<PAGE>
As filed with the Securities and Exchange Commission on November 20, 1995
Registration No. 33- ___
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. ___ [ ]
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
(Exact Name of Registrant as Specified in Charter)
200 Park Avenue - 55th Floor
New York, New York 10166
(Address of Principal Executive Offices)
(800) 225-5267
(Registrant's Area Code and Telephone Number)
John E. Pelletier, Secretary
Dreyfus Massachusetts Municipal Money Market Fund
200 Park Avenue - 55th Floor
New York, New York 10166
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: as soon as
practicable after this Registration Statement becomes effective.
The Registrant has filed a declaration registering an indefinite
number of securities pursuant to Rule 24f-2 under the Investment Company
Act of 1940, as amended. Accordingly, no filing fee is payable herewith.
The Registrant filed on March 23, 1995, the notice required by Rule 24f-2
for its fiscal year ended January 31, 1995.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION
8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following documents:
Cover Sheet
Contents of Registration Statement
Cross Reference Sheet
Letter to Shareholders
Notice of Special Meeting
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Pages
Exhibits
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<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
Form N-14 Cross Reference Sheet
Part A Item No. Prospectus/Proxy
and Caption Statement Caption
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<S> <C>
1. Beginning of Registration Statement and Outside Cover Page
Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Page of Table of Contents
Prospectus
3. Synopsis Information and Risk Factors Summary of Proposal 1; Comparison of Investment
Objectives and Policies
4. Information About the Transaction Summary of Proposal 1; Information about the
Reorganization
5. Information About the Registrant Summary of Proposal 1; Comparison of Investment
Objectives and Policies; See also, the
Prospectus of Dreyfus Massachusetts Municipal
Money Market Fund, dated May 31, 1995,
previously filed on EDGAR, Accession No.
0000871967-95-000003
6. Information About the Company Being Acquired Summary of Proposal 1; Comparison of Investment
Objectives and Policies; See also, the
Prospectus of Dreyfus/Laurel Massachusetts Tax-
Free Money Fund, dated October 31, 1995,
previously filed on EDGAR, Accession No.
0000717341-95-000020
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Summary of Proposal 1; Information about the
Reorganization
9. Additional Information Required for Reoffering Not Applicable
by Persons Deemed to be Underwriters
<PAGE>
THE MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
Form N-14 Cross Reference Sheet
(continued)
Part B Item No. Statement of Additional
and Caption Information Caption
--------------- -----------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Statement of Additional Information of Dreyfus
Massachusetts Municipal Money Market Fund,
dated May 31, 1995, previously filed on EDGAR,
Accession No. 0000871967-95-000003
13. Additional Information About the Company Being Statement of Additional Information of
Acquired Dreyfus/Laurel Massachusetts Tax-Free Money
Fund, dated October 31, 1995, previously filed
on EDGAR, Accession No. 0000717341-95-000020
14. Financial Statements Audited Financial Statements for the Period
Ended January 31, 1995, in the Statement of
Additional Information of Dreyfus Massachusetts
Municipal Money Market Fund, dated May 31,
1995, previously filed on EDGAR, Accession No.
0000871967-95-000003
Semi-Annual Report of Dreyfus Massachusetts
Municipal Money Market Fund for Period Ended
July 31, 1995, previously filed on EDGAR,
Accession No. 0000871967-95-000012
Annual Report of Dreyfus/Laurel Massachusetts
Tax-Free Money Fund, for Fiscal Year Ended June
30, 1995, previously filed on EDGAR, Accession
No. 0000717341-95-000012
Pro Forma Financial Statements as of July 31,
1995
</TABLE>
Part C
------
Information required to be included in Part C is set forth under
the appropriate item, so numbered, in Part C of this Registration
Statement.
<PAGE>
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
December 21, 1995
Dear Shareholder:
The Board of Trustees of The Dreyfus/Laurel Tax-Free Municipal
Funds (formerly known as The Laurel Tax-Free Municipal Funds and prior to
that as The Boston Company Tax-Free Municipal Funds) (the "Trust") has
recently reviewed and unanimously endorsed two proposals for the
reorganization of Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the
"Fund"), a series of the Trust, that the Trustees judge to be in the best
interests of the shareholders of the Fund.
Under the first proposal, Dreyfus Massachusetts Municipal Money
Market Fund (the "Acquiring Fund"), another fund advised by the Fund's
investment adviser, The Dreyfus Corporation ("Dreyfus"), would acquire a
portion of the Fund's assets having a value equal to the aggregate net
asset value of the Fund's Investor class of shares. Holders of those
shares would become shareholders of the Acquiring Fund, receiving (in
exchange for their Investor shares) shares of the Acquiring Fund with an
aggregate net asset value equivalent to their investment in the Fund at
the time of the transaction, and the Fund's Investor class of shares would
be terminated. The Board of Trustees has determined that the proposed
transaction should provide benefits to shareholders due, in part, to more
efficient operations.
The second proposal, which will be implemented only if the first
proposal is also approved, seeks approval of a new investment management
agreement between Dreyfus and the Trust with respect to the Fund.
The first proposal would be voted upon by holders of both
Investor and Class R shares of the Fund, while the second proposal would
be voted upon only by holders of the Fund's Class R shares. Each proposal
is discussed in greater detail in the attached Proxy Statement.
The Board of Trustees has called a special meeting of
shareholders to be held February 15, 1996 to consider these proposals.
YOUR PARTICIPATION IS ENCOURAGED AND YOU ARE ASKED TO REVIEW, COMPLETE,
DATE, SIGN AND RETURN YOUR PROXY CARD SO THAT IT WILL BE RECEIVED NO LATER
THAN FEBRUARY 14, 1996.
I thank you for your participation as a shareholder and urge you
to please exercise your right to vote by completing, dating, signing and
returning the enclosed proxy card. A self-addressed, postage-paid
envelope has been enclosed for your convenience.
<PAGE>
If you have any questions regarding the proposed transaction,
please call 1-800-645-6561.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED NO
LATER THAN FEBRUARY 14, 1996.
Sincerely,
Marie E. Connolly
President, The Dreyfus/Laurel
Tax-Free Municipal Funds
<PAGE>
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on February 15, 1996
Notice is hereby given that a Special Meeting of Shareholders
(the "Meeting") of Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the
"Transferring Fund"), a series of The Dreyfus/Laurel Tax-Free Municipal
Funds (formerly known as The Laurel Tax-Free Municipal Funds and prior to
that as The Boston Company Tax-Free Municipal Funds) (the "Trust"), will
be held at the offices of the Trust, 200 Park Avenue, New York, New York,
on February 15, 1996 at 10:00 a.m., Eastern time, for the following
purposes:
1. For Investor and Class R shareholders of the Transferring Fund to
approve or disapprove the Agreement and Plan of Reorganization
dated as of November 1, 1995 (the "Plan") between the Trust (on
behalf of the Transferring Fund) and Dreyfus Massachusetts
Municipal Money Market Fund (the "Acquiring Fund"), providing for
the transfer to the Acquiring Fund of a portion of the assets of
the Transferring Fund having a value equal to the aggregate net
asset value of the Investor shares of the Transferring Fund, in
exchange for shares of the Acquiring Fund, and the redemption in
kind of such Investor shares by distributing to holders thereof
shares of the Acquiring Fund equal in value to the Investor
shares redeemed;
2. For Class R shareholders of the Transferring Fund to approve or
disapprove an investment management agreement (the "New
Agreement") between The Dreyfus Corporation ("Dreyfus") and the
Trust under which (a) the management fee payable by the
Transferring Fund to Dreyfus for providing or arranging for the
provision of substantially all services to the Transferring Fund
would be increased from .35 (the current rate) to .45 of 1% of
the Transferring Fund's average daily net assets and (b) certain
other changes would be implemented. The adjustments to the
Transferring Fund's management fee will become effective only if
the Plan (Proposal 1) is approved and consummated, in which event
Dreyfus has agreed to limit its fee for one year following the
implementation of the New Agreement to .35 of 1% of the
Transferring Fund's average daily net assets; and
3. To consider and act upon such other matters as may properly come
before the Meeting or any adjournment or adjournments thereof.
The Trustees of the Trust have fixed the close of business on
December 4, 1995 as the record date for the determination of shareholders
of the Transferring Fund entitled to notice of and to vote at this Meeting
or any adjournment thereof.
<PAGE>
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY. SHARE-
HOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED WITHOUT DELAY TO
SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE, SO THAT THEIR SHARES MAY BE REPRESENTED AT THE
MEETING. YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY MATERIALS WILL HELP
TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
December 21, 1995 By order of the Board of Trustees
JOHN E. PELLETIER
Secretary
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating
your vote if you fail to sign your proxy card(s) properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card(s).
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the
registration on the proxy card(s).
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card(s) should be indicated unless it is reflected in the
form of registration. For example:
Registration Valid Signature
--------------------------- ---------------
Corporate Accounts
------------------
(1) ABC Corp. John Doe, Treasurer
(2) ABC Corp.
c/o John Doe, Treasurer John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
--------------
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d/ 12/28/78 Jane B. Doe, Trustee
Custodial or Estate Accounts
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr.,
Executor
<PAGE>
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
--------------------
DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND,
a series of THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
--------------------
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
PROSPECTUS/PROXY STATEMENT DATED DECEMBER 21, 1995
This Prospectus/Proxy Statement (the "Proxy Statement") is being
furnished to Investor and Class R shareholders of Dreyfus/Laurel
Massachusetts Tax-Free Money Fund (the "Transferring Fund"), a series of
The Dreyfus/Laurel Tax-Free Municipal Funds (formerly known as The Laurel
Tax-Free Municipal Funds and prior to that known as The Boston Company
Tax-Free Municipal Funds) (the "Trust"), a non-diversified management
investment company, in connection with two proposals being submitted to
shareholders of the Transferring Fund for their consideration at a Special
Meeting of Shareholders to be held on February 15, 1996 at 10:00 a.m.
Eastern time, at the offices of the Trust, 200 Park Avenue, New York, New
York, and any adjournments thereof (the "Meeting"). The first proposal is
for approval of an Agreement and Plan of Reorganization between Dreyfus
Massachusetts Municipal Money Market Fund (the "Acquiring Fund") and the
Trust on behalf of the Transferring Fund (the "Plan"). A conformed copy
of the Plan is attached to this Proxy Statement as Appendix A. The second
proposal is for approval of a new management agreement between The Dreyfus
Corporation ("Dreyfus") and the Trust on behalf of the Transferring Fund
(the "New Agreement"). A copy of the form of the New Agreement is
attached to this Proxy Statement as Appendix B.
-----------------------
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/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. AN INVESTMENT IN THE DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET
FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN
BE NO ASSURANCE THAT THE DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
<PAGE>
The Funds. Both the Transferring Fund and the Acquiring Fund
(sometimes referred to herein individually as a "Fund" and collectively as
the "Funds") are open-end, non-diversified management investment companies
known as money market funds. The Acquiring Fund's investment objective is
to provide investors with as high a level of current income exempt from
Federal and Massachusetts income taxes as is consistent with the
preservation of capital and the maintenance of liquidity. The
Transferring Fund's investment objective is to provide a high level of
current income exempt from Federal and Massachusetts income taxes. The
Transferring Fund seeks to obtain this objective by investing in high
quality, short-term municipal securities. Dreyfus, a wholly owned
subsidiary of Mellon Bank, N.A. ("Mellon Bank"), serves as investment
manager to both Funds.
The Plan. The Plan provides for a portion of the assets of the
Transferring Fund having a value equal to the aggregate net asset value of
the Investor class of shares of beneficial interest in the Transferring
Fund (the "Investor Shares") to be transferred to the Acquiring Fund in
exchange for shares of the Acquiring Fund (the "Acquiring Fund Shares")
(such transaction being hereinafter referred to as the "Reorganization").
Holders of Investor Shares and Class R shares of beneficial interest in
the Transferring Fund ("Class R Shares") are requested to vote on the
Reorganization.
Pursuant to the Reorganization, Investor Shares will be redeemed
by the Transferring Fund's distributing to the holders thereof of the
Acquiring Fund Shares. As a result of the Reorganization, a holder of
Investor Shares will receive that number of Acquiring Fund Shares having
an aggregate net asset value equal to the aggregate net asset value of
such shareholder's Investor Shares held as of the time of the
Reorganization. Class R Shares in which a holder of Investor Shares also
has a beneficial interest immediately before noon on the Closing Date will
also be redeemed for cash as part of the Reorganization. Class R Shares
not redeemed will remain outstanding after the Reorganization, and the
Transferring Fund will thereafter operate as a single class fund.
The Reorganization will not be a tax-free reorganization, but
because both Funds are money market funds that seek to maintain a net
asset value per share ("NAV") of $1.00, Dreyfus has indicated that it
anticipates that any gain or loss recognized to holders of Investor Shares
for Federal income tax purposes would be minimal. Shareholders should
consult their tax advisers with respect to the tax effect of the Reorgani-
zation on them.
The New Agreement. Under the New Agreement, the management fee
payable by the Transferring Fund to Dreyfus for providing or arranging for
the provision of substantially all services to the Transferring Fund would
be increased from .35 (the current rate) to .45 of 1% of the Transferring
Fund's average daily net assets and certain other changes will be
implemented. Dreyfus has indicated that, if the New Agreement is
approved, it will nonetheless limit its fee to .35 of 1% of the
Transferring Fund's average daily net assets for a period of one year
- 2 -
<PAGE>
following implementation of the New Agreement (which is expected to be
coincident with consummation of the Reorganization). Only holders of
Class R Shares are requested to vote on the New Agreement.
Available Information. This Proxy Statement, which should be
retained for future reference, sets forth concisely the information about
the Acquiring Fund that shareholders of the Transferring Fund should know
before voting on the Plan and receiving Acquiring Fund Shares and that
holders of Class R Shares should know before voting on the New Agreement.
Certain relevant documents listed below have been filed with the
Securities and Exchange Commission ("SEC") and are incorporated herein in
whole or in part by reference. A Statement of Additional Information
dated December 21, 1995, relating to this Proxy Statement, incorporating
by reference the audited financial statements of the Acquiring Fund at
January 31, 1995, the unaudited financial statements of the Acquiring Fund
at July 31, 1995, and the audited financial statements of the Transferring
Fund at June 30, 1995, has been filed with the SEC and is incorporated by
reference in its entirety herein. Copies of such Statement of Additional
Information, and of the Annual Report of the Acquiring Fund for its fiscal
year ended January 31, 1995, including its audited financial statements,
and the Semi-Annual Report of the Acquiring Fund for the period ended July
31, 1995, including its unaudited financial statements, are available upon
request and without charge by writing to the Acquiring Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11566-0144, or by calling toll-free
1-800-645-6561. A Prospectus describing the Acquiring Fund accompanies
this Proxy Statement, and a Statement of Additional Information relating
to that Prospectus is incorporated by reference herein in its entirety. A
copy of that Statement of Additional Information is also available upon
request and without charge by writing to the Acquiring Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11566-0144, or by calling toll-free
1-800-645-6561.
The Prospectus of the Trust describing the Transferring Fund
dated October 31, 1995, and a Statement of Additional Information of the
same date relating to that Prospectus, are incorporated by reference
herein in their entirety. Copies of that Prospectus, that Statement of
Additional Information, and the Annual Report of the Transferring Fund for
its fiscal year ended June 30, 1995, including its audited financial
statements, are available upon request and without charge by writing to
the Transferring Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11566-0144, or by calling toll-free 1-800-645-6561.
Also accompanying this Proxy Statement as Appendix A is a copy of
the Plan for the proposed Reorganization and as Appendix B is a copy of
the proposed New Agreement.
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<PAGE>
TABLE OF CONTENTS
Page
----
Proposal 1: The Proposed Reorganization 5
Summary of Proposal 1 5
Reasons for the Reorganization 12
Information about the Reorganization 14
Comparison of Investment Objectives and Policies 18
Risk Factors 20
Comparative Information on Shareholders' Rights 21
Additional Information About the Funds 23
Proposal 2: The New Investment Management Agreement 24
Summary of Proposal 2 24
The New Agreement 25
Certain Other Changes 28
Reasons for Proposal 2 29
Other Information 31
Financial Statements and Experts 37
Legal Matters 38
Appendix A: Agreement and Plan of
Reorganization A-1
Appendix B: Form of Investment Management Agreement B-1
Appendix C: Expense Ratio Comparison Under New Agreement C-1
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<PAGE>
PROPOSAL 1: THE PROPOSED REORGANIZATION --
TRANSFER OF A PORTION OF THE ASSETS OF THE TRANSFERRING FUND TO THE
ACQUIRING FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND DISTRIBUTION OF
SUCH SHARES IN REDEMPTION OF INVESTOR SHARES
SUMMARY OF PROPOSAL 1
(to be voted on by all shareholders)
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT, THE
PROSPECTUS OF THE ACQUIRING FUND DATED MAY 31, 1995, THE PROSPECTUS OF THE
TRANSFERRING FUND DATED OCTOBER 31, 1995, AND THE PLAN, A COPY OF WHICH IS
ATTACHED TO THIS PROXY STATEMENT AS APPENDIX A.
PROPOSED REORGANIZATION. The Plan provides for the transfer to
the Acquiring Fund of a portion of the assets of the Transferring Fund
having a value equal to the aggregate net asset value of the Investor
Shares, in exchange for the Acquiring Fund Shares. Under the Plan, all
Investor Shares will be redeemed by distributing to the holders thereof
the Acquiring Fund Shares. As a result of the Reorganization, each holder
of Investor Shares will become the holder of that number of full and
fractional Acquiring Fund Shares having an aggregate net asset value equal
to the aggregate net asset value of the shareholder's Investor Shares as
of 12:00 noon, Eastern time, on the date the Reorganization is consummated
(the "Closing Date"). Following the Reorganization, the Transferring Fund
will continue to operate as a separate single class fund, with its share-
holders initially consisting of those persons who hold Class R Shares on
the Closing Date. See "Information about the Reorganization."
For the reasons set forth below under "Reasons for the Reorgani-
zation," the Board of Trustees of the Trust, including the Trustees who
are not "interested persons" as that term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), has unanimously deter-
mined that the Reorganization is in the best interests of the shareholders
of the Transferring Fund and that the interests of holders of Investor
Shares and Class R Shares will not be diluted as a result of the Reorgani-
zation. The Board of Trustees of the Acquiring Fund, including those
Trustees who are not "interested persons" as defined in the 1940 Act, has
similarly unanimously determined that the Reorganization is in the best
interests of the shareholders of the Acquiring Fund and that the interests
of its shareholders will not be diluted as a result of the Reorganization.
The Trust's Board of Trustees has therefore submitted the Plan for the
approval of the Transferring Fund's shareholders.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL OF THE
PLAN EFFECTING THE REORGANIZATION.
Approval of the Plan on the part of the Transferring Fund will
require the affirmative vote of a "majority of the outstanding voting
securities" of the Transferring Fund and of each class thereof, which for
this purpose means the affirmative vote of the lesser of: (1) 67% of the
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<PAGE>
voting securities of the Transferring Fund or class present at the Meet-
ing, if the holders of more than 50% of the outstanding voting securities
of the Transferring Fund or class are present or represented by proxy, or
(2) more than 50% of the outstanding voting securities of the Transferring
Fund or class. See "Voting Information."
If the shareholders of the Transferring Fund do not vote to
approve the Plan, the Trustees of the Trust will continue the management
of the Transferring Fund in its present form and will consider other
alternatives in the best interests of the shareholders.
TAX CONSEQUENCES. The Trust has been advised by its counsel,
Kirkpatrick & Lockhart LLP, that the Reorganization will constitute a
taxable sale of assets by the Transferring Fund, and not a tax-free
reorganization, for Federal income tax purposes. Consequently, the
Reorganization will result in the recognition of gain (or loss) to the
Transferring Fund to the extent that the value of the Acquiring Fund
Shares received upon the transfer of its assets to the Acquiring Fund
exceeds (or is less than) the Transferring Fund's basis for the assets
transferred. Dreyfus has indicated, however, that it anticipates that the
market value of the assets to be transferred -- and thus the value of
Acquiring Fund Shares to be received therefor -- will be approximately
equal to that basis, and the Plan provides that the Reorganization will be
postponed indefinitely if Dreyfus reasonably determines that the Transfer-
ring Fund would recognize gain or loss on the Reorganization for Federal
income tax purposes in excess of $.0010 per share. It is therefore not
anticipated that the Transferring Fund will recognize material gain or
loss for Federal income tax purposes in connection with the Reorganiza-
tion. The Trust has been advised by its counsel that the Transferring
Fund will not incur Massachusetts income tax liability as a result of the
Reorganization.
In addition, the Trust has been advised by its counsel that the
redemption of Investor Shares may result in the recognition of gain (or
loss) by a redeeming shareholder for Federal income tax purposes to the
extent the value of the Acquiring Fund Shares received on the redemption
exceeds (or is less than) the basis of the redeemed shares. The Trust
also has been advised by its counsel that such a redeeming shareholder
(who is a Massachusetts resident) would recognize the same gain or loss
for purposes of the Massachusetts income tax. Because both the Acquiring
Fund and the Transferring Fund are money market funds, however, and pay
dividends daily and seek to maintain their respective NAVs at $1.00,
Dreyfus believes that it is highly unlikely that a redeeming shareholder
would receive Acquiring Fund Shares having a value unequal to the shareho-
lder's basis for his or her Investor Shares, and that, accordingly, a
redeeming shareholder would recognize for Federal income tax purposes
anything other that a minimal gain or loss, if any, as a result of the
Reorganization.
The Trust has been advised by its counsel further that (1) the
Acquiring Fund's basis for the assets received from the Transferring Fund
will equal their fair market value on the Closing Date, (2) the Acquiring
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<PAGE>
Fund's holding period for those assets will begin on the day after the
Closing Date, (3) the basis of each holder of Investor Shares for the
Acquiring Fund Shares received pursuant to the Reorganization will equal
the fair market value of the shares received as of the Closing Date, and
(4) each such holder's holding period for such shares will begin on the
day after the Closing Date. Shareholders should consult their tax advis-
ers with respect to the tax effect of the Reorganization on them.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Acquiring
Fund seeks to provide investors with as high a level of current income
exempt from Federal and Massachusetts income taxes as is consistent with
the preservation of capital and the maintenance of liquidity. To accom-
plish this goal, the Acquiring Fund invests primarily in high quality,
short-term debt securities of the Commonwealth of Massachusetts, its
political subdivisions, authorities and corporations, the interest from
which is, in the opinion of bond counsel to the issuer, exempt from
Federal and Massachusetts income taxes ("Acquiring Fund Municipal Obliga-
tions"). It is a fundamental policy of the Acquiring Fund that it will
invest a minimum of 80% of its net assets (except when maintaining a
temporary defensive position) in debt securities the interest from which,
in the opinion of bond counsel to the issuer, is exempt from Federal
income tax. Under normal circumstances, at least 65% of the value of the
Acquiring Fund's net assets will be invested in Acquiring Fund Municipal
Obligations. From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Acquiring Fund's net assets) or for temporary defensive purposes, the
Acquiring Fund may invest in taxable short-term investments.
The Transferring Fund seeks to provide a high level of current
income exempt from Federal income taxes and from Massachusetts personal
income taxes for resident shareholders of Massachusetts. The Transferring
Fund seeks to achieve its objective by investing in high quality, short-
term debt obligations issued by the Commonwealth of Massachusetts and its
political subdivisions, municipalities and public authorities, and in
municipal obligations issued by other governmental entities if, in the
opinion of counsel to the respective issuers, the interest from such
obligations is excluded from gross income for Federal tax purposes and is
exempt from Massachusetts personal income taxes for residents of Massachu-
setts ("Transferring Fund Municipal Obligations"). Under normal market
conditions, the Transferring Fund attempts to invest 100%, and as a
fundamental policy will invest a minimum of 80%, of its total assets in
Transferring Fund Municipal Obligations. When, in the opinion of Dreyfus,
a defensive investment posture is warranted, the Transferring Fund may
temporarily invest more than 20% of its total assets in money market
instruments having maturity and quality characteristics comparable to
those for Transferring Fund Municipal Obligations, but which produce
interest which is not exempt from Massachusetts income tax, or more than
20% of its total assets in taxable obligations.
The respective investment objectives and policies of the Funds
are similar in their concentration in high quality, short-term municipal
obligations exempt from Federal income tax and Massachusetts personal
- 7 -
<PAGE>
income tax. Dreyfus currently advises no other money market funds with
these objectives. Certain differences in such objectives and policies are
discussed under "Comparison of Investment Objectives and Policies and Risk
Factors" and should be considered by shareholders of the Transferring
Fund.
MANAGEMENT AND OTHER SERVICE PROVIDERS. The business affairs of
the Acquiring Fund are managed by its Board of Trustees, and the business
affairs of the Trust are managed by its Board of Trustees.
Dreyfus, a subsidiary of Mellon Bank, which is a wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"), serves as the investment
manager for both Funds. As of September 30, 1995, Dreyfus managed or
administered approximately $78 billion in assets for more than 1.8 million
investor accounts nationwide.
Premier Mutual Fund Services, Inc. ("Premier"), One Exchange
Place, Boston, Massachusetts 02109, acts as distributor for both Funds,
and First Data Investor Services Group, Inc., One American Express Plaza,
Providence, Rhode Island 02903, acts as transfer agent for both Funds. A
subsidiary of Dreyfus may in the future act as transfer agent to the
Funds, subject to the requisite approval of each Board.
Mellon Bank, One Mellon Bank Center, Pittsburgh, Pennsylvania
15258, serves as the custodian for the Transferring Fund. The Bank of New
York, 90 Washington Street, New York, New York 10286, serves as custodian
for the Acquiring Fund.
FEES AND EXPENSES. The Acquiring Fund has agreed to pay Dreyfus,
as its investment manager, a fee, computed daily and payable monthly, at
the annual rate of .50 of 1% of the value of its average daily net assets.
The Acquiring Fund's shares are subject to a Shareholder Services Plan
whereby the Acquiring Fund reimburses Dreyfus Service Corporation ("DSC"),
a wholly owned subsidiary of Dreyfus, not to exceed .25 of 1% of the value
of the Acquiring Fund's assets for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. In addition,
the Acquiring Fund pays expenses to third parties for the provision of
custody, transfer agency, legal, audit and other services. From time to
time, Dreyfus may waive receipt of a portion or all of its fees, or
voluntarily assume certain expenses of the Acquiring Fund, either of which
would have the effect of lowering the overall expense ratio of the Acquir-
ing Fund and increasing yield to investors at the time such amounts are
waived or assumed, as the case may be. Dreyfus has currently undertaken
through January 31, 1997 to limit its fee to the Acquiring Fund, or to
reimburse that Fund for its expenses, in order to ensure that the overall
expense ratio of that Fund does not exceed .60% of its average daily net
assets.
The Transferring Fund currently pays Dreyfus, as its investment
manager, a fee, computed daily and payable monthly, at the annual rate of
.35 of 1% of the value of its average daily net assets less certain
expenses. Dreyfus arranges and pays for all of the expenses of the
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<PAGE>
Transferring Fund, except brokerage fees, taxes, interest, fees and
expenses of non-interested trustees (including counsel fees), Rule 12b-1
fees, and extraordinary expenses. In addition, the Investor Shares are
sold subject to a distribution plan adopted by the Transferring Fund
pursuant to Rule 12b-1 under the 1940 Act ("12b-1 plan"), under which Rule
12b-1 fees are assessed at an annual rate of .25 of 1% of average daily
net assets. See "Purchase and Redemption Procedures."
Prior to April 4, 1994, the Transferring Fund operated pursuant
to a predecessor investment management agreement under which it paid a fee
to its investment manager at an annual rate of .50 of 1% of its average
daily net assets, and the Transferring Fund arranged and separately paid
for administrative, custody, transfer agency, fund accounting, securities
registration, legal and audit services.
Dreyfus has indicated to the Trustees of the Trust that it
believes that it will be unable to provide the Transferring Fund with
adequate investment advisory services indefinitely under that Fund's
existing fee structure. Accordingly, on October 25, 1995, the Trust's
Board of Trustees approved, subject to shareholder approval, the proposed
Reorganization and an increase in the management fee from .35 to .45 of 1%
of the Transferring Fund's average daily net assets following the comple-
tion of the Reorganization. If the proposed adjustment to the management
fee payable by the Transferring Fund to Dreyfus is approved, Dreyfus has
agreed to limit its fee for one year following the implementation of the
New Agreement to .35 of 1% of the Transferring Fund's average daily net
assets. In addition, Dreyfus has agreed, for the one-year period follow-
ing the consummation of the Reorganization, to waive receipt of a portion
of the Acquiring Fund's management fee, and/or to absorb certain operating
expenses of that Fund, so that the overall expenses of that Fund are
limited to .60 of 1% of its average daily net assets.
The following table shows the actual annual fund operating
expenses allocable to the Class R shares and the Investor Shares and paid
by the Acquiring Fund, for the periods ended June 30, 1995 and January 31,
1995, respectively, and estimated total annual fund operating expenses to
be paid by the Acquiring Fund after giving effect to the Reorganization
(the "Combined Fund" in the table), with and without the one-year volun-
tary limitation on fees payable to Dreyfus by the Acquiring Fund.
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<PAGE>
Annual Fund Operating Expenses
(as a percentage of average net assets)
Acquiring
Fund
Transferring Fund Fiscal Year
Fiscal Year Ended
Ended 6/30/95 1/31/95 Combined Fund
----------------- --------- -------------
(One Year
Class R Investor Voluntary
Shares Shares (No Cap) Cap
------- -------- -------- ---------
Management Fees .35% .35% .50%* .50%* .36%**
12b-1 Fees .00% .25% none none none
Other Expenses .00% .00% .24%* .24%* .24%**
---- ---- ----- ----- -----
Total Fund
Operating Expenses .35% .60% .74%* .74%* .60%**
Example
You would pay the following expenses on a $1,000 investment, assuming (1)
a 5% annual return and (2) redemption at the end of each time period.
1 year $ 4 $ 6 $ 8 $ 8 $ 6
3 years $11 $19 $24 $24 $19
5 years $20 $33 $41 $41 $33
10 years $44 $75 $92 $92 $75
* These expense ratios do not reflect any voluntary waivers and
expense reimbursements. Amounts payable by the Acquiring Fund
pursuant to its Shareholder Services Plan are included in "Other
Expenses." For the fiscal year ended January 31, 1995, the
Acquiring Fund paid a management fee at the effective annual rate
of .04 of 1% of the value of its average daily net assets
pursuant to undertakings by Dreyfus.
** Dreyfus has agreed to limit the Acquiring Fund's Total Fund
Operating Expenses to .60% of the Acquiring Fund's average daily
net assets for one year following the completion of the
Reorganization. Management fees may be higher than indicated and
other expenses may be reduced pursuant to this limitation.
The amounts listed above 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,
a Fund's actual performance will vary and may result in actual returns
greater or less than 5%.
PURCHASE AND REDEMPTION PROCEDURES. Investor Shares are sold
primarily to retail investors by Premier and by banks, securities brokers
or dealers and other financial institutions (including Mellon Bank and its
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<PAGE>
affiliates) ("Agents") that have entered into a Selling Agreement with
Premier. The Acquiring Fund offers a single class of shares that are also
offered by Agents that have entered into a Selling Agreement with Premier
and are also directly available from Premier.
All shares of each Fund are sold without a sales charge. The
Acquiring Fund has adopted a Shareholder Service Plan pursuant to which it
reimburses DSC an amount not to exceed an annual rate of .25 of 1% of the
value of the Acquiring Fund's average daily net assets for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. Investor Shares are sold subject to the
Transferring Fund's 12b-1 plan, under which the Transferring Fund spends
annually .25 of 1% of the value of the average daily net assets
attributable to Investor Shares to compensate DSC for shareholder
servicing activities and Premier for shareholder servicing activities and
for activities or expenses primarily intended to result in the sale of
Investor Shares.
EXCHANGE PRIVILEGES. Shareholders of the Acquiring Fund may
exchange shares thereof for shares of certain other funds advised by
Dreyfus, to the extent that such shares are offered for sale in their
state of residence. In the case of each Fund, the shares being exchanged
and the shares of the fund being acquired must have a current value of at
least $500 and otherwise meet the minimum investment requirement of the
fund being acquired. Holders of Investor Shares may exchange those shares
for shares of the same class of certain other funds advised by Dreyfus, to
the extent such shares are offered for sale in their state of residence.
As part of the Reorganization, each holder of Investor Shares who becomes
the owner of Acquiring Fund Shares will be entitled to the exchange
privileges offered by the Acquiring Fund. For further information see
"Shareholder Services -- Fund Exchanges" in the accompanying Prospectus of
the Acquiring Fund.
DIVIDENDS AND OTHER DISTRIBUTIONS. The policies of each Fund
with regard to dividends and other distributions are similar. Each Fund
declares dividends from net investment income daily and distributes those
dividends monthly, normally on the last business day of each month in the
case of the Acquiring Fund and on the first business day of the following
month in the case of the Transferring Fund. Each Fund generally declares
and makes distributions of net capital gains (reduced by any available
capital loss carryovers), if any, once a year. Unless a shareholder of
either Fund instructs that dividends and capital gain distributions be
paid in cash and credited to the shareholder's account at the transfer
agent, dividends and capital gain distributions are reinvested
automatically in additional shares of the respective Fund at its NAV. A
holder of Investor Shares that has elected to receive dividends and other
distributions in cash will continue to receive them in cash from the
Acquiring Fund, though at any time subsequent to the Reorganization each
such holder may elect to have his or her dividends and other distributions
reinvested automatically in additional shares of the Acquiring Fund by
writing the Acquiring Fund. See "Dividends, Distributions and Taxes" in
the accompanying Prospectus of the Acquiring Fund.
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<PAGE>
CLASS R SHARES. In addition to Investor Shares, the Transferring
Fund offers Class R Shares, which are sold primarily to bank trust
departments and other financial service providers (including Mellon Bank
and its affiliates) acting on behalf of customers having a qualified trust
or investment account or relationship at such institution. Class R Shares
are not subject to a 12b-1 plan, and their performance does not reflect
payment of any fee associated with such a plan. The annualized expense
ratio for Class R Shares for the year ended June 30, 1995 was .35 of 1% of
average daily net assets.
Holders of Class R Shares will not receive Acquiring Fund Shares
pursuant to the Reorganization, and if any person having a beneficial
interest in Class R Shares also holds Investor Shares immediately prior to
the Reorganization, those Class R Shares will be redeemed for cash on the
Closing Date. If the Plan is approved, the Transferring Fund will operate
after the Reorganization as a separate single class fund. The Trust's
Board of Trustees has approved an increase in the management fee that the
Transferring Fund would pay Dreyfus following the completion of the
Reorganization from .35 to .45 of 1% of that Fund's average daily net
assets. Holders of Class R Shares are requested to vote on such fee
increase, as described in the section of this Proxy Statement entitled
"Proposal 2 The New Investment Management Agreement." For further
information with respect to Class R Shares, see the Prospectus of the
Transferring Fund.
REASONS FOR THE REORGANIZATION
The Board of Trustees of the Trust has determined that it is
advantageous to combine with the Acquiring Fund a portion of the assets of
the Transferring Fund having a value equal to the aggregate net asset
value of the Investor Shares. The Funds have substantially similar
investment objectives, restrictions and policies and the same adviser,
transfer agent and distributor.
The Board of Trustees of the Trust has determined that the
Reorganization should provide certain benefits to shareholders. In making
such determination, the Board of Trustees considered, among other things,
that while the yields achieved by both Funds in recent periods have
generally compared favorably to those of competing funds with similar
investment objectives, the Acquiring Fund's performance has been better
than that of the Investor Shares. The seven-day yields of the Acquiring
Fund (after the effects of voluntary reimbursements and waivers) exceeded
those of the Investor Shares in twenty-four of the thirty weeks ended
March 14, 1995 through October 3, 1995. In addition, the Board of
Trustees noted that Dreyfus has requested an increase in the management
fee payable by the Transferring Fund and that, as discussed at greater
length in the section of this Proxy Statement entitled "Proposal 2 The
New Investment Management Agreement," such an increase appears justified
based on the management fees and total expenses borne by competing funds
and other state-specific, tax-free money market funds managed by Dreyfus.
The Board of Trustees further noted that Dreyfus has proposed increases in
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<PAGE>
minimum account balance requirements with respect to the Transferring
Fund, the elimination of certain shareholder features for that Fund and
the imposition of certain direct shareholder charges, all as discussed in
connection with Proposal 2, and that the proposed Reorganization would
permit holders of Investor Shares to avoid the impact of these changes,
which are not being proposed with respect to the Acquiring Fund. The
Board of Trustees also took into consideration that Dreyfus has agreed to
reduce its fee or reimburse the Acquiring Fund to ensure that its total
operating expenses for one year following consummation of the Reorganiza-
tion do not exceed .60 of 1% of the average daily net assets of that Fund,
the same expense ratio presently experienced by holders of Investor
Shares, which should allow ample opportunity for holders of Investor
Shares not wishing to remain as shareholders of the Acquiring Fund to
redeem their shares and to pursue alternative investments. Finally, the
Board of Trustees noted that Dreyfus has agreed to bear all costs of the
Reorganization, including those of soliciting proxies with respect to it.
The Trust's Board of Trustees also believes that holders of Class
R Shares will benefit from the Reorganization. As discussed at greater
length in the section of this Proxy Statement entitled "Proposal 2 The
New Investment Management Agreement," the Board of Trustees is also
proposing that, following the Reorganization, certain changes be
implemented with respect to the Transferring Fund. These changes include
an increase in the management fee payable to Dreyfus to enable it to be
better able to continue to provide investment advisory services
appropriate to the Transferring Fund. In order to minimize the fee
increase requested, the Transferring Fund would also be reoriented to
target it to investors having higher account balances, likely to engage in
a more limited number of account transactions, and less in need of direct
shareholder support services from DSC or other Agents. Dreyfus has
indicated to the Board of Trustees that it believes the general
characteristics of holders of Investor Shares, which currently represent a
substantial majority of the assets of the Transferring Fund, are less
likely to be consistent with the reorientation of the Fund and that their
continued investment in that Fund could make it necessary for Dreyfus to
request a greater fee increase than would otherwise be required. Thus,
the elimination of Investor Shares from the Transferring Fund as
contemplated by the Reorganization enables Dreyfus to minimize the fee
increase it is requesting.
The Trust's Board of Trustees considered the taxable nature of
the Reorganization but has been advised by Dreyfus that it is likely that
there will be little or no tax impact on Transferring Fund shareholders.
(1) Although the Transferring Fund may recognize gain or
loss, depending upon whether its aggregate tax basis
for the assets transferred to the Acquiring Fund is
less than, equal to or exceeds the fair value of the
Acquiring Fund Shares received, Dreyfus believes that
such gain or loss should be small. Because of the
relative stability in value of the short-term high
quality obligations held by the Transferring Fund,
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<PAGE>
Dreyfus believes that Fund's tax basis for its assets
should not vary markedly from their value on the Clos-
ing Date (which will determine the amount paid for such
assets by the Acquiring Fund). In addition, the Plan
provides that the Reorganization will be postponed
indefinitely if Dreyfus reasonably determines that the
Transferring Fund would recognize gain or loss on the
Reorganization for Federal income tax purposes in
excess of $.0010 per share.
(2) Although a holder of Investor Shares may recognize
either gain or loss on the redemption of those shares
and receipt of Acquiring Fund Shares pursuant to the
Reorganization, depending upon whether the holder's tax
basis for those Investor Shares is less than, equal to
or exceeds the fair value of the Acquiring Fund Shares
received, Dreyfus believes such gain or loss should be
negligible because each Fund is a money market fund
that attempts to maintain a stable NAV of $1.00, and
Investor Shares are generally purchased by shareholders
at NAV (by direct investment by the shareholder or by
reinvestment of dividends), which establishes their
basis for those shares.
(3) Counsel to the Trust has advised that the tax basis for
the Acquiring Fund Shares to be received by a holder of
Investor Shares pursuant to the Reorganization will
equal the fair market value of such Acquiring Fund
Shares on the date of distribution.
(4) Counsel to the Trust also has advised that the holding
period for the Acquiring Fund Shares received by a
holder of Investor Shares will begin on the day after
the distribution thereof.
In light of the foregoing, the Trust's Board of Trustees,
including those Trustees that are not "interested persons" as defined in
the 1940 Act, has unanimously determined that it will be in the best
interests of the Transferring Fund and its shareholders to proceed with
the Reorganization and thereafter to operate the Transferring Fund as a
single class fund. The Trust's Board of Trustees, including those
Trustees that are not "interested persons" as so defined, has also
determined that the Reorganization will not result in a dilution of the
Transferring Fund's shareholders' interests.
INFORMATION ABOUT THE REORGANIZATION
PLAN OF REORGANIZATION. The following summary of the Plan is
qualified in its entirety by reference to the Plan (Appendix A hereto).
The Plan provides that the Acquiring Fund will acquire a portion of the
assets of the Transferring Fund having a value equal to the aggregate net
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<PAGE>
asset value of the Investor Shares. In exchange for those assets, the
Transferring Fund will receive Acquiring Fund Shares with an aggregate net
asset value equal to the market value of the assets transferred. Prior to
the Closing Date, the Transferring Fund will endeavor to discharge all of
its known liabilities and obligations attributable to the Investor Shares.
The Acquiring Fund also will be entitled to receive, and will assume, a
proportionate share of the unknown or contingent assets and liabilities of
the Transferring Fund. The number of full and fractional Acquiring Fund
Shares to be issued to the Transferring Fund, and subsequently distributed
to holders of Investor Shares, will be determined on the basis of the NAV
(rounded to the nearest one-hundredth of one cent ($.0001)) of the
Acquiring Fund Shares and the market value of the transferred assets as of
noon on the Closing Date.
The Closing of the Reorganization will occur at 4:00 p.m.,
Eastern time, on the Closing Date (the "Closing"). The NAV of the
Investor Shares (rounded to the nearest one-hundredth of one cent
($.0001)) and the value of the transferred assets will be determined as of
noon on the Closing Date on the basis of market quotations or market
equivalents with respect to the assets of the Transferring Fund, obtained
from independent pricing services approved by the parties' respective
Boards of Trustees. The NAV of the Acquiring Fund Shares (rounded to the
nearest one-hundredth of one cent ($.0001)) will be determined in
accordance with Rule 2a-7 under the 1940 Act, as interpreted by the SEC's
Division of Investment Management.
As soon after the Closing as is conveniently possible, the
Transferring Fund will distribute in kind pro rata to the holders of
record of its Investor Shares, determined as of noon on the Closing Date,
in redemption of such Investor Shares, the Acquiring Fund Shares received
by the Transferring Fund pursuant to the Reorganization. Such
distribution will be accomplished by establishing an account in the name
of each holder of the Investor Shares on the share records of the
Acquiring Fund maintained by its transfer agent and transferring to each
such account the respective pro rata number of full and fractional
Acquiring Fund Shares representing the same proportion of the Acquiring
Fund Shares transferred to the Transferring Fund as the Investor Shares of
such shareholder represent of the aggregate of all Investor Shares. The
number of Acquiring Fund Shares received by a holder of Investor Shares
may differ from the number of Investor Shares held at noon on the Closing
Date to the extent that the NAVs of the Investor Shares and the Acquiring
Fund Shares, in each case rounded to the nearest one-hundredth of one cent
($.0001), differ at such time, although Dreyfus expects any such
differential would be relatively small since both the Transferring Fund
and the Acquiring Fund attempt to maintain a stable NAV of $1.00.
At or immediately prior to the Closing Date, the Transferring
Fund will declare a dividend that, together with all previous dividends,
shall have the effect of distributing to its shareholders all of its
taxable income and net tax-exempt interest income for all previous taxable
years and the period thereafter ending on the Closing Date (computed
without regard to any deduction for dividends paid) and any net capital
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<PAGE>
gain realized in all such years (after reduction for any capital loss
carryforward).
Immediately before noon on the Closing Date, the Transferring
Fund will redeem for cash any Class R Shares held of record as of that
time by persons who also have a direct or indirect beneficial interest in
Investor Shares. Effective as of noon on the Closing Date, the
Transferring Fund's 12b-1 plan will be terminated, and all shares of that
Fund not redeemed pursuant to the Reorganization will be redesignated as
shares of a single class of that Fund.
The consummation of the Reorganization is subject to the
conditions set forth in the Plan, including the condition that the parties
to the Reorganization shall have received exemptive relief from the SEC
with respect to certain restrictions under the 1940 Act that could
otherwise impede or prohibit consummation of the Reorganization.
Notwithstanding approval of the Transferring Fund's shareholders, the Plan
may be terminated at any time at or prior to the Closing Date by either
party because: (a) its Board of Trustees determines that circumstances
have developed which make proceeding with the Reorganization inadvisable;
(b) a material breach by the other party of any representation, warranty
or agreement contained therein has occurred; or (c) a condition to the
obligation of the terminating party cannot reasonably be met. In
addition, the Reorganization may be postponed by either party if the
respective NAVs of the Investor Shares and the Acquiring Fund Shares,
computed on the basis of market quotations or market equivalents obtained
from independent pricing services approved by the parties' respective
Boards of Trustees, differ by $.0025 or more, such postponement to
continue until those respective NAVs, as so computed, differ by less than
such amount. Moreover, the Plan provides that if, at the time otherwise
scheduled for the Closing, Dreyfus reasonably determines that the
Transferring Fund would recognize gain or loss on the Reorganization for
Federal income tax purposes of $.0010 or more per share, the Closing will
be postponed until such time as Dreyfus reasonably determines that any
such gain or loss recognized would be less than such amount.
All expenses associated with the Reorganization (including the
cost of any proxy soliciting agents) will be borne by Dreyfus.
If the shareholders of the Transferring Fund do not vote to
approve the Plan, the Trustees of the Trust will continue the management
of the Transferring Fund in its present form, and will consider other
alternatives in the best interests of the shareholders.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS
APPROVAL OF THE PLAN.
DESCRIPTION OF SHARES OF THE ACQUIRING FUND AND THE TRANSFERRING
FUND. Full and fractional shares of beneficial interest in the Acquiring
Fund will be issued for Investor Shares in accordance with the procedures
detailed in the Plan. All issued and outstanding Investor Shares,
including those represented by certificates, will be canceled. Generally,
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<PAGE>
the Acquiring Fund does not issue share certificates to shareholders
unless a specific request is submitted to its transfer agent. The Acquir-
ing Fund Shares to be issued pursuant to the Reorganization will have no
pre-emptive or conversion rights.
FEDERAL INCOME TAX CONSEQUENCES. The Trust has been advised by
its counsel, Kirkpatrick & Lockhart LLP, that the exchange of certain
assets (constituting less than "substantially all" assets) by the
Transferring Fund for the Acquiring Fund Shares will not qualify for
Federal income tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the
"Code"). Instead, the Reorganization will be treated for Federal income
tax purposes as a taxable sale of assets by the Transferring Fund to the
Acquiring Fund followed by the redemption of Investor Shares. As a result
--
(1) The Acquiring Fund's acquisition of a portion of the
Transferring Fund's assets in exchange for the Acquir-
ing Fund Shares will constitute a taxable sale of
assets by the Transferring Fund to the Acquiring Fund;
(2) The Transferring Fund's redemption of its Investor
Shares by distributing in kind to the holders thereof
the Acquiring Fund Shares will constitute a taxable
redemption of such Investor Shares;
(3) Gain or loss may be recognized to the Transferring Fund
on the transfer to the Acquiring Fund of those assets
in exchange for the Acquiring Fund Shares, depending
upon whether the Transferring Fund's aggregate tax
basis for those assets is less than, is equal to or
exceeds the aggregate fair value of the Acquiring Fund
Shares;
(4) No gain or loss will be recognized to the Transferring
Fund on the distribution of the Acquiring Fund Shares
to redeeming holders of Investor Shares;
(5) No gain or loss will be recognized to the Acquiring
Fund on its receipt of the transferred assets in ex-
change for the Acquiring Fund Shares;
(6) The Acquiring Fund's aggregate tax basis for the trans-
ferred assets will be equal to the aggregate fair value
of the Acquiring Fund Shares exchanged therefor, and
its holding period for those assets will begin on the
day after the Closing Date; and
(7) The basis for the Acquiring Fund Shares received in the
Reorganization by a holder of Investor Shares will be
the fair market value of such Acquiring Fund Shares on
the date of distribution, and such holder's holding
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<PAGE>
period for those Acquiring Fund Shares will begin on
the day after such date.
Shareholders of the Transferring Fund should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization in
light of their individual circumstances. Because the foregoing discussion
only relates to the Federal income tax consequences of the Reorganization,
those shareholders also should consult their tax advisers as to state and
local tax consequences, if any, of the Reorganization.
CAPITALIZATION. The following table shows the capitalization of
each Fund as of July 31, 1995 (unaudited), and on a pro forma basis as of
that date (unaudited), giving effect to the proposed Reorganization:
<TABLE>
<CAPTION>
Transferring Pro Forma
Fund after Reorganization
------------ --------------------
Acquiring Transferring Acquiring
Investor Class R Fund Fund Fund
-------- ------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net Assets $87,143,585 $29,610,433 $163,171,949 $29,610,433 $250,350,412
Net Asset Value Per Share $.9994 $.9994 $.9998 $.9994 $.9998
Shares Outstanding 87,195,902 29,626,768 163,203,379 29,626,768 250,399,281
----------- ----------- ------------ ----------- ------------
</TABLE>
As of _________, 1995, there were the following number of shares
of the Acquiring Fund outstanding and the following approximate
percentages of the outstanding shares of the Acquiring Fund were
beneficially owned by Dreyfus and its affiliates:
[RESERVED]
As of ___________, 1995, the officers and Trustees of the
Acquiring Fund and of the Trust, respectively, beneficially owned as a
group less than 1% of the outstanding shares of the Acquiring Fund. To
the best knowledge of the Trustees of the Acquiring Fund, as of
____________, 1995, no other shareholder or "group" (as that term is used
in Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), beneficially owned more than 5% of the outstanding shares
of the Acquiring Fund except as shown in the table below:
[RESERVED]
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<PAGE>
For information with respect to the beneficial ownership of
shares of the Transferring Fund, see the section of this Proxy Statement
entitled "Other Information Voting Information."
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives,
policies and restrictions of the Acquiring Fund and the Transferring Fund
is based upon and qualified in its entirety by the sections of the Funds'
respective Prospectuses describing their investment objectives, policies
and restrictions. For a full discussion of the investment objective,
policies and restrictions of the Acquiring Fund, refer to its Prospectus
(which accompanies this Proxy Statement) under the caption "Description of
the Fund." For a discussion of these matters as they apply to the
Transferring Fund, refer to the Trust's Prospectus dated October 31, 1995
(available upon request) under the caption "Description of the Funds."
INVESTMENT OBJECTIVES. The investment objective of the Acquiring
Fund is to provide investors with as high a level of current income exempt
from Federal and Massachusetts income taxes as is consistent with the
preservation of capital and the maintenance of liquidity. To accomplish
this goal, the Acquiring Fund invests primarily in Acquiring Fund
Municipal Obligations.
The Transferring Fund seeks to provide a high level of current
income exempt from Federal income taxes and from Massachusetts personal
income taxes for resident shareholders of the Commonwealth of
Massachusetts. The Transferring Fund seeks to achieve this objective by
investing in Transferring Fund Municipal Obligations.
Although the language used by the Funds to define their
respective investment objectives is slightly different, those investment
objectives are substantially the same. There can be no assurance that
either Fund will meet its investment objective. While the Transferring
Fund's investment objective is considered non-fundamental and may be
changed with approval by its Board of Trustees, the investment objective
of the Acquiring Fund is fundamental and may not be changed without
approval of a majority of its voting securities (as defined in the 1940
Act). In addition, the policies described below in this "Comparison of
Investment Objectives and Policies" section can also be changed without
shareholder approval, except as otherwise indicated or described in a
fundamental policy.
PRIMARY INVESTMENTS. The Acquiring Fund will invest at least 80%
of the value of its net assets (except when maintaining a temporary
defensive position) in debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
This is a fundamental policy of the Acquiring Fund and may not be changed
without shareholder approval. Under normal circumstances, at least 65% of
the Acquiring Fund's net assets will be invested in Acquiring Fund
Municipal Obligations and the remainder may be invested in securities that
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are not Acquiring Fund Municipal Obligations and therefore may be subject
to Massachusetts income taxes.
The Acquiring Fund may invest more than 25% of the value of its
total assets in debt securities the interest from which is, in the opinion
of bond counsel to the issuer, exempt from Federal income tax, that 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. The Acquiring Fund may also 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. The Acquiring Fund may
invest without limitation in obligations the interest from which may be a
preference item for purposes of the alternative minimum tax, if Dreyfus
determines that their purchase is consistent with its investment
objective. Furthermore, the Acquiring 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 securities are consistent with its objec-
tive. For a complete description of the Acquiring Fund's primary
investments see "Description of the Fund" in its Prospectus.
The Transferring Fund attempts to invest 100%, and as a matter of
fundamental policy will invest a minimum of 80%, of its total assets in
Transferring Fund Municipal Obligations under normal market conditions.
When, in the opinion of Dreyfus, adverse market conditions exist for
Transferring Fund Municipal Obligations, and a "defensive" investment
posture is warranted, the Transferring Fund may temporarily invest more
than 20% of its total assets in money market instruments having maturity
and quality characteristics comparable to those for Transferring Fund
Municipal Obligations, but which produce income exempt from Federal, but
not Massachusetts, income taxes, or more than 20% of its total assets in
taxable obligations (including obligations the interest on which is
included in the calculation of alternative minimum tax for individuals).
The municipal securities in which the Transferring Fund may invest
include: (1) municipal bonds; (2) municipal notes; and (3) municipal
commercial paper. The Transferring Fund may invest up to 10% of the value
of its net assets in illiquid securities. For a complete description of
the Transferring Fund's primary investments see "Description of the Fund"
in its Prospectus.
Both Funds invest in securities that present minimal credit risk.
Each Fund will invest in debt securities that are rated in one of the two
highest rating categories for debt obligations by at least two nationally
recognized statistical rating organizations (or by one such rating
organization if only one organization has rated the obligation), or, if
unrated, are of comparable quality as determined in accordance with
procedures established by the Board of Trustees of the Trust or the
Acquiring Fund, respectively, or, in the case of the Transferring Fund,
are obligations of an issuer whose other outstanding short-term debt
obligations are so rated.
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All securities in which either Fund invests have remaining
maturities of thirteen months or less at the date of purchase. Floating
rate or variable rate obligations, which are payable on demand under
conditions established by the SEC, may have a stated maturity in excess of
thirteen months; those securities will be deemed to have remaining
maturities of thirteen months or less. Each Fund maintains a dollar-
weighted average portfolio maturity of 90 days of less and seeks to
maintain a constant NAV of $1.00, although there is no assurance that it
will be able to do so on a continuing basis.
RISK FACTORS
Due to the similarities of the investment objectives and policies
of the Acquiring Fund and Transferring Fund, their investment risks are
also generally similar. Such risks, and certain differences in the risks
associated with investing in the Funds, are discussed under the caption
"Description of the Fund" in the Prospectus of the Acquiring Fund
accompanying this Proxy Statement and under the caption "Other Investment
Policies and Risk Factors" in the Prospectus of the Transferring Fund
(available upon request).
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION. The Acquiring Fund and the Trust are open-
end management investment companies registered with the SEC under the 1940
Act that continuously offer to sell shares at their current NAV. Each of
the Acquiring Fund and the Trust is organized as a Massachusetts business
trust and is governed by its Agreement and Declaration of Trust
("Declaration of Trust") (in the case of the Acquiring Fund), Third
Amended and Restated Master Trust Agreement, as amended ("Master Trust
Agreement") (in the case of the Trust), By-Laws and Board of Trustees.
Both the Acquiring Fund and the Trust are governed by Massachusetts and
Federal law. Certain differences and similarities between the Acquiring
Fund and the Trust are summarized below.
CAPITALIZATION. The beneficial interest in the Acquiring Fund is
represented by transferable shares, $.001 par value per share. The
beneficial interest in the Transferring Fund is represented by
transferable shares without par value. The respective Trustees of the
Trust and the Acquiring Fund are permitted to issue an unlimited number of
shares of beneficial interest with rights determined by the Trustees
without shareholder approval. Fractional shares may be issued by both the
Trust and the Acquiring Fund. The Acquiring Fund's shares have equal
voting rights and represent equal proportionate interests in the assets
belonging to the Acquiring Fund and are entitled to receive dividends and
other amounts as determined by the Acquiring Fund's Trustees. The Trust
permits the Trustees to create an unlimited number of investment
portfolios, each of which may issue separate classes of shares. The
Transferring Fund is one of seven such portfolios. Shareholders of the
Transferring Fund are entitled to receive pro rata dividends declared by
the Trust's Board of Trustees and distributions upon liquidation.
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SHAREHOLDER LIABILITY. Under Massachusetts law, shareholders of
a Massachusetts business trust could, under certain circumstances, be held
personally liable for the obligations of the trust. The Master Trust
Agreement and the Declaration of Trust, however, disclaim shareholder
liability for acts or obligations of the Transferring Fund and the
Acquiring Fund, respectively, and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into by the
Trust or the Acquiring Fund, respectively, or their Trustees. The
Declaration of Trust also provides for indemnification out of the
Acquiring Fund's property for all losses and expenses of the Acquiring
Fund or its shareholders. The Master Trust Agreement similarly provides
for indemnification out of the portfolio's or series' property for all
losses and expenses of any shareholder held personally liable for the
obligations of the portfolio or series.
Thus, the risk of a shareholder of either Fund incurring
financial loss on account of shareholder liability is considered remote,
since it is limited to circumstances in which a disclaimer is inoperative
and the Acquiring Fund, or the Trust or a portfolio or series thereof,
itself would be unable to meet its obligations. A substantial number of
mutual funds in the United States are organized as Massachusetts business
trusts.
SHAREHOLDER MEETINGS AND VOTING RIGHTS. Neither the Acquiring
Fund nor the Trust is required to hold annual meetings of its
shareholders, but each is required to call a meeting of shareholders for
the purpose of voting upon the question of removal of a Trustee when
requested in writing to do so by the holders of at least 10% of their
respective outstanding shares. In addition, each of the Acquiring Fund
and the Trust is required to call a meeting of shareholders for the
purpose of electing Trustees, if, at any time, less than a majority of the
Trustees then holding office were elected by shareholders. Neither the
Acquiring Fund nor the Trust currently intends to hold regular shareholder
meetings. The Acquiring Fund is required to call a special meeting of
shareholders when requested to do so in writing by the holders of at least
10% of the shares entitled to vote on matters at such meeting. The
holders of no less than 10% of the Trust's shares outstanding and entitled
to vote may require the Trust to hold a special meeting of shareholders
for any proper purpose.
In the case of the Acquiring Fund, 30% of the outstanding shares
constitutes a quorum for transacting business at a shareholders' meeting,
and a majority vote of the quorum is sufficient to pass any matter (except
that a plurality vote of the quorum is sufficient to elect a Trustee, or
if the Declaration of Trust or By-laws of the Acquiring Fund provides for
a different vote on a particular matter). In the case of the Trust, a
majority of shares entitled to vote on a matter constitutes a quorum for
consideration of such matter, and a majority of the shares voted at a
meeting at which a quorum is present (or a plurality with respect to
election of a Trustee) is sufficient to act on a matter (unless otherwise
specifically required by the applicable governing documents or other law,
including the 1940 Act). In the case of both the Trust and the Acquiring
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Fund, abstentions and "broker non-votes" (i.e., shares held by brokers or
nominees as to which (1) instructions have not been received from the
beneficial owners or the persons entitled to vote or (2) the broker or
nominee does not have discretionary voting power on a particular matter)
are counted as shares that are present and entitled to vote for purposes
of determining the presence of a quorum, but not as votes cast. Neither
the Acquiring Fund nor the Trust permits cumulative voting.
LIQUIDATION OR DISSOLUTION. In the event of the liquidation of
the Acquiring Fund or the Transferring Fund or a class thereof, the
shareholders of the Fund or class are entitled to receive, when and as
declared by that Fund's Trustees, the excess of the assets belonging to
the Fund or attributable to the class over the liabilities belonging to
the Fund or attributable to the class. In either case, the assets so
distributable to shareholders will be distributed among the shareholders
in proportion to the number of shares of the Fund held by them and
recorded on the books of that Fund.
LIABILITY AND INDEMNIFICATION OF TRUSTEES. The Declaration of
Trust provides that no Trustee of the Acquiring Fund shall be responsible
or liable in any event for any neglect or wrongdoing of any officer,
agent, employee or investment adviser of the Acquiring Fund, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but
nothing shall protect a Trustee from his or her own bad faith, willful
misfeasance, gross negligence, or reckless disregard of his duties. The
Declaration of Trust also provides that a Trustee or officer is entitled
to indemnification against liabilities and expenses with respect to claims
related to his or her position with the Acquiring Fund, unless such
Trustee or officer shall have been adjudicated to have acted with bad
faith, willful misfeasance, or gross negligence, or in reckless disregard
of his or her duties, or not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Acquiring Fund, or,
in the event of settlement, unless there has been a determination that
such Trustee or officer has engaged in willful misfeasance, bad faith,
gross negligence, or reckless disregard of his or her duties. The Master
Trust Agreement contains similar indemnification for the Trust's Trustees
and officers.
RIGHTS OF INSPECTION. Shareholders of the Acquiring Fund and the
Trust have the same right to inspect the governing documents, records of
meetings of shareholders, shareholder lists, share transfer records,
accounts and books of the Acquiring Fund and the Trust, respectively, as
are permitted shareholders of a corporation under the Massachusetts
corporation law. The purpose of inspection must be for interests of
shareholders relative to the affairs of the Acquiring Fund or the Trust.
The foregoing is only a summary of certain characteristics of the
Acquiring Fund, the Transferring Fund, the Trust, the Declaration of
Trust, the Master Trust Agreement, By-Laws, and Massachusetts law. The
foregoing is not a complete description of the documents cited.
Shareholders should refer to the provisions of such respective documents
and Massachusetts law directly for a more thorough description.
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ADDITIONAL INFORMATION ABOUT THE FUNDS
Information concerning the operation and management of the
Acquiring Fund is incorporated herein by reference from its Prospectus
dated May 31, 1995, a copy of which accompanies this Proxy Statement, and
its Statement of Additional Information dated May 31, 1995, a copy of
which is available upon request and without charge by writing the
Acquiring Fund, at the address listed on the cover page of this Proxy
Statement, or by calling toll-free 1-800-645-6561.
Information about the Transferring Fund is included in the
Prospectus of the Trust dated October 31, 1995, and the Trust's Statement
of Additional Information of the same date, both of which have been filed
with the SEC and are incorporated herein by reference, and copies of which
are available upon request and without charge by writing to the
Transferring Fund, at the address listed on the cover page of this Proxy
Statement, or by calling toll-free 1-800-645-6561.
Each of the Acquiring Fund and the Trust is subject to the
informational requirements of the Exchange Act and the 1940 Act and in
accordance therewith files reports and other information, including proxy
materials and charter documents with the SEC. These materials can be
inspected, and copies obtained at prescribed rates, at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, the Midwest Regional Office of the SEC, Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60611, and the Northeast Regional Office of the SEC, Seven World Trade
Center, Suite 1300, New York, New York 10048.
PROPOSAL 2: THE NEW INVESTMENT MANAGEMENT AGREEMENT
SUMMARY OF PROPOSAL 2
The following is a brief overview regarding Proposal 2 being
presented at the Meeting, which is qualified in its entirety by reference
to the form of New Agreement (Appendix B hereto). Holders of Investor
Shares will not be affected by Proposal 2 and are not being asked to vote
on it. Proposal 2 will not be implemented, however, unless Proposal 1 is
also approved and implemented.
Holders of Class R Shares are being asked in Proposal 2 to
approve the New Agreement, which provides for an increase in the
management fee payable by the Transferring Fund to Dreyfus from .35 to .45
of 1% of that Fund's average daily net assets. If Proposal 2 is approved,
however, Dreyfus has agreed for one year following implementation of the
New Agreement to limit its fee to .35 of 1% of that Fund's average daily
net assets.
Under the New Agreement Dreyfus would continue to be responsible
for providing or arranging for third parties to provide administrative,
custody, fund accounting and transfer agency services for the Transferring
Fund. If the Proposal is approved, however, certain transaction charges
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payable directly to the transfer agent by shareholders engaging in certain
transactions would be implemented with respect to persons purchasing
shares of the Transferring Fund after the effective date of the New Agree-
ment. The New Agreement would provide that such payment of charges by
shareholders to the transfer agent would not reduce the amount otherwise
payable by the Transferring Fund to Dreyfus.
The proposed charges would not apply to shareholders of the
Transferring Fund who purchased their shares prior to the effective date
of the New Agreement, and the Trust has no present intention of imposing
such charges in the future on such shareholders.
If Proposal 2 is approved, Dreyfus intends that the Transferring
Fund would be marketed in a manner consistent with an existing group of
funds advised by Dreyfus constituting the "BASIC" group of funds.
Accordingly, the name of the Transferring Fund would be changed to
"Dreyfus BASIC Massachusetts Municipal Money Market Fund." In addition,
consistent with the format of other Dreyfus BASIC funds, certain increases
in minimum initial and subsequent investment amount requirements and
minimum account balance requirements would be implemented, as would an "a
la carte" cost structure pursuant to which certain shareholder
transactions would be available for a nominal charge. The "BASIC" cost
structure is generally grounded in the concept of reducing fund expenses
to increase yields.
Holders of Class R Shares who purchased their shares prior to the
effective date of the New Agreement would be permitted to maintain their
existing accounts subject to the minimum account balances and minimum
subsequent investment amounts now in effect, until further action by the
Trust's Board of Trustees.
If Proposal 2 is approved, the availability of certain
shareholder service features would also be eliminated or altered as
described in greater detail below. See "The Proposed New Investment
Management Agreement -- Certain Other Changes." These changes would
become effective simultaneously with the New Agreement.
The New Agreement and the related changes explained in Proposal 2
will only become effective if the Plan (Proposal 1) is approved by holders
of Investor Shares and Class R Shares and is implemented. If the New
Agreement and the Plan are approved, the Transferring Fund's 12b-1 plan
will be terminated and all shares of that Fund not redeemed in connection
with the Reorganization will be redesignated as shares of a single class
of that Fund, which will thereafter only offer that single class of
shares. Accordingly, the purchase restrictions and shareholder exchange
privileges currently applicable to Class R Shares would be modified to
conform with other single class funds offered by Dreyfus. See "The
Proposed New Agreement Certain Other Charges."
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS
APPROVAL OF THE NEW AGREEMENT.
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<PAGE>
THE NEW AGREEMENT
Investment advisory services to the Transferring Fund are
currently provided by Dreyfus, which is a wholly owned subsidiary of
Mellon Bank, under an Investment Advisory Agreement dated April 4, 1994
(the "Existing Agreement"). The Existing Agreement was originally entered
into between the Trust and Mellon Bank, a subsidiary of Mellon, and was
assigned to Dreyfus on October 17, 1994. The Existing Agreement was
approved by the Trust's Board of Trustees at its regular meeting held on
November 22, 1993, and was approved by the Transferring Fund's
shareholders on March 29, 1994. The Board of Trustees has approved, and
recommends that holders of Class R Shares approve, the New Agreement,
under which the management fee that Dreyfus receives from the Transferring
Fund would be increased from .35 to .45 of 1% of the Fund's average daily
net assets. The services for which Dreyfus would be responsible would not
change under the New Agreement. If the New Agreement is adopted, however,
the Board of Trustees has authorized the implementation of certain fees
payable directly by shareholders of the Transferring Fund to its transfer
agent in connection with certain transactions in which shareholders may
engage. The New Agreement provides that payment of these charges to the
transfer agent does not reduce the amount otherwise payable by the
Transferring Fund to Dreyfus under the New Agreement.
In addition, in order to minimize the impact of the proposed
management fee increase on the existing holders of Class R Shares, Dreyfus
has agreed to limit its fee to .35 of 1% of the Transferring Fund's
average daily net assets for the first year after the New Agreement
becomes effective. Thus, if Proposal 2 is approved, during the first year
total expenses payable by the Transferring Fund would be unchanged from
total expenses presently attributable to Class R Shares.
A description of the New Agreement and the services to be
provided by Dreyfus, as adviser, is set forth below. This description is
qualified in its entirety by reference to the form of the New Agreement,
which is attached as Appendix B to this Proxy Statement. Except for the
adjusted management fees and reference to charges payable by shareholders
to the transfer agent, the New Agreement is substantially identical to the
Existing Agreement. If approved by shareholders of the Transferring Fund,
the New Agreement will take effect as soon as practicable following such
approval and will remain in effect for two years, subject to continuation
by the Board of Trustees. If the New Agreement is not approved, the
Existing Agreement will remain in effect pursuant to which total Fund
operating expenses are expected to be .35 of 1% of average daily assets.
Appendix C shows, with respect to the Transferring Fund, a
comparison of the current expense ratio and aggregate fee and the proposed
expense ratio and aggregate fee (after giving effect to the proposed
management fee adjustments), with and without the one-year cap on the fee
payable to Dreyfus under the New Agreement.
At a meeting held on October 25, 1995, the Trustees of the Trust,
including a majority of those Trustees who are not "interested persons" of
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the Trust within the meaning of the 1940 Act, approved the New Agreement
with Dreyfus with respect to the Transferring Fund.
Approval of the New Agreement will require the affirmative vote
of a "majority of the outstanding voting" Class R Shares, which for this
purpose means the affirmative vote of the lesser of (1) 67% of the Class R
Shares present at the Meeting, if the holders of more than 50% of the
outstanding Class R Shares are present or represented by proxy, or (2)
more than 50% of the outstanding Class R Shares. Each full Class R Share
outstanding is entitled to one vote and each fractional Class R Share out-
standing is entitled to a proportionate share of one vote for such
purposes.
If the New Agreement is not approved by the shareholders, the
Existing Agreement will continue in effect. In addition, the Transferring
Fund would forego implementation of direct charges on new shareholders of
that Fund in connection with certain Fund transactions and the planned
changes in minimum investment amount and account maintenance requirements.
DESCRIPTION OF THE EXISTING AGREEMENT AND OF THE NEW AGREEMENT.
The following summarizes the principal distinction between the Existing
Agreement and the New Agreement.
Under the terms of the Existing Agreement, Dreyfus, subject to
the overall supervision and review of the Trustees of the Trust,
supervises the investments of the Transferring Fund, maintains a
continuous investment program for that Fund, determines what securities
shall be purchased and sold, secures and evaluates such information as it
deems proper and takes whatever action is necessary or convenient to
perform its functions, including the placing of purchase and sale orders.
Dreyfus also provides to the Transferring Fund, or arranges for and
supervises the provision by third parties of, a variety of services,
including custody, fund accounting, transfer agency, administrative,
securities registration (including payment of Blue Sky fees and fees
pursuant to Rule 24f-2 under the 1940 Act), legal, audit and similar
services.
Pursuant to the Existing Agreement, the Trust on behalf of the
Transferring Fund pays Dreyfus a fee computed daily and payable monthly at
the annual rate of .35 of 1% of that Fund's average daily net assets, less
the Fund's allocable portion of the accrued fees and expenses (including
counsel fees) of the Trustees who are not "interested persons" of the
Trust under the 1940 Act. (The Transferring Fund's allocable portion of
fees and expenses of those Trustees, including expenses of their counsel,
are also borne by the Transferring Fund, but Dreyfus is required to reduce
the fee payable to it by the amount of such fees and expenses, so that
payment thereof does not increase the fees and expenses of the Fund.)
Other expenses incurred in the operation of the Transferring Fund, which
are expected to be minimal, include interest, taxes, brokerage commis-
sions, and extraordinary expenses, and are borne by the Transferring Fund.
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The New Agreement would be substantially the same as the Existing
Agreement with three notable differences.
First, the form of the Existing Agreement reflects that it was
originally entered into between Mellon Bank, the predecessor of Dreyfus as
the Transferring Fund's manager, and the Trust with respect to several
funds thereof. The Existing Agreement was transferred to Dreyfus
effective October 17, 1994. The form of the New Agreement will reflect
that it is between Dreyfus as manager of only certain series of the Trust
(including the Transferring Fund) and the Trust on behalf of those series.
(The Existing Agreement will remain in effect with respect to other series
of the Trust until altered by appropriate shareholder or Trustee action
with respect to those series.)
Second, under the New Agreement, the Trust on behalf of the
Transferring Fund would pay Dreyfus a fee computed daily and payable
monthly at the annual rate of .45 of 1% of that Fund's average daily net
assets (less the Fund's allocable portion of the accrued fees and
expenses, including counsel fees, of the non-interested Trustees). This
rate represents an increase from .35 of 1% of such average daily net
assets (less such allocable portion) under the Existing Agreement.
Third, the Trustees have approved the implementation of certain
charges to be paid directly by shareholders of the Transferring Fund to
the Fund's transfer agent with respect to certain transactions in which
shareholders engage. A shareholder of the Transferring Fund would be
required to pay a $5.00 charge for each exchange out of the Fund, wire
redemption, Dreyfus Teletransfer redemption, or closeout of a shareholder
account, and a $2.00 charge for each check redemption. Such charges are
not currently assessed on shareholders of the Transferring Fund or payable
to the transfer agent. Current shareholders of the Transferring Fund
would be exempted from payment of the proposed charges, and the Board of
Trustees has no present intention of imposing these or similar charges on
current holders of Class R Shares in the future.
Currently, all compensation received by the transfer agent with
respect to the Transferring Fund is paid by Dreyfus as part of its
responsibility under the Existing Agreement. Imposition of direct charges
on shareholders may reduce the level of shareholder transactions and could
indirectly benefit Dreyfus by allowing expenses payable by it to be
reduced or maintained below those that might otherwise be in effect. The
New Agreement would expressly recognize the payment of these charges
directly by shareholders and would provide that the fee otherwise payable
to Dreyfus under the New Agreement would not be reduced by the amount of
any such charges paid to the transfer agent. Under Proposal 2, such
direct shareholder charges could be adjusted in the future by action of
the Board of Trustees, without further action by shareholders of the
Transferring Fund. Dreyfus has indicated that it intends to recommend,
whether or not the Plan or the New Agreement is approved, that an
affiliate of Dreyfus be appointed as transfer agent for the Transferring
Fund. Such appointment would not alter the fact that the payment of
certain charges directly by shareholders to the transfer agent would not
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<PAGE>
reduce the management fee otherwise payable by the Transferring Fund to
Dreyfus under the New Agreement.
IMPACT OF THE PROPOSAL. The Proposal would result in an increase
in the fees and expenses that holders of Class R Shares bear from those in
effect under the Existing Agreement. Holders of Class R Shares would
experience an increase in management fees of .10 of 1% of the Transferring
Fund's average daily net assets (although no change would occur in the
first year, during which Dreyfus would limit its management fee to that
currently in effect).
A comparison of the management fees and total expenses holders of
Class R Shares pay under the existing structure with the fees and expenses
holders of Class R Shares would pay under the New Agreement are attached
hereto as Appendix C.
The accounts of purchasers of shares of the Transferring Fund
after the New Agreement becomes effective would be charged $5.00 for each
exchange out of the Transferring Fund, for each redemption transaction
effected by wire or pursuant to the Dreyfus Teletransfer Privilege, and
for account closeouts for which a charge otherwise does not apply and
$2.00 for each check written. However, such charges would not be imposed
under Proposal 2 on current holders of Class R Shares, and the Board of
Trustees has no present intention of imposing these or similar charges on
those holders.
During the fiscal year ended June 30, 1995, Dreyfus and Mellon
Bank as it predecessor received $397,565 in fees from the Transferring
Fund, pursuant to the Existing Agreement. If the New Agreement had been
in effect during the same period, the fees paid by the Transferring Fund
would have been $511,155, or approximately 129% of the fees received under
the Existing Agreement.
CERTAIN OTHER CHANGES
If Proposal 2 is approved, Dreyfus intends that the Transferring
Fund would be marketed in a manner consistent with an existing group of
funds advised by Dreyfus, marketed under the name "BASIC" and available to
all investors but designed for higher balance investors who generally tend
to make more limited use of account transaction features and to use money
market accounts more as a savings vehicle. Accordingly, the name of the
Transferring Fund would be changed to "Dreyfus BASIC Massachusetts
Municipal Money Market Fund." As of November 30, 1995, the Dreyfus BASIC
family of funds was composed of six investment funds with total assets of
approximately $4.5 billion.
In addition, certain other changes would be implemented for the
Transferring Fund if Proposal 2 is approved. Specifically, the minimum
initial investment would be increased to $25,000, the minimum subsequent
investment would be increased to $1,000, and the account balance below
which accounts may be involuntarily redeemed by the Fund would be
increased to $10,000. Shareholders of the Transferring Fund who purchased
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their shares prior to the effective date of the New Agreement would be
permitted, until further action by the Board of Trustees, to maintain
their existing accounts subject to the minimum account balances and
minimum subsequent investment amounts now in effect, which are described
in the Trust's Prospectus dated October 31, 1995.
If Proposal 2 is approved, the availability of certain
shareholder service features would also be eliminated. These services
include the Dreyfus Auto-Exchange Privilege, Dreyfus-Automatic Asset
BuilderRegistered Trademark, Dreyfus Dividend Options, Dreyfus Government
Direct Deposit Privilege, Dreyfus Payroll Savings Plan and the Automatic
Withdrawal Plan. In addition, checks used to redeem shares of the
Transferring Fund would be required to be drawn in a minimum amount of
$1,000 each. Finally, the minimum amount for Dreyfus Teletransfer
transactions would be increased from $500 to $1,000 per day.
The New Agreement and the related changes in Proposal 2 will only
become effective if the Plan (Proposal 1) is approved by holders of
Investor Shares and Class R Shares. If the New Agreement and the Plan are
approved, the Transferring Fund would consist of a single class of shares,
those presently designated Class R Shares. Accordingly, all shares of the
Transferring Fund would be redesignated as "shares" (without separate
classes). In addition, restrictions on persons to whom the Transferring
Fund's shares may be sold, currently applicable to Class R Shares, would
be eliminated. Furthermore, the exchange privileges currently applicable
to Class R Shares would be modified, permitting a shareholder of the
Transferring Fund to exchange into any class of shares of another fund in
the Dreyfus Family of Funds to the extent that the shareholder was able to
purchase that class initially, and limiting the number of exchanges out of
the Transferring Fund in any calendar year to four. These changes would
become effective simultaneously with the New Agreement.
REASONS FOR PROPOSAL 2
Dreyfus recommended the New Agreement and the related changes in
Proposal 2 to the Board of Trustees to increase the Transferring Fund's
management fee in light of fees paid by comparable mutual funds in the
industry and to provide Dreyfus with adequate fees to manage the
Transferring Fund. At present, the overall expense ratio (including
management fees) for Class R Shares has been below those of other state-
specific, tax-free money market funds advised by Dreyfus and the industry
average for funds with substantially the same investment objective and
management services. Prior to the Existing Agreement, which became
effective in April 1994, the Transferring Fund was obligated to pay
advisory fees of .50 of 1% of its average daily net assets to its
investment adviser; in addition, the Transferring Fund was directly
responsible for paying third parties for various other services provided
to the Fund, including custody, fund accounting and transfer agency
services. After over eighteen months of operation under the current fee
structure, under which Dreyfus is required (and Mellon Bank as its
predecessor was required) to pay for essentially all normally recurring
operating expenses of the Transferring Fund out of its fee of .35 of 1% of
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that Fund's average daily assets, Dreyfus believes that the current level
of fees is inadequate for it to be able to continue indefinitely to
properly manage the Transferring Fund. Dreyfus believes that keeping the
Transferring Fund's management fee at its current level could hurt the
Transferring Fund's long-term performance and has requested an increase in
its fee as a result.
The performance of the Transferring Fund, in Dreyfus' opinion,
reflects management's commitment to developing investment management
techniques and resources, such as research staff, qualified portfolio
managers, and systems and facilities, that promote the long-term
performance of the Transferring Fund. Dreyfus believes that the increase
in the management fee is necessary to ensure that the Transferring Fund
receives the investment services and resources needed to provide the Fund
with the level and quality of service it requires. Dreyfus' request that
the management fee be raised also reflects its belief that the
Transferring Fund should bear the same level of fees for these services as
other Dreyfus funds with comparable management needs and services. The
New Agreement will result in a fee that is compatible to other state-
specific, tax-free money market funds managed by Dreyfus. Furthermore,
the level of total management and other fees for the Transferring Fund
will remain below the median of total expenses experienced by competing
funds with similar investment objectives and services.
To mitigate possible adverse effects on existing holders of Class
R Shares resulting from the adjustment of the Transferring Fund's
management fee, Dreyfus has agreed that it will limit its fee to .35 of 1%
of average daily net assets for one year following the implementation of
the New Agreement.
CONSIDERATION AND APPROVAL BY THE BOARD OF TRUSTEES. The Trust's
Board of Trustees has determined that the compensation to be paid to
Dreyfus under the New Agreement is fair and reasonable and provides a
management fee similar to those of competing tax-free money market funds.
In unanimously approving the New Agreement and recommending its approval
by the holders of Class R Shares (which approval and recommendation were
undertaken concurrently with its consideration of the Reorganization
contemplated in Proposal 1 and are conditioned upon approval of Proposal 1
by the shareholders), the Trustees of the Trust, including those Trustees
who are not "interested persons" of the Trust, as defined in the 1940 Act,
took into account all factors that they deemed relevant. The factors
considered by the Trustees, including the non-interested Trustees,
included: the nature, quality and extent of the services Dreyfus furnishes
to the Transferring Fund; the need for Dreyfus to maintain and to enhance
its ability to attract and to retain qualified personnel to serve the
Transferring Fund; the investment record of Dreyfus in managing the
Transferring Fund; extensive financial, personnel and structural
information on the Dreyfus organization, including the revenues and
expenses of Dreyfus relating to its activities with respect to the
Transferring Fund; and the effect of the proposed management fee increase
on the total expense ratio of the Transferring Fund. The Trustees were
also provided information as to Dreyfus' qualifications to act as
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investment manager in terms of the ability of its personnel, the quality
and extent of the services rendered, and its commitment to its mutual fund
investment business, including the Transferring Fund.
On October 25, 1995, the Board of Trustees, including the non-
interested Trustees, reviewed and approved the New Agreement. Among other
things, they considered the following facts: that the current advisory fee
is significantly below that paid to Dreyfus by other state-specific, tax-
free money market funds for which it serves as investment adviser; that
the total operating expenses with respect to the Transferring Fund are
below those of other funds with comparable assets, objectives and
services; that the total operating expense ratio of the Transferring Fund
under the New Agreement would be below the median for other funds with
comparable assets, objectives and services; that Dreyfus is entitled to be
paid a reasonable fee for its services and that payment of such a fee is
likely to be necessary to ensure that the Transferring Fund receives
adequate resources and services; that the Transferring Fund's proposed
fees would remain lower than its fees as in effect immediately prior to
effectiveness of the Existing Agreement; and that Dreyfus agreed to limit
its fee to .35 of 1% of the Transferring Fund's average daily net assets
for one year following the implementation of the New Agreement, allowing
time for shareholders of the Transferring Fund to find alternative
investments if they so choose before being directly effected by the
increase in the management fee. The Trustees also considered that
provisions had been made to exempt existing holders of Class R Shares from
the adverse impact of most of the other changes in operations proposed to
be undertaken contemporaneously with adoption of the New Agreement,
including the imposition of shareholder service charges and increases in
minimum investment or transaction requirements.
Accordingly, the Trustees unanimously voted to approve the terms
and conditions of the proposed New Agreement, which will become effective
only if the Plan (Proposal 1) is approved by holders of Investor Shares
and Class R Shares, and to recommend that holders of Class R Shares vote
FOR Proposal 2.
OTHER INFORMATION
VOTING INFORMATION. This Proxy Statement is furnished in
connection with a solicitation of proxies by the Trust's Board of Trustees
to be used at the Meeting to be held at 10:00 a.m., Eastern time, February
15, 1996, at 200 Park Avenue, New York, New York 10166, and at any
adjournments thereof. This Proxy Statement, along with a Notice of the
Meeting and a proxy card, is first being mailed to shareholders of the
Transferring Fund on or about December 21, 1995. Only shareholders of
record as of the close of business on December 4, 1995 (the "Record Date")
will be entitled to notice of, and to vote at, the Meeting or any
adjournment thereof. The holders of a majority of the shares of the
Transferring Fund and each class of the Transferring Fund outstanding and
entitled to vote at the close of business on the Record Date present in
person or represented by proxy will constitute a quorum for the Meeting of
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the Transferring Fund and its classes. If the enclosed form of proxy card
is properly executed and returned in time to be voted at the Meeting, the
proxies named therein will vote the shares represented by the proxy in
accordance with the instructions marked thereon. Unmarked proxy cards
will be voted FOR Proposals 1 and 2 and FOR any other matters deemed
appropriate.
Proxy cards that reflect abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (1) instructions
have not been received from the beneficial owners or the persons entitled
to vote or (2) the broker or nominee does not have discretionary voting
power on a particular matter) will be counted as shares that are present
and entitled to vote for purposes of determining the presence of a quorum,
but not as votes cast. Holders of Investor Shares as of the Record Date
who also have a beneficial interest in Class R Shares as of the Record
Date are requested to so indicate on the proxy cards submitted by them. A
proxy may be revoked at any time on or before the Meeting by written
notice to the Secretary of the Trust, 200 Park Avenue, New York, New York
10166. Unless revoked, all valid proxies will be voted in accordance with
the specifications thereon or, in the absence of such specifications, FOR
approval of Proposals 1 and 2.
Proposal 1: Approval of Proposal 1 will require the affirmative
vote of a "majority of the outstanding voting securities" of the
Transferring Fund and each class of the Transferring Fund, which for this
purpose means the lesser of: (1) 67% of the voting securities of the
Transferring Fund or class present at the Meeting, if the holders of more
than 50% of the outstanding voting securities of the Transferring Fund or
class are present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of the Transferring Fund or class. Each
full share outstanding is entitled to one vote, and each fractional share
outstanding is entitled to a proportionate share of one vote for such
purposes.
If the shareholders of the Transferring Fund, or the holders of
either class thereof, do not vote to approve the Plan, the Trustees of the
Trust will continue the Transferring Fund in its current form, including
the portion of its assets attributable to Investor Shares, and will
consider other alternatives in the best interests of the shareholders.
Proposal 2: Approval of Proposal 2 will require the affirmative
vote of a "majority of the outstanding voting" Class R Shares, which for
this purpose means the affirmative vote of the lesser of (1) 67% of such
Class R Shares present at the Meeting, if the holders of more than 50% of
the outstanding Class R Shares are present or represented by proxy, or (2)
more than 50% of the outstanding Class R Shares. Each full Class R Share
outstanding is entitled to one vote, and each fractional Class R Share
outstanding is entitled to a proportionate share of one vote for such
purposes.
If the New Agreement is not approved by the holders of Class R
Shares, the Existing Agreement will continue in effect. In addition, the
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Transferring Fund would forego implementation of direct charges on new
shareholders of that Fund in connection with certain transactions and the
planned changes in minimum investment amount and account maintenance
requirements.
Holders of both Investor Shares and Class R Shares are requested
to vote on Proposal 1, and only holders of Class R Shares are requested to
vote on Proposal 2. Under the Master Trust Agreement, a majority of the
shares of the Transferring Fund or class within the Fund outstanding and
entitled to vote on a matter shall be a quorum for the transaction of
business at the Meeting, except as otherwise provided by the 1940 Act or
other applicable law. The Trustees of the Trust have established December
4, 1995, as the record date for determining holders of Investor Shares and
Class R Shares entitled to vote at the Meeting. As of __________, 1995,
the number of shares outstanding and the approximate shares of each class
of the Transferring Fund and those beneficially owned by Dreyfus and its
affiliates were as follows:
Shares Beneficially Owned
By Dreyfus and Affiliates
-------------------------
Total Shares Number of % of Total
Class Designation Outstanding Shares Outstanding
----------------- ------------ --------- -----------
Investor _____ _____ _____
Class R _____ _____ _____
Dreyfus has advised the Trust that shares owned by Dreyfus or an
affiliate of Dreyfus with respect to which Dreyfus or such affiliate
exercises voting discretion will be voted FOR Proposals 1 and 2 described
in this Proxy Statement, unless it votes more than 25% of the outstanding
shares of the Transferring Fund or any class thereof entitled to vote, in
which case it will vote its shares in proportion to the vote of the
remaining shares, provided such vote is consistent with its fiduciary
duties.
Dreyfus is not aware of any holders of Investor Shares as of the
Record Date who also have a beneficial interest in Class R Shares as of
the Record Date. Holders of Investor Shares as of the Record Date who
also have a beneficial interest in Class R Shares as of the Record Date
are requested to so indicate on the proxy cards submitted by them.
To the best knowledge of the Trustees of the Trust, as of
____________, 1995, no other single shareholder or "group" (as the term is
used in Section 13(d) of the Exchange Act) beneficially owned more than 5%
of any class of the Transferring Fund's outstanding shares, except as
shown in the table below:
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<PAGE>
Shares
Benefi-
cially % of
Class Designation Shareholder Address Owned Total
----------------- ----------- ------- ------ ------
Investor ___ ___ ___ ___
Class R ___ ___ ___ ___
At December 4, 1995, the Trustees and officers of the Trust and
the Acquiring Fund as a group beneficially owned less than 1% of the
shares of each class of the Transferring Fund and of the Transferring
Fund's shares in the aggregate.
Proxy solicitations will be made primarily by mail but may also
be made by telephone, telegraph or personal solicitations conducted by
officers and employees of Dreyfus, its affiliates or other representatives
of the Trust. The cost of solicitation will be borne by Dreyfus.
Dreyfus will be responsible for the expenses of both Funds
incurred in connection with entering into and carrying out the
Reorganization, whether or not the Reorganization is consummated.
In the event that sufficient votes to approve Proposal 1 or
Proposal 2 are not received by February 15, 1996, the persons named as
proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the percentage of votes
actually cast, the percentage of negative votes actually cast, the nature
of any further solicitation and the information to be provided to
shareholders with respect to the reasons for the solicitation. Any such
adjournment will require an affirmative vote by the holders of a majority
of the shares present in person or by proxy and entitled to vote at the
Meeting. The persons named as proxies will vote upon such adjournment
after consideration of all circumstances that may bear upon a decision to
adjourn the Meeting.
A shareholder of the Transferring Fund who objects to the
proposed Reorganization will not be entitled under either Massachusetts
law or the Master Trust Agreement to demand payment for, or an appraisal
of, his or her shares. Shareholders should be aware that shares of either
class of the Transferring Fund and shares of the Acquiring Fund may be
redeemed at their then-current NAV as described in the Prospectus of the
respective Fund.
The votes of the shareholders of the Acquiring Fund are not being
solicited by this Proxy Statement and are not required to carry out the
Reorganization.
INFORMATION ABOUT DREYFUS. The following persons are officers
and/or directors of Dreyfus: Howard Stein, Chairman of the Board and
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<PAGE>
Chief Executive Officer; W. Keith Smith, Vice Chairman of the Board;
Christopher M. Condron, President, Chief Operating Officer and a director;
Stephen E. Canter, Vice Chairman, Chief Investment Officer and a director;
Lawrence S. Kash, Vice Chairman-Distribution and a director; Philip L.
Toia, Vice Chairman-Operations and Administration; Daniel C. Maclean, Vice
President and General Counsel; Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate
Communications; Elie M. Genadry, Vice President-Institutional Sales; Henry
D. Gottman, Vice President-Retail Sales and Service; William F. Galvin,
Jr., Vice President-Corporate Development; Andrew S. Waser, Vice
President-Information Services; Mark N. Jacobs, Vice President-Fund Legal
and Compliance and Secretary; Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Katherine C. Wickham, Vice President-Corporate Human
Resources; Maurice Bendrihem, Controller; Elvira Oslapas, Assistant
Secretary; Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman,
Lawrence M. Green, Julian M. Smerling, David B. Truman, directors.
Dreyfus, located at 200 Park Avenue, New York, New York 10166,
was formed in 1947. Dreyfus is a wholly owned subsidiary of Mellon Bank,
which is in turn a wholly owned subsidiary of Mellon. As of September 30,
1995, Dreyfus managed or administered approximately $78 billion in assets
for more than 1.8 million investor accounts nationwide. Mellon is a
publicly owned multibank holding company incorporated under Pennsylvania
law in 1971 and registered under the 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, 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 Dreyfus, Mellon managed more than $203 billion in assets as of
June 30, 1995, including $73 billion in mutual fund assets. As of June
30, 1995, Mellon, through various subsidiaries, provided non-investment
services, such as custodial or administration services, for approximately
$707 billion in assets, including approximately $71 billion in mutual fund
assets.
At __________, 1995, Joseph S. DiMartino and Arch S. Jeffery,
Trustees of the Trust, hold beneficial interest in ____ shares and ___
shares of Mellon, respectively.
Dreyfus advises no money market funds other than the Transferring
Fund and the Acquiring Fund that seek a high level of current income
exempt from Federal and Massachusetts income taxes.
Fund Transactions. Decisions to buy and sell securities for the
Transferring Fund and effectuation of securities transactions are made by
Dreyfus, subject to the overall supervision and review of the Trustees of
the Trust. The same personnel are also in charge of portfolio
transactions for other clients of other subsidiaries and affiliates of
Dreyfus.
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Purchases and sales of portfolio securities for the Transferring
Fund generally are transacted with the issuer or a primary market maker on
a net basis, without the payment by the Transferring Fund of any brokerage
commission for such purchases or sales. Purchases from dealers serving as
primary market makers reflect the spread between the bid and asked prices.
In selecting dealers and in executing portfolio transactions, Dreyfus
seeks, on behalf of the Transferring Fund, the best overall terms
available. In doing so, Dreyfus considers all matters it deems relevant,
including the breadth of the market in the security, the price of the
security and the financial condition and executing capability of the
dealer. The Transferring Fund paid no brokerage commissions for the
fiscal years ended June 30, 1993, 1994 and 1995.
Dealers may be selected who provide brokerage and/or research
services to the Trust and/or other accounts over which Dreyfus or its
affiliates exercise investment discretion. Such services may include
advice concerning the value of securities; the advisability of investing
in, purchasing or selling securities; the availability of securities or
the purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as
clearance and settlement). The receipt of research from dealers may be
useful to Dreyfus in rendering investment management services to the Trust
and/or its other clients; and, conversely, such information provided by
its brokers or dealers who have executed transaction orders on behalf of
other clients of Dreyfus may be useful to Dreyfus in carrying out its
obligation to the Trust.
The Transferring Fund will not purchase municipal obligations
during the existence of any underwriting or selling group relating thereto
of which an affiliate is a member, except to the extent permitted by the
SEC. Under certain circumstances, the Transferring Fund may be at a
disadvantage because of this limitation in comparison with other
investment companies which have a similar investment objective but are not
subject to such limitations.
Dreyfus makes investment decisions for the Transferring Fund
independently from those made for its other clients, other funds and
clients of other affiliates of Dreyfus. On occasion, however, the same
investment decisions will be made for the Transferring Fund as for one or
more of Dreyfus' clients at about the same time. In a case in which the
Transferring Fund and one of these other clients are simultaneously
engaged in the purchase or sale of the same security, the transactions
will, to the extent feasible and practicable, be averaged as to price and
allocated as to amount among the Transferring Fund and/or the other client
or clients pursuant to a formula considered equitable. In some cases,
this system could have a detrimental effect on the price or volume of the
security to be purchased or sold on behalf of the Transferring Fund. In
other cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the
Transferring Fund.
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<PAGE>
INFORMATION ABOUT THE DISTRIBUTOR. Premier is the principal
underwriter of the Transferring Fund pursuant to a Distribution Agreement
between the Trust on behalf of the Transferring Fund and Premier. Premier
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. During the fiscal year ended June 30,
1995, the Transferring Fund paid distribution fees of $222,784 with
respect to its Investor Shares.
Premier serves as Sub-Administrator to the Transferring Fund
pursuant to a Sub-Administration Agreement with Dreyfus. As Sub-
Administrator, Premier provides various administrative and corporate
secretarial services to the Transferring Fund and is compensated by
Dreyfus for the provision of such services.
SHAREHOLDER PROPOSALS. Annual shareholder meetings are not held
by the Trust. Shareholders wishing to submit proposals for consideration
for inclusion in a proxy statement for a subsequent shareholder meeting
should send their written proposals to the Trust at 200 Park Avenue, New
York, New York 10166, such that they will be received by the Trust a
reasonable period of time prior to any such meeting.
OTHER BUSINESS. The Trustees of the Trust do not intend to
present any other business at the Meeting. If, however, any other matters
are properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with their
judgment.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise the Transferring Fund, 200 Park Avenue, New York,
New York 10166, whether other persons are beneficial owners of shares for
which proxies are being solicited and, if so, the number of copies of this
Proxy Statement needed to supply copies to the beneficial owners of the
respective shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Acquiring Fund, as of
January 31, 1995, and the statement of operations, the statement of
changes in net assets and financial highlights for the period ended
January 31, 1995, have been incorporated by reference into this Proxy
Statement in reliance on the authority of the report of Ernst & Young LLP,
independent accountants for the Acquiring Fund, as experts in accounting
and auditing. The unaudited financial statements of the Acquiring Fund,
as of June 30, 1995, and the statement of operations, the statement of
changes in net assets and financial highlights for the period ended July
31, 1995, have been incorporated by reference into this Proxy Statement
from the Semi-Annual Report of the Acquiring Fund.
The audited financial statements, which include the statement of
assets and liabilities of the Transferring Fund, as of June 30, 1995, and
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the statement of operations, the statement of changes in net assets and
financial highlights for the year ended June 30, 1995, have been
incorporated by reference into this Proxy Statement in reliance on the
report of KPMG Peat Marwick LLP, independent accountants for the Trust for
each of the two years ended June 30, 1995, given on the authority of the
firm as experts in accounting and auditing. Information for fiscal years
(periods) prior to the fiscal year ended June 30, 1994, was audited by
other independent auditors.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the
Acquiring Fund will be passed upon by Stroock & Stroock & Lavan, Seven
Hanover Square, New York, New York 10004-2594.
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING THOSE TRUSTEES WHO
ARE NOT "INTERESTED PERSONS" OF THE TRUST AS DEFINED IN THE 1940 ACT,
UNANIMOUSLY RECOMMEND APPROVAL OF PROPOSALS 1 AND 2. ANY UNMARKED PROXY
CARDS WITHOUT INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF
APPROVAL OF PROPOSALS 1 AND 2.
__________________________
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APPENDIX A TO PROXY STATEMENT
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of
November 1, 1995 (the "Agreement"), between THE DREYFUS/LAUREL TAX-FREE
MUNICIPAL FUNDS, a Massachusetts business trust (the "Trust"), on behalf
of DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND, a segregated
portfolio of assets (a "series") thereof having an office at 200 Park
Avenue, New York, New York 10166 (the "Transferring Fund"), and DREYFUS
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND, a Massachusetts business trust
having an office at 200 Park Avenue, New York, New York 10166 (the
"Acquiring Fund"). All agreements, representations, actions and obliga-
tions described herein made or to be taken or undertaken by the
Transferring Fund are made and shall be taken or undertaken by the Trust
on behalf of the Transferring Fund.
WHEREAS, the Trust and the Acquiring Fund wish to
effect a reorganization (the "Reorganization"), which will consist of the
transfer to the Acquiring Fund of a portion of the assets of the
Transferring Fund equal in value to the aggregate net asset value of the
interest in the Transferring Fund represented by its Investor shares, in
exchange solely for shares of the Acquiring Fund (the "Acquiring Fund
Shares") and the redemption of those Investor shares by distribution in
kind to the holders thereof of the Acquiring Fund Shares, such transfer
and redemption to occur as of noon on the closing date provided for in
paragraph 3.1 hereof (the "Closing Date"), all upon the terms and
conditions hereinafter set forth in this Agreement;
WHEREAS, the Trust and the Acquiring Fund are regis-
tered, open-end management investment companies and the Transferring Fund
is a duly established and designated series of the Trust that owns
securities that are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, both the Acquiring Fund and the Trust are
authorized to issue their shares of beneficial interest;
WHEREAS, the Board of Trustees of the Acquiring Fund
has determined that the exchange of Acquiring Fund Shares for a portion of
the assets of the Transferring Fund equal in value to the aggregate net
asset value of the interest in the Transferring Fund represented by its
Investor shares is in the best interests of the Acquiring Fund
shareholders and that the interests of those shareholders would not be
diluted as a result of the Reorganization; and
WHEREAS, the Board of Trustees of the Trust has deter-
mined that the exchange of such assets for Acquiring Fund Shares is in the
best interests of the Transferring Fund shareholders and that the
interests of those shareholders would not be diluted as a result of the
Reorganization:
A-1
<PAGE>
NOW, THEREFORE, in consideration of the premises and of
the covenants and agreements hereinafter set forth, the parties agree as
follows:
1. TRANSFER OF CERTAIN ASSETS OF THE TRANSFERRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES.
1.1. Subject to the terms and conditions contained
herein:
(a) The Transferring Fund agrees to assign,
transfer and convey to the Acquiring Fund as of noon on the Closing Date
(the "Valuation Time") a portion of the assets of the Transferring Fund,
including securities and cash, having a value equal to the aggregate net
asset value of all Investor shares of the Transferring Fund, both full and
fractional, issued and outstanding (collectively, the "Assets"), such
values to be determined as set forth in paragraph 2.1. The Assets shall
consist of as nearly a pro rata portion as is reasonably practicable of
each security or other asset held by the Transferring Fund at the
Valuation Time; and
(b) The Acquiring Fund agrees in exchange
therefor (i) to deliver to the Transferring Fund the number of full and
fractional Acquiring Fund Shares determined as set forth in paragraph 2.3
and (ii) to take certain other actions, as set forth in paragraph 1.2.
In lieu of delivering certificates for the Acquiring Fund Shares, the
Acquiring Fund shall cause its transfer agent to credit the Acquiring Fund
Shares to the Transferring Fund's account on the books of the Acquiring
Fund and shall deliver a confirmation thereof to the Transferring Fund.
1.2. The Transferring Fund will endeavor to
discharge all of its known liabilities and obligations attributable to its
Investor shares prior to the Closing Date to the extent reasonably
practicable. At the closing provided for in paragraph 3.1 (the
"Closing"), the Acquiring Fund shall execute an instrument in form and
substance reasonably satisfactory to the Trust and its counsel, assuming a
pro rata portion of the liabilities of the Transferring Fund unknown or
contingent at the Closing Date, and entitling the Acquiring Fund to a pro
rata portion of the assets of the Transferring Fund unknown or contingent
at the Closing Date, in each case to the extent such assets or liabilities
are discovered within a period of one year following the Closing Date,
such pro rata portion to be determined based on the ratio of the aggregate
net asset value of the Investor shares of the Transferring Fund, both full
and fractional, issued and outstanding at the Valuation Time, to the
aggregate net asset value of all shares of the Transferring Fund, both
full and fractional, issued and outstanding at the Valuation Time.
1.3. The Transferring Fund shall deliver the Assets
at the Closing to The Bank of New York, 90 Washington Street, New York,
New York 10286, the Acquiring Fund's custodian (the "Custodian"), for the
account of the Acquiring Fund, with all securities not in bearer form duly
endorsed, or accompanied by duly executed separate assignments or stock
A-2
<PAGE>
powers, in proper form for transfer, with signatures guaranteed, and with
all necessary stock transfer stamps, sufficient to transfer good and
marketable title thereto (including all accrued interest and dividends and
rights pertaining thereto) to the Custodian for the account of the
Acquiring Fund free and clear of all liens, encumbrances, rights,
restrictions and claims. All cash delivered shall be in the form of
immediately available funds payable to the order of the Custodian for the
account of the Acquiring Fund.
1.4. The Transferring Fund will pay or cause to be
paid to the Acquiring Fund any dividends or interest received on or after
the Closing Date with respect to any of the Assets. The Transferring Fund
will transfer to the Acquiring Fund any distributions, rights or other
assets received by the Transferring Fund on or after the Closing Date as
distributions on or with respect to any of the Assets. Such assets shall
be deemed included in the Assets and shall not be separately valued.
1.5. As soon after the Closing as is conveniently
possible, the Transferring Fund will distribute in kind pro rata to the
holders of record of its Investor shares, determined as of the Valuation
Time, in redemption of such Investor shares, the Acquiring Fund Shares
received by the Transferring Fund pursuant to paragraph 1.1. Such
distribution will be accomplished by the Acquiring Fund's transfer agent
transferring the Acquiring Fund Shares then credited to the account of the
Transferring Fund on the books of the Acquiring Fund to open accounts on
such books in the names of the holders of the Transferring Fund's Investor
shares and representing the respective pro rata number of the Acquiring
Fund Shares due each such shareholder. All issued and outstanding
Investor shares of the Transferring Fund will simultaneously be canceled
on the books of the Transferring Fund.
1.6. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund's transfer agent. The Acquiring
Fund Shares will be issued in the manner described in the Acquiring Fund's
current prospectus and statement of additional information.
1.7. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than the registered holder of the
redeemed Investor shares on the books of the Transferring Fund shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.8. In the event that, immediately before the
Valuation Time, any holder of Investor shares of the Transferring Fund
also holds a direct or indirect beneficial interest in Class R shares of
the Transferring Fund, the Transferring Fund shall redeem and cancel the
Class R shares of such holder as of that time, by payment to the holder of
cash equal to the net asset value of such Class R shares (and such Class R
shares shall be deemed to have been previously redeemed and not
outstanding for purposes of calculating pro rata amounts in this Section
1). Class R shares of the Transferring Fund not so redeemed shall be
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designated as a single class of shares of the Transferring Fund, effective
at the Valuation Time.
1.9. Any reporting responsibility of the
Transferring Fund is and shall remain the responsibility of the
Transferring Fund after the Reorganization.
2. VALUATION.
2.1. The value of the Assets shall be their values
computed as of the Valuation Time, based on market quotations or market
equivalents obtained from independent pricing services approved by the
respective Boards of Trustees of the Trust and the Acquiring Fund. The
aggregate net asset value of the Investor shares of the Transferring Fund,
both full and fractional, issued and outstanding, shall be equal to (a)
the number of such shares issued and outstanding at the Valuation Time,
times (b) the net asset value per share of an Investor share computed as
of the Valuation Time, based on market quotations or market equivalents
with respect to the assets of the Transferring Fund obtained from indepen-
dent pricing services approved by the respective Boards of Trustees of the
Trust and the Acquiring Fund (rounded to the nearest one-hundredth of one
cent ($.0001)).
2.2. The net asset value of an Acquiring Fund Share
shall be the net asset value per share of the Acquiring Fund computed as
of the Valuation Time, using the valuation procedures set forth in the
Acquiring Fund's Agreement and Declaration of Trust dated September 12,
1990, as amended (the "Declaration of Trust") and then-current prospectus
or statement of additional information (rounded to the nearest one-
hundredth of one cent ($.0001)).
2.3. The number of the Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Assets
shall be determined by dividing the value of the Assets determined in
accordance with paragraph 2.1 by the net asset value of one Acquiring Fund
Share determined in accordance with paragraph 2.2. Dreyfus will undertake
the valuation and calculations provided for in this Section 2.
3. CLOSING AND CLOSING DATE.
3.1. Subject to the provisions of Section 9 of this
Agreement, the Closing Date shall be the first day (other than a Friday)
on which both the New York Stock Exchange and the Federal Reserve Bank of
New York are open for business that occurs not less than seven (7)
calendar days after the approval of this Agreement by the shareholders of
the Transferring Fund, or such other date as the parties may mutually
agree. All acts necessary to consummate the Reorganization (i.e., the
Closing) shall be deemed to take place simultaneously as of noon on the
Closing Date unless otherwise provided, notwithstanding that the Closing
with respect to the Reorganization shall be held at 4:00 p.m., Eastern
time, on the Closing Date at the offices of The Dreyfus Corporation
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("Dreyfus"), 200 Park Avenue, New York, New York, or at such other time on
the Closing Date and/or place as the parties may mutually agree.
3.2. The Custodian shall deliver at the Closing a
certificate of an authorized officer stating that (a) the Assets have been
delivered in proper form to the Acquiring Fund and (b) all necessary taxes
including all applicable stock transfer stamps have been paid, or
provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3. If at the Valuation Time (a) the trading market
or markets for portfolio securities of the Acquiring Fund or the
Transferring Fund shall be closed to trading or trading thereon shall be
restricted, or (b) trading or the reporting of trading in such market or
markets shall be disrupted so that accurate appraisal of the value of the
net assets of the Acquiring Fund or the Assets is impracticable, the
Closing Date shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have been
restored.
3.4. The transfer agent for the Transferring Fund
shall deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of all the
holders of Investor shares of the Transferring Fund and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing (but after the redemption of Class R
shares provided for in paragraph 1.8). The Acquiring Fund, or its
transfer agent on its behalf, shall issue and deliver to the Secretary of
the Trust a confirmation, or other evidence satisfactory to the Trust,
that the Acquiring Fund Shares to be transferred to the Transferring Fund
on the Closing Date have been credited to the Transferring Fund's account
on the books of the Acquiring Fund. At the Closing, each party shall
deliver to the other such bills of sale, checks, assignments, receipts or
other documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Trust, on behalf of the Transferring Fund,
represents and warrants to the Acquiring Fund as follows:
(a) The Trust is a business trust duly orga-
nized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has power to own all of its properties
and assets and to carry out this Agreement.
(b) The Trust is registered under the Invest-
ment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
non-diversified, management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
(c) The Transferring Fund is a duly
established and designated series of the Trust.
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(d) The current prospectus and statement of
additional information of the Transferring Fund conform in all material
respects to the applicable requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act and the rules and regulations
of the Securities and Exchange Commission (the "SEC") thereunder and do
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(e) The Transferring Fund is not, and the
execution, delivery and performance of this Agreement will not result, in
material violation of the Trust's Third Amended and Restated Master Trust
Agreement dated December 9, 1992, as amended (the "Master Trust
Agreement") or the Trust's By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Transferring
Fund is a party or by which it is bound.
(f) The Transferring Fund has no material
contracts or other commitments outstanding (other than this Agreement)
that will be terminated with liability to it on or prior to the Closing
Date.
(g) No litigation or administrative proceeding
or investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Trust with respect to
the Transferring Fund or any of its properties or assets that, if
adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Transferring Fund knows of
no facts that might form the basis for the institution of such proceedings
and is not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body that materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated.
(h) The Statements of Assets and Liabilities
of the Transferring Fund for the fiscal years ended June 30, 1994 and
1995, have been audited by KPMG Peat Marwick LLP, independent auditors,
and for the fiscal years ended June 30, 1991, 1992 and 1993, have been
audited by Coopers & Lybrand L.L.P., independent auditors; such financial
statements are in accordance with generally accepted accounting
principles, consistently applied; such statements (copies of which have
been furnished to the Acquiring Fund) fairly reflect the financial
condition of the Transferring Fund as of such dates; and there are no
known contingent liabilities of the Transferring Fund as of such dates not
disclosed therein.
(i) Since June 30, 1995, there has not been
any material adverse change in the Transferring Fund's financial
condition, assets, liabilities or business other than changes occurring in
the ordinary course of business nor any incurrence by the Transferring
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Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred.
(j) At the Closing Date, all Federal and other
tax returns and reports of the Transferring Fund required by law to have
been filed by such date shall have been filed, and all Federal and other
taxes shall have been paid so far as due, or provision shall have been
made for the payment thereof; and to the best of the Transferring Fund's
knowledge, no such return is currently under audit and no assessment has
been asserted with respect to any such return.
(k) For each taxable year of the Transferring
Fund ended on or prior to the Closing Date, it has met the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), for qualification and treatment as a regulated investment
company, and it will continue to meet all such requirements for its
taxable year that includes the Closing Date.
(l) All issued and outstanding shares of the
Transferring Fund are duly and validly issued and outstanding, fully paid
and non-assessable by the Transferring Fund, except to the extent that
under Massachusetts law shareholders of a business trust may, under
certain circumstances, be held personally liable for its obligations. All
of the issued and outstanding shares of the Transferring Fund, at noon on
the Closing Date, will be held by the persons and in the amounts set forth
in the records of the transfer agent as provided in paragraph 3.4. The
Transferring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the Transferring Fund shares,
nor is there outstanding any security convertible into any of the
Transferring Fund shares, except such as are contemplated herein.
(m) On the Closing Date, the Transferring Fund
will have full right, power and authority to sell, assign, transfer and
deliver the Assets.
(n) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the Closing Date by
all necessary action on the part of the Trust's Board of Trustees; and,
subject to the approval of the Transferring Fund's shareholders and
assuming due execution and delivery hereof by the Acquiring Fund, this
Agreement will constitute the valid and legally binding obligation of the
Trust on behalf of the Transferring Fund, enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the
discretion of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(o) The proxy statement and statement of
additional information of the Transferring Fund (the "Proxy Statement")
included in the Registration Statement (as defined in paragraph 5.4) and
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the information incorporated by reference into that Registration Statement
(in each case other than information that has been furnished by the
Acquiring Fund) will, on the effective date of the Registration Statement
and on the Closing Date, not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which such statements were made, not misleading.
4.2. The Acquiring Fund represents and warrants to
the Transferring Fund as follows:
(a) The Acquiring Fund is a business trust
duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has power to carry on its business
as it is now being conducted and to carry out this Agreement.
(b) The Acquiring Fund is registered under the
1940 Act as an open-end, non-diversified, management investment company,
and such registration has not been revoked or rescinded and is in full
force and effect.
(c) The current prospectus and statement of
additional information of the Acquiring Fund conform in all material
respects to the applicable requirements of the 1933 Act, the 1940 Act and
the rules and regulations of the SEC thereunder and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) The Acquiring Fund is not, and the execu-
tion, delivery and performance of this Agreement will not result, in
material violation of the Declaration of Trust or its By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to
which it is a party or by which it is bound.
(e) No litigation or administrative proceeding
or investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Acquiring Fund or any
of its properties or assets that, if adversely determined, would
materially and adversely affect its financial condition or the conduct of
its business. The Acquiring Fund knows of no facts that might form the
basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects its business or
its ability to consummate the transactions contemplated herein.
(f) The Statements of Assets and Liabilities
of the Acquiring Fund for the fiscal period ended January 31, 1992, and
the fiscal years ended January 31, 1993, 1994 and 1995, have been audited
by Ernst & Young LLP, independent auditors, and are in accordance with
generally accepted accounting principles, consistently applied, and such
statements (copies of which have been furnished to the Trust) fairly
reflect the financial condition of the Acquiring Fund as of such dates.
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(g) Since January 31, 1995, there has not been
any material adverse change in the Acquiring Fund's financial condition,
assets, liabilities or business other than changes occurring in the
ordinary course of business nor any incurrence by the Acquiring Fund of
indebtedness maturing more than one year from the date such indebtedness
was incurred.
(h) At the Closing Date, all Federal and other
tax returns and reports of the Acquiring Fund required by law to have been
filed by such date shall have been filed, and all Federal and other taxes
shall have been paid so far as due, or provision shall have been made for
the payment thereof; and to the best of the Acquiring Fund's knowledge, no
such return is currently under audit and no assessment has been asserted
with respect to any such return.
(i) For each taxable year of the Acquiring
Fund ended on or prior to the Closing Date, it has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company, and it will continue to meet all such requirements for
its taxable year that includes the Closing Date.
(j) All issued and outstanding shares of the
Acquiring Fund are duly and validly issued and outstanding, fully paid and
non-assessable by the Acquiring Fund, except to the extent that under
Massachusetts law shareholders of a business trust may, under certain
circumstances, be held personally liable for its obligations. The
Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the Acquiring Fund Shares, nor
is there outstanding any security convertible into any Acquiring Fund
Shares, except such as are contemplated herein.
(k) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the Closing Date by
all necessary action, if any, on the part of the Acquiring Fund's Board of
Trustees; and, assuming due execution and delivery hereof by the Trust on
behalf of the Transferring Fund, this Agreement will constitute the valid
and legally binding obligation of the Acquiring Fund, enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and to general principles of equity
and the discretion of the court (regardless of whether the enforceability
is considered in a proceeding in equity or at law).
(l) The Registration Statement and the
information incorporated by reference therein (only insofar as it relates
to the Acquiring Fund and is based on information furnished by the
Acquiring Fund) will, on the effective date of the Registration Statement
and on the Closing Date, not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which such statements were made, not misleading.
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5. COVENANTS OF THE ACQUIRING FUND AND THE TRANSFERRING
FUND.
5.1. The Acquiring Fund and the Transferring Fund
each will operate its respective business in the ordinary course between
the date hereof and the Closing Date, it being understood that such
ordinary course of business will include the declaration and payment of
customary dividends and other distributions and the anticipated termina-
tion by the Transferring Fund, as of the Valuation Time, of the
Distribution Plan adopted pursuant to Rule 12b-1 of the SEC under the 1940
Act with respect to the Investor shares of the Transferring Fund.
5.2. The Transferring Fund shall call a meeting of
its shareholders to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions contemplated
herein.
5.3. Subject to the provisions of this Agreement,
the Acquiring Fund and the Transferring Fund will each take, or cause to
be taken, all action and do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the
transactions contemplated herein.
5.4. The Acquiring Fund and the Transferring Fund
shall cooperate in the provision of all information reasonably necessary
for the preparation and filing of the registration statement of the
Acquiring Fund on Form N-14, including the Proxy Statement, in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and
the 1940 Act, and applicable Blue Sky laws, in connection with the meeting
of the shareholders of the Transferring Fund to consider approval of this
Agreement and the transactions contemplated herein (the "Registration
Statement").
5.5. The Acquiring Fund and the Transferring Fund
shall cooperate in the preparation and filing as promptly as practicable
with the SEC of an application, in form and substance reasonably
satisfactory to their respective counsel, for exemptive relief from the
provisions of Sections 12(d) and 17 of the 1940 Act, and from any other
provision of the 1940 Act deemed necessary or advisable by such counsel,
to permit consummation of the Reorganization as contemplated herein (the
"Exemptive Application"). The Acquiring Fund and the Transferring Fund
shall use all reasonable efforts to obtain the relief requested by the
Exemptive Application.
5.6. The Acquiring Fund shall use all reasonable
efforts to obtain the approvals and authorizations required by the 1933
Act, the 1940 Act and such of the state Blue Sky or securities laws as it
may deem appropriate in order to continue its operations after the Closing
Date.
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6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
FUND.
The obligations of the Acquiring Fund to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Transferring Fund of all the obligations to be
performed by it hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
6.1. All representations and warranties of the
Transferring Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated herein, as of the Closing with
the same force and effect as if made on the Closing Date and as of the
Closing.
6.2. The Trust, on behalf of the Transferring Fund,
shall have delivered to the Acquiring Fund at the Closing a certificate
executed in its name by its President and a Vice President, in form and
substance reasonably satisfactory to the Acquiring Fund, to the effect
that the representations and warranties of the Transferring Fund made in
this Agreement are true and correct at and as of the Closing, except as
they may be affected by the transactions contemplated herein, and as to
such other matters as the Acquiring Fund shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFERRING
FUND.
The obligations of the Transferring Fund to consummate
the transactions provided for herein shall be subject, at its election, to
the performance by the Acquiring Fund of all the obligations to be
performed by it hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
7.1. All representations and warranties of the
Acquiring Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated herein, as of the Closing with
the same force and effect as if made on the Closing Date and as of the
Closing.
7.2. The Acquiring Fund shall have delivered to the
Transferring Fund at the Closing a certificate executed in its name by its
President and a Vice President, in form and substance reasonably
satisfactory to the Trust, to the effect that the representations and
warranties of the Acquiring Fund made in this Agreement are true and
correct at and as of the Closing, except as they may be affected by the
transactions contemplated herein, and as to such other matters as the
Trust shall reasonably request.
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8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND THE TRANSFERRING FUND.
If any of the conditions set forth below does not exist
on or before the Closing Date with respect to the Transferring Fund or the
Acquiring Fund, the other party to this Agreement, at its option, shall
not be required to consummate the transactions contemplated herein.
8.1. This Agreement and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of the Transferring Fund in accordance
with the provisions of the Master Trust Agreement and the 1940 Act.
8.2. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in
which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein.
8.3. All consents of other parties and all other
consents, orders and permits of Federal, state and local regulatory
authorities (including those of the SEC and of state Blue Sky and
securities authorities) deemed necessary by the Acquiring Fund or the
Transferring Fund to permit consummation, in all material respects, of the
transactions contemplated herein shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Transferring Fund.
8.4. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and, to the best knowledge of the parties
hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.5. The relief requested by the Exemptive Applica-
tion shall have been granted in form and substance reasonably satisfactory
to the respective counsel for the Acquiring Fund and the Transferring
Fund.
8.6. The Transferring Fund shall have declared a
dividend or dividends that, together with all previous dividends, shall
have the effect of distributing to the Transferring Fund's shareholders
all of its investment company taxable income, and net interest income
excludable from gross income under Section 103(a) of the Code, for all its
taxable years ended on or prior to the Closing Date and for its current
taxable year through the Closing Date (computed without regard to any
deduction for dividends paid) and any net capital gain realized in all
such taxable years (after reduction for any capital loss carryforward).
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8.7. The Acquiring Fund and the Trust shall each
have received an opinion from Kirkpatrick & Lockhart LLP, counsel to the
Trust, substantially to the effect that:
(a) The Acquiring Fund's acquisition of the Assets
in exchange for the Acquiring Fund Shares will consti-
tute a taxable sale of assets by the Transferring Fund
to the Acquiring Fund;
(b) The Transferring Fund's redemption of its
Investor shares by distributing in kind to the holders
thereof the Acquiring Fund Shares will constitute a
taxable redemption of such Investor shares to such
holder;
(c) Gain or loss may be recognized to the Transfer-
ring Fund on the transfer to the Acquiring Fund of the
Assets in exchange for the Acquiring Fund Shares,
depending upon whether the Transferring Fund's aggre-
gate tax basis for the Assets is less than, is equal to
or exceeds the aggregate fair value of the Acquiring
Fund Shares received by the Transferring Fund;
(d) No gain or loss will be recognized to the
Transferring Fund on the distribution of the Acquiring
Fund Shares to redeeming holders of Investor shares of
the Transferring Fund;
(e) No gain or loss will be recognized to the Ac-
quiring Fund on its receipt of the Assets in exchange
for the Acquiring Fund Shares;
(f) The Acquiring Fund's aggregate tax basis for
the Assets will be equal to the aggregate fair value of
the Acquiring Fund Shares exchanged therefor, and the
Acquiring Fund's holding period for the Assets will
begin on the day after the Closing Date; and
(g) The basis for the Acquiring Fund Shares
received in the Reorganization by a holder of Investor
shares of the Transferring Fund will be the fair market
value of such Acquiring Fund Shares on the date of
distribution, and such holder's holding period for
those Acquiring Fund Shares will begin on the day after
such date.
9. POSTPONEMENT OF THE CLOSING DUE TO CERTAIN CONDITIONS.
9.1. If as of noon on the day otherwise scheduled to
be the Closing Date, the difference between the net asset values per share
of the Investor shares of the Transferring Fund and of shares of the
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Acquiring Fund, computed based on market quotations or market equivalents
obtained from independent pricing services approved by the respective
Boards of Trustees of the Trust and the Acquiring Fund, equals or exceeds
$.0025, either the Acquiring Fund or the Transferring Fund may postpone
the Closing Date until the first date on which, as of noon, such
difference in net asset values per share is less than $.0025, in which
event noon on such date shall be the Valuation Time and the Closing shall
occur at 4:00 p.m., Eastern time, on such date, unless the parties
otherwise agree.
9.2. If as of noon on the day otherwise scheduled to
be the Closing Date, Dreyfus, as investment adviser to the Transferring
Fund, shall reasonably determine that consummation of the Reorganization
will result in recognition to the Transferring Fund for Federal income tax
purposes of gain or loss of $.0010 or more per share, the Closing Date
shall be postponed until the first date on which, as of noon, Dreyfus
shall so determine that such recognition of gain or loss will be less that
$.0010 per share, in which event noon on such date shall be the Valuation
Time and the Closing shall occur at 4:00 p.m., Eastern time, on such date,
unless the parties otherwise agree.
10. TERMINATION OF AGREEMENT.
10.1. This Agreement and the transactions
contemplated herein may be terminated and abandoned by resolution of the
Board of Trustees of the Trust or of the Acquiring Fund, as the case may
be, at any time at or prior to the Closing Date (notwithstanding any vote
of the Transferring Fund's shareholders) if: (a) circumstances should
develop that, in the opinion of either such Board, make proceeding with
this Agreement inadvisable; (b) a material breach by the other party of
any representation, warranty, or agreement contained therein has occurred;
or (c) a condition to the obligation of the terminating party cannot
reasonably be met.
10.2. If this Agreement is terminated and the Reorga-
nization is abandoned pursuant to the provisions of this Section 10, this
Agreement shall become void and have no effect, without any liability on
the part of either party hereto or the Trustees, officers or shareholders
of the Acquiring Fund or of the Trust or the Transferring Fund, as the
case may be, in respect of this Agreement. If this Agreement is
terminated or the exchange contemplated herein is abandoned, Dreyfus shall
bear all expenses incurred in connection with this Agreement and the
transaction contemplated herein up to the time of such termination or
abandonment.
11. WAIVER.
At any time prior to the Closing Date, any of the
conditions set forth in Sections 6, 7 or 8 may be waived by the Board of
Trustees of the Acquiring Fund or of the Trust, as the case may be, if, in
the judgment of either, such waiver will not have a material adverse
effect on the benefits intended under this Agreement to the shareholders
of the Acquiring Fund or of the Transferring Fund, as the case may be.
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12. MISCELLANEOUS.
12.1. None of the representations and warranties
included or provided for herein shall survive consummation of the
Reorganization.
12.2. This Agreement contains the entire agreement
and understanding between the parties with respect to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation other than as set forth or provided
in this Agreement or as may be, on or subsequent to the date hereof, set
forth in a writing signed by the party to be bound thereby.
12.3. Copies of the Master Trust Agreement and of the
Declaration of Trust are on file with the Secretary of the Commonwealth of
Massachusetts. This Agreement is executed by the undersigned officers on
behalf of the Trust (on behalf of the Transferring Fund) and the Acquiring
Fund, respectively, and not on behalf of such officers or the Trustees of
either the Trust or the Acquiring Fund as individuals. The respective
obligations of the Trust and the Acquiring Fund under this Agreement are
not binding upon any of their respective Trustees, officers, shareholders
or partners individually. The obligations of the Acquiring Fund hereunder
are binding only upon its assets and property, and the obligations of the
Trust hereunder are binding only upon the assets and property of the
Transferring Fund.
12.4. This Agreement shall be governed and construed
in accordance with the internal laws of the State of New York, without
giving effect to principles of conflict of laws; provided, however, that
the due authorization, execution and delivery of this Agreement by the
Acquiring Fund and the Trust shall be governed and construed in accordance
with the internal laws of the Commonwealth of Massachusetts, without
giving effect to principles of conflict of laws.
12.5. This Agreement may be executed in counterparts,
each of which, when executed and delivered, shall be deemed to be an
original.
12.6. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns,
but no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by either party without the written consent of the
other party. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation, other
than the parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the Trust, on behalf of the Trans-
ferring Fund, and the Acquiring Fund have caused this Agreement and Plan
A-15
<PAGE>
of Reorganization to be executed and attested on its behalf by its duly
authorized representatives as of the date first above written.
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS, on
behalf of DREYFUS/LAUREL MASSACHUSETTS TAX-FREE
MONEY FUND
ATTEST: /s/ John E. Pelletier By: /s/ Marie E. Connolly
--------------------- --------------------------
Secretary President
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET
FUND
ATTEST: /s/ Elizabeth Bachman By: /s/ Eric B. Fischman
--------------------- ---------------------
Assistant Secretary Vice President
A-16
<PAGE>
APPENDIX B TO PROXY STATEMENT
FORM OF
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this _____ day of ______________, 1995 between The
Dreyfus Corporation, a New York corporation (hereinafter referred to as
the "Adviser") and The Dreyfus/Laurel Tax-Free Municipal Funds, a
Massachusetts business trust (hereinafter referred to as the "Trust"), on
behalf of those of its series listed on Exhibit A hereto and such other of
its portfolios of which the Trust may notify the Adviser and which the
Adviser may notify the Trust it is willing to advise as provided in
paragraph 2(b) hereof (in each case hereinafter referred to individually
as a "Fund", and collectively as the "Funds").
WHEREAS, the Trust is engaged in business as an open-end
management company and is so registered under the Investment Company Act
of 1940 (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate funds with each such fund representing the
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust currently offers shares of beneficial interest
in each Fund; and
WHEREAS, the Trust desires for the Adviser to provide or
otherwise arrange for the provision of other services for each Fund,
including custody, transfer agency, administrative, accounting, legal,
audit and similar services, and the Adviser is willing to do so,
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the
parties hereto as follows:
1. NAME OF TRUST.
The Adviser consents to the use by the Trust of the name "The
Dreyfus/Laurel Tax-Free Municipal Funds" so long as this Agreement or an
extension, renewal or amendment thereof remains in effect, including any
such agreements with any organization which shall have succeeded to the
business of the Adviser. The Trust agrees that if and when no such
agreement is in effect it will cease to use that name or any name
indicating that it is advised by or otherwise associated with the Adviser.
2. APPOINTMENT OF ADVISER.
(a) The Trust hereby appoints the Adviser to act as
investment adviser to each Fund for the period and on the terms herein set
forth. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
- B-1 -
<PAGE>
(b) In the event that the Trust desires to retain the
Adviser to render investment advisory services hereunder with respect to
one or more funds of the Trust other than those Funds listed on Exhibit A,
the Trust shall notify the Adviser in writing. If the Adviser is willing
to render such services it shall notify the Trust in writing whereupon
each of such funds shall become a Fund hereunder and the compensation
payable by such Funds to the Adviser will be as agreed in writing at the
time.
3. DUTIES OF THE ADVISER.
(a) The Adviser shall supervise the investments of each
Fund, maintain a continuous investment program for each Fund, determine
what securities shall be purchased or sold by each Fund, secure and
evaluate such information as it deems proper and take whatever action is
necessary or convenient to perform its functions, including the placing of
purchase and sale orders. With the approval of the Board of Trustees, the
Adviser may, from time to time, engage one or more sub-investment
advisers.
(b) The Adviser shall also provide to each Fund, or arrange
for and supervise third parties in the provision to each Fund of, custody,
transfer agency, administrative, accounting, legal, audit and similar
services.
(c) The Adviser, at its own expense, shall place all orders
for the purchase and sale of portfolio securities for the account of each
Fund with brokers or dealers selected by the Adviser. In executing
portfolio transactions and selecting brokers or dealers, the Adviser will
use its best efforts to seek on behalf each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any (for the
specific transaction and on a continuing basis). In evaluating the best
overall terms available and in selecting the broker or dealer to execute a
particular transaction, the Adviser may also consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to any Fund and/or other
accounts over which the Adviser or any affiliate of the Adviser exercises
investment discretion. The Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Adviser determines in good
faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer --
viewed in terms of that particular transaction or in terms of all of
accounts over which investment discretion is so exercised.
- B-2 -
<PAGE>
(d) All of the functions undertaken by the Adviser
hereunder shall at all times be subject to any directions of the Board of
Trustees of the Trust, its committees or officers of the Trust acting
under the authority of the Board of Trustees.
4. COMPENSATION OF THE ADVISER.
(a) Except as may be agreed pursuant to paragraph 2(b) with
respect to Funds not listed on Exhibit A, the Trust agrees to pay to the
Adviser, and the Adviser agrees to accept as full compensation for the
services and facilities provided by the Adviser hereunder with respect to
each Fund, a fee computed daily and payable monthly at the annual rate of
.45 of 1% of the average daily net assets of the Fund, less the Fund's
allocable portion of the accrued fees and expenses (including counsel
fees) of the non-interested trustees of the Trust.
In case of termination of this Agreement with respect to a Fund
during any month, the fee with respect to such Fund for that month shall
be reduced proportionately based upon the number of calendar days during
which it is in effect, and the fee shall be computed upon the average net
assets of the Fund for the business days during which it is so in effect.
The fees payable under this Agreement shall be calculated by
applying 1/365ths of the annual rate to the net assets of the applicable
Fund each day, such net assets to be determined as of the close of
business on that day or that last previous business day, and shall be
accrued daily.
(b) The Adviser will pay all of the Trust's expenses
(exclusive of those paid directly by shareholders as provided in paragraph
4(c)), including the fees and other charges of third-party service
providers engaged pursuant to paragraph 3(a) or (b) above, except
interest, taxes, brokerage commissions, Rule 12b-1 distribution fees and
expenses, fees and expenses of the non-interested trustees (including
counsel fees), and extraordinary expenses. The Adviser will provide the
Trust with all physical facilities and personnel required to carry on the
business of the Trust, including but not limited to office space, office
furniture, fixtures and equipment, office supplies, computer hardware and
software, and salaried and hourly paid personnel. The Adviser may at its
own expense employ others to provide all or any part of such facilities
and personnel.
(c) The Trust may, from time to time, provide for the payment of
charges to be made by shareholders of a Fund to the Fund's transfer agent
for services used by such shareholders (including, without limitation,
exchanges out of the Fund, wire redemptions, account closeouts, Dreyfus
Teletransfer redemptions and redemption checks). Such payments by
shareholders to the Fund's transfer agent shall not be obligations of the
Adviser under paragraph 4(b) above, and the Adviser shall not be required
to reduce the compensation otherwise payable to it under paragraph 4(a),
nor shall the Trust be entitled to a credit toward the amount payable by
it under such paragraph 4(a), by virtue of any such shareholder payments,
- B-3 -
<PAGE>
whether or not such shareholder payments may directly or indirectly affect
amounts payable to the Fund's transfer agent by the Adviser.
5. LIMITATION OF LIABILITY OF ADVISER.
The Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust or any Fund in
connection with the performance of its obligations under this Agreement;
but nothing herein contained shall be construed to protect the Adviser
against any liability to the Trust by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under the Agreement.
All functions undertaken by the Adviser shall at all times
conform to, and be in accordance with, any requirements imposed by: (i)
the Investment Company Act of 1940, and any rules and regulations
promulgated thereunder; (ii) any other applicable provisions of law; (iii)
the Third Amended and Restated Master Trust Agreement dated December 9,
1992, as amended from time to time; (iv) the By-Laws of the Trust as
amended from time to time; and (v) the registration statement of the
Trust, as amended from time to time, filed under the Securities Act of
1933 and the 1940 Act.
6. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective with respect to
the Funds listed on Exhibit A on the date hereof and, with respect to any
additional Fund, on the date of receipt by the Trust of notice from the
Adviser in accordance with paragraph 2(b) hereof that the Adviser is
willing to serve as Adviser with respect to such Fund. Unless terminated
as herein provided, this Agreement shall remain in full force and effect
for two years from the date hereof with respect to each Fund listed on
Exhibit A and, with respect to each other Fund added to the Trust pursuant
to paragraph 2(b), for two years from the date on which such Fund becomes
a Fund hereunder, and shall continue in full force and effect for periods
of one year thereafter with respect to each Fund so long as such
continuance with respect to any such Fund is approved at least annually,
(a) by either the Trustees of the Trust or by vote of a majority of the
outstanding voting Shares (as defined in the 1940 Act) of such Fund, and
(b) in either event by the vote of a majority of the Trustees of the Trust
who are not parties to this Agreement or interested persons (as defined in
the 1940 Act) of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
Any approval of this Agreement by the holders of a majority of
the outstanding Shares (as defined in the 1940 Act) of any Fund shall be
effective to continue this Agreement with respect to such Fund
notwithstanding (a) that this Agreement has not been approved by the
holders of a majority of the outstanding Shares of any other Fund affected
thereby, and (b) that this Agreement has not been approved by the vote of
a majority of the outstanding Shares of the Trust, unless such approval
shall be required by any other applicable law or otherwise.
- B-4 -
<PAGE>
(b) This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Trustees of the Trust or by vote of
a majority of the outstanding Shares (as defined in the 1940 Act), or by
the Adviser on sixty (60) days' written notice to the other party.
(c) This Agreement shall automatically and immediately
terminate in the event of its assignment.
7. LIMITATION OF LIABILITY.
The term Trustees of The Dreyfus/Laurel Tax-Free Municipal Funds
means and refers to the Trustees from time to time serving under the Third
Amended and Restated Master Trust Agreement dated December 9, 1992, as the
same may subsequently thereto have been, or subsequently hereto be,
amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind
only the trust property of the Trust, as provided in the Third Amended and
Restated Master Trust Agreement of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees and shareholders of
the Trust and signed by the President of the Trust, acting as such, and
neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as
provided in its Third Amended and Restated Master Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed the day and year above written.
THE DREYFUS/LAUREL TAX-FREE
MUNICIPAL FUNDS
By:________________________________
Name:
Title:
THE DREYFUS CORPORATION
By:________________________________
Name:
Title:
- B-5 -
<PAGE>
Exhibit A to Appendix B
Dreyfus BASIC California Municipal Money Market Fund
(formerly the Dreyfus/Laurel California Tax-Free Money Fund)
Dreyfus BASIC New York Municipal Money Market Fund
(formerly the Dreyfus/Laurel New York Tax-Free Money Fund)
Dreyfus BASIC Massachusetts Municipal Money Market Fund
(formerly the Dreyfus/Laurel Massachusetts Tax-Free Money Fund)
- B-6 -
<PAGE>
APPENDIX C TO PROXY STATEMENT
EXPENSE RATIO COMPARISON UNDER NEW AGREEMENT
DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND
Current Expense Ratio
ESTIMATED ANNUAL FUND OPERATING Investor Class R
EXPENSES Shares Shares
(as a percentage of net assets)
Management Fee . . . . . . . . . . . .35% .35%
12b-1 Fees . . . . . . . . . . . . . .25% none
Other Expenses(1) . . . . . . . . . . .00% .00%
---- ----
Total Fund Operating Expenses . . . . .60% .35%
Example:
You would pay the following
expenses on a $1,000
investment, assuming (1) a 5%
annual return and (2)
redemption at the end of each
time period:
Investor Shares Class R Shares
--------------- --------------
1 Year $ 6 $ 4
3 Years $19 $11
5 Years $33 $20
10 Years $75 $44
Proposed Expense Ratio (With One Year Cap)
------------------------------------------
Fund Shares
ESTIMATED ANNUAL FUND OPERATING EXPENSES -----------
(as a percentage of net assets)
Management Fee . . . . . . . . . . . . . . . .35%
12b-1 Fees . . . . . . . . . . . . . . . . . 0.00%
Other Expenses(1) . . . . . . . . . . . . . . 0.00%
-----
Total Fund Operating Expenses . . . . . . . . .35%
Example:
You would pay the following expenses
on a $1,000 investment, assuming (1)
a 5% annual return and (2) redemption
at the end of each time period:
C-1
<PAGE>
Fund Shares
-----------
1 Year $ 4
3 Years $11
5 Years $20
10 Years $44
The amounts listed in the examples should not be
considered as representative of 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%.
________________________
(1) Does not include fees and expenses of the non-interested trustees
(including counsel). The investment manager is contractually
required to reduce its Management Fee in an amount equal to the
Fund's allocable portion of such fees and expenses, which are
estimated to be .02% of the Fund's net assets.
C-2
<PAGE>
Proposed Expense Ratio (Without One Year Cap)
---------------------------------------------
Fund
Shares
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
Management Fee . . . . . . . . . . . . . . .45%
12b-1 Fees . . . . . . . . . . . . . . . . .00%
Other Expenses(1) . . . . . . . . . . . . . .00%
----
Total Fund Operating Expenses . . . . . . . .45%
Example:
You would pay the following
expenses on a $1,000 investment,
assuming (1) a 5% annual return and
(2) redemption at the end of each
time period:
Fund Shares
1 Year $ 5
3 Years $14
5 Years $25
10 Years $57
The amounts listed in the example should not be
considered as representative of 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%.
________________________
(1) Does not include fees and expenses of the non-interested trustees
(including counsel). The investment manager is contractually
required to reduce its Management Fee in an amount equal to the
Fund's allocable portion of such fees and expenses, which are
estimated to be .02% of the Fund's net assets.
C-3
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
DATED DECEMBER 21, 1995
This Statement of Additional Information, which is not a
Prospectus, relates to the acquisition of the Investor shares of
Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the "Transferring
Fund"), a portfolio of The Dreyfus/Laurel Tax-Free Municipal Funds
(formerly known as The Laurel Tax-Free Municipal Funds and also formerly
known as The Boston Company Tax-Free Municipal Funds), by Dreyfus
Massachusetts Municipal Money Market Fund (the "Acquiring Fund") and
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated December 21, 1995. To obtain a copy of the
Prospectus/Proxy Statement, please write to the Acquiring Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11566-0144, or call toll-free
1-800-645-6561.
This Statement of Additional Information incorporates by
reference the following documents, a copy of each of which accompanies
this Statement of Additional Information:
A. The Statement of Additional Information of the
Acquiring Fund dated May 31, 1995, including the
Acquiring Fund's audited financial statements for the
period ended January 31, 1995, previously filed on
EDGAR, Accession number 0000871967-95-000003.
B. The unaudited financial statements of the Acquiring
Fund for the semi-annual period ended July 31, 1995,
which appear in the Acquiring Fund's Semi-Annual
Reports for the period ending July 31, 1995, previously
filed on EDGAR, Accession number 0000871967-95-000012.
C. The Statement of Additional Information of the
Transferring Fund dated October 31, 1995, previously
filed on EDGAR, Accession number 0000717341-95-000020.
D. The audited financial statements of the Transferring
Fund for the fiscal year ended June 30, 1995, which are
included in the Transferring Fund's Annual Report for
the period ending June 30, 1995, previously filed on
EDGAR, Accession number 0000717341-95-000012.
The following are pro forma financial statements of the Acquiring
Fund and the Transferring Fund giving effect to the proposed
Reorganization described in the Prospectus/Proxy as of July 31, 1995:
<PAGE>
<TABLE>
<CAPTION>
Dreyfus/Laurel Massachusetts Tax-Free Money Fund
Pro Forma Statement of Assets and Liabilities
July 31, 1995 (Unaudited)
Pro Forma
Dreyfus/Laurel
Dreyfus/Laurel Massachusetts
Massachusetts Tax-Free Money
Tax-Free Money Fund (b)
Fund Adjustments (a) (Note 1)
------------------ --------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investment in securities, at value - Note 2 $118,020,962 ($86,634,444) $31,386,518
Interest Receivable 693,596 (509,141) 184,455
---------------- -------------- ---------------
Total Assets 118,714,558 (87,143,585) (c)31,570,973
LIABILITIES:
Due to The Dreyfus Corporation 113,972 113,972
Due to Distributor 14,910 14,910
Due to Custodian 655,990 655,990
Accrued Expenses 5,668 5,668
Payable for investment securities purchased 1,170,000 1,170,000
--------------- ---------------- --------------
Total Liabilities 1,960,540 1,960,540(f)
--------------- ---------------- --------------
NET ASSETS $116,754,018 ($87,143,585) $29,610,433
============ ============= ============
REPRESENTED BY:
Paid-in capital 116,822,670 ($87,178,463) (d)29,644,207
Accumulated net realized gain/(loss)
on investments (68,652) 34,878 (e) (33,774)
---------------- ---------------- --------------
NET ASSETS $116,754,018 ($87,143,585) $29,610,433
============ ============= ============
Shares of Beneficial Interest Outstanding 116,822,670 (87,195,902) 29,626,768
============ ============= ============
NET ASSET VALUE PER SHARE $0.9994 $0.9994
============ ============
See notes to pro forma financial statements.
</TABLE>
<PAGE>
(a) Represents amounts allocated to the Fund's Investor class of
shares.
(b) Represents pro forma statement of assets and liabilities of
Dreyfus/Laurel Massachusetts Tax-Free Money Fund after
redemption of the Fund's Investor shares.
(c) Represents assets at amortized cost. Market value of assets is
$87,178,463.
(d) Includes a $17,439 adjustment resulting from the difference
between the number of shares redeemed (87,195,902) by
Dreyfus/Laurel Massachusetts Tax-Free Money Fund and the number
of shares exchanged (87,178,463) by Dreyfus Massachusetts
Municipal Money Market Fund.
(e) Represents difference between assets at amortized cost and
assets at market value.
(f) The Transferring Fund will endeavor to discharge all of its
known liabilities and obligations attributable to its Investor
shares prior to the Closing Date to the extent reasonably
practicable.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus/Laurel Massachusetts Tax-Free Money Fund
Pro Forma Statement of Operations
Twelve Months Ended June 30, 1995 (Unaudited)
Pro Forma
Dreyfus/Laurel
Dreyfus/Laurel Massachusetts
Massachusetts Tax-Free Money
Tax-Free Money Pro Forma Fund (b)
Fund Adjustments (a) Adjustments (Note 1)
-------------- --------------- ----------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income $4,113,322 ($3,226,987) $886,335
---------- ----------- --------
Expenses:
Management fee 397,565 (311,898) 24,476 110,143 (c)
Trustees' fees and expenses 9,343 (7,330) 2,013
Distribution fees 222,784 (222,784) 0
---------- ---------- --------- ----------
629,692 (542,012) 24,476 112,156
Less-reduction in management fee ------- ------- 24,476 24,476
due to undertaking ----------- ---------- ---------- ----------
Total Expenses 629,692 (542,012) 0 87,680 (d)
---------- ---------- ---------- ----------
INVESTMENT INCOME-NET 3,483,630 (2,684,975) 798,655
NET REALIZED GAIN ON INVESTMENTS 977 (766) 211
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING $3,484,607 ($2,685,741) $798,866
FROM OPERATIONS ========== ========== ========== ==========
</TABLE>
See notes to proforma financial statements.
(a) Represents amounts allocated to the Fund's Investor class of
shares. Amount based on the average number of shares
outstanding for the Investor shares divided by the average net
assets of the Fund.
(b) Represents pro forma operating results of Dreyfus/Laurel
Massachusetts Tax-Free Money Fund after redemption of the Fund's
Investor shares and other pro forma adjustments.
<PAGE>
(c) Total combined average net assets for the twelve months ended
June 30, 1995 multiplied by the proposed Management Fee of .45%.
(d) Total combined average net assest for the twelve months ended
June 30, 1995 multiplied by .35%. Dreyfus has agreed to limit
its fee for one year following completion of the Reorganization
to .35%.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Massachusetts Municipal Money Market Fund
Pro Forma Statement of Assets and Liabilities
July 31, 1995 (Unaudited)
Pro Forma Combined
Dreyfus/Laurel Dreyfus
Dreyfus Massachusetts Massachusetts
Massachusetts Tax-Free Money Municipal Money
Municipal Money Fund Market Fund
Market Fund Investor Class Adjustments (Note 1)
(a)
<S> <C> <C> <C> <C>
ASSETS:
Investment in securities, at value - Note 2 $171,417,802 $87,178,463 $258,596,265
Interest receivable 1,000,855 1,000,855
Prepaid expenses 10,851 10,851
Total Assets 172,429,508 87,178,463 259,607,971
LIABILITIES:
Due to The Dreyfus Corporation 43,314 43,314
Due to Custodian 130,149 130,149
Accrued Expenses 49,446 49,446
Payable for investment securities purchased 9,034,650 9,034,650
Total Liabilities 9,257,559 $9,257,559
NET ASSETS $163,171,949 $87,178,463 $250,350,412
REPRESENTED BY:
Paid-in capital 163,203,379 87,178,463 250,381,842
Accumulated net realized (loss) on investments (31,430) (31,430)
NET ASSETS $163,171,949 $87,178,463 $250,350,412
Shares of Beneficial Interest outstanding 163,203,379 87,195,902 250,399,281
NET ASSET VALUE PER SHARE - Note 3 $0.9998 $0.9998 $0.9998
</TABLE>
See notes to pro forma financial statements.
(a) Represents the aggregate net asset value of the Fund's Investor
class of shares being acquired.
See pro forma Dreyfus/Laurel Massachusetts Tax-Free Money Fund
Statement of Assets and Liabilities on page 1.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Massachusetts Municipal Money Market Fund
Pro Forma Statement of Operations
Twelve Months Ended July 31, 1995 (Unaudited)
Pro Forma
Combined
Dreyfus/Laurel Dreyfus
Dreyfus Massachusetts Massachusetts
Massachusetts Tax-Free Money Municipal Money
Municipal Money Fund Market Fund
Market Fund Investor Class (a) Adjustments (Note 1)
--------------- ------------------ ----------- ---------------
<S> <C> <C> <C> <C>
Interest Income $5,107,787 $3,226,987 $8,334,774
Expenses:
Management fee 710,334 311,898 133,671 1,155,903 (b)
Shareholder servicing costs 158,024 ----- 84,429 242,453 (c)
Professional fees 36,941 ----- 36,941 (d)
Custodian fees 14,211 ----- 7,593 21,804 (c)
Registration fees 18,183 ----- 18,183 (d)
Prospectus & shareholders' reports 10,536 ----- 10,536 (d)
Trustees' fees and expenses 7,139 7,330 (7,330) 7,139 (d)
Distribution fees 0 222,784 (222,784) 0 (e)
Miscellaneous 17,633 ----- 17,633 (d)
973,001 542,012 (4,421) 1,510,592
Less-reduction in management fee due 501,643 ----- (378,134) 123,509
Total Expenses 471,358 542,012 373,713 1,387,083 (f)
INVESTMENT INCOME - NET 4,636,429 2,684,975 (373,713) 6,947,691
NET REALIZED GAIN/(LOSS) ON INVESTMENTS (30,672) 766 (29,906)
NET INCREASE IN NET ASSETS RESULTING FROM $4,605,757 $2,685,741 ($373,713) $6,917,785
</TABLE>
See notes to pro forma financial statements.
(a) Represents amounts allocated to the Fund's Ivestor Class of
shares for the year ended June 30, 1995.
See pro forma Dreyfus/Laurel Massachusetts Tax-Free Money Fund
Statement of Operations on page 2.
(b) Total combined average net assets for the twelve months ended
multiplied by .50%.
(c) Based on expenses of Dreyfus Massachusetts Municipal Money
Market Fund and estimated additional costs after the merger.
<PAGE>
(d) Expenses are based on one fund.
(e) No Distribution Plan exists on Dreyfus Massachusetts Municipal
Money Market Fund.
(f) Total combined average net assets for the twelve months ended
multiplied by .60%.
Dreyfus has agreed to limit the Fund's total operating expenses
to .60% for one year following the completion of the
Reorganization.
<PAGE>
DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - Basis of Combination
On October 25, 1995, the Board of Trustees of the Dreyfus/Laurel Tax-
Free Municipal Funds (the "Trust") approved an Agreement and Plan of
Reorganization whereby, subject to approval by the shareholders (holders
of both Investor and Class R shares) of Dreyfus/Laurel Massachusetts Tax-
Free Money Fund (the "Fund"), the Dreyfus Massachusetts Municipal Money
Market Fund (the "Acquiring Fund") would acquire a portion of the Fund's
assets having a value equal to the aggregate net asset value of the Fund's
Investor shares. Holders of the Fund's Investor shares would become
shareholders of the Acquiring Fund, receiving (in exchange for their
Investor shares) shares of the Acquiring Fund with an aggregate net asset
value equivalent to their investment in the Fund at the time of the
transaction, and the Fund's Investor class of shares would be terminated.
This transaction will be accounted for as a taxable merger of investment
companies.
Subject to the approval by the Fund's shareholders of the above
transaction, the Board of Trustees of the Trust approved a new investment
management agreement (the "New Agreement") between The Dreyfus Corporation
("Dreyfus") and the Trust with respect to the Fund. This new agreement
would require approval from the Class R shareholders of the Fund. Under
the New Agreement the management fee payable by the Fund to Dreyfus for
providing or arranging for the provision of substantially all services to
the Fund would be increased from .35 (the current rate) to .45 of 1% of
the Fund's average daily net assets and certain other changes would be
implemented. Dreyfus has agreed to limit its fee for one year following
the implementation of the New Agreement to .35 of 1% of the Fund's average
daily net assets.
The unaudited pro forma statement of assets and liabilities reflect
the financial position of Dreyfus/Laurel Massachusetts Tax-Free Money Fund
and Dreyfus Massachusetts Municipal Money Market Fund at July 31, 1995 as
though the reorganization occurred as of that date. The unaudited pro
forma statement of operations reflect the results of operations of the
Fund and the Acquiring Fund for the twelve months ended June 30, 1995 and
July 31, 1995 respectively. These statements have been derived from the
Funds' books and records utilized in calculating daily net asset value
under generally accepted accounting principles.
The pro forma statement of assets and liabilities and operations
should be read in conjunction with the historical financial statements of
the Funds included or incorporated by reference in the Statements of
Additional Information.
<PAGE>
NOTE 2 - Portfolio Valuation:
Investments are valued at amortized cost, which has been determined
by the Funds Boards to represent the fair value of the Funds' investments.
The value of the assets being acquired by the Acquiring Fund shall be
their values computed as of the valuation time on the reorganization date,
based on market quotations or market equivalents obtained from independent
pricing services approved by the respective Boards of Trustees of the
Trust and the Acquiring Fund.
NOTE 3 - Capital Shares:
The pro forma net asset value per share assumes 87,195,902 additional
shares of Beneficial Interest of the Acquiring Fund were issued in
connection with the proposed acquisition of the Fund's Investor Class by
the Acquiring Fund as of July 31, 1995. The pro forma combined number of
shares outstanding of 250,399,281 consists of the 87,195,902 shares
issuable to the Fund's Investor Class in the merger and 163,203,379 shares
of the Acquiring Fund outstanding at July 31, 1995.
NOTE 4 - Federal Income Taxes:
The Funds have each elected to be taxed as a "regulated investment
company" under the Internal Revenue Code. After the reorganization, both
Funds intend to continue to qualify as regulated investment companies, if
such qualification is in the best interests of its shareholders, by
complying with the provisions available to certain investment companies,
as defined in applicable sections of the Internal Revenue Code, and to
make distributions of taxable income sufficient to relieve it from all, or
substantially all, Federal incomes taxes.
The identified cost of investments for the Funds is substantially the
same for both financial accounting and federal income tax purposes. The
tax cost of investments will remain unchanged for the combined entity.
<PAGE>
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PART C
Item 15. Indemnification.
Reference is made to Article EIGHTH of the Registrant's
Agreement and Declaration of Trust incorporated by reference to Exhibit 1
of the Registration Statement filed under the Securities Act of 1933 on
January 29, 1991 -- Registration No. 33-38741 (" Applicant's Registration
Statement"). The application of these provisions is limited by Article 10
of the Registrant's By-Laws, incorporated by reference to Exhibit 2 of the
Registration Statement, and by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such Act as is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a trustee, officer or controlling person of the
registration in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement, which is
incorporated by reference to Exhibit (7) of this Registration
Statement.
Item 16. Exhibits
1 Registrant's Agreement and Declaration of Trust and
Articles of Amendment are incorporated by reference to
Exhibit (1) to the Applicant's Registration Statement filed
under the Securities Act of 1933 on January 29, 1991.
2 Registrant's By-Laws are incorporated by reference to
Exhibit (2) to the to the Applicant's Registration
Statement, filed under the Securities Act of 1933 on
January 29, 1991.
3 Not Applicable.
C-1
<PAGE>
4 The Agreement and Plan of Reorganization is filed herewith
as Appendix A to Part A of this Registration Statement.
5 Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement filed under
the Securities Act of 1933 on February 19, 1991.
6 Registrant's Management Agreement is incorporated by
reference to Exhibit 24(b)(5) of Post-Effective Amendment
No. 6 to the Registration Statement filed under the
Securities Act of 1933 on May 31, 1995.
7 Registrant's Distribution Agreement is incorporated by
reference to Exhibit 24(b)(6) of Post-Effective Amendment
No. 6 to the Registration Statement filed under the
Securities Act of 1933 on May 31, 1995.
8 Not Applicable.
9 Custody Agreement with The Bank of New York is incorporated
by reference to Exhibit 8 of Post-Effective Amendment No. 1
to the Registration Statement filed under the Securities
Act of 1933 on August 20, 1991.
10 Not Applicable.
11(a) Opinion of Stroock & Stroock & Lavan, Counsel to
Registrant, as to the legality of the securities being
registered.
11(b) Opinion of Ropes & Gray as to the legality of the
securities being registered.
12 Tax opinion and consent of Kirkpatrick & Lockhart LLP.
13 Registrant's Shareholder Services Plan is incorporated by
reference to Exhibit 24(b)(9) of Post-Effective Amendment
No. 6 to the Registration Statement filed under the
Securities Act of 1933 on May 31, 1995.
14(a) Consent of Ernst & Young LLP, Independent Auditors to
Registrant, as to the use of their report dated March 2,
1995 concerning the financial statements of Registrant
dated January 31, 1995.
14(b) Consent of KPMG Peat Marwick LLP, independent auditors to
Dreyfus/Laurel Massachusetts Tax-Free Money Fund, as to the
use of their report dated September 7, 1995 concerning the
financial statements of Dreyfus/Laurel Massachusetts Tax-
Free Money Fund dated June 30, 1995.
C-2
<PAGE>
14(c) Consent of Stroock & Stroock & Lavan, Counsel to
Registrant, as to the use of its opinion as to the legality
of the securities being registered and as to the use of its
name as counsel to such Fund. See Exhibit 11(a).
14(d) Consent of Ropes & Gray as to the use of its opinion as to
the legality of the securities being registered. See
Exhibit 11(b).
14(e) Consent of Kirkpatrick & Lockhart LLP as to use of its tax
opinion. See Exhibit 12.
15 Not Applicable.
16 Powers of Attorney for David W. Burke, Samuel Chase, Joni
Evans, Arnold S. Hiatt, David J. Mahoney and Burton N.
Wallack, Trustees; also for Marie E. Connolly, President
and Treasurer of the Fund is incorporated by reference to
Other Exhibit of Post-Effective Amendment No. 6 to the
Registration Statement filed under the Securities Act of
1933 on May 31, 1995.
17(a) Form of Proxy Card.
17(b) Declaration of Rule 24f-2.
Item 17. Undertakings.
1 The undersigned Registrant agrees that prior to any public
offering of the securities registered through the use of a
prospectus which is part of this registration statement by
any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act,
the reoffering prospectus will contain the information
called for by the applicable registration form for
offerings by persons who may be deemed underwriters, in
addition to the information called for by the other items
of the applicable form.
2 The undersigned Registrant agrees that every prospectus
that is filed under paragraph (1) above will be filed as a
part of an amendment to the registration statement and will
not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933,
each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein,
and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
C-3
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the Registrant, in the City of Boston and
Commonwealth of Massachusetts, on the 17th day of November, 1995.
DREYFUS MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND
/s/ Marie E. Connolly*
By: ________________________________
Marie E. Connolly
President
As required by the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated. This instrument may be executed in one or more counterparts,
all of which shall together constitute a single instrument.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Marie E. Connolly* President, Treasurer November 17, 1995
----------------------
Marie E. Connolly
/s/ David W. Burke* Trustee November 17, 1995
----------------------
David W. Burke
/s/ Samuel Chase* Trustee November 17, 1995
----------------------
Samuel Chase
/s/ Joni Evans* Trustee November 17, 1995
----------------------
Joni Evans
/s/ Arnold S. Hiatt* Trustee November 17, 1995
----------------------
Arnold S. Hiatt
/s/ David J. Mahoney* Trustee November 17, 1995
---------------------
David J. Mahoney
<PAGE>
Signatures Title Date
---------- ----- ----
/s/ Burton N. Wallack* Trustee November 17, 1995
-----------------------
Burton N. Wallack
</TABLE>
*By: /s/Eric B. Fischman
--------------------
Eric B. Fischman,
Attorney-in-Fact
<PAGE>
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
REGISTRATION STATEMENT ON FORM N-14
REGISTRATION NO. 33-___
EXHIBITS
Exhibit:
-------
11(a) Opinion of Stroock & Stroock and Lavan, Counsel to
Registrant, as to the legality of the securities being
registered.
11(b) Opinion of Ropes & Gray as to the legality of the
securities being registered.
12 Tax opinion and consent of Kirkpatrick & Lockhart LLP.
14(a) Consent of Ernst & Young LLP, Independent Auditors to
Registrant, as to the use of their report dated March 2,
1995 concerning the financial statements of Registrant
dated January 31, 1995.
14(b) Consent of KPMG Peat Marwick LLP, Independent Auditors to
Dreyfus/Laurel Massachusetts Tax-Free Money Fund, as to the
use of their report dated September 7, 1995 concerning the
financial statements of Dreyfus/Laurel Massachusetts Tax-
Free Money Fund dated June 30, 1995.
17(a) Form of Proxy Card.
17(b) Declaration of Rule 24f-2.
<PAGE>
<PAGE>
EXHIBIT 11(a)
STROOCK & STROOCK & LAVAN
November 17, 1995
Dreyfus Massachusetts Municipal
Money Market Fund
200 Park Avenue
New York, New York 10166
Gentlemen:
We have acted as counsel to Dreyfus Massachusetts Municipal Money Market
Fund (the "Fund") in connection with the issuance by the Fund of shares of
its beneficial interest (the "Shares") pursuant to an Agreement and Plan
of Reorganization (the "Plan") dated as of October 25, 1995 between the
Fund and The Dreyfus/Laurel Tax-Free Municipal Funds, on behalf of
Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the "Transferring
Fund"). Under the Plan, if approved by the Transferring Fund's
shareholders, the Fund will acquire the Transferring Fund's assets
represented by the Transferring Fund's Investor shares in exchange for the
Shares. In connection with the Plan, the Fund has filed a Registration
Statement on Form N-14 (the "Registration Statement") registering the
Shares to be issued pursuant to the Plan.
We have examined copies of the Agreement and Declaration of Trust and By-
Laws of the Fund, the Registration Statement and such other documents,
records, papers, statutes and authorities as we deemed necessary to form a
basis for the opinion hereinafter expressed. In our examination of such
material, we have assumed the genuineness of all signatures and the
conformity to original documents of all copies submitted to us. As to
various questions of fact material to such opinion, we have relied upon
statements and certificates of officers and representatives of the Fund
and others.
Attorneys involved in the preparation of this opinion are admitted only to
the bar of the State of New York. As to various questions arising under
the laws of the Commonwealth of Massachusetts, we have relied on the
opinion of Messrs. Ropes & Gray, a copy of which is attached hereto.
Qualifications set forth in their opinion are deemed incorporated herein.
<PAGE>
Page 2
Based upon the foregoing, we are of the opinion that the Fund is
authorized to issue the Shares, and that, when the Shares are issued in
accordance with the Plan and the Fund's Agreement and Declaration of Trust
and By-Laws, subject to compliance with applicable federal and state laws
regulating the distribution of securities, they will be validly issued,
fully paid and nonassessable by the Fund.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the Prospectus/Proxy
Statement included in the Registration Statement, and to the filing of
this opinion as an exhibit to any application made by or on behalf of the
Fund or any distributor or dealer in connection with the registration and
qualification of the Fund or its Shares under the securities laws of any
state or jurisdiction. In giving such permission, we do not admit hereby
that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the rules and regulations
of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Stroock & Stroock & Lavan
STROOCK & STROOCK & LAVAN
<PAGE>
<PAGE>
EXHIBIT 11(b)
ROPES & GRAY
November 17, 1995
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004
Ladies and Gentlemen:
We are furnishing this opinion in connection with the proposed issuance by
Dreyfus Massachusetts Municipal Money Market Fund (the "Fund") of its
shares of beneficial interest (the "Shares") pursuant to an Agreement and
Plan of Reorganization (the "Plan") dated as of October 25, 1995 between
The Dreyfus/Laurel Tax-Free Municipal Funds, on behalf of Dreyfus/Laurel
Massachusetts Tax-Free Money Fund (the "Transferring Fund") and the Fund.
Under the Plan, if approved by shareholders of the Transferring Fund, the
Fund will acquire the Transferring Fund's assets represented by the
Transferring Fund's Investor class of shares in exchange for the Shares.
In connection with the Plan, the Fund has filed a Registration Statement
on Form N-14 (the "Registration Statement") registering the Shares to be
issued pursuant to the Plan.
We are familiar with the action taken by the Trustees of the Trust to
authorize the issuance of the Shares. We have examined the Plan, the
Registration Statement, the Trust's records of Trustee action, its By-Laws
and its Agreement and Declaration of Trust, as amended to date, on file at
the Office of the Secretary of State of The Commonwealth of Massachusetts.
We have examined such other documents as we deem necessary for the
purposes of this opinion. In our examination of such material, we have
assumed the genuineness of all signatures and the conformity to original
documents of all copies submitted to us. As to various questions of fact
material to such opinion, we have relied upon statements and certificates
of officers and representatives of the Fund.
Based upon the foregoing, we are of the opinion that the Fund is
authorized to issue the Shares, and that, when the Shares are issued in
accordance with the Plan and the Fund's Agreement and Declaration of Trust
and By-Laws, subject to compliance with applicable federal and state laws
regulating the distribution of securities, they will be validly issued,
fully paid and nonassessable by the Fund.
The Fund is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the obligations of
the Fund. However, the Agreement and Declaration of Trust disclaims
shareholder liability for acts or obligations of the Fund and requires
that notice of such disclaimer be given in every note, bond, contract or
other undertaking issued by or on behalf of the Fund. The Agreement and
<PAGE>
Stroock & Stroock & Lavan -2- November 17, 1995
Declaration of Trust provides for indemnification out of the Fund property
for all loss and expense of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Ropes & Gray
ROPES & GRAY
<PAGE>
<PAGE>
KIRKPATRICK & LOCKHART LLP
1800 M Street, N.W.
Washington, D.C. 20036
(202) 778-9155
THEODORE L. PRESS
(202) 778-9025
[email protected]
November 1, 1995
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
200 Park Avenue
New York, New York 10066
Ladies and Gentlemen:
The Dreyfus/Laurel Tax-Free Municipal Funds, a Massachusetts
business trust ("Trust"), on behalf of Dreyfus/Laurel Massachusetts Tax-
Free Money Fund, a segregated portfolio of assets ("series") thereof
("Transferring Fund"), and Dreyfus Massachusetts Municipal Money Market
Fund, a Massachusetts business trust ("Acquiring Fund"),1/ have requested
our opinion as to certain federal income tax consequences of the proposed
transactions (collectively "Reorganization") contemplated by an Agrement
and Plan of Reorganization between the Investment Companies dated as of
October 25, 1995 ("Plan"). The Plan is attached as an appendix to the
prospectus/proxy statement to be furnished in connection with the solici-
tation of proxies by the Trust's Board of Trustees for use at a special
meeting of Transferring Fund shareholders to be held on February 15, 1996
("Proxy"), included in the registration statement on Form N-14 to be filed
with the Securities and Exchange Commission ("SEC") on or about the date
hereof ("Registration Statement"). Specifically, the Investment Companies
have requested our opinion:
(1) that the acquisition by Acquiring Fund of a
portion of Transferring Fund's Assets (as defined below)
in exchange for shares of beneficial interest in Acquir-
ing Fund ("Acquiring Fund Shares") will constitute a
taxable sale of the Assets by Transferring Fund to
Acquiring Fund;
------------------
1/ Transferring Fund and Acquiring Fund are sometimes referred to
herein individually as a "Fund" and collectively as the "Funds," and the
Trust and Acquiring Fund are sometimes referred to herein individually as
an "Investment Company" and collectively as the "Investment Companies."
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 2
(2) that Transferring Fund's redemption of the
Investor class of shares of beneficial interest in
Transferring Fund ("Investor Shares") by distributing the
Acquiring Fund Shares to the holders of Investor Shares
of record as of the Closing (as defined below) ("Share-
holders") will constitute a taxable redemption thereof to
each such holder;
(3) that gain or loss may be recognized to Trans-
ferring Fund on the transfer to Acquiring Fund of the
Assets in exchange for the Acquiring Fund Shares,
depending upon whether Transferring Fund's aggregate
adjusted basis for the Assets is less than, equals, or
exceeds the aggregate fair value of the Acquiring Fund
Shares;
(4) that no gain or loss will be recognized to
Transferring Fund on the distribution of the Acquiring
Fund Shares to the Shareholders;
(5) that no gain or loss will be recognized to
Acquiring Fund on its receipt of the Assets in exchange
for the Acquiring Fund Shares; and
(6) regarding the basis and holding period after
the Reorganization of the Assets and the Acquiring Fund
Shares distributed to the Shareholders.
In rendering this opinion, we have examined (1) the Trust's
currently effective prospectus and statement of additional information,
both dated October 27, 1995, and Acquiring Fund's currently effective
prospectus and statement of additional information, both dated May 31,
1995, (2) the Proxy, (3) the Plan, and (4) such other documents as we have
deemed necessary or appropriate for the purposes hereof. As to various
matters of fact material to this opinion, we have relied, exclusively and
without independent verification, on statements of responsible officers of
each Investment Company and the representations made in the Plan
(collectively "Representations").
FACTS
-----
The Trust is an unincorporated voluntary association with
transferable shares formed as a business trust under the laws of the
Commonwealth of Massachusetts (commonly referred to as a "Massachusetts
business trust") and is governed by its Third Amended and Restated Master
Trust Agreement; Transferring Fund is a series thereof. Acquiring Fund
also is a Massachusetts business trust and is governed by an Agreement and
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 3
Declaration of Trust. Each Investment Company is registered with the SEC
as an open-end management investment company under the Investment Company
Act of 1940, as amended ("1940 Act"). The Dreyfus Corporation serves as
investment manager to each Fund.
Transferring Fund offers two classes of shares, Investor Shares
and Class R shares ("Class R Shares"). Investor Shares are sold primarily
to retail investors by its distributor, Premier Mutual Fund Services, Inc.
("Premier"), and by banks, securities brokers or dealers, and other
financial institutions that have entered into a shareholder servicing and
sales support agreement with Premier (collectively "Agents"). Investor
Shares are sold subject to a distribution plan adopted pursuant to Rule
12b-1 under the 1940 Act ("12b-1 plan"); fees are paid under that 12b-1
plan fees to compensate Premier and Dreyfus Service Corporation ("DSC"), a
wholly owned subsidiary of Dreyfus, for shareholder servicing activities
and activities or expenses primarily intended to result in the sale of
Investor Shares. Class R Shares are sold primarily to bank trust
departments and other financial service providers acting on behalf of
customers having a qualified trust or investment account relationship at
such institution. Class R Shares are not subject to a 12b-1 plan.
Acquiring Fund offers a single class of shares that are also
offered by Agents and also are directly available from Premier.
The Trust's board of trustees ("Trust Board") has determined that
it is advantageous to combine a portion of Transferring Fund's assets with
Acquiring Fund and that the Reorganization thus should provide certain
benefits to shareholders. In making such determinations, the Trust Board
considered, among other things, that while the yields achieved by both
Funds in recent periods have generally compared favorably to those of
competing funds with similar investment objectives, Acquiring Fund's
performance has been better than that of the Investor Shares. In
addition, Dreyfus has requested an increase in the management fee payable
by Transferring Fund (which, the Trust Board noted, appears to be
justified) and certain other changes respecting Transferring Fund; the
Trust Board noted that the Reorganization would permit holders of Investor
Shares to avoid the impact of these changes. The Trust Board also took
into consideration that Dreyfus has agreed to reduce its fee or reimburse
Acquiring Fund to ensure that such Fund's total operating expenses for one
year following consummation of the Reorganization do not exceed the
expense ratio presently experienced by holders of Investor Shares.
Finally, the Trust Board noted that Dreyfus has agreed to bear all costs
of the Reorganization.
The Trust Board also believes that holders of Class R Shares will
benefit from the Reorganization, as discussed in the Proxy. Finally, the
Trust Board also considered the taxable nature of the Reorganization but
has been advised by Dreyfus that it is likely that there will be little or
no tax impact on Transferring Fund shareholders.
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 4
In light of the foregoing, the Trust Board, including the
trustees who are not "interested persons," as that term is defined in the
1940 Act, of either Investment Company ("Disinterested Trustees"), unani-
mously determined that the Reorganization is in the best interests of
Transferring Fund's shareholders and that their interests will not be
diluted as a result of the Reorganization. Similarly, Acquiring Fund's
board of trustees, including its Disinterested Trustees, unanimously
determined that the Reorganization is in the best interests of Acquiring
Fund's shareholders and that their interests will not be diluted as a
result of the Reorganization. Pursuant to such determinations, each
Investment Company's Board of Trustees approved the Plan, subject to ap-
proval of Transferring Fund's shareholders.
Under the Plan, Acquiring Fund will acquire a portion of
Transferring Fund's assets, including securities and cash, having a value
equal to the aggregate net asset value of the Investor Shares, both full
and fractional, issued and outstanding as of the Closing (collectively
"Assets"). (Based on the respective net asset values per share of the
Investor Shares and the Class R Shares as of October 30, 1995, the portion
of Transferring Fund's assets attributable to Investor Shares is slightly
more than 70%.) In exchange therefor Acquiring Fund will deliver to
Transferring Fund the number of full and fractional Acquiring Fund Shares
equal in value to the Assets.2/ As soon thereafter as is conveniently
possible, Transferring Fund will distribute those shares to the Share-
holders. Such distribution will be accomplished by transferring those
shares to open accounts on Acquiring Fund's share records established in
the Shareholders' names, with each Shareholder's account being credited
with the number of full and fractional Acquiring Fund Shares having an
aggregate net asset value equal to the aggregate net asset value of the
Shareholder's Investor Shares held as of the Closing. (We understand that
such distribution will occur on the same day as the Closing at the same
net asset value per share as is determined at the time of the Closing.)
If a Shareholder also has a beneficial interest in Class R Shares
at the time of the Reorganization, those shares will be redeemed for cash
as part of the Reorganization. Class R Shares not so redeemed will remain
outstanding after the Reorganization, and Transferring Fund will there-
after operate as a single class fund.
---------------------
2/ In addition, Acquiring Fund will assume the same portion of
Transferring Fund's liabilities, and be entitled to the same portion of
Transferring Fund's assets, unknown or contingent at the Closing Date, to
the extent such assets or liabilities are discovered within one year
following the Closing Date.
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 5
The "Closing" will be deemed to occur as of noon on the first day
(other than a Friday) on which both the New York Stock Exchange and the
Federal Reserve Bank of New York are open for business that occurs not
less than five calendar days after the Plan is approved by the sharehold-
ers of Transferring Fund or such other date as the parties may mutually
agree.
OPINION
-------
Based solely on the facts set forth above, and conditioned on
(1) the Representations being true as of the Closing and (2) the Reor-
ganization being consummated in accordance with the Plan, our opinion (as
explained more fully in the next section of this letter) is as follows:
1. Acquiring Fund's acquisition of the Assets in
exchange for the Acquiring Fund Shares will constitute a
taxable sale of the Assets by Transferring Fund to
Acquiring Fund;
2. Transferring Fund's redemption of the
Investor Shares by distributing the Acquiring Fund Shares
to the Shareholders will constitute a taxable redemption
thereof to each Shareholder;
3. Gain or loss may be recognized to Trans-
ferring Fund on the transfer to Acquiring Fund of the
Assets in exchange for the Acquiring Fund Shares,
depending upon whether Transferring Fund's aggregate
adjusted basis for the Assets is less than, equals, or
exceeds the aggregate fair value of the Acquiring Fund
Shares;
4. No gain or loss will be recognized to
Transferring Fund on the distribution of the Acquiring
Fund Shares to the Shareholders;
5. No gain or loss will be recognized to
Acquiring Fund on its receipt of the Assets in exchange
for the Acquiring Fund Shares;
6. Acquiring Fund's aggregate basis for the
Assets will be equal to the aggregate fair value of the
Acquiring Fund Shares exchanged therefor, and its holding
period for the Assets will begin on the day after the
Closing; and
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 6
7. The basis for the Acquiring Fund Shares
received in the Reorganization by a Shareholder will be
the fair market value of those shares on the date of
distribution, and the holding period for those shares
will begin on the day after the Closing.
The foregoing opinion (1) is based on, and is conditioned on the
continued applicability of, the provisions of the Internal Revenue Code of
1986, as amended ("Code"),3/ and the Regulations, judicial decisions, and
rulings and other pronouncements of the Internal Revenue Service
("Service") in existence on the date hereof and (2) is applicable only to
the extent each Fund is solvent. We express no opinion about the tax
treatment of the transactions described herein if either Fund is
insolvent.
ANALYSIS
--------
I. Each Fund Is a Separate Corporation.
-----------------------------------
Although the Trust and Acquiring Fund are Massachusetts business
trusts, not corporations, and Transferring Fund is a separate series of
the Trust, we believe that the tax consequences of the Reorganization
should be analyzed under the provisions of the Code applicable to
corporations.
Treasury Regulation section 301.7701-4(b) provides that "business
or commercial trusts," although known as trusts because legal title is
conveyed to trustees for the benefit of beneficiaries, will not be classi-
fied as trusts for purposes of the Code because they are not merely
arrangements to protect or conserve the property for the beneficiaries.
Rather, these arrangements are created as devices to carry on profit-
making businesses that normally would have been carried on through
corporations or partnerships. Treasury Regulation section 301.7701-4(c)
further provides that an "`investment' trust will not be classified as a
trust if there is a power under the trust agreement to vary the investment
of the certificate holders." See Commissioner v. North American Bond
Trust, 122 F.2d 545 (2d Cir. 1941), cert. denied, 314 U.S. 701 (1942).
----------------
3/ All section references are to the Code, and all "Treas. Reg.
Section" references are to the regulations under the Code ("Regulations").
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 7
Based on these criteria, neither Investment Company qualifies as
a trust for federal income tax purposes. While each Investment Company is
an "investment trust," it does not have a fixed pool of assets -- each
Fund has been a managed portfolios of securities, and its investment
adviser has had the authority to buy and sell securities for it. Neither
Investment Company is simply an arrangement to protect or conserve prop-
erty for the beneficiaries, but each is designed to carry on a profit-
making business. In addition, the word "association" has long been held
to include "Massachusetts business trusts," such as the Investment
Companies. See Hecht v. Malley, 265 U.S. 144 (1924). Accordingly, we
believe that each Investment Company will be treated as a corporation for
federal income tax purposes.
The Trust as such, however, is not participating in the
Reorganization, but rather a series thereof is a participant. Under
section 851(h), however, Transferring Fund, as a segregated pool of
assets, is treated as a separate corporation for all purposes of the Code
save the definitional requirement of section 851(a) (which is satisfied by
the Trust). Thus, Transferring Fund will be a separate corporation, and
the shares of Transferring Fund will be treated as shares of corporate
stock, for purposes of the Code.
II. The Reorganization Will Not Be a Tax-Free Reorganization under
Section 368(a)(1) and Will Be a Taxable Sale of Assets.
--------------------------------------------------------------
Reorganizations described in section 368(a)(1) are varieties of
corporate combinations or restructurings that, at least in part, do not
result in the recognition of gain or loss. These tax-free reorganizations
are: (1) a statutory merger or consolidation (section 368(a)(1)(A) ("Type
A")); (2) an acquisition by one corporation of another corporation's stock
(section 368(a)(1)(B) ("Type B")); (3) an acquisition by one corporation
of another corporation's assets (section 368(a)(1)(C) ("Type C")); (4) a
transfer to a controlled corporation (section 368(a)(1)(D) ("Type D"));
(5) a recapitalization (section 368(a)(1)(E) ("Type E")); (6) a change in
a corporation's identity, form, or place of organization (section
368(a)(1)(F) ("Type F")); and (7) a bankruptcy reorganization (section
368(a)(1)(G) ("Type G")). The Reorganization contemplated in the Plan
does not satisfy the requirements of any of these types of tax-free
reorganizations.
A Type A reorganization involves the combination of two corporate
entities in a merger or consolidation undertaken pursuant to state law.
The Reorganization involves the transfer of certain assets of Transferring
Fund to Acquiring Fund in exchange for Acquiring Fund Shares, followed by
the distribution of those shares to certain shareholders of Transferring
Fund in redemption of their Transferring Fund shares. Transferring Fund,
however, will remain in existence and will continue to own assets after
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 8
the Reorganization, and shareholders will continue to hold Class R Shares
that are not redeemed as part of the Reorganization. The Reorganization
thus will not be a Type A reorganization.
A Type B reorganization involves the acquisition by one
corporation of another corporation's stock as a result of which the
acquiring corporation has control of the second corporation immediately
after the acquisition. Neither Fund will hold any interest in the other
Fund following the Reorganization. The Reorganization, therefore, will
not be a Type B reorganization.
A Type C reorganization involves the acquisition by one
corporation, in exchange solely for all or a part of its voting stock, of
substantially all the properties of another corporation. For purposes of
issuing private letter rulings, the Service considers the transfer of at
least 70% of the transferor's gross assets, and at least 90% of its net
assets, held immediately before the reorganization to satisfy the
"substantially all" requirement. Rev. Proc. 77-37, 1977-2 C.B. 568. The
Reorganization will involve a transfer of approximately 70% of the assets
of Transferring Fund (thus failing to satisfy the net asset part of this
test). Although there is authority that a transaction may qualify as a
Type C reorganization despite the transfer of a smaller percentage of
assets than required by Rev. Proc. 77-37, we believe the Reorganization
will not involve the transfer to Acquiring Fund of substantially all of
Transferring Fund's properties for purposes of qualifying as a Type C
reorganization. Furthermore, in a Type C reorganization, the transferor
corporation must liquidate and distribute all of its assets to its
shareholders. After the Reorganization, Transferring Fund will remain in
existence and continue its business. Accordingly, the Reorganization will
not qualify as a Type C reorganization.
A Type D reorganization involves the transfer by a corporation of
all or part of its assets to a corporation controlled (immediately after
the transfer) by the transferor corporation or its shareholders, provided
that the controlled corporation's stock is distributed pursuant to a plan
of reorganization in a transaction that qualifies under sections 354, 355,
or 356. In order to qualify as a Type D reorganization, either
(1) Transferring Fund or its shareholders would need to hold at least 50%
of the shares of Acquiring Fund following the Reorganization and Transfer-
ring Fund would need to liquidate and distribute its assets to its share-
holders in accordance with sections 354 or 356 or (2) Transferring Fund or
its shareholders would need to hold at least 80% of the shares of
Acquiring Fund following the Reorganization and Transferring Fund would
need to distribute the Acquiring Fund Shares in a corporate division
qualifying under section 355. Transferring Fund and its shareholders will
not meet either the 50% or the 80% control test immediately following the
Reorganization. Moreover, the Regulations under section 355 state that
holding stock and securities for investment does not constitute the active
conduct of a trade or business, which is necessary to qualify for a
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 9
nontaxable corporate division under section 355. Treas. Reg.
Section 1.355-3(b)(2)(iv)(A). The Reorganization, therefore, will not be
a Type D reorganization.
A Type E reorganization involves a readjustment of the financial
structure of a single corporation. A Type F reorganization involves a
change in identity, form, or place of organization of a single
corporation. The Reorganization involves two active entities, both of
which will survive the transaction. A Type G reorganization involves a
transfer by a corporation pursuant to a bankruptcy proceeding, not present
here. Thus, the Reorganization will not qualify as a Type E, Type F, or
Type G reorganization.
Accordingly, we believe that the transfer of the Assets in
exchange for the Acquiring Fund Shares will not qualify as a tax-free
reorganization under section 368(a)(1) and instead will be treated as a
taxable sale of the Assets by Transferring Fund to Acquiring Fund.
III. Distribution of the Acquiring Fund Shares Will Be a Taxable
Redemption, and a Shareholder May Recognize Gain or Loss.
----------------------------------------------------------
Because the Reorganization will not qualify as a reorganization
under section 368(a)(1), section 354 will not apply to prevent recognition
of gain or loss on the receipt of the Acquiring Fund Shares by the
Shareholders. Also, because Transferring Fund will not control Acquiring
Fund within the meaning of section 355(a)(1) immediately before the
distribution of the Acquiring Fund Shares to the Shareholders, section 355
will not apply to prevent recognition of gain or loss.
Pursuant to sections 302(a) and (b)(3), a redemption of a
shareholder's stock that results in the "complete redemption of all of the
stock of the corporation owned by the shareholder" will be treated as a
distribution in payment in exchange for the stock. Pursuant to the
Reorganization, all shares in Transferring Fund (including Class R Shares,
if any) held by each Shareholder (i.e., a holder of Investor Shares) will
be redeemed in exchange for Acquiring Fund Shares or, with respect to
Class R Shares, for cash. Accordingly, we believe that each such redemp-
tion will be taxable under section 302, and each Shareholder will
recognize gain or loss if, and to the extent, the amount received on the
redemption exceeds his or her adjusted basis for the redeemed shares.
IV. Gain or Loss May Be Recognized to Transferring Fund on Transfer
of the Assets.
---------------------------------------------------------------
Because the Reorganization will not qualify as a reorganization
under section 368(a)(1), sections 361(a) and (c), which provide for
nonrecognition of gain or loss to corporations that exchange property
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 10
and/or make distributions pursuant to such a reorganization, are not
applicable. Transferring Fund, therefore, will recognize gain or loss on
the exchange of the Assets for the Acquiring Fund Shares pursuant to
section 1001.
Under section 1001, gain from the sale of property is the excess
of the amount realized therefrom over the adjusted basis of such property
determined under section 1011, and loss from the sale of property is the
excess of such adjusted basis over the amount realized. Under section
1001(b), the amount realized is the sum of any money received plus the
fair market value of the property received in exchange.
Accordingly, we believe that gain or loss may be recognized to
Transferring Fund on the transfer of the Assets to Acquiring Fund in
exchange for the Acquiring Fund Shares, depending upon whether
Transferring Fund's aggregate adjusted basis for the Assets is less than,
equals, or exceeds the aggregate fair value of the Acquiring Fund Shares.
V. No Gain or Loss Will Be Recognized to Transferring Fund on
Distribution of the Acquiring Fund Shares.
----------------------------------------------------------
Section 311(a) provides that, except as provided in section
311(b), no gain or loss shall be recognized to a corporation on the
distribution (not in complete liquidation) of property with respect to its
stock. The exception under section 311(b) states that if the fair market
value of the distributed property exceeds its adjusted basis in the hands
of the distributing corporation, then gain shall be recognized to that
corporation as if such property were sold to the distributee at its fair
market value.
Transferring Fund will distribute the Acquiring Fund Shares to
the Shareholders as soon after the Closing "as is conveniently possible."
We understand (and assume) that such distribution will occur on the same
day as the Closing at the same net asset value per share as is determined
at the time of the Closing. The fair market value of the Acquiring Fund
Shares, when distributed, thus should not exceed their adjusted basis in
the hands of Transferring Fund (which will be their fair market value as
of the Closing, the time of receipt thereof by Transferring Fund).
Accordingly, we believe that no gain or loss will be recognized to
Transferring Fund on distribution of the Acquiring Fund Shares.
VI. No Gain or Loss Will Be Recognized to Acquiring Fund.
-----------------------------------------------------
Section 1032(a) provides that no gain or loss will be recognized
to a corporation on the receipt by it of money or other property in
exchange for its shares. Acquiring Fund will issue the Acquiring Fund
Shares to Transferring Fund in exchange for the Assets, which consist of
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 11
money and securities. Accordingly, we believe that no gain or loss will
be recognized to Acquiring Fund on the Reorganization.
VII. Acquiring Fund's Basis and Holding Period for the Assets.
--------------------------------------------------------
Because the Reorganization will not qualify as a reorganization
under section 368(a)(1), section 362(b), which provides for a "carryover"
basis for property received by a corporation in connection with such a
reorganization, will not apply. Accordingly, we believe that Acquiring
Fund's aggregate basis for the Assets will be equal to the fair market
value of the Acquiring Fund Shares transferred to Transferring Fund in
exchange for the Assets. Treas. Reg. Section 1.1012-1(a).
Because the Assets will not have a carryover basis in Acquiring
Fund's hands, section 1223(2), which provides that the holding period of
property includes its holding period in the hands of another person if the
property has a carryover basis, will not apply. Accordingly, we believe
that Acquiring Fund's holding period for the Assets will not include any
part of Transferring Fund's holding period and will begin on the day after
the Closing. See, e.g., Anderson v. Commissioner, 527 F.2d 198 (9th Cir.
1975).
VIII. A Shareholder's Basis and Holding Period for Acquiring Fund
Shares.
-----------------------------------------------------------
Because the Reorganization will not qualify as a reorganization
under section 368(a)(1), section 358(a)(1) will not apply to provide a
Shareholder with a basis in the Acquiring Fund Shares that is the same as
the Shareholder's basis in his or her Investor Shares. Accordingly, we
believe that a Shareholder's basis in the Acquiring Fund Shares received
in redemption of his or her Investor Shares will be equal to the fair
market value of the Shares received. Treas. Reg. Section 1.1012-1(a).
Because the Acquiring Fund Shares will not have a carryover basis
in a Shareholder's hands, section 1223(2) (see above) will not apply.
Accordingly, we believe that a Shareholder's holding period for the
Acquiring Fund Shares received in redemption of his or her Investor Shares
will not include any part of the holding period of those Investor Shares
and will begin on the day after the Closing. See, e.g., Anderson, supra.
<PAGE>
The Dreyfus/Laurel Tax-Free Municipal Funds
Dreyfus Massachusetts Municipal Money Market Fund
November 1, 1995
Page 12
We hereby consent to this opinion accompanying the Registration
Statement and to the references to our firm under the captions "Proposal
1: The Proposed Reorganization -- Summary of Proposal 1 -- Tax Con-
sequences" and "Proposal 1: The Proposed Reorganization -- Information
about the Reorganization -- Federal Income Tax Consequences" in the Proxy.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
/s/ Theodore L. Press
By: ------------------------
Theodore L. Press
<PAGE>
<PAGE>
Exhibit 14(a)
-------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial
Statements and Experts" in this Registration Statement (Form N-14 No. 33-
38741) of Dreyfus Massachusetts Municipal Money Market Fund.
We also consent to the use of our report dated March 2, 1995 and to the
references to our firm under the captions "Condensed Financial
Information" and "Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors" included in the Registration Statement
of Dreyfus Massachusetts Municipal Money Market Fund dated May 31, 1995
which is incorporated by reference in this Registration Statement.
/s/ Ernst & Young LLP
----------------------
ERNST & YOUNG LLP
New York, New York
November 2, 1995
<PAGE>
<PAGE>
Exhibit 14(b)
KPMG PEAT MARWICK LLP
To the Shareholders and Board of Trustees
The Dreyfus/Laurel Tax-Free Municipal Funds
We consent to the use of our report dated August 18, 1995 with
respect to the Dreyfus/Laurel Massachusetts Tax-Free Money Fund (one of
the series comprising The Dreyfus/Laurel Tax-Free Municipal Funds)
incorporated by reference in the Prospectus/Proxy Statement and to the
reference to our Firm under the heading "Financial Statements and Experts"
in the Prospectus/Proxy Statement to be dated December 21, 1995, in the
Registration Statement (N-14) of Dreyfus Massachusetts Municipal Money
Market Fund.
/s/ KPMG PEAT MARWICK LLP
New York, New York
November 16, 1995
<PAGE>
<PAGE>
Exhibit 17(a)
-------------
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
..........................................................................
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
SPECIAL MEETING OF SHAREHOLDERS -- FEBRUARY 15, 1996
The undersigned hereby appoints Steven F. Newman and Jeff S. Prusnofsky,
and each of them, attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of beneficial interest in
Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the "Fund"), a series of
The Dreyfus/Laurel Tax-Free Municipal Funds, that the undersigned is
entitled to vote at a Special Meeting of Shareholders of the Fund to be
held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor
West, New York, New York 10166 on February 15, 1996, at 10:00 a.m.
(Eastern time) and at any adjournment(s) thereof. The undersigned hereby
acknowledges receipt of the Notice of Special Meeting and Proxy Statement,
and hereby instructs said attorneys and proxies to vote said shares as
indicated hereon. In their discretion, the proxies are authorized to vote
upon such other matters as may properly come before the Meeting. The
undersigned hereby revokes any proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
NOTE: Please sign exactly as your name or names appear on this Proxy. If
joint owners, EITHER may sign this Proxy. When signing as attorney,
executor, administrator, trustee, guardian, or corporate officer, please
give your full title as such.
DATE: _____________________, 199_ ________________________
________________________
Signature(s)
_________________________
Title(s), if applicable
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
<PAGE>
PLEASE INDICATE YOUR VOTE BY MARKING AN "X" IN THE APPROPRIATE BOX BELOW,
USING BLUE OR BLACK INK OR DARK PENCIL. DO NOT USE RED INK.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO
BE TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL.
Investor shareholders of the Fund are requested to vote on the following
Proposal:
To approve the proposed Agreement and Plan of
Reorganization between The Dreyfus/Laurel Tax-Free
Municipal Funds, on behalf of Dreyfus/Laurel
Massachusetts Tax-Free Money Fund (the "Fund"), and
Dreyfus Massachusetts Municipal Money Market Fund (the
"Acquiring Fund"), whereby the Fund will transfer to the
Acquiring Fund a portion of the Fund's assets having a
value equal to the aggregate net asset value of the
Fund's Investor shares, in exchange for shares of the
Acquiring Fund, and redeem in kind such Investor shares
by distributing to holders thereof shares of the
Acquiring Fund.
__ __ __
/__/ YES /__/ NO /__/ ABSTAIN
In their discretion, the proxies are, and each of them is, authorized to
vote upon any other business that may properly come before the Meeting, or
any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums and for approvals.
Please check the following box ONLY IF you hold a direct or indirect
beneficial interest in BOTH Investor and Class R shares of the Fund.
(This box is for informational purposes
__
only.): /__ /
<PAGE>
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
.........................................................................
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
SPECIAL MEETING OF SHAREHOLDERS -- FEBRUARY 15, 1996
The undersigned hereby appoints Steven F. Newman and Jeff S. Prusnofsky,
and each of them, attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of beneficial interest of
Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the "Fund"), a series of
The Dreyfus/Laurel Tax-Free Municipal Funds, that the undersigned is
entitled to vote at a Special Meeting of Shareholders of the Fund to be
held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor
West, New York, New York 10166 on February 15, 1996, at 10:00 a.m.
(Eastern time) and at any adjournment(s) thereof. The undersigned hereby
acknowledges receipt of the Notice of Special Meeting and Proxy Statement,
and hereby instructs said attorneys and proxies to vote said shares as
indicated hereon. In their discretion, the proxies are authorized to vote
upon such other matters as may properly come before the Meeting. The
undersigned hereby revokes any proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
NOTE: Please sign exactly as your name or names appear on this Proxy. If
joint owners, EITHER may sign this Proxy. When signing as attorney,
executor, administrator, trustee, guardian, or corporate officer, please
give your full title as such.
DATE: _____________________, 199_ ________________________
________________________
Signature(s)
_________________________
Title(s), if applicable
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
<PAGE>
PLEASE INDICATE YOUR VOTE BY MARKING AN "X" IN THE APPROPRIATE BOX BELOW,
USING BLUE OR BLACK INK OR DARK PENCIL. DO NOT USE RED INK.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO
BE TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION,
THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
Class R shareholders of the Fund are requested to vote on the following
Proposals:
To approve the proposed Agreement and Plan of
Reorganization between The Dreyfus/Laurel Tax-Free
Municipal Funds (the "Trust"), on behalf of
Dreyfus/Laurel Massachusetts Tax-Free Money Fund (the
"Fund"), and Dreyfus Massachusetts Municipal Money Market
Fund (the "Acquiring Fund"), whereby the Fund will
transfer to the Acquiring Fund a portion of the Fund's
assets having a value equal to the aggregate net asset
value of the Fund's Investor shares, in exchange for
shares of the Acquiring Fund, and redeem in kind such
Investor shares by distributing to holders thereof shares
of the Acquiring Fund.
__ __ __
/__/ YES /__/ NO /__/ ABSTAIN
To approve a new investment management agreement between
The Dreyfus Corporation ("Dreyfus") and the Trust, on
behalf of the Fund, under which (a) the management fee
payable by the Fund to Dreyfus for Dreyfus to provide or
arrange for the provision of substantially all services
to the Fund would be increased from the current rate of
0.35 of 1% of the Fund's average daily net assets to 0.45
of 1% of the Fund's average daily net assets; and (b)
certain other changes will be implemented.
__ __ __
/__/ YES /__/ NO /__/ ABSTAIN
In their discretion, the proxies are, and each of them is, authorized to
vote upon any other business that may properly come before the Meeting, or
any adjournment(s) thereof, including any adjournment(s) necessary to
obtain the requisite quorums and for approvals.
<PAGE>
<PAGE>
EXHIBIT 17(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [ ]
(Check appropriate box or boxes)
DREYFUS MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2594
Approximate Date of Proposed Public Offering: As soon as practicable
after this Registration Statement is declared effective.
It is proposed that this filing will become effective (check
appropriate box)
___ immediately upon filing pursuant to paragraph (b) of Rule
485
___ on (date) pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a) of Rule
485
___ on (date) pursuant to paragraph (a) of Rule 485
<PAGE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
==========================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Titles of Amount Offering Aggregate Amount of
Securities Being Price Per Offering Registration
Being Registered Registered Unit Price Fee
---------------- ---------- --------- -------- ------------
<S> <C> <C> <C> <C>
Share of beneficial interest, par * * * $500.00
value $.001 per share
</TABLE>
==========================================================================
* Pursuant to Regulation 270.24f2 under the Investment Company Act
of 1940, the Registrant hereby elects to register an indefinite
number of shares of beneficial interest.
==========================================================================
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
