regulated investment company"
under the Code. The Fund intends to continue to so qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax to
the extent its earnings are distributed in accordance with applicable
provisions of
Page 11
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 1940 Act, 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 Fund's
Board 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 or
outside New York State, 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.
Page 12
APPENDIX
INVESTMENT TECHNIQUES
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. In connection with such
loans, the Fund continues to be entitled to payments in amounts equal to the
interest or other distributions payable on the loaned securities. Loans of
portfolio securities afford the Fund an opportunity to earn interest on the
amount of the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities 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 which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such loans are terminable by the Fund 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.
BORROWING MONEY AND REVERSE REPURCHASE AGREEMENTS -- The Fund may borrow for
temporary and 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 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 the expiration of the reverse repurchase
agreement. At an agreed upon future date, the Fund repurchases the security,
at principal, plus accrued interest.
The Fund may borrow money from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser or cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While such borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
FORWARD COMMITMENTS -- The Fund may purchase money market instruments on a
forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate that will be received
on a forward commitment or when-issued security are fixed at the time the
Fund enters into the commitment. However, the Fund does not make a payment
until it receives delivery from the other party to the transaction. The Fund
will make commitments to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. A segregated account of
the Fund consisting of cash, cash equivalents or U.S. Government securities
or other high quality liquid debt securities at least equal at all times to
the amount of the commitments will be established and maintained at the
Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT 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 are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. While the U.S. Government currently provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS -- In a repurchase agreement, the Fund buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thereby
Page 13
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of the underlying
securities. TheFund may enter into repurchase agreements with certain banks
or non-bank dealers.
BANK OBLIGATIONS -- The Fund may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Fund may be subject to
additional investment risks that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER -- Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Fund will consist only of direct obligations issued by
domestic and foreign entities. The other corporate obligations in which the
Fund may invest consist of high quality, U.S. dollar denominated short-term
bonds and notes (including variable amount master demand notes) issued by
domestic and foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS -- The Fund may purchase floating and
variable rate demand notes and bonds, which are obligations ordinarily having
stated maturities in excess of 13 months, but which permit the holder to
demand payment of principal at any time, or at specified intervals not
exceeding 13 months, in each case upon not more than 30 days' notice.
Variable rate demand notes include master demand notes which are obligations
that permit the Fund to invest fluctuating amounts, at varying rates of
interest, pursuant to direct arrangements between the Fund, as lender, and
the borrower. These obligations permit daily changes in the amounts borrowed.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand.
ILLIQUID SECURITIES -- The Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
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
PROSPECTUS
DREYFUS
CASH
MANAGEMENT PLUS, INC.
(LION LOGO)
1996COPYRIGHT LOGO DREYFUS SERVICE CORPORATION
719P020196
__________________________________________________________________________
DREYFUS CASH MANAGEMENT PLUS, INC.
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
FEBRUARY 1, 1996
AS REVISED JULY 3, 1996
__________________________________________________________________________
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 February 1,
1996, 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:
In New York State -- Call 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 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-6
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . .B-9
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . .B-11
Service Plan (Class B Only) . . . . . . . . . . . . . . . . . . . . . . .B-11
Shareholder Services Plan (Class A Only). . . . . . . . . . . . . . . . .B-12
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . .B-13
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . .B-14
Investor Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-15
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . .B-15
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . .B-16
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-16
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . .B-17
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . . . .B-17
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-18
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . .B-20
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . .B-29
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
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 $1 billion, or
primary government securities dealers reporting to the Federal Reserve
Bank of New York, with respect to securities of the type in which the Fund
may invest, and will require that additional securities be deposited with
it if the value of the securities purchased should decrease below the
resale price.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops for certain restricted securities purchased
by the Fund pursuant to Rule 144A under the Securities Act of 1933, as
amended, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board. 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 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.
Management Policies
Lending Portfolio Securities. In connection with its securities
lending transactions, 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.
Reverse Repurchase Agreements. To the extent the Fund enters into a
reverse repurchase agreement, the Fund will maintain in a segregated
custodial account cash 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 transactions as collateralized borrowings by the Fund, and
pursuant to the Investment Company Act of 1940, as amended (the "1940
Act"), 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 required coverage should decline as a
result of market fluctuations or other reasons, the Fund may be required
to sell some of its portfolio securities within three days to reduce the
amount of its borrowings and restore the 300% asset coverage, even though
it may be disadvantageous from an investment standpoint to sell securities
at that time.
Forward Commitments. Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally changing in
the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception
of the creditworthiness of the issuer and changes, real or anticipated, in
the level of interest rates. Securities purchased on a forward commitment
or when-issued basis may expose the Fund to risks because they may
experience such fluctuations prior to their actual delivery. Purchasing
securities on a when-issued basis can involve the additional risk that the
yield available in the market when the delivery takes place actually may
be higher than that obtained in the transaction itself. Purchasing
securities on a forward commitment or when-issued basis when the Fund is
fully or almost fully invested may result in greater potential fluctuation
in the value of the Fund's net assets and its net asset value per share.
Investment Restrictions
The Fund has adopted the investment restrictions numbered 1 through
11 as fundamental policies, which cannot be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting shares. Investment restrictions numbered 12 and 13 are
not fundamental policies and may be changed by vote of a majority of the
Fund's Board members 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 shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members 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 Board member who is deemed to be an
"interested person" of the Fund, as defined in the 1940 Act, is indicated
by an asterisk.
Board Members of the Fund
*DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 to February 1995, Mr.
Burke was a Consultant to the Manager and from October 1990 to August
1994, he was Vice President and Chief Administrative Officer of the
Manager. From 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.
Mr. Burke is 58 years old and his address is 200 Park Avenue, New
York, N.Y. 10166.
ISABEL P. DUNST, Board Member. Partner in the law firm of Hogan & Hartson
since 1990. From 1986 to 1990, Deputy General Counsel of the United
States Department of Health and Human Services. She is also a
Trustee of the Clients Security Fund of the District of Columbia Bar
and a Trustee of Temple Sinai. Ms. Dunst is 48 years old and her
address is c/o Hogan & Hartson, Columbia Square, 555 Thirteenth
Street, N.W., Washington, D.C. 20004-1109.
LYLE E. GRAMLEY, Board Member. 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. From 1980 to 1985, member of
the Board of Governors of the Federal Reserve System. Mr. Gramley is
68 years old and his address is 12901 Three Sisters Road, Potomac,
Maryland 20854.
WARREN B. RUDMAN, Board Member. Since January 1993, Partner in the law
firm Paul, Weiss, Rifkind, Wharton & Garrison. From January 1981 to
January 1993, Mr. Rudman served as a United States Senator from the
State of New Hampshire. Since May 1995, Mr. Rudman has served as a
director of Collins & Aikman Corporation. Since January 1993, Mr.
Rudman has served as a director of Chubb Corporation and of the
Raytheon Company. He has served as Vice Chairman of the President's
Foreign Intelligence Advisory Board since January 1993. From January
1993 to December 1994, Mr. Rudman served as Vice Chairman of the
Federal Reserve Bank of Boston. Since 1988, Mr. Rudman has served as
a trustee of Boston College and since 1986 as a member of the Senior
Advisory Board of the Institute of Politics of the Kennedy School of
Government at Harvard University. Mr. Rudman is 65 years old and his
address is 1615 L Street, N.W., Suite 1300, Washington, D.C. 20036.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the Board
members of the Fund who are not "interested persons" of the Fund, as
defined in the 1940 Act, will be selected and nominated by the Board
members who are not "interested persons" of the Fund.
Board members are entitled to receive an annual retainer and a per
meeting fee and reimbursement for their expenses. Emeritus Board members
are entitled to receive an annual retainer and a per meeting fee of one-
half the amount paid to them as Board members. The aggregate amount of
compensation payable to each Board member by the Fund for the fiscal year
ended September 30, 1995, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for
the year ended December 31, 1994, were as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual from Fund and
Name of Board Compensation from Accrued as Part of Benefits Upon Fund Complex Paid
Member Fund(*)(+) Fund's Expenses Retirement to Board Member
<S> <C> <C> <C> <C>
David W. Burke $5,000 none none $36,311 (52)
Isabel P. Dunst $5,000 none none $40,692 (7)
Lyle E. Gramley $5,000 none none $40,692 (7)
Warren B. Rudman $5,000 none none $76,544 (17)
_____________________________________
(*) Amount does not include reimbursed expenses for attending Board meetings, which
amounted to $467.06 for all Board members as a group.
(+) The aggregate compensation payable to each Board member by the Fund was paid by the
Manager and not the Fund.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Executive
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., the ultimate parent of which is
Boston Institutional Group, Inc. Prior to December 1991, she served
as Vice President and Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President -
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray. He is 31 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was manager of the High Performance Fabric Division
of Springs Industries Inc. He is 34 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 31 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 26 years
old.
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. He is 33
years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was an
Assistant Vice President in the Mutual Fund Accounting Department of
the Manager. He is 60 years old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the Distributor
and an officer of other investment companies advised or administered
by the Manager. From June 1992 to April 1995, she was a Medical
Coordination Officer at ORBIS International. Prior to June 1992, she
worked as a Program Coordinator at Physicians World Communications
Group. She is 27 years old.
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 January 3, 1996.
The following shareholders are known by the Fund to own of record 5%
or more of the Fund's Class A shares outstanding on January 3, 1996: (1)
Comerica Bank, 100 Renaissance Center, Suite 9, Detroit, MI 48243-1006
(5.68%); and (2) International Business Machines Corporation, Old Orchard
Road, Armonk, NY 10504 (5.38%). No shareholder is known by the Fund to
own beneficially 5% or more of the Fund's Class A shares outstanding on
January 3, 1995.
The following shareholders are known by the Fund to own of record 5%
or more of the Fund's Class B shares outstanding on January 3, 1996: (1)
Capital Network Services, 1 Bush Street, 11th Floor, San Francisco, CA
94104-4425 (42.72%); (2) Barnett Bank of Jacksonville, N.A., P.O. Box
45147, Jacksonville, FL 32232-5147 (35.05%). No shareholder is known by
the Fund to own beneficially 5% or more of the Fund's common stock
outstanding on January 3, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board or (ii)
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund or the Manager, by vote
cast in person at a meeting called for the purpose of voting on such
approval. Shareholders approved the Agreement on August 5, 1994 and the
Fund's Board, including a majority of the Board members who are not
"interested persons" of any party to the Agreement, last voted to approve
the Agreement at a meeting held on May 24, 1995. The Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority of the Fund's shares or, 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 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President,
Chief Operating Officer and a director; Stephen E. Canter, Vice Chairman,
Chief Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; William T. Sandalls, Jr., Vice President
and Chief Financial Officer; Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional Sales;
William G. Glavin, Jr., Vice President-Corporate Development; Mark N.
Jacobs, Vice President-Fund Legal and Secretary; Daniel C. Maclean, Vice
President and General Counsel; Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Andrew S. Wasser, Vice President-Information Services;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene
and Julian M. Smerling, 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. The Manager is responsible for investment decisions, and
provides the Fund with portfolio managers who are authorized by the Board
to execute purchases and sales of securities. The Fund's portfolio
managers are Robert Fort, Bernard W. Kiernan, Jr., Garitt Kono 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 to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services 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, 1993, 1994 and 1995 were $7,263,870, $5,287,681 and
$8,013,464, respectively. The amounts payable in fiscal 1993 and 1994
were reduced pursuant to an undertaking by the Manager, resulting in net
management fees paid of $5,735,796 in fiscal 1993 and $4,898,028 in fiscal
1994.
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 on
a best efforts basis 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. In
some states, banks or other financial institutions effecting transactions
in Fund shares may be required to register as dealers pursuant to state
law.
Using Federal Funds. Dreyfus Transfer, 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.
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 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
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 providing 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 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 Board for its 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 Fund's Board and by the Board members
who are not "interested persons" (as defined in the 1940 Act) of the Fund
and have no direct or indirect financial interest in the operation of the
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 cast in person at a meeting called for the purpose
of voting on the Service Plan. The Service Plan was so approved by the
Fund's Board at a meeting held on May 24, 1995. The Service Plan may be
terminated at any time by vote of a majority of the Board members who are
not "interested persons" and have no direct or indirect financial interest
in the operation of the 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 fiscal year ended September 30, 1995, the Fund paid $245,822
pursuant to the Service Plan, of which $233,500 was paid to the
Distributor as reimbursement for distributing Class B shares, and $12,322
was paid to Dreyfus for advertising and marketing Class B shares and for
providing services to Class B shareholders.
SHAREHOLDER SERVICES PLAN
(CLASS A ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund has agreed to reimburse the Dreyfus Service
Corporation for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts with respect to Class A shares
only. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services related
to the maintenance of 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
Fund's Board for its review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of
the Fund or the Manager and have no direct or indirect financial interest
in the operation of the Plan, 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 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 Board members who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Plan.
For the fiscal year ended September 30, 1995, no amounts were paid by
the Fund with respect to Class A shares under the Plan. See "Management
of the Fund."
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Redemption by Wire or Telephone. By using this procedure, the
investor authorizes the Transfer Agent to act on wire or telephone
redemption instructions from any person representing himself or herself to
be an authorized representative of the investor, and reasonably believed
by the Transfer Agent to be genuine. Ordinarily, the Fund will initiate
payment for shares redeemed pursuant to this procedure on the same
business day if Dreyfus Institutional Services Division receives the
redemption request in proper form in New York by 5:00 p.m., 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 Fund's Board reserves the right to make payments in whole or
in part in securities or other assets of the Fund in case of an emergency
or any time a cash distribution would impair the liquidity of the Fund to
the detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient 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 Fund's Board 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 Fund's Board, 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 Fund's Board.
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 Fund's Board. If such
deviation exceeds 1/2 of 1%, the Fund's Board will consider promptly what
action, if any, will be initiated. In the event the Fund's Board
determines that a deviation exists which may result in material dilution
or other unfair results to investors or existing shareholders, it has
agreed to take such corrective action as it regards as necessary and
appropriate including: selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value 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.
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 Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares will be exchanged at the net asset
value next determined after receipt of an exchange request in proper form.
Shares in certificate form are not eligible for telephone exchange.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for shares of the Fund, shares of
Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus
Institutional Short Term Treasury Fund, 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.
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.
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, 1995, the yield and
effective yield for Class A shares was 5.84% and 6.01%, respectively, and
for Class B shares was 5.58% and 5.74%, 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 January 5, 1996, the total net assets of the Dreyfus
Family of Cash Management Funds amounted to approximately $21.4 billion.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
transfer and dividend disbursing agent. Under a transfer agency agreement
with the Fund, the Transfer Agent arranges for the maintenance of
shareholder account records for the Fund, the handling of certain
communications between shareholders and the Fund and the payment of
dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of the number
of shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. The Bank of New York, 90
Washington Street, New York, New York 10286, acts as custodian of the
Fund's investments. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, serves as a sub-custodian of the
Fund's investments. The Transfer Agent, The Bank of New York 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 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 Ratings
Group ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, L.P. ("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, 1995
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-43.6% AMOUNT VALUE
---------------- ---------------
<S> <C> <C>
Bank of Tokyo Ltd. (Yankee)
5.94%-5.95%, 12/5/95-1/16/96............................................ $ 200,000,000 $ 200,000,889
Bayerische Landesbank Girozentrale (London)
5.65%, 10/5/95.......................................................... 45,000,000 45,001,374
Bayerische Vereinsbank AG (London)
6.02%-6.16%, 7/17/96-8/27/96............................................ 314,000,000 314,000,000
Canadian Imperial Bank of Commerce (London)
6.04%-6.09%, 7/29/96-8/14/96............................................ 200,000,000 200,000,000
Commerzbank AG (Yankee)
6.33%-6.39%, 10/10/95-3/8/96............................................ 27,000,000 27,024,034
Dai-Ichi Kangyo Bank Ltd. (London)
5.79%-6.46%, 10/12/95-5/7/96............................................ 170,000,000 170,003,064
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.98%-6.50%, 12/20/95-1/2/96............................................ 65,000,000 65,029,385
Deutsche Bank AG (London)
6.02%, 8/16/96.......................................................... 75,000,000 75,000,000
Dresdner Bank AG (Yankee)
6.30%, 3/29/96.......................................................... 10,000,000 10,011,278
Industrial Bank of Japan Ltd. (Yankee)
5.82%-5.98%, 12/6/95-1/22/96............................................ 180,000,000 180,001,225
Mitsubishi Bank Ltd. (London)
5.77%-5.89%, 10/12/95-12/13/95.......................................... 145,000,000 145,000,955
Mitsubishi Bank Ltd. (Yankee)
6.11%-6.57%, 12/8/95-1/31/96............................................ 104,000,000 104,113,766
Sanwa Bank Ltd. (London)
5.80%-5.93%, 10/13/95-7/12/96........................................... 80,000,000 80,000,197
Sanwa Bank Ltd. (Yankee)
5.83%-6.52%, 11/10/95-1/24/96........................................... 164,000,000 163,997,686
Societe Generale (London)
6.08%, 8/15/96.......................................................... 100,000,000 99,997,428
Societe Generale (Yankee)
6.30%-6.42%, 12/15/95-3/22/96........................................... 60,000,000 60,019,544
Sumitomo Bank Ltd. (Foreign)
5.97%, 12/5/95.......................................................... 30,000,000 30,001,442
Sumitomo Bank Ltd. (Yankee)
5.97%-6.12%, 12/5/95-1/2/96............................................. $ 105,000,000 $ 105,000,911
------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $2,074,203,178)................................................... $2,074,203,178
==============
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1995
PRINCIPAL
BANKERS' ACCEPTANCES-1.8% AMOUNT VALUE
---------------- ----------------
Bank of Tokyo Ltd. (Yankee)
5.77%-5.99%, 10/20/95-12/11/95.......................................... $ 47,250,000 $ 46,902,370
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.80%-6%, 11/28/95-2/7/96............................................... 35,000,000 34,464,429
Sanwa Bank Ltd. (Yankee)
5.94%, 1/17/96.......................................................... 5,000,000 4,912,850
------------
TOTAL BANKERS' ACCEPTANCES
(cost $86,279,649)...................................................... $ 86,279,649
=============
COMMERCIAL PAPER-10.4%
Abbey National North America
6.50%, 1/2/96........................................................... $ 50,000,000 $ 49,199,167
Bankers Trust New York Corp.
5.81%, 3/15/96.......................................................... 25,000,000 24,349,833
Chrysler Financial Corp.
5.94%-6%, 11/22/95-12/1/95.............................................. 55,000,000 54,493,556
General Motors Acceptance Corp.
5.80%-6.36%, 10/13/95-2/26/96........................................... 56,000,000 55,278,188
Lehman Brothers Holdings Inc.
5.90%, 6/7/96 (a)....................................................... 50,000,000 50,000,000
Merrill Lynch & Co. Inc.
6.19%, 2/2/96........................................................... 60,000,000 58,776,533
Mitsubishi Motor Credit of America
5.86%-5.92%, 10/25/95-1/19/96 (b)....................................... 65,000,000 64,406,897
Sears Roebuck Acceptance Corp.
6.40%, 10/2/95.......................................................... 10,000,000 9,998,278
Spintab AB
5.85%-6.11%, 10/20/95-12/27/95.......................................... 80,000,000 79,221,070
SwedBank Inc.
5.89%, 12/18/95......................................................... 50,000,000 49,378,708
----------
TOTAL COMMERCIAL PAPER
(cost $495,102,230)..................................................... $ 495,102,230
============
CORPORATE NOTES-17.6%
Avco Financial Services Inc.
6.03%, 4/1/96 (a)....................................................... $ 90,000,000 $ 90,000,000
Bear Stearns Companies Inc.
5.46%-6.06%, 1/26/96-6/10/96 (a)........................................ 145,000,000 145,000,000
Comerica Bank
5.90%, 7/26/96 (a)...................................................... 50,000,000 49,998,795
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1995
PRINCIPAL
CORPORATE NOTES (CONTINUED) AMOUNT VALUE
---------------- ----------------
General Electric Capital Corp.
6.03%-6.10%, 2/9/96-4/12/96 (a)......................................... $ 105,000,000 $ 104,990,319
Lehman Brothers Holdings Inc.
6.20%, 5/16/96 (a)...................................................... 100,000,000 100,000,000
Merrill Lynch & Co. Inc.
5.95%-6.14%, 3/13/96-9/24/96 (a)........................................ 150,000,000 149,987,073
PHH Corp.
5.91%, 8/19/96 (a)...................................................... 100,000,000 99,981,637
Westdeutsche Landesbank Girozentrale
5.94%, 12/13/95......................................................... 98,500,000 98,703,180
------------
TOTAL CORPORATE NOTES
(cost $838,661,004)..................................................... $838,661,004
============
PROMISSORY NOTES-4.7%
Goldman Sachs Group L.P.
5.81%-6.15%, 11/7/95-1/18/96 (c,d)
(cost $223,000,000)..................................................... $ 223,000,000 $ 223,000,000
============
SHORT-TERM BANK NOTES-7.7%
First National Bank of Boston
5.94%-5.97%, 7/5/96-7/12/96 (a)......................................... $ 265,000,000 $ 265,000,000
Morgan Guaranty Trust Co.
5.95%, 7/18/96.......................................................... 50,000,000 50,000,000
NationsBank of Texas
6.15%, 8/28/96.......................................................... 50,000,000 50,000,000
------------
TOTAL SHORT-TERM BANK NOTES
(cost $365,000,000)..................................................... $ 365,000,000
============
U.S. GOVERNMENT AGENCY-12.0%
Federal Farm Credit Banks, Floating Rate Notes
6.05%, 9/30/96 (a)...................................................... $ 20,000,000 $ 20,000,000
Federal Home Loan Banks, Floating Rate Notes
5.96%, 7/10/97 (a)...................................................... 200,000,000 200,000,000
Federal National Mortgage Association, Floating Rate Notes
5.85%-6.21%, 2/14/97-6/19/98 (a)........................................ $ 350,000,000 $ 349,896,710
------------
TOTAL U.S. GOVERNMENT AGENCY
(cost $569,896,710)..................................................... $ 569,896,710
============
TIME DEPOSITS-3.0%
Fleet Bank of New York N.A. (Cayman)
6.50%, 10/2/95
(cost $142,256,000)..................................................... $ 142,256,000 $ 142,256,000
============
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1995
PRINCIPAL
AMOUNT VALUE
---------------- ----------------
TOTAL INVESTMENTS
(cost $4,794,398,771)......................................... 100.8% $4,794,398,771
====== ==============
LIABILITIES, LESS
CASH AND RECEIVABLES.......................................... (.8%) $ (36,910,666)
====== ==============
NET ASSETS ................................................. 100.0% $4,757,488,105
====== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Variable interest rate - subject to periodic change.
(b) Backed by an irrevocable letter of credit.
(c) This note was acquired for investment, not with the intent to
distribute or sell.
(d) Securities restricted as to public resale. These securities were
acquired from 4/10/95 to 9/11/95 at a cost of par value. At September
30, 1995, the value of these securities is $223 million, representing
approximately 4.7% of net assets and are valued at amortized cost.
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $4,794,398,771
Interest receivable..................................................... 48,473,075
--------------
4,842,871,846
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 1,054,396
Due to Custodian........................................................ 54,255,272
Due to Distributor...................................................... 74,073
Payable for investment securities purchased............................. 30,000,000 85,383,741
------------ -------------
NET ASSETS ................................................................ $4,757,488,105
==============
REPRESENTED BY:
Paid-in capital......................................................... $4,758,411,328
Accumulated net realized (loss) on investments.......................... (923,223)
--------------
NET ASSETS at value......................................................... $4,757,488,105
==============
Shares of Common Stock outstanding:
Class A Shares
(15 billion shares of $.001 par value shares authorized).............. 4,405,908,812
==============
Class B Shares
(15 billion shares of $.001 par value shares authorized).............. 352,502,516
==============
NET ASSET VALUE per share:
Class A Shares
($4,404,988,961 / 4,405,908,812 shares)............................... $1.00
=====
Class B Shares
($352,499,144 / 352,502,516 shares)................................... $1.00
=====
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 240,739,171
EXPENSES:
Management fee-Note 2(a).............................................. $ 8,013,464
Distribution fees (Class B shares)-Note 2(b).......................... 245,822
------------
TOTAL EXPENSES.................................................... 8,259,286
----------
INVESTMENT INCOME-NET....................................................... 232,479,885
NET REALIZED GAIN ON INVESTMENTS--Note 1(b)................................. 61,322
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 232,541,207
=============
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CASH MANAGEMENT PLUS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
---------------------------------------
1994 1995
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................... $ 92,366,365 $ 232,479,885
Net realized gain (loss) on investments............................. (956,312) 61,322
------------ -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 91,410,053 232,541,207
------------ -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares.................................................... (92,295,952) (226,918,456)
Class B shares.................................................... (70,413) (5,561,429)
------------ -------------
TOTAL DIVIDENDS............................................... (92,366,365) (232,479,885)
------------ -------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A shares.................................................... 31,741,072,296 57,520,547,392
Class B shares.................................................... 16,083,958 1,165,069,960
Dividends reinvested:
Class A shares.................................................... 18,340,378 54,890,923
Class B shares.................................................... 69,835 5,333,819
Cost of shares redeemed:
Class A shares.................................................... (32,868,317,086) (55,063,997,497)
Class B shares.................................................... (10,065,036) (823,990,020)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS.......................................... (1,102,815,655) 2,857,854,577
============ =============
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... . (1,103,771,967) 2,857,915,899
NET ASSETS:
Beginning of year................................................... 3,003,344,173 1,899,572,206
------------ -------------
End of year......................................................... $ 1,899,572,206 $ 4,757,488,105
============ =============
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
February 1, 1996.
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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales load. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
The Fund offers both Class A and Class B shares. Class B shares are
subject to a Service Plan adopted pursuant to Rule 12b-1 under the Act. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of 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 $885,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through September 30, 1995 which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, $22,000 of the carryover
expires in fiscal 1997, $3,000 expires in fiscal 1999, $3,000 expires in
fiscal 2000, $46,000 expires in fiscal 2002 and $811,000 expires in fiscal
2003.
At September 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS CASH MANAGEMENT PLUS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .20 of 1% of the average
daily value of the Fund's net assets and is payable monthly.
Unless the Manager gives the Fund's investors 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:
the management fee, and with respect to the Fund's Class B shares, Rule 12b-1
Service Plan expenses.
(B) Under the Class B Service Plan (the "Plan") adopted pursuant to Rule
12b-1 under the Act, the Fund (a) reimburses the Distributor for distributing
the Fund's Class B shares and (b) pays the Manager and Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, 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 Class B shares average daily net
assets. Both the Distributor and Dreyfus may pay one or more Service Agents a
fee in respect of the Fund's Class B shares owned by the shareholders with
whom the Service Agent has a Servicing relationship or for whom the Service
Agent is the dealer or holder of record. Both the Distributor and Dreyfus
determine the amounts, if any, to be paid to the Service Agents under the
Plan and the basis on which such payments are made. The fees payable under
the Plan are payable without regard to actual expenses incurred. During the
year ended September 30, 1995, $245,822 was charged to the Fund pursuant to
the Plan.
(D) Each director who is not an "affiliated person" as defined in the Act
receives an annual fee of $3,000 and an attendance fee of $500 per meeting.
DREYFUS CASH MANAGEMENT PLUS, INC.
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, 1995, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1995 by correspondence with the custodian
and brokers. 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, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
November 2, 1995
