File No. 33-7498
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. 15 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 15 [X]
(Check appropriate box or boxes.)
PREMIER CALIFORNIA MUNICIPAL BOND FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip
Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
____ immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a) (i)
X on June 1, 1995 pursuant to paragraph (a) (i)
____
____ 75 days after filing pursuant to paragraph (a) (ii)
____ on (date) pursuant to paragraph (a) (ii) of Rule 485.
If appropriate, check the following box:
this post-effective amendment designates a new effective date
____ for a previously filed amendment.
Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended January 31, 1995 was filed on March 23, 1995.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 6, 35
5 Management of the Fund 18
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 35
7 Purchase of Securities Being Offered 19
8 Redemption or Repurchase 26
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-29
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-14
Holders of Securities
16 Investment Advisory and Other B-14
Services
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation and Other Securities B-26
18 Capital Stock and Other Securities B-29
19 Purchase, Redemption and Pricing B-16, B-19, B-24
of Securities Being Offered
20 Tax Status *
21 Underwriters Cover, B-16
22 Calculations of Performance Data B-27
23 Financial Statements B-53
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
PROSPECTUS JUNE 1, 1995
Premier California Municipal Bond Fund (the "Fund") is an
open-end, diversified, management investment company,
known as a mutual fund. Its goal is to maximize current income exempt
from Federal and State of California personal income taxes to the extent
consistent with the preservation of capital.
By this Prospectus, Class A, Class B and Class C shares of
the Fund are being offered. Class A shares are subject to a sales charge
imposed at the time of purchase; Class B shares are subject to a
contingent deferred sales charge imposed on redemptions made within five
years of purchase; and Class C shares are subject to a contingent
deferred sales charge imposed on redemptions made within one year of
purchase. Other differences among the three Classes include the services
offered to and the expenses borne by each Class and certain voting
rights, as described herein. The Fund offers these alternatives to permit
an investor to choose the method of purchasing shares that is most
beneficial given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances.
The Fund provides free redemption checks with respect to
Class A, which you can use in amounts of $500 or more for cash or to pay
bills. You continue to earn income on the amount of the check until it
clears. You can purchase or redeem shares by telephone using the TELETRANS
FER Privilege.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
---------------
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read and
retained for future reference.
The Statement of Additional Information, dated June 1, 1995,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For a free
copy, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call 1-800-554-4611. When telephoning, ask for
Operator 666.
---------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------------------------------------------------------
#
TABLE OF CONTENTS
Fee Table.......................................... 3
Condensed Financial Information.................... 4
Alternative Purchase Methods....................... 5
Description of the Fund............................ 6
Management of the Fund............................. 18
How to Buy Fund Shares............................. 19
Shareholder Services............................... 23
How to Redeem Fund Shares.......................... 26
Distribution Plan and Shareholder Services Plan.... 31
Dividends, Distributions and Taxes................. 31
Performance Information............................ 34
General Information................................ 35
Page 2
#
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)....... 4.50% none none
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge) none* 3.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees........................... .55% .55% .55%
12b-1 Fees................................ none .50% .75%
Other Expenses ........................... .37% .39% .37%
Total Fund Operating Expenses............. .92% 1.44% 1.67%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS C
<S> <C> <C> <C>
1 YEAR...................................... $ 54 $ 45/$15** $27/$17**
3 YEARS..................................... $ 73 $ 66/$46** $53
5 YEARS..................................... $ 94 $ 89/$79** $91
10 YEARS.................................... $153 $ 145/$145*** $199
-------------
*A contingent deferred sales charge of 1.00% may be assessed on
certain redemptions of Class A shares purchased without an initial sales
charge as part of an investment of $1 million or more.
**Assuming no redemption of shares.
***Ten-year figures assume conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES
A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY
RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
-------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the various costs and expenses that investors will bear,
directly or indirectly, the payment of which will reduce investors'
return on an annual basis. Long-term investors in Class B or Class C
shares could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements
that may be in effect. Other Expenses of Class C are based on amounts for
Class A for the Fund's last fiscal year. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Fund," "How to Buy Fund Shares" and
"Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report thereon
appears in the Statement of Additional Information. Further financial
data and related notes for Class A and Class B are included in the
Statement of Additional Information, available upon request. No financial
information is available for Class C shares, which had not been offered
as of the date of this Prospectus.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for
Class A and Class B shares of beneficial interest outstanding, total
investment return, ratios to average net assets and other supplemental
data for each year indicated. This information has been derived from the
Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES
------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
------------------------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993 1994 1995
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of year............... $12.50 $12.92 $11.82 $12.00 $12.02 $12.23 $12.58 $12.80 $13.64
------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net.. .20 .84 .89 .89 .89 .82 .80 .77 .72
Net realized and
unrealized gain (loss)
on investments........ .42 (1.10) .18 .02 .21 .36 .39 .94 (.80)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT OPERATIONS .62 (.26) 1.07 .91 1.10 1.18 1.19 1.71 (.08)
------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net............ (.20) (.84) (.89) (.89) (.89) (.82) (.80) (.77) (.72)
Dividends from net realized
gain on investments -- -- -- -- -- (.01) (.17) (.10) (.60)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (.20) (.84) (.89) (.89) (.89) (.83) (.97) (.87) (1.32)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of year........... $12.92 $11.82 $12.00 $12.02 $12.23 $12.58 $12.80 $13.64 $12.24
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)..... 21.905(3) (1.61%) 9.52% 7.82% 9.45% 10.02% 9.78% 13.62% (4.34%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets.... -- -- -- -- .11% .47% .65% .78% .90%
Ratio of net investment
income to average net
assets................ 5.60%(3) 7.22% 7.41% 7.20% 7.19% 6.62% 6.30% 5.71% 5.72%
Decrease reflected in
above expense ratios
due to undertakings by
The Dreyfus Corporation
(limited to the expense
limitation provision of the
Management Agreement) 1.50%(3) 1.50% 1.50% 1.26% .91% .48% .28% .15% .02%
Portfolio Turnover Rate -- 2.77% 33.68% 28.64% 5.95% 10.29% 36.54% 26.69% 37.39%
Net Asssets, end of year
(000's omitted)........ $1,010 $2,713 $12,063 $58,714 $166,095 $218,703 $224,555 $245,435 $191,939
----------
(1)From November 10, 1986 (commencement of operations) to January 31, 1987.
(2)Exclusive of sales load.
(3)Annualized.
</TABLE>
Page 4
<TABLE>
<CAPTION>
CLASS B SHARES
------------------------------
YEAR ENDED JANUARY 31,
------------------------------
1993(1) 1994 1995
------- ------- -------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year................ $12.69 $12.81 $13.64
------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net............................. .03 .69 .65
Net realized and unrealized gain (loss) on investments .12 .93 (.79)
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................. .15 1.62 (.14)
------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net.............. (.03) (.69) (.65)
Dividends from net realized gain on investments... -- (.10) (.60)
------- ------- -------
TOTAL DISTRIBUTIONS.............................. (.03) (.79) (1.25)
------- ------- -------
Net asset value, end of year...................... $12.81 $13.64 $12.25
======= ======= =======
TOTAL INVESTMENT RETURN(2)................................ 25.98%(3) 12.91% (4.77%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... 1.07%(3) 1.31% 1.42%
Ratio of net investment income to average net assets 4.92%(3) 4.90% 5.17%
Decrease reflected in above expense ratios due to undertakings
by The Dreyfus Corporation (limited to the expense limitation
provision of the Management Agreement)........... .13%(3) .13% .02%
Portfolio Turnover Rate........................... 36.54% 26.69% 37.39%
Net Asssets, end of year
(000's omitted)................................... $325 $16,906 $18,981
-----------------
(1)From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(2)Exclusive of sales load.
(3)Annualized.
</TABLE>
Further information about the Fund's performance is contained in
its annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this
Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you three methods of purchasing Fund shares;
you may choose the Class of shares that best suits your needs, given the
amount of your purchase, the length of time you expect to hold your
shares and any other relevant circumstances. Each Fund share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Fund Shares - Class A
Shares." These shares are subject to an annual service fee at the rate of
.25 of l% of the value of the average daily net assets of Class A. See
"Distribution Plan and Shareholder Services Plan - Shareholder Services
Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 3% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within the first five years
of their purchase. See "How to Buy Fund Shares - Class B Shares" and "How
to Redeem Fund Shares - Contingent Deferred Sales Charge - Class B
Shares." These shares also are subject to an annual service fee at the
rate of .25 of 1% of the value of the average daily net assets of Class
B. In addition, Class B shares are subject to an annual distribution fee
at the rate of .50 of l% of the value of the average daily net assets of
Class B. See "Distribution Plan and Shareholder Services Plan." The
distribution fee paid by Class B will cause such Class to have a higher
expense ratio and to pay lower dividends than Class A. Approximately six
years after the date of purchase, Class B shares automatically will
convert to Class A shares, based on the relative net asset val-
Page 5
ues for
shares of each Class, and will no longer be subject to the distribution
fee. Class B shares that have been acquired through the reinvestment of
dividends and distributions will be converted on a pro rata basis
together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the
total Class B shares not acquired through the reinvestment of dividends
and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase. Class C shares are subject
to a 1% CDSC, which is assessed only if you redeem Class C shares within
one year of their purchase. See "How to Buy Fund Shares - Class C Shares"
and "How to Redeem Fund Shares - Contingent Deferred Sales Charge - Class
C Shares." These shares also are subject to an annual service fee at the
rate of .25 of 1% of the value of the average daily net assets of Class C
and an annual distribution fee at the rate of .75 of 1% of the value of
the average daily net assets of Class C. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class C will
cause such Class to have a higher expense ratio and to pay lower
dividends than Class A.
The decision as to which Class of shares is more beneficial
to you depends on the amount and the intended length of your investment.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC, if
any, on Class B or Class C shares would be less than the initial sales
charge on Class A shares purchased at the same time, and to what extent,
if any, such differential woul be offset by the return of Class A.
Additionally, investors qualifying for reduced initial sales charges who
expect to maintain their investment for an extended period of time might
consider purchasing Class A shares because the accumulated continuing
distribution fees on Class B or Class C shares may exceed the initial
sales charge on Class A shares during the life of the investment.
Finally, you should consider the effect of the CDSC period and any
conversion rights of the Classes in the context of your own investment
time frame. For example, while Class C shares have a shorter CDSC period
than Class B shares, Class C shares do not have a conversion feature and,
therefore, are subject to an ongoing distribution fee. Thus, Class B
shares may be more attractive than Class C shares to investors with long
term investment outlooks. Generally, Class A shares may be more
appropriate for investors who invest $1,000,000 or more in Fund shares,
and for investors who invest between $250,000 and $999,999 in Fund shares
with long term investment outlooks. Class A shares will not be
appropriate for investors who invest less than $50,000 in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to maximize current income exempt from
Federal and State of California personal income taxes to the extent
consistent with the preservation of capital. To accomplish this goal, the
Fund invests primarily in the debt securities of the State of California,
its political subdivisions, authorities and corporations, the interest
from which is, in the opinion of bond counsel to the issuer, exempt from
Federal and State of California personal income taxes (collectively,
"California Municipal Obligations"). To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the
Fund, the Fund will invest, for temporary defensive purposes, primarily
in other debt securities the interest from which is, in the opinion of
bond counsel to the issuer, exempt from Federal, but not State of
California, income tax. The Fund's investment objective cannot be changed
without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved.
Page 6
MUNICIPAL OBLIGATIONS
Debt securities the interest from which is, in the opinion of
bond counsel to the issuer, exempt from Federal income tax ("Municipal
Obligations") generally include debt obligations issued to obtain funds
for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
are classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the payment of principal and interest.
Revenue bonds are payable from the revenue derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise or other specific revenue source, but not from the general
taxing power. Tax exempt industrial development bonds, in most cases, are
revenue bonds that do not carry the pledge of the credit of the issuing
municipality, but generally are guaranteed by the corporate entity on
whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or
equipment issued by municipalities. Municipal Obligations bear fixed,
floating or variable rates of interest which are determined in some
instances by formulas under which the Municipal Obligation's interest
rate will change directly or inversely to changes in interest rates or an
index, or multiples thereof, in many cases subject to a maximum and
minimum. Certain Municipal Obligations are subject to redemption at a
date earlier than their stated maturity pursuant to call options, which
may be separated from the related Municipal Obligation and purchased and
sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at
least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations. At least 65% of
the value of the Fund's net assets (except when maintaining a temporary
defensive position) will be invested in bonds, debentures and other debt
instruments. At least 65% of the value of the Fund's net assets will be
invested in California Municipal Obligations and the remainder may be
invested in securities that are not California Municipal Obligations and
therefore may be subject to California income tax. See "Risk Factors _
Investing in California Municipal Obligations" below, and "Dividends,
Distributions and Taxes."
At least 70% of the value of the Fund's net assets must
consist of Municipal Obligations which, in the case of bonds, are rated
no lower than Baa by Moody's Investors Service, Inc. ("Moody's") or BBB
by Standard & Poor's Corporation ("S&P") or Fitch Investors Service, Inc.
("Fitch"). The Fund may invest up to 30% of the value of its net assets
in Municipal Obligations which, in the case of bonds, are rated lower
than Baa by Moody's and BBB by S&P and Fitch and as low as the lowest
rating assigned by Moody's, S&P or Fitch. The Fund may invest in
short-term Municipal Obligations which are rated in the two highest
rating categories by Moody's, S&P or Fitch. See "Appendix B" in the
Statement of Additional Information. Municipal Obligations rated BBB by
S&P or Fitch or Baa by Moody's are considered investment grade
obligations; those rated BBB by S&P and Fitch are regarded as having an
adequate capacity to pay principal and interest, while those rated Baa by
Moody's are considered medium grade obligations which lack outstanding
investment characteristics and have speculative characteristics.
Investments rated Ba or lower by Moody's and BB or lower by S&P and Fitch
ordinarily provide higher yields but involve greater risk because of
their speculative characteristics. The Fund may invest in Municipal
Obligations rated C by Moody's or D by S&P or Fitch, which is such rating
organizations' lowest rating and indicates
Page 7
that the Municipal Obligation
is in default and interest and/or repayment of principal is in arrears.
See "Risk Factors - Lower Rated Bonds" below for a further discussion of
certain risks. The Fund also may invest in securities which, while not
rated, are determined by The Dreyfus Corporation to be of comparable
quality to the rated securities in which the Fund may invest; for
purposes of the 70% requirement described in this paragraph, such unrated
securities shall be deemed to have the rating so determined. The Fund
also may invest in Taxable Investments of the quality described below.
Under normal market conditions, the weighted average maturity of the
Fund's portfolio is expected to exceed ten years.
In addition to usual investment practices, the Fund may use
speculative investment techniques such as short-selling and lending its
portfolio securities. The Fund also may purchase, hold or deal in futures
contracts and options on futures contracts. Options and futures
transactions involve so-called "derivative securities." See "Investment
Techniques" below.
The Fund may invest more than 25% of the value of its total
assets in Municipal Obligations which are related in such a way that an
economic, business or political development or change affecting one such
security also would affect the other securities; for example, securities
the interest upon which is paid from revenues of similar types of
projects. As a result, the Fund may be subject to greater risk as
compared to a fund that does not follow this practice.
From time to time, the Fund may invest more than 25% of the
value of its total assets in industrial development bonds which, although
issued by industrial development authorities, may be backed only by the
assets and revenues of the non-governmental users. Interest on Municipal
Obligations (including certain industrial development bonds) which are
specified private activity bonds, as defined in the Internal Revenue Code
of 1986, as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a preference item for the purpose of
the alternative minimum tax. Where a regulated investment company
receives such interest, a proportionate share of any exempt-interest
dividend paid by the investment company may be treated as such a
preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if The Dreyfus Corporation determines that
their purchase is consistent with the Fund's investment objective. See
"Risk Factors - Other Investment Considerations."
The Fund may purchase floating and variable rate demand notes
and bonds, which are tax exempt obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to demand
payment of principal at any time or at specified intervals. Variable rate
demand notes include master demand notes which are obligations that
permit the Fund to invest fluctuating amounts, at varying rates of
interest, pursuant to direct arrangements between the Fund, as lender,
and the borrower. These obligations permit daily changes in the amount
borrowed. As mutually agreed, the Fund may increase or decrease the
amounts under these obligations or the borrower may repay the amount
borrowed without penalty. Because these obligations are direct lending ar-
rangements between the lender and borrower, it is not contemplated that
such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest. Accordingly, where these
obligations are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of
the borrower to pay principal and interest on demand. Each obligation
purchased by the Fund will meet the quality criteria established for the
purchase of Municipal Obligations. The Dreyfus Corporation, on behalf of
the Fund, will consider
Page 8
on an ongoing basis the creditworthiness of the issuers of the floating
and variable rate demand obligations in the Fund's portfolio.
The Fund may purchase from financial institutions
participation interests in Municipal Obligations (such as industrial
development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Munici-
pal Obligation in the proportion that the Fund's participation interest
bears to the total principal amount of the Municipal Obligation. These
instruments may have fixed, floating or variable rates of interest. If
the participation interest is unrated, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Board of
Trustees has determined meets the prescribed quality standards for banks
set forth below, or the payment obligation otherwise will be
collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more
than seven days' notice, for all or any part of the Fund's participation
interest in the Municipal Obligation, plus accrued interest. As to these
instruments, the Fund intends to exercise its right to demand payment
only upon a default under the terms of the Municipal Obligation, as
needed to provide liquidity to meet redemptions, or to maintain or
improve the quality of its investment portfolio.
The Fund may purchase tender option bonds. A tender option
bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a
fixed rate substantially higher than prevailing short-term tax exempt
rates, that has been coupled with the agreement of a third party, such as
a bank, broker-dealer or other financial institution, pursuant to which
such institution grants the security holders the option, at periodic
intervals, to tender their securities to the institution and receive the
face value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the difference
between the Municipal Obligation's fixed coupon rate and the rate, as
determined by a remarketing or similar agent at or near the commencement
of such period, that would cause the securities, coupled with the tender
option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand
obligation that bears interest at the prevailing short-term tax exempt
rate. The Dreyfus Corporation, on behalf of the Fund, will consider on an
ongoing basis the creditworthiness of the issuer of the underlying Munici-
pal Obligation, of any custodian and of the third party provider of the
tender option. In certain instances and for certain tender option bonds,
the option may be terminable in the event of a default in payment of
principal or interest on the underlying Municipal Obligations and for
other reasons. The Fund will not invest more than 15% of the value of its
net assets in illiquid securities, which could include tender option
bonds as to which it cannot exercise the tender feature on not more than
seven days' notice if there is no secondary market available for these
obligations.
The Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at the Fund's
option, specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a
stand-by commitment, therefore, is subject to the ability of the seller
to make payment on demand. The Fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise
its rights thereunder for trading purposes. The Fund may pay for stand-by
commitments if such action is deemed necessary, thus increasing to a
degree the cost of the underlying Municipal Obligation and similarly
decreasing such security's yield to investors. The Fund also may acquire
call options on specific Municipal Obligations. The Fund generally would
purchase these call options to protect the Fund from the issuer of the
related Municipal Obligation redeem-
Page 9
ing, or other holder of the call option from calling away, the Municipal
Obligation before maturity. The sale by the Fund of a call option that
it owns on a specific Municipal Obligation could result in the receipt of
taxable income by the Fund.
The Fund may purchase custodial receipts representing the
right to receive certain future principal and interest payments on
Municipal Obligations which underlie the custodial receipts. A number of
different arrangements are possible. In a typical custodial receipt
arrangement, an issuer or a third party owner of Municipal Obligations
deposits such obligations with a custodian in exchange for two classes of
custodial receipts. The two classes have different characteristics, but,
in each case, payments on the two classes are based on payments received
on the underlying Municipal Obligations. One class has the
characteristics of a typical auction rate security, where at specified
intervals its interest rate is adjusted, and ownership changes, based on
an auction mechanism. This class's interest rate generally is expected to
be below the coupon rate of the underlying Municipal Obligations and
generally is at a level comparable to that of a Municipal Obligation of
similar quality and having a maturity equal to the period between
interest rate adjustments. The second class bears interest at a rate that
exceeds the interest rate typically borne by a security of comparable
quality and maturity; this rate also is adjusted, but in this case
inversely to changes in the rate of interest of the first class. If the
interest rate on the first class exceeds the coupon rate of the
underlying Municipal Obligations, its interest rate will exceed the rate
paid on the second class. In no event will the aggregate interest paid
with respect to the two classes exceed the interest paid by the
underlying Municipal Obligations. The value of the second class and
similar securities should be expected to fluctuate more than the value of
a Municipal Obligation of comparable quality and maturity and their
purchase by the Fund should increase the volatility of its net asset
value and, thus, its price per share. These custodial receipts are sold
in private placements. The Fund also may purchase directly from issuers,
and not in a private placement, Municipal Obligations having
characteristics similar to custodial receipts. These securities may be
issued as part of a multi-class offering and the interest rate on certain
classes may be subject to a cap or floor.
The Fund may invest up to 15% of the value of its net assets
in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale and repurchase agreements providing
for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund desire to
sell them when a ready buyer is not available at a price that the Fund
deems representative of their value, the value of the Fund's net assets
could be adversely affected.
The Fund may invest in zero coupon securities which are debt
securities issued or sold at a discount from their face value which do
not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). The
amount of the discount varies depending on the time remaining until
maturity or cash payment date, prevailing interest rates, liquidity of
the security and perceived credit quality of the issuer. Zero coupon
securities also may take the form of debt securities that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities
generally are more volatile than the market prices of interest-bearing
securities and are likely to respond to a greater degree to changes in
interest rates than interest-bearing securities having similar maturities
and credit qualities. The Fund may invest up to 5% of its assets in zero
coupon bonds which are rated below investment grade. See "Risk Factors
Page 10
- Lower Rated Bonds" and "Other Investment Considerations" below, and
"Investment Objective and Management Policies - Risk Factors - Lower
Rated Bonds" and "Dividends, Distributions and Taxes" in the Statement of
Additional Information.
From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may
invest in taxable short-term investments ("Taxable Investments")
consisting of: notes of issuers having, at the time of purchase, a
quality rating within the two highest grades of Moody's, S&P or Fitch;
obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-1 by Moody's, A-1 by S&P or F-1
by Fitch; certificates of deposit of U.S. domestic banks, including
foreign branches of domestic banks, with assets of one billion dollars or
more; time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors.
See "Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net
assets be invested in Taxable Investments. When the Fund has adopted a
temporary defensive position, including when acceptable California
Municipal Obligations are unavailable for investment by the Fund, in
excess of 35% of the Fund's net assets may be invested in securities that
are not exempt from California personal income taxes. Under normal market
conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable
Investments. Taxable Investments are more fully described in the
Statement of Additional Information, to which reference hereby is made.
INVESTMENT TECHNIQUES
The Fund may employ, among others, the investment techniques
described below. Use of certain of these techniques may give rise to
taxable income.
WHEN-ISSUED SECURITIES -- New issues of Municipal Obligations usually
are offered on a when-issued basis, which means that delivery and payment
for such Municipal Obligations ordinarily take place within 45 days after
the date of the commitment to purchase. The payment obligation and the
interest rate that will be received on the Municipal Obligations are
fixed at the time the Fund enters into the commitment. The Fund will make
commitments to purchase such Municipal Obligations only with the
intention of actually acquiring the securities, but the Fund may sell
these securities before the settlement date if it is deemed advisable,
although any gain realized on such sale would be taxable. The Fund will
not accrue income in respect of a when-issued security prior to its
stated delivery date. No additional when-issued commitments will be made
if more than 20% of the value of the Fund's net assets would be so
committed.
Municipal Obligations purchased on a when-issued basis and
the securities held in the Fund's portfolio are subject to changes in
value (both generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based
upon the public's perception of the creditworthiness of the issuer and
changes, real or anticipated, in the level of interest rates. Municipal
Obligations purchased on a when-issued basis may expose the Fund to risk
because they may experience such fluctuations prior to their actual
delivery. Purchasing Municipal Obligations on a when-issued basis can
involve the additional risk that the yield available in the market when
the delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of the Fund consisting of cash,
cash equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal
Page 11
at all times to the amount of the
when-issued commitments will be established and maintained at the Fund's
custodian bank. Purchasing Municipal Obligations on a when-issued basis
when the Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.
FUTURES TRANSACTIONS -- IN GENERAL -- The Fund is not a commodity
pool. However, as a substitute for a comparable market position in the
underlying securities or for hedging purposes, the Fund may engage in
futures and options on futures transactions, as described below.
The Fund's commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations
promulgated by the Commodity Futures Trading Commission. In addition, the
Fund may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would exceed 5%
of the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts it has entered
into; provided, however, that in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be
excluded in calculating the 5%. Pursuant to regulations and/or published
positions of the Securities and Exchange Commission, the Fund may be
required to segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount generally equal
to the value of the underlying commodity. To the extent the Fund engages
in the use of futures and options on futures for other than bona fide
hedging purposes, the Fund may be subject to additional risk.
Initially, when purchasing or selling futures contracts the
Fund will be required to deposit with its custodian in the broker's name
an amount of cash or cash equivalents up to approximately 10% of the
contract amount. This amount is subject to change by the exchange or
board of trade on which the contract is traded and members of such
exchange or board of trade may impose their own higher requirements. This
amount is known as "initial margin" and is in the nature of a performance
bond or good faith deposit on the contract which is returned to the Fund
upon termination of the futures position, assuming all contractual
obligations have been satisfied. Subsequent payments, known as "variation
margin," to and from the broker will be made daily as the price of the
index or securities underlying the futures contract fluctuates, making
the long and short positions in the futures contract more or less
valuable, a process known as "marking-to-market." At any time prior to
the expiration of a futures contract, the Fund may elect to close the
position by taking an opposite position at the then prevailing price,
which will operate to terminate the Fund's existing position in the
contract.
Although the Fund intends to purchase or sell futures
contracts only if there is an active market for such contracts, no
assurance can be given that a liquid market will exist for any particular
contract at any particular time. Many futures exchanges and boards of
trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached
in a particular contract, no trades may be made that day at a price
beyond the limit or trading may be suspended for specified periods during
the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially
subjecting the Fund to substantial losses. If it is not possible or the
Fund determines not to close a futures position in anticipation of
adverse price movements, the Fund will be required to make daily cash
payments of variation margin. In such circumstances, an increase in the
value of the portion of the Fund's portfolio being hedged, if any, may
offset partially or completely losses on the futures contract. However,
no assurance can be given that the
Page 12
price of the securities being hedged will correlate with the price
movements in a futures contract and thus provide an offset to
losses on the futures contract.
To the extent the Fund is engaging in a futures transaction
as a hedging device, because of the risk of an imperfect correlation
between securities in the Fund's portfolio that are the subject of a
hedging transaction and the futures contract used as a hedging device, it
is possible that the hedge will not be fully effective if, for example,
losses on the portfolio securities exceed gains on the futures contract
or losses on the futures contract exceed gains on the portfolio
securities. For futures contracts based on indices, the risk of imperfect
correlation increases as the composition of the Fund's portfolio varies
from the composition of the index. In an effort to compensate for the
imperfect correlation of movements in the price of the securities being
hedged and movements in the price of futures contracts, the Fund may buy
or sell futures contracts in a greater or lesser dollar amount than the
dollar amount of the securities being hedged if the historical volatility
of the futures contract has been less or greater than that of the
securities. Such "over hedging" or "under hedging" may adversely affect
the Fund's net investment results if the market does not move as
anticipated when the hedge is established.
Successful use of futures by the Fund also is subject to The
Dreyfus Corporation's ability to predict correctly movements in the
direction of the market or interest rates. For example, if the Fund has
hedged against the possibility of a decline in the market adversely
affecting the value of securities held in its portfolio and market prices
increase instead, the Fund will lose part or all of the benefit of the
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. The Fund may have
to sell such securities at a time when it may be disadvantageous to do
so.
An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if
the option is a put) at a specified exercise price at any time during the
option exercise period. The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if
the option is a call and a long position if the option is a put). Upon
exercise of the option, the assumption of offsetting futures positions by
the writer and holder of the option will be accompanied by delivery of
the accumulated cash balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract,
at exercise, exceeds, in the case of a call, or is less than, in the case
of a put, the exercise price of the option on the futures contract.
Call options sold by the Fund with respect to futures
contracts will be covered by, among other things, entering into a long
position in the same contract at a price no higher than the strike price
of the call option, or by ownership of the instruments underlying, or
instruments the prices of which are expected to move relatively
consistently with the instruments underlying, the futures contract. Put
options sold by the Fund with respect to futures contracts will be
covered when, among other things, cash or liquid securities are placed in
a segregated account to fulfill the obligation undertaken.
The Fund may utilize municipal bond index futures to protect
against changes in the market value of the Municipal Obligations in its
portfolio or which it intends to acquire. Municipal bond index futures
contracts are based on an index of long-term Municipal Obligations. The
index assigns relative values to the Municipal Obligations included in
the index, and fluctuates with changes in the market value of such
Municipal Obligations. The contract is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash based upon
the difference between the value of the index at the close of the last
trading day of the contract and the price at which the
Page 13
index contract was originally written. The acquisition or sale of a
municipal bond index futures contract enables the Fund to protect its
assets from fluctuations in rates on tax exempt securities without
actually buying or selling such securities.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES
CONTRACTS -- The Fund may purchase and sell interest rate futures
contracts and options on interest rate futures contracts as a substitute
for a comparable market position or to hedge against adverse movements in
interest rates.
To the extent the Fund has invested in interest rate futures
contracts or options on interest rate futures contracts as a substitute
for a comparable market position, the Fund will be subject to the
investment risks of having purchased the securities underlying the
contract.
The Fund may purchase call options on interest rate futures
contracts to hedge against a decline in interest rates and may purchase
put options on interest rate futures contracts to hedge its portfolio
securities against the risk of rising interest rates.
The Fund may sell call options on interest rate futures
contracts to partially hedge against declining prices of its portfolio
securities. If the futures price at expiration of the option is below the
exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any decline that may have
occurred in the Fund's portfolio holdings. The Fund may sell put options
on interest rate futures contracts to hedge against increasing prices of
the securities which are deliverable upon exercise of the futures
contract. If the futures price at expiration of the option is higher than
the exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any increase in the price
of securities which the Fund intends to purchase. If a put or call option
sold by the Fund is exercised, the Fund will incur a loss which will be
reduced by the amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio securities
and changes in the value of its futures positions, the Fund's losses from
existing options on futures may, to some extent, be reduced or increased
by changes in the value of its portfolio securities.
The Fund also may sell options on interest rate futures
contracts as part of closing purchase transactions to terminate its
options positions. No assurance can be given that such closing
transactions can be effected or that there will be a correlation between
price movements in the options on interest rate futures and price
movements in the Fund's portfolio securities which are the subject of the
hedge. In addition, the Fund's purchase of such options will be based
upon predictions as to anticipated interest rate trends, which could
prove to be inaccurate.
SHORT-SELLING -- The Fund may make short sales of securities, which
are transactions in which the Fund sells a security it does not own in
anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then is obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement.
The price at such time may be more or less than the price at which the
security was sold by the Fund. The Fund will incur a loss as a result of
the short sale if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed
security. The Fund will realize a gain if the security declines in price
between those dates.
No securities will be sold short if, after effect is given to
any such short sale, the total market value of all securities sold short
would exceed 25% of the value of the Fund's net assets. The Fund may not
sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of the
Fund's net
Page 14
assets. The Fund may not sell short the securities of any
class of an issuer to the extent, at the time of transaction, of more
than 5% of the outstanding securities of that class.
In addition to the short sales discussed above, the Fund may
make short sales "against the box," a transaction in which the Fund
enters into a short sale of a security which the Fund owns. At no time
will the Fund have more than 15% of the value of its net assets in
deposits on short sales against the box.
FUTURE DEVELOPMENTS -- The Fund may take advantage of opportunities
in the area of options and futures contracts and options on futures
contracts and any other derivative investments which are not presently
contemplated for use by the Fund or which are not currently available but
which may be developed, to the extent such opportunities are both
consistent with the Fund's investment objective and legally permissible
for the Fund. Before entering into such transactions or making any such
investment, the Fund will provide appropriate disclosure in its
prospectus.
LENDING PORTFOLIO SECURITIES -- From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain
transactions. Such loans may not exceed 331/3 % of the value of the
Fund's total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned
securities. The Fund can increase its income through the investment of
such collateral. However, such income generally would not be tax exempt.
The Fund continues to be entitled to payments in amounts equal to the
interest or other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might experience
risk of loss if the institution with which it has engaged in a portfolio
loan transaction breaches its agreement with the Fund.
BORROWING MONEY -- As a fundamental policy, the Fund is permitted to
borrow to the extent permitted under the Investment Company Act of 1940.
However, the Fund currently intends to borrow money only for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value
of the Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings exceed 5%
of the Fund's total assets, the Fund will not make any additional
investments.
CERTAIN FUNDAMENTAL POLICIES
The Fund may (i) borrow money to the extent permitted under
the Investment Company Act of 1940, which currently limits borrowing to
no more than 331/3 % of the value of the Fund's total assets; and (ii)
invest up to 25% of its assets in the securities of issuers in any single
industry, provided that there is no such limitation on investments in
Municipal Obligations, and, for temporary defensive purposes, obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies that
cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. See "Investment Objective and Management Policies -
Investment Restrictions" in the Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES
The Fund may (i) pledge, hypothecate, mortgage or otherwise
encumber its assets, but only to secure permitted borrowings; and (ii)
invest up to 15% of the value of its net assets in repurchase agreements
providing for settlement in more than seven days after notice and in
other illiquid securities (which securities could include participation
interests (including municipal lease/purchase agreements) that are not
subject to the
Page 15
demand feature described above, and floating and variable
rate demand obligations as to which the Fund cannot exercise the related
demand feature described above and as to which there is no secondary
market). See "Investment Objective and Management Policies - Investment
Restrictions" in the Statement of Additional Information.
RISK FACTORS
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS -- You should consider
carefully the special risks inherent in the Fund's investment in
California Municipal Obligations. These risks result from certain
amendments to the California Constitution and other statutes that limit
the taxing and spending authority of California governmental entities, as
well as from the general financial condition of the State of California.
Since the start of the State's 1990-91 fiscal year, the State has
experienced the worst economic, fiscal and budget conditions since the
1930s. As a result, the State has experienced recurring budget deficits for
four of the last five fiscal years ended 1991-92. Revenues and expenditures
were essentially equal in 1992-93, but the original budget for that year
projected revenues exceeding expenditures by $2.6 billion. The excess of
revenue over expenditures for the State's 1993-94 fiscal year is expected
to have been $500 million, after originally being estimated to $2
billion. By June 30, 1994, according to California Department of Finance,
the State's Reserve for Economic Uncertainties had an accumulated
deficit, on a budget basis, of approximately $2.0 billion. A further
consequence of the large budget imbalances has been that the State
depleted its available cash resources and has had to use a series of
external borrowings to meet its cash needs. To meet its cash flow needs
in the 1994-95 fiscal year, the State issued, in July and August 1994,
$4.0 billion of revenue anticipation warrants and $3.0 billion of revenue
anticipation notes. As a result of the deterioration in the State's
budget and cash situation between October 1991 and July 1994 the rating
on the State's general obligation bonds was reduced by S&P from AAA to A,
by Moody's from Aaa to A1 and by Fitch from AAA to A. These and other
factors may have the effect of impairing the ability of the issuers of
California Municipal Obligations to pay interest on, or repay the
principal of, such California Municipal Obligations. You should obtain
and review a copy of the Statement of Additional Information which more
fully sets forth these and other risk factors.
LOWER RATED BONDS -- You should carefully consider the relative risks
of investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest up to 30% of the value of its net
assets. These are bonds such as those rated Ba by Moody's or BB by S&P or
Fitch or as low as the lowest rating assigned by Moody's, S&P or Fitch.
They generally are not meant for short-term investing and may be subject
to certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. Bonds rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Bonds
rated BB by S&P are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face
major ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Bonds rated BB by Fitch are
considered speculative and the payment of principal and interest may be
affected at any time by adverse economic changes. Bonds rated C by
Moody's are regarded as having extremely poor prospects of ever attaining
any real investment standing. Bonds rated D by S&P are in default and the
payment of interest and/or repayment of principal is in arrears. Bonds
rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery
Page 16
value in liquidation or reorganization of the issuer; DDD
represents the highest potential for recovery of such bonds; and D
represents the lowest potential for recovery. Such bonds, though high
yielding, are characterized by great risk. See "Appendix B" in the
Statement of Additional Information for a general description of Moody's,
S&P and Fitch ratings of Municipal Obligations. The ratings of Moody's,
S&P and Fitch represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and, although ratings
may be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of these bonds.
Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, The Dreyfus Corporation also will
evaluate these securities and the ability of the issuers of such
securities to pay interest and principal. The Fund's ability to achieve
its investment objective may be more dependent on The Dreyfus
Corporation's credit analysis than might be the case for a fund that
invested in higher rated securities. Once the rating of a portfolio
security has been changed, the Fund will consider all circumstances
deemed relevant in determining whether to continue to hold the security.
The market price and yield of bonds rated Ba or lower by
Moody's and BB or lower by S&P and Fitch are more volatile than those of
higher rated bonds. Factors adversely affecting the market price and
yield of these securities will adversely affect the Fund's net asset
value. In addition, the retail secondary market for these bonds may be
less liquid than that of higher rated bonds; adverse market conditions
could make it difficult at times for the Fund to sell certain securities
or could result in lower prices than those used in calculating the Fund's
net asset value.
The Fund may invest up to 5% of the value of its net assets
in zero coupon securities and pay-in-kind bonds (bonds which pay interest
through the issuance of additional bonds) rated Ba or lower by Moody's
and BB or lower by S&P and Fitch. These securities may be subject to
greater fluctuations in value due to changes in interest rates than
interest-bearing securities and thus may be considered more speculative
than comparably rated interest-bearing securities. See "Other Investment
Considerations" below, and "Investment Objective and Management Policies
- Risk Factors - Lower Rated Bonds" and "Dividends, Distributions and
Taxes" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS -- Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price
fluctuations. Certain securities that may be purchased by the Fund, such
as those with interest rates that fluctuate directly or indirectly based
on multiples of a stated index, are designed to be highly sensitive to
changes in interest rates and can subject the holders thereof to extreme
reductions of yield and possibly loss of principal. The values of
fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. The Fund's net
asset value generally will not be stable and should fluctuate based upon
changes in the value of the Fund's portfolio securities. Securities in
which the Fund invests may earn a higher level of current income than
certain shorter-term or higher quality securities which generally have
greater liquidity, less market risk and less fluctuation in market value.
Federal income tax law requires the holder of a zero coupon
security or of certain pay-in-kind bonds to accrue income with respect to
these securities prior to the receipt of cash payments. To maintain its
qualification as a regulated investment company and avoid liability for
Federal income taxes, the Fund may be required to distribute such income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Page 17
Certain municipal lease/purchase obligations in which the
Fund may invest may contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in future
years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by
the leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors
including the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance of
Municipal Obligations may reduce the volume of Municipal Obligations
qualifying for Federal tax exemption. One effect of these provisions
could be to increase the cost of the Municipal Obligations available for
purchase by the Fund and thus reduce available yield. Shareholders should
consult their tax advisers concerning the effect of these provisions on
an investment in the Fund. Proposals that may restrict or eliminate the
income tax exemption for interest on Municipal Obligations may be
introduced in the future. If any such proposal were enacted that would
reduce the availability of Municipal Obligations for investment by the
Fund so as to adversely affect Fund shareholders, the Fund would reevalu-
ate its investment objective and policies and submit possible changes in
the Fund's structure to shareholders for their consideration. If legislation
were enacted that would treat a type of Municipal Obligation as taxable,
the Fund would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
Investment decisions for the Fund are made independently from
those of other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, Municipal Obligations or Taxable Investments at the
same time as the Fund, available investments or opportunities for sales
will be allocated equitably to each investment company. In some cases,
this procedure may adversely affect the size of the position obtained for
or disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary
of Mellon Bank Corporation ("Mellon"). As of February 28, 1995, The
Dreyfus Corporation managed or administered approximately $72 billion in
assets for more than 1.9 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law. The Fund's primary portfolio manager
is A. Paul Disdier. He has held that position since May 1988 and has been
employed by The Dreyfus Corporation since February 1988. The Fund's other
portfolio managers are identified in the Fund's Statement of Additional
Information. The Dreyfus Corporation also provides research services for
the Fund as well as for other Funds advised by The Dreyfus Corporation
through a professional staff of portfolio managers and securities
analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National
Page 18
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon Financial
Services Corporations. Through its subsidiaries, including The Dreyfus
Corporation, Mellon managed approximately $193 billion in assets as of
December 31, 1994, including approximately $70 billion in mutual fund
assets. As of December 31, 1994, Mellon, through various subsidiaries,
provided non-investment services, such as custodial or administration
services, for approximately $654 billion in assets, including
approximately $74 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. From time
to time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the
effect of lowering the overall expense ratio of the Fund and increasing
yield to investors at the time such amounts are waived or assumed, as the
case may be. The Fund will not pay The Dreyfus Corporation at a later
time for any amounts it may waive, nor will the Fund reimburse The
Dreyfus Corporation for any amounts it may assume. For the fiscal year
ended January 31, 1995, the Fund paid The Dreyfus Corporation a
management fee at the effective annual rate of .53 of 1% of the value of
the Fund's average daily net assets pursuant to an undertaking in
effect.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDI Distribution
Services, Inc., a provider of mutual fund administration services, which
in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent
company of which is Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First
Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is
the Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent").
The Bank of New York, 90 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
GENERAL
Fund shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals (collectively,
"Service Agents"), except that full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors
of The Dreyfus Corporation, Board members of a fund advised by The
Dreyfus Corporation, including members of the Fund's Board, or the spouse
or minor child of any of the foregoing may purchase Class A shares
directly through the Distributor. Subsequent purchases may be sent
directly to the Transfer Agent or your Service Agent. Service Agents may
receive different levels of compensation for selling different Classes of
shares. Management understands that some Service Agents may impose
certain conditions on their clients which are different from those
described in this Prospectus, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees which would be
in addition to any amounts which might be received under the Shareholder
Services Plan. Each Service Agent has agreed to transmit to its clients a
schedule of such fees. You should consult your Service Agent in this
regard.
When purchasing Fund shares, you must specify which Class is
being purchased. Share certificates are issued only upon your written
request. No certificates are issued
Page 19
for fractional shares. It is not recommended that the Fund be used as
a vehicle for Keogh, IRA or other qualified retirement plans. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Premier California Municipal Bond Fund." Payments to open new accounts
which are mailed should be sent to Premier California Municipal Bond
Fund, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application indicating which Class of shares is being
purchased. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to
Premier California Municipal Bond Fund, P.O. Box 105, Newark, New Jersey
07101-0105. Neither initial nor subsequent investments should be made by
third party check. Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New York,
DDA#8900119306/Premier California Municipal Bond Fund-Class A shares, or
DDA#8900115025/Premier California Municipal Bond Fund-Class B shares, or
DDA#8900_____/Premier California Municipal Bond Fund-Class C shares, as
the case may be, for purchase of Fund shares in your name. The wire must
include your Fund account number (for new accounts, your Taxpayer Identifi
cation Number ("TIN") should be included instead), account registration and
dealer number, if applicable. If your initial purchase of Fund shares is
by wire, please call 1-800-645-6561 after completing your wire payment to
obtain your Fund account number. Please include your Fund account number
on the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be
made in U.S. dollars and, to avoid fees and delays, should be drawn only
on U.S. banks. A charge will be imposed if any check used for investment
in your account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through
compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. For purposes of
determining net asset value, options and futures contracts will be valued
15 minutes after the close of trading on the floor of the New York Stock
Exchange. Net asset value per share of each Class is computed by dividing
the value of the Fund's net assets represented by such Class (i.e., the
value of its assets less liabilities) by the total number of shares of
such Class outstanding. The Fund's investments are valued each business
day by an independent pricing service approved by the Board of Trustees
and are valued at fair value as determined by the pricing service. The
pricing service's procedures are reviewed under the general supervision
of the Board of Trustees. For further information regarding the methods
employed in valuing Fund investments, see
Page 20
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN to the
Fund could subject you to a $50 penalty imposed by the Internal Revenue
Service (the "IRS").
If an order is received by the Transfer Agent by the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
New York time) on any business day, Fund shares will be purchased at the
public offering price determined as of the close of trading on the floor
of the New York Stock Exchange on that day. Otherwise, Fund shares will
be purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on the next business
day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee by the
close of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined public
offering price. It is the dealers' responsibility to transmit orders so
that they will be received by the Distributor or its designee before the
close of its business day.
CLASS A SHARES -- The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
--------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
----------------------- ---------------- ---------------- --------------------------
<S> <C> <C> <C>
Less than $50,000................. 4.50 4.70 4.25
$50,000 to less than $100,000..... 4.00 4.20 3.75
$100,000 to less than $250,000.... 3.00 3.10 2.75
$250,000 to less than $500,000.... 2.50 2.60 2.25
$500,000 to less than $1,000,000.. 2.00 2.00 1.75
</TABLE>
There is no initial sales charge on purchases of $1,000,000 or
more of Class A shares. However, if you purchase Class A shares without an
initial sales charge as part of an investment of at least $1,000,000 and
redeem those shares within two years after purchase, a CDSC of 1% will be
imposed at the time of redemption. The terms contained in the section of
the Fund's Prospectus entitled "How to Redeem Fund shares--Contingent
Deferred Sales Charge--Class B" (other than the amount of the CDSC and its
time periods) are applicable to the Class A shares subject to a CDSC.
Letter of Intent and Right of Accumulation apply to such purchases of
Class A shares.
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage-related or clearing arrangement with an
NASD member firm or other financial institution with respect to sales of
Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children, at net asset value, provided that they have
furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible to
purchase Class A shares at net asset value. In addition, Class A shares
are offered at net asset value to full-time
Page 21
or part-time employees of The Dreyfus Corporation or any of its affiliates
or subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing.
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its own
expense, may provide additional promotional incentives to dealers that
sell shares of funds advised by The Dreyfus Corporation which are sold
with a sales load, such as the Fund. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell
significant amounts of such shares. For the period from February 1, 1994
through August 23, 1994, Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation and distributor of the Fund's
shares until August 24, 1994, retained $17,596 from sales loads on Class
A shares.
CLASS B SHARES
The public offering price for Class B shares is the net asset
value per share of that Class. No initial sales charge is imposed at the
time of purchase. A CDSC is imposed, however, on certain redemptions of
Class B shares as described under "How to Redeem Fund Shares." The
Distributor compensates certain Service Agents for selling Class B or
Class C shares at the time of purchase from the Distributor's own assets.
The proceeds of the CDSC and the distribution fee, in part, are used to
defray these expenses. For the period February 1, 1994 through August 23,
1994, $33,555 was retained by Dreyfus Service Corporation, as former
distributor, from the CDSC on Class B shares.
CLASS C SHARES
The public offering price for Class C shares is the net asset
value per share of that Class. No initial sales charge is imposed at the
time of purchase. A CDSC, however, is imposed on redemptions of Class C
shares made within the first year of purchase. See "Class B Shares" above
and "How to Redeem Fund Shares."
RIGHT OF ACCUMULATION -- CLASS A SHARES
Reduced sales loads apply to any purchase of Class A shares,
shares of other funds in the Premier Family of Funds, shares of certain
other funds advised by The Dreyfus Corporation which are sold with a
sales load and shares of certain other funds acquired by a previous
exchange of such shares (hereinafter referred to as "Eligible Funds"), by
you and any related "purchaser" as defined in the Statement of Additional
Information, where the aggregate investment, including such purchase, is
$50,000 or more. If, for example, you have previously purchased and still
hold Class A shares of the Fund, or of any other Eligible Fund or
combination thereof, with an aggregate current market value of $40,000
and subsequently purchase Class A shares of the Fund or an Eligible Fund
having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4% of the offering price. All
present holdings of Eligible Funds may be combined to determine the
current offering price of the aggregate investment in ascertaining the
sales load applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of a purchase
you or your Service Agent must notify the Distributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE
You may purchase Fund shares (minimum $500, maximum $150,000
per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account desig-
Page 22
nated in one of these documents and your Fund account. Only such an
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon notice
to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES
Clients of certain Service Agents may purchase, in exchange
for Class A, Class B or Class C shares of the Fund, shares of the same
Class in certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state
of residence. These funds have different investment objectives which may
be of interest to you. You also may exchange your Fund shares that are
subject to a CDSC for shares of Dreyfus Worldwide Dollar Money Market
Fund, Inc. The shares so purchased will be held in a special account
created solely for this purpose (the "Exchange Account"). Exchanges of
shares from an Exchange Account only can be made into certain other funds
managed or administered by The Dreyfus Corporation. No CDSC is charged
when an investor exchanges into an Exchange Account; however, the
applicable CDSC will be imposed when shares are redeemed from an Exchange
Account or other applicable Fund account. Upon redemption, the applicable
CDSC will be calculated without regard to the time such shares were held
in an Exchange Account. See "How to Redeem Fund Shares." Redemption
proceeds for Exchange Account shares are paid by Federal wire or check
only. Exchange Account shares also are eligible for the Auto-Exchange Priv-
ilege, Dividend Sweep and the Automatic Withdrawal Plan. If you desire to
use this service, you should consult your Service Agent or call
1-800-645-6561 to determine if it is available and whether any conditions
are imposed on its use.
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of Personal Retirement Plans, the shares being
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "NO" box on the Account Application,
indicating that you specifically refuse this Privilege. The Telephone
Exchange Privilege may be established for an existing account by written
request, signed by all shareholders on the account, or by a separate
signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege,
you may telephone exchange instructions by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. See "How to Redeem
Fund Shares--Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried
Page 23
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, TELETRANSFER Privilege and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be imposed
on Class B or Class C shares at the time of an exchange; however, Class B
or Class C shares acquired through an exchange will be subject on
redemption to the higher CDSC applicable to the exchanged or acquired
shares. The CDSC applicable on redemption of the acquired Class B or
Class C shares will be calculated from the date of the initial purchase
of the Class B or Class C shares exchanged. If you are exchanging Class A
shares into a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are exchanging were:
(a) purchased with a sales load, (b) acquired by a previous exchange from
shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of your exchange your
Service Agent must notify the Distributor. Any such qualification is
subject to confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee
in accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange request in
whole or in part. The availability of Fund Exchanges may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. The amount you designate, which can
be expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may
be charged with respect to exchanges of Class A shares into funds sold
with a sales charge. No CDSC will be imposed on Class B or Class C shares
at the time of an exchange; however, Class B or Class C shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B or Class C shares will be calculated
from the date of the initial purchase of the Class B or Class C shares
exchanged. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
cancelled by the Fund or the Transfer Agent. You may modify or cancel
your exercise of this Privilege at any time by writing to Premier
California Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares
of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder
and, therefore, an exchanging shareholder may realize a taxable gain or
loss. For more information con-
Page 24
cerning this Privilege and the funds in the Premier Family of Funds or
Dreyfus Family of Funds eligible to participate in this Privilege, or to
obtain an Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
AUTOMATIC ASSET BUILDER
Automatic Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring
funds from the bank account designated by you. At your option, the bank
account designated by you will be debited in the specified amount, and
Fund shares will be purchased, once a month, on either the first or
fifteenth day, or twice a month, on both days. Only an account maintained
at a domestic financial institution which is an Automated Clearing House
member may be so designated. To establish an Automatic Asset Builder
account, you must file an authorization form with the Transfer Agent. You
may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount
of purchase at any time by mailing written notification to Premier
California Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587, and the notification will be effective three business days
following receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained from your Service Agent or by calling 1-800-645-6561. Death or
legal incapacity will terminate your participation in this Privilege. You
may elect at any time to terminate your participation by notifying in
writing the appropriate Federal agency. Further, the Fund may terminate
your participation upon 30 days' notice to you.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of the same Class of another fund in the Premier Family of Funds
or the Dreyfus Family of Funds of which you are a shareholder. Shares of
the other fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a CDSC, the shares purchased will be
subject on redemption to the CDSC, if any, applicable to the purchased
shares. See "Shareholder Services" in the Statement of Additional
Information. Dividend ACH permits you to transfer electronically
dividends or dividends and capital gain distributions, if any, from the
Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing House
member may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges, or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these privileges by mailing written notification to
Premier California Municipal Bond Fund, P.O. Box 6587,
Page 25
Providence, Rhode Island 02940-6587. To select a new fund after
cancellation, you must submit a new Dividend Options Form. Enrollment
in or cancellation of these privileges is effective three business days
following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No
such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. There is a service charge of 50cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you, the
Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Class B or Class C shares withdrawn pursuant to the Automatic
Withdrawal Plan will be subject to any applicable CDSC. Purchases of
additional Class A shares where the sales load is imposed concurrently
with withdrawals of Class A shares generally are undesirable.
LETTER OF INTENT -- CLASS A SHARES
By signing a Letter of Intent form, available from the
Distributor, you become eligible for the reduced sales load applicable to
the total number of Eligible Fund shares purchased in a 13-month period
pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that may be used
toward "Right of Accumulation" benefits described above may be used as a
credit toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares held in escrow to realize
the difference. Signing a Letter of Intent does not bind you to purchase,
or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent. Purchases pursuant to a Letter of Intent will be made at the
then-current net asset value plus the applicable sales load in effect at
the time such Letter of Intent was executed.
HOW TO REDEEM FUND SHARES
GENERAL -- You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If
Page 26
you fail to specify the Class of shares to be redeemed or if you own fewer
shares of the Class than specified to be redeemed, the redemption request
may be delayed until the Transfer Agent receives further instructions from
you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original
cost, depending on the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the Securities
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER
AND SUBSEQUENTLY SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK
CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER PURCHASE OR AUTOMATIC ASSET
BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES PURSUANT
TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER
PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES
WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT
COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO
THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE
AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF
BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE -- CLASS B SHARES -- A CDSC payable
to the Distributor is imposed on any redemption of Class B shares which
reduces the current net asset value of your Class B shares to an amount
which is lower than the dollar amount of all payments by you for the
purchase of Class B shares of the Fund held by you at the time of
redemption. No CDSC will be imposed to the extent that the net asset
value of the Class B shares redeemed does not exceed (i) the current net
asset value of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the net asset value
of your Class B shares above the dollar amount of all your payments for
the purchase of Class B shares of the Fund held by you at the time of
redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
Page 27
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
----------------- ------------------------
First................................... 3.00
Second.................................. 3.00
Third................................... 2.00
Fourth.................................. 2.00
Fifth................................... 1.00
Sixth................................... 0.00
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase
in net asset value of Class B shares above the total amount of payments
for the purchase of Class B shares made during the preceding five years;
then of amounts representing the cost of shares purchased five years
prior to the redemption; and finally, of amounts representing the cost
of shares held for the longest period of time within the applicable
five-year period.
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder acquired
five additional shares through dividend reinvestment. During the second
year after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
has appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be
applied to the value of the reinvested dividend shares and the amount
which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 3%
(the applicable rate in the second year after purchase) for a total CDSC
of $7.20.
CONTINGENT DEFERRED SALES CHARGE -- CLASS C SHARES -- A CDSC of 1.00%
payable to the Distributor is imposed on any redemption of Class C shares
within one year of the date of purchase. The basis for calculating the
payment of any such CDSC will be the method used in calculating the CDSC
for Class B shares. See "Contingent Deferred Sales Charge - Class B
Shares" above.
WAIVER OF CDSC -- The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability, as
defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by employees participating in qualified or non-qualified
employee benefit plans or other programs where (i) the employers or
affiliated employers maintaining such plans or programs have a minimum of
250 employees eligible for participation in such plans or programs, or
(ii) such plan's or program's aggregate investment in the Dreyfus Family
of Funds or certain other products made available by the Distributor
exceeds one million dollars, (c) redemptions as a result of a combination
of any investment company with the Fund by merger, acquisition of assets
or otherwise, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 70 1/2 in the case of
an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
the Code, and (e) redemptions by such shareholders as the Securities and
Exchange Commission or its staff may permit. If the Fund's Trustees
determine to discontinue the waiver of the CDSC, the disclosure in the
Fund's prospectus will be appropriately revised. Any Fund shares subject
to a CDSC which were purchased prior to the termination of such waiver
will have the CDSC waived as provided in the Fund's prospectus at the
time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to confirmation
of your entitlement.
Page 28
PROCEDURES
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege with
respect to Class A shares only, the TELETRANSFER Privilege or, if you are
a client of a Selected Dealer, through the Selected Dealer. If you have
given your Service Agent authority to instruct the Transfer Agent to
redeem shares and to credit the proceeds of such redemptions to a
designated account at your Service Agent, you may redeem shares only in
this manner and in accordance with the regular redemption procedure
described below. If you wish to use the other redemption methods
described below, you must arrange with your Service Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Service Agents. The
Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities.
Your redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or
administered by The Dreyfus Corporation that are not available through
the Exchange Privilege. The applicable CDSC will be charged upon the
redemption of Class B or Class C shares. Your redemption proceeds will be
invested in shares of the other fund on the next business day. Before you
make such a request, you must obtain and should review a copy of the
current prospectus of the fund being purchased. Prospectuses may be
obtained by calling 1-800-645-6561. The prospectus will contain
information concerning minimum investment requirements and other
conditions that may apply to your purchase.
You may redeem Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select the TELE-
TRANSFER redemption privilege or telephone exchange privilege (which is
granted automatically unless you refuse it), you authorize the Transfer
Agent to act on telephone instructions from any person representing
himself or herself to be you, or a representative of your Service Agent,
and reasonably believed by the Transfer Agent to be genuine. The Fund
will require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by telephone
to request a TELETRANSFER redemption or an exchange of Fund shares. In
such cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your redemption request being processed at a later time than it would
have been if TELETRANSFER redemption had been used. During the delay, the
Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Premier California Municipal
Bond Fund, P.O. Box 6527, Providence, Rhode Island 02940-6527. Written
redemption requests must specify the Class of shares being redeemed.
Redemption requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Page 29
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please contact your Service Agent or call the telephone number listed on
the cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- CLASS A SHARES -- If you hold Class A
shares, you may request on the Account Application, Shareholder Services
Form or by later written request that the Fund provide Redemption Checks
drawn on the Fund's account. Redemption Checks may be made payable to the
order of any person in the amount of $500 or more. Potential fluctuations
in the net asset value of Class A shares should be considered in
determining the amount of the check. Redemption Checks should not be used
to close your account. Redemption Checks are free, but the Transfer Agent
will impose a fee for stopping payment of a Redemption Check upon your
request or if the Transfer Agent cannot honor the Redemption Check due to
insufficient funds or other valid reason. You should date your Redemption
Checks with the current date when you write them. Please do not postdate
your Redemption Checks. If you do, the Transfer Agent will honor, upon
presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of
presentment for payment, if they are otherwise in good order. Class A
shares for which certificates have been issued may not be redeemed by
Redemption Check. This Privilege may be modified or terminated at any
time by the Fund or the Transfer Agent upon notice to holders of Class A
shares.
TELETRANSFER PRIVILEGE -- You may redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between your Fund account and the bank
account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the TELETRANSFER Privilege for transfer to their bank account not
more than $250,000 within any 30-day period. The Fund reserves the right
to refuse any request made by telephone, including requests made shortly
after a change of address, and may limit the amount involved or the
number of such requests. The Fund may modify or terminate this Privilege
at any time or charge a service fee upon notice to shareholders. No such
fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares issued in certificate form are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a
Page 30
timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Fund Shares"
for a discussion of additional conditions or fees that may be imposed
upon redemption.
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, the shares will be redeemed at the next determined
net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- CLASS A SHARES -- Upon written request, you
may reinvest up to the number of Class A shares you have redeemed, within
30 days of redemption, at the then-prevailing net asset value without a
sales load, or reinstate your account for the purpose of exercising the
Exchange Privilege. The Reinvestment Privilege may be exercised only
once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class A, Class B and Class C shares are subject to a
Shareholder Services Plan and Class B and Class C shares only are subject
to a Distribution Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, the Fund pays the Distributor
for distributing the Fund's Class B and Class C shares at an annual rate
of .50 of 1% of the value of the average daily net assets of Class B and
.75 of 1% of the value of the average daily net assets of Class C.
SHAREHOLDER SERVICES PLAN
Under the Shareholder Services Plan, the Fund pays the
Distributor for the provision of certain services to the holders of Class
A, Class B and Class C shares a fee at the annual rate of .25 of 1% of
the value of the average daily net assets of Class A, Class B and Class
C. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. Under the Shareholder
Services Plan, the Distributor may make payments to Service Agents in
respect of these services. The Distributor determines the amounts to be
paid to Service Agents. Each Service Agent is required to disclose to its
clients any compensation payable to it by the Fund pursuant to the
Shareholder Services Plan and any other compensation payable by their
clients in connection with the investment of their assets in Class A,
Class B or Class C shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net
investment income on each day the New York Stock Exchange is open for
business. Fund shares begin earning income dividends on the day
immediately available funds ("Federal Funds" (monies of member banks
within the Federal Reserve System which are held on deposit at a Federal
Reserve Bank) ) are received by the Transfer Agent in written or
telegraphic form. If a purchase order is not accompanied by remittance in
Federal Funds, there may be a delay between the time the purchase order
becomes effective and the time the shares purchased start earning
dividends. If your payment is not made in Federal Funds, it
Page 31
must be converted into Federal Funds. This usually occurs within one
business day of receipt of a bank wire and within two business days of
receipt of a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal Reserve System
may take considerably longer to convert into Federal Funds.
Dividends usually are paid on the last calendar day of each
month and are automatically reinvested in additional shares of the same
Class from which they were paid at net asset value without a sales load
or, at your option, paid in cash. The Fund's earnings for Saturdays,
Sundays and holidays are declared as dividends on the preceding business
day. If you redeem all shares in your account at any time during the
month, all dividends to which you are entitled will be paid to you along
with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid once a year,
but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the Investment Company Act of 1940. The
Fund will not make distributions from net realized securities gains
unless capital loss carryovers, if any, have been utilized or have
expired. You may choose whether to receive distributions in cash or to
reinvest in additional Fund shares of the same Class from which they were
paid at net asset value without a sales load. All expenses are accrued
daily and deducted before declaration of dividends to investors. Dividends
paid by each Class will be calculated at the same time and in the same
manner and will be of the same amount, except that the expenses
attributable solely to a particular Class will be borne exclusively by
that Class. Class B and Class C shares will receive lower per share
dividends than Class A shares because of the higher expenses borne by the
relevant Class. See "Fee Table."
Except for dividends from Taxable Investments, the Fund
anticipates that substantially all dividends paid by the Fund will not be
subject to Federal income tax or California personal income taxes. To the
extent that you are obligated to pay state or local taxes outside of the
State of California, dividends earned by an investment in the Fund may
represent taxable income. Dividends and distributions derived from
Taxable Investments and from income or gain derived from securities
transactions and from the use of certain of the investment techniques
described under "Description of the Fund _ Investment Techniques" will be
subject to Federal income tax. Dividends derived from Taxable
Investments, together with distributions from any net realized short-term
securities gains and all or a portion of any gains realized from the sale
or other dispostion of certain market discount bonds, paid by the Fund
are subject to Federal income tax as ordinary income whether or not
reinvested. No dividend paid by the Fund will qualify for the dividends
received deduction allowable to certain U.S. corporations. Distributions
from net realized long-term securities gains of the Fund generally are
subject to Federal income tax as long-term capital gains if you are a
citizen or resident of the United States. The Code provides that the net
capital gain of an individual generally will not be subject to Federal
income tax at a rate in excess of 28%. Under the Code, interest on
indebtedness incurred or continued to purchase or carry Fund shares which
is deemed to relate to exempt-interest dividends is not deductible.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if you exchange your Class A shares
for shares of another fund advised or administered by The Dreyfus
Corporation within 91 days of purchase and such other fund reduces or
eliminates its otherwise applicable sales load for the purpose of the
exchange. In this case, the amount of the sales load charge for Class A
shares, up to the amount of the reduction of the sales load charge on the
exchange, is not included in the
Page 32
basis of your Class A shares for purposes of computing gain or loss on the
exchange, and instead is added to the basis of the fund shares received on
the exchange.
Although all or a substantial portion of the dividends paid
by the Fund may be excluded by shareholders of the Fund from their gross
income for Federal income tax purposes, the Fund may purchase specified
private activity bonds, the interest from which may be (i) a preference
item for purposes of the alternative minimum tax, (ii) a component of the
"adjusted current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the corporate
environmental tax or (iii) a factor in determining the extent to which a
shareholder's Social Security benefits are taxable. If the Fund purchases
such securities, the portion of the Fund's dividends related thereto will
not necessarily be tax exempt to an investor who is subject to the
alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year. These statements set forth the dollar amount of income exempt
from Federal tax and the dollar amount, if any, subject to Federal tax.
These dollar amounts will vary depending on the size and length of time
of your investment in the Fund. If the Fund pays dividends derived from
taxable income, it intends to designate as taxable the same percentage of
the day's dividends as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of taxable
dividends, distributions from net realized securities gains and the
proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect
or if a shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified
for the fiscal year ended January 31, 1995 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income taxes
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. In addition, the Fund is subject to a
non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains, if
any.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
Page 33
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of
shares may be calculated on several bases, including current yield, tax
equivalent yield, average annual total return and/or total return. These
total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made
by the Fund during the measuring period were reinvested in shares of the
same Class. Class A total return figures include the maximum initial
sales charge and Class B and Class C total return figures include any
applicable CDSC. These figures also take into account any applicable
service and distribution fees. As a result, at any given time, the
performance of Class B and Class C should be expected to be lower than
that of Class A. Performance for each Class will be calculated
separately.
Current yield refers to the Fund's annualized net investment
income per share over a 30-day period, expressed as a percentage of the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B or Class C at the end of the
period. For purposes of calculating current yield, the amount of net
investment income per share during that 30-day period, computed in
accordance with regulatory requirements, is compounded by assuming that
it is reinvested at a constant rate over a six-month period. An identical
result is then assumed to have occurred during a second six-month period
which, when added to the result for the first six months, provides an
"annualized" yield for an entire one-year period. Calculations of the
Fund's current yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax
yield which, after being taxed at a stated rate, would be equivalent to a
stated current yield calculated as described above.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to
the reinvestment of dividends and distributions during the period. The
return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's
performance will include the Fund's average annual total return for Class
A, Class B and Class C for one, five and ten year periods, or for shorter
periods depending upon the length of time during which the Fund has
operated. Computations of average annual total return for periods of less
than one year represent an annualization of the Class's actual total
return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B or Class C at the beginning of the
period. Advertisements may include the percentage rate of total return or
may include the value of a hypothetical investment at the end of the
period which assumes the application of the percentage rate of total
return. Total return may also be calculated by using the net asset value
per share at the beginning of the period instead of the maximum offering
price per share at the beginning of the period for Class A shares or
without giving effect to any applicable CDSC at the end of the period for
Class B or Class C shares. Calculations based on the net asset value per
share do not reflect the deduction of the applicable sales charge which,
if reflected, would reduce the performance quoted.
Page 34
Performance will vary from time to time and past results are
not necessarily representative of future results. Investors should
remember that performance is a function of portfolio management in
selecting the type and quality of portfolio securities and is affected by
operating expenses. Performance information, such as that described
above, may not provide a basis for comparison with other investments or
other investment companies using a different method of calculating
performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including data from
Lipper Analytical Services, Inc., Moody's Bond Survey Bond Index, Lehman
Brothers Municipal Bond Index, Morningstar, Inc. and other industry
publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust (the "Trust Agreement") dated July 24,
1985, and commenced operations on November 10, 1986. On July 2, 1990, the
Fund's name was changed from Premier California Tax Exempt Bond Fund to
Premier California Municipal Bond Fund. The Fund is authorized to issue
an unlimited number of shares of beneficial interest, par value $.001 per
share. The Fund's shares are classified into three classes _ Class A,
Class B and Class C . Each share has one vote and shareholders will vote
in the aggregate and not by class except as otherwise required by law or
when class voting is permitted by the Board of Trustees. However, only
holders of Class B or Class C shares, as the case may be, will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
On August 3, 1994, the Fund's shareholders approved a
proposal to change, among other things, certain of the Fund's fundamental
policies and investment restrictions to (i) increase the amount the Fund
may borrow and (ii) increase the amount of the Fund's assets that it may
pledge to secure such borrowings and make such policy non-fundamental.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or
executed by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations, a possibility which manage-
ment believes is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
discussed under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove
Trustees.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Page 35
Shareholder inquiries may be made to your Service Agent or by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
023/613p17060195
Page 36
PREMIER CALIFORNIA MUNICIPAL BOND FUND
CLASS A, CLASS B AND CLASS C SHARES
STATEMENT OF ADDITIONAL INFORMATION
JUNE 1, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier California Municipal Bond Fund (the "Fund"), dated June 1, 1995,
as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . B-10
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . B-14
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . B-16
Distribution Plan and Shareholder Services Plan . . . . . . . . . . B-18
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . B-19
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . B-21
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . B-24
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . B-24
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . B-26
Performance Information . . . . . . . . . . . . . . . . . . . . . . B-27
Information About the Fund. . . . . . . . . . . . . . . . . . . . . B-29
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . B-29
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-44
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . B-53
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . B-64
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended January 31, 1995, computed
on a monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
AAA Aaa AAA 18.9%
AA Aa AA 14.9
A A A 39.3
BBB Baa BBB 10.8
D D D .5
F-1+\F-1 VMIG1\MIG1, SP-1+, SP-1, 1.8
P-1 A1+\A1
Not Rated Not Rated Not Rated 13.8
----
100.0%
======
________
* Included under the Not Rated category are securities comprising 13.8% of
the Fund's market value which, while not rated, have been determined by
the Manager to be of comparable quality to securities in the following
rating category: AAA/Aaa (2.8%), A/A (1.3%), Baa/BBB (9.5%) and CC/Ca (.2%).
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities, air or water
pollution control facilities and certain local facilities for water supply,
gas, electricity or sewage or solid waste disposal; the interest paid on
such obligations may be exempt from Federal income tax, although current
tax laws place substantial limitations on the size of such issues. Such
obligations are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the opinion of bond
counsel to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending rate,
such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act of
1940, as amended (the "Act"), the identification of the issuer of Municipal
Obligations depends on the terms and conditions of the security. When the
assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating
the subdivision and the security is backed only by the assets and revenues
of the subdivision, such subdivision would be deemed to be the sole issuer.
Similarly, in the case of an industrial development bond, if that bond is
backed only by the assets and revenues of the non-governmental user, then
such non-governmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other entity
guarantees a security, such a guaranty would be considered a separate
security and will be treated as an issue of such government or other
entity.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the
event of foreclosure might prove difficult. The staff of the Securities
and Exchange Commission currently considers certain lease obligations to be
illiquid. Determination as to the liquidity of such securities is made in
accordance with guidelines established by the Fund's Board. Pursuant to
such guidelines, the Board has directed the Manager to monitor carefully
the Fund's investment in such securities with particular regard to (1) the
frequency of trades and quotes for the lease obligation; (2) the number of
dealers willing to purchase or sell the lease obligation and the number of
other potential buyers; (3) the willingness of dealers to undertake to make
a market in the lease obligation; (4) the nature of the marketplace trades
including the time needed to dispose of the lease obligation, the method of
soliciting offers and the mechanics of transfer; and (5) such other factors
concerning the trading market for the lease obligation as the Manager may deem
relevant. In addition, in evaluating the liquidity and credit quality of a
lease obligation that is unrated, the Fund's Board has directed the Manager to
consider (a) whether the lease can be cancelled; (b) what assurance there is
that the assets represented by the lease can be sold; (c) the strength of the
lessee's general credit (e.g., its debt, administrative, economic, and
financial characteristics); (d) the likelihood that the municipality will
discontinue appropriating funding for the leased property because the property
is no longer deemed essential to the operations of the municipality (e.g., the
potential for an "event of nonappropriation"); (e) the legal recourse in the
event of failure to appropriate; and (f) such other factors concerning credit
quality as the Manager may deem relevant. The Fund will not invest more
than 15% of the value of its net assets in lease obligations that are
illiquid and in other illiquid securities. See "Investment Restriction No.
6" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based on
the tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation, and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, including fees paid under the Fund's Shareholder Services Plan
with respect to Class A, Class B and Class C shares and the Distribution
Plan with respect to Class B and Class C shares, will have the effect of
reducing the yield to investors.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent that
the ratings given by Moody's, S&P or Fitch for Municipal Obligations may
change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in the
Fund's Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P and Fitch represent their opinions as to the
quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and
are not absolute standards of quality. Although these ratings may be an
initial criterion for selection of portfolio investments, the Manager also
will evaluate these securities.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option on a futures contract, the writer of the option delivers to the
holder of the option the futures position and the accumulated balance in
the writer's futures margin account, which represents the amount by which
the market price of the futures contract exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract. The potential loss related to the purchase of options on
futures contracts is limited to the premium paid for the option (plus
transaction costs). Because the value of the option is fixed at the time
of sale, there are no daily cash payments to reflect changes in the value
of the underlying contract; however, the value of the option does change
daily and that change would be reflected in the net asset value of the
Fund.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral. For
purposes of this policy, the Fund considers collateral consisting of U.S.
Government securities or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund to be the
equivalent of cash. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with the Fund, and which is acting
as a "placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the U.S. Treasury; others,
such as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government -
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
Short-Selling. The Fund may engage in short-selling. Until the Fund
replaces a borrowed security in connection with a short sale, the Fund will
(a) maintain daily a segregated account, containing cash or U.S. Government
securities, at such a level that (i) the amount deposited in the account plus
the amount deposited with the broker as collateral will equal the current
value of the securities sold short and (ii) the amount deposited in the
segregated account plus the amount deposited with the broker as collateral
will not be less than the market value of the security at the time it was sold
short; or (b) otherwise cover its short position.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of Trustees.
Because it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the Fund's Board
of Trustees has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.
To the extent that, for a period of time, qualified institutional buyers
cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level of
illiquidity in its portfolio during such period.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating and
variable rates of interest.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian or
subcustodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements only with domestic banks with total assets in excess
of one billion dollars or primary government securities dealers reporting
to the Federal Reserve Bank of New York, with respect to securities of the
type in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below resale price. The Manager will monitor on an ongoing
basis the value of the collateral to assure that it always equals or
exceeds the repurchase price. Certain costs may be incurred by the Fund in
connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
Risk Factors
Investing in California Municipal Obligations. Investors should
consider carefully the special risks inherent in the Fund's investment in
California Municipal Obligations. These risks result from certain
amendments to the California Constitution and other statutes that limit the
taxing and spending authority of California governmental entities, as well
as from the general financial condition of the State of California. Since
the start of the State's 1990-91 fiscal year, the State has experienced the
worst economic, fiscal and budget conditions since the 1930s. As a result,
the State has experienced recurring budget deficits for four of the last
five fiscal years ending with 1991-92. Revenues and expenditures were
essentially equal in 1992-93, but the original budget for that year
projected revenues exceeding expenditures by $2.6 billion. The excess of
revenues over expenditures for the State's 1993-94 fiscal year is expected
to have been $500 million, after originally being estimated to $2.0
billion. By June 30, 1994, according to California's Department of
Finance, the State's Reserve for Economic Uncertainties had an accumulated
deficit, on a budget basis, of approximately $2.0 billion. A further
consequence of the large budget imbalances has been that the State depleted
its available cash resources and has had to use a series of external
borrowings to meet its cash needs. To meet its cash flow in the 1994-95
fiscal year, the State issued, in July and August 1994, $4.0 billion of
revenue anticipation warrants and $3.0 billion of revenue anticipation notes.
As a result of the deterioration in the State's budget and cash situation
between October 1991 and July 1994 the rating on the State's general obligation
bonds was reduced by S&P from AAA to A, by Moody's from Aaa to A1, and by
Fitch from AAA to A. These and other factors may have the effect of impairing
the ability of the issuers of California Municipal Obligations to pay interest
on, or repay principal of, such California Municipal Obligations.
Investors should review Appendix A which more fully sets forth these and
other risk factors relating to investing in California Municipal
Obligations.
Lower Rated Bonds. The Fund is permitted to invest in securities
rated below Baa by Moody's and below BBB by S&P and Fitch. Such bonds,
though higher yielding, are characterized by risk. See "Description of the
Fund--Risk Factors--Lower Rated Bonds" in the Prospectus for a discussion
of certain risks and "Appendix B" for a general description of Moody's, S&P
and Fitch ratings of Municipal Obligations. Although ratings may be useful
in evaluating the safety of interest and principal payments, they do not
evaluate the market value risk of these bonds. The Fund will rely on the
Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Manager will take
into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, the quality of the
issuer's management and regulatory matters. It also is possible that a
rating agency might not timely change the rating on a particular issue to
reflect subsequent events. As stated above, once the rating of a bond in
the Fund's portfolio has been changed, the Manager will consider all
circumstances deemed relevant in determining whether the Fund should
continue to hold the bond.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities. These bonds generally are considered by Moody's, S&P and
Fitch to be predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation
and generally will involve more credit risk than securities in the higher
rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues when
necessary to meet the Fund's liquidity needs or in response to a specific
economic event such as a deterioration in the creditworthiness of the
issuer. The lack of a liquid secondary market for certain securities also
may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating its
net asset value. Adverse publicity and investor perceptions, whether or
not based on fundamental analysis, may decrease the values and liquidity of
these securities. In such cases, judgment may play a greater role in
valuation because less reliable objective data may be available.
These bonds may be particularly susceptible to economic downturns. It
is likely that any economic recession could disrupt severely the market for
such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
Lower rated zero coupon securities and pay-in-kind bonds, in which the
Fund may invest up to 5% of its net assets, involve special considerations.
The credit risk factors pertaining to lower rated securities also apply to
lower rated zero coupon bonds and pay-in-kind bonds. Such zero coupon,
pay-in-kind or delayed interest bonds carry an additional risk in that,
unlike bonds which pay interest throughout the period to maturity, the Fund
will realize no cash until the cash payment date unless a portion of such
securities are sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. See "Dividends, Distributions and Taxes."
Investment Restrictions. The Fund has adopted the following
investment restrictions (except as otherwise noted) as fundamental
policies. These restrictions cannot be changed without approval by the
holders of a majority (as defined in the Act) of the Fund's outstanding
voting shares. Investment restrictions numbered 3 and 6 are not
fundamental policies and may be changed by vote of a majority of the
Trustees at any time. The Fund may not:
1. Purchase securities other than Municipal Obligations and
Taxable Investments as those terms are defined above and in the Prospectus and
those arising out of transactions in futures and options.
2. Borrow money, except to the extent permitted under the Act
(whichcurrently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). Transactions in futures and options and the entry
into short sales transactions do not involve any borrowing for purposes of
this restriction.
3. Pledge, mortgage, hypothecate or otherwise encumber its
assets, except to the extent necessary to secure permitted borrowings. The
deposit of assets in escrow in connection with the writing of covered put and
call options and the purchase of securities on a when-issued or delayed-delivery
basis and collateral arrangements with respect to initial or variation
margin for futures contracts and options on futures contracts or indices
will not be deemed to be pledges of the Fund's assets.
4. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in futures, including those
related to indices, and options on futures or indices.
5. Underwrite the securities of other issuers, except that the
Fund may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available, and except to the extent the Fund
may be deemed an underwriter under the Securities Act of 1933, as amended,
by virtue of disposing of portfolio securities.
6. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are illiquid
(which securities could include participation interests that are not
subject to the demand feature described in the Fund's Prospectus and
floating and variable rate demand obligations as to which no secondary
market exists and the Fund cannot exercise the demand feature described in
the Fund's Prospectus on less than seven days' notice), if, in the
aggregate, more than 15% of the value of its net assets would be so
invested.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein, or prevent the Fund from
purchasing and selling futures contracts, including those related to
indices, and options on futures contracts or indices.
8. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to above
and in the Fund's Prospectus; however, the Fund may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value of its total
assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Fund's Trustees.
9. Invest more than 15% of its assets in the obligations of any
one bank for temporary defensive purposes, or invest more than 5% of its assets
in the obligations of any other issuer, except that up to 25% of the value
of the Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities may
be purchased, without regard to any such limitations. Notwithstanding the
foregoing, to the extent required by the rules of the Securities and
Exchange Commission, the Fund will not invest more than 5% of its assets in
the obligations of any one bank, except that up to 25% of the value of the
Fund's total assets may be invested without regard to such limitation.
10. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
For purposes of Investment Restriction No. 10, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."
If a percentage restriction is adhered to at the time of investment, a
later increase in percentage resulting from a change in values or assets
will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Trustees of the Fund
CLIFFORD L. ALEXANDER, JR., Trustee. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander
served as Secretary of the Army and Chairman of the Board of the
Panama Canal Company, and from 1975 to 1977 he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corporation,
The Dun & Bradstreet Corporation, MCI Communications Corporation,
Mutual of America Life Insurance Company and Equitable Resources, a
producer and distributor of natural gas and crude petroleum. Mr.
Alexander is also a Board member of 17 other funds in the Dreyfus
Family of Funds. He is 61 years old and his address is 400 C Street,
N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Trustee. Shad Professor of Law, New York University School
of Law. Professor Davis has been a member of the New York University
law faculty since 1983. Prior to that time, she served for three
years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and non
profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. Ms. Davis is also a Board member of 15
other funds in the Dreyfus Family of Funds. She is 52 years old and
her address is c/o New York University School of Law, 249 Sullivan
Street, New York, New York 10011.
*JOSEPH S. DiMARTINO, Chairman of the Board of Trustees. Since January
1995, Mr. DiMartino has served as Chairman of the Board for various
funds in the Dreyfus Family of Funds. For more than five years prior
thereto, he was President, a director and, until August 24, 1994,
Chief Operating Officer of the Manager and Executive Vice President
and a director of Dreyfus Service Corporation, a wholly-owned
subsidiary of the Manager and, until August 24, 1994, the Fund's
distributor. From August 1994 to December 1994, he was a director of
Mellon Bank Corporation. Mr. DiMartino is a director and former
Treasurer of the Muscular Dystrophy Association; a trustee of Bucknell
University; and a director of the Noel Group, Inc. Mr. DiMartino is
also a Board member of 69 other funds in the Dreyfus Family of Funds.
He is 51 years old and his address is 200 Park Avenue, New York, New
York 10166.
ERNEST KAFKA, Trustee. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. For more
than the past five years, Dr. Kafka has held numerous administrative
positions and has published many articles on subjects in the field of
psychoanalysis. Dr. Kafka is also a Board member of 15 other funds in
the Dreyfus Family of Funds. He is 62 years old and his address is 23
East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Trustee. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal
Reserve System and on several Presidential Commissions and has held
numerous consulting and advisory positions in the fields of economics
and housing finance. Dr. Klaman is also a Board member of 15 other
funds in the Dreyfus Family of Funds. He is 75 years old and his
address is 431-B Dedham Street, The Gables, Newton Center,
Massachusetts 02159.
NATHAN LEVENTHAL, Trustee. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York
City from September 1979 to March 1984 and Commissioner of the
Department of Housing Preservation and Development of New York City
from February 1978 to September 1979. Mr. Leventhal was an associate
and then a member of the New York law firm of Poletti Freidin Prashker
Feldman and Gartner from 1974 to 1978. He was Commissioner of Rent
and Housing Maintenance for New York City from 1972 to 1973. Mr.
Leventhal serves as Chairman of Citizens Union, an organization which
strives to reform and modernize city and state governments. Mr.
Leventhal is also a Board member of 15 other funds in the Dreyfus
Family of Funds. He is 52 years old and his address is 70 Lincoln
Center Plaza, New York, New York 10023-6583.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Each Trustee, except Mr. DiMartino, was elected at a meeting of
shareholders held on August 3, 1994. There ordinarily will be no further
meetings of shareholders for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have
been elected by shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of Trustees. Under the
Act, shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Trustee through a declaration in writing or
by vote cast in person or by proxy at a meeting called for that purpose.
The Trustees are required to call a meeting of shareholders for the purpose
of voting upon the question of removal of any such Trustee when requested
in writing to do so by the shareholders of record of not less than 10% of
the Fund's outstanding shares.
The Fund typically pays its Trustees an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. The aggregate
amount of compensation paid to each Trustee by the Fund for the fiscal year
ended January 31, 1995, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member for the year ended December
31, 1994, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Member
-------------- ---------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Clifford L. Alexander, Jr $4,134 none none $73,210
Peggy C. Davis $4,134 none none $61,751
Joseph S. DiMartino** $5,625 none none $445,000
Ernest Kafka $4,134 none none $61,001
Saul B. Klaman $4,134 none none $61,751
Nathan Leventhal $4,134 none none $61,751
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $221 for all Trustees as a group.
** Estimated amounts for the current fiscal year ending January 31, 1996.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment companies
advised or administered by the Manager. From December 1991 to July 1994,
she was President and Chief Compliance Officer of Funds Distributor, Inc.,
a wholly-owned subsidiary of The Boston Company, Inc. Prior to December
1991, she served as Vice President and Controller, and later as Senior
Vice President, of The Boston Company Advisors. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc. From
August 1990 to February 1992, he was employed as an Associate at Ropes &
Gray, and prior to August 1990, he was employed as an Associate at Sidley &
Austin. He is 30 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September 1992 to
August 1994, he was an attorney with the Board of Governors of the Federal
Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment companies
advised or administered by the Manager. From 1988 to August 1994, he was
Manager of the High Performance Fabric Division of Springs Industries Inc.
He is 33 years old.
JOSEPH S. TOWER, III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an officer of
other investment companies advised or administered by the Manager. From
July 1988 to August 1994, he was employed by The Boston Company, Inc. where
he held various management positions in the Corporate Finance and Treasury
areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From 1984 to July 1994, he was Assistant Vice President in the
Mutual Fund Accounting Department of the Manager. He is 59 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992, a
mutual fund accountant, for The Boston Company Advisors, Inc. He is 28
years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment company.
From March 1990 until September 1991, she was Development Director of The
Rockland Center for the Arts. She is 50 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on March 2, 1995.
As of March 2, 1995, the following persons owned 5% or more of the
outstanding shares of beneficial interest of the Fund: Class A shares:
Merrill Lynch Pierce Fenner & Smith Inc. Trade House A/C, 4800 Deer Lake
Drive E Fl 3, Jacksonville, Florida 32246-6484 - 11.9%; Class B shares:
Merrill Lynch FDS, 4800 Deer Lake Drive E, Jacksonville, Florida 32246-6484
- 8.9%.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii) vote
of a majority (as defined in the Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is approved
by a majority of the Trustees who are not "interested persons" (as defined
in the Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Agreement was
approved by shareholders on August 3, 1994 and was last approved by the
Fund's Board of Trustees, including a majority of the Trustees who are not
"interested persons" of any party to the Agreement, at a meeting held on
July 20, 1994. The Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board of Trustees or by vote of the holders of a
majority of the Fund's shares, or, on not less than 90 days' notice, by the
Manager. The Agreement will terminate automatically in the event of its
assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration; Paul H. Snyder, Vice President-Finance and Chief Financial
Officer; 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. Gottmann, Vice President-Retail Sales and
Service; William F. Glavin, Jr., Vice President-Product Management; Andrew
S. Wassir, Vice President-Information Services; Mark N. Jacobs, Vice
President-Legal and Secretary; Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Katherine C. Wickham, Vice President-Human Resources;
Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and David B.
Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Trustees. The Manager is responsible for investment decisions,
and provides the Fund with portfolio managers who are authorized by the
Board of Trustees to execute purchases and sales of securities. The Fund's
portfolio managers are Joseph P. Darcy, A. Paul Disdier, Karen M. Hand,
Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence
Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the Fund
as well as for other funds advised by the Manager. All purchases and sales
are reported for the Trustees' review at the meeting subsequent to such
transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings, and
any extraordinary expenses. Class A, Class B and Class C shares are
subject to an annual service fee for ongoing personal services relating to
shareholder accounts and services related to the maintenance of shareholder
accounts. In addition, each of Class B and Class C shares are subject to
an annual distribution fee for distributing the relevant Class of shares
pursuant to a distribution plan adopted in accordance with Rule 12b-1 under
the Act. See "Distribution Plan and Shareholder Services Plan."
The Manager maintains office facilities on behalf of the Fund and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. The
management fee payable for the fiscal years ended January 31, 1993, 1994
and 1995 amounted to $1,209,756, $1,365,438 and $1,264,646, respectively,
which fees were reduced by $610,731, $362,893 and $51,429, respectively,
pursuant to undertakings in effect, resulting in net fees paid to the
Manager of $599,025 in fiscal 1993, $1,002,545 in fiscal 1994 and
$1,213,217 in fiscal 1995.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment to be made
to the Manager under the Agreement, or the Manager will bear, such excess
expense to the extent required by state law. Such deduction or payment, if
any, will be estimated daily, and reconciled and effected or paid, as the
case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement dated August 24, 1994. The Distributor also acts
as distributor for the other funds in the Premier Family of Funds, for the
funds in the Dreyfus Family of Funds and for certain other investment
companies.
Using Federal Funds. The Shareholders Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn on
banks that are not members of the Federal Reserve System as to the possible
delay in conversion into Federal Funds and may attempt to arrange for a
better means of transmitting the money. If the investor is a customer of a
securities dealer ("Selected Dealer") and his order to purchase Fund shares
is paid for other than in Federal Funds, the Selected Dealer, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer's order. The order is effective only when so converted and
received by the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with sufficient Federal Funds or a cash balance in
his brokerage account with a Selected Dealer will become effective on the
day that the order, including Federal Funds, is received by the Transfer
Agent.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended (the "Code"), although more than
one beneficiary is involved; or a group of accounts established by or on
behalf of the employees of an employer or affiliated employers pursuant to
an employee benefit plan or other program (including accounts established
pursuant to Sections 403(b), 408(k) and 457 of the Code); or an organized
group which has been in existence for more than six months, provided that
it is not organized for the purpose of buying redeemable securities of a
registered investment company and provided that the purchases are made
through a central administration or a single dealer, or by other means
which result in economy of sales effort or expense.
Offering Prices. Based upon the Fund's net asset value at the close
of business on January 31, 1995, the maximum offering price of the Fund's
Class A and Class B shares would have been as follows. Class C shares were
not offered as of January 31, 1995.
<TABLE>
<CAPTION>
Class A Shares:
<S> <C>
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . . . . . . $ 12.24
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5 percent of offering price
(approximately 4.7 percent of net asset value per share) $ .58
-------
Offering Price to Public . . . . . . . . . . . . . . . . . . . . . . . . $ 12.82
=======
Class B Shares:
NET ASSET VALUE, redemption price and offering
price to public* . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.25
=======
______________________________
* Class B shares are subject to a contingent deferred sales charge on
certain redemptions, see "How to Redeem Fund Shares" in the Fund's Prospectus.
</TABLE>
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 a.m. and 4:00 p.m., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open. Such purchases will be credited to the shareholder's Fund account on
the next bank business day. To qualify to use the TeleTransfer Privilege,
the initial payment for purchase of Fund shares must be drawn on, and
redemption proceeds paid to, the same bank and account as are designated on
the Account Application or Shareholder Services Form on file. If the
proceeds of a particular redemption are to be wired to an account at any
other bank, the request must be in writing and signature-guaranteed. See
"Redemption of Fund Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
Class A, Class B and Class C shares are subject to a Shareholder
Services Plan and Class B and Class C shares only are subject to a
Distribution Plan.
Distribution Plan. Rule l2b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
of Trustees has adopted such a plan (the "Distribution Plan") with respect
to Class B and Class C shares of the Fund pursuant to which the Fund pays
the Distributor for distributing the relevant Class of shares. The Fund's
Board of Trustees believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and holders of the relevant Class
of shares. In some states, certain financial institutions effecting
transactions in Fund shares may be required to register as dealers pursuant
to state law.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Trustees for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of the relevant Class of shares may bear for distribution pursuant
to the Distribution Plan without the approval of the holders of the
affected Class of shares and that other material amendments of the
Distribution Plan must be approved by the Board of Trustees, and by the
Trustees who are not "interested persons" (as defined in the Act) of the
Fund or the Manager and have no direct or indirect financial interest in
the operation of the Distribution Plan, by vote cast in person at a meeting
called for the purpose of considering such amendments. The Distribution
Plan is subject to annual approval by such vote of the Trustees cast in
person at a meeting called for the purpose of voting on the Distribution
Plan. The Distribution Plan was last approved by the Fund's Board of
Trustees, including a majority of the Trustees who are not "interested
persons," at a meeting held on April 12, 1995. As to each such class, the
Distribution Plan is terminable at any time by vote of a majority of the
Trustees who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution Plan, or by vote of
holders of a majority of such Class.
For the period from February 1, 1994 through August 23, 1994, the Fund
paid Dreyfus Service Corporation, as former distributor, $52,773 with
respect to Class B under the Distribution Plan. For the period from August
24, 1994 through January 31, 1995, the Fund paid the Distributor $42,473
with respect to Class B under the Distribution Plan. There were no
payments made under the Distribution Plan with respect to Class C during
the fiscal year ended January 31, 1995, as Class C shares had not yet been
offered.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A, Class B and Class
C shares. Under the Shareholder Services Plan, the Distributor may make
payments to certain Selected Dealers, financial institutions and other
financial industry professionals (collectively, "Service Agents") in
respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Trustees for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the Act) of the Fund and who have no
direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. The Shareholder Services Plan
is subject to annual approval by such vote cast in person at a meeting
called for the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan was so approved on April 12, 1995. As to each
Class, the Shareholder Services Plan is terminable at any time by vote of a
majority of the Trustees who are not "interested persons" and who have no
direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan.
For the period from February 1, 1994 through August 23, 1994, the Fund
paid Dreyfus Service Corporation, as former distributor, $309,651 with
respect to Class A, and $26,386 with respect to Class B, under the
Shareholder Services Plan. For the period from August 24, 1994 through
January 31, 1995, the Fund paid the Distributor $217,565 with respect to
Class A, and $21,237 with respect to Class B, under the Shareholder
Services Plan. There were no payments made under the Shareholder Services
Plan with respect to Class C during the fiscal year ended January 31, 1995,
as Class C shares had not yet been offered.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege - Class A. An investor may indicate on the
Account Application, Shareholder Services Form or by later written request
that the Fund provide Redemption Checks ("Checks") drawn on the Fund's
account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application or
later written request must be manually signed by the registered owner(s).
Checks may be made payable to the order of any person in an amount of $500
or more. When a Check is presented to the Transfer Agent for payment, the
Transfer Agent, as the investor's agent, will cause the Fund to redeem a
sufficient number of full and fractional Class A shares in the investor's
account to cover the amount of the Check. Dividends are earned until the
Check clears. After clearance, a copy of the Check will be returned to the
investor. Investors generally will be subject to the same rules and
regulations that apply to checking accounts, although election of this
Privilege creates only a shareholder-transfer agent relationship with the
Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested.
Redemption proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "Purchase of Fund Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets in case of an emergency or any
time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Class A, Class B and Class C shares of the Fund may
be exchanged for shares of the respective Class of certain other funds
advised or administered by the Manager. Shares of the same Class of such
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load
may be exchanged without a sales load for Class A shares of
other funds sold without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A
shares purchased with a sales load, and additional Class A
shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to
herein as "Purchased Shares") may be exchanged for Class A
shares of other funds sold with a sales load (referred to
herein as "Offered Shares"), provided that, if the sales
load applicable to the Offered Shares exceeds the maximum
sales load that could have been imposed in connection with
the Purchased Shares (at the time the Purchased Shares
were acquired), without giving effect to any reduced loads,
the difference will be deducted.
D. Class B or Class C shares of any fund may be exchanged for the
same Class of shares of other funds without a sales load.
Class B or Class C shares of any fund exchanged for the same
Class of shares of another fund will be subject to the higher
applicable contingent deferred sales charge ("CDSC") of the
two exchanged funds and, for purposes of calculating CDSC
rates and conversion periods, will be deemed to have been
held since the date the Class B or Class C shares being
exchanged were initially purchased.
To accomplish an exchange under item C above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
such Class A shares and the investor's account number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all shareholders automatically, unless the investor
checks the applicable "NO" box on the Account Application, indicating that
the investor specifically refuses this privilege. By using the Telephone
Exchange Privilege, the investor authorizes the Transfer Agent to act on
telephonic exchange instructions from any person representing himself or
herself to be the investor or a representative of the investor's Service
Agent, and reasonably believed by the Transfer Agent to be genuine.
Telephone exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment being required for the shares of the same Class of the fund into
which the exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and IRAs set up under a Simplified Employee Pension Plan ("SEP-IRAs") with
only one participant, the minimum initial investment is $750. To exchange
shares held in Corporate Plans, 403(b)(7) Plans and SEP-IRAs with more than
one participant, the minimum initial investment is $100 if the plan has at
least $2,500 invested among shares of the same Class of the funds in the
Dreyfus Family of Funds. To exchange shares held in Personal Retirement
Plans, the shares exchanged must have a current value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A, Class B or Class C shares of
the Fund, shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified
if his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior to
the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan. Class B or
Class C shares withdrawn pursuant to the Automatic Withdrawal Plan will be
subject to any applicable CDSC.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of the same Class of another fund in the
Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same Class of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid with respect to Class A
shares by a fund may be invested without imposition of a
sales load in Class A shares of other funds that are offered
without a sales load.
B. Dividends and distributions paid with respect to Class A
shares by a fund which does not charge a sales load may be
invested in Class A shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Dividends and distributions paid with respect to Class A
shares by a fund which charges a sales load may be invested
in Class A shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends
or distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund with respect to
Class B or Class C shares may be invested without imposition
of any applicable CDSC in the same Class of shares of other
funds and the relevant Class of shares of such other funds
will be subject on redemption to any applicable CDSC.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Board of Trustees. When, in the judgment of the Service,
quoted bid prices for investments are readily available and are
representative of the bid side of the market, these investments are valued
at the mean between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board of Trustees. Expenses and fees,
including the management fee (reduced by the expense limitation, if any)
and fees pursuant to the Shareholder Services Plan, with respect to Class
A, Class B and Class C shares, and fees pursuant to the Distribution Plan,
with respect to Class B and Class C shares only, are accrued daily and are
taken into account for the purpose of determining the net asset value of
the relevant Class of shares. Because of the difference in operating
expenses incurred by each Class, the per share net asset value of each
Class will differ.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated investment
company" under the Code for the fiscal year ended January 31, 1995, and the
Fund intends to continue to so qualify so long as such qualification is in
the best interests of its shareholders. As a regulated investment company,
the Fund will pay no Federal income tax on net investment income and net
realized capital gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of the
Code. To qualify as a regulated investment company, the Fund must pay out
to its shareholders at least 90% of its net income (consisting of net
investment income from tax exempt obligations and taxable obligations, if
any, and net short-term capital gains), must derive less than 30% of its
annual gross income from gain on the sale of securities held for less than
three months, and must meet certain asset diversification and other
requirements. Accordingly, the Fund may be restricted in the selling of
securities held for less than three months, and in the utilization of
certain of the investment techniques described in the Prospectus under
"Description of the Fund--Investment Techniques." The Code, however,
allows the Fund to net certain offsetting positions making it easier for
the Fund to satisfy the 30% test. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of Federal tax exempt
obligations, then the Fund may designate and pay Federal exempt-interest
dividends from interest earned on all such tax exempt obligations. Such
exempt-interest dividends may be excluded by shareholders of the Fund from
their gross income for Federal income tax purposes.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of obligations which, when
held by an individual, the interest therefrom is exempt from California
personal income tax, and if the Fund qualifies as a management company
under the California Revenue and Taxation Code, then the Fund will be
qualified to pay dividends to its shareholders that are exempt from
California personal income tax (but not from California franchise tax)
("California exempt-interest dividends"). However, the total amount of
California exempt-interest dividends paid by the Fund to a non-corporate
shareholder with respect to any taxable year cannot exceed such
shareholder's pro-rata share of interest received by the Fund during such
year that is exempt from California taxation less any expenses and
expenditures deemed to have been paid from such interest.
For shareholders subject to the California personal income tax,
exempt-interest dividends derived from California Municipal Obligations
will not be subject to the California personal income tax. Distributions
from net realized short-term capital gains to California resident
shareholders will be subject to the California personal income tax as
ordinary income. Distributions from net realized long-term capital gains
may constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the Fund's shareholders will
not be subject to California personal income tax, or receive a credit for
California taxes paid by the Fund, on undistributed capital gains. In
addition, California tax law does not consider any portion of the exempt-
interest dividends paid an item of tax preference for the purposes of
computing the California alternative minimum tax.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of his shares below the
cost of his investment. Such a distribution would be a return on the
investment in an economic sense although taxable as stated in "Dividends,
Distributions and Taxes" in the Prospectus. In addition, the Code provides
that if a shareholder has not held his Fund shares for more than six months
(or such shorter period as the Internal Revenue Service may prescribe by
regulation) and has received an exempt-interest dividend with respect to
such shares, any loss incurred on the sale of such shares will be
disallowed to the extent of the exempt-interest dividend received.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gains
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Code.
In addition, all or a portion of the gain realized from engaging in
"conversion transactions" may be treated as ordinary income under Section
1258 of the Code. "Conversion transactions" are defined to include certain
forward, futures, options and "straddle" transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to
be issued in the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain financial futures and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such futures and options
as well as from closing transactions. In addition, such futures and
options remaining unexercised at the end of the Fund's taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving financial futures and
options transactions may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Section 1256. As
such, all or a portion of any short- or long-term capital gain from certain
"straddle" and/or conversion transactions may be recharacterized to
ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in certain futures or options transactions, such "straddles" would
be characterized as "mixed straddles" if the futures or options
transactions comprising a part of such "straddles" were governed by Section
1256 of the Code. The Fund may make one or more elections with respect to
"mixed straddles." Depending on which election is made, if any, the
results to the Fund may differ. If no election is made to the extent the
"straddle" rules apply to positions established by the Fund, losses
realized by the Fund will be deferred to the extent of unrealized gain in
the offsetting position. Moreover, as a result of the "straddle" and the
conversion transaction rules, short-term capital losses on "straddle"
positions may be recharacterized as long-term capital losses, and long-term
capital gains may be treated as short-term capital gains or ordinary
income.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could, under special tax rules, affect the amount, timing and
character of distributions to shareholders. For example, the Fund could
be required to take into account annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute
such portion in order to maintain its qualification as a regulated
investment company. In such case, the Fund may have to dispose of
securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily
are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases and
sales, although the price paid usually includes an undisclosed compensation
to the dealer acting as agent. The prices paid to underwriters of
newly-issued securities usually include a concession paid by the issuer to
the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
The Fund's portfolio turnover rate for the fiscal years ended January
31, 1994 and 1995 was 26.69% and 37.39%, respectively. The Fund
anticipates that its annual portfolio turnover rate will not be a limiting
factor when the Fund deems it desirable to sell or purchase securities.
Therefore, depending upon market conditions, the Fund's annual portfolio
turnover rate may exceed 100% in particular years.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
Class C shares had not been offered as of the date of the financials
and, therefore, no performance data is provided for Class C.
Current yield for the 30-day period ended January 31, 1995 for Class A
was 5.35% and for Class B was 5.07%. Current yield is computed pursuant to
a formula which operates as follows: The amount of the Fund's expenses
accrued for the 30-day period (net of reimbursements) is subtracted from
the amount of the dividends and interest earned (computed in accordance
with regulatory requirements) by the Fund during the period. That result
is then divided by the product of: (a) the average daily number of shares
outstanding during the period that were entitled to receive dividends, and
(b) the maximum offering price per share in the case of Class A or the net
asset value per share in the case of Class B or Class C on the last day of
the period less any undistributed earned income per share reasonably
expected to be declared as a dividend shortly thereafter. The quotient is
then added to 1, and that sum is raised to the 6th power, after which 1 is
subtracted. The current yield is then arrived at by multiplying the result
by 2.
Based upon a combined 1995 Federal and State of California personal
income tax rate of 46.24%, the tax equivalent yield for the 30-day period
ended January 31, 1995 for Class A was 9.95% and for Class B was 9.43%.
Tax equivalent yield is computed by dividing that portion of the current
yield (calculated as described above) which is tax exempt by 1 minus a
stated tax rate and adding the quotient to that portion, if any, of the
yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of the
highest Federal and State of California marginal personal income tax rates
presently in effect. For Federal personal income tax purposes, a 39.60%
rate has been used. For California personal income tax purposes, an 11.00%
tax rate has been used. The tax equivalent yield figure, however, does not
reflect the potential effect of any local (including, but not limited to,
county, district or city) taxes, including applicable surcharges. In
addition, there may be pending legislation which could affect such stated
tax rates or yields. Each investor should consult its tax adviser, and
consider its own factual circumstances and applicable tax laws, in order to
ascertain the relevant tax equivalent yield.
The average annual total return for the 1, 5 and 8.227 year periods
ended January 31, 1995 for Class A was (8.55)%, 6.54% and 6.47%,
respectively. The average annual total return for the 1 and 2.047 year
periods ended January 31, 1995 for Class B was (7.46)% and 3.31%,
respectively. Average annual total return is calculated by determining the
ending redeemable value of an investment purchased at net asset value
(maximum offering price in the case of Class A) per share with a
hypothetical $1,000 payment made at the beginning of the period (assuming
the reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n" is
the number of years in the period) and subtracting 1 from the result. A
Class's average total return figures calculated in accordance with such
formula assume that in the case of Class A the maximum sales load had been
deducted from the hypothetical initial investment at the time of purchase
or in the case of Class B or Class C the maximum applicable CDSC has been
paid upon redemption at the end of the period.
The total return for Class A for the period November 10, 1986
(commencement of operations) to January 31, 1995 was 67.49%. Based on net
asset value per share, the total return for Class A was 75.41% for this
period. The total return for Class B for the period January 15, 1993
(commencement of initial offering of Class B shares) through January 31,
1995 was 6.89%. Without giving effect to the applicable CDSC, the total
return for Class B was 8.82% for this period. Total return is calculated
by subtracting the amount of the Fund's net asset value (maximum offering
price in the case of Class A) per share at the beginning of a stated period
from the net asset value per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during the period
and any applicable CDSC), and dividing the result by the net asset value
(maximum offering price in the case of Class A) per share at the beginning
of the period. Total return also may be calculated based on the net asset
value per share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for Class A shares
or without giving effect to any applicable CDSC at the end of the period
for Class B or Class C shares. In such cases, the calculation would not
reflect the deduction of the sales load with respect to Class A shares or
any applicable CDSC with respect to Class B or Class C shares, which, if
reflected, would reduce the performance quoted.
From time to time, the Fund may use hypothetical tax equivalent yields
or charts in its advertising. These hypothetical yields or charts will be
used for illustrative purposes only and are not indicative of the Fund's
past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, including those relating to or arising from actual or proposed tax
legislation. From time to time, advertising materials for the Fund may
also refer to statistical or other information concerning trends relating
to investment companies, as compiled by industry associations such as the
Investment Company Institute. From time to time, advertising materials for
the Fund also may refer to Morningstar ratings and related analysis
supporting such ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive or subscription rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
The Manager's legislative efforts led to the 1976 Congressional
Amendment to the Code permitting an incorporated mutual fund to pass
through tax exempt income to its shareholders. The Manager offered to the
public the first incorporated tax exempt fund and currently manages or
administers over $25 billion in tax exempt assets.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of beneficial interest being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
RISK FACTORS - INVESTING
IN CALIFORNIA MUNICIPAL OBLIGATIONS
Certain California (the "State") constitutional amendments,
legislative measures, executive orders, civil actions and voter
initiatives, as well as the general financial condition of the State, could
adversely affect the ability of issuers of California Municipal Obligations
to pay interest and principal on such obligations. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State of California (the
"State") and various local agencies, available as of the date of this
Statement of Additional Information. While the Fund has not independently
verified such information, it has no reason to believe that such
information is not correct in all material respects.
Recent Developments. Since the start of the State's 1990-91 fiscal
year, the State has faced the worst economic, fiscal and budget conditions
since the 1930s. Construction, manufacturing (especially aerospace),
exports and financial services, among others, have all been severely
affected. Job losses have been the worst of any post-war recession.
Unemployment reached 9.2% in 1993 and is expected to remain well above 9%
through 1994. According to the State's Department of Finance, recovery
from the recession in California is not expected in meaningful terms until
late 1994, notwithstanding signs of recovery elsewhere in the nation.
The recession has seriously affected State tax revenues, which
basically mirror economic conditions. It has also caused increased
expenditures for health and welfare programs. The State has also been
facing a structural imbalance in its budget with the largest programs
supported by the General Fund (K-12 schools and community colleges, health
and welfare, and corrections) growing at rates higher than the growth rates
for the principal revenue sources of the General Fund. As a result, the
State has experienced recurring budget deficits. The Controller reported
that expenditures exceeded revenues for four of the five fiscal years
ending with 1991-92. Revenues and expenditures were essentially equal in
1992-93, but the original budget for that year projected revenues exceeding
expenditures by $2.6 billion. By June 30, 1993, according to the
Department of Finance, the State's Special Fund for Economic Uncertainties
("SFEU") had a deficit, on a budget basis, of approximately $2.8 billion.
The 1993-94 Budget Act incorporated a Deficit Retirement Plan to repay this
deficit over two fiscal years. The original budget for 1993-94 reflected
revenues which exceeded expenditures by approximately $2.0 billion. As a
result of the continuing recession, the excess of revenues over
expenditures for the fiscal year is now expected to be only about $500
million. Thus, the accumulated budget deficit at June 30, 1994 was
estimated by the Department of Finance to have been approximately $2.0
billion, and the deficit will not be retired by June 30, 1995, as planned.
A further consequence of the large budget imbalances over the last
three fiscal years has been that the State depleted its available cash
resources and has had to use a series of external borrowings to meet its
cash needs. To meet its cash flow needs in the 1994-95 fiscal year the
State issued, in July and August 1994, $4.0 billion of revenue anticipation
warrants which mature on April 25, 1996, and $3.0 billion of revenue
anticipation notes maturing on June 28, 1995.
The 1994-95 Budget Act is projected to have $41.9 billion of General
Fund revenues and transfers and $40.9 billion of budgeted expenditures. In
addition, the 1994-95 Budget Act anticipates deferring retirement of about
$1 billion of the accumulated budget deficit to the 1995-96 fiscal year
when it is intended to be fully retired by June 30, 1996.
As a result of the deterioration in the State's budget and cash
situation, the rating agencies reduced the State's credit ratings. Between
October 1991 and July 1994 the rating on the State's general obligation
bonds was reduced by S&P from "AAA" to "A," by Moody's from "Aaa" to "A1"
and by Fitch from "AAA" to "A."
On January 17, 1994, an earthquake of the magnitude of an estimated
6.8 on the Richter Scale struck Los Angeles causing significant damage to
public and private structures and facilities. Although some individuals
and businesses suffered losses totaling in the billions of dollars, the
overall effect of the earthquake on the regional and State economy is not
expected to be serious.
State Finances. State moneys are segregated into the General Fund and
approximately 600 Special Funds. The General Fund consists of the revenues
received into the State Treasury and earnings from State investments, which
are not required by law to be credited to any other fund. The General Fund
is the principal operating fund for the majority of governmental activities
and is the depository of most major State revenue sources.
The SFEU is funded with General Fund revenues and was established to
protect the State from unforeseen reduced levels of revenues and/or
unanticipated expenditure increases. Amounts in the SFEU may be
transferred by the Controller as necessary to meet cash needs of the
General Fund. The Controller is required to return moneys so transferred
without payment of interest as soon as there are sufficient moneys in the
General Fund. For budgeting and accounting purposes, any appropriation
made from the SFEU is deemed an appropriation from the General Fund. For
year-end reporting purposes, the Controller is required to add the balance
in the SFEU to the balance in the General Fund so as to show the total
monies then available for General Fund purposes.
Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June
30, 1994, the General Fund had outstanding loans in the aggregate principal
amount of $5.2 billion, which consisted of $4.0 billion of internal loans
to the General Fund from the SFEU and other Special Funds and $1.2 billion
of external loans represented by the 1994 revenue anticipation warrants.
Articles XIIIA and XIIIB to the State Constitution and Other Revenue
Law Changes. Prior to 1977, revenues of the State government experienced
significant growth primarily as a result of inflation and continuous
expansion of the tax base of the State. In 1978, State voters approved an
amendment to the State Constitution known as Proposition 13, which added
Article XIIIA to the State Constitution, reducing ad valorem local property
taxes by more than 50%. In addition, Article XIIIA provides that
additional taxes may be levied by cities, counties and special districts
only upon approval of not less than a two-thirds vote of the "qualified
electors" of such district, and requires not less than a two-thirds vote of
each of the two houses of the State Legislature to enact any changes in
State taxes for the purpose of increasing revenues, whether by increased
rate or changes in methods of computation.
Primarily as a result of the reductions in local property tax revenues
received by local governments following the passage of Proposition 13, the
Legislature undertook to provide assistance to such governments by
substantially increasing expenditures from the General Fund for that
purpose beginning in the 1978-79 fiscal year. In recent years, in addition
to such increased expenditures, the indexing of personal income tax rates
(to adjust such rates for the effects of inflation), the elimination of
certain inheritance and gift taxes and the increase of exemption levels for
certain other such taxes had a moderating impact on the growth in State
revenues. In addition, the State has increased expenditures by providing a
variety of tax credits, including renters' and senior citizens' credits and
energy credits.
The State is subject to an annual "appropriations limit" imposed by
Article XIIIB of the State Constitution adopted in 1979. Article XIIIB
prohibits the State from spending "appropriations subject to limitation" in
excess of the appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes," which consist
of tax revenues, and certain other funds, including proceeds from
regulatory licenses, user charges or other fees to the extent that such
proceeds exceed "the cost reasonably borne by such entity in providing the
regulation, product or service." One of the exclusions from these
limitations is "debt service" (defined as "appropriations required to pay
the cost of interest and redemption charges, including the funding of any
reserve or sinking fund required in connection therewith, on indebtedness
existing or legally authorized as of January 1, 1979 or on bonded
indebtedness thereafter approved" by the voters). In addition,
appropriations required to comply with mandates of courts or the Federal
government and, pursuant to Proposition 111 enacted in June 1990,
appropriations for qualified capital outlay projects and appropriations of
revenues derived from any increase in gasoline taxes and motor vehicle
weight fees above January 1, 1990 levels are not included as appropriations
subject to limitation. In addition, a number of recent initiatives were
structured or proposed to create new tax revenues dedicated to certain
specific uses, with such new taxes expressly exempted from the Article
XIIIB limits (e.g., increased cigarette and tobacco taxes enacted by
Proposition 99 in 1988). The appropriations limit also may be exceeded in
cases of emergency. However, unless the emergency arises from civil
disturbance or natural disaster declared by the Governor, and the
appropriations are approved by two-thirds of the Legislature, the
appropriations limit for the next three years must be reduced by the amount
of the excess.
The State's appropriations limit in each year is based on the limit
for the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable,
for any transfer of financial responsibility of providing services to or
from another unit of government. The measurement of change in population
is a blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the appropriations limit is tested over
consecutive two-year periods. Any excess of the aggregate "proceeds of
taxes" received over such two-year periods above the combined
appropriations limits for those two years is divided equally between
transfers to K-14 districts and refunds to taxpayers.
As originally enacted in 1979, the State's appropriations limit was
based on its 1978-79 fiscal year authorizations to expend proceeds of taxes
and was adjusted annually to reflect changes in cost of living and
population (using different definitions, which were modified by Proposition
111). Commencing with the 1991-92 fiscal year, the State's appropriations
limit is adjusted annually based on the actual 1986-87 limit, and as if
Proposition 111 had been in effect. The State Legislature has enacted
legislation to implement Article XIIIB which defines certain terms used in
Article XIIIB and sets forth the methods for determining the State's
appropriations limit. Government Code Section 7912 requires an estimate of
the State's appropriations limit to be included in the Governor's Budget,
and thereafter to be subject to the budget process and established in the
Budget Act.
For the 1990-91 fiscal year, the State appropriations limit was $32.7
billion, and appropriations subject to limitation were $7.51 billion under
the limit. The limit for the 1991-92 fiscal year was $34.2 billion, and
appropriations subject to limitations were $3.8 billion under the limit.
The limit for the 1992-93 fiscal year was $35.01 billion, and the
appropriations subject to limitation were $4.2 billion under the limit.
The estimated limits for the 1993-94 and 1994-95 fiscal years is $36.60
billion and $36.61 billion, respectively, and the estimated appropriations
subject to limitation are $3.77 billion and $5.49 billion, respectively,
under the limit.
In November 1988, State voters approved Proposition 98, which changed
State funding of public education below the university level and the
operation of the State's appropriations limit, primarily by guaranteeing K-
14 schools a minimum share of General Fund revenues. Under Proposition 98
(as modified by Proposition 111, which was enacted in June 1990), K-14
schools are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the prior year,
adjusted for changes in the cost of living (measured as in Article XIIIB by
reference to California per capita personal income) and enrollment ("Test
2"), or (c) a third test, which would replace the second test in any year
when the percentage growth in per capita General Fund revenues from the
prior year plus .5% is less than the percentage growth in California per
capita personal income ("Test 3"). Under "Test 3," schools would receive
the amount appropriated in the prior year adjusted for changes in
enrollment and per capita General Fund revenues, plus an additional small
adjustment factor. If "Test 3" is used in any year, the difference between
"Test 3" and "Test 2" would become a "credit" to schools which would be the
basis of payments in future years when per capita General Fund revenue
growth exceeds per capita personal income growth.
Proposition 98 permits the Legislature by two-thirds vote of both
houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3%
of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the Article
XIIIB limit to K-14 schools.
The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.4 billion for K-14 schools pursuant to
Proposition 98. During the course of the fiscal year, revenues proved to
be substantially below expectations. By the time the Governor's Budget was
introduced in January 1992, it became clear that per capita growth in
General Fund revenues for 1991-92 would be far smaller than the growth in
California per capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by applying
"Test 3" rather than "Test 2."
In response to the changing revenue situation and to fully fund the
Proposition 98 guarantee in both the 1991-92 and 1992-93 fiscal years
without exceeding it, the Legislature enacted several bills as part of the
1992-93 budget package which responded to the fiscal crisis in education
funding. Fiscal year 1991-92 Proposition 98 appropriations for K-14
schools were reduced by $1.083 billion. In order to not adversely impact
cash received by school districts, however, a short-term loan was
appropriated from the non-Proposition 98 State General Fund. The
Legislature then appropriated $16.6 billion to K-14 schools for 1992-93
(the minimum guaranteed by Proposition 98), but designated $1.083 billion
of this amount to "repay" the prior year loan, thereby reducing cash
outlays in 1992-93 by that amount. In addition to reducing the 1991-92
fiscal year appropriations for K-14 schools by $1.083 billion and
converting the amount to a loan (the "inter-year adjustment"), Chapter 703,
Statutes of 1992 also made an adjustment to "Test 1," based on the
additional $1.2 billion of local property taxes that were shifted to
schools and community colleges. The "Test 1" percentage changed from 40%
to 37%. Additionally, Chapter 703 contained a provision that if an
appellate court should determine that the "Test 1" recalculation or the
inter-year adjustment is unconstitutional, unenforceable or invalid,
Proposition 98 would be suspended for the 1992-93 fiscal year, with the
result that K-14 schools would receive the amount intended by the 1992-93
Budget Act compromise.
The State Controller stated in October 1992 that, because of a
drafting error in Chapter 703, he could not implement the $1.083 billion
reduction of the 1991-92 school funding appropriation, which was part of
the inter-year adjustment. The Legislature untimely enacted corrective
legislation as part of the 1993-94 Budget package to implement the $1.083
billion inter-year adjustment as originally intended.
In the 1992-93 Budget Act, a new loan of $732 million was made to K-12
schools in order to maintain per-average daily attendance ("ADA") funding
at the same level as 1991-92, at $4,187. An additional loan of $241
million was made to community college districts. These loans are to be
repaid from future Proposition 98 entitlements. (The teachers'
organization lawsuit discussed above also seeks to declare invalid the
provision making the $732 million a loan "repayable" from the future years'
Proposition 98 funds). Including both State and local funds, and adjusting
for the loans and repayments, on a cash basis, total Proposition 98 K-12
funding in 1992-93 increased to $21.5 billion, 2.4% more than the amount in
1992-93 ($21.0 billion).
Based on revised State tax revenues and estimated decreased reported
pupil enrollment, the 1993-94 Budget Act projected that the 1992-93
Proposition 98 Budget Act appropriations of $16.6 billion exceeded a
revised minimum guarantee by $313 million. As a result, the 1993-94 Budget
Act reverted $25 million in 1992-93 appropriations to the General Fund.
Limiting the reversion to this amount ensures that per ADA funding for
general purposes will remain at the prior year level of $4,217 per pupil.
The 1993-94 Governor's Budget subsequently proposed deficiency funding of
$121 million for school apportionments and special education, increasing
funding per pupil in 1992-93 to $4,244. The 1993-94 Budget Act also
designated $98 million in 1992-93 appropriations toward satisfying prior
years' guarantee levels, an obligation that resulted primarily from
updating State tax revenues for 1991-92, and designates $190 million as a
loan repayable from 1993-94 funding.
The 1993-94 Budget Act projected the Proposition 98 minimum funding
level at $13.5 billion based on the "Test 3" calculation where the
guarantee is determined by the change in per capita growth in General Fund
revenues, which are projected to decrease on a year-over-year basis. This
amount also takes into account increased property taxes transferred to
school districts from other local governments.
Legislation accompanying the 1993-94 Budget Act (Chapter 66/93)
provided a new loan of $609 million to K-12 schools in order to maintain
per ADA funding at $4,187 and a loan of $178 million to community colleges.
These loans have been combined with the K-14 1992-93 loans into one loan
totalling $1.760 billion. Repayment of this loan would be from future
years' Proposition 98 entitlements, and would be conditioned on maintaining
current funding levels per pupil for K-12 schools. Chapter 66 also reduced
the "Test 1" percentage to 33% to reflect the property tax shift among
local government agencies.
The 1994-95 Budget Act appropriated $14.4 billion of Proposition 98
funds for K14 schools based on Test 2. This exceeds the minimum
Proposition 98 guarantee by $8 million to maintain K-12 funding per pupil
at $4,217. Based upon updated State revenues, growth rates and inflation
factors, the 1994-95 Budget Act appropriated an additional $286 million
within Proposition 98 for the 1993-94 fiscal year, to reflect a need in
appropriations for school districts and county offices of education, as
well as an anticipated deficiency in special education fundings. These
appropriations increase the 1993-94 Proposition 98 guarantee to $13.8
billion, which exceeds the minimum guarantee in that year by $272 million
and provides per pupil funding of $4,225.
Sources of Tax Revenue. The California personal income tax, which in
1992-93 contributed about 44% of General Fund revenues, is closely modeled
after the Federal income tax law. It is imposed on net taxable income
(gross income less exclusions and deductions). The tax is progressive with
rates ranging from 1% to 11%. Personal, dependent, and other credits are
allowed against the gross tax liability. In addition, taxpayers may be
subject to an alternative minimum tax ("AMT") which is much like the
Federal AMT. This is designed to ensure that excessive use of tax
preferences does not reduce taxpayers' liabilities below some minimum
level. Legislation enacted in July 1991 added two new marginal tax rates,
at 10% and 11%, effective for tax years 1991 through 1995. After 1995, the
maximum personal income tax rate is scheduled to return to 9.3%, and the
AMT rate is scheduled to drop from 8.5% to 7%.
The personal income tax is adjusted annually by the change in the
consumer price index to prevent taxpayers from being pushed into higher tax
brackets without a real increase in income.
The sales tax is imposed upon retailers for the privilege of selling
tangible personal property in California. Most retail sales and leases are
subject to the tax. However, exemptions have been provided for certain
essentials such as food for home consumption, prescription drugs, gas,
electricity and water. Sales tax accounted for about 38% of General Fund
revenue in 1992-93. Bank and corporation tax revenues comprised about 12%
of General Fund revenue in 1992-93. In 1989, Proposition 99 added a 25
cents per pack excise tax on cigarettes, and a new equivalent excise tax on
other tobacco products. Legislation enacted in 1993 added an additional 2
cents per pack for the purpose of funding breast cancer research.
General Financial Condition of the State. Revenues in the most recent
fiscal years have been unusually difficult to forecast with a high degree
of accuracy due in major part to the volatility in the personal income tax.
The 1986-87 through 1989-90 fiscal years were affected by both the Federal
Tax Reform Act of 1986 and subsequent conforming State legislation. The
difficulty with recent forecasts has occurred because taxpayers have
changed their behavior as a result of these events. Capital gains are now
fully taxed. This revenue component is subject to taxpayer discretion and
is very sensitive to change in tax law, market conditions and individual
circumstances. Capital gains have always been a volatile item and since it
is contributing a greater percentage of total revenue, it makes these
collections subject to greater variance.
The State entered the 1988-89 fiscal year with essentially no budget
reserve. The 1988-89 Budget Act called for significant spending cuts to
balance expected revenues and expenditures and to provide an estimated
balance of approximately $600 million in the SFEU at year-end.
Revenues for the 1989-90 fiscal year were approximately $517.7 million
less than presented in the Governor's Budget in January 1990 and $1.021
billion less than estimated in July 1989, primarily owing to lower than
estimated receipts from individual and corporate taxes. The shortfall in
revenues was made up through the transfer of moneys from the SFEU and a
variety of expenditure reduction actions initiated by the Administration.
As a result, the SFEU was fully depleted by June 30, 1990.
The California State Controller reported that the State's General Fund
ended the 1990-91 fiscal year with a negative budgetary basis balance of
$1.316 billion. In order to pay necessary cash expenses through June 1991,
including payment of $4.1 billion of 1990 Revenue Anticipation Notes which
were due June 28, 1991, the General Fund borrowed $1.390 billion from the
SFEU and $3.266 billion from other Special Funds as of the end of the
fiscal year. Data on General Fund revenues for the 1990-91 fiscal year
show that revenues in all major categories (except insurance taxes) were
lower than receipts in 1989-90, the first time this has happened on a year-
over-year basis since the 1930s.
The 1991-92 Budget Act projected General Fund expenditures of $43.4
billion and Special Fund expenditures of $10.6 billion. The Department of
Finance estimated that there would be a balance in the SFEU on June 30,
1992 of $1.2 billion. An estimated $14.3 billion "budget gap" was closed
through a combination of temporary and permanent changes in laws and one-
time budget adjustments. The major features of the budget compromise were:
program funding reductions totaling $5.1 billion; a total of $5.1 billion
of increased State tax revenues; savings of $2.1 billion by returning
certain health and welfare programs to counties; and additional
miscellaneous savings or revenue gains and one-time accounting charges
totaling $2.0 billion.
The 1991-92 Budget Act was based on economic forecasts showing
recovery from the recession would begin in summer or fall of 1991, but
revenues lagged behind projections from the start of the 1991-92 fiscal
year. By the time the Governor's Budget for 1992-93 was prepared in late
1991, it was evident that the recession had been much more severe in the
State than was thought earlier, and that it was continuing longer than
anticipated. As a result, revenues for the 1991-92 fiscal year were much
lower than originally estimated and expenditures were higher, particularly
in health and welfare programs.
As a result of the revenue shortfalls accumulating for the previous
two fiscal years, the Controller in April 1992 indicated that cash
resources (including borrowing from Special Funds) would not be sufficient
to meet all General Fund obligations due on June 30 and July 1, 1992. On
June 25, 1992, the Controller issued $475 million of 1992 Revenue
Anticipation Warrants (the "1992 Warrants") in order to provide funds to
cover all necessary payments from the General Fund at the end of the 1991-
92 fiscal year and on July 1, 1992. The 1992 Warrants were paid on July 24,
1992. In addition to the 1992 Warrants the Controller reported that as of
June 30, 1992, the General Fund had borrowed $1.336 billion from the SFEU
and $4.699 billion from other Special Funds, using all but about $183
million of borrowable cash resources.
To balance the 1992-93 Governor's Budget, program reductions totalling
$4.365 billion and a revenue and transfer increase of $872 million were
proposed for the 1991-92 and 1992-93 fiscal years. Economic performance in
the State continued to be sluggish after the 1992-93 Governor's Budget was
prepared. By the time of the "May Revision", issued on May 20, 1992, the
Administration estimated that the 1992-93 Budget needed to address a gap of
about $7.9 billion, much of which was needed to repay the accumulated
budget deficits of the previous two years.
In early 1992, the Director of Finance acknowledged that actual
economic conditions were worse than the projections in the Governor's
Budget. Because the State had accumulated a significant budget deficit
over two consecutive years, and the continuing recession depressed revenue
estimates for the coming year, the State faced a major challenge to enact a
balanced budget. The State also began the 1992-93 fiscal year with
essentially no cash reserves. By June 1992, it was estimated that
approximately $7.9 billion of budget actions would be required to end the
1992-93 fiscal year without a budget deficit. The severity of the budget
actions needed led to a long delay in adopting the budget.
With the failure to enact a budget by July 1, 1992, the State had no
legal authority to pay many of its vendors until the budget was passed.
Starting on July 1, 1992, the Controller was required to issue "registered
warrants" in lieu of normal warrants backed by cash to pay many State
obligations. Available cash was used to pay constitutionally mandated and
priority obligations, such as debt service on bonds and revenue
anticipation warrants. Between July 1 and September 4, 1992, the
Controller issued an aggregate of approximately $3.8 billion of registered
warrants payable from the General Fund, all of which were called for
redemption by September 4, 1992 following enactment of the 1992-93 Budget
Act and issuance by the State of $3.3 billion of interim notes.
The Legislature enacted the 1992-93 Budget Bill on August 29, 1992,
and it was signed by the Governor on September 2, 1992. The 1992-93 Budget
Act provides for expenditures of $57.4 billion and consists of General Fund
expenditures of $40.8 billion and Special Fund and Bond Fund expenditures
of $16.6 billion. The Department of Finance estimates there will be a
balance in the SFEU of $28 million on June 30, 1993.
The $7.9 billion budget gap was closed through a combination of
increased revenues and transfers and expenditure cuts such as:
1. General Fund savings in health and welfare programs
totaling $1.6 billion.
2. General Fund reductions of $1.9 billion for K-12
schools and community colleges. This was
accomplished by requiring schools to repay
$1.1 billion in excess appropriations from 1991-92.
3. Redirecting property taxes from cities ($200 million)
and counties ($525 million) to schools. These shifts
are permanent and will reduce the State General Funds
obligation for schools. The State will also
redirect property taxes from special districts
($375 million) and redevelopment agencies
($200 million) to schools. The shift from
redevelopment agencies is a one-time shift.
4. Program cuts for higher education totaling $415
million ($246 million for The University of
California, $143 million for California
State University, and $26 million for the
Student Aid Commission). These reductions are
partially offset by $141 million in increased
student fees.
5. A total of $1.6 billion of transfers and accelerated
collections of State revenues by conforming State
schedules for estimated payments for personal income
and bank and corporate taxes with federal
schedules ($105 million), accelerating settlement of
outstanding tax disputes ($300 million), reaching an
agreement with the Federal government to repay
federal contractors over a ten-year period beginning
in 1992-93, rather than making a lump sum payment in
1992-93 ($580 million), accelerating liquidation of
unclaimed properties through the sale of all
unclaimed securities received prior to July 1, 1992,
rather than maintaining them for three years
($70 million), transfers from Special
Funds ($423 million), and other miscellaneous
actions ($122 million).
6. Approximately $1.0 billion from various additional
program reductions.
In May 1993, the Department of Finance projected that the General Fund
would end the fiscal year on June 30, 1993 with an accumulated budget
deficit of about $2.8 billion, and a negative fund balance of about $2.2
billion (the difference being certain reserves for encumbrances and school
funding costs). As a result, the State issued $5 billion of revenue
anticipation notes and warrants.
The Governor's 1993-94 Budget, introduced on January 8, 1993, proposed
General Fund expenditures of $37.3 billion, with projected revenues of
$39.9 billion. It also proposed Special Fund expenditures of $12.4 billion
and Special Fund revenues of $12.1 billion. The 1993-94 fiscal year
represents the third consecutive year the Governor and the Legislature were
faced with a very difficult budget environment, requiring revenue actions
and expenditure cuts totaling billions of dollars to produce a balanced
budget. To balance the budget in the face of declining revenues, the
Governor proposed a series of revenue shifts from local government,
reliance on increased Federal aid and reductions in state spending.
The "May Revision" of the Governor's Budget, released on May 20, 1993,
indicated that the revenue projections of the January Budget Proposal were
tracking well, with the full year 1992-93 about $80 million higher than the
January projection. Personal income tax revenue was higher than projected,
sales tax was close to target, and bank and corporation taxes were lagging
behind projections. The May Revision projected the State would have an
accumulated deficit of about $2.75 billion by June 30, 1993. The Governor
proposed to eliminate this deficit over an 18-month period. He also agreed
to retain the 0.5% sales tax scheduled to expire June 30 for a six-month
period, dedicated to local public safety purposes, with a November election
to determine a permanent extension. Unlike previous years, the Governor's
Budget and May Revision did not calculate a "gap" to be closed, but rather
set forth revenue and expenditure forecasts and proposals designed to
produce a balanced budget.
The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71 million
in spending. With enactment of the Budget Act, the State carried out its
regular cash flow borrowing program for the fiscal year, which included the
issuance of approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues were the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991 -- a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available revenues.
The Budget also included Special Fund expenditures of $12.1 billion, a 4.2%
increase.
The 1993-94 Budget Act contained no General Fund tax/revenue increases
other than a two year suspension of the renters' tax credit.
The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71 million
in spending. With enactment of the Budget Act, the State carried out its
regular cash flow borrowing program for the fiscal year, which included the
issuance of approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues are the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991 -- a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available revenues.
The Budget also included Special Fund expenditures of $12.1 billion, a 4.2%
increase.
The 1993-94 Budget Act contained no General Fund tax/revenue increases
other than a two year suspension of the renters' tax credit.
Administration reports during the course of the 1993-94 fiscal year
indicated that while economic recovery appeared to have started in the
second half of the fiscal year, recessionary conditions continued longer
than had been anticipated when the 1993-94 Budget Act was adopted.
Overall, revenues for the 1993-94 fiscal year were about $800 million lower
than original projections, and expenditures were about $780 million higher,
primarily because of higher health and welfare caseloads, lower property
taxes which require greater State support for K-14 education to make up to
shortfall, and lower than anticipated Federal government payments for
immigration-related costs. The reports in May and June 1994, indicated that
revenues in the second half of the 1993-94 fiscal year have been very close
to the projections made in the Governor's Budget of January 10, 1994, which
is consistent with a slow turn around in the economy.
The Department of Finance's July 1994 Bulletin, which included final
June receipts, reported that June revenues were $114 million (2.5%) above
projection, with final end-of-year results at $377 million (about 1%) above
the May Revision projections. Part of this result was due to the end-of-
year adjustments and reconciliations. Personal income tax and sales tax
continued to track projections. The largest factor in the higher than
anticipated revenues was from bank and corporation taxes, which were $140
million (18.4%) above projection in June.
During the 1993-94 fiscal year, the State implemented the Deficit
Retirement Plan, which was part of the 1993-94 Budget Act, by issuing $1.2
billion of revenue anticipation warrants in February 1994 that matured
December 21, 1994. This borrowing reduced the cash deficit at the end of
the 1993-94 fiscal year. Nevertheless, because of the $1.5 billion
variance from the original 1993-94 Budget Act assumptions, the General Fund
ended the fiscal year at June 30, 1994 carrying forward an accumulated
deficit of approximately $2 billion.
Because of the revenue shortfall and the State's reduced internal
borrowable cash resources, in addition to the $1.2 billion of revenue
anticipation warrants issued as part of the Deficit Retirement Plan, the
State issued an addition $2.0 billion of revenue anticipation warrants that
matured July 26, 1994, which were needed to fund the State's obligations
and expenses through the end of the 1993-94 fiscal year.
The 1994-95 fiscal year represents the fourth consecutive year the
Governor and Legislature were faced with a very difficult budget
environment to produce a balanced budget. Many program cost and budgetary
adjustments have already been made in the last three years. The Governor's
Budget Proposal, as updated in May and June 1994, recognized that the
accumulated deficit could not be repaid in one year, and proposed a two-
year solution. The budget proposal set forth revenue and expenditure
forecasts and revenue and expenditure proposals which estimated operating
surpluses for the budget for both 1994-95 and 1995-96, and lead to the
elimination of the accumulated budget deficit, estimated at about $2.0
billion at June 30, 1994, by June 30, 1996.
The 1994-95 Budget Act, signed by the Governor on July 8, 1994,
projects revenues and transfers of $41.9 billion, $2.1 billion higher than
revenues in 1993-94. This reflects the Administration's forecast of an
improving economy.
The 1994-95 Budget Act projects Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues.
The 1994-95 Budget Act projects General Fund expenditures of $40.9
billion, an increase of $1.6 billion over the 1993-94 fiscal year. The
1994-95 Budget Act also projects Special Fund expenditures of $13.7
billion, a 5.4% increase over 1993-94 fiscal year estimated expenditures.
The 1994-95 Budget Act contains no tax increases. Under legislation
enacted for the 1993-94 Budget Act, the renters' tax credit was suspended
for two years (1993 and 1994). A ballot proposition to permanently restore
the renters' tax credit after this year failed at the June 1994 election.
The Legislature enacted a further one-year suspension of the renters' tax
credit, for 1995, saving about $390 million in the 1995-96 fiscal year.
The 1994-95 Budget Act assumes that the State will use a cash flow
borrowing program in 1994-95 which combines one-year notes and two-year
warrants, which have now been issued. Issuance of the warrants allows the
State to defer repayment of approximately $1.0 billion of its accumulated
budget deficit into the 1995-96 fiscal year. The Budget Adjustment Law,
described above, enacted along with the 1994-95 Budget Act is designed to
ensure that the warrants will be repaid in the 1995-96 fiscal year.
Recent Economic Trends. The State's tax revenue experience clearly
reflects sharp declines in employment, income and retail sales on a scale
not seen in over 50 years. The May 1994 Revision to the 1994-95 Governor's
Budget, released May 20, 1994 (the "May 1994 Revision"), assumed the State
would start to recover from recessionary conditions in 1994, with a modest
upturn beginning in 1994 and continuing in 1995, a year later than
predicted in the May 1993 Department of Finance economic projection. Pre-
recession job levels are not expected to be reached until 1997. The
following are excerpts from the May 1994 Revision discussion of economic
conditions.
There is growing evidence that California is showing signs of an
economic turn around, and the May 1994 Revision forecast is revised up from
the 1994-95 Governor's Budget forecast. Since the 1994-95 Governor's
Budget forecast, 1993 nonfarm employment has been revised upward by 31,000.
Employment in the early months of 1994 has shown encouraging signs of
growth, several months sooner than was contemplated in the 1994-95
Governor's Budget forecast. Between December and April, payrolls are up by
50,000 jobs. The Northridge Earthquake may have dampened economic activity
briefly during late January and February, but the rebuilding effects are
now adding a small measure of stimulus.
Sectors which are contributing to California's recovery include
construction and related manufacturing, wholesale and retail trade,
transportation and several service industries such as amusements and
recreation, business services and management consulting. Electronics is
showing modest growth and the rate of decline in aerospace manufacturing is
slowly diminishing. These trends are expected to continue, and by next
year, much of the restructuring in the finance and utilities industries
should be nearly completed. Thus, the State's recovery should gain
momentum over the next two years.
As a result of these factors, average 1994 nonfarm employment is now
forecast to maintain 1993 levels compared to a projected 0.6% decline in
the 1994-95 Governor's Budget. Employment in 1995 is expected to be up
1.6%, compared to 0.7% in the 1994-95 Governor's Budget.
The housing forecast remains essentially unchanged. Although existing
home sales have strengthened and subdivision surveys indicated increased
new home sales, building permits are up only slightly from recession lows.
Gains are expected in the months ahead, but higher mortgage interest rates
will dampen the upturn. Essentially, the earthquake adds a few thousand
units to the forecast, but this effect is offset by higher interest rates.
Interest rates represent one of several downside risks to the
forecast. The rise in interest rates has occurred more rapidly than
contemplated in the 1994-95 Governor's Budget forecast. In addition to
affecting housing, higher rates may also dampen consumer spending, given
the high proportion of California homeowners with adjustable-rate
mortgages. The May 1994 Revision forecast includes a further rise in the
Federal Funds rate to nearly 5% by the beginning of 1995. Should rates
rise more steeply, housing and consumer spending would be adversely
affected.
The employment upturn is still tenuous. The Employment Development
Department revised down February's employment gain and March was revised to
a small decline. Unemployment rates in California have historically been
volatile.
The July 1994 Bulletin of the Department of Finance reports that the
economy continued to who signs of recovery, although several labor market
indicators were weak in June. Based on a survey of employers, nonfarm
employment fell 12,000 in June, although it was still up over 17,000 since
December 1993. The Bulletin noted, however, that data from payroll tax
records and income tax withholding receipts for late 1993 and the first
part of 1994 were stronger than the employer survey results would indicate,
suggesting steady job gains thus far in 1994. The unemployment rate, which
is volatile, remained unchanged in June at 8.3%, still much higher than the
national average. The trend in the first six months of 1994, however,
appeared to be downward, and was below the 10.1% peak in March.
Housing permits were reported rising slowly, to a 93,000 annual rate
in May, continuing a modest recovery evident since late 1993. Retail sales
for January-April 1994 were up 4.3% over the same period a year earlier.
Sales had grown less than 1% in both 1992 and 1993.
APPENDIX B
Description of S&P, Moody's & Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
A
Principal and interest payments on bonds in this category are regarded
as safe. This rating describes the third strongest capacity for payment of
debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse
circumstances, any one such weakness might impair the ability of the issuer
to meet debt obligations at some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management performance
appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service. The difference between "A" and "BBB" rating is that the
latter shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the pledged
revenues could show substantial variations, with the revenue flow possibly
being subject to erosion over time. Basic security provisions are no more
than adequate. Management performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC or C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and C the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing
within the major ratings categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus sign (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
SP-3
The issuers of these municipal notes exhibit speculative capacity to
pay principal and interest.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign
(+) designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment some time in
the future.
Baa
Bonds which are rated Baa are considered as medium- grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in categories below B. The modifier 1 indicates a ranking for the security
in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example, may
be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
MIG 3/VMIG 3
This designation denotes favorable quality. All security elements are
accounted for but there is lacking the undeniable strength of the preceding
grades. Liquidity and cash flow protection may be narrow and market access
for refinancing is likely to be less well established.
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and, although not
distinctly or predominantly speculative, there is specific risk.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and the requirements
for relatively high financial leverage. Adequate alternate liquidity is
maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents the lowest potential
for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the AAA category covering 12-36
months or the DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN Premier California
Municipal Bond Fund, Class A Shares AND THE lehman brothers municipal bond
index
*Source: Lehman Brothers
Exhibit A
AVERAGE ANNUAL TOTAL RETURNS
CLASS A CLASS B
------------------------------------------------------------ -----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIODS ENDED 1/31/95 Sales Charge Sales Charge (4.5%) PERIODS ENDED 1/31/95 Redemption Redemption*
-------------------- ------------ -------------- ------------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
1 Year (4.34%) (8.63%) 1 Year (4.77%) (7.46%)
5 Years 7.52 6.53 From Inception (1/15/93) 4.22 3.31
From Inception (11/10/86) 7.06 6.46
</TABLE>
Past performance is not predictive of future performance. Share price and
investment return fluctuate and share price may be more or less than original
cost upon redemption.
The above graph compares a $10,000 investment made in Class A shares of
Premier California Municipal Bond Fund on 11/10/86 (Inception Date) to a
$10,000 investment made in the Lehman Brothers Municipal Bond Index on that
date. For comparative purposes the value of the Index on 10/31/86 is used as
the beginning value on 11/10/86. All dividends and capital gain distributions
are reinvested. Performance for Class B shares will vary from the results
shown above due to the difference in charges and expenses charged to that
class.
The Fund invests primarily in California municipal securities and its
performance takes into account the maximum initial sales charge on Class A
shares and all other applicable fees and expenses. Unlike the Fund, the
Lehman Brothers Municipal Bond Index is an unmanaged total return performance
benchmark for the long-term, investment grade municipal bond market,
calculated by using municipal bonds selected to be representative of the
market. The Index does not take into account charges, fees and other expenses.
Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Condensed Financial
Information section of the Prospectus and elsewhere in this report.
* Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--99.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
CALIFORNIA--93.8%
Alameda, Special Tax (Community Facilities District Number 1) 7.75%, 9/1/2019 $ 2,000,000 $ 2,028,500
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 6.31%, 12/28/2018 (Insured; MBIA)......... 4,000,000 4,003,600
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006.............. 2,400,000 2,492,256
Bakersfield, COP (Wastewater Treatment Plant 3 Project)
8%, 1/1/2010 (Prerefunded 1/1/1998) (a)................................. 250,000 270,570
California:
6.90%, 4/1/2005......................................................... 2,000,000 2,149,480
6.125%, 10/1/2011....................................................... 2,875,000 2,864,305
California Department of Water Resources, Revenue (Central Valley Project)
6.385%, 12/1/2026 (b)................................................... 7,800,000 7,613,346
California Educational Facilities Authority, Revenue:
(Refunding - Saint Mary's College) 5%, 10/1/2012........................ 4,000,000 3,297,880
(Santa Clara University) 6.25%, 2/1/201................................. 3,500,000 3,361,855
California Health Facilities Financing Authority, Revenue:
(Eskaton Properties) 7.50%, 5/1/2020 (Insured; California Health
Facilities
Construction Insurance) (Prerefunded 5/1/2000) (a).................... 4,000,000 4,444,400
(Health Dimensions) 7%, 5/1/2020........................................ 6,000,000 5,772,780
(Kaiser Permanente) 5.60%, 5/1/2033.................................... 3,000,000 2,476,620
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023..................... 4,500,000 3,842,010
California Housing Finance Agency, Home Mortgage Revenue:
Zero Coupon, 8/1/2023................................................... 6,570,000 728,810
7.50%, 8/1/2029......................................................... 1,135,000 1,167,200
8%, 8/1/2029............................................................ 525,000 552,043
7.60%, 8/1/2030......................................................... 1,605,000 1,670,869
7.70%, 8/1/2030......................................................... 1,200,000 1,253,268
California Pollution Control Financing Authority:
RRR (Waste Management, Inc.) 7.15%, 2/1/2011............................ 2,000,000 2,066,900
SWDR (North County Recycling Center)
6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (c).................. 2,500,000 2,529,275
California Public Works Board, LR:
(Department of Corrections - Madera State Prison) 6%, 6/1/2010.......... 3,000,000 2,912,010
(Department of Corrections - Susanville State Prison)
5.375%, 6/1/2018 (Insured; MBIA)...................................... 6,500,000 5,641,220
(Secretary of State) 6.75%, 12/1/2012................................... 2,375,000 2,400,175
(University of California Projects):
5.55%, 6/1/2010....................................................... 4,000,000 3,623,400
5.50%, 6/1/2019....................................................... 3,000,000 2,548,260
California Statewide Communities Development Authority, COP, Revenue,
Refunding:
(Pacific Homes) 5.90%, 4/1/2009......................................... 4,340,000 4,206,068
(Triad Healthcare) 6.25%, 8/1/2006...................................... 2,000,000 1,944,200
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice - General Project) 6%, 7/1/2009............................. 4,500,000 4,207,410
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (c). 2,000,000 2,044,740
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
CALIFORNIA (CONTINUED)
Contra Costa County, Home Mortgage Revenue
8.25%, 6/1/2021 (Collateralized; GNMA )................................. $ 350,000 $ 429,782
Fontana Redevelopment Agency, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020................... 4,250,000 4,336,317
Glendora Public Finance Authority, Tax Allocation Revenue
7.625%, 9/1/2010 (Prerefunded 9/1/1999) (a)............................. 1,815,000 2,004,559
Lake Elsinore Public Financing Authority, Local Agency Revenue:
7.50%, 10/1/2010........................................................ 3,000,000 3,054,900
8%, 10/1/2020........................................................... 1,640,000 1,694,464
Los Angeles Convention and Exhibition Center Authority, COP, Revenue,
Refunding
7.375%, 8/15/2018 (Prerefunded 8/15/1999) (a)........................... 700,000 765,583
Los Angeles County Building Authority, Revenue, Refunding:
5.60%, 5/1/2008......................................................... 4,445,000 4,163,943
5.625%, 5/1/2011........................................................ 5,250,000 4,777,867
Los Angeles Department of Water and Power, Electric Plant Revenue:
4.75%, 11/15/2019....................................................... 5,000,000 3,883,250
5.30%, 2/15/2021........................................................ 2,000,000 1,685,140
5.375%, 9/1/2023........................................................ 5,000,000 4,227,900
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018..................... 750,000 839,092
Los Banos, COP 7.65%, 9/1/2019 (Prerefunded 9/1/1999) (a)................... 500,000 552,725
Mount Shasta, HR, COP (Mercy Medical Center)
7.25%, 7/1/2019 (Prerefunded 7/1/1999) (a).............................. 1,885,000 2,050,861
Mountain View Shoreline Regional Park Community 5.75%, 8/1/2018............. 4,605,000 3,853,510
Nevada County, COP (Western Nevada Co.- Solid Waste) 7.50%, 6/1/2021........ 2,200,000 2,100,384
Northern California Power Agency, Public Power Revenue:
6.30%, 7/1/2018 (b)..................................................... 6,000,000 5,948,820
(Refunding - Geothermal Project No. 3):
7%, 7/1/2007.......................................................... 1,000,000 1,023,960
5.85%, 7/1/2010....................................................... 4,000,000 3,690,400
(Refunding - Hydroelectric Project No. 1) 7.15%, 7/1/2024............... 4,445,000 4,518,476
Oakdale Public Finance Authority, Revenue (Center City Redevelopment Project)
7.90%, 7/1/2019......................................................... 1,750,000 1,807,120
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014........................................................ 2,375,000 2,208,750
7.80%, 8/15/2015 (Prerefunded 8/15/2000) (a)............................ 2,000,000 2,259,440
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012......................................................... 3,000,000 3,032,550
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013......... 1,500,000 1,536,330
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)............... 1,250,000 1,465,563
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020 2,000,000 2,028,660
Sacramento County, Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010........................................................ 2,250,000 2,386,710
8.25%, 12/1/2020........................................................ 2,000,000 2,098,160
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
CALIFORNIA (CONTINUED)
Sacramento Schools Insurance Authority, Revenue (Workers Compensation
Program)
5.75%, 6/1/2003......................................................... $ 3,955,000 $ 3,944,282
San Diego, IDR (San Diego Electric and Gas)
5.90%, 6/1/2018......................................................... 5,000,000 4,665,000
San Diego County Water Authority, Water Revenue, COP 5.607%, 4/23/2008...... 4,000,000 3,820,760
San Francisco City and County Public Utilities Commission, Water Revenue,
Refunding
6%, 11/1/2015........................................................... 2,000,000 1,933,060
San Jose Financing Authority, Revenue, Refunding (Convention Center Project)
6.40%, 9/1/2022......................................................... 4,000,000 3,874,040
San Marcos Public Facilities Authority, Revenue, Refunding
(Public Improvement - Civic Center) 6.15%, 8/1/2013..................... 2,320,000 2,081,782
Santa Monica, Wastewater Enterprise Revenue 4.75%, 1/1/2010 (Insured; AMBAC) 2,895,000 2,446,275
Sequoia Hospital District, Revenue, Refunding:
7.50%, 9/1/2008 (Prerefunded 9/1/1998) (a).............................. 795,000 865,890
7.60, 9/1/2014 (Prerefunded 9/1/1998) (a)............................... 750,000 819,038
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (d) 2,000,000 1,000,000
University of California, COP (UCLA Central Chiller/Cogeneration)
7%, 11/1/2018 (Prerefunded 11/1/1999) (a)............................... 3,340,000 3,615,684
Upland, HR, COP (San Antonio Community Hospital) 7.125%, 1/1/2011........... 1,000,000 1,021,860
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017........................ 3,000,000 3,052,410
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020.............. 3,505,000 3,597,918
U.S. RELATED--5.2%
Puerto Rico Electric Power Authority, Power Revenue, Refunding:
7.125%, 7/1/1999........................................................ 3,500,000 3,809,050
7.125%, 7/1/2014........................................................ 2,000,000 2,072,900
Virgin Islands Territory (Hugo Insurance Claims Fund Program) 7.75%, 10/1/2006. 1,770,000 1,869,014
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011 3,000,000 3,080,820
--------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $206,689,074)................... $206,108,449
============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INVESTMENTS--1.0%
California Pollution Control Financing Authority, SWDR, VRDN
<S> <C> <C>
3.30%,
(cost $2,000,000) (e)................................................... $ 2,000,000 $ 2,000,000
--------------
--------------
TOTAL INVESTMENTS--100.0% (cost $208,689,074)............................... $208,108,449
============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation MFHR Multi - Family Housing Revenue
GNMA Government National Mortgage Association RRR Resources Recovery Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Note
LR Lease Revenue
</TABLE>
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
--------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 18.9%
AA Aa AA 18.2
A A A 36.4
BBB Baa BBB 10.7
D D D .5
F1+ & F1 MIG1,VMIG1 & P1 SP1 & A1 1.0
Not Rated (g) Not Rated (g) Not Rated (g) 14.3
-------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Bonds which are prerefunded are collateralized by U.S. Government
Securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At January 31,
1995, these securities amounted to $13,562,166 or 6.4% of net assets.
(c) Secured by letters of credit.
(d) Non-income producing security; interest payments in default.
(e) Security payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates of an index of market interest
rates.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Manager to be of comparable
quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $208,689,074)--see statement.................................... $208,108,449
Cash.................................................................... 238,093
Receivable for investment securities sold............................... 12,841,148
Interest receivable..................................................... 3,625,638
Receivable for shares of Beneficial Interest subscribed................. 75,515
Prepaid expenses........................................................ 10,244
--------------
224,899,087
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 97,428
Due to Distributor...................................................... 52,264
Payable for investment securities purchased............................. 13,496,145
Payable for shares of Beneficial Interest redeemed...................... 261,212
Accrued expenses........................................................ 72,348 13,979,397
---------- ------------
NET ASSETS ................................................................ $210,919,690
============
REPRESENTED BY:
Paid-in capital......................................................... $210,682,786
Accumulated undistributed net realized gain on investments.............. 817,529
Accumulated net unrealized (depreciation) on investments_Note 3(b)...... (580,625)
--------------
NET ASSETS at value......................................................... $210,919,690
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 15,678,009
============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,549,730
============
NET ASSET VALUE per share:
Class A Shares
($191,939,038 / 15,678,009 shares).................................... $12.24
=======
Class B Shares
($18,980,652 / 1,549,730 shares)...................................... $12.25
=======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 15,224,028
EXPENSES:
Management fee--Note 2(a)............................................. $ 1,264,646
Shareholder servicing costs_Note 2(c)................................. 711,937
Distribution fees (Class B Shares)_Note 2(b).......................... 95,246
Professional fees..................................................... 41,348
Prospectus and shareholders' reports.................................. 24,345
Custodian fees........................................................ 24,113
Trustees' fees and expenses_Note 2(d)................................. 20,846
Registration fees..................................................... 10,658
Miscellaneous......................................................... 30,358
-----------
2,223,497
Less_reduction in management fee due to
undertakings_Note 2(a)............................................ 51,429
--------------
TOTAL EXPENSES.................................................. 2,172,068
--------------
INVESTMENT INCOME--NET.......................................... 13,051,960
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments--Note 3(a)............................. $ 1,747,587
Net realized gain on financial futures_Note 3(a)........................ 11,431
--------------
NET REALIZED GAIN................................................. 1,759,018
Net unrealized (depreciation) on investments............................ (27,102,766)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (25,343,748)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(12,291,788)
=============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
--------------------------------
1994 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 14,116,597 $ 13,051,960
Net realized gain on investments........................................ 1,865,591 1,759,018
Net unrealized appreciation (depreciation) on investments for the year.. 15,121,644 (27,102,766)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 31,103,832 (12,291,788)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares........................................................ (13,671,122) (12,067,054)
Class B shares........................................................ (445,475) (984,906)
Net realized gain on investments:
Class A shares........................................................ (1,751,692) (1,316,480)
Class B shares........................................................ (106,093) (128,731)
-------------- --------------
TOTAL DIVIDENDS................................................... (15,974,382) (14,497,171)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 26,262,438 12,980,330
Class B shares........................................................ 17,148,970 6,515,990
Dividends reinvested:
Class A shares........................................................ 7,074,547 6,079,502
Class B shares........................................................ 366,127 709,931
Cost of shares redeemed:
Class A shares........................................................ (27,275,575) (47,805,009)
Class B shares........................................................ (1,244,937) (3,113,197)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS................................ 22,331,570 (24,632,453)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 37,461,020 (51,421,412)
NET ASSETS:
Beginning of year....................................................... 224,880,082 262,341,102
-------------- --------------
End of year............................................................. $262,341,102 $210,919,690
============== =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------------------------------------------------------------------
CLASS A CLASS B
-------------------------------- --------------------------------
YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31,
-------------------------------- --------------------------------
1994 1995 1994 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 1,965,588 1,040,833 1,279,001 506,103
Shares issued for dividends reinvested. 526,710 489,182 27,085 57,245
Shares redeemed........................ (2,036,874) (3,847,929) (92,319) (252,804)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING............. 455,424 (2,317,914) 1,213,767 310,544
=============== ============ ============= =============
</TABLE>
See notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Reference is made to Page 4 of the Prospectus dated June 1, 1995.
See notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified, open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager
became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
The Fund offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if
any, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement of
expenses in any full fiscal year that such expenses (exclusive of
distribution expenses and certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 million and
1 1/2% of the excess over $100 million of the average value of the Fund's net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from February 1, 1994 through July 7, 1994, to reduce
the management fee paid by the Fund to the extent that the Fund's aggregate
expenses (excluding certain expenses as described above) exceeded specified
annual percentages of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $51,429 for the
year ended January 31, 1995.
Dreyfus Service Corporation retained $17,596 during the year ended
January 31, 1995 from commissions earned on sales of the Fund's Class A
shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $33,555
during the year ended January 31, 1995 from contingent deferred sales charges
imposed upon redemptions of the Fund's Class B shares.
(B) On August 3, 1994, the Fund's shareholders approved a revised
Distribution Plan with respect to Class B shares only (the "Class B
Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the
Class B Distribution Plan, effective August 24, 1994, the Fund pays the
Distributor for distributing the Fund's Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation at
an annual rate of .50 of 1% of the value of the Fund's Class B shares average
daily net assets, for costs and expenses in connection with advertising,
marketing and distributing the Fund's Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended January 31, 1995, $42,473 was charged to the Fund
pursuant to the Class B Distribution Plan and $52,773 was charged to the Fund
pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1 % of the value of the average daily net assets
of Class A and Class B shares for servicing shareholder
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. From February 1, 1994 through August
23, 1994, $309,651 and $26,386 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
January 31, 1995, $217,565 and $21,237 were charged to Class A and B shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(D) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Earlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market
value of the contract at the close of each day's trading. Accordingly,
variation margin payments are made or received to reflect daily unrealized
gains or losses. When the contracts are closed, the Fund recognizes a
realized gain or loss. These investments require initial margin deposits
which consist of cash or cash equivalents, up to approximately 10% of the
contract amount. The amount of these deposits is determined by the exchange
or Board of Trade on which the contract is traded and is subject to change
At January 31, 1995, there were no financial futures contracts outstanding.
(B) At January 31, 1995 accumulated net unrealized depreciation on
investments was $580,625, consisting of $4,975,986 gross unrealized
appreciation and $5,556,611 gross unrealized depreciation.
At January 31, 1995 the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER CALIFORNIA MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER CALIFORNIA MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Premier California Municipal Bond Fund, including the statement of
investments, as of January 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of January 31, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier California Municipal Bond Fund, at January 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
(logo signature)
New York, New York
March 7, 1995
PREMIER CALIFORNIA MUNICIPAL BOND FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information --
Class A - For the period from November 10, 1986
(commencement of operations) to January 31, 1987 and
for each of the eight years ended January 31, 1995.
Class B - For the period from January 15, 1993
(commencement of initial offering) to January 31, 1993
and for each of the two years ended January 31, 1995.
Included in Part B of the Registration Statement:
Statement of Investments -- January 31, 1995.
Statement of Assets and Liabilities -- January 31,
1995.
Statement of Operations -- year ended January 31, 1995.
Statement of Changes in Net Assets -- for the years
ended January 31, 1994 and 1995.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors,
dated March 7, 1995.
All Schedule Nos. I through VII and other financial statement
information, for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission, are either
omitted because they are not required under the related instructions,
they are inapplicable, or the required information is presented in the
financial statements or notes which are included in Part B of the
Registration Statement.
Item 24. Financial Statements and Exhibits - List (continued)
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust.
(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of Post-Effective Amendment No. 14 to the Registration Statement
on Form N-1A, filed on May 19, 1994.
(5) Management Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Service Agreements.
(6)(c) Forms of Distribution Plan Agreements.
(8)(a) Registrant's Custody Agreement is incorporated by reference to
Exhibit (8)(a) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on May 30, 1990.
(8)(b) Registrant's Sub-Custodial Agreements are incorporated by
reference to Exhibit (8)(b) of Post-Effective Amendment No. 14 to
the Registration Statement on Form N-1A, filed on May 19, 1994.
(9) Shareholder Services Plan.*
(10) Opinion and consent of Registrant's counsel.
(11) Consent of Independent Auditors.
(15) Distribution Plan.*
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 14 to
the Registration Statement on Form N-1A, filed on May 19, 1994.
Other Exhibits: (a) Powers-of-Attorney of Registrant's Trustees and
officers.
(b) The Certificate of Assistant Secretary.
----
*To be filed by Amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders as of March 2, 1995
Beneficial Interest
(par value $.001)
Class A 3,809
Class B 588
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a trustee, officer,
underwriter or affiliated person of the Registrant is indemnified
is incorporated by reference to Item 27 of Part C of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on September 10, 1986.
Reference is also made to the Distribution Agreement filed as
Exhibit (6)(a) hereto.
Item 28. Business and Other Connections of Investment Adviser
Investment Adviser - The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser and manager for sponsored investment companies
registered under the Investment Company Act of 1940 and as an
investment adviser to institutional and individual accounts.
Dreyfus also serves as sub-investment adviser to and/or
administrator of several investment companies. Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, serves
primarily as the registered broker-dealer of shares of investment
companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as sub-investment adviser and/or
administrator. Dreyfus Management, Inc., another wholly-owned
subsidiary, provides investment management services to
various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
DAVID B. TRUMAN Former Director:
(cont'd) Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
World Balanced Fund+++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation
Operating Officer,
and a Director
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Director:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++'
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company+++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization*;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
PAUL H. SNYDER Director:
Vice President-Finance Pennsylvania Economy League
and Chief Financial Philadelphia, Pennsylvania;
Officer Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Dreyfus Service Corporation*
Director and Vice President:
Financial Executives Institute,
Philadelphia Chapter
Philadelphia, Pennsylvania
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
HENRY D. GOTTMANN Executive Vice President:
Vice President-Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals*;
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President- Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-Fund Lion Management, Inc.*;
Legal and Compliance, Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) The Dreyfus/Laurel Investment Series
40) The Dreyfus Leverage Fund, Inc.
41) Dreyfus Life and Annuity Index Fund, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund, Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Intermediate Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
65) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Tax Exempt Cash Management
75) Dreyfus Treasury Cash Management
76) Dreyfus Treasury Prime Cash Management
77) Dreyfus Variable Investment Fund
78) Dreyfus-Wilshire Target Funds, Inc.
79) Dreyfus Worldwide Dollar Money Market Fund, Inc.
80) General California Municipal Bond Fund, Inc.
81) General California Municipal Money Market Fund
82) General Government Securities Money Market Fund, Inc.
83) General Money Market Fund, Inc.
84) General Municipal Bond Fund, Inc.
85) General Municipal Money Market Fund, Inc.
86) General New York Municipal Bond Fund, Inc.
87) General New York Municipal Money Market Fund
88) Pacific American Fund
89) Peoples Index Fund, Inc.
90) Peoples S&P MidCap Index Fund, Inc.
91) Premier Insured Municipal Bond Fund
92) Premier California Municipal Bond Fund
93) Premier GNMA Fund
94) Premier Growth Fund, Inc.
95) Premier Municipal Bond Fund
96) Premier New York Municipal Bond Fund
97) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly Director, President, Chief President and
Operating Officer and Compliance Treasurer
Officer
Joseph F. Tower, III Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Frederick C. Dey Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman Vice President and Associate Vice President
General Counsel and Assistant
Secretary
Leslie M. Gaynor Assistant Treasurer None
Mary Nelson Assistant Treasurer None
John J. Pyburn Assistant Treasurer Assistant
Treasurer
Lynn H. Johnson Vice President None
Jean M. O'Leary Assistant Secretary and None
Assistant Clerk
Ruth D. Leibert Assistant Vice President Assistant
Secretary
Paul D. Furcinito Assistant Vice President Assistant
Secretary
Paul Prescott Assistant Vice President None
John W. Gomez Director None
William J. Nutt Director None
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of common stock and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State
of New York on the 30th day of March, 1995.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
By: /s/ Marie E. Connolly*
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
------------------ ----------------- _______
/s/Marie E. Connolly* President (Principal 3/30/95
Marie E. Connolly Executive Officer and Principal
Financial and Accounting Officer)
/s/Clifford L. Alexander, Jr.* Trustee 3/30/95
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Trustee 3/30/95
Peggy C. Davis
/s/Joseph S. DiMartino* Trustee 3/30/95
Joseph S. DiMartino
/s/Ernest Kafka* Trustee 3/30/95
Ernest Kafka
/s/Saul B. Klaman* Trustee 3/30/95
Saul B. Klaman
/s/Nathan Leventhal* Trustee 3/30/95
Nathan Leventhal
*By:____________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
ITEM PAGE
(1) Registrant's Amended and Restated
Agreement and Declaration of Trust
(5) Management Agreement
(6)(a) Distribution Agreement
(6)(b) Forms of Service Agreements
(6)(c) Form of Distribution Plan Agreements
(10) Opinion and Consent of Registrant's Counsel
(11) Consent of Independent Auditors
Other Exhibits:
(a) Powers of Attorney of the Trustees and Officers
(b) Certificate of Assistant Secretary
TO BE PROVIDED
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Amended and Restated Agreement and Declaration of Trust
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF
TRUST, made this 25th day of June, 1992, hereby amends and
restates in its entirety the Agreement and Declaration of Trust
made at Boston, Massachusetts, dated July 24, 1985, by the
Trustees hereunder (hereinafter with any additional and
successor trustees referred to as the "Trustees") and by the
holders of shares of beneficial interest to be issued hereunder
as hereinafter provided.
W I T N E S S E T H :
WHEREAS, the Trustees have
agreed to manage all property coming into their hands as trustees
of a Massachusetts business trust in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they
will hold all cash, securities and other assets, which they may
from time to time acquire in any manner as Trustees hereunder IN
TRUST to manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders from time
to time of Shares, whether or not certificated, in this Trust as
hereinafter set forth.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as
"Premier California Municipal Bond Fund."
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The term "Commission" shall have the meaning
provided in the 1940 Act;
(b) The "Trust" refers to the Massachusetts business
trust established by this Agreement and Declaration of Trust, as
amended from time to time;
(c) "Shareholder" means a record owner of
Shares of the Trust;
(d) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the Trust
shall be divided from time to time or, if more than one series or
class of Shares is authorized by the Trustees, the equal
proportionate transferable units into which each series or class
of Shares shall be divided from time to time, and includes a
fraction of a Share as well as a whole Share;
(e) The "1940 Act" refers to the Investment Company
Act of 1940, and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The term "Manager" is defined in Article IV, Sec-
tion 5;
(g) The term "Person" shall mean an individual or any
corporation, partnership, joint venture, trust or other
enterprise;
(h) "Declaration of Trust" shall mean this Agreement
and Declaration of Trust as amended or restated from time to
time;
(i) "Bylaws" shall mean the Bylaws of the Trust as
amended from time to time;
(j) The term "series" or "series of Shares" refers to
the one or more separate investment portfolios of the Trust into
which the assets and liabilities of the Trust may be divided and
the Shares of the Trust representing the beneficial interest of
Shareholders in such respective portfolios; and
(k) The term "class" or "class of Shares" refers to
the division of Shares representing any series into two or more
classes as provided in Article III, Section 1 hereof.
ARTICLE II
Purposes of Trust
This Trust is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of
an investment company;
(b) to subscribe for, invest in, reinvest in, purchase
or otherwise acquire, hold, pledge, sell, assign, transfer, lend,
write options on, exchange, distribute or otherwise dispose of
and deal in and with securities of every nature, kind, character,
type and form, including, without limitation of the generality of the
foregoing, all types of stocks, shares, futures contracts, bonds,
debentures, notes, bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest, certificates of
interest, certificates of participation, certificates, interests,
evidences of ownership, guarantees, warrants, options or
evidences of indebtedness issued or created by or guaranteed as to
principal and interest by any state or local government or any agency or
instrumentality thereof, by the United States Government or any
agency, instrumentality, territory, district or possession thereof, by
any foreign government or any agency, instrumentality, territory,
district or possession thereof, by any corporation organized under
the laws of any state, the United States or any territory or
possession thereof or under the laws of any foreign country, bank
certificates of deposit, bank time deposits, bankers' acceptances and
commercial paper; to pay for the same in cash or by the issue of stock,
including treasury stock, bonds or notes of the Trust or otherwise; and
to exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of every kind and
description, including, without limitation, the right to consent and
otherwise act with respect thereto, with power to designate one or more
persons, firms, associations or corporations to exercise any of
said rights, powers and privileges in respect of any said
instruments;
(c) to borrow money or otherwise obtain credit and to
secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the Trust;
(d) to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and
otherwise deal in, Shares including Shares in fractional
denominations, and to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or
other assets of the appropriate series or class of Shares, whether
capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of The Commonwealth of Massachu-
setts;
(e) to conduct its business, promote its purposes,
and carry on its operations in any and all of its branches and
maintain offices both within and without The Commonwealth of
Massachusetts, in any and all States of the United States of
America, in the District of Columbia, and in any other parts of
the world; and
(f) to do all and everything necessary, suitable,
convenient, or proper for the conduct, promotion, and attainment
of any of the businesses and purposes herein specified or which
at any time may be incidental thereto or may appear conducive to or
expedient for the accomplishment of any of such businesses and
purposes and which might be engaged in or carried on by a Trust
organized under the Massachusetts General Laws, and to have and
exercise all of the powers conferred by the laws of The Common-
wealth of Massachusetts upon a Massachusetts business trust.
The foregoing provisions of this Article II shall be
construed both as purposes and powers and each as an independent
purpose and power.
ARTICLE III
Beneficial Interest
Section 1. Shares of Beneficial Interest. The Shares
of the Trust shall be issued in one or more series as the Trustees may,
without Shareholder approval, authorize. Each series shall be preferred
over all other series in respect of the assets allocated to that series
and shall represent a separate investment portfolio of the Trust. The
beneficial interest in each series at all times shall be divided into
Shares, with or without par value as the Trustees may from time to time
determine, each of which shall, except as provided in the following
sentence, represent an equal proportionate interest in the series with
each other Share of the same series, none having priority or preference
over another. The Trustees may, without Shareholder approval, divide
Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights and
privileges (including conversion rights, if any) as the Trustees
may determine. The number of Shares authorized shall be
unlimited, and the Shares so authorized may be represented in part
by fractional shares. From time to time, the Trustees may divide
or combine the Shares of any series or class into a greater or
lesser number without thereby changing the proportionate
beneficial interests in the series or class.
Section 2. Ownership of Shares. The ownership of
Shares will be recorded in the books of the Trust or a transfer
agent. The record books of the Trust or any transfer agent, as
the case may be, shall be conclusive as to who are the holders
of Shares of each series and class and as to the number of Shares
of each series and class held from time to time by each. No
certificates certifying the ownership of Shares need be issued
except as the Trustees may otherwise determine from time to time.
Section 3. Issuance of Shares. The Trustees are
authorized, from time to time, to issue or authorize the
issuance of Shares at not less than the par value thereof, if any,
and to fix the price or the minimum price or the consideration (in cash
and/or such other property, real or personal, tangible or
intangible, as from time to time they may determine) or minimum
consideration for such Shares. Anything herein to the contrary
notwithstanding, the Trustees may issue Shares pro rata to the
Shareholders of a series at any time as a stock dividend, except
to the extent otherwise required or permitted by the preferences
and special or relative rights and privileges of any classes of
Shares of that series, and any stock dividend to the Shareholders
of a particular class of Shares shall be made to such Shareholders
pro rata in proportion to the number of Shares of such
class held by each of them.
All consideration received by the Trust for the issue
or sale of Shares of each series, together with all income, earnings,
profits, and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall belong irrevocably to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
Shares may be issued in fractional denominations to the
same extent as whole Shares, and Shares in fractional
denominations shall be Shares having proportionately to the
respective fractions represented thereby all the rights of whole
Shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to
participate upon liquidation of the Trust or of a particular
series of Shares.
Section 4. No Preemptive Rights. Shareholders shall
have no preemptive or other right to subscribe for any additional
Shares or other securities issued by the Trust.
Section 5. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder by
virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same
nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against
the Trust or the Trustees, but only to the rights of said decedent
under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the
Trustees, nor any officer, employee or agent of the Trust shall
have any power to bind any Shareholder or Trustee personally or to
call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder at any
time personally may agree to pay by way of subscription for any
Shares or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust shall include a
recitation limiting the obligation represented thereby to the
Trust and its assets or the assets of a particular series (but
the omission of such a recitation shall not operate to bind any Share-
holder or Trustee personally).
ARTICLE IV
Trustees
Section 1. Election. A Trustee may be elected either
by the Trustees or the Shareholders. The Trustees named herein
shall serve until the first meeting of the Shareholders or until
the election and qualification of their successors. Prior to the
first meeting of Shareholders the initial Trustees hereunder may
elect additional Trustees to serve until such meeting and until
their successors are elected and qualified. The Trustees also
at any time may elect Trustees to fill vacancies in the number of
Trustees. The number of Trustees shall be fixed from time to
time by the Trustees and, at or after the commencement of the business
of the Trust, shall be not less than three. Each Trustee, whether
named above or hereafter becoming a Trustee, shall serve as a
Trustee during the lifetime of this Trust, until such Trustee
dies, resigns, retires, or is removed, or, if sooner, until the
next meeting of Shareholders called for the purpose of electing
Trustees and the election and qualification of his successor.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect
their own successors and, pursuant to this Section, may appoint
Trustees to fill vacancies.
Section 2. Powers. The Trustees shall have all powers necessary or
desirable to carry out the purposes of the Trust, including, without
limitation, the powers referred to in Article II hereof. Without limiting the
generality of the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the business of the
Trust and may amend and repeal them to the extent that they do not reserve that
right to the Shareholders; they may fill vacancies in their number, including
vacancies resulting from increases in their own number, and may elect and
remove such officers and employ, appoint and terminate such employees or agents
as they consider appropriate; they may appoint from their own number and
terminate any one or more committees; they may employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities, retain a transfer agent and a
Shareholder servicing agent, or both, provide for the distribution of Shares
through a principal underwriter or otherwise, set record dates, and in
general delegate such authority as they consider desirable (including, without
limitation, the authority to purchase and sell securities and to invest funds,
to determine the net income of the Trust for any period, the value of the total
assets of the Trust and the net asset value of each Share, and to execute such
deeds, agreements or other instruments either in the name of the Trust or
the names of the Trustees or as their attorney or attorneys or otherwise as the
Trustees from time to time may deem expedient) to any officer of the Trust,
committee of the Trustees, any such employee, agent, custodian or underwriter
or to any Manager.
Without limiting the generality of the foregoing, the Trustees shall
have full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to
such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(c) To hold any security or property in a form not
indicating any trust whether in bearer, unregistered or other
negotiable form or in the name of the Trust or a custodian,
subcustodian or other depository or a nominee or nominees or
otherwise;
(d) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent
to any contract, lease, mortgage, purchase or sale of property by
such corporation or concern, and to pay calls or subscriptions
with respect to any security held in the Trust;
(e) To join with other security holders in acting
through a committee, depositary, voting trustee or otherwise, and
in that connection to deposit any security with, or transfer any
security to, any such committee, depositary or trustee, and to
delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(f) To compromise, arbitrate, or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including, but not limited to, claims for taxes;
(g) Subject to the provisions of Article III, Section
3, to allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the same
among two or more series, provided that any liabilities or
expenses incurred by a particular series of Shares shall be
payable solely out of the assets of that series; and to the extent
necessary or appropriate to give effect to the preferences and
special or relative rights and privileges of any classes of
Shares, to allocate assets, liabilities, income and expenses of
a series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of that
series;
(h) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(i) To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including, without limitation,
insurance policies insuring the assets of the Trust and payment
of distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers or Managers, principal underwriters, or independent
contractors of the Trust individually against all claims and liabilities of
every nature arising by reason of holding, being or having held any such office
or position, or by reason of any action alleged to have been taken
or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or Manager, principal
underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such
person against such liability; and
(j) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase, savings,
thrift and other retirement, incentive and benefit plans, trusts
and provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and
other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Further, without limiting the generality of the
foregoing, the Trustees shall have full power and authority to
incur and pay out of the principal or income of the Trust such
expenses and liabilities as may be deemed by the Trustees to be
necessary or proper for the purposes of the Trust; provided,
however, that all expenses and liabilities incurred by or
arising in connection with a particular series of Shares, as determined
by the Trustees, shall be payable solely out of the assets of that
series.
Any determination made in good faith and, so far as
accounting matters are involved, in accordance with generally
accepted accounting principles by or pursuant to the authority
granted by the Trustees, as to the amount of the assets, debts,
obligations or liabilities of the Trust or a particular series or
class of Shares; the amount of any reserves or charges set up
and the propriety thereof; the time of or purpose for creating such
reserves or charges; the use, alteration or cancellation of any
reserves or charges (whether or not any debt, obligation or
liability for which such reserves or charges shall have been
created shall have been paid or discharged or shall be then or
thereafter required to be paid or discharged); the price or
closing bid or asked price of any investment owned or held by
the Trust or a particular series; the market value of any investment
or fair value of any other asset of the Trust or a particular
series; the number of Shares outstanding; the estimated expense
to the Trust or a particular series in connection with purchases of
its Shares; the ability to liquidate investments in an orderly
fashion; and the extent to which it is practicable to deliver a
cross-section of the portfolio of the Trust or a particular series
in payment for any such Shares, or as to any other matters
relating to the issue, sale, purchase and/or other acquisition
or disposition of investments or Shares of the Trust or a
particular series, shall be final and conclusive, and shall be binding upon
the Trust or such series and its Shareholders, past, present and
future, and Shares are issued and sold on the condition and
understanding that any and all such determinations shall be
binding as aforesaid.
Section 3. Meetings. At any meeting of the Trustees,
a majority of the Trustees then in office shall constitute a
quorum. Any meeting may be adjourned from time to time by a majority of
the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further
notice.
When a quorum is present at any meeting, a majority of
the Trustees present may take any action, except when a larger
vote is required by this Declaration of Trust, the By-Laws or
the 1940 Act.
Any action required or permitted to be taken at any
meeting of the Trustees or of any committee thereof may be taken
without a meeting, if a written consent to such action is signed
by a majority of the Trustees or members of any such committee
then in office, as the case may be, and such written consent is
filed with the minutes of proceedings of the Trustees or any
such committee.
The Trustees or any committee designated by the Trustees may
participate in a meeting of the Trustees or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
Section 4. Ownership of Assets of the Trust. Title
to all of the assets of each series of Shares of the Trust at all
times shall be considered as vested in the Trustees.
Section 5. Investment Advice and Management Services.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. The Trustees from time to time may enter into a
written contract or contracts with any person or persons (herein called
the "Manager"), including any firm, corporation, trust or association in which
any Trustee or Shareholder may be interested, to act as investment advisers
and/or managers of the Trust and to provide such investment advice and/or
management as the Trustees from time to time may consider necessary for the
proper management of the assets of the Trust, including, without limitation,
authority to determine from time to time what investments shall
be purchased, held, sold or exchanged and what portion, if any, of
the assets of the Trust shall be held uninvested and to make
changes in the Trust's investments. Any such contract shall be
subject to the requirements of the 1940 Act with respect to its
continuance in effect, its termination and the method of
authorization and approval of such contract, or any amendment
thereto or renewal thereof.
Any Trustee or any organization with which any Trustee
may be associated also may act as broker for the Trust in making
purchases and sales of securities for or to the Trust for its
investment portfolio, and may charge and receive from the Trust
the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as
broker for the Trust shall be responsible only for the proper
execution of transactions in accordance with the instructions of
the Trust and shall be subject to no further liability of any
sort whatever.
The Manager, or any affiliate thereof, also may be a
distributor for the sale of Shares by separate contract or may
be a person controlled by or affiliated with any Trustee or any
distributor or a person in which any Trustee or any distributor
is interested financially, subject only to applicable provisions of
law. Nothing herein contained shall operate to prevent any
Manager, who also acts as such a distributor, from also
receiving compensation for services rendered as such distributor.
Section 6. Removal and Resignation of Trustees. The
Trustees or the Shareholders (by vote of 66-2/3% of the
outstanding Shares entitled to vote thereon) may remove at any
time any Trustee with or without cause, and any Trustee may
resign at any time as Trustee, without penalty by written notice to the
Trust; provided that sixty days' advance written notice shall be
given in the event that there are only three or fewer Trustees
at the time a notice of resignation is submitted.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. The Shareholders shall
have power to vote only (i) for the election of Trustees as provided
in Article IV, Section 1, of this Declaration of Trust; provided,
however, that no meeting of Shareholders is required to be
called for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees have been elected by the
Shareholders, (ii) for the removal of Trustees as provided in
Article IV, Section 6, (iii) with respect to any Manager as pro-
vided in Article IV, Section 5, (iv) with respect to any
amendment of this Declaration of Trust as provided in Article IX, Section
9, (v) with respect to a consolidation, merger or certain sales of
assets as provided in Article IX, Section 5, (vi) with respect
to the termination of the Trust or a series of Shares as provided
in Article IX, Section 6, and (vii) with respect to such additional
matters relating to the Trust as may be required by law, by this
Declaration of Trust, or the By-Laws of the Trust or any
registration of the Trust with the Commission or any state, or
as the Trustees may consider desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to
vote (except that in the election of Trustees said vote may be
cast for as many persons as there are Trustees to be elected),
and each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote
shall be voted by individual series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by
individual series and (ii) when the Trustees have determined
that the matter affects only the interests of one or more series or
class, or as otherwise required by applicable law, then only
Shareholders of such series or class shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them, unless at or
prior to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, this Declaration of
Trust or any By-Laws of the Trust to be taken by Shareholders.
Section 2. Meetings. Meetings of the Shareholders
may be called by the Trustees or such other person or persons as may
be specified in the By-Laws and shall be called by the Trustees
upon the written request of Shareholders owning at least 30% of
the outstanding Shares entitled to vote. Shareholders shall be
entitled to at least ten days' prior notice of any meeting.
Section 3. Quorum and Required Vote. Thirty percent
(30%) of the outstanding Shares shall be a quorum for the
transaction of business at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall vote as a
series or class, then thirty percent (30%) of the aggregate
number of Shares of that series or class entitled to vote shall be
necessary to constitute a quorum for the transaction of business
by that series or class. Any lesser number, however, shall be
sufficient for adjournment and any adjourned session or sessions
may be held within 90 days after the date set for the original
meeting without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of
Trust or the By-Laws of the Trust and subject to any applicable
requirements of law, a majority of the Shares voted shall decide
any question and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall vote
as a series or class, then a majority of the Shares of that series
or class voted on the matter (or a plurality with respect to the
election of a Trustee) shall decide that matter insofar as that
series or class is concerned.
Section 4. Action by Written Consent. Any action
required or permitted to be taken at any meeting may be taken
without a meeting if a consent in writing, setting forth such
action, is signed by a majority of Shareholders entitled to vote
on the subject matter thereof (or such larger proportion thereof
as shall be required by any express provision of this
Declaration of Trust) and such consent is filed with the records of the
Trust.
Section 5. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters.
ARTICLE VI
Distributions and Redemptions
Section 1. Distributions. The Trustees shall
distribute periodically to the Shareholders of each series of
Shares an amount approximately equal to the net income of that
series, determined by the Trustees or as they may authorize and
as herein provided. Distributions of income may be made in one or
more payments, which shall be in Shares, cash or otherwise, and
on a date or dates and as of a record date or dates determined by
the Trustees. At any time and from time to time in their
discretion, the Trustees also may cause to be distributed to the
Shareholders of any one or more series as of a record date or dates
determined by the Trustees, in Shares, cash or otherwise, all or part of
any gains realized on the sale or disposition of the assets of the
series or all or part of any other principal of the Trust
attributable to the series. Each distribution pursuant to this
Section 1 shall be made ratably according to the number of
Shares of the series held by the several Shareholders on the record
date for such distribution, except to the extent otherwise required
or permitted by the preferences and special or relative rights and
privileges of any classes of Shares of that series, and any
distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them. No
distribution need be made on Shares purchased pursuant to orders
received, or for which payment is made, after such time or times
as the Trustees may determine.
Section 2. Determination of Net Income. In
determining the net income of each series or class of Shares for any period,
there shall be deducted from income for that period (a) such
portion of all charges, taxes, expenses and liabilities due or
accrued as the Trustees shall consider properly chargeable and
fairly applicable to income for that period or any earlier
period and (b) whatever reasonable reserves the Trustees shall consider
advisable for possible future charges, taxes, expenses and
liabilities which the Trustees shall consider properly
chargeable and fairly applicable to income for that period or any earlier
period. The net income of each series or class for any period
may be adjusted for amounts included on account of net income in the
net asset value of Shares issued or redeemed or repurchased
during that period. In determining the net income of a series or class
for a period ending on a date other than the end of its fiscal
year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated
as income, and losses shall not be charged against income unless
appropriate under applicable accounting principles, except in
the exercise of the discretionary powers of the Trustees. Any
amount contributed to the Trust which is received as income pursuant to
a decree of any court of competent jurisdiction shall be applied
as required by the said decree.
Section 3. Redemptions. Any Shareholder shall be
entitled to require the Trust to redeem and the Trust shall be
obligated to redeem at the option of such Shareholder all or any
part of the Shares owned by said Shareholder, at the redemption
price, pursuant to the method, upon the terms and subject to the
conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be
presented for redemption in proper form for transfer to the
Trust or the agent of the Trust appointed for such purpose, and these
shall be presented with a written request that the Trust redeem
all or any part of the Shares represented thereby.
(b) The redemption price per Share shall be the net
asset value per Share when next determined by the Trust at such
time or times as the Trustees shall designate, following the
time of presentation of certificates for Shares, if issued, and an
appropriate request for redemption, or such other time as the
Trustees may designate in accordance with any provision of the
1940 Act, or any rule or regulation made or adopted by any
securities association registered under the Securities Exchange
Act of 1934, as determined by the Trustees, less any applicable
charge or fee imposed from time to time as determined by the
Trustees.
(c) Net asset value of each series or class of Shares
(for the purpose of issuance of Shares as well as redemptions
thereof) shall be determined by dividing:
(i) the total value of the assets of such series
or class determined as provided in paragraph (d) below
less, to the extent determined by or pursuant to the
direction of the Trustees in accordance with generally
accepted accounting principles, all debts, obligations
and liabilities of such series or class (which debts,
obligations and liabilities shall include, without
limitation of the generality of the foregoing, any and
all debts, obligations, liabilities, or claims, of any
and every kind and nature, fixed, accrued and
otherwise, including the estimated accrued expenses of
management and supervision, administration and distribution
and any reserves or charges for any or all of the foregoing,
whether for taxes, expenses, or otherwise, and the
price of Shares redeemed but not paid for) but excluding the
Trust's liability upon its Shares and its surplus, by
(ii) the total number of Shares of such series or
class outstanding.
The Trustees are empowered, in their absolute
discretion, to establish other methods for determining such net
asset value whenever such other methods are deemed by them to be
necessary to enable the Trust to comply with applicable law, or
are deemed by them to be desirable, provided they are not
inconsistent with any provision of the 1940 Act.
(d) In determining for the purposes of this
Declaration of Trust the total value of the assets of each
series or class of Shares at any time, investments and any
other assets of such series or class shall be valued in such
manner as may be determined from time to time by or pursuant to
the order of the Trustees.
(e) Payment of the redemption price by the Trust may
be made either in cash or in securities or other assets at the time
owned by the Trust or partly in cash and partly in securities or
other assets at the time owned by the Trust. The value of any
part of such payment to be made in securities or other assets of
the Trust shall be the value employed in determining the
redemption price. Payment of the redemption price shall be made
on or before the seventh day following the day on which the
Shares are properly presented for redemption hereunder, except that
delivery of any securities included in any such payment shall be
made as promptly as any necessary transfers on the books of the
issuers whose securities are to be delivered may be made and,
except as postponement of the date of payment may be permissible
under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may
deduct from the payment made for any Shares redeemed a liquidating charge not
in excess of one percent (1%) of the redemption price of the Shares so
redeemed, and the Trustees may alter or suspend any such liquidating charge
from time to time.
(f) The right of any holder of Shares redeemed by the
Trust as provided in this Article VI to receive dividends or
distributions thereon and all other rights of such Shareholder
with respect to such Shares shall terminate at the time as of
which the redemption price of such Shares is determined, except
the right of such Shareholder to receive (i) the redemption
price of such Shares from the Trust in accordance with the provisions
hereof, and (ii) any dividend or distribution to which such
Shareholder previously had become entitled as the record holder of
such Shares on the record date for such dividend or distribution.
(g) Redemption of Shares by the Trust is conditional
upon the Trust having funds or other assets legally available
therefor.
(h) The Trust, either directly or through an agent,
may repurchase its Shares, out of funds legally available therefor,
upon such terms and conditions and for such consideration as the
Trustees shall deem advisable, by agreement with the owner at a
price not exceeding the net asset value per Share as determined
by or pursuant to the order of the Trustees at such time or times
as the Trustees shall designate, less a charge not to exceed one
percent (1%) of such net asset value, if and as fixed by
resolution of the Trustees from time to time, and to take all
other steps deemed necessary or advisable in connection
therewith.
(i) Shares purchased or redeemed by the Trust shall
be cancelled or held by the Trust for reissue, as the Trustees from
time to time may determine.
(j) The obligations set forth in this Article VI may
be suspended or postponed, (1) for any period (i) during which the
New York Stock Exchange is closed other than for customary
weekend and holiday closings, or (ii) during which trading on the New
York Stock Exchange is restricted, (2) for any period during which an
emergency exists as a result of which (i) the disposal by the
Trust of investments owned by it is not reasonably practicable,
or (ii) it is not reasonably practicable for the Trust fairly to
determine the value of its net assets, or (3) for such other
periods as the Commission or any successor governmental
authority by order may permit.
Notwithstanding any other provision of this Section 3
of Article VI, if certificates representing such Shares have been
issued, the redemption or repurchase price need not be paid by
the Trust until such certificates are presented in proper form for
transfer to the Trust or the agent of the Trust appointed for
such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made.
Section 4. Redemptions at the Option of the Trust.
The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof as
determined in accordance with Section 3 of Article VI of this
Declaration of Trust: (i) if at such time such Shareholder owns
fewer Shares than, or Shares having an aggregate net asset value
of less than, an amount determined from time to time by the
Trustees; or (ii) to the extent that such Shareholder owns
Shares of a particular series or class of Shares equal to or in excess
of a percentage of the outstanding Shares of that series or class
determined from time to time by the Trustees; or (iii) to the
extent that such Shareholder owns Shares of the Trust
representing a percentage equal to or in excess of such percentage of the
aggregate number of outstanding Shares of the Trust or the
aggregate net asset value of the Trust determined from time to
time by the Trustees.
Section 5. Dividends, Distributions, Redemptions and
Repurchases. No dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust
or of any series) with respect to, nor any redemption or repurchase
of, the Shares of any series shall be effected by the Trust
other than from the assets of such series.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
Section 1. Compensation. The Trustees shall be
entitled to reasonable compensation from the Trust and may fix
the amount of their compensation.
Section 2. Limitation of Liability. The Trustees
shall not be responsible or liable in any event for any neglect or
wrongdoing of any officer, agent, employee or Manager of the
Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, but nothing herein contained
shall protect any Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
Every note, bond, contract, instrument, certificate,
share, or undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust or the Trustees or
any of them in connection with the Trust, shall be deemed
conclusively to have been executed or done only in their or his
capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Section 1. Indemnification of Trustees, Officers,
Employees and Agents. Each person who is or was a Trustee,
officer, employee or agent of the Trust shall be entitled to
indemnification out of the assets of the Trust to the extent
provided in, and subject to the provisions of, the By-Laws,
provided that no indemnification shall be granted by the Trust
in contravention of the 1940 Act.
Section 2. Merged Corporations. For the purposes of
this Article VIII references to "the Trust" include any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or
agents as well as the resulting or surviving entity; so that any
person who is or was a director, officer, employee or agent of
such a constituent corporation or is or was serving at the
request of such a constituent corporation as a trustee, director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same
position under the provisions of this Article VIII with respect
to the resulting or surviving entity as he would have with respect
to such a constituent corporation if its separate existence had
continued.
Section 3. Shareholders. In case any Shareholder or
former Shareholder shall be held to be personally liable solely
by reason of his being or having been a Shareholder and not because
of his acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his heirs, executors, administrators
or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be
entitled out of the assets of the particular series of Shares of
which he is or was a Shareholder to be held harmless from and
indemnified against all losses and expenses arising from such
liability. Upon request, the Trust shall cause its counsel to
assume the defense of any claim which, if successful, would
result in an obligation of the Trust to indemnify the Shareholder as
aforesaid.
ARTICLE IX
Status of the Trust and Other General Provisions
Section 1. Trust Not a Partnership. It is hereby
expressly declared that a trust and not a partnership is created
hereby. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind
personally either the Trust's Trustees or officers or any Share-
holders. All persons extending credit to, contracting with or
having any claim against the Trust or a particular series of
Shares shall look only to the assets of the Trust or the assets
of that particular series for payment under such credit, contract
or claim; and neither the Shareholders nor the Trustees, nor any of
the Trust's officers, employees or agents, whether past, present
or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any
liability to which such Trustee otherwise would be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
Section 2. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety. The exercise by the Trustees of their powers
and discretion hereunder under the circumstances then
prevailing, shall be binding upon everyone interested. A Trustee shall be
liable for his or her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law.
The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of
Trust, and subject to the provisions of Section 1 of this Article IX
shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.
Section 3. Liability of Third Persons Dealing with
Trustees. No person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees pursuant hereto or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Section 4. Trustees, Shareholders, etc. Not
Personally Liable; Notice. All persons extending credit to, contracting
with or having any claim against the Trust or a particular
series of Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares for payment under such
credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor.
Section 5. Consolidation, Merger, Sale of Assets.
The Trust may, in accordance with the provisions of this Section:
(1) Consolidate with one or more corporations or
trusts to form a new consolidated corporation or trust; or
(2) Merge into a corporation or trust, or have merged
into it one or more corporations or trusts; or
(3) Sell, lease, exchange or transfer all, or
substantially all, its property and assets, including its good
will and franchises.
Any such consolidation, merger, sale, lease, exchange
or other transfer of all or substantially all of the property and
assets of the Trust may be made only upon substantially the
terms and conditions set forth in a proposed form of articles of
consolidation, articles of merger or articles of sale, lease,
exchange or transfer, as the case may be, which are approved by
votes of the Trustees and Shareholders holding a majority of the
Shares entitled to vote thereon, provided that in the case of a
merger in which the Trust is the surviving entity which effects
no reclassification or change of any outstanding shares of the
Trust or other amendment of this Declaration of Trust, no vote of the
Shareholders shall be necessary (and in lieu thereof, the
proposed articles of merger shall be approved by a majority of the
Trustees) if the number of Shares, if any, of the Trust to be
issued or delivered in the merger does not exceed fifteen
percent of the number of Shares outstanding (before giving effect to the
merger) on the effective date of the merger. Any articles of
consolidation, merger, sale, lease, exchange or transfer shall
constitute a supplemental Declaration of Trust, copies of which
shall be filed as specified in Section 7 of this Article IX.
Section 6. Termination of Trust. Unless terminated
as provided herein, the Trust shall continue without limitation of
time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares of each
series entitled to vote or by the Trustees by written notice to
the Shareholders. Any series of Shares may be terminated at any
time by vote of Shareholders holding at least a majority of the
Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more
series of Shares, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued
or anticipated as may be determined by the Trustees, the Trust
shall reduce, in accordance with such procedures as the Trustees
consider appropriate, the remaining assets to distributable form
in cash or shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series
involved, ratably according to the number of Shares of such
series held by the several Shareholders of such series on the date of
termination, except to the extent otherwise required or
permitted by the preferences and special or relative rights and privileges
of any classes of Shares of that series, provided that any
distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them.
Section 7. Filing of Copies, References, Headings.
The original or a copy of this instrument and of each amendment
hereto and of each Declaration of Trust supplemental hereto shall be
kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each such amendment
and supplemental Declaration of Trust shall be filed by the Trust
with the Secretary of State of The Commonwealth of Massachusetts and
the Boston City Clerk, as well as any other governmental office
where such filing may from time to time be required. Anyone
dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments or
supplemental Declarations of Trust have been made and as to matters in
connection with the Trust hereunder; and, with the same effect
as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendment or supplemental Declaration of Trust. In this
instrument or in any such amendment or supplemental Declaration
of Trust, references to this instrument, and all expressions like
"herein," "hereof," and "hereunder," shall be deemed to refer to
this instrument as amended or affected by any such amendment or
supplemental Declaration of Trust. Headings are placed herein
for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall
control. This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
Section 8. Applicable Law. The Trust set forth in
this instrument is made in The Commonwealth of Massachusetts, and it
is created under and is to be governed by and construed and
administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by
such a trust.
Section 9. Amendments. This Declaration of Trust may
be amended at any time by an instrument in writing signed by a
majority of the then Trustees when authorized so to do by a vote
of Shareholders holding a majority of the Shares of each series
or class entitled to vote, except that an amendment which shall
affect the holders of one or more series or class of Shares but
not the holders of all outstanding series or class shall be
authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of each series or class affected and no
vote of Shareholders of a series or class not affected shall be
required. Amendments having the purpose of changing the name of
the Trust or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent
provision contained herein shall not require authorization by
Shareholder vote.
IN WITNESS WHEREOF, the undersigned Trustees have
hereunto set their hand and seal for themselves and their
assigns as of the day and year first above written.
/s/Clifford L. Alexander, Jr.
Clifford L. Alexander, Jr.
/s/Peggy C. Davis
Peggy C. Davis
/s/Ernest Kafka
Ernest Kafka
/s/Saul B. Klaman
Saul B. Klaman
/s/Nathan Leventhal
Nathan Leventhal
/s/Richard J. Moynihan
Richard J. Moynihan
MANAGEMENT AGREEMENT
PREMIER CALIFORNIA MUNICIPAL BOND FUND
August 24, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter documents
and in its Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be
submitted to you, and in such manner and to such extent as from
time to time may be approved by the Fund's Board. The Fund
desires to employ you to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or persons
may be officers or employees who are employed by both you and the
Fund. The compensation of such person or persons shall be paid
by you and no obligation may be incurred on the Fund's behalf in
any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of the Fund's
portfolio in accordance with the Fund's investment objectives
and policies as stated in its Prospectus and Statement of Additional
Information as from time to time in effect. In connection
therewith, you will obtain and provide investment research and
will supervise the Fund's investments and conduct a continuous
program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. You will furnish to the Fund
such statistical information, with respect to the investments
which the Fund may hold or contemplate purchasing, as the Fund
may reasonably request. The Fund wishes to be informed of
important developments materially affecting its portfolio and
shall expect you, on your own initiative, to furnish to the Fund
from time to time such information as you may believe appropriate
for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to the Fund's
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of the Fund's shares;
and generally assist in all aspects of the Fund's operations.
You shall have the right, at your expense, to engage other
entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you shall not
be liable hereunder for any error of judgment or mistake of law
or for any loss suffered by the Fund, provided that nothing
herein shall be deemed to protect or purport to protect you
against any liability to the Fund or to its security holders to
which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the annual rate of .55 of 1% of the value of
the Fund's average daily net assets. Net asset value shall be
computed on such days and at such time or times as described in
the Fund's then-current Prospectus and Statement of Additional
Information. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be pro-
rated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you,
the value of the Fund's net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of the Fund's net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes, interest,
loan commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board
members who are not your officers, directors or employees or holders
of 5% or more of your outstanding voting securities, Securities and
Exchange Commission fees and state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and
any extraordinary expenses.
If in any fiscal year the aggregate expenses of the
Fund (including fees pursuant to this Agreement, but excluding
interest, taxes, brokerage and, with the prior written
consent of the necessary state securities commissions, extraordinary
expenses) exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense to the
extent required by state law. Your obligation pursuant hereto
will be limited to the amount of your fees hereunder. Such
deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a
monthly basis.
The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so acting,
provided that when the purchase or sale of securities
of the same issuer is suitable for the investment objectives of two or
more companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a
manner believed by you to be equitable to each company or
account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by the Fund or the
size of the position obtainable for or disposed of by the Fund.
In addition, it is understood that the
persons employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except for a
loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or
from reckless disregard by you of your obligations and duties under
this Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting
solely for the Fund and not as your officer, director, partner,
employee or agent or one under your control or direction even
though paid by you.
This Agreement shall continue until September 5, 1994,
and thereafter shall continue automatically for successive
annual periods ending on September 5th of each year, provided such
continuance is specifically approved at least annually by (i) the
Fund's Board or (ii) vote of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting
securities, provided that in either event its continuance also
is approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in said Act) of any party to
this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of the Fund's shares
or, upon not less than 90 days' notice, by you. This Agreement
also will terminate automatically in the event of its assignment
(as defined in said Act).
This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
PREMIER CALIFORNIA MUNICIPAL
BOND FUND
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
DISTRIBUTION AGREEMENT
PREMIER CALIFORNIA MUNICIPAL BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
August 24, 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agree-
ments hereinafter contained, the above-named investment company
(the "Fund") has agreed that you shall be, for the period of
this agreement, the distributor of (a) shares of each Series of
the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes
of this agreement the term "Shares" shall mean the authorized
shares of the relevant Series, if any, and otherwise shall mean
the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities Act
of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the
Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you will
enter into sales or servicing agreements with securities
dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished
by the Fund hereunder, and all expenses in connection with the
preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided however, that nothing
contained herein shall be deemed to require the Fund to pay any
of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents
and to furnish any and all information and otherwise to take all
actions which may be reasonably necessary in the discretion of
the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement, all
other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for
use in connection with the sale of Shares, such information with
respect to the Fund or any relevant Series and the Shares as you
may reasonably request, all of which shall be signed by one or
more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information,
when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual audited reports of the Fund's
books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully prepared
in conformity with the requirements of said Acts and rules and
regulations of the Securities and Exchange Commission there-
under. As used in this agreement the terms "registration state-
ment" and "prospectus" shall mean any registration statement and
prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective
will include an 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 not misleading. The Fund may but
shall not be obligated to propose from time to time such amend-
ment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of
future developments, may, in the opinion of the Fund's counsel,
be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this agreement
or decline to make offers of the Fund's securities until such
amendments are made. The Fund shall not file any amendment to
any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in
the form furnished to you from time to time, in connection with
the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person
who controls you within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which you, your officers and directors, or any such con-
trolling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in either any registration statement or any prospectus or
necessary to make the statements in either thereof not
misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund,
its several officers and Board members, and any person who con-
trols the Fund within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting
from such claims or demands, shall arise out of or be based upon
any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration
statement or in the corresponding statements made in the pro-
spectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the
Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within ten days after the summons or
other first legal process shall have been served. You shall
have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or
omission on your part, and in any other event the Fund, its
officers or Board members, or such controlling person shall each
have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which
you may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and to
the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no orders
for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any necessary amend-
ments thereto shall be suspended under any of the provisions of
the Securities Act of 1933, as amended, or if and so long as a
current prospectus as required by Section 10 of said Act, as
amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing contained in this
paragraph 1.11 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase any
Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement
or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or pro-
spectus then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectus then in effect or
which requires the making of a change in such registra-
tion statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to
any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you
shall be offered for sale at a price per share (the "offering
price") approximately equal to (a) their net asset value
(determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you
shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
PREMIER CALIFORNIA MUNICIPAL
BOND FUND
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
EXHIBIT A
Reapproval Date Reapproval Day
September 5, 1995 September 5th
BANK AFFILIATED BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We are a broker-dealer registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). We desire to make available to our customers shares of
beneficial interest or common stock of open-end registered investment
companies managed, advised or administered by The Dreyfus Corporation
or its subsidiaries or affiliates (hereinafter referred to individually as a
"Fund" and collectively as the "Funds"). You are the principal underwriter
(as such term is defined in the Investment Company Act of 1940, as
amended) of the offering of shares of the Funds and the exclusive agent
for the continuous distribution of such shares pursuant to the terms of a
Distribution Agreement between you and each Fund. Unless the context
otherwise requires, as used herein the term "Prospectus" shall mean the
prospectus and related statement of additional information (the
"Statement of Additional Information") incorporated therein by reference
(as amended or supplemented) of each of the respective Funds included in
the then currently effective registration statement (or post-effective
amendment thereto) of each such Fund, as filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended
(the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. With respect to any and all transactions in the shares of any Fund
pursuant to this Agreement, it is understood and agreed in each case that:
(a) we shall be acting solely as agent for the account of our customer; (b)
each transaction shall be initiated solely upon the order of our customer;
(c) you shall execute transactions only upon receiving instructions from
us acting as agent for our customer; (d) as between us and our customer,
our customer will have full beneficial ownership of all Fund shares; and
(e) each transaction shall be for the account of our customer and not for
our account. We represent and warrant to you that we will have full right,
power and authority to effect transactions (including, without limitation,
any purchases, exchanges and redemptions) in Fund shares on behalf of all
customer accounts provided by us to you or to any transfer agent as such
term is defined in the Prospectus of each Fund (the "Transfer Agent").
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i.e., the net asset value
per share plus the applicable sales charge, if any) and all orders for the
redemption of any Fund shares shall be executed at the net asset value per
share less the applicable deferred sales charge, redemption fee or similar
charge or fee, if any, in each case as described in the Prospectus of such
Fund. The minimum initial purchase order and minimum subsequent
purchase order shall be as set forth in the Prospectus of such Fund. All
orders are subject to acceptance or rejection by you at your sole
discretion. Unless otherwise mutually agreed in writing, each transaction
shall be promptly confirmed in writing directly to the customer on a fully
disclosed basis and a copy of each confirmation shall be sent
simultaneously to us. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw entirely the sale of
shares of any or all of the Funds.
3. In ordering shares of any Fund, we shall rely solely and conclusively
on the representations contained in the Prospectus of such Fund. We agree
that we shall not make shares of any Fund available to our customers
except in compliance with all applicable federal and state laws, and the
rules, regulations, requirements and conditions of all applicable
regulatory and self-regulatory agencies or authorities. We agree that we
shall not purchase any Fund shares, as agent for any customer, unless we
deliver or cause to be delivered to such customer, at or prior to the time
of such purchase, a copy of the Prospectus of such Fund, or unless such
customer has acknowledged receipt of the Prospectus of such Fund. We
further agree to obtain from each customer for whom we act as agent for
the purchase of Fund shares any taxpayer identification number
certification and such other information as may be required from time to
time under the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations promulgated thereunder, and to provide you or your
designee with timely written notice of any failure to obtain such taxpayer
identification number certification or other information in order to enable
the implementation of any required withholding. We will be responsible
for the proper instruction and training of all sales personnel employed by
us. Unless otherwise mutually agreed in writing, you shall deliver or
cause to be delivered to each of the customers who purchases shares of
any of the Funds through us pursuant to this Agreement copies of all
annual and interim reports, proxy solicitation materials and any other
information and materials relating to such Funds and prepared by or on
behalf of you, the Fund or its investment adviser, custodian, Transfer
Agent or dividend disbursing agent for distribution to each such customer.
You agree to supply us with copies of the Prospectus, Statement of
Additional Information, annual reports, interim reports, proxy solicitation
materials and any such other information and materials relating to each
Fund in reasonable quantities upon request.
4. We shall not make any representations concerning any Fund shares
other than those contained in the Prospectus of such Fund or in any
promotional materials or sales literature furnished to us by you or the
Fund. We shall not furnish or cause to be furnished to any person or display
or publish any information or materials relating to any Fund (including,
without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters,
signs or other similar materials), except such information and materials
as may be furnished to us by you or the Fund, and such other information
and materials as may be approved in writing by you. In making Fund shares
available to our customers hereunder, or in providing investment advice
regarding such shares to our customers, we shall at all times act in
compliance with the Interagency Statement on Retail Sales of Nondeposit
Investment Products issued by The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of Thrift Supervision
(February 15, 1994) or any successor interagency requirements as in force
at the time such services are provided.
5. In determining the amount of any reallowance payable to us
hereunder, you reserve the right to exclude any sales which you reasonably
determine are not made in accordance with the terms of the applicable
Fund Prospectuses or the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge,
customers may be entitled to a reduction in the sales charge on purchases
made under a letter of intent ("Letter of Intent") in accordance with the
Fund Prospectus. In such a case, our reallowance will be paid based upon
the reduced sales charge, but an adjustment to the reallowance will be
made in accordance with the Prospectus of the applicable Fund to reflect
actual purchases of the customer if such customer's Letter of Intent is
not fulfilled. The sales charge and/or reallowance may be changed at any
time in your sole discretion upon written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of
each Fund sold with a sales charge, a reduced sales charge may be
applicable with respect to customer accounts through a right of
accumulation under which customers are permitted to purchase shares of
a Fund at the then current public offering price per share applicable to the
total of (i) the dollar amount of shares then being purchased plus (ii) an
amount equal to the then current net asset value or public offering price
originally paid per share, whichever is higher, of the customer's combined
holdings of the shares of such Fund and of any other open-end registered
investment company as may be permitted by the applicable Fund
Prospectus. In such case, we agree to furnish to you or the Transfer Agent
sufficient information to permit your confirmation of qualification for a
reduced sales charge, and acceptance of the purchase order is subject to
such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to
advise you promptly at your request as to amounts of any and all
purchases of Fund shares made by us, as agent for our customers,
qualifying for a reduced sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the
liquidation of shares of one open-end registered investment company
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates in the shares of another open-end registered
investment company managed, advised or administered by The Dreyfus
Corporation or its subsidiaries or affiliates) shall, where available, be
made subject to and in accordance with the terms of each relevant Fund's
Prospectus.
(e) Unless at the time of transmitting an order we advise you or the
Transfer Agent to the contrary, the shares ordered will be deemed to be
the total holdings of the specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus
and Service Plan, Shareholder Services Plan, Distribution Plan or other
similar plan, if any, we understand that you may pay to certain financial
institutions, securities dealers and other industry professionals with
which you have entered into an agreement in substantially the form
annexed hereto as Appendix A, B or C (or such other form as may be
approved from time to time by the board of directors, or trustees or
managing general partners of the Fund) such fees as may be determined by
you in accordance with such agreement for shareholder, administrative or
distribution-related services as described therein.
8. The procedures relating to all orders and the handling thereof will
be subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be
accepted. We agree to place orders with you immediately for the same
number of shares and at the same price as any orders we receive from our
customers. We shall not withhold placing orders received from customers
so as to profit ourselves as a result of such withholding by a change in the
net asset value from that used in determining the offering price to such
customers, or otherwise; provided, however, that the foregoing shall not
prevent the purchase of shares of any Fund by us for our own bona fide
investment. We agree that: (a) we shall not effect any transactions
(including, without limitation, any purchases, exchanges and redemptions)
in any Fund shares registered in the name of, or beneficially owned by, any
customer unless such customer has granted us full right, power and
authority to effect such transactions on such customer's behalf, and (b)
you, each Fund, the Transfer Agent and your and their respective officers,
directors, trustees, managing general partners, agents, employees and
affiliates shall not be liable for, and shall be fully indemnified and held
harmless by us from and against, any and all claims, demands, liabilities
and expenses (including, without limitation, reasonable attorneys' fees)
which may be incurred by you or any of the foregoing persons entitled to
indemnification from us hereunder arising out of or in connection with the
execution of any transactions in Fund shares registered in the name of, or
beneficially owned by, any customer in reliance upon any oral or written
instructions reasonably believed to be genuine and to have been given by or
on behalf of us.
9. (a) We agree to remit on behalf of our customers the purchase price
for purchase orders of any Fund shares placed by us in accordance with the
terms of the Prospectus of the applicable Fund. On or before the
settlement date of each purchase order for shares of any Fund, we shall
either (i) remit to an account designated by you with the Transfer Agent
an amount equal to the then current public offering price of the shares of
such Fund being purchased less our reallowance, if any, with respect to
such purchase order as determined by you in accordance with the terms of
the applicable Fund Prospectus, or (ii) remit to an account designated by
you with the Transfer Agent an amount equal to the then current public
offering price of the shares of such Fund being purchased without
deduction for our reallowance, if any, with respect to such purchase order
as determined by you in accordance with the terms of the applicable Fund
Prospectus, in which case our reallowance, if any, shall be payable to us
by you on at least a monthly basis. If payment for any purchase order is
not received in accordance with the terms of the applicable Fund
Prospectus, you reserve the right, without notice, to cancel the sale and
to hold us responsible for any loss sustained as a result thereof.
(b) If any shares sold to us as agent for our customers under the
terms of this Agreement are sold with a sales charge and are redeemed
for the account of the Fund or are tendered for redemption within seven
(7) business days after the date of purchase: (i) we shall forthwith refund
to you the full reallowance received by us on the sale; and (ii) you shall
forthwith pay to the Fund your portion of the sales charge on the sale
which had been retained by you and shall also pay to the Fund the amount
refunded by us.
10. Certificates for shares sold to us as agent for our customers
hereunder shall only be issued in accordance with the terms of each Fund's
Prospectus upon our customers' specific request and, upon such request,
shall be promptly delivered to our customers by the Transfer Agent unless
other arrangements are made by us. However, in making delivery of such
share certificates to our customers, the Transfer Agent shall have
adequate time to clear any checks drawn for the payment of Fund shares.
11. Each party hereby represents and warrants to the other party that:
(a) it is a corporation, partnership or other entity duly organized and
validly existing in good standing under the laws of the jurisdiction in
which it was organized; (b) it is duly registered as a broker-dealer with
the Securities and Exchange Commission and, to the extent required, with
applicable state agencies or authorities having jurisdiction over
securities matters, and it is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); (c) it will comply with all applicable
federal and state laws, and the rules, regulations, requirements and
conditions of all applicable regulatory and self-regulatory agencies or
authorities in the performance of its duties and responsibilities
hereunder; (d) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly
authorized by all necessary action, and all other authorizations and
approvals (if any) required for its lawful execution and delivery of this
Agreement and its performance hereunder have been obtained; and (e) upon
execution and delivery by it, and assuming due and valid execution and
delivery by the other party, this Agreement will constitute a valid and
binding agreement, enforceable in accordance with its terms. Each party
agrees to provide the other party with such information and access to
appropriate records as may be reasonably required to verify its
compliance with the provisions of this Agreement.
12. You agree to inform us, upon our request, as to the states in which
you believe the shares of the Funds have been qualified for sale under, or
are exempt from the requirements of, the respective securities laws of
such states, but you shall have no obligation or responsibility as to our
right to make shares of any Funds available to our customers in any
jurisdiction. We agree to notify you immediately in the event of (a) our
expulsion or suspension from the NASD, or (b) our violation of any
applicable federal or state law, rule, regulation, requirement or condition
arising out of or in connection with this Agreement, or which may
otherwise affect in any material way our ability to act in accordance with
the terms of this Agreement. Our expulsion from the NASD will
automatically terminate this Agreement immediately without notice. Our
suspension from the NASD for violation of any applicable federal or state
law, rule, regulation, requirement or condition will terminate this
Agreement effective immediately upon your written notice of termination
to us.
13. (a) You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of
Section 15 of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
we, our officers and directors, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by you herein, or (ii) any
failure by you to perform your obligations as set forth herein, or (iii) any
untrue statement, or alleged untrue statement, of a material fact
contained in any Registration Statement or any Prospectus, or arising out
of or based upon any omission, or alleged omission, to state a material
fact required to be stated in either any Registration Statement or any
Prospectus, or necessary to make the statements in any thereof not
misleading; provided, however, that your agreement to indemnify us, our
officers and directors, and any such controlling person shall not be
deemed to cover any claims, demands, liabilities or expenses arising out
of any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to you
or the Fund by us specifically for use in the preparation thereof. Your
agreement to indemnify us, our officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against our officers or directors, or any
such controlling person, such notification to be given by letter or by
telecopier, telex, telegram or similar means of same day delivery received
by you at your address as specified in Paragraph 18 of this Agreement
within seven (7) days after the summons or other first legal process shall
have been served. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the person against
whom such action is brought by reason of any such breach, failure or
untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of your indemnity agreement contained in this
Paragraph 13(a). You will be entitled to assume the defense of any suit
brought to enforce any such claim, demand, liability or expense. In the
event that you elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case you
do not elect to assume the defense of any such suit, you will reimburse us,
our officers and directors, and any controlling persons named as
defendants in such suit, for the fees and expenses of any counsel retained
by us and/or them. Your indemnification agreement contained in this
Paragraph 13(a) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any person entitled
to indemnification pursuant to this Paragraph 13(a), and shall survive the
delivery of any Fund shares and termination of this Agreement. This
agreement of indemnity will inure exclusively to the benefit of the
persons entitled to indemnification from you pursuant to this Agreement
and their respective estates, successors and assigns.
(b) We agree to indemnify, defend and hold you and your several
officers and directors, and each Fund and its several officers and
directors or trustees or managing general partners, and any person who
controls you and/or each Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you and your several
officers and directors, or the Fund and its officers and directors or
trustees or managing general partners, or any such controlling person, may
incur under the Securities Act of 1933, as amended, or under common law
or otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by us herein, or (ii) any failure
by us to perform our obligations as set forth herein, or (iii) any untrue, or
alleged untrue, statement of a material fact contained in the information
furnished in writing by us to you or any Fund specifically for use in such
Fund's Registration Statement or Prospectus, or used in the answers to
any of the items of the Registration Statement or in the corresponding
statements made in the Prospectus, or arising out of or based upon any
omission, or alleged omission, to state a material fact in connection with
such information furnished in writing by us to you or the Fund and required
to be stated in such answers or necessary to make such information not
misleading. Our agreement to indemnify you and your officers and
directors, and the Fund and its officers and directors or trustees or
managing general partners, and any such controlling person, as aforesaid,
is expressly conditioned upon our being notified of any action brought
against any person or entity entitled to indemnification hereunder, such
notification to be given by letter or by telecopier, telex, telegram or
similar means of same day delivery received by us at our address as
specified in Paragraph 18 of this Agreement within seven (7) days after
the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to you or your officers and directors, or to
the Fund or its officers and directors or trustees or managing general
partners, or to any such controlling person, by reason of any such breach,
failure or untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of our indemnity agreement contained
in this Paragraph 13(b). We will be entitled to assume the defense of any
suit brought to enforce any such claim, demand, liability or expense. In the
event that we elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case we
do not elect to assume the defense of any such suit, we will reimburse you
and your officers and directors, and the Fund and its officers and directors
or trustees or managing general partners, and any controlling persons
named as defendants in such suit, for the fees and expenses of any counsel
retained by you and/or them. Our indemnification agreements contained in
Paragraph 8 above, Paragraph 16 below and this Paragraph 13(b) shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to
indemnification pursuant to Paragraph 8 above, Paragraph 16 below or this
Paragraph 13(b), and shall survive the delivery of any Fund shares and
termination of this Agreement. Such agreements of indemnity will inure
exclusively to the benefit of the persons entitled to indemnification
hereunder and their respective estates, successors and assigns.
14. The names and addresses and other information concerning our
customers are and shall remain our sole property, and neither you nor your
affiliates shall use such names, addresses or other information for any
purpose except in connection with the performance of your duties and
responsibilities hereunder and except for servicing and informational
mailings relating to the Funds. Notwithstanding the foregoing, this
Paragraph 14 shall not prohibit you or any of your affiliates from utilizing
for any purpose the names, addresses or other information concerning any
of our customers if such names, addresses or other information are
obtained in any manner other than from us pursuant to this Agreement. The
provisions of this Paragraph 14 shall survive the termination of this
Agreement.
15. We agree to serve as a service agent or to provide distribution
assistance, in accordance with the terms of the Form of Service
Agreement annexed hereto as Appendix A, Form of Shareholder Services
Agreement annexed hereto as Appendix B, and/or Form of Distribution Plan
Agreement annexed hereto as Appendix C, as applicable, for all of our
customers who purchase shares of any and all Funds whose Prospectuses
provide therefor. By executing this Agreement, each of the parties hereto
agrees to be bound by all terms, conditions, rights and obligations set
forth in the forms of agreement annexed hereto and further agrees that
such forms of agreement supersede any and all prior service agreements
or other similar agreements between the parties hereto relating to any
Fund or Funds. It is recognized that certain parties may not be permitted
to collect distribution fees under the Form of Distribution Plan Agreement
annexed hereto, and if we are such a party, we will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed
hereto as Appendix D, we agree that you, each Fund with respect to which
you permit us to exercise an expedited redemption privilege, the transfer
agent of each such Fund, and your and their respective officers, directors
or trustees or managing general partners, agents, employees and affiliates
shall not be liable for and shall be fully indemnified and held harmless by
us from and against any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys' fees) arising out of
or in connection with any expedited redemption payments made in reliance
upon the information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or joint
venture between you and us. Neither party hereto shall be, act as, or
represent itself as, the agent or representative of the other, nor shall
either party have the right or authority to assume, create or incur any
liability or any obligation of any kind, express or implied, against or in the
name of, or on behalf of, the other party. This Agreement is not intended
to, and shall not, create any rights against either party hereto by any third
party solely on account of this Agreement. Neither party hereto shall use
the name of the other party in any manner without the other party's prior
written consent, except as required by any applicable federal or state law,
rule, regulation, requirement or condition, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties
hereto.
18. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or by telecopier, telex, telegram or similar means of same day
delivery (with a confirming copy by mail as provided herein). Unless
otherwise notified in writing, all notices to you shall be given or sent to
you at your offices located at One Exchange Place, Tenth Floor, Boston, MA
02109, Attention: President (with a copy to the same address, Attention:
General Counsel), and all notices to us shall be given or sent to us at our
address shown below.
19. This Agreement shall become effective only when accepted and
signed by you, and may be terminated at any time by either party hereto
upon 15 days' prior written notice to the other party. This Agreement,
including the Appendices hereto, may be amended by you upon 15 days'
prior written notice to us, and such amendment shall be deemed accepted
by us upon the placement of any order for the purchase of Fund shares or
the acceptance of a fee payable under this Agreement, including the
Appendices hereto, after the effective date of any such amendment. This
Agreement may not be assigned by us without your prior written consent.
This Agreement constitutes the entire agreement and understanding
between the parties hereto relating to the subject matter hereof and
supersedes any and all prior agreements between the parties hereto
relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to
principles of conflicts of laws.
Very truly yours,
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Bank Name (Please Print or Type)
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Address
Date: --------------------------------- By:----------------------------------
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to Premier
Mutual Fund Services, Inc. Upon acceptance one countersigned copy will be
returned to you for your files.
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
Date: --------------------------------- By:----------------------------------
Authorized Signature
APPENDIX A
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; providing periodic statements
and/or reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. In this
regard, if we are a subsidiary or affiliate of a federally chartered and
supervised bank or other banking organization, you recognize that we may
be subject to the provisions of the Glass-Steagall Act and other laws,
rules, regulations or requirements governing, among other things, the
conduct of our activities. As such, we are restricted in the activities we
may undertake and for which we may be paid and, therefore, intend to
perform only those activities as are consistent with our statutory and
regulatory obligations. We represent and warrant to, and agree with you,
that the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment
of their assets in shares of the Funds, will be properly disclosed by us to
our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a subsidiary or an affiliate of a federally supervised
bank or thrift institution, we agree that in providing services hereunder
we shall at all times act in compliance with the Interagency Statement on
Retail Sales of Nondeposit Investment Products issued by The Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, and the Office
of Thrift Supervision (February 15, 1994) or any successor interagency
requirements as in force at the time such services are provided. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. For all Funds as to which Board approval of this Agreement
is required, such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. For any Fund as to which Board approval of this
Agreement is required, this Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement or, upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. As to all Funds, this
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative
functions contemplated herein by you as to any or all of the Funds, this
Agreement shall be terminable effective upon receipt of notice thereof by
us. This Agreement also shall terminate automatically in the event of its
assignment (as defined in the Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are
in effect. We agree that no Director, officer or shareholder of the Fund
shall be liable individually for the performance of the obligations
hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX B
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; providing periodic statements
and/or reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. In this
regard, if we are a subsidiary or affiliate of a federally chartered and
supervised bank or other banking organization, you recognize that we may
be subject to the provisions of the Glass-Steagall Act and other laws,
rules, regulations or requirements governing, among other things, the
conduct of our activities. As such, we are restricted in the activities we
may undertake and for which we may be paid and, therefore, intend to
perform only those activities as are consistent with our statutory and
regulatory obligations. We represent and warrant to, and agree with you,
that the compensation payable to us hereunder, together with any other
compensation payable to us by clients in connection with the investment
of their assets in shares of the Funds, will be properly disclosed by us to
our clients, will be authorized by our clients and will not result in an
excessive or unauthorized fee to us.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent. We agree that in the event an issue pertaining
to a Fund's Shareholder Services Plan is submitted for shareholder
approval, we will vote any Fund shares held for our own account in the
same proportion as the vote of those shares held for our clients' accounts.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a subsidiary or an affiliate of a federally supervised
bank or thrift institution, we agree that in providing services hereunder
we shall at all times act in compliance with the Interagency Statement on
Retail Sales of Nondeposit Investment Products issued by The Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, and the Office
of Thrift Supervision (February 15, 1994) or any successor interagency
requirements as in force at the time such services are provided. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement. This Agreement is terminable without penalty
upon 15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein
by you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We
understand that any payments pursuant to this Agreement shall be paid
only so long as this Agreement and such Plan are in effect. We agree that
no Director, officer or shareholder of the Fund shall be liable individually
for the performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX C
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you with respect to our
providing distribution assistance relating to shares of certain mutual
fund(s) managed, advised or administered by The Dreyfus Corporation or
its subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide distribution assistance in connection with the
sale of shares of the Funds. In this regard, if we are a subsidiary or
affiliate of a federally chartered and supervised bank or other banking
organization, you recognize that we may be subject to the provisions of
the Glass-Steagall Act and other laws, rules, regulations or requirements
governing, among other things, the conduct of our activities. As such, we
are restricted in the activities we may undertake and for which we may be
paid and, therefore, intend to perform only those activities as are
consistent with our statutory and regulatory obligations. We represent and
warrant to, and agree with you, that the compensation payable to us
hereunder, together with any other compensation payable to us by clients
in connection with the investment of their assets in shares of the Funds,
will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
services hereunder. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a subsidiary or an affiliate of a federally supervised
bank or thrift institution, we agree that in providing services hereunder
we shall at all times act in compliance with the Interagency Statement on
Retail Sales of Nondeposit Investment Products issued by The Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, and the Office
of Thrift Supervision (February 15, 1994) or any successor interagency
requirements as in force at the time such services are provided. We shall
have no authority to act as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement or, upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. This Agreement is
terminable without penalty upon 15 days' notice by either party. In
addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the distribution functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted
pursuant to Rule 12b-1 under the Act, and Prospectus and related
Statement of Additional Information. We understand that any payments
pursuant to this Agreement shall be paid only so long as this Agreement
and such Plan are in effect. We agree that no Director, officer or
shareholder of the Fund shall be liable individually for the performance of
the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX D
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Firm identified below which
desires to exercise expedited redemption privileges with respect to
shares of certain mutual funds managed, advised or administered by The
Dreyfus Corporation or its subsidiaries or affiliates, which shares are
registered in the name of, or beneficially owned by, the customers of such
Firm.
(PLEASE PRINT OR TYPE)
-----------------------------------------------------------------------------
NAME OF BANK
-----------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Firm.
-----------------------------------------------------------------------------
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
-----------------------------------------------------------------------------
ACCOUNT NAME ACCOUNT NUMBER
-----------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
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BROKER-DEALER AGREEMENT
(FULLY DISCLOSED BASIS)
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We desire to enter into an Agreement with you for the sale of shares of
beneficial interest or common stock of open-end registered investment
companies managed, advised or administered by The Dreyfus Corporation
or its subsidiaries or affiliates (hereinafter referred to individually as a
"Fund" and collectively as the "Funds"), for which you are the principal
underwriter, as such term is defined in the Investment Company Act of
1940, as amended, and for which you are the exclusive agent for the
continuous distribution of shares pursuant to the terms of a Distribution
Agreement between you and each Fund. Unless the context otherwise
requires, as used herein the term "Prospectus" shall mean the prospectus
and related statement of additional information (the "Statement of
Additional Information") incorporated therein by reference (as amended or
supplemented) of each of the respective Funds included in the then
currently effective registration statement (or post-effective amendment
thereto) of each such Fund, as filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the
"Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. In all sales of Fund shares to the public, we shall act as dealer for
our own account and in no transaction shall we have any authority to act
as agent for any Fund, for you or for any other dealer.
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i.e., the net asset value
per share plus the applicable sales charge, if any) and all orders for the
redemption of any Fund shares shall be executed at the net asset value per
share, less the applicable deferred sales charge, redemption fee, or
similar charge or fee, if any, in each case as described in the Prospectus
of such Fund. The minimum initial purchase order and minimum subsequent
purchase order shall be as set forth in the Prospectus of such Fund. All
orders are subject to acceptance or rejection by you at your sole
discretion. Unless otherwise mutually agreed in writing, each transaction
shall be promptly confirmed in writing directly to the customer on a fully
disclosed basis and a copy of each confirmation shall be sent
simultaneously to us. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw entirely the sale of
shares of any or all of the Funds.
3. In ordering shares of any Fund, we shall rely solely and conclusively
on the representations contained in the Prospectus of such Fund. We agree
that we shall not offer or sell shares of any Fund except in compliance
with all applicable federal and state securities laws, and the rules,
regulations, requirements and conditions of all applicable regulatory and
self-regulatory agencies or authorities. In connection with offers to sell
and sales of shares of each Fund, we agree to deliver or cause to be
delivered to each person to whom any such offer or sale is made, at or
prior to the time of such offer or sale, a copy of the Prospectus and, upon
request, the Statement of Additional Information of such Fund. We further
agree to obtain from each customer to whom we sell Fund shares any
taxpayer identification number certification and such other information
as may be required from time to time under the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated
thereunder, and to provide you or your designee with timely written notice
of any failure to obtain such taxpayer identification number certification
or other information in order to enable the implementation of any required
withholding. We will be responsible for the proper instruction and training
of all sales personnel employed by us. Unless otherwise mutually agreed
in writing, you shall deliver or cause to be delivered to each of the
customers who purchases shares of any of the Funds from or through us
pursuant to this Agreement copies of all annual and interim reports, proxy
solicitation materials and any other information and materials relating to
such Funds and prepared by or on behalf of you, the Fund or its investment
adviser, custodian, transfer agent or dividend disbursing agent for
distribution to each such customer. You agree to supply us with copies of
the Prospectus, Statement of Additional Information, annual reports,
interim reports, proxy solicitation materials and any such other
information and materials relating to each Fund in reasonable quantities
upon request.
4. We shall not make any representations concerning any Fund shares
other than those contained in the Prospectus of such Fund or in any
promotional materials or sales literature furnished to us by you or the
Fund. We shall not furnish or cause to be furnished to any person or display
or publish any information or materials relating to any Fund (including,
without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters,
signs or other similar materials), except such information and materials
as may be furnished to us by you or the Fund, and such other information
and materials as may be approved in writing by you.
5. In determining the amount of any dealer reallowance payable to us
hereunder, you reserve the right to exclude any sales which you reasonably
determine are not made in accordance with the terms of the applicable
Fund Prospectuses or the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge,
customers may be entitled to a reduction in the sales charge on purchases
made under a letter of intent ("Letter of Intent") in accordance with the
Fund Prospectus. In such a case, our dealer reallowance will be paid based
upon the reduced sales charge, but an adjustment to the dealer
reallowance will be made in accordance with the Prospectus of the
applicable Fund to reflect actual purchases of the customer if such
customer's Letter of Intent is not fulfilled. The sales charge and/or dealer
reallowance may be changed at any time in your sole discretion upon
written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of
each Fund sold with a sales charge, a reduced sales charge may be
applicable with respect to customer accounts through a right of
accumulation under which customers are permitted to purchase shares of
a Fund at the then current public offering price per share applicable to the
total of (i) the dollar amount of shares then being purchased plus (ii) an
amount equal to the then current net asset value or public offering price
originally paid per share, whichever is higher, of the customer's combined
holdings of the shares of such Fund and of any other open-end registered
investment company as may be permitted by the applicable Fund
Prospectus. In such case, we agree to furnish to you or the transfer agent,
as such term is defined in the Prospectus of each Fund (the "Transfer
Agent"), sufficient information to permit your confirmation of
qualification for a reduced sales charge, and acceptance of the purchase
order is subject to such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to
advise you promptly at your request as to amounts of any and all sales by
us to the public qualifying for a reduced sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the
liquidation of shares of one open-end registered investment company
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates in the shares of another open-end registered
investment company managed, advised or administered by The Dreyfus
Corporation or its subsidiaries or affiliates) shall, where available, be
made subject to and in accordance with the terms of each relevant Fund's
Prospectus.
(e) Unless at the time of transmitting an order we advise you or the
Transfer Agent to the contrary, the shares ordered will be deemed to be
the total holdings of the specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus
and Service Plan, Shareholder Services Plan, Distribution Plan or similar
plan, if any, we understand that you may pay to certain financial
institutions, securities dealers and other industry professionals with
which you have entered into an agreement in substantially the form
annexed hereto as Appendix A, B or C (or such other form as may be
approved from time to time by the board of directors, trustees or
managing general partners of the Fund) such fees as may be determined by
you in accordance with such agreement for shareholder, administrative or
distribution-related services as described therein.
8. The procedures relating to all orders and the handling thereof will
be subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be
accepted. We agree to place orders with you immediately for the same
number of shares and at the same price as any orders we receive from our
customers. We shall not withhold placing orders received from customers
so as to profit ourselves as a result of such withholding by a change in the
net asset value from that used in determining the offering price to such
customers, or otherwise. We agree that: (a) we shall not effect any
transactions (including, without limitation, any purchases, exchanges and
redemptions) in any Fund shares registered in the name of, or beneficially
owned by, any customer unless such customer has granted us full right,
power and authority to effect such transactions on such customer's
behalf, and (b) you, each Fund, the Transfer Agent and your and their
respective officers, directors, trustees, managing general partners,
agents, employees and affiliates shall not be liable for, and shall be fully
indemnified and held harmless by us from and against, any and all claims,
demands, liabilities and expenses (including, without limitation,
reasonable attorneys' fees) which may be incurred by you or any of the
foregoing persons entitled to indemnification from us hereunder arising
out of or in connection with the execution of any transactions in Fund
shares registered in the name of, or beneficially owned by, any customer
in reliance upon any oral or written instructions reasonably believed to be
genuine and to have been given by or on behalf of us.
9. (a) We agree to pay for purchase orders for Fund shares placed by us
in accordance with the terms of the Prospectus of the applicable Fund. On
or before the settlement date of each purchase order for shares of any
Fund, we shall either (i) remit to an account designated by you with the
Transfer Agent an amount equal to the then current public offering price
of the shares of such Fund being purchased less our dealer reallowance, if
any, with respect to such purchase order as determined by you in
accordance with the terms of the applicable Fund Prospectus, or (ii) remit
to an account designated by you with the Transfer Agent an amount equal
to the then current public offering price of the shares of such Fund being
purchased without deduction for our dealer reallowance, if any, with
respect to such purchase order as determined by you in accordance with
the terms of the applicable Fund Prospectus, in which case our dealer
reallowance, if any, shall be payable to us on at least a monthly basis. If
payment for any purchase order is not received in accordance with the
terms of the applicable Fund Prospectus, you reserve the right, without
notice, to cancel the sale and to hold us responsible for any loss sustained
as a result thereof.
(b) If any shares sold to us under the terms of this Agreement are
sold with a sales charge and are redeemed for the account of the Fund or
are tendered for redemption within seven (7) business days after the date
of purchase: (i) we shall forthwith refund to you the full dealer
reallowance received by us on the sale; and (ii) you shall forthwith pay to
the Fund your portion of the sales charge on the sale which had been
retained by you and shall also pay to the Fund the amount refunded by us.
10. Certificates for shares sold to us hereunder shall only be issued in
accordance with the terms of each Fund's Prospectus upon our customer's
specific request and, upon such request, shall be promptly delivered to us
by the Transfer Agent unless other arrangements are made by us.
However, in making delivery of such share certificates to us, the Transfer
Agent shall have adequate time to clear any checks drawn for the payment
of Fund shares.
11. Each party hereby represents and warrants to the other party that:
(a) it is a corporation, partnership or other entity duly organized and
validly existing in good standing under the laws of the jurisdiction in
which it was organized; (b) it is duly registered as a broker-dealer with
the Securities and Exchange Commission and, to the extent required, with
applicable state agencies or authorities having jurisdiction over
securities matters, and it is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); (c) it will comply with all applicable
federal and state laws, and the rules, regulations, requirements and
conditions of all applicable regulatory and self-regulatory agencies or
authorities in the performance of its duties and responsibilities
hereunder; (d) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly
authorized by all necessary action, and all other authorizations and
approvals (if any) required for its lawful execution and delivery of this
Agreement and its performance hereunder have been obtained; and (e) upon
execution and delivery by it, and assuming due and valid execution and
delivery by the other party, this Agreement will constitute a valid and
binding agreement, enforceable in accordance with its terms. Each party
agrees to provide the other party with such information and access to
appropriate records as may be reasonably required to verify its
compliance with the provisions of this Agreement.
12. You agree to inform us, upon our request, as to the states in which
you believe the shares of the Funds have been qualified for sale under, or
are exempt from the requirements of, the respective securities laws of
such states, but you shall have no obligation or responsibility as to our
right to sell shares in any jurisdiction. We agree to notify you
immediately in the event of (a) our expulsion or suspension from the
NASD, or (b) our violation of any applicable federal or state law, rule,
regulation, requirement or condition arising out of or in connection with
this Agreement, or which may otherwise affect in any material way our
ability to act as a dealer in accordance with the terms of this Agreement.
Our expulsion from the NASD will automatically terminate this Agreement
immediately without notice. Our suspension from the NASD for violation
of any applicable federal or state law, rule, regulation, requirement or
condition will terminate this Agreement effective immediately upon your
written notice of termination to us.
13. (a) You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of
Section 15 of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
we, our officers and directors, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by you herein, or (ii) any
failure by you to perform your obligations as set forth herein, or (iii) any
untrue statement, or alleged untrue statement, of a material fact
contained in any Registration Statement or any Prospectus, or arising out
of or based upon any omission, or alleged omission, to state a material
fact required to be stated in either any Registration Statement or any
Prospectus, or necessary to make the statements in any thereof not
misleading; provided, however, that your agreement to indemnify us, our
officers and directors, and any such controlling person shall not be
deemed to cover any claims, demands, liabilities or expenses arising out
of any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to you
or the Fund by us specifically for use in the preparation thereof. Your
agreement to indemnify us, our officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against our officers or directors, or any
such controlling person, such notification to be given by letter or by
telecopier, telex, telegram or similar means of same day delivery received
by you at your address as specified in Paragraph 18 of this Agreement
within seven (7) days after the summons or other first legal process shall
have been served. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the person against
whom such action is brought by reason of any such breach, failure or
untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of your indemnity agreement contained in this
Paragraph 13(a). You will be entitled to assume the defense of any suit
brought to enforce any such claim, demand, liability or expense. In the
event that you elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case you
do not elect to assume the defense of any such suit, you will reimburse us,
our officers and directors, and any controlling persons named as
defendants in such suit, for the fees and expenses of any counsel retained
by us and/or them. Your indemnification agreement contained in this
Paragraph 13(a) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any person entitled
to indemnification pursuant to this Paragraph 13(a), and shall survive the
delivery of any Fund shares and termination of this Agreement. This
agreement of indemnity will inure exclusively to the benefit of the
persons entitled to indemnification from you pursuant to this Agreement
and their respective estates, successors and assigns.
(b) We agree to indemnify, defend and hold you and your several
officers and directors, and each Fund and its several officers and
directors or trustees or managing general partners, and any person who
controls you and/or each Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you and your several
officers and directors, or the Fund and its officers and directors or
trustees or managing general partners, or any such controlling person, may
incur under the Securities Act of 1933, as amended, or under common law
or otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by us herein, or (ii) any failure
by us to perform our obligations as set forth herein, or (iii) any untrue, or
alleged untrue, statement of a material fact contained in the information
furnished in writing by us to you or any Fund specifically for use in such
Fund's Registration Statement or Prospectus, or used in the answers to
any of the items of the Registration Statement or in the corresponding
statements made in the Prospectus, or arising out of or based upon any
omission, or alleged omission, to state a material fact in connection with
such information furnished in writing by us to you or the Fund and required
to be stated in such answers or necessary to make such information not
misleading. Our agreement to indemnify you and your officers and
directors, and the Fund and its officers and directors or trustees or
managing general partners, and any such controlling person, as aforesaid,
is expressly conditioned upon our being notified of any action brought
against any person or entity entitled to indemnification hereunder, such
notification to be given by letter or by telecopier, telex, telegram or
similar means of same day delivery received by us at our address as
specified in Paragraph 18 of this Agreement within seven (7) days after
the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to you or your officers and directors, or to
the Fund or its officers and directors or trustees or managing general
partners, or to any such controlling person, by reason or any such breach,
failure or untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of our indemnity agreement contained
in this Paragraph 13(b). We shall be entitled to assume the defense of any
suit brought to enforce any such claim, demand, liability or expense. In the
event that we elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case we
do not elect to assume the defense of any such suit, we will reimburse you
and your officers and directors, and the Fund and its officers and directors
or trustees or managing general partners, and any controlling persons
named as defendants in such suit, for the fees and expenses of any counsel
retained by you and/or them. Our indemnification agreements contained in
Paragraph 8 above, Paragraph 16 below and this Paragraph 13(b) shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to
indemnification pursuant to Paragraph 8 above, Paragraph 16 below or this
Paragraph 13(b), and shall survive the delivery of any Fund shares and
termination of this Agreement. Such agreements of indemnity will inure
exclusively to the benefit of the persons entitled to indemnification
hereunder and their respective estates, successors and assigns.
14. The names and addresses and other information concerning our
customers are and shall remain our sole property, and neither you nor your
affiliates shall use such names, addresses or other information for any
purpose except in connection with the performance of your duties and
responsibilities hereunder and except for servicing and informational
mailings relating to the Funds. Notwithstanding the foregoing, this
Paragraph 14 shall not prohibit you or any of your affiliates from utilizing
for any purpose the names, addresses or other information concerning any
of our customers if such names, addresses or other information are
obtained in any manner other than from us pursuant to this Agreement. The
provisions of this Paragraph 14 shall survive the termination of this
Agreement.
15. We agree to serve as a service agent or to provide distribution
assistance, in accordance with the terms of the Form of Service
Agreement annexed hereto as Appendix A, Form of Shareholder Services
Agreement annexed hereto as Appendix B, and/or Form of Distribution Plan
Agreement annexed hereto as Appendix C, as applicable, for all of our
customers who purchase shares of any and all Funds whose Prospectuses
provide therefor. By executing this Agreement, each of the parties hereto
agrees to be bound by all terms, conditions, rights and obligations set
forth in the forms of agreement annexed hereto and further agrees that
such forms of agreement supersede any and all prior service agreements
or other similar agreements between the parties hereto relating to any
Fund or Funds. It is recognized that certain parties may not be permitted
to collect distribution fees under the Form of Distribution Plan Agreement
annexed hereto, and if we are such a party, we will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed
hereto as Appendix D, we agree that you, each Fund with respect to which
you permit us to exercise an expedited redemption privilege, the Transfer
Agent of each such Fund, and your and their respective officers, directors
or trustees or managing general partners, agents, employees and affiliates
shall not be liable for and shall be fully indemnified and held harmless by
us from and against any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys' fees) arising out of
or in connection with any expedited redemption payments made in reliance
upon the information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or joint
venture between you and us. Neither party hereto shall be, act as, or
represent itself as, the agent or representative of the other, nor shall
either party have the right or authority to assume, create or incur any
liability or any obligation of any kind, express or implied, against or in the
name of, or on behalf of, the other party. This Agreement is not intended
to, and shall not, create any rights against either party hereto by any third
party solely on account of this Agreement. Neither party hereto shall use
the name of the other party in any manner without the other party's prior
written consent, except as required by any applicable federal or state law,
rule, regulation, requirement or condition, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties
hereto.
18. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or by telecopier, telex, telegram or similar means of same day
delivery (with a confirming copy by mail as provided herein). Unless
otherwise notified in writing, all notices to you shall be given or sent to
you at your offices, located at One Exchange Place, Tenth Floor, Boston, MA
02109, Attn: President (with a copy to the same address, Attention:
General Counsel), and all notices to us shall be given or sent to us at our
address shown below.
19. This Agreement shall become effective only when accepted and
signed by you, and may be terminated at any time by either party hereto
upon 15 days' prior written notice to the other party. This Agreement,
including the Appendices hereto, may be amended by you upon 15 days'
prior written notice to us, and such amendment shall be deemed accepted
by us upon the placement of any order for the purchase of Fund shares or
the acceptance of a fee payable under this Agreement, including the
Appendices hereto, after the effective date of any such amendment. This
Agreement may not be assigned by us without your prior written consent.
This Agreement constitutes the entire agreement and understanding
between the parties hereto relating to the subject matter hereof and
supersedes any and all prior agreements between the parties hereto
relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to
principles of conflicts of laws.
Very truly yours,
------------------------------------------------------------------------------
Name of Broker or Dealer (Please Print
or Type)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Address
Date: --------------------------------- By:----------------------------------
Authorized Signature
NOTE: Please sign and return both copies of this Agreement to Premier
Mutual Fund Services, Inc. Upon acceptance one countersigned copy will be
returned to you for your files.
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
Date: --------------------------------- By:----------------------------------
Authorized Signature
APPENDIX A
TO BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: answering client inquiries about the Funds;
assisting clients in changing dividend options, account designations and
addresses; performing sub-accounting; establishing and maintaining
shareholder accounts and records; processing purchase and redemption
transactions; investing client account cash balances automatically in
shares of one or more of the Funds; providing periodic statements and/or
reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. We
represent and warrant to, and agree with you, that the compensation
payable to us hereunder, together with any other compensation payable to
us by clients in connection with the investment of their assets in shares
of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. For all Funds as to which Board approval of this Agreement
is required, such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. For any Fund as to which Board approval of this
Agreement is required, this Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement or, upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. As to all Funds, this
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative
functions contemplated herein by you as to any or all of the Funds, this
Agreement shall be terminable effective upon receipt of notice thereof by
us. This Agreement also shall terminate automatically in the event of its
assignment (as defined in the Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are
in effect. We agree that no Director, officer or shareholder of the Fund
shall be liable individually for the performance of the obligations
hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX B
TO BROKER-DEALER AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; providing periodic statements
and/or reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. We
represent and warrant to, and agree with you, that the compensation
payable to us hereunder, together with any other compensation payable to
us by clients in connection with the investment of their assets in shares
of the Funds, will be properly disclosed by us to our clients, will be
authorized by our clients and will not result in an excessive or
unauthorized fee to us. We will act solely as agent for, upon the order of,
and for the account of, our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent. We agree that in the event an issue pertaining
to a Fund's Shareholder Services Plan is submitted for shareholder
approval, we will vote any Fund shares held for our own account in the
same proportion as the vote of those shares held for our client's accounts.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement. This Agreement is terminable without penalty
upon 15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein
by you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We
understand that any payments pursuant to this Agreement shall be paid
only so long as this Agreement and such Plan are in effect. We agree that
no Director, officer or shareholder of the Fund shall be liable individually
for the performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telex, telecopier, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX C
TO BROKER-DEALER AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you with respect to our
providing distribution assistance relating to shares of certain mutual
fund(s) managed, advised or administered by The Dreyfus Corporation or
its subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide distribution assistance in connection with the
sale of shares of the Funds. We represent and warrant to, and agree with
you, that the compensation payable to us hereunder, together with any
other compensation payable to us by clients in connection with the
investment of their assets in shares of the Funds, will be properly
disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
services hereunder. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. We shall have no authority to act as agent for the Funds or for
you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement, or upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. This Agreement is
terminable without penalty upon 15 days' notice by either party. In
addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the distribution functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted
pursuant to Rule 12b-1 under the Act, and Prospectus and related
Statement of Additional Information. We understand that any payments
pursuant to this Agreement shall be paid only so long as this Agreement
and such Plan are in effect. We agree that no Director, officer or
shareholder of the Fund shall be liable individually for the performance of
the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX D
TO BROKER-DEALER AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Firm identified below which
desires to exercise expedited redemption privileges with respect to
shares of certain mutual funds managed, advised or administered by The
Dreyfus Corporation or its subsidiaries or affiliates, which shares are
registered in the name of, or beneficially owned by, the customers of such
Firm.
(PLEASE PRINT OR TYPE)
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NAME OF FIRM
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STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Firm.
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NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
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ACCOUNT NAME ACCOUNT NUMBER
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STREET ADDRESS CITY STATE ZIP CODE
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BANK AGREEMENT
(Fully Disclosed Basis)
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We are a "bank" (as such term is defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") ). We
desire to make available to our customers shares of beneficial interest or
common stock of open-end registered investment companies managed,
advised or administered by The Dreyfus Corporation or its subsidiaries or
affiliates (hereinafter referred to individually as a "Fund" and collectively
as the "Funds"). You are the principal underwriter (as such term is defined
in the Investment Company Act of 1940, as amended) of the offering of
shares of the Funds and the exclusive agent for the continuous distribution
of such shares pursuant to the terms of a Distribution Agreement between
you and each Fund. Unless the context otherwise requires, as used herein
the term "Prospectus" shall mean the prospectus and related statement of
additional information ("Statement of Additional Information")
incorporated therein by reference (as amended and supplemented) of each
of the respective Funds included in the then currently effective
registration statement (or post-effective amendment thereto) of each
such Fund, as filed with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the "Registration Statement").
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. With respect to any and all transactions in the shares of any Fund
pursuant to this Agreement, it is understood and agreed in each case that:
(a) we shall be acting solely as agent for the account of our customer; (b)
each transaction shall be initiated solely upon the order of our customer;
(c) you shall execute transactions only upon receiving instructions from
us acting as agent for our customer; (d) as between us and our customer,
our customer will have full beneficial ownership of all Fund shares; and
(e) each transaction shall be for the account of our customer and not for
our account. Each transaction shall be without recourse to us provided
that we act in accordance with the terms of this Agreement. We represent
and warrant to you that we will have full right, power and authority to
effect transactions (including, without limitation, any purchases,
exchanges and redemptions) in Fund shares on behalf of all customer
accounts provided by us to you or to any transfer agent as such term is
defined in the Prospectus of each Fund (the "Transfer Agent").
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i.e., the net asset value
per share plus the applicable sales charge, if any) and all orders for the
redemption of any Fund shares shall be executed at the net asset value per
share less the applicable deferred sales charge, redemption fee or similar
charge or fee, if any, in each case as described in the Prospectus of such
Fund. The minimum initial purchase order and minimum subsequent
purchase order shall be as set forth in the Prospectus of such Fund. All
orders are subject to acceptance or rejection by you at your sole
discretion. Unless otherwise mutually agreed in writing, each transaction
shall be promptly confirmed in writing directly to the customer on a fully
disclosed basis and a copy of each confirmation shall be sent
simultaneously to us. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw entirely the sale of
shares of any or all of the Funds.
3. In ordering shares of any Fund, we shall rely solely and conclusively
on the representations contained in the Prospectus of such Fund. We agree
that we shall not make shares of any Fund available to our customers
except in compliance with all applicable federal and state laws, and the
rules, regulations and requirements of applicable regulatory agencies or
authorities. We agree that we shall not purchase any Fund shares, as agent
for any customer, unless we deliver or cause to be delivered to such
customer, at or prior to the time of such purchase, a copy of the
Prospectus of such Fund, or unless such customer has acknowledged
receipt of the Prospectus of such Fund. We further agree to obtain from
each customer for whom we act as agent for the purchase of Fund shares
any taxpayer identification number certification and such other
information as may be required from time to time under the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated thereunder, and to provide you or your designee with timely
written notice of any failure to obtain such taxpayer identification
number certification or other information in order to enable the
implementation of any required withholding. We will be responsible for
the proper instruction and training of all sales personnel employed by us.
Unless otherwise mutually agreed in writing, you shall deliver or cause to
be delivered to each of the customers who purchases shares of any of the
Funds through us pursuant to this Agreement copies of all annual and
interim reports, proxy solicitation materials and any other information
and materials relating to such Funds and prepared by or on behalf of you,
the Fund or its investment adviser, custodian, Transfer Agent or dividend
disbursing agent for distribution to each such customer. You agree to
supply us with copies of the Prospectus, Statement of Additional
Information, annual reports, interim reports, proxy solicitation materials
and any such other information and materials relating to each Fund in
reasonable quantities upon request.
4. We shall not make any representations concerning any Fund shares
other than those contained in the Prospectus of such Fund or in any
promotional materials or sales literature furnished to us by you or the
Fund. We shall not furnish or cause to be furnished to any person or display
or publish any information or materials relating to any Fund (including,
without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters,
signs or other similar materials), except such information and materials
as may be furnished to us by you or the Fund, and such other information
and materials as may be approved in writing by you. In making Fund shares
available to our customers hereunder, or in providing investment advice
regarding such shares to our customers, we shall at all times act in
compliance with the Interagency Statement on Retail Sales of Nondeposit
Investment Products issued by The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of Thrift Supervision
(February 15, 1994) or any successor interagency requirements as in force
at the time such services are provided.
5. In determining the amount of any reallowance payable to us
hereunder, you reserve the right to exclude any sales which you reasonably
determine are not made in accordance with the terms of the applicable
Fund Prospectuses or the provisions of this Agreement.
6. (a) In the case of any Fund shares sold with a sales charge,
customers may be entitled to a reduction in sales charge on purchases
made under a letter of intent ("Letter of Intent") in accordance with the
Fund Prospectus. In such case, our reallowance will be paid based upon the
reduced sales charge, but an adjustment will be made as described in the
Prospectus of the applicable Fund to reflect actual purchases of the
customer if he should fail to fulfill his Letter of Intent. The sales charge
and/or reallowance may be changed at any time in your sole discretion
upon written notice to us.
(b) Subject to and in accordance with the terms of the Prospectus of
each Fund sold with a sales charge, a reduced sales charge may be
applicable with respect to customer accounts through a right of
accumulation under which customers are permitted to purchase shares of
a Fund at the then current public offering price per share applicable to the
total of (i) the dollar amount of shares then being purchased plus (ii) an
amount equal to the then current net asset value or public offering price
originally paid per share, whichever is higher, of the customer's combined
holdings of the shares of such Fund and of any other open-end registered
investment company as may be permitted by the applicable Fund
Prospectus. In such case, we agree to furnish to you or the Transfer Agent
sufficient information to permit your confirmation of qualification for a
reduced sales charge, and acceptance of the purchase order is subject to
such confirmation.
(c) With respect to Fund shares sold with a sales charge, we agree to
advise you promptly at your request as to amounts of any and all
purchases of Fund shares made by us, as agent for our customers,
qualifying for a reduced sales charge.
(d) Exchanges (i.e., the investment of the proceeds from the
liquidation of shares of one open-end registered investment company
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates in the shares of another open-end registered
investment company managed, advised or administered by The Dreyfus
Corporation or its subsidiaries or affiliates) shall, where available, be
made subject to and in accordance with the terms of each Fund's
Prospectus.
(e) Unless at the time of transmitting an order we advise you to the
contrary, the shares ordered will be deemed to be the total holdings of the
specified customer.
7. Subject to and in accordance with the terms of each Fund Prospectus
and Service Plan, Shareholder Services Plan, Distribution Plan or other
similar plan, if any, we understand that you may pay to certain financial
institutions, securities dealers and other industry professionals with
which you have entered into an agreement in substantially the form
annexed hereto as Appendix A, B, or C (or such other form as may be
approved from time to time by the board of directors or trustees or
managing general partners of the Fund) such fees as may be determined by
you in accordance with such agreement for shareholder, administrative or
distribution-related services as described therein.
8. The procedures relating to all orders and the handling thereof will
be subject to the terms of the Prospectus of each Fund and your written
instructions to us from time to time. No conditional orders will be
accepted. We agree to place orders with you immediately for the same
number of shares and at the same price as any orders we receive from our
customers. We shall not withhold placing orders received from customers
so as to profit ourselves as a result of such withholding by a change in the
net asset value from that used in determining the offering price to such
customers, or otherwise; provided, however, that the foregoing shall not
prevent the purchase of shares of any Fund by us for our own bona fide
investment. We agree that: (a) we shall not effect any transactions
(including, without limitation, any purchases, exchanges and redemptions)
in any Fund shares registered in the name of, or beneficially owned by, any
customer unless such customer has granted us full right, power and
authority to effect such transactions on such customer's behalf, and (b)
you, each Fund, the Transfer Agent and your and their respective officers,
directors, trustees, managing general partners, agents, employees and
affiliates shall not be liable for, and shall be fully indemnified and held
harmless by us from and against, any and all claims, demands, liabilities
and expenses (including, without limitation, reasonable attorneys' fees)
which may be incurred by you or any of the foregoing persons entitled to
indemnification from us hereunder arising out of or in connection with the
execution of any transactions in Fund shares registered in the name of, or
beneficially owned by, any customer in reliance upon any oral or written
instructions reasonably believed to be genuine and to have been given by or
on behalf of us.
9. (a) We agree to pay for purchase orders of any Fund shares placed by
us in accordance with the terms of the Prospectus of the applicable Fund.
On or before the settlement date of each purchase order for shares of any
Fund, we shall either (i) remit to an account designated by you with the
Transfer Agent an amount equal to the then current public offering price
of the shares of such Fund being purchased less our reallowance, if any,
with respect to such purchase order as determined by you in accordance
with the terms of the applicable Fund Prospectus, or (ii) remit to an
account designated by you with the Transfer Agent an amount equal to the
then current public offering price of the shares of such Fund being
purchased without deduction for our reallowance, if any, with respect to
such purchase order as determined by you in accordance with the terms of
the applicable Fund Prospectus, in which case our reallowance, if any,
shall be payable to us by you on at least a monthly basis. If payment for
any purchase order is not received in accordance with the terms of the
applicable Fund Prospectus, you reserve the right, without notice, to
cancel the sale and to hold us responsible for any loss sustained as a
result thereof.
(b) If any shares sold to us as agent for our customers under the
terms of this Agreement are sold with a sales charge and are redeemed
for the account of the Fund or are tendered for redemption within seven
(7) days after the date of purchase: (i) we shall forthwith refund to you
the full reallowance received by us on the sale; and (ii) you shall
forthwith pay to the Fund your portion of the sales charge on the sale
which had been retained by you and shall also pay to the Fund the amount
refunded by us.
10. Certificates for shares sold to us as agent for our customers
hereunder shall only be issued in accordance with the terms of each Fund's
Prospectus upon our customers' specific request and, upon such request,
shall be promptly delivered to our customers by the Transfer Agent unless
other arrangements are made by us. However, in making delivery of such
share certificates to our customers, the Transfer Agent shall have
adequate time to clear any checks drawn for the payment of Fund shares.
11. We hereby represent and warrant to you that: (a) we are a "bank" as
such term is defined in Section 3(a)(6) of the Exchange Act; (b) we are a
duly organized and validly existing "bank" in good standing under the laws
of the jurisdiction in which we were organized; (c) all authorizations (if
any) required for our lawful execution of this Agreement and our
performance hereunder have been obtained; and (d) upon execution and
delivery by us, and assuming due and valid execution and delivery by you,
this Agreement will constitute a valid and binding agreement, enforceable
against us in accordance with its terms. We agree to give written notice
to you promptly in the event that we shall cease to be a "bank" as such
term is defined in Section 3(a)(6) of the Exchange Act. In such event, this
Agreement shall be automatically terminated upon such written notice.
12. You agree to inform us, upon our request, as to the states in which
you believe the shares of the Funds have been qualified for sale under, or
are exempt from the requirements of, the respective securities laws of
such states, but you shall have no obligation or responsibility as to our
right to make shares of any Funds available to our customers in any
jurisdiction. We agree to comply with all applicable federal and state
laws, rules, regulations and requirements relating to the performance of
our duties and responsibilities hereunder.
13. (a) You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of
Section 15 of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
we, our officers and directors, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or
otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by you herein, or (ii) any
failure by you to perform your obligations as set forth herein, or (iii) any
untrue statement, or alleged untrue statement, of a material fact
contained in any Registration Statement or any Prospectus, or arising out
of or based upon any omission, or alleged omission, to state a material
fact required to be stated in either any Registration Statement or any
Prospectus, or necessary to make the statements in any thereof not
misleading; provided, however, that your agreement to indemnify us, our
officers and directors, and any such controlling person shall not be
deemed to cover any claims, demands, liabilities or expenses arising out
of any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to you
or the Fund by us specifically for use in the preparation thereof. Your
agreement to indemnify us, our officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against our officers or directors, or any
such controlling person, such notification to be given by letter or by
telecopier, telex, telegram or similar means of same day delivery received
by you at your address as specified in Paragraph 18 of this Agreement
within seven (7) days after the summons or other first legal process shall
have been served. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the person against
whom such action is brought by reason of any such breach, failure or
untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of your indemnity agreement contained in this
Paragraph 13(a). You will be entitled to assume the defense of any suit
brought to enforce any such claim, demand, liability or expense. In the
event that you elect to assume the defense of any such suit and retain
counsel, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case you
do not elect to assume the defense of any such suit, you will reimburse us,
our officers and directors, or any controlling persons named as defendants
in such suit, for the fees and expenses of any counsel retained by us or
them. Your indemnification agreement contained in this Paragraph 13(a)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any person entitled to
indemnification pursuant to this Paragraph 13(a), and shall survive the
delivery of any Fund shares and termination of this Agreement. This
agreement of indemnity will inure exclusively to the benefit of the
persons entitled to indemnification from you pursuant to this Agreement
and their respective estates, successors and assigns.
(b) We agree to indemnify, defend and hold you and your several
officers and directors, and each Fund and its several officers and
directors or trustees or managing general partners, and any person who
controls you and/or each Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you and your several
officers and directors, or the Fund and its officers and directors or
trustees or managing general partners, or any such controlling person, may
incur under the Securities Act of 1933, as amended, or under common law
or otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by us herein, or (ii) any failure
by us to perform our obligations as set forth herein, or (iii) any untrue, or
alleged untrue, statement of a material fact contained in the information
furnished in writing by us to you or any Fund specifically for use in such
Fund's Registration Statement or Prospectus, or used in the answers to
any of the items of the Registration Statement or in the corresponding
statements made in the Prospectus, or arising out of or based upon any
omission, or alleged omission, to state a material fact in connection with
such information furnished in writing by us to you or the Fund and required
to be stated in such answers or necessary to make such information not
misleading. Our agreement to indemnify you and your officers and
directors, and the Fund and its officers and directors or trustees, and any
such controlling person, as aforesaid, is expressly conditioned upon our
being notified of any action brought against any person or entity entitled
to indemnification hereunder, such notification to be given by letter or by
telecopier, telex, telegram or similar means of same day delivery received
by us at our address as specified in Paragraph 18 of this Agreement
within seven (7) days after the summons or other first legal process shall
have been served. The failure so to notify us of any such action shall not
relieve us from any liability which we may have to you or your officers
and directors, or the Fund or its officers and directors or trustees or
managing general partners, or to any such controlling person, by reason of
any such breach, failure or untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of our indemnity
agreement contained in this Paragraph 13(b). Our indemnification
agreements contained in Paragraph 8 above, Paragraph 16 below and this
Paragraph 13(b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any person entitled
to indemnification pursuant to Paragraph 8 above, Paragraph 16 below or
this Paragraph 13(b), and shall survive the delivery of any Fund shares and
termination of this Agreement. Such agreements of indemnity will inure
exclusively to the benefit of the persons entitled to indemnification
hereunder and their respective estates, successors and assigns.
14. The names and addresses and other information concerning our
customers are and shall remain our sole property, and neither you nor your
affiliates shall use such names, addresses or other information for any
purpose except in connection with the performance of your duties and
responsibilities hereunder and except for servicing and informational
mailings relating to the Funds. Notwithstanding the foregoing, this
Paragraph 14 shall not prohibit you or any of your affiliates from utilizing
for any purpose the names, addresses or other information concerning any
of our customers if such names, addresses or other information are
obtained in any manner other than from us pursuant to this Agreement. The
provisions of this Paragraph 14 shall survive the termination of this
Agreement.
15. We agree to serve as a service agent, in accordance with the terms
of the Form of Service Agreement annexed hereto as Appendix A, Form of
Shareholder Services Agreement annexed hereto as Appendix B, and/or
Form of Distribution Plan Agreement annexed hereto as Appendix C, as
applicable, for all of our customers who purchase shares of any and all
Funds whose Prospectuses provide therefor. By executing this Agreement,
each of the parties hereto agrees to be bound by all terms, conditions,
rights and obligations set forth in the forms of agreements annexed hereto
and further agrees that such forms of agreement supersede any and all
prior service agreements or other similar agreements between the parties
hereto, relating to any Fund or Funds. It is recognized that certain parties
may not be permitted to collect distribution fees under the Form of
Distribution Plan Agreement annexed hereto, and if we are such a party,
we will not collect such fees.
16. By completing the Expedited Redemption Information Form annexed
hereto as Appendix D, we agree that you, each Fund with respect to which
you permit us to exercise an expedited redemption privilege, the Transfer
Agent of each such Fund, and your and their respective officers, directors
or trustees or managing general partners, agents, employees and affiliates
shall not be liable for and shall be fully indemnified and held harmless by
us from and against any and all claims, demands, liabilities and expenses
(including, without limitation, reasonable attorneys' fees) arising out of
or in connection with any expedited redemption payments made in reliance
upon the information set forth in such Appendix D.
17. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or joint
venture between you and us. Neither party hereto shall be, act as, or
represent itself as, the agent or representative of the other, nor shall
either party have the right or authority to assume, create or incur any
liability or any obligation of any kind, express or implied, against or in the
name of, or on behalf of, the other party. This Agreement is not intended
to, and shall not, create any rights against either party hereto by any third
party solely on account of this Agreement. Neither party hereto shall use
the name of the other party in any manner without the other party's prior
written consent, except as required by any applicable federal or state law,
rule, regulation or requirement, and except pursuant to any promotional
programs mutually agreed upon in writing by the parties hereto.
18. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or by telecopier, telex, telegram or similar means of same day
delivery (with a confirming copy by mail as provided herein). Unless
otherwise notified in writing, all notices to you shall be given or sent to
you at your offices, located at One Exchange Place, Tenth Floor, Boston, MA
02109, Attn: President (with a copy to the same address, Attention:
General Counsel), and all notices to us shall be given or sent to us at our
address shown below.
19. This Agreement shall become effective only when accepted and
signed by you, and may be terminated at any time by either party hereto
upon 15 days' prior written notice to the other party. This Agreement may
be amended by you upon 15 days' prior written notice to us, and such
amendment shall be deemed accepted by us upon the placement of any
order for the purchase of Fund shares or the acceptance of a fee payable
under this Agreement, including the Appendices hereto, after the effective
date of any such amendment. This Agreement may not be assigned by us
without your prior written consent. This Agreement constitutes the entire
agreement and understanding between the parties hereto relating to the
subject matter hereof and supersedes any and all prior agreements
between the parties hereto relating to the subject matter hereof.
20. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to
principles of conflicts of laws.
Very truly yours,
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Bank Name (Please Print or Type)
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Address
Date: --------------------------------- By:-------------------------
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Authorized Signature
NOTE: Please sign and return both copies of this Agreement to Premier
Mutual Fund Services, Inc. Upon acceptance one countersigned copy will be
returned to you for your files.
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
Date: --------------------------------- By:-------------------------
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Authorized Signature
APPENDIX A
TO BANK AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; providing periodic statements
and/or reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. In this
regard, if we are a federally chartered and supervised bank or other
banking organization, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws, rules, regulations or
requirements governing, among other things, the conduct of our activities.
As such, we are restricted in the activities we may undertake and for
which we may be paid and, therefore, intend to perform only those
activities as are consistent with our statutory and regulatory obligations.
We represent and warrant to, and agree with you, that the compensation
payable to us hereunder, together with any other compensation payable to
us by clients in connection with the investment of their assets in shares
of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a federally supervised bank or thrift institution, we
agree that, in providing services hereunder, we shall at all times act in
compliance with the Interagency Statement on Retail Sales of Nondeposit
Investment Products issued by The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of Thrift Supervision
(February 15, 1994) or any successor interagency requirements as in force
at the time such services are provided. We shall have no authority to act
as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. For all Funds as to which Board approval of this Agreement
is required, such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. For any Fund as to which Board approval of this
Agreement is required, this Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement or upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. As to all Funds, this
Agreement is terminable without penalty upon 15 days' notice by either
party. In addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the shareholder servicing and administrative
functions contemplated herein by you as to any or all of the Funds, this
Agreement shall be terminable effective upon receipt of notice thereof by
us. This Agreement also shall terminate automatically in the event of its
assignment (as defined in the Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Service Plan adopted pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant to this
Agreement shall be paid only so long as this Agreement and such Plan are
in effect. We agree that no Director, officer or shareholder of the Fund
shall be liable individually for the performance of the obligations
hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX B
TO BANK AGREEMENT
FORM OF SHAREHOLDER SERVICES AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing shareholders
of, and administering shareholder accounts in, certain mutual fund(s)
managed, advised or administered by The Dreyfus Corporation or its
subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services for our
clients who own shares of the Funds ("clients"), which services may
include, without limitation: assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; providing periodic statements
and/or reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the client's
other accounts serviced by us; arranging for bank wires; and providing
such other information and services as you reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. In this
regard, if we are a federally chartered and supervised bank or other
banking organization, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws, rules, regulations, or
requirements governing, among other things, the conduct of our activities.
As such, we are restricted in the activities we may undertake and for
which we may be paid and, therefore, intend to perform only those
activities as are consistent with our statutory and regulatory obligations.
We represent and warrant to, and agree with you, that the compensation
payable to us hereunder, together with any other compensation payable to
us by clients in connection with the investment of their assets in shares
of the Funds, will be properly disclosed by us to our clients, will be
authorized by our clients and will not result in an excessive or
unauthorized fee to us.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent. We agree that in the event an issue pertaining
to a Fund's Shareholder Services Plan is submitted for shareholder
approval, we will vote any Fund shares held for our own account in the
same proportion as the vote of those shares held for our clients' accounts.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a federally supervised bank or thrift institution, we
agree that, in providing services hereunder, we shall at all times act in
compliance with the Interagency Statement on Retail Sales of Nondeposit
Investment Products issued by The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of Thrift Supervision
(February 15, 1994) or any successor interagency requirements as in force
at the time such services are provided. We shall have no authority to act
as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement. This Agreement is terminable without penalty
upon 15 days' notice by either party. In addition, you may terminate this
Agreement as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve the Fund(s) in
such capacity, or if you cease to act as distributor of such Fund(s).
Notwithstanding anything contained herein, if we fail to perform the
shareholder servicing and administrative functions contemplated herein
by you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Shareholder Services Plan and
Prospectus and related Statement of Additional Information. We
understand that any payments pursuant to this Agreement shall be paid
only so long as this Agreement and such Plan are in effect. We agree that
no Director, officer or shareholder of the Fund shall be liable individually
for the performance of the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX C
TO BANK AGREEMENT
FORM OF DISTRIBUTION PLAN AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you with respect to our
providing distribution assistance relating to shares of certain mutual
fund(s) managed, advised or administered by The Dreyfus Corporation or
its subsidiaries or affiliates (hereinafter referred to individually as the
"Fund" and collectively as the "Funds"). You are the principal underwriter
as defined in the Investment Company Act of 1940, as amended (the "Act"),
and the exclusive agent for the continuous distribution of shares of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide distribution assistance in connection with the
sale of the shares of the Funds. In this regard, if we are a federally
chartered and supervised bank or other banking organization, you recognize
that we may be subject to the provisions of the Glass-Steagall Act and
other laws, rules, regulations or requirements governing, among other
things, the conduct of our activities. As such, we are restricted in the
activities we may undertake and for which we may be paid and, therefore,
intend to perform only those activities as are consistent with our
statutory and regulatory obligations. We represent and warrant to, and
agree with you, that the compensation payable to us hereunder, together
with any other compensation payable to us by clients in connection with
the investment of their assets in shares of the Funds, will be properly
disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space,
equipment and facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
services hereunder. We shall transmit promptly to clients all
communications sent to us for transmittal to clients by or on behalf of
you, any Fund, or any Fund's investment adviser, custodian or transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning shares of any Fund,
except those contained in the then current Prospectus for such Fund,
copies of which will be supplied by you to us in reasonable quantities upon
request. If we are a federally supervised bank or thrift institution, we
agree that, in providing services hereunder, we shall at all times act in
compliance with the Interagency Statement on Retail Sales of Nondeposit
Investment Products issued by The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of Thrift Supervision
(February 15, 1994) or any successor interagency requirements as in force
at the time such services are provided. We shall have no authority to act
as agent for the Funds or for you.
4. You reserve the right, at your discretion and without notice, to
suspend the sale of shares or withdraw the sale of shares of any or all of
the Funds.
5. We acknowledge that this Agreement shall become effective for a
Fund only when approved by vote of a majority of (i) the Fund's Board of
Directors or Trustees or Managing General Partners, as the case may be
(collectively "Directors," individually "Director"), and (ii) Directors who
are not "interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the calendar year
next following the date of execution, and thereafter shall continue
automatically for successive annual periods ending on the last day of each
calendar year. Such continuance must be approved specifically at least
annually by a vote of a majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in this
Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, at
any time, by a majority of the Fund's Directors who are not "interested
persons" (as defined in the Act) and have no direct or indirect financial
interest in this Agreement or, upon not more than 60 days' written notice,
by vote of holders of a majority of the Fund's shares. This Agreement is
terminable without penalty upon 15 days' notice by either party. In
addition, you may terminate this Agreement as to any or all Funds
immediately, without penalty, if the present investment adviser of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything contained herein,
if we fail to perform the distribution functions contemplated herein by
you as to any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This Agreement also shall
terminate automatically in the event of its assignment (as defined in the
Act).
7. In consideration of the services and facilities described herein, we
shall be entitled to receive from you, and you agree to pay to us, the fees
described as payable to us in each Fund's Distribution Plan adopted
pursuant to Rule 12b-1 under the Act, and Prospectus and related
Statement of Additional Information. We understand that any payments
pursuant to this Agreement shall be paid only so long as this Agreement
and such Plan are in effect. We agree that no Director, officer or
shareholder of the Fund shall be liable individually for the performance of
the obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such information
relating to our services hereunder as may be required to be maintained by
you and/or such Fund under applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable regulatory and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the
other party.
10. All notices required or permitted to be given pursuant to this
Agreement shall be given in writing and delivered by personal delivery or
by postage prepaid, registered or certified United States first class mail,
return receipt requested, or by telecopier, telex, telegram or similar
means of same day delivery (with a confirming copy by mail as provided
herein). Unless otherwise notified in writing, all notices to you shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address, Attention: General
Counsel), and all notices to us shall be given or sent to us at our address
which shall be furnished to you in writing on or before the effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
APPENDIX D
TO BANK AGREEMENT
EXPEDITED REDEMPTION INFORMATION FORM
The following information is provided by the Bank identified below
which desires to exercise expedited redemption privileges with respect to
shares of certain mutual funds managed, advised or administered by The
Dreyfus Corporation or its affiliates, which shares are registered in the
name of, or beneficially owned by, the customers of such Bank.
(PLEASE PRINT OR TYPE)
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NAME OF BANK
------------------------------------------------------------------
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STREET ADDRESS CITY STATE ZIP CODE
In order to speed payment, redemption proceeds shall be sent only to the
commercial bank identified below, for credit to customer accounts of the
above-named Bank.
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NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
------------------------------------------------------------------
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ACCOUNT NAME ACCOUNT NUMBER
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STREET ADDRESS CITY STATE ZIP CODE
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[STROOCK & STROOCK & LAVAN LETTERHEAD]
EXHIBIT 10
September 8, 1986
Premier California Tax Exempt
Bond Fund
666 Old Country Road
Garden City, New York 11530
Gentlemen:
We have acted as counsel to Premier California Tax
Exempt Bond Fund (the "Fund") in connection with the preparation
of a Registration Statement on Form N-1A, Registration No. 33-
7498 (the "Registration Statement"), covering shares of
beneficial interest (the "Shares") of the Fund.
We have examined copies of the Agreement and
Declaration of Trust and By-Laws of the Fund, the Registration
Statement and such other documents, records, papers, statutes
and authorities as we deemed necessary to form a basis for the
opinion hereinafter expressed. In our examination of such
material, we have assumed the genuineness of all signatures and
the conformity to original documents of all copies submitted to
us. As to various questions of fact material to such opinion,
we have relied upon statements and certificates of officers and
representatives of the Fund and others.
Attorneys involved in the preparation of this opinion
are admitted only to the bar of the State of New York. As to
various questions arising under the laws of the Commonwealth of
Massachusetts, we have relied on the opinion of Messrs. Ropes &
Gray, a copy of which is attached hereto. Qualifications set
forth in their opinion are deemed incorporated herein.
Based upon the foregoing, we are of the opinion that
the Shares of the Fund to be issued in accordance with the terms
of the offering as set forth in the Prospectus included as part
of the Registration Statement, when so issued and paid for, will
constitute validly authorized and issued Shares, fully paid and
non-assessable by the Fund.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to us
in the Prospectus included in the Registration Statement, and to
the filing of this opinion as an exhibit to any application made
by or on behalf of the Fund or any Distributor or dealer in
connection with the registration and qualification of the Fund
or its Shares under the securities laws of any state or
jurisdiction. In giving such permission, we do not admit hereby
that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the
rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN
[ROPES & GRAY LETTERHEAD]
September 8, 1986
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004
Gentlemen:
We are furnishing this opinion in connection with the
proposed offer and sale from time to time by Premier California
Tax Exempt Bond Fund, a Massachusetts business trust (the
"Trust"), of an indefinite number of shares of beneficial
interest (the "Shares") of the Trust pursuant to the Trust's
Registration Statement on Form N-1A under the Securities Act of
1933.
We are familiar with the action taken by the Trustees of
the Trust to authorize the issuance of the Shares. We have
examined the Trust's records of Trustee action, its By-Laws and
its Agreement and Declaration of Trust, as amended to date, on
file at the Office of the Secretary of State of The Commonwealth
of Massachusetts. We have examined copies of such Registration
Statement, together with all amendments thereto, in the forms
filed with the Securities and Exchange Commission, and such
other documents as we deem necessary for the purposes of this
opinion.
We assume that, upon sale of the Shares, the Trust will
receive the net asset value thereof. We also assume that, in
connection with any offer and sale of the Shares, the Trust will
take proper steps to effect compliance with applicable federal
and state laws regulating offerings and sales of securities.
Based upon the foregoing, we are of the opinion that the
Trust is authorized to issue an unlimited number of Shares, and
that, when the Shares are issued and sold and the authorized
consideration therefor is received by the Trust, they will be
validly issued, fully paid and nonassessable by the Trust.
The Trust is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Trust. However,
the Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust
or the Trustees. The Agreement and Declaration of Trust
provides for indemnification out of the Trust property for all
loss and expense of any shareholder held personally liable for
the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be
unable to meet its obligations.
We consent to the filing of this opinion as an exhibit to
the aforesaid Registration Statement.
Very truly yours,
Ropes & Gray
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated March 7, 1995, in this Registration Statement (Form N-1A 33-7498)
of Premier California Municipal Bond Fund.
ERNST & YOUNG LLP
New York, New York
March 29, 1995
Other Exhibits (a)
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C. Dey, Eric
B. Fischman, Ruth D. Leibert and John E. Pelletier and each of them, with
full power to act without the other, his or her true and lawful attorney-
in-fact and in his or her name, place and stead, in any and all capacities
(until revoked in writing) to sign any and all amendments to the
Registration Statement for each Fund listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his or
her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
/s/ Marie E. Connolly
Marie E. Connolly, President and Treasurer
SCHEDULE A
GROUPS IV & V
Dreyfus Appreciation Fund, Inc.
General California Municipal Bond Fund, Inc.
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
General Municipal Bond Fund, Inc.
General Municipal Money Market Fund, Inc.
General New York Municipal Bond Fund, Inc.
General New York Municipal Money Market Fund
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Growth Fund, Inc.
Premier Insured Municipal Bond Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Frederick C. Dey, Eric
B. Fischman, Ruth D. Leibert and John E. Pelletier and each of them, with
full power to act without the other, his or her true and lawful attorney-
in-fact and agent, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to the
Registration Statement for each Fund listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his or
her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
/s/ Clifford L. Alexander, Jr.
Clifford L. Alexander, Jr., Board Member
/s/ Peggy C. Davis
Peggy C. Davis, Board Member
/s/Ernest Kafka
Ernest Kafka, Board Member
/s/Saul B. Klaman
Saul B. Klaman, Board Member
/s/Nathan Leventhal
Nathan Leventhal, Board Member
Dated August 30, 1994
SCHEDULE A
GROUPS IV & V
Dreyfus Appreciation Fund, Inc.
General California Municipal Bond Fund, Inc.
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
General Municipal Bond Fund, Inc.
General Municipal Money Market Fund, Inc.
General New York Municipal Bond Fund, Inc.
General New York Municipal Money Market Fund
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Growth Fund, Inc.
Premier Insured Municipal Bond Fund
Premier Limited Term Municipal Bond Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C. Dey, Eric
B. Fischman, Ruth D. Leibert and John E. Pelletier and each of them, with
full power to act without the other, his or her true and lawful attorney-
in-fact and agent, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to the
Registration Statement for each Fund listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his or
her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
/s/Joseph S. DiMartino
Joseph S. DiMartino, Board Member
Dated January 18, 1995
SCHEDULE A
GROUPS IV & V
Dreyfus Appreciation Fund, Inc.
General California Municipal Bond Fund, Inc.
General California Municipal Money Market Fund
General Government Securities Money Market Fund, Inc.
General Money Market Fund, Inc.
General Municipal Bond Fund, Inc.
General Municipal Money Market Fund, Inc.
General New York Municipal Bond Fund, Inc.
General New York Municipal Money Market Fund
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Growth Fund, Inc.
Premier Insured Municipal Bond Fund
Premier Limited Term Municipal Bond Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund
OTHER EXHIBITS(b)
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Certificate of Assistant Secretary
The undersigned, Eric B. Fischman, Assistant Secretary of Premier
California Municipa Bond Fund (the "Fund"), hereby certifies that set
forth below is a copy of the resolution adopted by the Fund's Board of
Trustees pursuant to unanimous written consent authorizing the signing
of Frederick C. Dey, Eric B. Fischman, Ruth D. Leibert or John Pelletier
on behalf of the Fund pursuant to a power of attorney.
RESOLVED, that the Registration Statement and any and
all amendments and supplements thereto, may be signed
by any of Frederick C. Dey, Eric B. Fischman, Ruth D.
Leibert or John Pelletier as the attorney-in-fact for
the proper officers of the Fund, with full power of
substitution and resubstitution; and that the
appointment of each of such persons as such
attorney-in-fact is authorized and approved; and that
such attorneys-in-fact, and each of them, shall have
full power and authority to do and perform each and
every act and thing requisite and necessary to be done
in connection with such Registration Statement and any
and all amendments and supplements thereto, as fully to
all intents and purposes as the officer, for whom he is
acting as attorney-in-fact, might or could do in
person.
IN WITNESS WHEREOF, I have hereunto signed my name and
affixed the seal of the Fund on March 30, 1995.
____________________
Eric B. Fischman
Assistant Secretary
(SEAL)
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