FOR USE BY BANKS ONLY
June 1, 1995
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
Supplement to Prospectus Dated June 1, 1995
All mutual fund shares involve certain investment risks, including
the possible loss of principal.
758/s060195IST
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PROSPECTUS JUNE 1, 1995
DREYFUS NEW JERSEY MUNICIPAL
MONEY MARKET FUND, INC.
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DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC. (THE "FUND") IS
AN OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL OF
CURRENT INCOME EXEMPT FROM FEDERAL AND NEW JERSEY INCOME TAXES AS IS
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JUNE 1, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
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TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.................... 3
Condensed Financial Information................... 3
Yield Information................................. 4
Description of the Fund........................... 4
Management of the Fund............................ 10
How to Buy Fund Shares............................ 11
Shareholder Services.............................. 13
How to Redeem Fund Shares......................... 15
Shareholder Services Plan......................... 18
Dividends, Distributions and Taxes................ 18
General Information............................... 20
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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This Page Intentionally Left Blank
Page 2
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees ............................................ .50%
Other Expenses.............................................. .14%
Total Fund Operating Expenses............................... .64%
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $7 $20 $36 $80
</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 you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect. You can
purchase Fund shares without charge directly from the Fund's distributor; you
may be charged a nominal fee if you effect transactions in Fund shares
through a securities dealer, bank or other financial institution. See
"Management of the Fund" and "Shareholder Services Plan."
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. The information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
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PER SHARE DATA: 1989(1) 1990 1991 1992 1993 1994 1995
------ ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- -------- -------- -------- -------- ------- --------
INVESTMENT OPERATIONS:
Investment income-net............. .0361 .0615 .0567 .0415 .0265 .0210 .0252
Net realized and unrealized gain
(loss) on investments........... -- -- -- -- -- -- (.0001)
------- -------- -------- -------- -------- ------- --------
TOTAL FROM INVESTMENT OPERATIONS.... .0361 .0615 .0567 .0415 .0265 .0210 .0251
------- -------- -------- -------- -------- ------- --------
DISTRIBUTIONS:
Dividends from investment income-net... (.0361) (.0615) (.0567) (.0415) (.0265) (.0210)
(.0252) Dividends from net realized
gain on investments............. -- -- -- -- -- -- --
------- -------- -------- -------- -------- ------- --------
TOTAL DISTRIBUTIONS............. (.0361) (.0615) (.0567) (.0415) (.0265) (.0210) (.0252)
------- -------- -------- -------- -------- ------- --------
Net asset value, end of year...... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $.9999
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN............... 5.95%(2) 6.33% 5.83% 4.22% 2.68% 2.12% 2.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... -- .23% .16% .17% .32% .35% .42%
Ratio of net investment income
to average net assets........... 6.06%(2) 6.13% 5.66% 4.14% 2.65% 2.10% 2.52%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation..... .79%(2) .42% .45% .45% .32% .30% .22%
Net Assets, end of year (000's Omitted).... $294,011 $501,475 $848,608 $823,739 $781,600 $778,236 $772,913
- ------------------------
(1) From June 21, 1988 (commencement of operations) to January 31, 1989.
(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."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, such information under certain conditions may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla.
33408, IBC/Donoghue's Money Fund ReportRegistration Mark, Morningstar, Inc.
and other industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE _ The Fund's goal is to provide you with as high a
level of current income exempt from Federal and New Jersey income taxes as is
consistent with the preservation of capital and the maintenance of liquidity.
To accomplish this goal, the Fund invests primarily in the debt securities of
the State of New Jersey, its political subdivisions, authorities and
corporations, and certain other specified securities, the interest from which
is, in the opinion of bond counsel to the issuer, exempt from Federal and New
Jersey income taxes (collectively, "New Jersey Municipal Obligations"). To
the extent acceptable New Jersey Municipal Obligations are at any time
unavailable for investment by the Fund, the Fund will invest temporarily in
other debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal, but not New Jersey income taxes.
The Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940) of
the Fund's outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved. Securities in which the Fund
invests may not earn as high a level of current income as long-term or lower
quality securities which generally have less liquidity, greater market risk
and more fluctuation in market value.
MUNICIPAL OBLIGATIONS _ Debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax
("Municipal Obligations") generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases,
Page 4
from the proceeds of a special excise or other specific revenue source, but
not from the general taxing power. Tax exempt industrial development bonds,
in most cases, are revenue bonds that do not carry the pledge of the credit of
the issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other revenues.
Municipal Obligations include municipal lease/purchase agreements which are
similar to installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates
of interest.
MANAGEMENT POLICIES _ It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations. Under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in New Jersey Municipal Obligations and the remainder may be
invested in securities that are not New Jersey Municipal Obligations and
therefore may be subject to New Jersey income taxes. See "Risk
Factors_Investing in New Jersey Municipal Obligations" below, and "Dividends,
Distributions and Taxes."
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940, certain requirements of which are summarized as follows. In
accordance with Rule 2a-7, the Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in U.S. dollar
denominated securities determined in accordance with procedures established
by the Board of Directors to present minimal credit risks and which are rated
in one of the two highest rating categories for debt obligations by at least
two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated only by one such organization) or,
if unrated, are of comparable quality as determined in accordance with
procedures established by the Board of Directors. The nationally recognized
statistical rating organizations currently rating instruments of the type the
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch") and
their rating criteria are described in Appendix B to the Fund's Statement of
Additional Information. For further information regarding the amortized cost
method of valuing securities, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information. There can be no assurance that
the Fund will be able to maintain a stable net asset value of $1.00 per
share.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security also
would affect the other securities; for example, securities the interest upon
which is paid from revenues of similar types of projects. As a result, the
Fund may be subject to greater risk as compared to a fund that does not
follow this practice.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest div-
Page 5
idend paid by the investment company may be treated as such a preference item
to shareholders. The Fund may invest without limitation in such Municipal
Obligations if The Dreyfus Corporation determines that their purchase is
consistent with the Fund's investment objective. See "Risk Factors _ Other
Investment Considerations" below.
The Fund may purchase floating and variable rate demand notes and
bonds, which are tax exempt obligations ordinarily having stated maturities
in excess of 13 months, but which permit the holder to demand payment of
principal at any time, or at specified intervals not exceeding 13 months, in
each case upon not more than 30 days' notice. Variable rate demand notes
include master demand notes which are obligations that permit the Fund to
invest fluctuating amounts, at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
permit daily changes in the amounts borrowed. Frequently, such obligations
are secured by letters of credit or other credit support arrangements
provided by banks. Use of letters of credit or other credit support
arrangements will not adversely affect the tax exempt status of these
obligations. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand. Each obligation purchased by the Fund will meet the
quality criteria established for the purchase of Municipal Obligations. The
Dreyfus Corporation, on behalf of the Fund, will consider on an ongoing basis
the creditworthiness of the issuers of the floating and variable rate demand
obligations in the Fund's portfolio.
The Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the Fund
an undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated, or has been given a rating below that
which otherwise is permissible for purchase by the Fund, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank that the Board of Directors has determined meets the prescribed quality
standards for banks set forth below, or the payment obligation otherwise will
be collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. As to these instruments,
the Fund intends to exercise its right to demand payment only upon a default
under the terms of the Municipal Obligation, as needed to provide liquidity
to meet redemptions, or to maintain or improve the quality of its investment
portfolio.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement)
having a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing
or similar agent
Page 6
at or near the commencement of such period, that would cause the securities,
coupled with the tender option, to trade at par on the date of such
determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the issuers of the
underlying Municipal Obligations, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a default in
payment of principal or interest on the underlying Municipal Obligations and
for other reasons.
To the extent consistent with the requirements for a "qualified
investment fund" under the New Jersey gross income tax, the Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment therefore is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's
net assets could be adversely affected.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
short-term investments ("Taxable Investments") consisting of: notes of
issuers having, at the time of purchase, a quality rating within the two
highest grades of Moody's, S&P or Fitch; obligations of the U.S. Government,
its agencies or instrumentalities; commercial paper rated not lower than P-2
by Moody's, A-2 by S&P or F-2 by Fitch; certificates of deposit of U.S.
domestic banks, including foreign branches of domestic banks, with assets of
one billion dollars or more; time deposits; bankers' acceptances and other
short-term bank obligations; and repurchase agreements in respect of any of
the foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments. If the Fund purchases Taxable
Investments, it will value them using the amortized cost method and comply
with the provisions of Rule 2a-7 relating to purchases of taxable
instruments. When the Fund has adopted a temporary defensive position,
including when acceptable New Jersey Municipal Obligations are unavailable
for investment by the Fund, in excess of 35% of the Fund's net assets may be
invested in securities that are not exempt from State of New Jersey income
tax. Under normal market conditions, the Fund anticipates that not more than
5% of the value of its total assets will be invested in any one category of
Taxable Investments. Taxable
Page 7
Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
CERTAIN FUNDAMENTAL POLICIES _ The Fund may (i) borrow money from banks, but
only for temporary or emergency (not leveraging) purposes in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While borrowings exceed
5% of the Fund's total assets, the Fund will not make any additional
investments; (ii) pledge, hypothecate, mortgage or otherwise encumber its
assets, but only to secure borrowings for temporary or emergency purposes;
and (iii) invest up to 25% of its total assets in the securities of issuers
in any industry, provided that there is no such limitation on investments in
Municipal Obligations and, for temporary defensive purposes, securities
issued by domestic banks and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940) of the
Fund's outstanding voting shares. See "Investment Objective and Management
Policies_Investment Restrictions" in the Statement of Additional Information.
RISK FACTORS
INVESTING IN NEW JERSEY MUNICIPAL OBLIGATIONS _ You should consider
carefully the special risks inherent in the Fund's investment in New Jersey
Municipal Obligations. If there should be a default or other financial crisis
relating to the State of New Jersey or an agency or municipality thereof, the
market value and marketability of outstanding New Jersey Municipal
Obligations in the Fund's portfolio and interest income to the Fund could be
adversely affected. Although New Jersey enjoyed a period of economic growth
with unemployment levels below the national average during the mid-1980s, the
State's economy slowed down well before the onset of the national recession,
which, according to the National Bureau of Economic Research, began in July
1990. Reflecting the economic downturn, the State's unemployment rate rose
from a low of 3.6% in the first quarter of 1989 to a recessionary peak of
9.3% during 1992. Since then, the State's unemployment rate fell to 6.7%
during the fourth quarter of 1993 and averaged 7.1% during the first nine
months of 1994. As a result of New Jersey's recent fiscal weakness, in July
l991, S&P lowered its rating of the State's general obligation debt from AAA
to AA+. You should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors.
OTHER INVESTMENT CONSIDERATIONS _ Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest rates
and, therefore, are subject to the risk of market price fluctuations. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities.
New issues of Municipal Obligations usually are offered on a
when-issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate that
will be received on the Municipal Obligations are fixed at the time the Fund
enters into the commitment. The Fund will make commitments to purchase such
Municipal Obligations only with the intention of actually acquiring the
securities, but the Fund may sell these securities before the settlement date
if it is deemed advisable, although any gain realized on such sale would be
taxable. The Fund will not accrue income in respect of a when-issued security
prior to its stated delivery date. No additional when-issued commitments will
be made if more than 20% of the value of the Fund's net assets would be so
committed.
Page 8
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value (both
generally changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Municipal Obligations purchased
on a when-issued basis may expose the Fund to risk because they may experience
such fluctuations prior to their actual delivery. Purchasing Municipal
Obligations on a when-issued basis can involve the additional risk that the
yield available in the market when the delivery takes place actually may be
higher than that obtained in the transaction itself. A segregated account of
the Fund consisting of cash, cash equivalents or U.S. Government securities
or other high quality liquid debt securities at least equal at all times to
the amount of the when-issued commitments will be established and maintained
at the Fund's custodian bank. Purchasing Municipal Obligations on a
when-issued basis when the Fund is fully or almost fully invested may result
in greater potential fluctuation in the value of the Fund's net assets and
its net asset value per share.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for
interest on Municipal Obligations may be introduced in the future. If any
such proposal were enacted that would reduce the availability of Municipal
Obligations for investment by the Fund so as to adversely affect Fund
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of
Municipal Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
The Fund's classification as a "non-diversified" investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act of
1940. A "diversified" investment company is required by the Investment
Company Act of 1940 generally to invest, with respect to 75% of its total
assets, not more than 5% of such assets in the securities of a single issuer.
However, the Fund intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Code which requires that,
at the end of each quarter of its taxable year, (i) at least 50% of the
market value of the Fund's total assets be invested in cash, U.S. Government
securities, the securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of the value of
the Fund's total assets, and (ii) not more than 25% of the value of its total
assets be invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies). Since a relatively
Page 9
high percentage of the Fund's assets may be invested in the obligations of a
limited number of issuers, the Fund's portfolio securities may be more
susceptible to any single economic, political or regulatory occurrence than
the portfolio securities of a diversified investment company.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time as
the Fund, available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of February 28, 1995, The Dreyfus Corporation managed or administered
approximately $72 billion in assets for approximately 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$193 billion in assets as of December 31, 1994, including approximately $70
billion in mutual fund assets. As of December 31, 1994, various subsidiaries
of Mellon provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .50 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
January 31, 1995, the Fund paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .28 of 1% of the value of the Fund's
average daily net assets pursuant to various undertakings by The Dreyfus
Corporation. From time to time, The Dreyfus Corporation may waive receipt of
its fees and/or voluntarily assume certain expenses of the Fund, which would
have the effect of lowering the overall expense ratio of the Fund and
increasing yield to investors at the time such amounts are waived or assumed,
as the case may be. The Fund will not pay The Dreyfus Corporation at a later
time for any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers or others in respect of these services.
Page 10
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Share certificates are issued
only upon your written request. No certificates are issued for fractional
shares. It is not recommended that the Fund be used as a vehicle for Keogh,
IRA or other qualified plans. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a fund ad
vised by The Dreyfus Corporation, including members of the Fund's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund account, the minimum
initial investment is $50. In addition, Fund shares are offered without
regard to the minimum initial investment requirements through the Dreyfus
Step Program described under "Shareholder Services." The Fund reserves the
right to vary further the initial and subsequent investment minimum
requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor subseq
uent investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900052309/Dreyfus New
Jersey Municipal Money Market Fund, Inc., for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing your wire
payment
Page 11
to obtain your Fund account number. Please include your Fund account
number on the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S.
banks. A charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent. If you do not
remit Federal Funds, your payment must be converted into Federal Funds. This
usually occurs within one business day of receipt of a bank wire or within
two business days of receipt of a check drawn on a member bank of the Federal
Reserve System. Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into Federal Funds.
Prior to receipt of Federal Funds, your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open for business.
Net asset value per share is computed by dividing the value of the Fund's net
assets (i.e., the value of its assets less liabilities) by the total number
of shares outstanding. See "Determination of Net Asset Value" in the Fund's
Statement of Additional Information.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent, you will receive the
dividend declared that day. If your payments are received in or converted
into Federal Funds after 12:00 Noon, New York time, by the Transfer Agent,
you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares. These orders will become effective at the price determined at 12:00
Noon, New York time, and the shares purchased will receive the dividend on
Fund shares declared on that day, if the telephone order is placed by 12:00
Noon, New York time, and Federal Funds are received by 4:00 p.m., New York
time, on that day.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
Page 12
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES _ You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions are
imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of Personal Retirement Plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the Account, or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange instructions by
calling 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c)
acquired through reinvestment of dividends or distributions paid with respect
to the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent. Any such qualification is
subject to confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in
part. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Page 13
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of other funds in the
Dreyfus Family of Funds of which you are currently an investor. The amount
you designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this
Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to obtain a Dreyfus Auto-Exchange
Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, and the
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load,
Page 14
you may qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject on
redemption to the contingent deferred sales charge, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement of Additional
Information. Dreyfus Dividend ACH permits you to transfer electronically on
the payment date dividends or dividends and capital gain distributions, if
any, from the Fund to a designated bank account. Only an account maintained at
a domestic financial institution which is an Automatic Clearing House member
may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM _ Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Fund's
Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan, as the case may be, as provided
under the terms of such Privilege(s). The Fund reserves the right to redeem
your account if you have terminated your participation in the Program and
your account's net asset value is $500 or less. See "How to Redeem Fund
Shares." The Fund may modify or terminate this Program at any time.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic
Page 15
Withdrawal Plan may be ended at any time by you, the Fund or the Transfer
Agent. Shares for which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL _ You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES _ You may redeem shares by using the regular redemption procedure
through the Transfer Agent, the Check Redemption Privilege, the Wire
Redemption Privilege, the Telephone Redemption Privilege, or the Dreyfus
TELETRANSFER Privilege. The Fund makes available to certain large institutions
the ability to issue redemption instructions through compatible computer
facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to confirm that instructions are genuine
and, if it does not follow such procedures, the Fund or the Transfer Agent
may be liable for any losses due to unauthorized or fraudulent
Page 16
instructions. Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may request on the Account Application,
Shareholder Services Form or by later written request that the Fund provide
Redemption Checks drawn on the Fund's account. Redemption Checks may be made
payable to the order of any person in the amount of $500 or more. Redemption
Checks should not be used to close your account. Redemption Checks are free,
but the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor the Redemption C
heck due to insufficient funds or other valid reason. You should date your
Redemption Checks with the current date when you write them. Please do not
postdate your Redemption Checks. If you do, the Transfer Agent will honor,
upon presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of presentment
for payment, if they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check. This
Privilege may be modified or terminated at any time by the Fund or the
Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day)made out to the owners of record and mailed to your address.
Redemption proceeds of less than $1,000 will be paid automatically by check.
Holders of jointly registered Fund or bank accounts may have redemption
proceeds of not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by call-
Page 17
ing 1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
The Fund reserves the right to refuse any redemption request, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. This Privilege may be modified or
terminated at any time by the Transfer Agent or the Fund. The Fund's Statement
of Additional Information sets forth instructions for transmitting redemption
requests by wire. Shares for which certificates have been issued are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or the Fund.
Shares for which certificates have been issued are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE _ You may redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in one
of these documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate
this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. Shares issued in certificate form are not eligible for this
Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Dividends usually
are paid on the last calendar day of each month and are automatically
reinvested in additional Fund shares at net asset value or, at your option,
Page 18
paid in cash. The Fund's earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. If you redeem all shares
in your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption.
Distributions from net realized securities gains, if any, generally are
declared and paid once a year, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Code, in
all events in a manner consistent with the provisions of the Investment
Company Act of 1940. The Fund will not make distributions from net realized
securities gains unless capital loss carryovers, if any, have been utilized
or have expired. You may choose whether to receive distributions in cash or
to reinvest in additional Fund shares at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to investors.
The Fund intends to be a "qualified investment fund" within the
meaning of the New Jersey gross income tax. The primary criteria for
constituting a "qualified investment fund" are that (i) the Fund is an
investment company registered with the Securities and Exchange Commission
which, for the calendar year in which the dividends and distributions (if
any) are paid, has no investments other than interest-bearing obligations,
obligations issued at a discount, and cash and cash items, including
receivables, and financial options, futures and forward contracts, or other
similar financial instruments relating to interest-bearing obligations,
obligations issued at a discount or bond indexes related thereto and (ii) at
the close of each quarter of the taxable year, the Fund has not less than 80%
of the aggregate principal amount of all of its investments, excluding
financial options, futures and forward contracts, or other similar financial
instruments, related to interest-bearing obligations, obligations issued at a
discount or bond indexes related thereto, cash and cash items, which cash
items shall include receivables, in New Jersey Municipal Obligations,
including obligations of Puerto Rico, the Virgin Islands and other
territories and possessions of the United States and certain other specified
securities exempt from Federal and New Jersey income taxes. Additionally, a
qualified investment fund must comply with certain continuing reporting
requirements.
If the Fund qualifies as a qualified investment fund and the Fund
complies with its reporting obligations, (a) dividends and distributions by
the Fund to a New Jersey resident individual shareholder will not be subject
to New Jersey gross income tax to the extent that the dividends and
distributions are attributable to income earned by the Fund as interest on or
gain from New Jersey Municipal Obligations, and (b) gain from the sale of
Fund shares by a New Jersey resident individual shareholder will not be
subject to the New Jersey gross income tax. Shares of the Fund are not
subject to property taxation by New Jersey or its political subdivisions. To
the extent that you are subject to state and local taxes outside of New
Jersey, dividends and distributions earned by an investment in the Fund may
represent taxable income.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal income tax. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, are subject to Federal income tax as ordinary income,
whether or not reinvested in additional Fund shares. No dividend paid by the
Fund will qualify for the dividends received deduction allowable to certain
U.S. corporations. Distributions from net realized long-term securities gains
of the Fund generally are taxable as long-term capital gains for Federal
income tax purposes if you are 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%. Under the
Code, interest on indebtedness incurred or
Page 19
continued to purchase or carry Fund shares which is deemed to relate to
exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private activity
bonds, the interest from which may be (i) a preference item for purposes of
the alternative minimum tax, (ii) a component of the "adjusted current
earnings" preference item for purposes of the corporate alternative minimum
tax as well as a component in computing the corporate environmental tax or
(iii) a factor in determining the extent to which a shareholder's Social
Security benefits are taxable. If the Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
the tax on Social Security benefits and may cause an investor to be subject
to such taxes.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividends as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or in
terest income on a Federal income tax return. Furthermore, the IRS may notify
the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has not properly reported
taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended January 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on April 4, 1988, and
commenced operations on June 21, 1988. On October 2, 1990, the Fund's name
was changed from Dreyfus New Jersey Tax Exempt Money Market Fund, Inc. to
Dreyfus New Jersey Municipal Money Market Fund, Inc. The
Page 20
Fund is authorized to issue 2 billion shares of Common Stock, par value
$.001 per share. Each share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for the purpose of removing a Director from office and the
holders of at least 25% of such shares may require the Fund to hold a special
meeting of shareholders for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's outstanding
voting shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561; in New York City, call 1-718-895-1206; outside the U. S. and
Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 21
DREYFUS
New Jersey
Municipal
Money Market
Fund, Inc.
Prospectus
(LION LOGO)
Registration Mark
Copy Rights 1995 Dreyfus Service Corporation
758P10060195
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 1, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus New Jersey Municipal Money Market Fund, Inc. (the "Fund"),
dated June 1, 1995, as it may be further revised from time to time. To
obtain a copy of the Fund's Prospectus, please write to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call the
following numbers:
Call Toll Free 1-800-645-6561
In New York City - Call 1-718-895-1206
Outside the U.S. and Canada - Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . . .B-7
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . .B-11
Shareholder Services Plan . . . . . . . . . . . . . . . . . . . . . . . . .B-13
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . .B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . .B-15
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . . . . .B-17
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . . .B-20
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . . .B-21
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-21
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . .B-22
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . . .B-23
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . . . . . .B-23
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-24
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-27
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . .B-31
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . .B-39
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended January 31, 1995, as
computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. or Service, Inc. or Corporation Percentage
("Fitch") ("Moody's") ("S&P") of Value
------------- ------------- ----------- ----------
<S> <C> <C> <C>
F-1+/F-1 MIG1/VMIG1, SP-1+/SP-1, 83.4%
P-1 A1+/A1
AAA/AA Aaa/Aa AAA/AA 7.1%
Not Rated Not Rated Not Rated 9.5%
100.0%
</TABLE>
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity, or solid waste or sewage disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months,
but which permit the holder to demand payment of principal at any time, or
at specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligation plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The Fund will
seek to minimize these risks by investing only in those lease obligations
that (1) are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was
rated by only one such organization) or (2) if unrated, are purchased
principally from the issuer or domestic banks or other responsible third
parties, in each case only if the seller shall have entered into an
agreement with the Fund providing that the seller or other responsible
third party will either remarket or repurchase the lease obligation within
a short period after demand by the Fund. The staff of the Securities and
Exchange Commission currently considers certain lease obligations to be
illiquid. Accordingly, not more than 10% of the value of the Fund's net
assets will be invested in lease obligations that are illiquid and in
other securities that are illiquid. See "Investment Restriction No. 6"
below.
The Fund will not purchase tender option bonds unless (a) the demand
feature applicable thereto is exercisable by the Fund within 13 months of
the date of such purchase upon no more than 30 days' notice and thereafter
is exercisable by the Fund no less frequently than annually upon no more
than 30 days' notice and (b) at the time of such purchase, the Manager
reasonably expects (i) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment and (ii) that the circumstances
which might entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender opportunity.
At the time of each tender opportunity, the Fund will exercise the tender
option with respect to any tender option bonds unless the Manager
reasonably expects, (x) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt
rates will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and (y) that
the circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with
respect to tender option bonds, or otherwise dispose of tender option
bonds, prior to the time the tender option is scheduled to expire pursuant
to the terms of the agreement under which the tender option is granted.
The Fund otherwise will comply with the provisions of Rule 2a-7 in
connection with the purchase of tender option bonds, including, without
limitation, the requisite determination by the Board of Directors that the
tender option bonds in question meet the quality standards described in
Rule 2a-7, which, in the case of a tender option bond subject to a
conditional demand feature, would include a determination that the
security has received both the required short-term and long-term quality
rating or is determined to be of comparable quality. In the event of a
default of the Municipal Obligation underlying a tender option bond, or
the termination of the tender option agreement, the Fund would look to the
maturity date of the underlying security for purposes of compliance with
Rule 2a-7 and, if its remaining maturity was greater than 13 months, the
Fund would sell the security as soon as would be practicable. The Fund
will purchase tender option bonds only when it is satisfied that the
custodial and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of the
underlying Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund. Based on the
tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund,
(a) an issue of rated Municipal Obligations ceases to be rated in the
highest rating category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for its investments in accordance with the
investment policies contained in the Fund's Prospectus and this Statement
of Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of Directors.
Because it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the Fund's Board
of Directors has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.
To the extent that, for a period of time, qualified institutional buyers
cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level
of illiquidity in its portfolio during such period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home
Loan Banks, by the right of the issuer to borrow from the U.S. Treasury;
others, such as those issued by the Federal National Mortgage Association,
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will
always do so, since it is not so obligated by law. The Fund will invest
in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and
Exchange Commission to be loans by the Fund. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total assets in
excess of one billion dollars or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Manager will monitor on
an ongoing basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Risk Factors -- Investing in New Jersey Municipal Obligations.
Investors should consider carefully the special risks inherent in the
Fund's investment in New Jersey Municipal Obligations. These risks result
from the financial condition of the State of New Jersey. If there should
be a default or other financial crisis relating to the State of New Jersey
or an agency of municipality thereof, the market value and marketability
of outstanding New Jersey Municipal Obligations in the Fund's portfolio
and interest income to the Fund could be adversely affected. Although New
Jersey enjoyed a period of economic growth in the mid-1980s, the State's
economy slowed down well before the onset of the national recession which,
according to the National Bureau of Economic Research, began in July 1990.
Reflecting the downturn, the State's unemployment rate rose from a low of
3.6% in the first quarter of 1989 to a recessionary peak of 9.3% during
1992. Since then, the State's unemployment rate fell to 6.7% during the
fourth quarter of 1993 and averaged 7.1% during the first nine months of
1994. As a result of New Jersey's recent fiscal weakness, in July 1991,
S&P lowered its rating of the State's general obligation debt from AAA to
AA+. Investors should review Appendix A which sets forth these and other
risk factors.
Investment Restrictions. The Fund has adopted the following
investment restrictions, except investment restriction number 6, as
fundamental policies. Fundamental policies cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the Fund's outstanding
voting shares. Investment restriction number 6 is a non-fundamental
policy and may be changed by a vote of a majority of the Fund's Directors
at any time. The Fund may not:
1. Purchase securities other than Municipal Obligations and
Taxable Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost
or market, less
liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers, except that the
Fund may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage of
the lower purchase price available.
6. 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.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal
Obligations secured by real estate or interests therein.
8. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to
above and in the Fund's Prospectus.
9. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
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.
For purposes of Investment Restriction No. 9, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
- ---------------------
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Mr.
DiMartino has served as Chairman of the Board for various funds in
the Dreyfus Family of Funds. For more than five years prior thereto,
he was President, a director and, until August 1994, Chief Operating
Officer of the Manager and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager
and, until August 24, 1994, the Fund's distributor. From August 1994
to December 31, 1994, he was a director of Mellon Bank Corporation.
Mr. DiMartino is a director of the Muscular Dystrophy Association; a
trustee of Bucknell University; Chairman of the Board of Noel Group,
Inc.; a director of HealthPlan Services Corporation, Belding
Hemingway Company, Inc., and Curtis Industries, Inc. Mr. DiMartino
is also a Board member of 91 other funds in the Dreyfus Family of
Funds. He is 51 years old and his address is 200 Park Avenue, New
York, New York 10166.
*DAVID W. BURKE, Director. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Vice President and Chief
Administrative Officer of the Manager. From 1977 to 1990, Mr. Burke
was involved in the management of national television news, as Vice-
President and Executive Vice President of ABC News, and subsequently
as President of CBS News. Mr. Burke is also a Board member of 51
other funds in the Dreyfus Family of Funds. He is 59 years old and
his address is 200 Park Avenue, New York, New York 10166.
SAMUEL CHASE, Director. Since 1982, President of Samuel Chase & Company,
Ltd., an economic consulting firm. From 1983 to 1989, Chairman of
Chase, Brown & Blaxall, Inc., an economic consulting firm. Mr. Chase
is also a Board member of 13 other funds in the Dreyfus Family of
Funds. He is 63 years old and his address is 4410 Massachusetts
Avenue, N.W., Suite 408, Washington, D.C. 20016.
GORDON J. DAVIS, Director. Since October 1994, Mr. Davis has been a
senior partner with the firm of LeBoeuf, Lamb, Greene & MacRae. From
1983 to September 1994, Mr. Davis was a senior partner with the law
firm of Lord Day & Lord, Barrett Smith. Former Commissioner of Parks
and Recreation for the City of New York from 1978 to 1983. He is
also a director of Consolidated Edison, a utility company, and
Phoenix Home Life Insurance Company and a member of various other
corporate and not-for-profit boards. Mr. Davis is also a Board
member of 24 other funds in the Dreyfus Family of Funds. He is 53
years old and his address is 241 Central Park West, New York, New
York 10023.
JONI EVANS, Director. Senior Vice President of the William Morris Agency.
From September 1987 to May 1993, Executive Vice President of Random
House, Inc., and from January 1991 to May 1993, President and
Publisher of Turtle Bay Books; from January 1987 to December 1990,
Publisher of Random House Adult Trade Division; and from 1985 to
1987, President of Simon & Schuster-Trade Division. Ms. Evans is
also a Board member of 13 other funds in the Dreyfus Family of Funds.
She is 53 years old and her address is 1350 Avenue of the Americas,
New York, New York 10019.
ARNOLD S. HIATT, Director. Chairman of The Stride Rite Foundation. From
1969 to June 1992, Chairman of the Board, President or Chief
Executive Officer of The Stride Rite Corporation, a multi-divisional
footwear manufacturing and retailing company. Mr. Hiatt is also a
director of The Cabot Corporation. Mr. Hiatt is also a Board member
of 13 other funds in the Dreyfus Family of Funds. He is 68 years old
and his address is 400 Atlantic Avenue, Boston, Massachusetts 02110.
DAVID J. MAHONEY, Director. President of David Mahoney Ventures since
1983. From 1968 to 1983, he was Chairman and Chief Executive Officer
of Norton Simon Inc., a producer of consumer products and services.
Mr. Mahoney is also a director of National Health Laboratories Inc.,
Bionaire Inc. and Good Samaritan Health Systems, Inc. Mr. Mahoney is
also a Board member of 13 other funds in the Dreyfus Family of Funds.
He is 72 years old and his address is 745 Fifth Avenue, Suite 700,
New York, New York 10151.
BURTON N. WALLACK, Director. President and co-owner of Wallack Management
Company, a real estate management company managing real estate in the
New York City area. Mr. Wallack is also a Board member of 13 other
funds in the Dreyfus Family of Funds. He is 44 years old and his
address is 18 East 64th Street, Suite 3D, New York, New York 10031.
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Directors of the Fund
who are not "interested persons" of the Fund, as defined in the Act, will
be selected and nominated by the Directors who are not "interested
persons" of the Fund.
The Fund typically pays its Directors an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additioanl 25% of such compensation. The aggregate
amount of compensation paid by the Fund to each Director for the fiscal
year ended January 31, 1995, and by all other funds in the Dreyfus Family
of Funds for which such person is a Board member for the year ended
December 31, 1994, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total Compensation
(2) Pension or (4) From Fund and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation From Accrued as Part of Benefits Upon Paid to Board
Member Fund* Fund's Expenses Retirement Member
- ------------- ----------------- ------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Joseph S. DiMartino** $5,625 none none $445,000
David W. Burke $2,096 none none $ 27,898
Gordon J. Davis** $4,500 none none $ 29,602
Samuel Chase $4,500 none none $ 46,250
Joni Evans $4,000 none none $ 46,250
Arnold S. Hiatt $4,000 none none $ 42,750
David J. Mahoney $4,000 none none $ 43,000
Burton N. Wallack $4,500 none none $ 46,250
</TABLE>
_____________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $444 for all Directors as a group.
** Estimated amounts for the current fiscal year ending January 31,
1996.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., a wholly-owned subsidiary of The Boston Company,
Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. From August 1990 to February 1992, he was
employed as an Associate at Ropes & Gray, and prior to August 1990,
he was employed as an Associate at Sidley & Austin. He is 30 years
old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was Manager of the High Performance Fabric Division
of Springs Industries Inc. He is 33 years old.
JOSEPH S. TOWER,III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in
the Corporate Finance and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was
Assistant Vice President in the Mutual Fund Accounting Department of
the Manager. He is 59 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was
a Senior Legal Product Manager and from January 1990 to January 1992,
he was mutual fund accountant, for The Boston Company Advisors, Inc.
He is 28 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts. She is 50 years old.
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 March 14, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Directors who are not "interested
persons" (as defined in the Act) of the Fund or the Manager, by vote cast
in person at a meeting called for the purpose of voting on such approval.
The Agreement was approved by shareholders on August 2, 1994, and was last
approved by the Fund's Board of Directors, including a majority of the
Directors who are not "interested persons" of any party to the Agreement,
at a meeting held on January 24, 1995. The Agreement is terminable
without penalty, on 60 days' notice, by the Fund's Board of Directors or
by vote of the holders of a majority of the Fund's outstanding voting
shares, or, upon not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically in the event of its assignment (as
defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration; Paul H. Snyder, Vice President-Finance 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 F. Glavin, Jr., Vice
President-Product Management; Henry D. Gottmann, Vice President-Retail
Sales and Service; Mark N. Jacobs, Vice President-Legal and Secretary;
Daniel C. Maclean, Vice President and General Counsel; Jeffrey N. Nachman,
Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice President-
Information Services; Katherine C. Wickham, Vice President-Human
Resources; Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Directors. The Manager is responsible for investment
decisions and provides the Fund with portfolio managers who are authorized
by the Board of Directors to execute purchases and sales of securities.
The Fund's portfolio managers are Joseph P. Darcy, A. Paul Disdier, Karen
M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L.
Lawrence Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The
Manager also maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research services
for the Fund as well as for other funds advised by the Manager. All
purchases and sales are reported for the Directors' review at the meeting
subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: organizational costs, taxes,
interest, brokerage fees and commissions, if any, fees of Directors who
are not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory fees, charges
of custodians, transfer and dividend disbursing agents' fees, certain
insurance premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining corporate existence, costs of independent
pricing services, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
shareholders' reports and corporate meetings, costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders, and any
extraordinary expenses.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to
pay the Manager a monthly management fee at the annual rate of .50 of 1%
of the value of the Fund's average daily net assets. All fees and
expenses are accrued daily and deducted before the declaration of
dividends to shareholders. The management fees payable for the fiscal
years ended January 31, 1993, 1994 and 1995 amounted to $3,983,470,
$3,873,077 and $3,891,191, respectively. These amounts were reduced
pursuant to undertakings by the Manager resulting in net fees paid to the
Manager of $2,531,205 in fiscal 1993, $2,323,846 in fiscal 1994 and
$2,140,973 in fiscal 1995.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment to be
made to the Manager under the Agreement, or the Manager will bear, such
excess expense to the extent required by state law. Such deduction or
payment, if any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
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 reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Directors cast in person at a meeting called
for the purpose of voting on the Plan. The Plan is terminable at any time
by vote of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the operation of the
Plan.
For the fiscal year ended January 31, 1995, $345,873 was chargeable
to the Fund under the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the
Fund's transfer agent 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 Transfer Agent. An order for the purchase of Fund shares
placed by an investor with 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 Transfer Agent.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time,
on any business day that the Transfer Agent and the New York Stock
Exchange are open. Such purchases will be credited to the shareholder's
Fund account on the next bank business day. To qualify to use the Dreyfus
TeleTransfer Privilege, the initial payment for purchase of Fund shares
must be drawn on, and redemption proceeds paid to, the same bank and
account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to
be wired to an account at any other bank, the request must be in writing
and signature-guaranteed. See "Redemption of Fund Shares--Dreyfus
TeleTransfer Privilege."
Transactions Through Securities Dealers. Fund shares may be
purchased and redeemed through securities dealers which may charge a
nominal transaction fee for such services. Some dealers will place the
Fund's shares in an account with their firm. Dealers also may require
that the customer invest more than the $1,000 minimum investment; the
customer not take physical delivery of stock certificates; the customer
not request redemption checks to be issued in the customer's name;
fractional shares not be purchased; monthly income distributions be taken
in cash; or other conditions.
There is no sales or service charge by the Fund or the Distributor,
although investment dealers, banks and other institutions may make
reasonable charges to investors for their services. The services provided
and the applicable fees are established by each dealer or other
institution acting independently of the Fund. The Fund has been given to
understand that these fees may be charged for customer services including,
but not limited to, same-day investment of client funds; same-day access
to client funds; advice to customers about the status of their accounts,
yield currently being paid or income earned to date; provision of periodic
account statements showing security and money market positions; other
services available from the dealer, bank or other institution; and
assistance with inquiries related to their investment. Any such fees will
be deducted from the investor's account monthly and on smaller accounts
could constitute a substantial portion of the distribution. Small,
inactive, long-term accounts involving monthly service charges may not be
in the best interest of investors. Investors should be aware that they
may purchase shares of the Fund directly from the Fund without imposition
of any maintenance or service charges, other than those already described
herein.
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only
to the registered owner(s) of the account and only to the address of
record. The Account Application or later written request must be manually
signed by the registered owner(s). Checks may be made payable to the
order of any person in an amount of $500 or more. When a Check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
shares in the investor's account to cover the amount of the Check.
Dividends are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to checking accounts,
although election of this Privilege creates only a shareholder-transfer
agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an Account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the same business day if the Transfer Agent receives the
redemption request in proper form prior to Noon 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 the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds, if wired,
must be in the amount of $1,000 or more and will be wired to the
investor's account at the bank of record designated in the investor's file
at the Transfer Agent, if the investor's bank is a member of the Federal
Reserve System, or to a correspondent bank if the investor's bank is not a
member. Fees ordinarily are imposed by such bank and usually are borne by
the investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to
the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians, and may accept other
suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission and is a fundamental policy of the Fund which may not be
changed without shareholder approval. In the case of requests for
redemption in excess of such amount, the Board of Directors reserves the
right to make payments in whole or in part in securities or other assets
of the Fund in case of an emergency or any time a cash distribution would
impair the liquidity of the Fund to the detriment of the existing
shareholders. In this event, the securities would be valued in the same
manner as the portfolio of the Fund is valued. If the recipient sold such
securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load, and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to
herein as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired),
without giving effect to any reduced loads, the difference will
be deducted.
To accomplish an exchange under item D above, shareholders must
notify the Transfer Agent of their prior ownership of fund shares and
their account number.
To request an exchange, an investor must give exchange instructions
to the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "NO" box on the
Account Application, indicating that the investor specifically refuses
this privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, the
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. There is a service charge of $.50 for each
withdrawal check. Automatic Withdrawal may be terminated at any time by
the investor, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds
that are offered without a sales load.
B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which charges a
sales load may be invested in shares of other funds sold with
a sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares
exceeds the maximum sales load charged by the fund from which
dividends or distributions are being swept, without giving
effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be
imposed upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Directors has established, as a particular
responsibility within the overall duty of care owed to the Fund's
investors, procedures reasonably designed to stabilize the Fund's price
per share as computed for the purpose of sales and redemptions at $1.00.
Such procedures include review of the Fund's portfolio holdings by the
Board of Directors, at such intervals as it deems appropriate, to
determine whether the Fund's net asset value calculated by using available
market quotations or market equivalents deviates from $1.00 per share
based on amortized cost. Market quotations and market equivalents used in
such review are obtained from an independent pricing service (the
"Service") approved by the Board of Directors. The Service values the
Fund's investments based on methods which include consideration of:
yields or prices of municipal bonds of comparable quality, coupon,
maturity and type; indications of values from dealers; and general market
conditions. The Service also may employ electronic data processing
techniques and/or a matrix system to determine valuations.
The extent of any deviation between the Fund's net asset value per
share based upon available market quotations or market equivalents and
$1.00 per share based on amortized cost will be examined by the Board of
Directors. If such deviation exceeds 1/2 of 1%, the Board of Directors
will consider what action, if any, will be initiated. In the event the
Board of Directors determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it regards
as necessary and appropriate, including: selling portfolio instruments
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations or market
equivalents.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of any
gains realized from the sale or the disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the
Internal Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended January 31, 1995, the Fund's yield was
3.16% and effective yield was 3.21%. These yields reflect the waiver of
a portion of the management fee, without which the Fund's seven-day yield
and effective yield for the seven-day period ended January 31, 1995 would
have been 3.02% and 3.07%, respectively. See "Management of the Fund" in
the Prospectus. Yield is computed in accordance with a standardized
method which involves determining the net change in the value of a hypo-
thetical 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 accounts, in
proportion to the length of the base period and the Fund's average account
size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising that sum
to a power equal to 365 divided by 7, and subtracting 1 from the result.
Based upon a combined 1995 Federal and New Jersey state tax rate of
43.57%, the Fund's tax equivalent yield for the seven-day period ended
January 31, 1995 was 5.60%. Without the waiver of a portion of the
management fee, the Fund's tax equivalent yield for the seven-day period
ended January 31, 1995 would have been 5.35%. See "Management of the
Fund" in the Prospectus. Tax equivalent yield is computed by dividing
that portion of the yield or effective yield (calculated as described
above) which is tax exempt by 1 minus a stated tax rate and adding the
quotient to that portion, if any, of the yield of the Fund that is not tax
exempt.
The tax equivalent yield noted above represents the application of
the highest Federal and New Jersey marginal personal income tax rates in
effect during 1995. For Federal income tax purposes, a 39.6% tax rate has
been used. For New Jersey gross income tax purposes, a 6.65% tax rate on
individuals, trust and estates has been used. The tax equivalent figure,
however, does not include the potential effect of any local (including,
but not limited to, county, district or city) taxes, including applicable
surcharges. In addition, there may be pending legislation which could
affect such stated tax rates or yield. Each investor should consult its
tax adviser, and consider its own factual circumstances and applicable
laws, in order to ascertain the relevant tax equivalent yield.
Yields will fluctuate and are not necessarily representative of
future results. Investors should remember that yield is a function of the
type and quality of the instruments in the portfolio, portfolio maturity
and operating expenses. An investor's principal in the Fund is not
guaranteed. See "Determination of Net Asset Value" for a discussion of
the manner in which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and not as being
representative of the Fund's past or future performance.
Advertising materials for the Fund also may refer to or discuss then-
current or past economic conditions, developments and/or events, including
those relating to or arising from actual or proposed tax legislation.
From time to time, advertising materials for the Fund also may refer to
statistical or other information concerning trends relating to investment
companies, as complied by industry associations such as the Investment
Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to
that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
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 are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of Common Stock being sold pursuant to the Fund's
Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.
APPENDIX A
RISK FACTORS -- INVESTING IN NEW JERSEY MUNICIPAL OBLIGATIONS
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn
from official statements relating to securities offerings of the State of
New Jersey and various local agencies available as of the date of this
Statement of Additional Information. While the Fund has not independently
verified this information, it has no reason to believe that such
information is not correct in all material respects.
New Jersey's economic base is diversified, consisting of a variety of
manufacturing, construction and service industries, supplemented by rural
areas with selective commercial agriculture. New Jersey's principal
manufacturing industries produce chemicals, pharmaceutical, electrical
equipment and instruments, machinery, printing and food products. Other
economic activities include services, wholesale and retail trade,
insurance, tourism, petroleum refining and truck farming.
While New Jersey's economy continued to expand during the late 1980s,
the level of growth slowed considerably after 1987. Initially, this
slowdown was an expected response to the State's tight labor market and
the decrease in the number of persons entering the labor force. Late in
the decade, a decline in construction demand and in the rate of growth in
consumer spending as well as continued softness in the State's
manufacturing sector set the stage for recession in New Jersey. By the
beginning of the national recession in July 1990 (according to the
National Bureau of Economic Research), construction activity had already
been declining in New Jersey for nearly two years. As the rapid
acceleration for real estate prices forced many would-be homeowners out of
the market and high non-residential vacancy rates reduced new commitments
for offices and commercial facilities, construction employment began to
decline; also growth had tapered off markedly in the service sectors and
the long-term downward trend of factory employment had accelerated, partly
because of a leveling off of industrial demand nationally. The onset of
recession caused an acceleration of New Jersey's job losses in
construction and manufacturing, as well as an employment downturn in such
previously growing sectors as wholesale trade, retail trade, finance,
utilities and trucking and warehousing. The net effect was a decline in
the State's total nonfarm wage and salary employment from a peak of
3,706,400 in March 1989 to a low of 3,445,000 in March 1992. This loss
has been followed by an employment gain of 118,700 from March 1992 to
September 1994. As a result of the State's recent fiscal weakness, S&P,
in July 1991, lowered its rating of the State's general obligation debt
from AAA to AA+.
Reflecting the downturn, the rate of unemployment in the State rose
from a low of 3.6% during the first quarter of 1989 to a recessionary peak
of 9.3% during 1992. Since then, the unemployment rate fell to 6.7%
during the fourth quarter of 1993. The jobless rate averaged 7.1% during
the first nine months of 1994. In the first nine months of 1994, relative
to the same period a year ago, job growth took place in services (3.5%)
and construction (5.7%), more moderate growth took place in trade (1.9%),
transportation and utilities (1.2%) and finance/insurance/real estate
(1.4%), while manufacturing and government declined (by 1.5% and 0.1%,
respectively). The net result was a 1.6% increase in average employment
during the first nine months of 1994 compared to the first nine months of
1993.
The fiscal year ending June 30, 1995 Appropriations Act Forecasts
Sales and Use Tax collections for fiscal year 1995 of $3,980 billion, a
5.3% increase from unaudited revenue for Fiscal Year 1994. Unaudited
revenue for fiscal year 1994 for the Sales and Use Tax of 3.778 billion
represents a 3.5% increase from actual receipts for fiscal year 1993.
The fiscal year 1995 Appropriations Act forecasts Gross Income Tax
collections for Fiscal Year 1995 of $4.582 billion, a 2.4% increase from
unaudited revenue for fiscal year 1994. Included in the fiscal year 1995
Gross Income Tax forecast if a 5% reduction of personal income tax rates
effective January 1, 1994 and a further 10% reduction of personal income
tax rates effective January 1, 1995. The fiscal year 1995 Gross Income
Tax estimates a $549 million reduction related to these tax cuts.
Unaudited revenue for fiscal year 1994 for the Gross Income Tax of $4,475
billion represents a 2.9% increase from actual receipts for fiscal year
1993.
The fiscal year 1995 Appropriations Act forecasts Corporation
Business Tax collections for fiscal year 1995 of $915 million, a 14%
decrease from unaudited revenue for fiscal year 1994. Included in the
Corporation Business Tax forecast is a reduction in the Corporation
Business Tax rate from 9.375% to 9.0% of net New Jersey income. Unaudited
revenue for fiscal year 1994 for the Corporation Business Tax of $1.063
billion, represents a 10.6% increase from actual receipts for fiscal 1993.
The fiscal year 1995 Appropriations Act forecasts Other Miscellaneous
Taxes Fees and Revenues collections for fiscal year 1995 of $1.338
billion, represents a 15.6% decrease from unaudited revenue for fiscal
year 1994 for Other Miscellaneous Taxes, Fees and Revenues. Included in
the Other Miscellaneous Taxes Fees and Revenues forecast is a decline of
$426 million in the Public Utility Gross receipts and Franchise tax in
accordance with the collection date changes that were legislated in 1991.
In connection with the current fiscal year 1995 budget, certain
unions and individual plaintiffs have filed a lawsuit concerning the
funding of certain retirement systems.
Should revenues be less than the amount anticipated in the budget for
a fiscal year, the Governor may, pursuant to statutory authority, prevent
any expenditure under any appropriation. There are additional means by
which the Governor may ensue that the State is operated efficiently and
does not incur a deficit. No supplemental appropriation may be enacted
after adoption of an appropriations act except where there are sufficient
revenues on hand or anticipated, as certified by the Governor, to meet
such appropriation. In the past when actual revenues have been less than
the amount anticipated in the budget, the Governor has exercised her
plenary powers leading to, among other actions, implementation of a hiring
freeze for all State departments and the discontinuation of programs for
which appropriations were budgeted but not yet spent.
The State appropriated approximately $15.492 billion and $15.291
billion for fiscal 1994 and 1995, respectively. Of the $15.492 billion
appropriated in fiscal year 1995 from the General Fund, the Property Tax
Relief Fund, the Casino Control Funds, the Casino revenue Fund and
Gubernatorial elections Fund, $5.782 billion (37.8%) in appropriated for
State Aid to Local Governments, $3,762 billion (24.6%) is appropriated for
Grants-in-Aid (payments to individuals or public or private agencies for
benefits to which a recipient is entitled by law or for the provision of
service on behalf of the State), $5.203 billion (34.0%) for Direct State
Services, $103.5 million (0.7%) for Debt Services on State general
obligation bonds and $440.6 million (2.9%) for Capital Construction.
Should tax revenues be less than the amount anticipated in the Budget
for a fiscal year, the Government may, purchase to statutory authority,
prevent an expenditure under any appropriation. The appropriations for
fiscal year 1994 are unaudited and for fiscal year 1995 as revised
estimates, as of November 7, 1994, from the amount contained in the fiscal
year 1995 Appropriations Act.
The State has made appropriations for principal and interest payments
for general obligation bonds for fiscal years 1991 through 1994 in the
amounts of $388.5 million, $410.6 million, $444.3 million and $119.9
million, respectively. For fiscal year 1995, $103.5 million has been
appropriated for principal and interest payments for general obligation
bonds.
As of June 30, 1993, the outstanding general obligation bonded
indebtedness of the State was approximately $3.6 billion.
APPENDIX B
Description of certain S&P's, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within such category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+) sign
designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for payment. Issues in
this category are delineated with the numbers 1, 2 and 3 to indicate the
relative degree of safety. Paper rated A-1 indicates that the degree of
safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign designation. Relative strength or weakness
of the various safety characteristics determines whether the issuer's
commercial paper is rated A-2 or A-3.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to show relative standing within the major rating
categories, except in the Aaa category. The modifier 1 indicates a
ranking for the security in the higher end of a rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a
ranking in the lower end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns an MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity. Issuers (or related
supporting institutions) rated Prime-2 (P-2) have a strong capacity for
repayment of short-term promissory obligations. This ordinarily will be
evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+. Plus (+) and minus (-) signs are used with a rating
symbol to indicate the relative position of a credit within the rating
category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues carrying this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Rating. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS--100.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
NEW JERSEY--94.0%
Atlantic County Improvement Authority, Revenue, VRDN
(Aces Pooled Government Loan Program)
3.35% (LOC; Hong Kong Shanghai Banking Corp.) (a,b)..................... $ 8,800,000 $ 8,800,000
Burlington County, BAN 4.50%, 8/11/95....................................... 7,000,000 7,024,609
Chatham Township, BAN 4.50%, 7/31/95........................................ 6,091,000 6,110,669
East Brunswick Township, BAN 5.75%, 1/3/96.................................. 22,051,000 22,164,495
Essex County, BAN 5.50%, Series A, 12/12/95................................. 15,000,000 15,061,423
Essex County Improvement Authority, Revenue, VRDN
(Aces Pooled Government Loan Program) 3.25% (LOC; Sumitomo Bank) (a,b).. 14,200,000 14,200,000
Hackensack, Refunding, BAN 3.74%, 6/9/95.................................... 5,268,000 5,269,053
Hudson County Improvement Authority, VRDN (Essential Purpose Pooled
Government Loan) 3.85% (LOC; Hong Kong Shanghai Banking Corp.) (a,b).... 49,040,000 49,040,000
Jersey City, Promissory Notes 3.75%, 3/10/95................................ 23,000,000 23,009,913
Middlesex County, BAN 3.48%, 6/29/95........................................ 13,900,000 13,900,509
Monmouth County, BAN 4.75%, 8/31/95......................................... 5,300,000 5,322,151
Monmouth County Improvement Authority, Revenue, VRDN
(Aces Pooled Government Loan Program)
3.25% (LOC; Union Bank of Switzerland) (a,b)............................ 30,000,000 30,000,000
Morris County, BAN 3.63%, 7/6/95............................................ 42,852,000 42,853,642
New Jersey Economic Development Authority:
Revenue, Exempt Facility, CP (Keystone Project):
4%, 2/14/95 (LOC; Union Bank of Switzerland) (b) ..................... 11,200,000 11,200,000
3.50%, 3/10/95 (LOC; Union Bank of Switzerland) (b)................... 15,500,000 15,500,000
VRDN:
EDR:
(Black Horse Pike Limited Project)
4.125% (Corp. Guaranty; Household Finance Corp.) (a)............ 5,400,000 5,400,000
(El Dorado Terminal) 3.90%, Series B (Corp. Guaranty; Dow Chemical Co.) (a) 3,000,000 3,000,000
(Exit 8A L.P. Project) 3.80% (LOC; Bank of Tokyo) (a,b)........... 7,200,000 7,200,000
(Hartz and Rex Associates) 4.025% (LOC; Bankers Trust) (a,b)...... 2,000,000 2,000,000
(Kenwood USA Corp. Project) 4.625% (LOC; The Asahi Bank) (a,b).... 7,400,000 7,400,000
(Merck and Co. Inc.) 4.125%, Series A (a)......................... 1,000,000 1,000,000
(White Horse Pike Limited Project)
4.125% (Corp. Guaranty; Household Finance Corp.) (a)............ 7,600,000 7,600,000
First Mortgage Gross Revenue
(Franciscan Oaks Project) 3.55%, Series B (LOC; Bank of Scotland) (a,b) 3,500,000 3,500,000
Industrial and EDR:
(Marriott Corp. Project) 3.40% (LOC; National Westminster Bank) (a,b) 17,900,000 17,900,000
(Merck and Co. Inc.) 3.875%, Series A and B(a).................... 1,000,000 1,000,000
Manufacturing Facilities Revenue
(Rennoc Corp. Project) 3.10% (LOC; National Bank of Philadelphia) (a,b) 5,235,000 5,235,000
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEW JERSEY (CONTINUED)
New Jersey Economic Development Authority (continued):
VRDN (continued):
PCR (Hoffman La Roche Project)
2.85%, Series 85 (LOC; Wachovia Bank of Georgia) (a,b)............ $ 20,000,000 $ 20,000,000
Water Facilities
(American Water Co. Project) 2.90% (Insured; FGIC) (a)............ 7,500,000 7,500,000
New Jersey Education Facility Authority, Revenue
(Higher Education Equipment Leasing Fund) 5%, Series A, 9/1/95 (Insured; MBIA) 14,670,000 14,765,184
New Jersey Health Care Facilities Financing Authority, Revenue, VRDN
(Hospital Capital Asset Financing):
3.55%, Series A (LOC; Chemical Bank) (a,b)............................ 18,700,000 18,700,000
3.55%, Series D (LOC; Chemical Bank) (a,b)............................ 21,000,000 21,000,000
New Jersey Housing and Mortgage Finance Agency, Revenue
4.20%, 9/29/95 (GIC; Bayerische Landesbank)............................. 12,640,000 12,640,000
New Jersey Sports and Exposition Authority, State Contract, VRDN
3.50%, Series C (BPA; Industrial Bank of Japan and Insured; MBIA) (a)... 29,900,000 29,900,000
New Jersey Turnpike Authority, Turnpike Revenue, Refunding, VRDN
3.35%, Series D (Insured; FGIC and Liquidity Agreement; Societe Generale) (a) 89,950,000 89,950,000
Passaic County, BAN 3.75%, 4/6/95........................................... 6,700,000 6,705,686
Patterson, BAN 4.50%, 4/12/95............................................... 14,713,000 14,722,252
Port Authority of New York and New Jersey:
VRDN:
Certificates Partnership 3.50% (a).................................... 9,793,000 9,793,000
(Project 2) 3.40% (SBPA; Morgan Guaranty Trust Co.) (a)............... 14,300,000 14,300,000
Special Obligation Revenue:
(Third Installment) 3.55%, Series 3 (LOC; Deutsche Bank) (a,b).... 23,000,000 23,000,000
Versatile Structure Obligation
3.85%, Series 1 (Liquidity Facility: Bank of Tokyo, Sanwa Bank
and Sumitomo Bank) (a).......................................... 9,900,000 9,900,000
Salem County Industrial Pollution Control Financing Authority, Revenue, CP
(Philadelphia Electric Co.)
3.70%, Series A, 3/10/95 (LOC; Toronto Dominion Bank) (b)............... 11,400,000 11,400,000
Sommerset County, BAN 4.23%, 10/27/95....................................... 15,000,000 15,005,727
State of New Jersey, TRAN 5%, 6/15/95....................................... 35,000,000 35,116,016
Union County Industrial Pollution Control Financing Authority, PCR,
Refunding, CP
(Exxon Project) 4.30%, 2/22/95 (Corp. Guaranty; Exxon Corp.)............ 9,100,000 9,100,000
West Windsor-Plainsboro Regional School District, BAN 5.25%, 12/19/95....... 30,000,000 30,063,022
Westwood, BAN 4.625%, 8/21/95............................................... 7,133,000 7,156,593
U.S. RELATED--6.0%
Commonwealth of Puerto Rico Government Development Bank, Refunding, VRDN
2.95% (LOC; Credit Suisse) (a,b)........................................ 38,900,000 38,900,000
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
U.S. RELATED (CONTINUED)
Commonwealth of Puerto Rico Highway and Transportation Authority,
Highway Revenue, VRDN 3.10%, Series X (LOC: Landesbank, Swiss Bank Corp.
and Union Bank of Switzerland) (a,b).................................... $ 8,000,000 $ 8,000,000
---------------
Total Investments (cost $778,308,944)....................................... $778,308,944
===============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
BAN Bond Anticipation Notes LOC Letter of Credit
BPA Bond Purchase Agreement MBIA Municipal Bond Investors Assurance
CP Commercial Paper PCR Pollution Control Revenue
EDR Economic Development Revenue SBPA Standby Bond Purchase Agreement
FGIC Financial Guaranty Insurance Company TRAN Tax and Revenue Anticipation Notes
GIC Guaranteed Investment Contract VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- -------------------- ----------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 77.1%
Aaa/Aa (d) AAA/AA (d) 14.0
Not Rated (e) Not Rated (e) 8.9
--------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject
to change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At January 31, 1995, 40.5% of the
Fund's net assets are backed by letters of credit issued by domestic
banks and foreign banks.
(c) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(d) Notes which are not MIG or SP rated are represented by bond ratings
of the issuers.
(e) Securities which, while not rated by Moody's and Standard & Poor's,
respectively, have been determined by the Fund's Board of Directors to be
of comparable quality to those rated securities in which the Fund may
invest.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value_Note 1(a)........................... $778,308,944
Interest receivable..................................................... 6,405,475
Prepaid expenses........................................................ 64,611
--------------
784,779,030
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 217,445
Due to Custodian........................................................ 11,451,174
Accrued expenses........................................................ 197,607 11,866,226
------------- --------------
NET ASSETS ................................................................ $772,912,804
==============
REPRESENTED BY:
Paid-in capital......................................................... $772,965,299
Accumulated net realized (loss) on investments.......................... (52,495)
--------------
NET ASSETS at value applicable to 772,965,299 shares outstanding
(2 billion shares of $.001 par value Common Stock authorized)........... $772,912,804
==============
NET ASSET VALUE, offering and redemption price per share
($772,912,804 / 772,965,299 shares)..................................... $1.00
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1995
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $ 22,844,115
EXPENSES:
Management fee_Note 2(a).............................................. $3,891,191
Shareholder servicing costs_Note 2(b)................................. 888,663
Custodian fees........................................................ 77,928
Professional fees..................................................... 62,886
Prospectus and shareholders' reports.................................. 31,360
Directors' fees and expenses_Note 2(c)................................ 24,731
Registration fees..................................................... 5,247
Miscellaneous......................................................... 31,950
------------
5,013,956
Less_reduction in management fee due to
undertakings_Note 2(a)............................................ 1,750,218
------------
TOTAL EXPENSES.................................................. 3,263,738
--------------
INVESTMENT INCOME--NET...................................................... 19,580,377
NET REALIZED (LOSS) ON INVESTMENTS--Note 1(b)............................... (49,213)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 19,531,164
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
-----------------------------------
1994 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 16,234,966 $ 19,580,377
Net realized (loss) on investments...................................... (1,731) (49,213)
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 16,233,235 19,531,164
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income_net................................................... (16,234,966) (19,580,377)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 1,594,549,698 1,408,301,004
Dividends reinvested.................................................... 14,863,253 17,751,331
Cost of shares redeemed................................................. (1,612,775,419) (1,431,326,369)
---------------- ----------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.............. (3,362,468) (5,274,034)
---------------- ----------------
TOTAL (DECREASE) IN NET ASSETS.................................... (3,364,199) (5,323,247)
NET ASSETS:
Beginning of year....................................................... 781,600,250 778,236,051
---------------- ----------------
End of year............................................................. $ 778,236,051 $ 772,912,804
================ ===============
See notes to financial statements.
</TABLE>
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page __ of the Fund's Prospectus dated June 1, 1995.
See notes to financial statements.
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. ("The
Distributor") was engaged as the Fund's distributor. The Distributor located
at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so.
There is no assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
(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. Interest income, adjusted
for amortization of premiums and original issue discounts on investments, is
earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified
cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of $43,083 available for
Federal income tax purposes to be applied against future net securities
profits, if any realized subsequent to January 31, 1995. The carryover does
not include net realized securities losses from November 1, 1994 through
January 31, 1995 which are treated, for Federal income tax purposes, as
arising in fiscal 1996. If not applied, $971 of the carryover expires in
fiscal 2000, $2,311 expires in fiscal 2002 and $39,801 expires in fiscal
2003.
At January 31, 1995 the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
payable monthly. The Agreement provides for an expense reimbursement from the
Manager should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund for any full fiscal
year. However, the Manager had undertaken, from February 1, 1994 through
December 11, 1994 to reduce the management fee paid by the Fund, to the
extent that the Fund's aggregate expenses exceeded specified annual
percentages of the Fund's average daily net assets. The Manager has currently
undertaken from December 12, 1994 through March 31, 1995, or until such time
as the net assets of the Fund exceed $825 million, regardless of whether they
remain at that level, to reduce the management fee paid by the Fund to the
extent that the Fund's aggregate expenses (excluding certain expenses as
described above) exceed .50 of 1% of the value of the Fund's average daily
net assets. The reduction in the management fee, pursuant to the
undertakings, amounted to $1,750,218 for the year ended January 31, 1995.
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be less
than the amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the Fund's average daily net assets for servicing shareholder accounts.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. During the year ended January 31, 1995,
the Fund was charged an aggregate of $345,873 pursuant to the Shareholder
Services Plan.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $2,500 and an attendance fee of $500 per meeting.
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS NEW JERSEY MUNICIPAL MONEY MARKET FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus New Jersey Municipal Money Market Fund, Inc., including the statement
of investments, as of January 31, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of January 31, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus New Jersey Municipal Money Market Fund, Inc. at January
31, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
March 8, 1995
