File No. 33-61738
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. 5 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 5 [X]
(Check appropriate box or boxes.)
PREMIER INSURED 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)
----
X on December 1, 1995 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) 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 post-effective amendment.
----
Registrant has registered an indefinite number of shares of its 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 July 31, 1995 was filed on September 27, 1995.
PREMIER INSURED 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 6
4 General Description of Registrant 10
5 Management of the Fund 18
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 36
7 Purchase of Securities Being Offered 19
8 Redemption or Repurchase 19
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-34
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-14
Holders of Securities
16 Investment Advisory and Other B-15
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER INSURED 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 B-29
18 Capital Stock and Other Securities B-34
19 Purchase, Redemption and Pricing B-18, B-22
of Securities Being Offered B-26
20 Tax Status *
21 Underwriters B-29
22 Calculations of Performance Data B-29
23 Financial Statements B-75
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
- ----------------------------------------------------------------------------
PREMIER INSURED MUNICIPAL BOND FUND
(LION LOGO)
PROSPECTUS DECEMBER 1, 1995
- ----------------------------------------------------------------------------
Premier Insured Municipal Bond Fund (the "Fund") is an open-end,
management investment company, known as a mutual fund.
The Fund's investment objective is to maximize current income exempt from
Federal and, where applicable, from State personal income taxes to the extent
consistent with the preservation of capital.
The Fund permits you to invest in any of six separate non-diversified
portfolios (each, a "Series"): the National Series, the California Series,
the Connecticut Series, the Florida Series, the New Jersey Series and the New
York Series. Each Series invests primarily in a portfolio of Municipal
Obligations (as defined below) that are insured as to the timely payment of
principal and interest by recognized insurers of Municipal Obligations. Each
Series other than the National Series will invest primarily in Municipal
Obligations issued by issuers in the State after which it is named. It is
anticipated that substantially all dividends paid by each Series will be
exempt from Federal income tax and also, where applicable, will be exempt
from the personal income tax of the State after which the Series is named.
By this Prospectus, each Series is offering three Classes of shares
- - Class A, Class B and Class C - which are described herein. See
"Alternative Purchase Methods."
The Fund provides free redemption checks with respect to Class A
shares, which you can use in amounts of $500 or more for cash or to pay
bills. You can purchase or redeem Fund shares by telephone using the
TELETRANSFER 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 December 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 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- ----------------------------------------------------------------------------
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............ 6
Alternative Purchase Methods............... 9
Description of the Fund.................... 10
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.................... 35
General Information........................ 36
Appendix................................... 38
Page 2
<TABLE>
<CAPTION>
FEE TABLE
NATIONAL CONNECTICUT
SERIES SERIES
----------------------------- ----------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).... 4.50% None None 4.50% None None
Maximum Deferred Sales Charge
Imposed on Redemption
(as a percentage of the
amount subject to charge)....... None* 3.00% 1.00% None* 3.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees....... .55% .55% .55% .55% .55% .55%
12b-1 Fees............ None .50% .75% None .50% .75%
Other Expenses........ .78% .81% .78% .62% .62% .62%
Total Series Operating Expenses... 1.33% 1.86% 2.08% 1.17% 1.67% 1.92%
EXAMPLE
An investor 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 CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
1 Year................. $58 $49/$19** $31/$21** $56 $47/$17** $29/$19**
3 Years................ $85 $78/$58** $65 $80 $73/$53** $60
5 YEARS................ $115 $111/$101** $112 $106 $101/$91** $104
10 YEARS............... $198 $187*** $241 $181 $172*** $224
* 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 figure assumes conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
Page 3
<TABLE>
<CAPTION>
FLORIDA CALIFORNIA
SERIES SERIES
----------------------------- ------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)... 4.50% None None 4.50% None None
Maximum Deferred Sales Charge
Imposed on Redemption
(as a percentage of the
amount subject to charge) None* 3.00% 1.00% None* 3.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees....... .55% .55% .55% .55% .55% .55%
12b-1 Fees............ None .50% .75% None .50% .75%
Other Expenses........ .56% .54% .56% 1.02% 1.07% 1.02%
Total Series Operating Expenses 1.11% 1.59% 1.86% 1.57% 2.12% 2.32%
EXAMPLE
An investor 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 CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
1 Year................. $56 $46/$16** $29/$19** $60 $52/$22** $34/$24**
3 Years................ $79 $70/$50* $58 $92 $86/$66** $72
5 YEARS................ $103 $97/$87** $101 $127 $124/$114** $124
10 YEARS............... $174 $164*** $218 $223 $218*** $266
* 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 figure assumes conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
Page 4
<TABLE>
<CAPTION>
NEW JERSEY NEW YORK
SERIES SERIES
-------------------------------- -----------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)....... 4.50% None None 4.50% None None
Maximum Deferred Sales Charge
Imposed on Redemption
(as a percentage of the
amount subject to charge)....... None* 3.00% 1.00% None* 3.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees....... .55% .55% .55% .55% .55% .55%
12b-1 Fees............ None .50% .75% None .50% .75%
Other Expenses........ .90% .85% .90% .99% .94% .99%
Total Series Operating Expenses...... 1.45% 1.90% 2.20% 1.54% 1.99% 2.29%
EXAMPLE
An investor 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 CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- -------
1 Year................. $59 $49/$19** $32/$22** $60 $50/$20** $33/$23**
3 Years................ $89 $80/$60** $69 $91 $82/$62** $72
5 YEARS................ $121 $113/$103** $118 $125 $117/$107** $123
10 YEARS............... $211 $195*** $253 $220 $210*** $263
* 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 figure assumes conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
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, EACH SERIES' 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 costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Other Expenses for
Class C are based on amounts for Class A for the Fund's last fiscal year.
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. 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 5
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 a
Class A and Class B share of beneficial interest outstanding, total
investment return, ratios to average net assets and other supplemental
data for each Series for the periods indicated. This information has been
derived from the Series' financial statements.
<TABLE>
<CAPTION>
CALIFORNIA SERIES
---------------------------------------
CLASS A SHARES CLASS B SHARES
---------------- ----------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
---------------- -----------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
-------- ----- ------ -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year.... $12.50 $11.56 $12.50 $11.57
------- ------ ------ -------
INVESTMENT OPERATIONS:
Investment income-net............. .62 .64 .56 .58
Net realized and unrealized
(loss) on investments.......... (.94) -- (.93) --
------- ------ ------ -------
TOTAL FROM INVESTMENT OPERATIONS.... (.32) .64 (.37) .58
------- ------ ------ -------
DISTRIBUTIONS:
Dividends from investment income-net..... (.62) (.64) (.56) (.58)
------- ------ ------ -------
Net asset value, end of year...... $11.56 $11.56 $11.57 $11.57
====== ====== ======= ======
TOTAL INVESTMENT RETURN (2)........... (2.79%)(3) 5.80% (3.20%)(3) 5.27%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... -- .08% .50%(3) .57%
Ratio of net investment income to
average net assets............ 5.30%(3) 5.56% 4.78%(3) 5.10%
Decrease reflected in above ratios
due to undertakings by The Dreyfus
Corporation (limited to the expense
limitation provision of the
Management Agreement)......... 2.50%(3) 1.49% 2.50%(3) 1.55%
Portfolio Turnover Rate........... -- 3.86% -- 3.86%
Net Assets, end of year (000's omitted).... $1,473 $3,525 $2,658 $3,793
(1) From August 19, 1993 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Annualized.
</TABLE>
Page 6
<TABLE>
<CAPTION>
CONNECTICUT SERIES
-----------------------------------------------
CLASS A SHARES CLASS B SHARES
-------------------------- --------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
-------------------------- --------------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
-------- ----- ------- -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year... $12.50 $12.76 $12.50 $12.76
------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net............... .19 .72 .17 .65
Net realized and
unrealized gain on investments....... .26 .19 .26 .20
------- ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...... .45 .91 .43 .85
------- ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net....... (.19) (.72) (.17) (.65)
------- ------ ------ ------
Net asset value, end of year......... $12.76 $12.95 $12.76 $12.96
====== ====== ======= ======
TOTAL INVESTMENT RETURN(2)............... 3.61%(3) 7.43% 3.49%(3) 6.95%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... -- .07% .50%(4) .58%
Ratio of net investment income
to average net assets........... 5.17%(4) 5.66% 4.77%(4) 5.11%
Decrease reflected in above
ratios due to undertakings by
The Dreyfus Corporation (limited to
the expense limitation
provision of the Management Agreement).... 2.50%(4) 1.10% 2.50%(4) 1.09%
Portfolio Turnover Rate.............. -- 5.33% -- 5.33%
Net Assets, end of year (000's omitted).... $8,438 $12,451 $6,916 $16,612
(1) From May 5, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
</TABLE>
<TABLE>
<CAPTION>
FLORIDA SERIES
------------------------------------------
CLASS A SHARES CLASS B SHARES
----------------- -------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------- --------------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
------- ------ ------ -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year... $12.50 $12.79 $12.50 $12.78
------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................ .19 .73 .17 .67
Net realized and unrealized
gain on investments.............. .29 .28 .28 .30
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........ .48 1.01 .45 .97
------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net...... (.19) (.73) (.17) (.67)
------ ------ ------ ------
Net asset value, end of year......... $12.79 $13.07 $12.78 $13.08
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)............... 3.83%(3) 8.24% 3.62%(3) 7.86%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... -- .09% .50%(4) .59%
Ratio of net investment income
to average net assets............. 5.11%(4) 5.72% 4.62%(4) 5.20%
Decrease reflected in above
ratios due to undertakings by
The Dreyfus Corporation........... 2.06%(4) 1.02% 2.02%(4) 1.00%
Portfolio Turnover Rate.............. -- .78% -- .78%
Net Assets, end of year (000's omitted)...... $10,405 $19,541 $12,320 $21,275
(1) From May 4, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
</TABLE>
Page 7
<TABLE>
<CAPTION>
NATIONAL SERIES
-------------------------------------------
CLASS A SHARES CLASS B SHARES
------------------ ---------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------ --------------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
------- ------ ------ -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year... $12.50 $12.94 $12.50 $12.95
------ ------- ------ -------
INVESTMENT OPERATIONS:
Investment income-net................ .18 .77 .16 .71
Net realized and
unrealized gain on investments........ .44 .07 .45 .06
------ ------- ------ -------
TOTAL FROM INVESTMENT OPERATIONS...... .62 .84 .61 .77
------ ------- ------ -------
DISTRIBUTIONS:
Dividends from investment income-net...... (.18) (.77) (.16) (.71)
------ ------- ------ -------
Net asset value, end of year......... $12.94 $13.01 $12.95 $13.01
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)............... 4.99%(3) 6.86% 4.94%(3) 6.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... -- .08% .50%(4) .59%
Ratio of net investment income to average net assets... 5.44%(4) 6.02% 4.90%(4) 5.51%
Decrease reflected in above ratios due to undertakings by
The Dreyfus Corporation (limited to the expense limitation
provision of the Management Agreement)..... 2.50%(4) 1.25% 2.50%(4) 1.27%
Portfolio Turnover Rate.............. -- 9.17% -- 9.17%
Net Assets, end of year (000's omitted).... $2,525 $8,272 $3,343 $9,739
(1) From May 4, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY SERIES
-----------------------------------------------
CLASS A SHARES CLASS B SHARES
----------------------- ------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------------- --------------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
------- ----- ------- -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year... $12.50 $12.58 $12.50 $12.58
------ ------- ------ ------
INVESTMENT OPERATIONS:
Investment income-net................ .18 .71 .16 .65
Net realized and unrealized
gain on investments................ .08 .13 .08 .13
------ ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... .26 .84 .24 .78
------ ------- ------ ------
DISTRIBUTIONS:
Dividends from investment income-net...... (.18) (.71) (.16) (.65)
------ ------- ------ ------
Net asset value, end of year......... $12.58 $12.71 $12.58 $12.71
====== ======= ======= =======
TOTAL INVESTMENT RETURN(2)............... 2.07%(3) 7.01% 1.94%(3) 6.48%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... -- .10% .50%(4) .61%
Ratio of net investment income to
average net assets.................. 5.25%(4) 5.60% 4.69%(4) 5.00%
Decrease reflected in above ratios
due to undertakings by
The Dreyfus Corporation (limited to the
expense limitation provision of the
Management Agreement)............... 2.50%(4) 1.35% 2.50%(4) 1.29%
Portfolio Turnover Rate.............. -- 43.48% -- 43.48%
Net Assets, end of year (000's omitted) $2,318 $4,981 $2,373 $6,852
(1) From May 4, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
</TABLE>
Page 8
<TABLE>
<CAPTION>
NEW YORK SERIES
---------------------------------------------------
CLASS A SHARES CLASS B SHARES
------------------------ --------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
-------------------------- ---------------------
PER SHARE DATA: 1994(1) 1995 1994(1) 1995
------- ----- ------- -----
<S> <C> <C> <C> <C>
Net asset value, beginning of year... $12.50 $12.79 $12.50 $12.80
------ ------- ------ ------
INVESTMENT OPERATIONS:
Investment income-net................ .18 .71 .16 .64
Net realized and unrealized
gain (loss) on investments......... .29 (.04) .30 (.03)
------ ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS...... .47 .67 .46 .61
------ ------- ------ ------
DISTRIBUTIONS:
Dividends from investment income-net..... (.18) (.71) (.16) (.64)
------ ------- ------ ------
Net asset value, end of year......... $12.79 $12.75 $12.80 $12.77
======= ======= ====== ======
TOTAL INVESTMENT RETURN(2)............... 3.76%(3) 5.53% 3.72%(3) 5.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... -- .09% .50%(4) .60%
Ratio of net investment income to
average net assets..................... 5.28%(4) 5.64% 4.87%(4) 5.02%
Decrease reflected in above ratios
due to undertakings by The Dreyfus
Corporation (limited to the expense limitation
provision of the Management Agreement)........ 2.50%(4) 1.45% 2.50%(4) 1.39%
Portfolio Turnover Rate.............. -- 2.76% -- 2.76%
Net Assets, end of year (000's omitted)...... $2,054 $4,791 $2,199 $6,611
(1) From May 6, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
</TABLE>
Further information about each Series' 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 each Series'
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 share of a Series
represents an identical pro rata interest in that Series' investment
portfolio.
As to each Series, 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 1% of the value of the average daily net assets
of Class A. See "Distribution Plan and Shareholder Services
Plan-Shareholder Services Plan."
As to each Series, 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 Series.
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 five years of 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 1% 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
Page 9
shares of a Series automatically will convert to Class A shares of such
Series, based on the relative net asset values for shares of each such
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.
As to each Series, Class C 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 C shares are subject to a 1% CDSC, which is assessed only if you
redeem Class C shares within one year of 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%, 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 intended length of time of your
investment. You should consider whether, during the anticipated life of
your investment in the Fund, the accumulated distribution fee and CDSC 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 would 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 investment objective is to maximize current income
exempt from Federal income tax and, where applicable, from State personal
income taxes for residents of the States of California, Connecticut,
Florida, New Jersey and New York, to the extent consistent with the
preservation of capital. To accomplish this goal, each Series invests
primarily in debt securities issued by States, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, authorities and corporations, the interest from
which is, in the opinion of bond counsel to the issuer, exempt from
Federal income taxes ("Municipal Obligations") that are insured as to the
timely payment of principal and interest by recognized insurers of
Municipal Obligations. In addition, the California Series, the Connecticut
Series, the Florida Series, the New Jersey Series and the New York Series
(collectively, the "State Series") invest primarily in such Municipal
Obligations of the State after which the relevant Series is named the
interest from which is, in the opinion of bond counsel to the issuer,
exempt from Federal and, if applicable, such State's personal income
taxes (collectively, "State Municipal Obligations" or when the context so
requires, "California Municipal Obligations," "Connecticut Municipal
Obligations," "Florida Municipal Obligations," etc.). To the extent
acceptable insured State
Page 10
Municipal Obligations at any time are unavailable for investment, a State
Series will invest temporarily in State Municipal Obligations that are
not subject to insurance, insured Municipal Obligations and/or other debt
securities the interest from which is, in the opinion of bond counsel to
the issuer, exempt from Federal, but not State, income tax. With respect
to the National Series, to the extent acceptable insured Municipal
Obligations at any time are unavailable for investment, such Series will
invest temporarily in Municipal Obligations that are not subject to
insurance and/or other debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
When used herein, the term "State" refers to the State, if applicable,
after which a Series is named. Each Series' investment objective cannot
be changed without approval by the holders of a majority (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) of such
Series' outstanding voting shares. There can be no assurance that the
Series' investment objective will be achieved.
MUNICIPAL OBLIGATIONS
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 each Series' net assets (except when
maintaining a temporary defensive position) in Municipal Obligations.
Generally, at least 65% of the value of each Series' net assets (except
when maintaining a temporary defensive position) will be invested in
bonds, debentures and other debt instruments that are insured Municipal
Obligations which, with respect to the State Series, are issued by
issuers in the State after which such Series is named. See "Insurance
Feature" and "Investment Considerations and Risks-Investing in State
Municipal Obligations" below, and "Dividends, Distributions and Taxes."
No Series will be limited in the maturities of the securities in which it
will invest; currently the longest available maturity of Municipal
Obligations is 40 years.
Municipal Obligations purchased by each Series will be rated
no lower than Baa by Moody's Investors Service, Inc. ("Moody's") or BBB
by Standard & Poor's Rating Group, a division of The McGraw Hill
Companies, Inc. ("S&P") or Fitch Investors Service, L.P. ("Fitch").
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 or 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. Each Series also may invest in securities
which, while not rated, are
Page 11
determined by The Dreyfus Corporation to be of comparable quality to the
rated securities in which the Series may invest. Each Series also may
invest in Taxable Investments of the quality described under "Appendix -
Certain Portfolio Securities - Taxable Investments." Under normal market
conditions, the weighted average maturity of each Series' portfolio is
expected to exceed ten years.
From time to time, a Series 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. Each Series 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 "Investment Considerations and Risks" below.
The annual portfolio turnover rate for a series is not
expected to exceed 100%. The Fund, on behalf of a Series, may engage in,
as permitted by applicable law, various investment techniques, such as
options and futures transactions, lending portfolio securities and
short-selling. Use of certain of these techniques may give rise to
taxable income. See also "Investment Considerations and Risks" below and
"Dividends, Distributions and Taxes" and "Investment Objective and
Management Policies - Management Policies" in the Statement of
Additional Information.
INSURANCE FEATURE
At the time they are purchased by a Series, the Municipal
Obligations held in such Series' portfolio that are subject to insurance
will be insured as to timely payment of principal and interest under an
insurance policy (i) purchased by the Series or by a previous owner of
the Municipal Obligation ("Mutual Fund Insurance") or (ii) obtained by
the issuer or underwriter of the Municipal Obligation ("New Issue
Insurance"). The insurance of principal refers to the face or par value
of the Municipal Obligation and is not affected by nor does it insure the
price paid therefor by the Series or the market value thereof. The value
of each Series' shares is not insured.
New Issue Insurance is obtained by the issuer of the
Municipal Obligations and all premiums respecting such securities are
paid in advance by such issuer. Such policies are non-cancelable and
continue in force so long as the Municipal Obligations are outstanding
and the insurer remains in business.
Certain types of Mutual Fund Insurance obtained by the Fund
are effective only so long as the Fund is in existence, the insurer
remains in business and the Municipal Obligations described in the policy
continue to be held by the Series. The Fund, on behalf of the Series,
will pay the premiums with respect to such insurance. Depending upon the
terms of the policy, in the event of a sale of any Municipal Obligation
so insured by a Series, the Mutual Fund Insurance may terminate as to
such Municipal Obligation on the date of sale and in such event the
insurer may be liable only for those payments of principal and interest
which then are due and owing. Other types of Mutual Fund Insurance may
not have this termination feature. Each Series may purchase Municipal
Obligations with this type of insurance from parties other than the
issuer and the insurance would continue for the Series' benefit.
Typically, the insurer may not withdraw coverage on insured
securities held by a Series, nor may the insurer cancel the policy for
any reason except failure to pay premiums when due. The insurer may
reserve the right at any time upon 90 days' written notice to the Fund to
refuse to insure any additional Municipal Obligations purchased by a
Series after the effective date of such notice. The Fund's Board of
Trustees has reserved the right to terminate the Mutual Fund Insurance
policy for any Series if it determines that the benefits to such Series
Page 12
of having its portfolio insured are not justified by the expense
involved. See "Investment Considerations and Risks - Investing in
Insured Municipal Obligations" below.
Mutual Fund Insurance and New Issue Insurance may be obtained
from Financial Guaranty Insurance Company ("Financial Guaranty"),MBIA
Insurance Corporation ("MBIA"), AMBAC Indemnity Corporation ("AMBAC
Indemnity") and Capital Guaranty Insurance Company ("Capital Guaranty"),
although the Fund may purchase insurance from, or each Series may
purchase Municipal Obligations insured by, other insurers.
The following information regarding these insurers has been
derived from information furnished by the insurers. The Fund has not
independently verified any of the information, but the Fund is not aware
of facts which would render such information inaccurate.
Financial Guaranty is a New York stock insurance company
regulated by the New York State Department of Insurance and authorized to
provide insurance in 50 states and the District of Columbia. Financial
Guaranty is a subsidiary of FGIC Corporation, a Delaware holding company,
which is a subsidiary of General Electric Capital Corporation. Financial
Guaranty, in addition to providing insurance for the payment of interest
on and principal of Municipal Obligations held in unit investment trust
and mutual fund portfolios, provides New Issue Insurance and insurance
for secondary market issues of Municipal Obligations and for portions of
new and secondary market issues of Municipal Obligations. As of June 30,
1995, Financial Guaranty reported total capital and surplus of
approximately $978.5 million (unaudited)and admitted assets of
approximately $2.2 billion (unaudited). The claims-paying ability of
Financial Guaranty is rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by
Fitch.
MBIA, formerly known as Municipal Bond Investors Assurance
Corporation, is the principal operating subsidiary of MBIA Inc., a New
York Stock Exchange listed company.MBIA Inc. is not obligated to pay the
debts of or claims against MBIA. MBIA is domiciled in the State of New
York and licensed to do business in all 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, the Virgen Islands of the United States and the
Territory of Guam. As of June 30, 1995, MBIA had admitted assets of $3.6
billion (unaudited), total liabilities of $2.4 billion (unaudited), and
total capital and surplus of $1.2 billion (unaudited), determined in
accordance with statutory accounting practices prescribed or permitted by
insurance regulatory authorities. The claims-paying ability of MBIA is
rated "AAA" by S&P and Fitch and "Aaa" by Moody's.
AMBAC Indemnity is a Wisconsin-domiciled stock insurance
company, regulated by the Office of the Commissioner of Insurance of the
State of Wisconsin and licensed to do business in 50 states, the District
of Columbia and the Commonwealth of Puerto Rico. AMBAC Indemnity is a
wholly-owned subsidiary of AMBAC Inc., a publicly held company. AMBAC
Indemnity had admitted assets of approximately $2.3 billion (unaudited)
and statutory capital of approximately $1.26 billion (unaudited) as of
June 30, 1995. Statutory capital consists of AMBAC Indemnity's statutory
contingency reserve and policyholders' surplus. The claims-paying ability
of AMBAC Indemnity is rated "AAA" by S&P and "Aaa" by Moody's.
Capital Guaranty is an "Aaa/AAA" rated monoline stock
insurance company incorporated in the State of Maryland, and is a
wholly-owned subsidiary of Capital Guaranty Corporation, a publicly owned
Maryland insurance holding company the shares of which are traded on the
New York Stock Exchange. Capital Guaranty is authorized to provide
insurance in 50 states, the District of Columbia and three U.S.
territories. As of September 30, 1995, the total statutory policyholders'
surplus and contingency reserve of Capital Guaranty was approximately
$205 million (unaudited) and the total admitted assets were approximately
$327 million (unaudited).
Additional information concerning the insurance feature
appears in the Statement of Additional Information to which your
attention is directed.
Page 13
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL - 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 Series, 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. 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. Certain securities
purchased by the Series, such as those rated Baa by Moody's and BBB by
S&P or Fitch, may be subject to such risk with respect to the issuing
entity and to greater market fluctuations than certain lower yielding,
higher rated fixed-income securities. Obligations which are rated Baa are
considered medium grade obligations; they are neither highly protected
nor poorly secured, and are considered by Moody's to have speculative
characteristics. Bonds rated BBB by S&P are regarded as having adequate
capacity to pay interest and repay principal, and while such bonds
normally exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for bonds in this
category than in higher rated categories. Bonds rated BBB by Fitch 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. See "Appendix B" in the Statement of
Additional Information. Each Series' net asset value generally will not
be stable and should fluctuate based upon changes in the value of such
Series' portfolio securities.
INVESTING IN STATE MUNICIPAL OBLIGATIONS (STATE SERIES ONLY) - You
should consider carefully the special risks inherent in each State
Series' investment in its respective State's Municipal Obligations.
Certain of the States have experienced financial difficulties, the
recurrence of which could result in defaults or declines in the market
values of various Municipal Obligations in which such Series invests. If
there should be a default or other financial crises relating to a State
or an agency or municipality thereof, the market value and marketability
of outstanding State Municipal Obligations in a State Series' portfolio
and interest income to such Series could be adversely affected. You
should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors.
CALIFORNIA SERIES. The special risks inherent in an
investment in California Municipal Obligations 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.
From mid-1990 to late 1993, the State suffered a recession with the worst
economic, fiscal and budget conditions since the 1930s. As a result, the
State experienced recurring budget deficits for four of the five fiscal
years ending June 30, 1992. The State had an operating surplus of
approximately $109 million in 1992-93, and $917 million in 1993-94.
However, at June 30, 1994, according to California's Department of
Finance, the State's Special Fund for Economic Uncertainties had an
accumulated deficit, on a budget basis, of approximately $1.8 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 in revenue anticipation warrants and $3.0 billion of
revenue anticipation notes. The 1994-95 Budget Act contains a plan to
retire a projected $1.025 billion deficit in the 1995-96 fiscal year. The
Department of Finance projects that, after repaying the last of the
carryover budget deficit, there will be a positive balance of $28 million
in the Special Fund for Economic Uncertainties at June 30, 1996. As a
result of the deterioration in the State's budget and cash situa-
Page 14
tion, 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.
CONNECTICUT SERIES. Connecticut's economy relies in part on
activities that may be adversely affected by cyclical change, and recent
declines in defense spending have had a significant impact on
unemployment levels. Although the State recorded General Fund surpluses
in the fiscal years 1985 through 1987, and 1992, 1993 and 1994.
Connecticut reported deficits from its General Fund operations for the
fiscal years 1988 through 1991. Together with the deficit carried forward
from the State's 1990 fiscal year, the total General Fund deficit for the
1991 fiscal year was $965.7 million. The total deficit was funded by the
issuance of General Obligation Economic Recovery Notes. The Comptroller
reported that the State ended the 1994 fiscal year with a General Fund
operating surplus of $19.7 million. The Comptroller, however, estimated
the cumulative projected deficit under GAAP for the fiscal year ended
June 30, 1994 to have been approximately $465.8 million. As a result of
the recurring budgetary problems, S&P downgraded the State's general
obligation bonds from AA+ to AA in April 1990 and to AA- in September
1991. Fitch downgraded the State's general obligation bonds from AA+ to
AA in March 1995. Moody's currently rates Connecticut's bonds Aa.
FLORIDA SERIES. The Florida Constitution and Statutes mandate
that the State budget as a whole, and each separate fund within the State
budget, be kept in balance from currently available revenues each fiscal
year. Florida's Constitution permits issuance of Florida Municipal
Obligations pledging the full faith and credit of the State, with a vote
of the electors, to finance or refinance fixed capital outlay projects
authorized by the Legislature, provided that the outstanding principal
does not exceed 50% of the total tax revenues of the State for the two
preceding years. Florida's Constitution also provides that the
Legislature shall appropriate monies sufficient to pay debt service on
State bonds pledging the full faith and credit of the State as the same
becomes due. All State tax revenues, other than trust funds dedicated by
Florida's Constitution for other purposes, would be available for such an
appropriation, if required. Revenue bonds may be issued by the State or
its agencies without a vote of Florida's electors only to finance or
refinance the cost of State fixed capital outlay projects which may be
payable solely from funds derived directly from sources other than State
tax revenues. Fiscal year 1995-96 total General Revenue, Working Capital
and Budget Stabilization funds available are estimated to be $15.149
billion, which would result in unencumbered reserves of approximately
$325.1 million at the end of fiscal 1995-96. The General Revenue, Working
Capital and Budget Stabilization funds ended the 1994-95 fiscal year with
unencumbered reserves of $290.3 million.
NEW JERSEY SERIES. Although New Jersey enjoyed a period of
economic growth with unemployment levels below the national average
during the mid-1980's, its economy slowed down well before the onset of
the national recession in July 1990. Reflecting the economic downturn,
New Jersey's unemployment rate rose from 3.6% in the first quarter of
1989 to 9.0% in 1993. As a result of New Jersey's fiscal weakness, in
July 1991, S&P lowered its rating of the State's general obligation debt
from AAA to AA+.
NEW YORK SERIES. The special risks inherent in investing in
New York Municipal Obligations result from the financial condition of New
York State, and certain of its public bodies and municipalities,
including New York City. Beginning in early 1975, New York State, New York
City and other State entities faced serious financial difficulties which
jeopardized the credit standing and impaired the borrowing abilities of
such entities and contributed to high interest rates on, and lower market
prices for, debt obligations issued by them. A recurrence of such
financial difficulties or a failure of certain financial recovery
programs could result in defaults or declines in the market values of
various New York Municipal Obligations in which the New York Series may
invest. If there should be a default or other financial crisis relating
to
Page 15
New York State, New York City, a State or City agency, or a State
municipality, the market value and marketability of outstanding New York
Municipal Obligations in the New York Series' portfolio and the interest
income to such Series could be adversely affected. Moreover, the national
recession and the significant slowdown in the New York regional economy
in the early 1990's added substantial uncertainty to estimates of the
State's tax revenues, which, in part, caused New York State to incur
cash-basis operating deficits in the General Fund and issue deficit notes
during the fiscal periods 1989 through 1992. The State's financial
operations have improved, however, during recent fiscal years. During the
fiscal periods 1992 through 1995, New York recorded balanced budgets on a
cash-basis. On a GAAP-basis, the State reported a General Fund operating
deficit of $1.426 billion for the 1994-95 fiscal year, as compared to an
operating surplus of $914 million in the prior fiscal year. The 1994-95
fiscal year deficit was caused by several factors, including the use of
$1.026 billion of the prior year's cash-based surplus to fund fiscal 1995
operating expenses and the adoption of changes in accounting
methodologies by the State Comptroller. There can be no assurance that
New York will not face substantial potential budget gaps in future years.
In January 1992, Moody's lowered from A to Baa1 the ratings on certain
appropriation-backed debt of New York State and its agencies. The State's
general obligation, State-guaranteed and New York State Local Government
Assistance Corporation bonds continued to be rated A by Moody's. In
January 1992, S&P lowered from A to A- its ratings of New York State
general obligation bonds and stated that it continues to assess the
ratings outlook as negative. The ratings of various agency debt, State
moral obligations, contractual obligations, lease purchase obligations
and State guarantees also were lowered. In February 1991, Moody's lowered
its rating on New York City's general obligation bonds from A to Baa1 and
in July 1995, S&P lowered its ratings on such bonds from A- to BBB+. The
rating changes reflected the rating agencies' concerns about the
financial condition of New York State and City, the heavy debt load of
the State and City, and economic uncertainties in the region.
INVESTING IN INSURED MUNICIPAL OBLIGATIONS - The insurance feature
is intended to reduce financial risk, but the cost thereof and the
restrictions on investments imposed by the guidelines in the insurance
policy will result in a reduction in the yield on the Municipal
Obligations purchased by a Series.
Because coverage under certain Mutual Fund Insurance policies
may terminate upon sale of a security from a Series' portfolio, insurance
with this termination feature should not be viewed as assisting the
marketability of securities in the Series' portfolio, whether or not the
securities are in default or subject to a serious risk of default. The
Dreyfus Corporation intends to retain any Municipal Obligations subject
to such insurance which are in default or, in the view of The Dreyfus
Corporation, in significant risk of default and to recommend to the Board
of Trustees that the Fund place a value on the insurance which will be
equal to the difference between the market value of the defaulted
security and the market value of similar securities of minimum investment
grade (i.e., rated Baa by Moody's or BBB by S&P or Fitch) which are not
in default. To the extent that a Series holds defaulted securities
subject to Mutual Fund Insurance with this termination feature, it may be
limited in its ability in certain circumstances to purchase other
Municipal Obligations. While a defaulted Municipal Obligation is held in
a Series' portfolio, such Series continues to pay the insurance premium
thereon but also is entitled to collect interest payments from the insurer
and retains the right to collect the full amount of principal from the
insurer when the security comes due.
Unlike certain Mutual Fund Insurance policies, New Issue
Insurance does not terminate with respect to a Municipal Obligation once
it is sold by a Series. Therefore, the Fund expects that the market
value, and thus the marketability, of a defaulted security covered by New
Issue Insurance generally will be greater than the market value of an
otherwise comparable defaulted security covered by Mutual Fund Insurance
with the termination feature. The Fund, at its option, may purchase from
Financial Guaranty secondary market insurance ("Secondary
Page 16
Market Insurance") on any Municipal Obligation purchased by a Series. By
purchasing Secondary Market Insurance, the Fund would obtain, upon
payment of a single premium, insurance against nonpayment of scheduled
principal and interest for the remaining term of the Municipal
Obligation, regardless of whether the Series then owned such security.
Such insurance coverage would be non-cancelable and would continue in
force so long as the security so insured is outstanding and the insurer
remains in business. The purpose of acquiring Secondary Market Insurance
would be to enable a Series to sell a Municipal Obligation to a third
party as a high rated insured Municipal Obligation at a market price
greater than what otherwise might be obtainable if the security were sold
without the insurance coverage.
INVESTING IN MUNICIPAL OBLIGATIONS - Each Series 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 or, with respect to the
National Series also, securities whose issuers are located in the same
state. As a result, each Series may be subject to greater risk as
compared to a fund that does not follow this practice.
Certain municipal lease/purchase obligations in which the
Series 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 the available yield. Shareholders
should consult their tax advisers concerning the effect of these
provisions on an investment in the Fund. Proposals that may restrict or
eliminate the income tax exemption for interest on Municipal Obligations
may be introduced in the future. If any such proposal were enacted that
would reduce the availability of Municipal Obligations for investment by
the Fund so as to adversely affect Fund shareholders, the Fund would
reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration.
If legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth
herein.
ZERO COUPON SECURITIES - 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, a Series 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.
USE OF DERIVATIVES - Each Series may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments which derive
their performance, at least in part, from the performance of an
underlying asset, index or interest rate. The Derivatives the Series may
use include options and futures. While Derivatives can be used
effectively in furtherance of the Series' investment objective, under
certain market conditions, they can increase the volatility of the
Series' net asset value, can decrease the liquidity of the Series'
investments and make more difficult the accurate pricing of the Series'
portfolio. See "Appendix - Investment Techniques - Use of
Derivatives"below, and "Investment
Page 17
Objective and Management Policies - Management Policies - Derivatives" in
the Statement of Additional Information.
NON-DIVERSIFIED STATUS - Each Series' classification as a
"non-diversified" investment company means that the proportion of such
Series' assets that may be invested in the securities of a single issuer
is not limited by the 1940 Act. A "diversified" investment company is
required by the 1940 Act generally to invest, with respect to 75% of its
total assets, not more than 5% of such assets in the securities of a
single issuer. Since a relatively high percentage of each Series' assets
may be invested in the securities of a limited number of issuers, the
Series' portfolio securities may be more sensitive to changes in the
market value of a single issuer. However, to meet Federal tax
requirements, at the close of each quarter no Series may have more than
25% of its total assets invested in any one issuer and, with respect to
50% of its total assets, more than 5% of its total assets invested in any
one issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS - Investment decisions for the Fund are
made independently from those of other investment companies advised by
The Dreyfus Corporation. However, if such other investment companies are
prepared to invest in, or desire to dispose of, Municipal Obligations or
Taxable Investments at the same time as the Fund, available investments
or opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of
the position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary
of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of September 30, 1995, The Dreyfus Corporation
managed or administered approximately $78 billion in assets for
approximately 1.8 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 primary portfolio manager for the
California Series is Stephen C. Kris. He held that position since
inception of the Series and has been an employee of The Dreyfus
Corporation since 1988. The primary portfolio manager for each of the
Connecticut Series, the Florida Series, the National Series, the New
Jersey Series and the New York Series is L. Lawrence Troutman. He has
held that position since inception of the relevant series and has been an
employee of The Dreyfus Corporation since 1985. The Fund's other portfolio
managers are identified in the 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 Association, Mellon Bank (MD), The Boston
Company, Inc., AFCOCredit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $209 billion
in assets as of September 30, 1995, including approximately $80 billion
in proprietary mutual fund assets. As of September 30, 1995, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $717 billion in
assets including $55 billion in mutual fund assets.
Page 18
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 each Series' average daily net assets. From
time to time, The Dreyfus Corporation may waive receipt of its fees
and/or voluntarily assume certain expenses of a Series, which would have
the effect of lowering the overall expense ratio of that Series 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 July 31, 1995, no management fee was paid by the
Fund with respect to any Series pursuant to undertakings 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's ultimate parent company is Boston Institutional
Group, Inc.
Dreyfus Transfer, Inc., a wholly-owned subsidiary of
TheDreyfus Corporation, is located at One American Express Plaza,
Providence, Rhode Island 02903, and serves as 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, such as investment
advisers, accountants and estate planning firms (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.
When purchasing Series' shares, you must specify which Class
is being purchased. Share certificates are issued only upon your written
request. No certificates are issued for fractional shares. It is not
recommended that the Fund be used as a vehicle for Keogh, IRA or other
qualified retirement plans. The Fund reserves the right to reject any
purchase order.
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. You should consult your
Service Agent in this regard.
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 Series' shares by check or wire, or through
the TELETRANSFER Privilege described below. Checks should be made payable
to "Premier Insured Municipal Bond Fund," and should specify the Series
in which you are investing. Payments to open new accounts which are
mailed should be sent to Premier Insured 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
Insured Municipal Bond Fund, P.O. Box 105, Newark, New Jersey 07101-0105.
Neither initial nor subsequent investments should be made by third party
check.
Page 19
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,
together with the applicable Series' DDA# as shown below, for purchase of
Fund shares in your name:
FOR CLASS A SHARES
DDA# 8900088311/Premier Insured Municipal Bond Fund/National
Series-Class A shares
DDA# 8900118172/Premier Insured Municipal Bond
Fund/California Series-Class A shares
DDA# 8900088346/Premier Insured Municipal Bond
Fund/Connecticut Series-Class A shares
DDA# 8900088362/Premier Insured Municipal Bond Fund/Florida
Series-Class A shares
DDA# 8900088389/Premier Insured Municipal Bond Fund/New
Jersey Series-Class A shares
DDA# 8900088400/Premier Insured Municipal Bond Fund/New York
Series-Class A shares
FOR CLASS B SHARES
DDA# 8900115440/Premier Insured Municipal Bond Fund/National
Series-Class B shares
DDA# 8900115270/Premier Insured Municipal Bond
Fund/California Series-Class B shares
DDA# 8900115459/Premier Insured Municipal Bond
Fund/Connecticut Series-Class B shares
DDA# 8900115467/Premier Insured Municipal Bond Fund/Florida
Series-Class B shares
DDA# 8900115475/Premier Insured Municipal Bond Fund/New
Jersey Series-Class B shares
DDA# 8900115491/Premier Insured Municipal Bond Fund/New York
Series-Class B shares
FOR CLASS C SHARES
DDA#8900276185/Premier Insured Municipal Bond Fund/National
Series-Class C shares
DDA#8900276193/Premier Insured Municipal Bond Fund/California
Series-Class C shares
DDA#8900276207/Premier Insured Municipal Bond
Fund/Connecticut Series-Class C shares
DDA#8099276215/Premier Insured Municipal Bond Fund/Florida
Series-Class C shares
DDA#8900276223/Premier Insured Municipal Bond Fund/New Jersey
Series-Class C shares
DDA#8900276231/Premier Insured Municipal Bond Fund/New York
Series-Class C shares;
The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment 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.
Fund shares also may be purchased through AUTOMATIC Asset
BuilderRegistration Mark and the Government Direct Deposit Privilege
described under "Shareholder Services." These services enable you to make
regularly scheduled investments and may provide you with a convenient way
to invest for long-term financial goals. You should be aware, however,
that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
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."
Shares of each Series are sold on a continuous basis. Net
asset value per share of each Class is determined as of the close of
trading on the floor of the New York Stock Exchange
Page 20
(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
net assets of each Series represented by such Class (i.e., the value of
assets of each Series less liabilities) by the total number of Series'
shares of such Class outstanding. Each Series' 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 the Series' investments, see
"Determination of Net Asset Value" in the Statement of Additional
Information.
If an order is received in proper form by the Transfer Agent
or other 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 dealer's responsibility to transmit orders so
that they will be received by the Distributor or its designee before the
close of its business day.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN to the
Fund could subject you to a $50 penalty imposed by the Internal Revenue
Service (the "IRS").
CLASS A SHARES-The public offering price for Class A shares
of each Series 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
$1,000,000 or more.. -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales charge as part of an
investment of a least $1,000,000 and redeemed within two years of
purchase. The terms contained in the section of the Prospectus entitled
"How to Redeem Fund Shares - Contingent Deferred Sales Charge"
(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 that 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 financial institution with respect to the sale of
Fund shares) may pur-
Page 21
chase 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 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.
Class A shares also may be purchased at net asset value
through certain broker-dealers and other financial institutions which
have entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by
TheDreyfus Corporation or its affiliates. The purchase of Class A shares
of the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii)been obligated to pay at any time
during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i) qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United States, (ii) a State, county or city or
instrumentality thereof, (iii) a charitable organization (as defined in
Section 501(c)(3) of the Code investing $50,000 or more in Fund shares,
and (iv) a charitable remainder trust (as defined in Section 501(c)(3) of
the Code).
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, those incentives
may be offered only to certain dealers who have sold or may sell
significant amounts of shares.
CLASS B SHARES - The public offering price for Class B
shares of each Series 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 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.
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 is imposed, however, 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 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 previously purchased
and still hold Class A shares of the Fund, or of any other Eligible Fund
or combination
Page 22
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 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 shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Fund's
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of 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 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 a Series, shares of the same
Class in one of the other Series, or 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 ("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 Dividend Sweep and the Automatic Withdrawal Plan.
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
Page 23
Application, indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege,
you may telephone exchange instructions by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. See "How to Redeem
Fund Shares_Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made; Telephone Exchange Privilege, Check Redemption
Privilege, 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 call 1-800-645-6561. 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.
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 a Series, in shares of the same Class of one of the other Series or 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 day 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 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 ClassC 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 canceled by the Fund
or the Transfer Agent. You may modify or cancel your exercise of this
Privilege at any time by mailing written notification to Premier Insured
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. For more information concerning this
Privilege and the funds in the Premier Family of Funds
Page 24
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 BUILDERRegistration Mark
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
Insured 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 the 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 Insured Municipal Bond Fund, P.O. Box 9671, 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.
Page 25
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 a 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 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 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 their clients a
nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the
redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Series' then-current net
asset value.
Page 26
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 REDEMPTION 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 of a Series 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 such Series 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 such Series held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has
declined below their original cost as a result of the Series'
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:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
------------------- -----------------------
<S> <C> <C>
First............................................. 3.00
Second............................................ 3.00
Third............................................. 2.00
Fourth............................................ 2.00
Fifth............................................. 1.00
Sixth............................................. 0.00
</TABLE>
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
Page 27
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
had 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.
CLASS C SHARES - A CDSC of 1% 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 other
products made available through 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, and
(d) a distribution following retirement under a tax-deferred retirement
plan or upon attaining age 701\2 in the case of an IRA or Keogh plan or
custodial account pursuant to Section 403(b) of the Code. If the Fund's
Board determines to discontinue the waiver of the CDSC, the disclosure in
the Fund's prospectus will be revised appropriately. 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.
PROCEDURES
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, using the Check Redemption
Privilege with respect to Class A shares only, through 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 avail-
Page 28
able 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
TELETRANSFER 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 Insured Municipal Bond Fund, P.O.
Box 6587, Providence, Rhode Island 02940-6587. 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 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
Page 29
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. In addition, this Privilege will be
terminated immediately, without notice, with respect to any account
which is, or becomes, subject to backup withholding on redemptions (see
"Dividends, Distributions and Taxes"). Any Redemption Check written on
an account which has become subject to backup withholding on redemptions
will not be honored by the Transfer Agent.
TELETRANSFER PRIVILEGE
You may redeem 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 only up to $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 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 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 will accept orders from Selected
Dealers with which it 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.
Page 30
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class B and Class C shares are subject to a Distribution Plan
and Class A, Class B and Class C shares are subject to a Shareholder
Services Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the 1940 Act, 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 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 each such Class. 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Each Series of 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 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 Series
and the Class from which they are paid at net asset value without a sales
load or, at your option, paid in cash. Each Series' 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. If you are an
omnibus account-holder and indicate in a partial redemption request that
a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his
or her account, such portion of the accrued dividends will be paid to you
along with the proceeds of the redemption. Distributions by each Series
from net realized securities gains, if any, generally are declared and
paid once a year, but the Series 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
dividends and distributions in cash or to reinvest in additional shares
of the Series and the 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
Page 31
that the expenses attributable solely to a particular Class will be borne
exclusively by such 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."
FEDERAL TAX TREATMENT
Under the Code, each Series of the Fund is treated as a
separate entity for purposes of qualification and taxation as a regulated
investment company. Except for dividends from Taxable Investments, the
Fund anticipates that substantially all dividends paid by a Series will
not be subject to Federal income tax. Dividends derived from Taxable
Investments, together with distributions from any net realized short-term
securities gains and all or a portion of any gains realized from the sale
or other disposition of certain market discount bonds, paid by the Fund
are subject to Federal income tax as ordinary income whether or not
reinvested. Distributions from net realized long-term securities gains of
a Series generally are taxable as long-term capital gains for Federal
income tax purposes if you are a citizen or resident of the United
States. Dividends and distributions attributable to gains derived from
securities transactions and from the use of certain of the investment
techniques will be subject to Federal income tax. 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 shares of any
Series which is deemed to relate to exempt-interest dividends is not
deductible. No dividend paid by any Series will qualify for the dividends
received deduction allowable to certain U.S. corporations.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares of a Series if you exchange your
Class A shares for shares of another Series or fund advised by The
Dreyfus Corporation within 91 days of purchase and such other Series or
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 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 other Series or fund shares received
on the exchange.
Although all or a substantial portion of the dividends paid
by each Series may be excluded by shareholders of the Series from their
gross income for Federal income tax purposes, each Series 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 a Series purchases such securities, the portion of the
Series' 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.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by a Series to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate
of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by a Series to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless
of the extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
The exchange of shares of one fund or Series for shares of
another is treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore, an exchanging
shareholder may realize a taxable gain or loss.
Page 32
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 a Series pays dividends derived from
taxable income, it intends to designate as taxable the same percentage of
the day's dividend 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 each Series has
qualified for the fiscal year ended July 31, 1995 as a "regulated
investment company" under the Code. Each Series intends to continue to so
qualify so long as such qualification is in the best interests of its
shareholders. Such qualification relieves the Series of any liability for
Federal income tax to the extent its earnings are distributed in
accordance with applicable provisions of the Code. Each Series of 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.
STATE AND LOCAL TAX TREATMENT
Each State Series will invest primarily in Municipal
Obligations of the State after which the Series is named. Except to the
extent specifically noted below, dividends by a State Series are not
subject to an income tax by such State to the extent that the dividends
are attributable to interest on such Municipal Obligations. However, some
or all of the other dividends or distributions by a Series may be taxable
by those States that have income taxes, even if the dividends or
distributions are attributable to income of the Series derived from
obligations of the United States or its agencies or instrumentalities.
The Fund anticipates that a substantial portion of the
dividends paid by each State Series will not be subject to income tax of
the State after which the Series is named. However, to the extent that
you are obligated to pay State or local taxes outside of such State,
dividends earned by an investment in such Series may represent taxable
income. Also, all or a portion of the dividends paid by a Series that are
not subject to income tax of the State after which the Series is named
may be a preference item for such State's alternative minimum tax (where
imposed). Finally, you should be aware that State and local taxes, other
than those described above, may apply to the dividends, distributions or
shares of a Series.
The paragraphs below discuss the State tax treatment of
dividends and distributions by each State Series to residents of the
State after which such Series is named. Investors should consult their
own tax advisers regarding specific questions as to Federal, State and
local taxes.
Page 33
CALIFORNIA SERIES
Except for dividends from Taxable Investments, the Fund
anticipates that substantially all dividends paid by the California
Series will not be subject to Federal or State of California personal
income taxes.
If, at the close of each quarter of its taxable year, at
least 50% of the value of the California Series' total assets consists of
Federal tax exempt obligations, then the California Series 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 California Series 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 California Series' total assets consists of
obligations which, when held by an individual, the interest therefrom is
exempt from California personal income tax, and if the California Series
qualifies as a management company under the California Revenue and
Taxation Code, and sends written notice to its shareholders not later
than 60 days following the end of its taxable year designating the
dividend as exempt from California personal income tax, then the
California Series 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 California Series to a noncorporate shareholder with respect to any
taxable year cannot exceed such shareholder's pro-rata share of interest
received by the California Series during such year that is exempt from
California taxation less any expenses and expenditures deemed to have
been paid from such interest.
Unlike under Federal tax law, the California Series'
shareholders will not be subject to California personal income tax, or
receive a credit for California taxes paid by the California Series, 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.
CONNECTICUT SERIES
Dividends paid by the Connecticut Series that qualify as
exempt-interest dividends for Federal income tax purposes are not subject
to the Connecticut income tax on individuals, trusts and estates, to the
extent that such dividends are derived from income received by the Series
as interest from Connecticut Municipal Obligations or obligations the
interest with respect to which Connecticut is prohibited by Federal law
from taxing. Dividends derived from other sources are taxable by
Connecticut, except that distributions qualifying as capital gains
dividends for Federal income tax purposes are not taxable by Connecticut
to the extent derived fromConnecticut Municipal Obligations. In the case
of a shareholder subject to the Connecticut income tax and required to
pay the Federal alternative minimum tax, the portion of exempt-interest
dividends paid by the Series that is derived from income received by the
Series as interest from Connecticut Municipal Obligations or obligations
the interest with respect to which Connecticut is prohibited by Federal
law from taxing and that is treated as a preference item for purposes of
the Federal alternative minimum tax is not subject to the net Connecticut
minimum tax.
Dividends qualifying as exempt-interest dividends for Federal
income tax purposes that are distributed by the Series to entities taxed
as corporations under the Connecticut corporation business tax are
included in gross income for purposes of that tax.
The shares of the Series are not subject to property taxation
by the State of Connecticut or its political subdivisions.
FLORIDA SERIES
Dividends or distributions paid by the Florida Series to a
Florida individual resident are not taxable by Florida. However, Florida
imposes an intangible personal property tax on shares of the Series owned
by a Florida resident on January 1 of each year unless such shares
qualify for an exemption from the tax.
Page 34
Dividends qualifying as exempt-interest dividends for Federal
income tax purposes as well as other federally taxable dividends and
distributions that are distributed by the Series to entities taxed as
corporations under Florida law may not be exempt from the Florida
corporate income tax.
The State of Florida, Department of Revenue has issued a
Technical Assistance Advisement which provides that Florida Series'
shares owned by a Florida resident will be exempt from the intangible
personal property tax so long as the Series' portfolio includes only
assets, such as notes, bonds, and other obligations issued by the State
of Florida or its municipalities, counties, and other taxing districts,
the United States Government, and its agencies, Puerto Rico, Guam, and
the U.S. Virgin Islands, and other assets which are exempt from that tax.
NEW JERSEY SERIES
The New Jersey Series intends to be a "qualified investment
fund" within the meaning of the New Jersey gross income tax. The primary
criteria for constituting a "qualified investment fund" are that (i) such
Series is an investment company registered with the Securities and
Exchange Commission, which for the calendar year in which the dividends
and distributions (if any) are paid, has no investments other than
interest-bearing obligations, obligations issued at a discount, and cash
and cash items, including receivables, and financial options, futures and
forward contracts, or other similar financial instruments relating to
interest-bearing obligations, obligations issued at a discount or bond
indexes related thereto and (ii) at the close of each quarter of the
taxable year, the Series has not less than 80% of the aggregate principal
amount of all of its investments, excluding financial options, futures
and forward contracts, or other similar financial instruments related to
interest-bearing obligations, obligations issued at a discount or bond
indexes related thereto, cash and cash items, which cash items shall
include receivables, in New Jersey Municipal Obligations and certain
other specified securities. Additionally, a qualified investment fund must
comply with certain continuing reporting requirements.
If the New Jersey Series qualifies as a qualified investment
fund and the New Jersey Series complies with its reporting obligations,
(a) dividends and distributions paid by the Series to a New Jersey
resident individual shareholder will not be subject to New Jersey gross
income tax to the extent that the dividends and distributions are
respectively attributable to income earned by the Series as interest on
or gain from New Jersey Municipal Obligations or certain other specified
securities, and (b) gain from the sale of shares in the Series by a New
Jersey resident individual shareholder will not be subject to the New
Jersey gross income tax.
Shares of the New Jersey Series are not subject to property
taxation by New Jersey or its political subdivisions.
NEW YORK SERIES
Except for dividends from Taxable Investments, the Fund
anticipates that substantially all dividends paid by the New York Series
will not be subject to Federal, New York State or New York City personal
income taxes.
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.
Page 35
Current yield refers to each Series' annualized net
investment income per share over a 30-day period, expressed as a
percentage of the net asset value (or maximum offering price in the case
of Class A) per share 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 each Series' 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 a Series 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 each Series'
performance will include such Series' average annual total return for
one, five and ten year periods, or for shorter periods depending upon the
length of time during which each Series has operated.
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
net asset value (or maximum offering price in the case of Class A) per
share 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 also may
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 on Class A shares
which, if reflected, would reduce the performance quoted.
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 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 March
12, 1992, and commenced operations on August 19, 1993. On December 8,
1993, the Fund's name was changed from Premier California Insured
Municipal Bond Fund to Premier Insured Municipal Bond Fund. The Fund is
authorized to issue an unlimited number of shares of beneficial interest,
par value $.001 per share. Each Series' shares are classified into three
classes-Class A, Class B and Class C. Each share has
Page 36
one vote and shareholders will vote in the aggregate and not by class
except as otherwise required by law. 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.
The Fund is a "series fund," which is a mutual fund divided
into separate portfolios, each is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder
of one Series is not deemed to be a shareholder of any other Series. For
certain matters Fund shareholders vote together as a group; as to others
they vote separately by Series.
To date, the Trustees have authorized the creation of six
Series of shares. All consideration received by the Fund for shares of
one of the Series and all assets in which such consideration is invested,
will belong to that Series (subject only to the rights of creditors of
the Fund) and will be subject to the liabilities related thereto. The
income attributable to, and the expenses of, one Series would be treated
separately from those of the other Series.
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's 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
management 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 Fund intends to
conduct its operations 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.
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.
Page 37
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY - Each Series is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 331/3% of the value of such company's total
assets. Each Series currently intends to borrow money only for temporary
or emergency (not leveraging) purposes, in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings exceed 5% of
a Series' total assets, the Series will not make any additional
investments.
SHORT-SELLING - In these transactions, the Series sells a security
it does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Series must borrow the
security to make delivery to the buyer. The Series is obligated to
replace the security borrowed by purchasing it subsequently 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 Series. The
Series will incur a loss if the price of the security increases between
the date of the short sale and the date on which the Series replaces the
borrowed security; it will realize a gain if the security declines in
price between those dates.
Securities will not 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 Series' net assets. No Series
may 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
Series' net assets. No Series may sell short the securities of any class
of an issuer if, as a result of such sale, the Series would have sold
short in the aggregate more than 5% of the outstanding securities of that
class.
Each Series also may make short sales "against the box," in
which the Series enters into a short sale of a security it owns in order
to hedge an unrealized gain on the security. At no time will more than
15% of the value of the Series' net assets be in deposits on short sales
against the box.
USE OF DERIVATIVES - Although neither the Fund nor any Series will
be a commodity pool, Derivatives subject the Series to the rules of the
Commodity Futures Trading Commission which limit the extent to which the
Series can invest in certain Derivatives. Each Series may invest in
futures contracts and options with respect thereto for hedging purposes
without limit. However, none of the Series may invest in such contracts
and options for other purposes if the sum of the amount of initial margin
deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceed 5% of the
liquidation value of the Series' assets, after taking into account
unrealized profits and unrealized losses on such contracts and options;
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% limitation.
Each Series may invest up to 5% of its assets, represented by
the premium paid, in the purchase of call and put options. Each Series
may write (i.e., sell) covered call and put option contracts to the
extent of 20% of the value of its net assets at the time such option
contracts are written. When required by the Securities and Exchange
Commission, the Series will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its purchase of
Derivatives. To maintain this required cover, the Series may have to sell
portfolio securities at disadvantageous prices or times since it may not
be possible to liquidate a Derivative position at a reasonable price.
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Series'
performance.
Page 38
If a Series invests in Derivatives at inappropriate times or
judges market conditions incorrectly, such investments may lower the
Series' return or result in a loss. The Series also could experience
losses if its Derivatives were poorly correlated with its other
investments, or if the Series were unable to liquidate its position
because of an illiquid secondary market. The market for many Derivatives
is, or suddenly can become, illiquid. Changes in liquidity may result in
significant, rapid and unpredictable changes in the prices for
Derivatives.
LENDING PORTFOLIO SECURITIES - Each Series may lend securities from
its portfolio to brokers, dealers and other financial institutions
needing to borrow securities to complete certain transactions. In
connection with such loans, the Series continues to be entitled to
payments in amounts equal to the interest, dividends or other
distributions payable on the loaned securities. Loans of portfolio
securities afford the Series an opportunity to earn interest on the
amount of the loan and at the same time to earn income on the loaned
securities' collateral. Loans of portfolio securities may not exceed
331/3% of the value of the Series' total assets. In connection with such
loans, the Series will receive collateral consisting of cash, U.S.
Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Such loans are terminable
by the Series at any time upon specified notice. TheSeries might
experience risk of loss if the institution with which it has engaged in
a portfolio loan transaction breaches its agreement with the Series.
FORWARD COMMITMENTS - Each Series may Municipal Obligations and
other securities on a forward commitment or when-issued basis, which
means that delivery and payment take place a number of days after the
date of the commitment to purchase. The payment obligation and the
interest rate that will be received on a forward commitment or
when-issued security are fixed at the time the Series enters into the
commitment. However, the Series does not make a payment until it receives
delivery from the other party to the transaction. The Series will make
commitments to purchase such securities only with the intention of
actually acquiring the securities, but a Series may sell these securities
before the settlement date if it is deemed advisable. A segregated
account of the Series consisting of cash, cash equivalents or U.S.
Government securities or other high quality liquid debt securities at
least equal at all times to the amount of the commitments will be
established and maintained at the Fund's custodian bank.
CERTAIN TAX EXEMPT OBLIGATIONS - Each Series also 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 Series to invest
fluctuating amounts, at varying rates of interest, pursuant to direct
arrangements between the Series, as lender, and the borrower. These
obligations permit daily changes in the amount borrowed. Because these
obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. 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 for a Series will meet the quality
criteria established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS - Each Series 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 Series an undivided
interest in the Municipal Obligation in the proportion that the Series'
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, the
partic-
Page 39
ipation interest 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 Series will have the
right to demand payment, on not more than seven days' notice, for all or
any part of the Series' participation interest in the Municipal
Obligation, plus accrued interest. As to these instruments, each Series
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.
TENDER OPTIONS BONDS - Each Series 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 Municipal 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.
CUSTODIAL RECEIPTS - Each Series 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 Series should increase the volatility of its net asset
value and, thus, its price per share. These custodial receipts are sold
in private placements. Each Series also may purchase directly from
issuers, and not in a private placement, Municipal Obligations having
characteristics similar to custodial receipts.
Page 40
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.
STAND-BY-COMMITMENTS - Each Series 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. A Series 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. Each Series also may acquire call options on specific
Municipal Obligations. A Series generally would purchase these call
options to protect the Series from the issuer of the related Municipal
Obligation redeeming, or other holder of the call option from calling
away, the Municipal Obligation before maturity. The sale by a Series of a
call option that it owns on a specific Municipal Obligation could result
in the receipt of taxable income by that Series.
ZERO COUPON SECURITIES - Each Series 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. See "Description of the Fund _
Investment Considerations and Risks," and "Dividends, Distributions and
Taxes" in the Statement of Additional Information.
ILLIQUID SECURITIES - Each Series 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 Series investing in such securities is subject to a risk
that should the Series desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the
value of such Series' net assets could be adversely affected.
TAXABLE INVESTMENTS - From time to time, on a temporary basis other
than for temporary defensive purposes (but not to exceed 20% of the value
of a Series' net assets) or for temporary defensive purposes, each Series
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 a Series that are attributable to income earned by the
Series from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more
Page 41
than 20% of the value of a Series' net assets be invested in Taxable
Investments. When a State Series has adopted a temporary defensive
position, including when acceptable State Municipal Obligations are
unavailable for investment by a State Series, in excess of 35% of such
Series' net assets may be invested in securities
that are not exempt from State personal income taxes, if applicable.
Under normal market conditions, each Series anticipates that not more
than 5% of the value of its total assets will be invested in any one
category of Taxable Investments. In certain states, dividends and
distributions paid by a Series that are attributable to interest income
earned by the Series from direct obligations of the United States may not
be subject to state income tax. Taxable Investments are more fully
described in the Statement of Additional Information, to which reference
hereby is made.
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.
PIMBFP3120195
Page 42
PREMIER INSURED MUNICIPAL BOND FUND
CLASS A, CLASS B AND CLASS C SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
DECEMBER 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 Insured Municipal Bond Fund (the "Fund"), dated December 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-11
Management Agreement. . . . . . . . . . . . . . . . . . . . . .B-15
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . .B-18
Distribution Plan and Shareholder Services Plan . . . . . . . .B-20
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . .B-22
Shareholder Services. . . . . . . . . . . . . . . . . . . . . .B-24
Determination of Net Asset Value. . . . . . . . . . . . . . . .B-26
Dividends, Distributions and Taxes. . . . . . . . . . . . . . .B-27
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . .B-29
Performance Information . . . . . . . . . . . . . . . . . . . .B-29
Information About the Fund. . . . . . . . . . . . . . . . . . .B-34
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . .B-35
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . .B-36
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . .B-69
Financial Statements. . . . . . . . . . . . . . . . . . . . . .B-75
Report of Independent Auditors
California Series. . . . . . . . . . . . . . . . . . . . .B-85
Connecticut Series . . . . . . . . . . . . . . . . . . . .B-96
Florida Series . . . . . . . . . . . . . . . . . . . . . .B-107
National Series. . . . . . . . . . . . . . . . . . . . . .B-118
New Jersey Series. . . . . . . . . . . . . . . . . . . . .B-128
New York Series. . . . . . . . . . . . . . . . . . . . . .B-138
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
Portfolio Securities
The average distribution of investments (at value) in Municipal
Obligations by ratings for each Series for the fiscal year ended July 31,
1995, computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Investors Moody's Investors Standard & Poor's
Service, L.P. Service, Inc. Ratings Group California Connecticut Florida
("Fitch") or ("Moody's") or ("S&P") Series Series Series
- --------------- ----------------- ----------------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
AAA Aaa AAA 98.4% 99.3% 96.9%
F-1/F-1+ VMIG1/MIG1, P-1 SP-1+/SP-1, A-1 1.6% .7% 3.1%
National New Jersey New York
Fitch or Moody's or S&P Series Series Series
------- -------- ---- -------- ----------- --------
AAA Aaa AAA 96.4% 93.6% 100.0%
F-1/F-1+ VMIG1/MIG1, P-1 SP-1+/SP-1, A-1 3.6% 6.4% -
</TABLE>
_______________
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities, air or water
pollution control facilities and certain local facilities for water supply,
gas, electricity or 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 obligations 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.
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. Accordingly, no Series will 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. 11"
below.
A Series will purchase tender option bonds only when the Fund 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 Series. 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
and, with respect to Class B and Class C shares, the Distribution Plan,
will have the effect of reducing the yield to investors.
Insurance Feature. The Mutual Fund Insurance policies provide for a
policy period of one year which the insurer typically renews for successive
annual periods at the request of the Fund for so long as the Fund is in
compliance with the terms of the relevant policy. The insurance premiums
are payable monthly by the Fund and are adjustable for purchases and sales
of covered Municipal Obligations during the month on a daily basis.
Premium rates for each issue of Municipal Obligations covered by the Mutual
Fund Insurance are fixed for as long as the Fund owns the security,
although similar Municipal Obligations purchased at different times may
have different premiums. In addition to the payment of premiums, each
Mutual Fund Insurance policy requires that the Fund notify the insurer on a
daily basis as to all Municipal Obligations in the insured portfolio and
permits the insurer to audit its records. The insurer cannot cancel
coverage already in force with respect to Municipal Obligations owned by
the Fund and covered by the Mutual Fund Insurance policy, except for
nonpayment of premiums.
Municipal Obligations are eligible for Mutual Fund Insurance if, at
the time of purchase by the Fund, they are identified separately or by
category in qualitative guidelines furnished by the insurer and are in
compliance with the aggregate limitations set forth in such guidelines.
Premium variations are based in part on the rating of the security being
insured at the time the Fund purchases such security. The insurer may
prospectively withdraw particular securities from the classifications of
securities eligible for insurance or change the aggregate amount limitation
of each issue or category of eligible Municipal Obligations but must
continue to insure the full amount of such securities previously acquired
so long as they remain in the Fund's portfolio. The qualitative guidelines
and aggregate amount limitations established by the insurer from time to
time will not necessarily be the same as the Fund or the Manager would use
to govern selection of securities for the Fund's portfolio. Therefore,
from time to time such guidelines and limitations may affect portfolio
decisions.
New Issue Insurance provides that in the event of a municipality's
failure to make payment of principal or interest on an insured Municipal
Obligation, the payment will be made promptly by the insurer. There are no
deductible clauses or cancellation provisions, and the tax exempt status of
the securities is not affected. The premiums, whether paid by the issuing
municipality or the municipal bond dealer underwriting the issue, are paid
in full for the life of the Municipal Obligation. The statement of
insurance is attached to or printed on the instrument evidencing the
Municipal Obligation purchased by the Fund and becomes part of the
Municipal Obligation. The benefits of the insurance accompany the
Municipal Obligations in any resale.
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
the Series 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.
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 a
Series, the Series 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 each Series'
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, a Series'
investing in such securities may have the effect of increasing the level of
illiquidity in the Series' investments during such period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the U.S. Treasury; others,
such as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of the
agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. 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.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
In a repurchase agreement, the Series buys, and the setter agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. The Fund's
custodian or sub-custodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans by the Series which enters
into them. In an attempt to reduce the risk of incurring a loss on a
repurchase agreement, a Series 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 Series may
invest, and will require that additional securities be deposited with it if
the value of the securities purchased should decrease below resale price.
Repurchase agreements could involve risks in the event of a default or
insolvency of the other party to the agreement, including possible delays
or restrictions upon the Series ability to dispose of the underlying
securities. The Series may enter into repurchase agreements with certain
banks or non-bank dealers.
Management Policies
Derivatives. Each Series may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Series to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit a Series to increase,
decrease or change the level of risk to which its portfolio is exposed in
much the same way as the Series can increase, decrease or change the risk
of its portfolio by making investments in specific securities.
When required by the Securities and Exchange Commission, the Series
will set aside permissible liquid assets in a segregated account to cover
its obligations relating to its purchase of Derivatives. To maintain this
required cover, a Series may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
Derivative position at a reasonable price. Derivatives may be purchased on
established exchanges or through privately negotiated transactions referred
to as over-the-counter Derivatives. Exchange-traded Derivatives generally
are guaranteed by the clearing agency which is the issuer or counterparty
to such Derivatives. This guarantee usually is supported by a daily
payment system (i.e., margin requirements) operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing
agency defaults, there is relatively little counterparty credit risk
associated with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives. Therefore, each
party to an over-the-counter Derivative bears the risk that the
counterparty will default. Accordingly, the Manager will consider the
creditworthiness of counterparties to over-the-counter Derivatives in the
same manner as it would review the credit quality of a security to be
purchased by a Series. Over-the-counter Derivatives are less liquid than
exchange-traded Derivatives since the other party to the transaction may be
the only investor with sufficient understanding of the Derivative to be
interested in bidding for it.
Futures Transactions--In General. Each Series may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade.
Engaging in these transactions involves risk of loss to a Series which
could adversely affect the value of the Series' net assets. Although each
Series 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 that 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 Series to substantial losses.
Successful use of futures by a Series also is subject to the ability
of the Manager to predict correctly movements in the direction of the
relevant market and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract.
For example, if a Series uses futures to hedge against the possibility of a
decline in the market value of securities held in its portfolio and the
prices of such securities instead increase, the Series 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 Series has insufficient cash, it
may have to sell securities to meet daily variation margin requirements. A
Series may have to sell such securities at a time when it may be
disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Series 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. The segregation of such assets will have the effect of limiting
a Series' ability otherwise to invest those assets.
Specific Futures Transactions. Each Series may purchase and sell
interest rate futures contracts. An interest rate future obligates the
Series to purchase or sell an amount of a specific debt security at a
future date at a specific price.
Options--In General. Each Series may purchase and write (i.e., sell)
call or put options with respect to specific securities. A call option
gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security or securities at the exercise price
at any time during the option period, or at a specific date. Conversely, a
put option gives the purchaser of the option the right to sell, and
obligates the writer to buy, the underlying security or securities at the
exercise price at any time during the option period.
A covered call option written by a Series is a call option with
respect to which the Series owns the underlying security or otherwise
covers the transaction by segregating cash or other securities. A put
option written by a Series is covered when, among other things, cash or
liquid securities having a value equal to or greater than the exercise
price of the option are placed in a segregated account with the Series'
custodian to fulfill the obligation undertaken. The principal reason for
writing covered call and put options is to realize, through the receipt of
premiums, a greater return than would be realized on the underlying
securities alone. A Series receives a premium from writing covered call or
put options which it retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts
or suspensions in one or more options. There can be no assurance that
similar events, or events that may otherwise interfere with the timely
execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If,
as a covered call option writer, the Series is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or it otherwise covers its position.
Future Developments. Each Series may take advantage of opportunities
in the area of options and futures contracts and options on futures
contracts and any other Derivatives which are not presently contemplated
for use by the Series or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Series' investment objective and legally permissible for the Series.
Before entering into such transactions or making any such investment, the
Fund will provide appropriate disclosure in its Prospectus or Statement of
Additional Information.
Forward Commitments. Municipal Obligations and other securities
purchased on a forward commitment or when-issued basis are subject to
changes in value (generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest rates rise)
based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may
expose a Series to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when a Series is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Series' net assets and its net asset value per share.
Short Selling. Until a Series closes its short position or replaces
the borrowed security, it will: (a) maintain a segregated account,
containing cash or U.S. Government securities, at such a level that the
amount deposited in the account plus the amount deposited with the broker
as collateral will equal the current value of the security sold short; or
(b) otherwise cover its short position.
Lending Portfolio Securities. In connection with its securities
lending transactions, a Series 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 from securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Series 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 Series must be able to terminate the loan at any time; (4) the
Series 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 Series may pay only reasonable
custodian fees in connection with the loan. These conditions may be
subject to future modification.
Investment Considerations and Risks
Investing in State Municipal Obligations (State Series only).
Investors should review Appendix A which sets forth additional information
relating to investing in State Municipal Obligations.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 7 as
fundamental policies which will apply to each Series. These restrictions
cannot be changed as to a Series without approval by the holders of a ma-
jority (as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of such Series' outstanding voting shares. Investment
restrictions numbered 8 through 12 are not fundamental policies and may be
changed by vote of a majority of the Trustees at any time. No Series may:
1. Invest more than 25% of the value of its assets in the securities
of issuers in any single industry; provided that there shall be no
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.
2. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Series' total assets). For purposes of this Investment Restriction,
the entry into options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or indices
shall not constitute borrowing.
3. Purchase or sell real estate, 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 options, forward
contracts, futures contracts, including those relating to indices, and
options on futures contracts or indices.
4. Underwrite the securities of other issuers, except that the
Series 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 Series may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements; however, the Fund may
lend each Series' portfolio securities in an amount not to exceed 33-1/3%
of the value of the Series' total assets. Any loans of portfolio
securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of Trustees.
6. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent that the activities permitted
in Investment Restrictions numbered 2, 3 and 10 may be deemed to give rise
to a senior security.
7. Purchase securities on margin, but the Series may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.
8. Purchase securities other than Municipal Obligations and Taxable
Investments and those arising out of transactions in futures and options or
as otherwise provided in the Fund's Prospectus.
9. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with respect to
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include, if there is no secondary market,
participation interests (including municipal lease/purchase agreements)
that are not subject to the demand feature described in the Fund's
Prospectus, and floating and variable rate demand obligations as to which
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 the Series' net assets would be so invested.
12. Invest in companies for the purpose of exercising control.
For purposes of Investment Restriction No. 1, 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."
As a fundamental policy, the Fund may invest, notwithstanding any
other investment restriction (whether or not fundamental), all of a Series'
assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objective, policies and
restrictions as such Series. The Fund will notify shareholders at least 60
days prior to any implementation of such policy.
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 Series shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of a Series and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of such Series 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 1940 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,
Inc., a producer and distributor of natural gas and crude petroleum.
He is 62 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. She is 52 years old and her address is c/o
New York University School of Law, 249 Sullivan Street, New York, New
York 10012.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Fund's distributor. From August 1994 to
December 31, 1994, he was a director of Mellon Bank Corporation. He
is Chairman of the Board of Directors of Noel Group, Inc, a venture
capital company; a trustee of Bucknell University; and a director of
the Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway, Inc., a manufacturer and marketer of industrial
threads, specialty yarns and home furnishings and fabrics, Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware, Simmons Outdoor
Corporation and Staffing Resources, Inc. He is 52 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. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions, including President of The New York
Psychoanalytic Society, and has published many articles on subjects in
the field of psychoanalysis. 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. 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 government. 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 1940 Act, will be selected and nominated by the Trustees who
are not "interested persons" of the Fund.
Ordinarily meetings of shareholders for the purpose of electing
Trustees will not be held 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 1940 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. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Trustee by the Fund for the fiscal year ended
July 31, 1995, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parenthesis next to each Board members name) for the year ended December
31, 1994 is as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual from 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. $ 2,250 none none $73,210 (17)
Peggy C. Davis $ 2,250 none none $61,751 (15)
Joseph S. DiMartino $ 1,941 none none $445,000** (94)
Ernest Kafka $ 2,250 none none $61,001 (15)
Saul B. Klaman $ 2,250 none none $61,751 (15)
Nathan Leventhal $ 2,250 none none $61,751 (15)
_________________________
* Amount does not include reimbursed expenses for attending Board meetings, which amounted to $262 for all Trustees as a group.
** Estimated amount for the year ending December 31, 1995.
</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., the ultimate parent company of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President 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. He is 31 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 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.
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 33 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From 1984 to July 1994, he was Assistant
Vice President in the Mutual Fund Accounting Department of the
Manager. He is 60 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
each Series' shares of beneficial interest outstanding on October 23, 1995.
The following shareholders are known by the Fund to own beneficially
or of record 5% or more of the indicated Series' voting securities
outstanding on October 23, 1995:
California Series
Class A: Prudential Securities FBO Ilse Jamin and Judith I. Friedman
TTEES FBO Noah Ned Jamin and Ilse Jamin Trust, Palm Springs, California--
10.9%; Wedbush Morgan Securities Special Custody Account for the Exclusive
Benefit of Customers, Los Angeles, California--8.3%; Smith Barney, Inc.,
New York, New York--6.8%.
Class B: Smith Barney, Inc., New York, New York--5.5%.
Connecticut Series
Class A: Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville,
Florida--23.5%; Prudential Securities FBO Victor A. Coopersmith and Andrea
Joving, Newton, Connecticut--11.8%.
Florida Series
Class B: Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville,
Florida--12.2%.
National Series
Class A: PaineWebber FBO John M. Wilfert, Jr., Woodstock, VT--7.0%;
Joseph Alden and Mary Alden, Palatine, Illinois--5.9%.
New Jersey Series
Class A: Bernard Stern & Rhoda Stern, Cranbury, NJ--7.4%.
Class B: Merrill Lynch Pierce Fenner & Smith, Inc., Jacksonville,
Florida--11.8%; Artemio Rivera and Carmen Aida Nash, Franklin Lakes, New
Jersey--6.6%.
New York Series
Class A: Prudential Securities, FBO Sherry Netherland, New York, NY--
10.4%.
Class B: Merrill Lynch Pierce Fenner & Smith, Jacksonville, Florida--
11.2%; Doris C. Sloan, Williamsville, NY--5.6%.
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") with the Fund dated August 24, 1994. As to
each Series, the Agreement is subject to annual approval by (i) the Fund's
Board of Trustees or (ii) vote of a majority (as defined in the 1940 Act)
of the outstanding voting securities of such Series, 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 1940 Act) of the Fund
or the Manager, by vote cast in person at a meeting called for the purpose
of voting on such approval. Shareholders of each Series approved the
Agreement on August 3, 1994. The Agreement 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
January 11, 1995. The Agreement is terminable without penalty, as to each
Series, on 60 days' notice, by the Fund's Board of Trustees or by vote of
the holders of a majority of such Series' shares, or, on not less than 90
days' notice, by the Manager. The Agreement will terminate automatically,
as to the relevant Series, in the event of its assignment (as defined in
the 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration and a director; Barbara E. Casey, Vice President-Dreyfus
Retirement Services; Diane M. Coffey, Vice President-Corporate Communications;
Elie M. Genadry, Vice President-Institutional Sales; William F. Glavin, Jr.,
Vice President-Corporate Development; Henry D. Gottmann, Vice President-Retail
Sales and Service; Mark N. Jacobs, Vice President-Legal and Secretary;
Daniel C. Maclean, Vice President and General Counsel; Jeffrey N. Nachman,
Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice President-
Information Services; Katherine C. Wickham, Vice President-Human Resources;
Maurice Bendrihem, Controller; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene,
Julian M. Smerling and David B. Truman, directors.
The Manager manages each Series' portfolio of investments in
accordance with the stated policies of such Series, 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 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 officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, 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 shareholders, costs of shareholders' reports and
meetings and any extraordinary expenses. In addition, Class B and Class C
shares are subject to an annual distribution fee and shares of each Class
are subject to an annual service fee. See "Distribution Plan and
Shareholder Services Plan." Expenses attributable to a particular Series
are charged against the assets of that Series; other expenses of the Fund
are allocated among the Series on the basis determined by the Board,
including, but not limited to, proportionately in relation to the net
assets of each Series.
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 each Series' average daily net assets. For the
period ended July 31, 1994 and the fiscal year ended July 31, 1995, the
management fee payable, the reduction in such fee and the net management
fee paid for each Series was as set forth below:
<TABLE>
<CAPTION>
Management Fee Payable Reduction in Fee Net Fee Paid
Series 1994 1995 1994 1995 1994 1995
- ------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
California $ 13,958(1) $ 32,794 $ 13,958(1) $ 32,794 $ -0- $ -0-
Connecticut 7,485(2) 119,902 7,485(2) 119,902 -0- -0-
Florida 12,159(3) 179,450 12,159(3) 179,450 -0- -0-
National 3,491(3) 64,630 3,491(3) 64,630 -0- -0-
New Jersey 2,995(3) 38,710 2,995(3) 38,710 -0- -0-
New York 2,971(4) 38,887 2,971(4) 38,887 -0- -0-
________________
(1) For the period from August 19, 1993 (commencement of operations) through July 31, 1994.
(2) For the period from May 5, 1994 (commencement of operations) through July 31, 1994.
(3) For the period from May 4, 1994 (commencement of operations) through July 31, 1994.
(4) For the period from May 6, 1994 (commencement of operations) through July 31, 1994.
</TABLE>
The Manager has agreed that if in any fiscal year the aggregate
expenses of each Series, 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 such Series, 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 a Series' net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement dated August 24, 1994, which
is renewable annually. The Distributor also acts as distributor for the
other funds in the Premier Family of Funds, the Dreyfus Family of Funds and
for certain other investment companies. In some states, certain financial
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
For the period August 24, 1994 through July 31, 1995, the Distributor
retained $_____ from sales loads on Class A shares and $_____ from
contingent defined sales charges ("CDSC") on Class B shares. For the
period August 1, 1994 through August 23, 1994 and for the fiscal year ended
July 31, 1994, Dreyfus Service Corporation, as the Fund's distributor
during such periods, retained $18,967 and $48,739, respectively, from sales
loads on Class A shares and $598 and $0, respectively, from CDSCs on Class
B shares.
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.
Set forth below is an example of the method of computing the offering
price of Class A shares of each Series. With respect to each Series, the
example assumes a purchase of Class A shares aggregating less than $50,000
subject to the schedule of sales charges set forth in the Prospectus at a
price based upon the net asset value of the Series, Class A shares on July
31, 1995.
<TABLE>
<CAPTION>
California Connecticut Florida
Series Series Series
---------- ----------- -------
<S> <C> <C> <C>
Class A shares:
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . $11.56 $12.95 $13.07
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5% of offering price
(approximately 4.7% of net asset value
per share) . . . . . . . . . . . . . . . . . . . . . . . . . .54 .61 .62
------ ------ ------
Offering price to public . . . . . . . . . . . . . . . . . . . $12.10 $13.56 $13.69
====== ====== ======
National New Jersey New York
Series Series Series
-------- ---------- --------
Class A shares:
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . $13.01 $12.71 $12.75
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5% of offering price
(approximately 4.7% of net asset value
per share) . . . . . . . . . . . . . . . . . . . . . . . . . .61 .60 .60
------ ------ ------
Offering price to public . . . . . . . . . . . . . . . . . . . $13.62 $13.31 $13.35
====== ====== ======
</TABLE>
Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt
to notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a securities
dealer ("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
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.
TeleTransfer Privilege. TeleTransfer purchase orders may be made at
any time. Purchase orders received by 4:00 p.m., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open for business will be credited to the shareholder's Fund account on the
next bank business day following such purchase order. Purchase orders made
after 4:00 p.m., New York time, on any business day the Transfer Agent and
the New York Stock Exchange are open for business, or orders made on
Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's
Fund account on the second bank business day following such purchase order.
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
Optional 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 B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act provides, among other things,
that an investment company may bear expenses of distributing its shares
only pursuant to a plan adopted in accordance with the Rule. The Fund's
Board has adopted such a plan (the "Distribution Plan") with respect to
Class B and Class C shares, pursuant to which the Fund pays the Distributor
for distributing Class B and Class C shares. The Fund's Board believes
that there is a reasonable likelihood that the Distribution Plan will
benefit the Fund and holders of Class B and Class C shares.
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 Board for its 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 such shareholders' approval and that other
material amendments of the Distribution Plan must be approved by the Board
and by the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Fund or the Manager and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements entered into in connection with 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 cast in person at a meeting called for the purpose of voting on the
Distribution Plan. The Distribution Plan was last so approved on April 12,
1995. The Distribution Plan is terminable, as to each Series and Class, at
any time by vote of a majority of the Board members who are not "interested
persons" and have no direct or indirect financial interest in the operation
of the Distribution Plan or in any of the related agreements entered into
in connection with the Distribution Plan, or by vote of the holders of a
majority of such Class of shares.
For the period from August 24, 1994 (effective date of the
Distribution Plan), through July 31, 1995, each Series was charged with
respect to Class B the following amounts for distributing Class B shares
pursuant to the Distribution Plan. There were no payments made under the
Distribution Plan with respect to Class C shares during the fiscal year
ended July 31, 1995, as Class C shares had not yet been offered.
Amount Charged
Series Class B
------ --------------
California $14,865
Connecticut 54,945
Florida 79,711
National 29,012
New Jersey 18,803
New York 19,331
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 securities 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 Board for its review. In addition, the Shareholder
Services Plan provides that it may not be amended without approval of the
Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the 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 last so approved on April 12, 1995. As to each Series
and Class, the Shareholder Services Plan is terminable at any time by vote
of a majority of the Board members 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 August 24, 1994 (effective date of Shareholder
Services Plan) through July 31, 1995, each Series was charged with respect
to Class A and Class B the following amounts pursuant to the Shareholder
Services Plan. There were no payments under the Shareholder Services Plan
with respect to Class C shares during the fiscal year ended July 31, 1995,
as Class C shares had not yet been offered.
<TABLE>
<CAPTION>
Amount Charged Amount Charged
Series Class A Class B
- ------ -------------- --------------
<S> <C> <C>
California $ 6,797 $ 7,433
Connecticut 24,544 27,473
Florida 37,877 39,855
National 13,854 14,506
New Jersey 7,520 9,402
New York 7,282 9,665
</TABLE>
Prior Distribution Plan and Shareholder Services Plan. As of August
24, 1994, the Fund terminated its then-existing Class B distribution plan,
which provided for payments to be made to Dreyfus Service Corporation, the
Fund's distributor prior to such date, for advertising, marketing and
distributing Class B shares at an annual rate of .50% of the value of the
average daily net assets of Class B. For the period from August 1, 1994
through August 23, 1994, the total amount charged to and paid by each
Series under such plan was as set forth below:
Series Amount Charged
- ------ --------------
California $ 830
Connecticut 2,244
Florida 4,063
National 1,139
New Jersey 689
New York 765
As of August 24, 1994, the Fund also terminated its then-existing
shareholder service plan, which provided for payments to be made to Dreyfus
Service Corporation for expenses related to the provision of shareholder
services. For the period from August 1, 1994 through August 23, 1994 each
Series was charged with respect to Class A and Class B the following
amounts pursuant to such plan:
<TABLE>
<CAPTION>
Amount Charged Amount Charged
Series Class A Class B
- ------ -------------- ---------------
<S> <C> <C>
California $ 261 $ 415
Connecticut 1,362 1,122
Florida 1,804 2,032
National 447 570
New Jersey 329 344
New York 346 383
</TABLE>
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 Shares. 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,
Shareholder Services Form 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 of a Series, limited
in amount during any 90-day period to the lesser of $250,000 or 1% of the
value of such Series' 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 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 Series to the detriment
of the existing shareholders. In such event, the securities would be
valued in the same manner as the Series' 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
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 Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer
Agent to act on telephonic 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 Simplified Employee Pension Plans ("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
a Series, shares of the same Class of one of the other Series or 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
"Exchange Privilege." 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. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. 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 with respect to Class B or Class
C shares by a fund 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. Each Series' investments are
valued each business day by an independent pricing service (the "Service")
approved by the Board. 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. Expenses and fees, including the management fee
(reduced by the expense limitation, if any) and fees pursuant to the
Shareholder Services Plan, and, with respect to the Class B and Class C
shares only, the Distribution Plan, are accrued daily and are taken into
account for the purpose of determining the net asset value of the relevant
Class of each Series' shares. Because of the difference in operating
expenses incurred by each Class, the per share net asset value of each
Class will differ.
Subject to guidelines established by the Fund's Board, the Manager
intends to retain in the Fund's portfolio Municipal Obligations which are
insured under the Mutual Fund Insurance policy and which are in default or
in significant risk of default in the payment of principal or interest
until the default has been cured or the principal and interest are paid by
the issuer or the insurer. In establishing fair value for these securities
the Board will give recognition to the value of the insurance feature as
well as the market value of the securities. Absent any unusual or
unforeseen circumstances, the Manager will recommend valuing these
securities at the same price as similar securities of a minimum investment
grade (i.e., rated Baa by Moody's or BBB by S&P or Fitch).
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 each Series has qualified as a "regulated
investment company" under the Code for the fiscal year ended July 31, 1995,
and each Series intends to continue to so qualify, so long as such
qualification is in the best interests of its shareholders. As a regulated
investment company, a Series 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. The term "regulated investment company"
does not imply the supervision of management or investment practices or
policies by any government agency.
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 gain
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, option and "straddle" transactions, 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 a Series 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 a Series' taxable year will be
treated as sold for their then fair market value, resulting in additional
gain or loss to a Series characterized in the manner described above.
Offsetting positions held by a Series involving certain 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 and 988
of the Code. 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 a Series 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. A Series may make one or more elections with respect to
"mixed straddles." Depending on which election is made, if any, the
results to a Series may differ. If no election is made to the extent the
"straddle" rules apply to positions established by the Fund, losses
realized by a Series will be deferred to the extent of unrealized gain in
the offsetting position. Moreover, as a result of the "straddle" and
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 Series 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, a
Series 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, a Series 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.
Each Series anticipates that its annual portfolio turnover rate
generally will not exceed 100% but the turnover rate will not be a limiting
factor when each Series deems it desirable to sell or purchase securities.
Therefore, depending upon market conditions, each Series' annual portfolio
turnover rate may exceed 100% in certain 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.
The current yield for the 30-day period ended July 31, 1995 for Class
A and Class B of each Series was as follows:
<TABLE>
<CAPTION>
Current Net of Absorbed
Series Yield Expenses(1)
- ------ ------ ---------------
<S> <C> <C>
Class A:
- --------
California 5.13% 3.80%
Connecticut 5.25 4.63
Florida 5.36 4.74
National 5.59 4.76
New Jersey 4.78 4.00
New York 5.20 4.31
____________________________
(1) This column sets forth current yield had expenses not been absorbed.
Current Net of Absorbed
Series Yield Expenses(1)
- ------ ------ ---------------
Class B:
- --------
California 4.83% 3.42%
Connecticut 4.97 4.32
Florida 5.09 4.43
National 5.32 4.45
New Jersey 4.49 3.68
New York 4.93 3.96
____________________________
(1) This column sets forth current yield had expenses not been absorbed.
</TABLE>
Current yield is computed pursuant to a formula which operates as follows:
The amount of each Series' 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 Series
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 net asset value (maximum
offering price in the case of Class A) per share 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 the 1995 combined (except where noted) Federal and, where
applicable, State tax rate specified below, the tax equivalent yield for
the 30-day period ended July 31, 1995 for Class A and Class B of each
Series was as follows:
<TABLE>
<CAPTION>
Tax Equivalent Net of Absorbed
Series Tax Rate Yield Expenses(1)
- ------ -------- -------------- ---------------
<S> <C> <C> <C>
Class A:
- --------
California 46.24% 9.54% 7.07%
Connecticut 42.32 9.10 8.03
Florida(2) 39.60 8.87 7.85
National 39.60 9.25 7.88
New Jersey 43.57 8.47 7.09
New York 47.05 9.82 8.14
Class B:
California 46.24% 8.98% 6.36%
Connecticut 42.32 8.62 7.49
Florida(2) 39.60 8.43 7.33
National 39.60 8.81 7.37
New Jersey 43.57 7.96 6.52
New York 47.05 9.31 7.48
____________________________
(1) This column sets forth tax equivalent yield had expenses not been absorbed.
(2) Federal tax rate only. No state personal income tax imposed during 1995
</TABLE>
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 Series that is not tax exempt.
The tax equivalent yield quoted above represents the application of
the highest marginal personal income tax rates currently in effect. For
Federal personal income tax purposes, a 39.6% tax rate has been used. The
tax equivalent figure, however, does not include the potential effect of
any local (including, but not limited to, county, district or city) taxes,
including applicable surcharges. In addition, there may be pending
legislation which could affect such stated tax rates or yield. Each
investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
The average annual total return since inception and for the period
indicated for Class A of each Series was as follows:
<TABLE>
<CAPTION>
Series Year ended July 31, 1995 Since Inception
- ------ ------------------------ ----------------
<S> <C> <C>
California 1.07% - 0.85% (1)
Connecticut 2.60 5.03 (2)
Florida 3.39 5.83 (3)
National 2.05 5.68 (3)
New Jersey 2.22 3.44 (3)
New York 0.80 3.67 (4)
________________
(1) For the 1.951 year period ended July 31, 1995.
(2) For the 1.244 year period ended July 31, 1995.
(3) For the 1.247 year period ended July 31, 1995.
(4) For the 1.241 year period ended July 31, 1995.
</TABLE>
The average annual total return since inception and for the period
indicated for Class B of each Series was as follows:
<TABLE>
<CAPTION>
Series Year ended July 31, 1995 Since Inception
- ------ ------------------------ ---------------
<S> <C> <C>
California 2.27% - 0.36% (1)
Connecticut 3.95 6.13 (2)
Florida 4.86 6.97 (3)
National 3.24 6.75 (3)
New Jersey 3.48 4.43 (3)
New York 2.08 4.79 (4)
________________
(1) For the 1.951 year period ended July 31, 1995.
(2) For the 1.244 year period ended July 31, 1995.
(3) For the 1.247 year period ended July 31, 1995.
(4) For the 1.241 year period ended July 31, 1995.
</TABLE>
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 annual total return figures calculated in accordance with such
formula assume that in the case of Class A the maximum sales load has 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 the period indicated for Class A of each Series
was as follows:
<TABLE>
<CAPTION>
Class A: Based on Maximum Based on Net Asset
Series Offering Price Value per Share
- ------- ---------------- -------------------
<S> <C> <C>
California -1.65%(1) 3.00%
Connecticut 6.29(2) 11.31
Florida 7.32(3) 12.38
National 7.13(3) 12.18
New Jersey 4.31(3) 9.23
New York 4.57(4) 9.50
____________________________
(1) For the period August 19, 1993 (commencement of operations) through July 31, 1995.
(2) For the period May 4, 1994 (commencement of operations) through July 31, 1995.
(3) For the period May 3, 1994 (commencement of operations) through July 31, 1995.
(4) For the period May 5, 1994 (commencement of operations) through July 31, 1995.
The total return for the period indicated for Class B of each Series
was as follows:
Class B: Based on Net Asset Based on
Series Value per Share Maximum CDSC
- ------- ------------------ ------------
California 2.07%(1) -0.71%
Connecticut 10.68(2) 7.68
Florida 11.76(3) 8.76
National 11.49(3) 8.49
New Jersey 8.55(3) 5.55
New York 8.98(4) 5.98
____________________________
(1) For the period August 19, 1993 (commencement of operations) through July 31, 1995.
(2) For the period May 4, 1994 (commencement of operations) through July 31, 1995.
(3) For the period May 3, 1994 (commencement of operations) through July 31, 1995.
(4) For the period May 5, 1994 (commencement of operations) through July 31, 1995.
</TABLE>
Total return is calculated by subtracting the amount of the Series'
net asset value (maximum offering price per share 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 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 not as representative 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 actual or proposed tax legislation.
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 analyses supporting such ratings.
The Fund may compare its performance, directly as well as against
inflation, with that of other instruments, such as short-term Treasury
bills (which are direct obligations of the U.S. Government), FDIC-insured
bank money market accounts and FDIC-insured fixed-rate certificates of
deposit. In addition, advertising for the Fund may indicate that investors
may consider diversifying their investment portfolios in order to seek
protection of the value of their assets against inflation.
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 Series share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Series' shares have no preemptive or subscription rights
and are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise, to the holders of the outstanding voting securities of an
investment company such as the Fund will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of such series.
However, the Rule exempts the selection of independent accountants and the
election of trustees from the separate voting requirements of the Rule.
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 $70 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. Dreyfus Transfer, Inc., a wholly owned subsidiary
of the Manager, is located at One American Express Plaza, Providence, Rhode
Island 02903, and serves as the Fund's transfer and dividend disbursing
agent. Under a transfer agency agreement with the Fund, the Transfer Agent
arranges for the maintenance of shareholder account records for the Fund,
the handling of certain communications between shareholders and the Fund
and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee computed on the
basis of the number of shareholder accounts it maintains for the Fund
during the month, and is reimbursed for certain out-of-pocket expenses.
Neither The Bank of New York nor Dreyfus Transfer, 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 STATE MUNICIPAL OBLIGATIONS
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn
from official statements relating to securities offerings of the relevant
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.
California Series . . . . . . . . . . . . . B-36
Connecticut Series. . . . . . . . . . . . . B-48
Florida Series. . . . . . . . . . . . . . . B-50
New Jersey Series . . . . . . . . . . . . . B-54
New York Series . . . . . . . . . . . . . . B-55
California Series
Recent Developments. From mid-1990 to late 1993, the State suffered a
recession with the worst economic, fiscal and budget conditions since the
1930s. Construction, manufacturing (especially aerospace), exports and
financial services, among others, were all severely affected. Job losses
were the worst of any post-war recession. Unemployment reached 10.1% in
January 1994, but fell sharply to 7.7% in October and November 1994.
According to the State's Department of Finance, recovery from the recession
in California began in 1994.
The recession seriously affected State tax revenues, which basically
mirror economic conditions. It 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 State General Fund. As a result, the
State experienced recurring budget deficits in the late 1980s and early
1990s. The State Controller reported that expenditures exceeded revenues
for four of the five fiscal years ending with 1991-92. The State had an
operating surplus of approximately $109 million in 1992-93 and $836 million
in 1993-94. However, at June 30, 1994, according to the Department of
Finance, the State's Special Fund for Economic Uncertainties ("SFEU") still
had a deficit, on a budget basis, of approximately $1.8 billion.
The accumulated budget deficits over the past several years, together
with expenditures for school funding which have not been reflected in the
budget, and reduction of available internal borrowable funds, have combined
to significantly deplete the State's cash resources to pay its ongoing
expenses. In order to meet its cash needs, the State has had to rely for
several years on a series of external borrowings, including borrowings past
the end of a fiscal year. Such borrowings are expected to continue in
future fiscal years. 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.
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."
The 1994-95 Fiscal Year Budget (as updated in the January 10, 1995
Governor's Budget) 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.
The Governor's Budget for 1995-96 proposes General Fund revenues and
transfers of $44.1 billion and expenditures of $43.4 billion, which would
leave a balance of approximately $28 million in the budget reserve, the
SFEU, at June 30, 1996 after repayment of the accumulated budget deficits.
The Budget proposal is based on a number of assumptions, including receipt
of $473 million from the Federal government to offset costs of undocumented
and refugee immigrants.
On December 6, 1994, Orange County, California (the "County"),
together with its pooled investment funds (the "Funds") filed for
protection under Chapter 9 of the Federal Bankruptcy Code, after reports
that the Funds had suffered significant market losses in their investments,
causing a liquidity crisis for the Funds and the County. More than 180
other public entities, most of which, but not all, are located in the
County, were also depositors in the Funds. As of mid-January, 1995,
following a restructuring of most of the Funds' assets to increase their
liquidity and reduce their exposure to interest rate increases, the County
estimated the Funds' loss at about $1.69 billion, or about 23% of their
initial deposits of approximately $7.5 billion. Many of the entities which
deposited moneys in the Funds, including the County, are facing cash flow
difficulties because of the bankruptcy filing and may be required to reduce
programs or capital projects. This may also effect their ability to meet
their outstanding obligations.
The State has no existing obligation with respect to any outstanding
obligations or securities of the County or any of the other participating
entities. However, in the event the County is unable to maintain county
administered State programs because of insufficient resources, it may be
necessary for the state to intervene, but the State cannot presently
predict what, if any, action may occur.
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 $7.53 billion under the limit.
The limit for the 1993-94 fiscal year was $36.60 billion, and the
appropriations subject to limitation were $6.55 billion under the limit.
The estimated limit for the 1994-95 fiscal year is $37.53 billion, and the
appropriations subject to limitations are estimated to be $5.83 billion
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 $4,217 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 and community colleges.
Chapter 66 also adjusted the "Test 1" percentage to 35% 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 and
other minor appropriation adjustments 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.
The 1995-96 Governor's Budget adjusts the 1993-94 minimum guarantee to
reflect changes in enrollment and inflation, and 1993-94 Proposition 98
appropriations are increased to $14.1 billion, primarily to reflect changes
in the statutory continuous appropriation for apportionments. The revised
appropriations now exceed the minimum guarantee by $32 million. This
appropriation level still provides per-pupil funding of $4,225.
The 1994-95 Proposition 98 minimum guarantee has also been adjusted
for changes in factors described above, and is now calculated to be $14.9
billion. Within the minimum guarantee, the dollars per pupil have been
maintained at the prior year's level; consequently, the 1994-95 minimum
guarantee now includes a loan repayment of $135 million, and the per-pupil
funding increases to $4,231.
The 1995-96 Governor's Budget proposes to appropriate $15.9 billion of
Proposition 98 funds to K-14 to meet the guarantee level. Included within
the guarantee is a loan repayment of $379 million for the combined
outstanding loans of $1.76 billion. Funding per pupil is estimated to
increase by $61 over 1994-95 to $4,292.
Sources of Tax Revenue. The California personal income tax, which in
1993-94 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 35% of General Fund
revenue in 1993-94. Bank and corporation tax revenues comprised about 12%
of General Fund revenue in 1993-94. 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. In the years following
enactment of the federal Tax Reform Act of 1986, and conforming changes to
the State's tax laws, taxpayer behavior became must more difficult to
predict, and the State experienced a series of fiscal years in which
revenue came in significantly higher or lower than original estimates. The
1989-90 fiscal year ended with revenues below estimates, so that the
State's budget reserve (the Special Fund for Economic Uncertainties or
"SFEU") was fully depleted by June 30, 1990. This date essentially
coincided with the state of the current recession, and the State has
subsequently accumulated a budget deficit in the SFEU approaching 2.8
billion at its peak. The State's budget problems in recent years have also
been caused by a structural imbalance which has been identified by the
current and previous Administrations. The largest General Fund Programs --
K-14 education, health, welfare and corrections -- were increasing faster
than the revenue base, driven by the State's rapid population increases.
Starting in the 1990-91 fiscal year, each budget required multibillion
dollar actions to bring projected revenues and expenditures into balance
and to close large "budget gaps" which were identified. The Legislature
and Governor eventually agreed on significant cuts in program expenditures,
some transfers of program responsibilities and funding from the State to
local governments, revenue increases (particularly in the 1991-92 fiscal
year budget), and various one-time adjustments and accounting changes.
However, as the recession took hold and deepened after the summer of 1990,
revenues dropped sharply and expenditures for health and welfare programs
increased as job losses mounted, so that the State ended each of the 1990-
91 and 1991-92 fiscal years with an unanticipated deficit in the budget
reserve, the SFEU, as compared to projected positive balances.
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.
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 primarily through cuts in the
program expenditures (principally for health and welfare programs, aid to
schools and support for higher education), together with some increases in
revenues from accelerated collections and changes in tax laws to confirm to
federal law changes, and a variety of on-time inter-fund transfers and
deferrals. The other major component of the budget compromise was a law
requiring local governments to transfer a total of $1.3 billion to K-12
school and community college districts, thereby reducing by that amount
General Fund support for those districts under Proposition 98.
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.
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 $1.8 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 additional $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 represented 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 $1.8
billion at June 30, 1994, by June 30, 1996.
The 1994-95 Budget Act, signed by the Governor on July 8, 1994,
projected revenues and transfers of $41.9 billion, $2.1 billion higher than
revenues in 1993-94. This reflected the Administration's forecast of an
improving economy. Also included in this figure was the projected receipt
of about $360 million from the Federal government to reimburse the State's
cost of incarcerating undocumented immigrants, most of which eventually was
not received.
The 1994-95 Budget Act projected Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues.
The 1994-95 Budget Act projected 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 projected Special Fund expenditures of $13.7
billion, a 5.4% increase over 1993-94 fiscal year estimated expenditures.
The 1994-95 Budget Act contained 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 assumed that the State would 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
enacted along with the 1994-95 Budget Act is designed to ensure that the
warrants will be repaid in the 1995-96 fiscal year.
Reports by the Department of Finance in May, 1995 indicate that, with
economic recovery well underway in the State, General Fund revenues for the
entire 1994-95 fiscal Year were above projections, and expenditures were
below projections because of slower then anticipated health/welfare
caseload growth and school enrollments. The aggregate effect improved the
budget picture by about $500 million, leaving an estimated budget deficit
of about $630 million at June 30, 1995.
For the first time in four years, the state enters the upcoming 1995-
96 fiscal year with strengthening revenues based on an improving economy.
On January 10, 1995, the Governor presented his 1995-96 Fiscal Year Budget
Proposal (the "Proposed Budget"). The Proposed Budget estimates General
Fund revenues and transfers of $42.5 billion (an increase of 0.2% over
1994-95). This nominal increase from 1994-95 fiscal year reflects the
Governor's realignment proposal and the first year of his tax cut proposal.
Without these two proposals, General Fund revenues would be projected at
approximately $43.8 billion, or an increase of 3.3% over 1994-95.
Expenditures are estimated at $41.7 billion (essentially unchanged from
1994-95). Special Fund revenues are estimated at $13.5 billion (10.7%
higher than 1994-95) and Special Fund expenditures are estimated at $13.8
billion (12.2% higher than 1994-95). The Proposed Budget projects that the
General Fund will end the fiscal year at June 30, 1996 with a budget
surplus in SFEU of about $92 million, or less than 1% of General Fund
expenditures, and will have repaid all of the accumulated budget deficits.
Recent Economic Trends. Revised employment data indicate that
California's recession ended in 1993, and following a period of stability,
a solid recovery is now underway. The State's unemployment rate fell from
9.2% in fiscal 1993 to 8.6% in fiscal 1994. The national unemployment rate
in 1994 was 6.1%. The number of employed Californians increased more than
250,000 during fiscal 1994.
Other indicators, including retail sales, homebuilding activity,
existing home sales and bank lending volume all confirm the State's
recovery.
Personal income was severely affected by the Northridge Earthquake,
which reduced the first quarter 1994 figure by $22 billion at an annual
rate, reflecting the uninsured damage to residences and unincorporated
businesses. As a result, personal income growth for all of 1994 was about
2.8%. However, excluding the Northridge effects, growth would have been in
excess of 3%.
Connecticut Series
Connecticut's economy is diverse, with manufacturing, services and
trade accounting for approximately 70% of total non-agricultural
employment. The State's manufacturing industry is diversified, but from
1970 to 1993 manufacturing employment declined 33.5%, while non-
manufacturing employment increased 63.3%, particularly in the service,
trade and finance categories, resulting in an increase of 27.6% in total
growth in non-agricultural sectors. Defense-related business plays and
important role in the Connecticut economy, and economic activity has been
affected by the volume of defense contracts awarded to Connecticut firms.
From 1984 to 1993, Connecticut ranked from sixth to twelfth among all
States in total defense contract awards, receiving 2.5% of all such
contracts in 1993. In recent years, the Federal government has reduced the
amount of defense-related spending and the largest defense-related
employers in the State have announced substantial labor force reductions.
The future effect of these and other industrial labor force reductions on
the Connecticut economy cannot be predicted at this time.
Connecticut has a high level of personal income. According to Bureau
of Economic Analysis figures, personal income of State residents for
calendar year 1994 was $95.1 billion, a 3.3% increase over the previous
year. Total personal income in the State increased 29.6% from 1987 to 1992
and 18.0% from 1989 to 1994, compared with national increases of 37.3% and
33.9%, respectively. According to U.S. Department of Commerce projections,
the State is expected to continue to rank among the highest in State per
capita income. As of January 1995, the estimated rate of unemployment (on
a seasonably adjusted basis) in the State was 5.6%.
While the State's General Fund ended fiscal 1984-85, 1985-86 and 1986-
87 with operating surpluses of approximately $365.5 million, $250.1 million
and $365.2 million, respectively, the State recorded operating deficits of
$115.6 million, $28.0 million, $259.5 million and $808.5 million for fiscal
1987-88, 1988-89, 1989-90 and 1990-91, respectively. Together with the
deficit carried forward from fiscal 1989-90, the total deficit for the
fiscal year 1990-91 was $965.7 million. The total deficit amount was
funded by the issuance of General Obligation Economic Recovery Notes in
late 1991. As of March 1, 1995, $455,610,000 of such Notes remained
outstanding. The Comptroller's annual report for the fiscal year ended
June 30, 1992 reflected a General Fund operating surplus of $110.2 million,
which surplus was used to retire $110.1 million of the State's Economic
Recovery Notes. The Comptroller's annual report for the fiscal year ended
June 30, 1993 reflected a General Fund operating surplus of $113.5 million.
The comptroller's annual report for the fiscal year ended June 30, 1994
reflected a General Fund operating surplus of $19.7 million. The
unappropriated surplus in the General Fund is deemed to be appropriated for
debt service for the fiscal year ending June 30, 1995.
Since 1988, the Comptroller's annual report has reported results on
the basis of both the modified cash basis required by State law and the
modified accrual basis used for GAAP financial reporting. The
Comptroller's monthly report for the period ended January 31, 1995
estimated that on a GAAP basis the cumulative deficit is $511 million for
fiscal 1994-95. The modified cash basis of accounting used for statutory
financial reporting and the modified accrual basis used for GAAP financial
reporting are different and, as a result, often produce varying financial
results, primarily because of differences in the recognition of revenues
and expenditures.
The State finances its operations primarily through the General Fund.
All tax and most non-tax revenues of the State, except for motor fuels
taxes and other transportation-related taxes, fees and revenues, are paid
into, and substantially all expenditures pursuant to legislative
appropriations are made out of, the General Fund. The State derives over
70% of its revenues from taxes. Miscellaneous fees, receipts, transfers
and Federal grants account for most of the other State revenue. The Sales
and Use Taxes, the corporation business tax and the recently enacted broad
based personal income tax are the major revenue raising taxes. For fiscal
1994-95, the adopted budget anticipates General Fund expenditures of $8.116
billion and General Fund revenues of $8.117 billion.
On November 3, 1992, Connecticut voters approved a constitutional
amendment which requires a balanced budget for each year and imposes a cap
on the growth of expenditures. The General Assembly is required by the
constitutional amendment to adopt by three-fifths vote certain spending cap
definitions. The statutory spending cap limits the growth of expenditures
to either (1) the rolling five-year average annual growth in personal
income, or (2) the increase in the consumer price index for urban consumers
during the preceding twelve-month period, whichever is greater.
Expenditures for the payment of bonds, notes and other evidences of
indebtedness are excluded from the constitutional and statutory definitions
of general budget expenditures. To preclude shifting expenditures out of
the General Fund to other funds, the spending cap applies to all
appropriated funds combined. For fiscal 1994-95, permitted growth in
capped expenditures is 4.49%. The adoption Budget for fiscal 1994-95 is
approximately $24 million below the spending cap.
The State has no constitutional or other organic limit on its power to
issue obligations or incur indebtedness other than that it may only borrow
for public purposes. There are no reported court decisions relating to
State bonded indebtedness other than two cases validating the legislative
determination of the public purpose for improving employment opportunities
and related activities. The State Constitution has never contained
provisions requiring submission of the questions of incurring indebtedness
to a public referendum. Therefore, the authorization and issuance of State
debt, including the purpose, amount and nature thereof, the method and
manner of the incurrence of such debt, the maturity and terms of repayment
thereof, and other related matters are statutory.
The State has established a program of temporary note issuances to
cover periodic cash flow requirements. The maximum volume of cash flow
borrowing is determined based upon the State's actual cash needs on a daily
basis. The State, as of April 17, 1990, commenced a program permitting the
issuance of up to $539 million of General Obligation Temporary Notes (the
"April 1990 Program"). Under the April 1990 Program, the State may issue
notes during a five-year period concluding in April of 1995. Additionally,
a separate $200 million temporary note program commenced as of April 30,
1991 and concluded on October 31, 1991. There are currently no notes
outstanding under either program.
The General Assembly has empowered, pursuant to bonds acts in effect,
the State Bond Commission to authorize general obligation bonds in the
amount of $10,194,811,925. As of March 1, 1995, the State Bond Commission
has authorized $8,673,257,266 in such bonds and the balance of
$1,521,554,659 was available for authorization. From such total
authorizations of $8,673,257,266, bonds in the aggregate of
$7,334,468,663.09 have been issued and the balance of $1,338,788,602.91
remained authorized but unissued as of March 1, 1995.
General obligation bonds issued by Connecticut municipalities are
payable primarily from ad valorem taxes on property subject to taxation by
the municipality. Certain Connecticut municipalities have experienced
severe fiscal difficulties and have reported operating and accumulated
deficits in recent years. The most notable of these is the City of
Bridgeport.
S&P, Moody's and Fitch rate Connecticut's municipal bonds AA-, Aa and
AA, respectively.
Florida Series
Revenues and Expenditures. Financial operations of the State of
Florida covering all receipts and expenditures are maintained through the
use of three funds: General Revenue Fund, Trust Funds and Working Capital
Fund. The General Revenue Fund receives the majority of State tax
revenues. The Trust Funds consist of monies received by the State which
under law or trust agreement are segregated for a purpose authorized by
law. Revenues in the General Revenue Fund which are in excess of the
amount needed to meet appropriations may be transferred to the Working
Capital Fund. Beginning in 1993-94, the Florida Constitution requires that
the State establish a Budget Stabilization Fund. This fund is to contain a
balance of at least 1% of the previous year's net General Revenue
collections in 1994-95, 2% in 1995-96, 3% in 1996-97, 4% in 1997-98 and 5%
in 1998-99 and thereafter. These monies can be only spent for the purpose
of covering revenue shortfalls and for emergency purposes as defined by
general law. Implementing legislation establishing this fund was enacted
during the 1994 Session of the Florida legislature.
In November of 1994, Florida voters approved an amendment to the
Florida Constitution which set forth limitations on revenue collections by
the State. With certain exceptions, State revenues collected for any
fiscal year are limited to State revenues allowed under the amendment for
the prior fiscal year plus and adjustment for growth.
As used in the amendment, "growth" means an amount equal to the
average annual rate of growth in Florida personal income over the most
recent twenty quarters times the State revenues allowed under the amendment
for the prior fiscal year. For the 1995-96 fiscal year, the State revenues
allowed under the amendment for the prior fiscal year shall equal the State
revenues collected for the 1994-95 fiscal year. Florida personal income
will be determined by the Legislature, from information available from the
United States Department of Commerce or its successor on the first day of
February prior to the beginning of the fiscal year. State revenues
collected for any fiscal year in excess of this limitation will be
transferred to the Budget Stabilization Fund until the fund reaches the
maximum balance specified above, and thereafter shall be refunded to
taxpayers as provided by general law. State revenues allowed under the
amendment for any fiscal year may be increased by a two-thirds vote of the
membership of each house of the Florida Legislature.
For purposes of the amendment "State revenues" means taxes, fees,
licenses, and charges for services imposed by the Legislature on
individuals, businesses, or agencies outside State government. However,
"State revenues" does not include: revenues that are necessary to meet the
requirements set forth in documents authorizing the issuance of bonds by
the State; revenues that are used to provide matching funds for the Federal
Medicaid program with the exception of the revenues used to support the
Public Medical Assistance Trust Fund or its successor program and with the
exception of State matching funds used to fund elective expansions made
after July 1, 1994; proceeds from the State Lottery returned as prizes;
receipts of the Florida Hurricane Catastrophe Fund; balances carried
forward from prior fiscal years; taxes, licenses, fees and charges for
services imposed by local, regional, or school district governing bodies;
or revenue from taxes, licenses, fees and charges for services required to
be imposed by any amendment or revision to the Constitution after July 1,
1994. An adjustment to the revenue limitation will be made by general law
to reflect the fiscal impact of transfers of responsibility for the funding
of governmental functions between the State and other levels of government.
The amendment became effective January 1, 1995.
The Florida Constitution and Statues mandate that the State budget as
a whole, and each separate fund within the State budget, be kept in balance
from currently available revenues each State fiscal year.
Florida ended fiscal years 1992-93 and 1993-94 with General Revenue
plus Working Capital Funds unencumbered reserves of approximately $543.5
million and $351.8 million, respectively. Fiscal year 1994-95 General
Revenue plus Working Capital Funds available totaled $14.699 billion.
Total effective appropriations for the 1994-95 fiscal year were $14.406
billion, resulting in estimated unencumbered reserves of $290.3 million at
the end of the fiscal year. The massive effort to rebuild and replace
destroyed or damaged property in the wake of Hurricane Andrew is
responsible for the substantial positive revenue growth shown. Most of the
impact is in the sales tax.
In fiscal year 1994-95, the State derived approximately 66% of its
total direct revenues from the General Revenue Fund, Trust Funds and
Working Capital Fund from State taxes and fees. Federal funds and other
special revenues accounted for the remaining revenues. Major sources of
tax revenues to the General Revenue Fund are the sales and use tax,
corporate income tax, and beverage tax, which amounted to 67.0%, 7.0% and
4.0%, respectively, of total General Revenue Fund receipts.
State expenditures are categorized for budget and appropriation
purposes by type of fund and spending unit, which are further subdivided by
line item. In fiscal year 1994-95, expenditures from the General Revenue
Fund for education, health and welfare and public safety amounted to
approximately 49.0%, 32.0% and 11.0%, respectively, of total General
Revenues.
Sales and Use Tax. The greatest single source of tax receipts in
Florida is the sales and use tax. The sales tax is 6% of the sales price
of tangible property sold at retail in the State. The use tax is 6% of the
cost price of tangible personal property when the same is not sold but is
used, or stored for use, in the State. The use tax also applies to the use
in the State of tangible personal property purchased outside Florida which
would have been subject to the sales tax if purchased from a Florida
dealer. Less than 10% of the sales tax is designated for local governments
and is distributed to the respective counties in which it is collected for
use by such counties and municipalities therein. In addition to this
distribution, local governments may (by referendum) assess a .5% or 1%
discretionary sales surtax within their county. Proceeds from this local
option sales tax are earmarked for funding local infrastructure programs
and acquiring land for public recreation or conservation or protection of
natural resources. In addition, non-consolidated counties with populations
in excess of 800,000 may levy a local option sales tax to fund indigent
health care. This tax rate may not exceed .5% and the combined levy of the
indigent health care surtax and the infrastructure surtax described above
may not exceed 1%. Furthermore, charter counties which adopted a charter
prior to June 1, 1976, and each country with a consolidated
county/municipal government, may (by referendum) assess up to a 1%
discretionary sales surtax within their county. Proceeds from this tax are
earmarked for the development, construction, maintenance and operation of a
fixed guideway rapid transit system or may be remitted to an expressway or
transportation authority for use on country roads and bridges, for a bus
system, or to service bonds financing roads and bridges. The two taxes,
sales and use, stand as complements to each other, and taken together
provide a uniform tax upon either the sale at retail or the use of all
tangible personal property irrespective of where it may have been
purchased. This tax also includes a levy on the following: (i) rentals of
tangible personal property, transient lodging and non-residential real
property; (ii) admissions to places of amusements, most sports and
recreation events; (iii) utilities, except those used in homes; and (iv)
restaurant meals. Exemptions include: groceries; medicines; hospital
rooms and meals; fuels used to produce electricity; purchases by religious,
charitable and educational nonprofit institutions; most professional,
insurance and personal service transactions; apartments used as permanent
dwellings; and trade-in value of motor vehicles; and residential utilities.
All receipts of the sales and use tax, with the exception of the tax
on gasoline and special fuels, are credited to either the General Revenue
Fund, the Solid Waste Management Trust Fund, or counties and cities. For
the State fiscal year which ended June 30, 1995, receipts from this source
were $10.672 billion, an increase of 6.0% from fiscal year 1993-94.
Motor Fuel Tax. The second largest source of State tax receipts is
the tax on motor fuels. Preliminary data show collections from this source
in the State fiscal year ended June 30, 1995, were $1.733 billion.
However, these revenues are almost entirely dedicated trust funds for
specific purposes and are not included in the State General Revenue Fund.
State and local taxes on motor fuels (gasoline and special fuel)
include several distinct fuel taxes: (i) the State sales tax on motor
fuels, levied at 6% of the average retail price per gallon of fuel, not to
fall below 6.9 cents per gallon; (ii) the State excise tax of four cents
per gallon of motor fuel, proceeds distributed to local governments; (iii)
the State Comprehensive Enhanced Transportation System (SCETS) tax, which
is levied at a rate in each county equal to two-thirds of the sum of the
county's local option motor fuel taxes; and (iv) local option motor fuel
taxes, which may range between one cent to seven cents per gallon.
Alcoholic Beverage Tax. Florida's alcoholic beverage tax is an excise
tax on beer, wine, and liquor. This tax is one of the State's major tax
sources, with revenues totalling $437.3 million in State fiscal year ended
June 30, 1995. Alcoholic beverage receipts declined from the previous
year's total. The revenues collected from this tax are deposited into the
State's General Revenue Fund.
The 1990 Legislature established a surcharge on alcoholic beverages.
This cargo is levied on alcoholic beverages sold for consumption on
premises. The surcharge is at ten cents per ounce of liquor, ten cents per
four ounces of wine, four cents per twelve ounces of beer. Most of these
proceeds are deposited into the General Revenue Fund. In fiscal 1994-95 a
total of $97.4 million was collected.
Corporate Income Tax. Pursuant to an amendment to the State
Constitution, the State Legislature adopted, effective January 1, 1972, the
"Florida Income Tax Code" imposing a tax upon the net income of
corporations, organizations, associations and other artificial entities for
the privilege of conducting business, deriving income or existing within
the State. This tax does not apply to natural persons who engage in a
trade or business or profession under their own or any fictitious name,
whether individually as proprietorships or in partnerships with others,
estates of decedents or incompetents, or testamentary trusts.
The tax is imposed in an amount equal to 5.5% of the taxpayer's net
corporate income for the taxable year, less a $5,000 exemption, as defined
in such Code. Net income is defined by the Code as that share of a
taxpayer's adjusted Federal income for such year which is apportioned to
the State of Florida. Apportionment is by weighted factors of sales (50%),
property (25%) and payroll (25%). All business income is apportioned and
non-business income is allocated to a single jurisdiction, usually the
State of commercial domicile.
All receipts of the corporate income tax are credited to the General
Revenue Fund. For the fiscal year ended June 30, 1995, receipts from this
source were $1.064 billion, an increase of 1.5% from fiscal year 1993-94.
Documentary Stamp Tax. Deeds and other documents relating to a realty
are taxed at 70 cents per $100 of consideration, while corporate shares,
bonds, certificates of indebtedness, promissory notes, wage assignments and
retail charge accounts are taxed at 35 cents per $100 consideration.
Documentary stamp tax collections totalled $695.3 million during fiscal
year 1994-95, posting a 11.4% decrease from the previous fiscal year. The
General Revenue Fund receives approximately 63% of documentary stamp tax
collections.
Gross Receipts Tax. Effective July 1, 1992, the tax rate was
increased from 2.25% to 2.5% of the gross receipts of electric, natural gas
and telecommunications services. All gross receipts utilities collections
are credited to the Public Education Capital Outlay and Debt Service Trust
Fund. In fiscal year 1994-95, gross receipts utilities tax collections
totalled $508.4 million, an increase of 10.4% over the previous fiscal
year.
Intangible Personal Property Tax. This tax is levied on two distinct
bases: (i) stocks, bonds, including bonds secured by Florida realty, notes,
government leaseholds, interests in limited partnerships registered with
the SEC, and other miscellaneous intangible personal property not secured
by liens on Florida realty are taxed annually at a rate of 2 mills, (ii)
mortgages and other obligations secured by liens on Florida realty, taxed
with a non-recurring 2 mill tax.
Of the tax proceeds, 33.5% is distributed to the County Revenue
Sharing Trust Fund. The remainder is distributed to the General Reserve
Fund.
Fiscal year 1994-95 total intangible personal property tax collections
were $818.0 million, a 2.1% decrease over the prior year.
Severance Taxes. The severance tax includes the taxation of oil, gas
and sulfur production and a tax on the severance of primarily phosphate
rock and other solid minerals. Total collections from severance taxes
totalled $61.2 million during fiscal year 1994-95, up 1.1% from the
previous fiscal year.
Lottery. The 1987 Legislature created the Department of the Lottery
to operate the State Lottery and setting forth the allocation of the
revenues. Of the revenues generated by the Lottery, 50% is to be returned
to the public as prizes; at least 38% is to be deposited in the Educational
Enhancement Trust Fund (for public education); and no more than 12% can be
spent on the administrative cost of operating the lottery.
Fiscal year 1994-95 produced ticket sales of $2.19 billion, of which
education received approximately $853.2 million.
New Jersey Series
New Jersey's economic base is diversified, consisting of a variety of
manufacturing, construction and service industries, supplemented by rural
areas with selective commercial agriculture. New Jersey's principal
manufacturing industries produce chemicals, pharmaceuticals, electrical
equipment and instruments, machinery, services, wholesale and retail trade,
food products, and printing. Other economic activities include services,
wholesale and retail trade, insurance, tourism, petroleum refining and
truck farming.
While New Jersey's economy continued to expand during the late 1980s,
the level of growth slowed considerably after 1987. Initially, this
slowdown was an expected response to the State's tight labor market and the
decrease in the number of persons entering the labor force. Late in the
decade, a decline in construction demand and in the rate of growth in
consumer spending as well as continued softness in the State's
manufacturing sector set the stage for the current recession in New Jersey.
The State's average annual unemployment rate was below the national average
from 1981 through 1990. In 1988, unemployment dropped to its lowest level
since 1969, averaging 3.8% for the year. Unemployment, however, began to
rise during 1989 and 1990, averaging 5.0% of the labor force in New Jersey
and 5.5% nationally in 1990. By August 1992, the State unemployment rate
moved above the national average for the first time in a decade,
registering 9.4%. In April 1993, the State unemployment rate was 9.1%. As
a result of the State's fiscal weakness, S&P, in July 1991, lowered its
rating of the State's general obligation debt from AAA to AA+.
The State's General Fund ended fiscal 1994 with an undesignated fund
balance of $1.265 billion.
The fiscal year 1995 Appropriations Act forecast Sales and Use Tax
collections of $4.130 billion, a 9.3% increase from fiscal year 1994
revenue, Gross Income Tax collections of $4.580 billion, a 1.9% increase
from fiscal year 1994 revenue, and Corporation Business Tax collections of
$1.054 billion, a .9% decrease from fiscal year 1994 revenue.
The State appropriated approximately $14.7 billion and $15.5 billion
for fiscal 1993 and 1994, respectively. Estimated 1995 and 1996 State
appropriations total $15.5 billion and $16.0 billion, respectively. Of the
$16.0 billion appropriated in fiscal year 1996 from the General Fund, the
Property Tax Relief Fund, the Casino Control Fund and the Casino Revenue
Fund, $6.425 billion (40.2%) is appropriated for State aid to local
governments, $3.708 billion (23.2%) is appropriated for grants-in-aid
(payments to individuals or public or private agencies for benefits to
which a recipient is entitled by law or for the provision of service on
behalf of the State), $5.180 billion (32.4%) for direct State services,
$466.3 million (2.9%) for debt service on State general obligation bonds
and $217.1 million (1.3%) for capital construction.
As of June 30, 1994, the outstanding general obligation bonded
indebtedness of the State was approximately $3.7 billion. In fiscal year
1992, the State initiated a program under which it issued tax and revenue
anticipation notes to aid in providing effective cash flow management to
fund imbalances which occur in the collection and disbursement of the
General Fund and Property Tax Relief Fund revenues. There are presently no
tax and revenue anticipation notes outstanding. It is anticipated that
this program will be continued in fiscal year 1996.
Such tax and revenue anticipation notes do not constitute a general
obligation of the State or a debt or liability within the meaning of the
State Constitution. Such notes constitute special obligations of the State
payable solely from moneys on deposit in the General Fund and Property Tax
Relief Fund and legally available for such payment.
New York Series
The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New
York City (the "City"), could affect the market values and marketability of
New York Municipal Obligations which may be held by the Fund. 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, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") 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.
A national recession commenced in mid-1990. The downturn continued
through the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic growth during the remainder of the 1991 calendar
year. For the calendar year 1992, the national economy continued to
recover, although at a rate below all post-war recoveries. The recession
was more severe in the State than in other parts of the nation, owing to a
significant retrenchment in the financial services industry, cutbacks in
defense spending, and an overbuilt real estate market. The State economy
remained in recession until 1993, when employment growth resumed. Since
early 1993, the State has gained approximately 100,000 jobs. The State's
economy is expected to continue to expand modestly during 1995, but there
will be a pronounced slow-down during the course of the year. Although
industries that export goods and services abroad are expected to benefit
from the lower dollar, growth will be slowed by government cutbacks at all
levels. On an average annual basis, employment growth will be about the
same as 1994. Both personal income and wages are expected to record
moderate gains in 1995.
The State's budget for the 1995-96 fiscal year was enacted by the
Legislature on June 7, 1995, more than two months after the start of the
fiscal year. Prior to adoption of the budget, the Legislature enacted
appropriations for disbursements considered to be necessary for State
operations and other purposes, including all necessary appropriations for
debt service. The State Financial Plan for 1995-96 fiscal year was
formulated on June 20, 1995 and is based on the State's budget as enacted
by the Legislature and signed into law by the Governor.
The 1995-96 budget is the first to be enacted in the administration of
the Governor, who assumed office on January 1. It is the first budget in
over half a century which proposed and, as enacted, projects an absolute
year-over-year decline in General Fund disbursements. Spending for State
operations is projected to drop even more sharply, by 4.6%. Nominal
spending from all State funding sources (i.e., excluding Federal aid) is
proposed to increase by only 2.5% from the prior fiscal year, in contrast
to the prior decade when such spending growth averaged more than 6.0%
annually.
In his Executive Budget, the Governor indicated that in the 1995-96
fiscal year, the State Financial Plan, based on then-current law governing
spending and revenues, would be out of balance by almost $4.7 billion, as a
result of the projected structural deficit resulting from the ongoing
disparity between sluggish growth in receipts, the effect of prior-year tax
changes, and the rapid acceleration of spending growth; the impact of
unfunded 1994-95 initiatives, primarily for local aid programs; and the use
of one-time solutions, primarily surplus funds from the prior year, to fund
recurring spending in the 1994-95 budget. The Governor proposed additional
tax cuts, to spur economic growth and provide relief for low and middle-
income tax payers, which were larger than those ultimately adopted, and
which added $240 million to the then projected imbalance or budget gap,
bringing the total to approximately $5 billion.
This gap is projected to be closed in the 1995-96 State Financial Plan
based on the enacted budget, through a series of actions, mainly spending
reductions and cost containment measures and certain reestimates that are
expected to be recurring, but also through the use of one-time solutions.
The State Financial Plan is based upon forecasts of national and State
economic activity. Economic forecasts have frequently failed to predict
accurately the timing and magnitude of changes in the national and the
State economies. Many uncertainties exist in forecasts of both the
national and State economies, including consumer attitudes toward spending,
Federal financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the
State. There can be no assurance that the State economy will not
experience worse-than-predicted results in the 1994-95 fiscal year, with
corresponding material and adverse effects on the State's projections of
receipts and disbursements.
The General Fund is projected to be balanced on a cash basis for the
1995-96 fiscal year. Total receipts and transfers from other funds are
projected to be $33.110 billion, a decrease of $48 million from total
receipts in the prior fiscal year. Total General fund disbursements and
transfers to other funds are projected to be $33.055 billion, a decrease of
$344 million from the total amount disbursed in the prior fiscal year.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant
disparity between tax revenues projected from a lower recurring receipts
base and the spending required to maintain State programs at current
levels. To address any potential budgetary imbalance, the State may need
to take significant actions to align recurring receipts and disbursements
in future fiscal years.
On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively. In
February 1991, Moody's lowered its rating on the City's general obligation
bonds from A to Baa1 and in July 1995, S&P lowered its rating on such bonds
from A- to BBB+. Ratings reflect only the respective views of such
organizations, and their concerns about the financial condition of New York
State and City, the debt load of the State and City and any economic
uncertainties about the region. There is no assurance that a particular
rating will continue for any given period of time or that any such rating
will not be revised downward or withdrawn entirely if, in the judgment of
the agency originally establishing the rating, circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a
continuation of the financial difficulties of the City, created substantial
investor resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976,
these difficulties resulted in a virtual closing of public credit markets
for State and many State related securities.
In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included
the adoption of a balanced budget on a cash basis (a deficit of $92 million
that actually resulted was financed by issuing notes that were paid during
the first quarter of the State's 1978 fiscal year). In addition,
legislation was enacted limiting the occurrence of additional so-called
"moral obligation" and certain other Agency debt, which legislation does
not, however, apply to MAC debt.
State Financial Cash-Basis Results--General Fund. The General Fund is
the principal operating fund of the State and is used to account for all
financial transactions, except those required to be accounted for in
another fund. It is the State's largest fund and receives almost all State
taxes and other resources not dedicated to particular purposes. General
Fund moneys are also transferred to other funds, primarily to support
certain capital projects and debt service payments in other fund types.
New York State's financial operations have improved during recent
fiscal years. During the period 1989-90 through 1991-92, the State
incurred General Fund operating deficits that were closed with receipts
from the issuance of tax and revenue anticipation notes ("TRANs"). First,
the national recession, and then the lingering economic slowdown in the New
York and regional economy, resulted in repeated shortfalls in receipts and
three budget deficits. For its 1992-93, 1993-94 and 1994-95 fiscal years,
the State recorded balanced budgets on a cash basis, with substantial fund
balances in 1992-93 and 1993-94, and a smaller fund balance in 1994-95, as
described below.
New York State ended its 1994-95 fiscal year with the General fund in
balance. The closing fund balance of $158 million reflects $157 million in
the Tax Stabilization Reserve Fund and $1 million in the Contingency
Reserve Fund ("CRF"). The CRF was established in State Fiscal year 1993-
94, funded partly with surplus moneys, to assist the State in financing the
1994-95 fiscal year costs of extraordinary ligation known or anticipated at
that time; the opening fund balance in State fiscal year 1994-95 was $265
million. The $241 million change in the fund balance reflects the use of
$264 million in the CRF as planned, as well as the required deposit of $23
million to the Tax Stabilization Reserve Fund. In addition, $278 million
was on deposit in the tax refund reserve account, $250 million of which was
deposited at the end of the State's 1994-95 fiscal year to continue the
process of restructure the State's cash flow as part of the New York Local
Government Assistance Corporation ("LGAC") program.
Compared to the State Financial Plan for 1994-1995 as formulated on
June 16, 1994, reported receipts fell short of original projections by
$1.163 billion, primarily in the categories of personal income and business
taxes. Of this amount, the personal income tax accounts for $800 million,
reflecting weak estimated tax collections and lower withholding due to
reduced wage and salary growth, more severe reductions in brokerage
industry bonuses than projected earlier, and deferral of capital gains
realizations in anticipation of potential Federal tax changes. Business
taxes fell short by $373 million, primarily reflecting lower payments from
banks as substantial overpayments of 1993 liability depressed net
collections in the 1994-95 fiscal year. These shortfalls were offset by
better performance in the remaining taxes, particularly the user taxes and
fees, which exceeded projections by $210 million. Of this amount, $277
million was attributable to certain restatements for accounting treatment
purposes pertaining to the CRF and LGAC; these restatements had no impact
on balance in the General Fund
Disbursements were also reduced from original projections by $848
million. After adjusting for the net impact of restatements relating to
the CRF and LGAC which raised disbursements by $38 million, the variance is
$886 million. Well over two-thirds of this variance is in the category of
grants to local governments, primarily reflecting the conservative nature
of the original estimates of projected costs for social services and other
programs. Lower education costs are attributable to the availability of
$110 million in additional lottery proceeds and the use of LGAC bond
proceeds.
The spending reductions also reflect $188 million in actions initiated
in January 1995 by the Governor to reduce spending to avert a potential gap
in the 1994-95 State Financial Plan. These actions included savings from a
hiring freeze, halting the development of certain services, and the
suspension of non-essential capital projects. These actions, together with
$71 million in other measures, comprised the Governor's $259 million gap-
closing plan, submitted to the Legislature in connection with the 1995-96
Executive Budget.
The State ended its 1993-94 fiscal year with a balance of $1.140
billion in the tax refund reserve account, $265 million in the CRF and $134
million in its tax stabilization reserve fund. These fund balances were
primarily the result of an improving national economy, State employment
growth, tax collections that exceeded earlier projections and disbursements
that were below expectations. Deposits to the personal income tax refund
reserve have the effect of reducing reported personal income tax receipts
in the fiscal year when made and withdrawals from such reserve increase
receipts in the fiscal year when made. The balance in the tax reserve
account will be used to pay taxpayer refunds, rather than drawing from
1994-95 receipts.
Of the $1.140 billion deposited in the tax refund reserve account,
$1.026 billion was available for budgetary planning purposes in the 1994-95
fiscal year. The remaining $114 million was redeposited in the tax refund
reserve account at the end of the State's 1994-95 fiscal year to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The balance in the contingency reserve fund was reserved to meet
the cost of litigation facing the State in its 1994-95 fiscal year.
Before the deposit of $1.140 billion in the tax refund reserve
account, General Fund receipts in 1993-94 exceeded those originally
projected when the State Financial Plan for the year was formulated on
April 16, 1993 by $1.002 billion. Greater-than-expected receipts in the
personal income tax, the bank tax, the corporation franchise tax and the
estate tax accounted for most of this variance, and more than offset
weaker-than-projected collections from the sales and use tax and
miscellaneous receipts. Collections from individual taxes were affected
by various factors including changes in Federal business laws, sustained
profitability of banks, strong performance of securities firms, and higher-
than-expected consumption of tobacco products following price cuts.
The higher receipts resulted, in part, because the New York economy
performed better than forecasted. Employment growth started in the first
quarter of the State's 1993-94 year, and although this lagged the national
economic recovery, the growth in New York began earlier than forecasted.
The New York economy exhibited signs of strength in the service sector, in
construction, and in trade. Long Island, and the Mid-Hudson Valley
continued to lag the rest of the State in economic growth. Approximately
100,000 jobs were added during the 1993-94 fiscal year.
Disbursements and transfer from the General Fund were $303 million
below the level projected in April 1993, an amount that would have been
$423 million had the State not accelerated the payment of Medicaid
billings, which in the April 1993 State Financial Plan were planned to be
deferred into the 1994-95 fiscal year. Compared to the estimates included
in the State Financial Plan formulated in April 1993, disbursements were
lower for Medicaid, capital projects, and debt service (due to refundings).
In addition, $114 million was used to restructure the State's cash flow as
part of the LGAC program. Disbursements were higher-than-expected for
general support for public schools. The State also made the first of six
required payments to the State of Delaware related to the settlement of
Delaware's litigation against the State regarding the disposition of
abandoned property receipts.
During the 1993-94 fiscal year, the State also established and funded
the CRF as a way to assist the State in financing the cost of litigation
affecting the State. The CRF was initially funded with a transfer of $100
million attributable to the positive margin recorded in the 1992-93 fiscal
year. In addition, the State augmented this initial deposit with $132
million on debt service savings attributable to the refinancing of State
and public authority bonds during 1993-94. A year-end transfer of $36
million was also made to the CRF, which, after a disbursement for
authorized fund purposes, brought the CRF balance at the end of 1993-94 to
$265 million. This amount was $165 million higher than the amount
originally targeted for this reserve fund.
For its 1992-93 fiscal year the State had a balanced budget on a cash
basis with a positive margin of $671 million in the General Fund that was
deposited in the refund reserve account.
After reflecting a 1992-93 year-end deposit to the refund reserve
account of $671 million, reported 1992-93 General Fund receipts were $45
million higher than originally projected in April 1992. If not for that
year-end transaction, which had the effect of reducing 1992-93 receipts by
$671 million and making those receipts available in 1993-94, General Fund
receipts would have been $716 million higher than originally projected.
The favorable performance was primarily attributable to personal
income tax collections that were more than $700 million higher than
originally projected (before reflecting the refund reserve transaction).
The withholding and estimated payment components of the personal income tax
exceeded original estimates by more than $800 million combined, reflecting
both stronger economic activity, particularly at year's end, and the tax-
induced one-time acceleration of income into 1992. Modest shortfalls were
experienced in other components of the income tax.
There were large, but largely offsetting, variances in other
categories. Significantly higher-than-projected business tax collections
and the receipt of unbudgeted payments from the Medical Malpractice
Insurance Association and the New York Racing Association approximately
offset the loss of an anticipated $200 million Federal reimbursement, the
loss of certain budgeted hospital differential revenue as a result of
unfavorable court decisions, and shortfalls in certain miscellaneous
revenue sources.
Disbursements and transfers to other funds totaled $30.829 billion, an
increase of $45 million above projections in April 1992. After adjusting
for the impact of a $150 million payment from the Medical Malpractice
Insurance Association to health insurers made pursuant to legislation
passed in January 1993, actual disbursements were $105 million lower than
projected. This reduction primarily reflected higher-than-anticipated
costs for educational programs, as offset by lower costs in virtually all
other categories of spending, including Medicaid, local health programs,
agency operations, fringe benefits, capital projects and debt service.
During its 1989-90, 1990-91 and 1991-92 fiscal years, the State
incurred cash-basis operating deficits in the General Fund of $775 million,
$1.081 billion and $575 million, respectively, prior to the issuance of
short-term TRANs, owing to lower-than-projected receipts.
Other Governmental Funds. Activity in the three other governmental
funds has remained relatively stable over the last three fiscal years, with
Federally-funded programs comprising approximately two-thirds of these
funds. The most significant change in the structure of these funds has
been the redirection, beginning in the 1993-94 fiscal year, of a portion of
transportation-related revenues from the General Fund to two new dedicated
funds in the Special Revenue and Capital Projects Fund types. These
revenues totalling $676 million in the 1994-95 fiscal year were used to
support the capital programs of the Department of Transportation and the
Metropolitan Transportation Authority ("MTA").
The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and
include all moneys received from the Federal government. Total receipts in
Special Revenue Funds are projected at $25.547 billion in the State's 1995-
96 fiscal year. Disbursements from Special Revenue Funds are projected to
be $26.002 billion for the State's 1995-96 fiscal year.
The Capital Projects Funds are used to finance the acquisition and
construction of major capital facilities and to aid local government units
and Agencies in financing capital constructions. Federal grants for
capital projects, largely highway-related, are projected to account for 24%
of the $4.170 billion in total projected receipts in Capital Projects Funds
in the State's 1995-96 fiscal year. Total disbursements for capital
projects are projected to be $4.160 billion during the State's 1995-96
fiscal year.
The Debt Service Funds serve to fulfill State debt service on long-
term general obligation State debt and other State lease/purchase and
contractual obligation financing commitments. Total receipts in Debt
Service Funds are projected to reach $2.409 billion in the State's 1995-96
fiscal year. Total disbursements from Debt Service Funds for debt service,
lease/purchase and contractual obligation financing commitments are
projected to be $2.506 billion for the 1994-95 fiscal year.
State Borrowing Plan. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and public
authorities in the 1995-96 fiscal year. The State expects to issue $248
million in general obligation bonds (including $70 million for purposes of
redeeming outstanding BANs) and $186 million in general obligation
commercial paper. The Legislature has also authorized the issuance of up
to $33 million in COPs during the State's 1995-96 fiscal year for equipment
purchases and $14 million for capital purposes. The projection of the
State regarding its borrowings for the 1995-96 fiscal year may change if
circumstances require.
In addition, the LGAC is authorized to provide net proceeds of up to
$529 million during the 1995-96 fiscal year to redeem notes sold in June
1995.
State Agencies. The fiscal stability of the State is related, at
least in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain
various debt service reserve funds established for such bonds (commonly
referred to as "moral obligation" provisions).
At September 30, 1994, there were 18 Agencies that had outstanding
debt of $100 million or more. The aggregate outstanding debt, including
refunding bonds, of these 18 Agencies was $70.3 billion as of September 30,
1994. As of March 31, 1995, aggregate Agency debt outstanding as State-
supported debt was $27.9 billion and as State-related was $36.1 billion.
Debt service on the outstanding Agency obligations normally is paid out of
revenues generated by the Agencies' projects or programs, but in recent
years the State has provided special financial assistance, in some cases on
a recurring basis, to certain Agencies for operating and other expenses and
for debt service pursuant to moral obligation indebtedness provisions or
otherwise. Additional assistance is expected to continue to be required in
future years.
Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to
meet their obligations could result in a default by one or more of such
Agencies. If a default were to occur, it would likely have a significant
effect on the marketability of obligations of the State and the Agencies.
These Agencies are discussed below.
The New York State Housing Finance Agency ("HFA") provides financing
for multifamily housing, State University construction, hospital and
nursing home development, and other programs. In general, HFA depends upon
mortgagors in the housing programs it finances to generate sufficient funds
from rental income, subsidies and other payments to meet their respective
mortgage repayment obligations to HFA, which provide the principal source
of funds for the payment of debt service on HFA bonds, as well as to meet
operating and maintenance costs of the projects financed. From January 1,
1976 through March 31, 1987, the State was called upon to appropriate a
total of $162.8 million to make up deficiencies in the debt service reserve
funds of HFA pursuant to moral obligation provisions. The State has not
been called upon to make such payments since the 1986-87 fiscal year and no
payments are anticipated during the 1995-96 fiscal year.
UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC
is currently attempting to increase its rate of collection by accelerating
its program of foreclosures and by entering into settlement agreements.
UDC has been, and will remain, dependent upon the State for appropriations
to meet its operating expenses. The State also has appropriated money to
assist in the curing of a default by UDC on notes which did not contain the
State's moral obligation provision.
The MTA oversees New York City's subway and bus lines by its
affiliates, the New York City Transit Authority and the Manhattan and Bronx
Surface Transit Operating Authority (collectively, the "TA"). Through
MTA's subsidiaries, the Long Island Rail Road Company, the Metro-North
Commuter Railroad Company and the Metropolitan Suburban Bus Authority, the
MTA operates certain commuter rail and bus lines in the New York
metropolitan area. In addition, the Staten Island Rapid Transit Authority,
an MTA subsidiary, operates a rapid transit line on Staten Island. Through
its affiliated agency, the Triborough Bridge and Tunnel Authority (the
"TBTA"), the MTA operates certain toll bridges and tunnels. Because fare
revenues are not sufficient to finance the mass transit portion of these
operations, the MTA has depended and will continue to depend for operating
support upon a system of State, local government and TBTA support and, to
the extent available, Federal operating assistance, including loans, grants
and subsidies. If current revenue projections are not realized and/or
operating expenses exceed current projections, the TA or commuter railroads
may be required to seek additional State assistance, raise fares or take
other actions.
Over the past several years the State has enacted several
taxes--including a surcharge on the profits of banks, insurance
corporations and general business corporations doing business in the
12-county region (the "Metropolitan Transportation Region") served by the
MTA and a special .25% regional sales and use tax--that provide additional
revenues for mass transit purposes, including assistance to the MTA. In
addition, since 1987, State law has required that the proceeds of .25%
mortgage recording tax paid on certain mortgages in the Metropolitan
Transportation Region be deposited in a special MTA fund for operating or
capital expenses. Further, in 1993, the State dedicated a portion of
certain additional State petroleum business tax receipts to fund operating
or capital assistance to the MTA. For the 1994-96 State fiscal year, total
State assistance to the MTA is estimated at approximately $1.1 billion.
A subway fire on December 28, 1990 and a subway derailment on August
28, 1991, each of which caused fatalities and many injuries, have given
rise to substantial claims for damages against both the TA and the City.
In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.
On April 5, 1993, the Legislature approved, and the Governor
subsequently signed into law, legislation authorizing a five-year $9.56
billion capital plan for the MTA for 1992-1996. The MTA has received
approval of the 1992-1996 Capital Program based on this legislation from
the MTA Capital Program Review Board (the "CPRB"), as State law requires.
This is the third five-year plan since the Legislature authorized
procedures for the adoption, approval and amendment of a five-year plan in
1981 for a capital program designed to upgrade the performance of the MTA's
transportation systems and to supplement, replace and rehabilitate
facilities and equipment. The MTA, the TBTA and the TA are collectively
authorized to issue an aggregate of $3.1 billion of bonds (net of certain
statutory exclusions) to finance a portion of the 1992-96 Capital Program.
The 1992-96 Capital Program was expected to be financed in significant part
through dedication of the State petroleum business tax receipts referred to
above. However, in December 1994 the proposed bond resolution based on
such tax receipts was not approved by the MTA Capital Program Review Board.
Further consideration of the resolution was deferred until 1995.
There can be no assurance that such governmental actions will be
taken, that sources currently identified will not be decreased or
eliminated, or that the 1992-1996 Capital Program will not be delayed or
reduced. If the MTA capital program is delayed or reduced because of
funding shortfalls or other factors, ridership and fare revenues may
decline, which could, among other things, impair the MTA's ability to meet
its operating expenses without additional State assistance.
The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad
powers and responsibilities with respect to the government, finances and
welfare of these political subdivisions, especially in education and social
services. In recent years the State has been called upon to provide added
financial assistance to certain localities.
Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the State's 1995-96 fiscal year and thereafter. The potential
impact on the State of such actions by localities is not included in the
projections of the State receipts and disbursements in the State's 1995-96
fiscal year.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1993, the total indebtedness of
all localities in the State, other than the City, was approximately $17.7
billion. A small portion (approximately $105 million) of this indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant
to enabling State legislation. State law requires the Comptroller to
review and make recommendations concerning the budgets of those local
government units other than the City authorized by State law to issue debt
to finance deficits during the period that such deficit financing is
outstanding. Fifteen localities had outstanding indebtedness for deficit
financing at the close of their fiscal year ending in 1993.
Certain proposed Federal expenditure reductions would reduce, or in
some cases eliminate, Federal funding of some local programs and
accordingly might impose substantial increased expenditure requirements on
affected localities to increase local revenues to sustain those
expenditures. If the State, the City or any of the Agencies were to suffer
serious financial difficulties jeopardizing their respective access to the
public credit markets, the marketability of notes and bonds issued by
localities within the State could be adversely affected. Localities also
face anticipated and potential problems resulting from certain pending
litigation, judicial decisions and long-range economic trends. The
longer-range, potential problems of declining city population, increasing
expenditures and other economic trends could adversely affect localities
and require increasing State assistance in the future.
Because of significant fiscal difficulties experienced from time to
time by the City of Yonkers, a Financial Control Board was created by the
State in 1984 to oversee Yonkers' fiscal affairs. Future actions taken by
the Governor or the State Legislature to assist Yonkers in this crisis
could result in the allocation of State resources in amounts that cannot
yet be determined.
Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to
providers of mandatory and optional Medicaid services; (iii) contamination
in the Love Canal area of Niagara Falls; (iv) a challenge to the State's
practice of reimbursing certain Office of Mental Health patient-care
expenses with clients' Social Security benefits; (v) a challenge to the
methods by which the State reimburses localities for the administrative
costs of food stamp programs; (vi) a challenge to the State's possession
of certain funds taken pursuant to the State's Abandoned Property law;
(vii) alleged responsibility of State officials to assist in remedying
racial segregation in the City of Yonkers; (viii) an action, in which the
State is a third party defendant, for injunctive or other appropriate
relief, concerning liability for the maintenance of stone groins
constructed along certain areas of Long Island's shoreline; (ix) actions
challenging the constitutionality of legislation enacted during the 1990
legislative session which changed the actuarial funding methods for
determining contributions to State employee retirement systems; (x) an
action against State and City officials alleging that the present level of
shelter allowance for public assistance recipients is inadequate under
statutory standards to maintain proper housing; (xi) an action challenging
legislation enacted in 1990 which had the effect of deferring certain
employer contributions to the State Teachers' Retirement System and
reducing State aid to school districts by a like amount; (xii) a challenge
to the constitutionality of financing programs of the Thruway Authority
authorized by Chapters 166 and 410 of the Laws of 1991 (described below in
this Part); (xiii) a challenge to the constitutionality of financing
programs of the Metropolitan Transportation Authority and the Thruway
Authority authorized by Chapter 56 of the Laws of 1993 (described below in
this Part); (xiv) challenges to the delay by the State Department of Social
Services in making two one-week Medicaid payments to the service providers;
(xv) challenges by commercial insurers, employee welfare benefit plans, and
health maintenance organizations to provisions of Section 2807-c of the
Public Health Law which impose 13%, 11% and 9% surcharges on inpatient
hospital bills and a bad debt and charity care allowance on all hospital
bills paid by such entities; (xvi) challenges to the promulgation of the
State's proposed procedure to determine the eligibility for and nature of
home care services for Medicaid recipients; (xvii) a challenge to State
implementation of a program which reduces Medicaid benefits to certain
home-relief recipients; and (xviii) challenges to the rationality and
retroactive application of State regulations recalibrating nursing home
Medicaid rates.
Adverse developments or decisions in such cases could affect the
ability of the State to maintain a balanced 1994-95 State Financial Plan.
(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax
and other ongoing revenues to cover expenses in each fiscal year. However,
the City's operating results for the fiscal year ending June 30, 1994 were
balanced in accordance with GAAP, the twelfth consecutive year in which the
City achieved balanced operating results in accordance with GAAP. The
City's ability to maintain balanced operating results in future years is
subject to numerous contingencies and future developments.
The City's economy, whose rate of growth slowed substantially over the
past three years, is currently in recession. During the 1990 and 1991
fiscal years, as a result of the slowing economy, the City experienced
significant shortfalls in almost all of its major tax sources and increases
in social services costs, and was required to take actions to close
substantial budget gaps in order to maintain balanced budgets in accordance
with the Financial Plan.
In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this
crisis, the State created MAC to provide financing assistance to the City
and also enacted the New York State Financial Emergency Act for the City of
New York (the "Emergency Act") which, among other things, created the
Financial Control Board (the "Control Board") to oversee the City's
financial affairs and facilitate its return to the public credit markets.
The State also established the Office of the State Deputy Comptroller
("OSDC") to assist the Control Board in exercising its powers and
responsibilities. On June 30, 1986, the Control Board's powers of approval
over the City Financial Plan were suspended pursuant to the Emergency Act.
However, the Control Board, MAC and OSDC continue to exercise various
monitoring functions relating to the City's financial condition. The City
prepares and operates under a four-year financial plan which is submitted
annually to the Control Board for review and which the City periodically
updates.
The City's independently audited operating results for each of its
fiscal years from 1981 through 1993 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in
its net General Fund position. In addition, the City's financial
statements for the 1993 fiscal year received an unqualified opinion from
the City's independent auditors, the eleventh consecutive year the City has
received such an opinion.
In August 1993, the City adopted and submitted to the Control Board
for its review a four-year Financial Plan covering fiscal years 1994
through 1997 (the "Financial Plan"). The Financial Plan was based on the
City's fiscal year 1994 expense budget adopted June 14, 1993 as well as
certain changes incorporated subsequent to the budget adoption process. On
November 23, 1993, the City adopted and submitted to the Control Board for
its review a first quarter modification to the Financial Plan (the
"November Modification") incorporating various re-estimates of revenues and
expenditures. For fiscal year 1994, the November Modification includes
additional resources stemming primarily from the City Comptroller's fiscal
year 1993 annual audit, savings from a reduction in prior years' accrued
expenditures, and higher State and Federal aid resulting from claims by the
City for reimbursement of various social services costs. These resources
were used to fund new needs in the November Modification including higher
costs in the uniformed agencies, at the Board of Education (the "BoE") and
for certain social services, the unlikelihood of the sale of the Off-Track
Betting Corporation (the "OTB"), and lower estimates of miscellaneous and
other revenues. After taking these adjustments into account, the November
Modification projects a balanced budget for fiscal year 1994, based upon
revenues of $31,585 billion. For fiscal years 1995, 1996 and 1997, the
November Modification projects budget gaps of $1.730 billion, $2.513
billion and $2.699 billion, respectively. These gaps are higher by about
$450 million in fiscal year 1995 and by about $700 million in each of
fiscal years 1996 and 1997 than in the Financial Plan, primarily on account
of the nonrecurring value of the fiscal year 1994 revenue adjustments, the
loss of certain one-time resources funding BoE fiscal year 1994 spending
needs, and the reclassification of anticipated State aid from the baseline
revenue estimates to the gap-closing program. To offset these larger gaps,
the November Modification relies on additional City, State and other
actions.
On December 1, 1993, a three-member panel appointed by the Mayor to
address City structural budget imbalance released a report setting forth
its findings and recommendations. In its report, the panel noted that
budget imbalance is likely to be greater than the City now projects by $255
million in fiscal year 1995, rising to nearly $1.5 billion in fiscal year
1997. The report provided a number of options that the City should
consider in addressing the structural balance issue such as severe cuts in
City-funded personnel levels, increases in residential property taxes and
the sales tax, and the imposition of bridge tolls and solid waste
collection fees. The report also noted that additional State actions will
be required in many instances to allow the City to cut its budget without
grave damage to basic services.
On December 21, 1993, OSDC issued a report reviewing the November
Modification. The report noted that while the outlook for fiscal year 1994
has improved since August, it will be necessary for the City to manage its
budget aggressively in order to stay on course for budget balance this
year. For fiscal years 1995 through 1997, the report expressed concern
that the gaps identified by the City in the November Modification are the
largest as a percentage of City-fund revenues that the City has faced at
this point in the fiscal year since budget balance in accordance with GAAP
was first achieved in fiscal year 1981.
On December 21, 1993, the staff of the Control Board issued its report
on the November Modification. The report states that the plan is now more
realistic in terms of the gaps it portrays and the solutions it offers.
However, the solutions are mostly limited to fiscal year 1994 while the gap
for fiscal year 1995 has been increased by $450 million. Beginning in
fiscal year 1995, budget gaps average over $1 billion annually. Therefore,
the staff recommends that prompt action to replace many current-year one-
shots with recurring savings is critical.
On February 2, 1994, the Mayor presented to the City Council and the
Control Board a mid-year modification to the Financial Plan (the "February
Modification"). The February Modification projects a balanced budget for
fiscal year 1994, based upon revenues of $31.735 billion, including a
general reserve of $81 million. For fiscal years 1995, 1996 and 1997, the
February Modification projects gaps of $2.261 billion, $3.167 billion and
$3.253 billion, respectively, and assumes no wage and salary increases
beyond the expiration of current labor agreements which expire in fiscal
years 1995 and 1996. These gaps have grown since November by about $530
million in fiscal year 1995, and $650 million and $550 million in fiscal
years 1996 and 1997, respectively, owing in large part to lower estimates
of real property tax revenues. To close the budget gap projected for
fiscal year 1995, the February Modification includes a gap-closing program
that consists of the following major elements: (i) an agency program of
$1.048 billion; (ii) fringe benefit and pension savings of $400 million;
(iii) an intergovernmental aid package of $400 million; (iv) a workforce
reduction program of $144 million; and (v) the assumption of a $234 million
surplus roll from fiscal year 1994. Implementation of many of the gap-
closing initiatives requires the cooperation of the municipal labor unions,
the City Council and the State and Federal governments. The February
Modification also includes a tax reduction program, with most of the
financial impact affecting the later years of the Plan period.
The City requires certain amounts of financing for seasonal and
capital spending purposes. The City has issued $1.75 billion of notes for
seasonal financing purposes during the 1994 fiscal year. The City's
capital financing program projects long-term financing requirements of
approximately $17 billion for the City's fiscal years 1995 through 1998 for
the construction and rehabilitation of the City's infrastructure and other
fixed assets. The major capital requirement include expenditures for the
City's water supply system, and waste disposal systems, roads, bridges,
mass transit, schools and housing. In addition, the City and the Municipal
Water Finance Authority have issued about $1.8 billion in refunding bonds
in the 1994 fiscal year.
State Economic Trends. The State historically has been one of the
wealthiest states in the nation. For decades, however, the State has grown
more slowly than the nation as a whole, gradually eroding its relative
economic position. Statewide, urban centers have experienced significant
changes involving migration of the more affluent to the suburbs and an
influx of generally less affluent residents. Regionally, the older
Northeast cities have suffered because of the relative success that the
South and the West have had and in attracting people and business. The
City has also had to face greater competition as other major cities have
developed financial and business capabilities which make them less
dependent on the specialized services traditionally available almost
exclusively in the City.
During the 1982-83 recession, overall economic activity in the State
declined less than that of the nation as a whole. However, in the calendar
years 1984 through 1991, the State's rate of economic expansion was
somewhat slower than that of the nation. In the 1990-91 recession, the
economy of the State, and that of the rest of the Northeast, was more
heavily damaged than that of the nation as a whole and has been slower to
recover. The total employment growth rate in the State has been below the
national average since 1984. The unemployment rate in the State dipped
below the national rate in the second half of 1981 and remained lower until
1991; since then, it has been higher. According to date published by the
U.S. Bureau of Economic Analysis, during the past ten years, total personal
income in the State rose slightly faster than the national average only
from 1986 through 1988.
APPENDIX B
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
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.
Plus (+) or minus (-): The ratings from AA to BBB 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.
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.
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.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the 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.
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.
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.
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.
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 INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-90.1% AMOUNT VALUE
------------ ------------
<S> <C> <C>
CALIFORNIA:
Anaheim Public Financing Authority, Electric Utility Revenue (San Juan 4)
5.75%, 10/1/2022 (Insured; FGIC)........................................ $ 100,000 $ 95,885
California Health Facilities Financing Authority, Revenue:
(Children's Hospital San Diego) 6.50%, 7/1/2020 (Insured; MBIA)......... 200,000 207,410
(College of Osteopathic) 5.75%, 6/1/2018 (Insured; Connie Lee).......... 250,000 235,457
California Public Works Board, Department of Corrections, LR
(State Prison - Coalinga) 5.375%, 12/1/2019 (Insured; MBIA)............. 100,000 90,860
California Resource and Efficiency Financing Authority, Revenue (First
Resource
Efficiency Program) 6%, 7/1/2017 (Insured; AMBAC)....................... 200,000 198,064
California Statewide Communities Development Authority, COP, Revenue
(Sutter Health Obligated Group) 5.50%, 8/15/2013 (Insured; MBIA)........ 200,000 189,064
California Veterans Bonds 6.20%, 2/1/2016 (Insured; AMBAC).................. 250,000 247,710
Calleguas - Las Virgines Public Financing Authority, Installment Purpose
Revenue
5.125%, 7/1/2021 (Insured; FGIC)........................................ 100,000 87,849
Campbell Unified School District, Series A 6.25%, 8/1/2019 (Insured; MBIA).. 500,000 507,945
Central Coast Water Authority, Revenue (State Water Project-Regional
Facilities)
6.60%, 10/1/2022 (Insured; AMBAC)....................................... 200,000 209,494
Central Union High School District, Imperial County
5.50%, 8/1/2017 (Insured; AMBAC)........................................ 195,000 182,723
East Bay Municipal Utility District, Wastewater Treatment Systems Revenue
5.55%, 6/1/2020 (Insured; AMBAC)........................................ 200,000 186,246
Eastern Municipal Water District, Water and Sewer Revenue, COP
5.25%, 7/1/2023 (Insured; FGIC)......................................... 100,000 89,152
Garden Grove Public Financing Authority, Revenue
(Water Services Capital Improvement Program) 5.50%, 12/15/2023 (Insured; FGIC) 100,000 92,323
Glendale Redevelopment Agency, Tax Allocation Revenue, Refunding
(Central Glendale Redevelopment Project) 5.50%, 12/1/2014 (Insured; AMBAC) 205,000 192,899
Los Angeles Community Redevelopment Agency, Tax Allocation
(Bunker Hill Project) 5.625%, 12/1/2023 (Insured; FSA).................. 100,000 92,485
Los Angeles Convention and Exhibition Center Authority, LR, Refunding
5.125%, 8/15/2013 (Insured; MBIA)....................................... 100,000 91,723
Los Angeles Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding
5%, 7/1/2021 (Insured; FGIC)............................................ 200,000 172,450
M-S-R Public Power Agency, Revenue (San Juan Project)
6%, 7/1/2020 (Insured; AMBAC)........................................... 200,000 197,694
Monrovia Redevelopment Agency, Public Parking Facilities Revenue, Refunding
5.20%, 4/1/2013 (Insured; AMBAC)........................................ 100,000 92,633
Moulton - Niguel Water District, Refunding (Consolidated Improvement
District)
5.25%, 9/1/2013 (Insured; MBIA)......................................... 100,000 93,248
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
Northern California, Transmission Revenue, Refunding (Ore Transmission)
5.25%, 5/1/2020 (Insured; MBIA)......................................... $ 100,000 $ 89,673
Oxnard Financing Authority, Wastewater Revenue, Refunding
5.25%, 6/1/2020 (Insured; FGIC)......................................... 200,000 179,318
Port Oakland, Port Revenue, Series E 6.50%, 11/1/2016 (Insured; MBIA)....... 200,000 204,432
Poway Redevelopment Agency, Tax Allocation, Refunding
(Paguay Redevelopment Project) 5.50%, 12/15/2023 (Insured; FGIC)........ 100,000 92,323
Riverside County Transportation Commission, Sales Tax Revenue
5.75%, 6/1/2008 (Insured; AMBAC)........................................ 300,000 308,484
Sacramento Municipal Utility District, Electric Revenue, Refunding
5.25%, 11/15/2020 (Insured; MBIA)....................................... 200,000 179,154
San Diego, Sewer Revenue 5%, 5/15/2013 (Insured; AMBAC)..................... 100,000 89,348
San Francisco City and Community Airports, International Commission Airport
Revenue
6.25%, 5/1/2012 (Insured; FGIC)......................................... 150,000 151,619
San Jose Redevelopment Agency, Tax Allocation, Refunding
(Merged Area Redevelopment Project) 5.25%, 8/1/2016 (Insured; MBIA)..... 200,000 182,002
San Mateo County Joint Powers Financing Authority, LR, Capital Projects
5.75%, 7/15/2017 (Insured; FSA)......................................... 200,000 190,888
Santa Ana Community Redevelopment Agency, Tax Allocation, Refunding
(South Main Street Redevelopment) 5.25%, 9/1/2013 (Insured; MBIA)....... 100,000 93,248
Santa Cruz County Public Financing Authority, Tax Allocation Revenue,
Refunding
5.30%, 9/1/2023 (Insured; MBIA)......................................... 300,000 269,025
University of California, Revenue:
Fresno Association Inc. (Auxilliary Residence-Student Project)
6.25%, 2/1/2017 (Insured; MBIA)....................................... 300,000 304,845
Refunding (Housing Systems) 5.25%, 11/1/2012 (Insured; MBIA)............ 200,000 187,880
Victor, Elementary School District, Capital Appreciation Zero Coupon 6/1/2015
(Insured; MBIA)......................................................... . 1,000,000 291,100
----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $6,583,653)..................... $6,366,653
===========
SHORT-TERM MUNICIPAL INVESTMENTS-9.9%
U.S. RELATED;
Puerto Rico Electric Power Authority, Power Revenue 4.34% (Insured; FSA) (a)
(cost $700,000)......................................................... $ 700,000 $ 700,000
===========
TOTAL INVESTMENTS-100.0%
(cost $7,283,653)....................................................... $7,066,653
===========
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
COP Certificate of Participation LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
STANDARD PERCENTAGE
FITCH (B) OR MOODY'S OR & POOR'S OF VALUE
- -------- -------- --------- -----------
<S> <C> <C> <C>
AAA Aaa AAA 100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At July 31, 1995, 40.7% of the Series' net assets are insured by
MBIA and 26.0% are insured by AMBAC.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $7,283,653)-see statement....................................... $7,066,653
Cash.................................................................... 121,482
Interest receivable..................................................... 103,556
Receivable for shares of Beneficial Interest subscribed................. 32,687
Prepaid expenses........................................................ 43,627
----------
7,368,005
LIABILITIES:
Due to The Dreyfus Corporation.......................................... . $ 5,770
Due to Distributor...................................................... 3,152
Accrued expenses and other liabilities.................................. 40,875 49,797
------- ----------
NET ASSETS.................................................................. $7,318,208
==========
REPRESENTED BY:
Paid-in capital......................................................... $7,546,766
Accumulated net realized (loss) on investments.......................... (11,558)
Accumulated net unrealized (depreciation) on investments-Note 3......... (217,000)
----------
NET ASSETS at value......................................................... $7,318,208
==========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 304,979
==========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 327,913
==========
NET ASSET VALUE per share:
Class A Shares
($3,525,094 / 304,979 shares)......................................... $11.56
======
Class B Shares
($3,793,114 / 327,913 shares)......................................... $11.57
======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $337,279
EXPENSES:
Management fee-Note 2(a).............................................. $ 32,794
Shareholder servicing costs-Note 2(c)................................. 26,019
Distribution fees (Class B shares)-Note 2(b).......................... 15,695
Organization expenses................................................. 11,040
Registration fees..................................................... 7,790
Prosepctus and shareholders' reports.................................. 4,235
Legal fees............................................................ 2,306
Trustees' fees and expenses-Note 2(d)................................. 1,684
Custodian fees........................................................ 1,136
Auditing fees......................................................... 829
Miscellaneous......................................................... 7,465
--------
110,993
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 90,802
--------
TOTAL EXPENSES.................................................. 20,191
--------
INVESTMENT INCOME-NET........................................... 317,088
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (11,558)
Net unrealized appreciation on investments.............................. 67,281
--------
NET REALIZED AND UNREALIZED GAIN ON INVESMENTS.................. 55,723
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $372,811
========
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
------------------------------
1994* 1995
------------- -----------
OPERATIONS:
Investment income-net................................................... $ 126,669 $ 317,088
Net realized (loss) on investments...................................... --- (11,558)
Net unrealized appreciation (depreciation) on investments for the year.. (284,281) 67,281
------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (157,612) 372,811
------------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (54,412) (157,005)
Class B shares........................................................ (72,257) (160,083)
------------- -----------
TOTAL DIVIDENDS................................................... (126,669) (317,088)
------------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,745,985 2,395,751
Class B shares........................................................ 4,456,351 1,798,008
Dividends reinvested:
Class A shares........................................................ 31,965 52,720
Class B shares........................................................ 49,861 99,361
Cost of shares redeemed:
Class A shares........................................................ (1,218,479) (441,885)
Class B shares........................................................ (1,750,952) (771,920)
------------- -----------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 4,314,731 3,132,035
------------- -----------
TOTAL INCREASE IN NET ASSETS.................................... 4,030,450 3,187,758
NET ASSETS:
Beginning of year....................................................... 100,000 4,130,450
------------- -----------
End of year............................................................. $ 4,130,450 $ 7,318,208
============= ============
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------------------------------------------------------------------
CLASS A CLASS B
------------------------------ ------------------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------------------ ------------------------------
1994* 1995 1994* 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 220,251 211,279 362,381 158,840
Shares issued for dividends reinvested. 2,657 4,664 4,168 8,762
Shares redeemed........................ (99,532) (38,340) (140,746) (69,492)
------------ ------------ ------------ ------------
NET INCREASE IN SHARES OUTSTANDING 123,376 177,603 225,803 98,110
=========== ============= ============ ============
____________________________________________________
* From August 19, 1993 (commencement of operations) to July 31, 1994.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the California Series (the "Series"). 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 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series 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 Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Series may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1994 through September 28, 1995, to
reduce the management fee and reimburse such excess expenses paid by the
Series, to the extent that the Series' aggregate expenses (excluding certain
expenses as described above) exceeded specified annual percentages of the
Series' average daily net assets. The expense reimbursement, pursuant to the
undertakings, amounted to $90,802 for the year ended July 31, 1995.
The Manager has currently undertaken through September 30, 1995, to
reduce the management fee paid by, or reimburse such excess expenses of the
Series, to the extent that the Series' aggregate annual expenses (excluding
12b-1 Distribution Plan fees and certain expenses as described above) exceed
an annual rate of 1.25 of 1% of the average daily value of the Series' net
assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
Prior to August 24, 1994, Dreyfus Service Corporation retained $598 from
contingent deferred sales charges imposed upon redemptions of the Series'
Class B shares.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 3, 1994, the Series' 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 Series' 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 Series pay Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares. Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service Agent.
During the year ended July 31, 1995, $14,865 was charged to the Series
pursuant to the Class B Distribution Plan and $830 was charged to the Series
pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994 through August 23,
1994, $261 and $415 were charged to the Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
July 31, 1995, $6,797 and $7,433 were charged to Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $12,459,315 and $10,087,321, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized depreciation on investments
was $217,000, consisting of $29,923 gross unrealized appreciation and
$246,923 gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, California Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, CALIFORNIA SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, California Series (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 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 July 31, 1995 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, California Series at July
31, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young signature logo]
New York, New York
September 6, 1995
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-100.0% AMOUNT VALUE
------------- -------------
<S> <C> <C>
CONNECTICUT-96.0.%
Cheshire:
5.80%, 8/15/2010 (Insured; FGIC)........................................ $ 500,000 $ 510,200
5.85%, 8/15/2011 (Insured; FGIC)........................................ 675,000 688,730
Columbia:
5.75%, 4/1/2014 (Insured; MBIA)......................................... 320,000 320,509
5.75%, 4/1/2015 (Insured; MBIA)......................................... 320,000 319,222
Connecticut:
Airport Revenue, Refunding 7.20%, 10/1/1997 (Insured; FGIC)............. 220,000 233,983
COP (Middletown Courthouse Facilities Project)
5.90%, 12/15/2001 (Insured; MBIA)..................................... 250,000 266,620
Special Tax Obligation Revenue (Transportation Infrastructure)
5.65%, 4/1/2013 (Insured; FGIC)....................................... 1,500,000 1,481,715
Connecticut Development Authority:
Governmental LR 6.60%, 6/15/2014 (Insured; MBIA)........................ 350,000 371,735
Health Care Revenue (Masonic) 6.50%, 8/1/2020 (Insured; AMBAC).......... 250,000 259,380
Water Facility Revenue, Refunding:
(Bridgeport Hydraulic) 5.60%, 6/1/2028 (Insured; MBIA)................ 700,000 648,207
(Connecticut Water Co. Project) 5.875%, 9/1/2022 (Insured; AMBAC)..... 250,000 241,290
Connecticut Health and Educational Facilities Authority, Revenue:
(Bridgeport Hospital) 6.625%, 7/1/2018 (Insured; MBIA).................. 700,000 738,220
(Connecticut College) 6.625%, 7/1/2011 (Insured; MBIA).................. 200,000 212,296
(Danbury Hospital) 6.50%, 7/1/2014 (Insured; MBIA)...................... 250,000 260,967
(Lawrence and Memorial Hospital):
7%, 7/1/2020 (Insured; MBIA).......................................... 250,000 281,887
6.25%, 7/1/2022 (Insured; MBIA)....................................... 285,000 315,660
(Loomis Chaffee School Project) 6%, 7/1/2025 (Insured; MBIA)............ 1,000,000 988,970
(Manchester Memorial Hospital) 5.75%, 7/1/2022 (Insured; MBIA).......... 100,000 95,776
(Mansfield Nursing) 5.875%, 11/1/2012 (Insured; AMBAC).................. 500,000 502,810
(Middlesex Hospital) 6.25%, 7/1/2022 (Insured; MBIA).................... 1,000,000 1,012,870
(New Britain General Hospital):
6.125%, 7/1/2014 (Insured; AMBAC)..................................... 1,000,000 1,011,440
6%, 7/1/2024 (Insured; AMBAC)......................................... 200,000 197,820
(Newington Children's Hospital):
6.05%, 7/1/2010 (Insured; MBIA)....................................... 235,000 239,308
6.10%, 7/1/2011 (Insured; MBIA)....................................... 250,000 254,470
6.25%, 7/1/2015 (Insured; MBIA)....................................... 500,000 512,690
(Norwalk Hospital) 6.25%, 7/1/2022 (Insured; MBIA)...................... 2,260,000 2,289,086
(Refunding-Hospital of Saint Raphael) 6.625%, 7/1/2014 (Insured; AMBAC). 250,000 262,928
(Refunding-Sharon Health Care Project) 6.25%, 11/1/2021 (Insured; AMBAC) 500,000 507,605
(Saint Francis Hospital and Medical Center) 5%, 7/1/2023 (Insured; FGIC) 760,000 652,126
(Waterbury Hospital) 7%, 7/1/2020 (Insured; FSA)........................ 1,000,000 1,087,680
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
CONNECTICUT (CONTINUED)
Connecticut Housing Finance Authority (Housing Mortgage Finance Program):
6.20%, 5/15/2012 (Insured; MBIA)........................................ $ 1,000,000 $ 1,018,980
6.40%, 5/15/2015 (Insured; MBIA)........................................ 1,000,000 1,024,930
6.125%, 5/15/2018 (Insured; MBIA)....................................... 1,655,000 1,659,634
6.30%, 5/15/2024 (Insured; MBIA)........................................ 1,000,000 1,015,200
Connecticut Municipal Electric Energy Cooperative, Power Supply Systems
Revenue
7%, 1/1/2016 (Insured; AMBAC)........................................... 310,000 320,249
Derby 5.90%, 5/15/2010 (Insured; AMBAC)..................................... 615,000 635,602
East Hampton:
5.80%, 7/15/2010 (Insured; FGIC)........................................ 295,000 301,224
5.90%, 7/15/2011 (Insured; FGIC)........................................ 320,000 328,298
Meriden 5.50%, 11/15/2001 (Insured; MBIA)................................... 250,000 266,785
New Britain 5.375%, 3/1/2003 (Insured; MBIA)................................ 250,000 259,840
New Haven:
5.75%, 2/15/2012 (Insured; FGIC)........................................ 500,000 504,180
Air Rights Parking Facility Revenue 6.50%, 12/1/2015 (Insured; MBIA).... 500,000 522,145
New London 5.10%, 10/1/2002 (Insured; MBIA)................................. 275,000 282,282
Plainfield 5.80%, 8/1/2001 (Insured; MBIA).................................. 250,000 270,057
Regional School District Number 5:
5.90%, 1/15/2010 (Insured; MBIA)........................................ 280,000 287,538
5.90%, 1/15/2011 (Insured; MBIA)........................................ 320,000 327,434
South Central Regional Water Authority, Water Systems Revenue
5.75%, 8/1/2012 (Insured; FGIC)......................................... 250,000 251,510
Waterbury, Refunding 4.90%, 4/15/2002 (Insured; FGIC)....................... 280,000 283,811
Woodstock:
5.85%, 2/15/2009 (Insured; FGIC)........................................ 345,000 357,406
6%, 2/15/2013 (Insured; FGIC)........................................... 340,000 348,425
U.S. RELATED-4.0%
Puerto Rico Commonwealth, Refunding 5.375%, 7/1/2022 (Insured; MBIA)........ 1,200,000 1,123,128
-----------
TOTAL INVESTMENTS (cost $27,472,365)........................................ $28,154,858
===========
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (A) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <C> <C>
AAA Aaa AAA 100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Fitch currently provides creditworthiness information for a limited
number of investments.
(b) At July 31, 1995, 59.1% of the Series' net assets are insured by
MBIA.
(c) At July 31, 1995, the Series had $10,223,343 (35.2% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from health care projects.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $27,472,365)-see statement...................................... $28,154,858
Cash.................................................................... 487,629
Interest receivable..................................................... 379,792
Receivable for shares of Beneficial Interest subscribed................. 95,157
Prepaid expenses........................................................ 10,708
Due from The Dreyfus Corporation........................................ 3,691
-----------
29,131,835
LIABILITIES:
Due to Distributor...................................................... $13,048
Accrued expenses and other liabilities.................................. 56,105 69,153
------- -----------
NET ASSETS.................................................................. $29,062,682
============
REPRESENTED BY:
Paid-in capital......................................................... $28,400,221
Accumulated net realized (loss) on investments.......................... (20,032)
Accumulated net unrealized appreciation on investments-Note 3........... 682,493
-----------
NET ASSETS at value......................................................... $29,062,682
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 961,386
============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,281,815
============
NET ASSET VALUE per share:
Class A Shares
($12,450,926 / 961,386 shares)........................................ $12.95
=======
Class B Shares
($16,611,756 / 1,281,815 shares)...................................... $12.96
=======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,244,275
EXPENSES:
Management fee-Note 2(a).............................................. $119,902
Shareholder servicing costs-Note 2(c)................................. 81,660
Distribution fees (Class B shares)-Note 2(b).......................... 57,189
Legal fees............................................................ 13,796
Auditing fees......................................................... 9,688
Registration fees..................................................... 9,096
Prospectus and shareholders' reports.................................. 5,997
Trustees' fees and expenses-Note 2(d)................................. 2,930
Custodian fees........................................................ 2,723
Miscellaneous......................................................... 9,167
--------
312,148
Less-expense reimbursement from Manager due to
undertaking-Note 2(a)............................................. 237,903
--------
TOTAL EXPENSES.................................................. 74,245
----------
INVESTMENT INCOME-NET........................................... 1,170,030
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (20,032)
Net unrealized appreciation on investments.............................. 543,616
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 523,584
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,693,614
==========
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
-------------------------------
1994* 1995
--------------------------
OPERATIONS:
Investment income-net................................................... $ 67,908 $ 1,170,030
Net realized (loss) on investments...................................... --- (20,032)
Net unrealized appreciation on investments for the year................. 138,877 543,616
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 206,785 1,693,614
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (38,771) (586,262)
Class B shares........................................................ (29,137) (583,768)
----------- -----------
TOTAL DIVIDENDS................................................... (67,908) (1,170,030)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 8,721,961 6,196,536
Class B shares........................................................ 7,229,976 11,068,365
Dividends reinvested:
Class A shares........................................................ 26,966 320,037
Class B shares........................................................ 18,182 359,096
Cost of shares redeemed:
Class A shares........................................................ (391,623) (2,682,798)
Class B shares........................................................ (390,000) (2,076,477)
----------- -----------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 15,215,462 13,184,759
----------- -----------
TOTAL INCREASE IN NET ASSETS.................................... 15,354,339 13,708,343
NET ASSETS:
Beginning of year....................................................... --- 15,354,339
----------- -----------
End of year............................................................. $15,354,339 $29,062,682
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------------------
CLASS A CLASS B
------------------------------- -------------------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------------------- -------------------------------
1994* 1995 1994* 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 689,991 490,513 570,954 875,988
Shares issued for dividends reinvested. 2,120 25,429 1,431 28,348
Shares redeemed........................ (30,621) (216,046) (30,492) (164,414)
------------- ------------- ------------- -------------
NET INCREASE IN SHARES OUTSTANDING 661,490 299,896 541,893 739,922
============= ============= ============= =============
* From May 5, 1994 (commencement of operations) to July 31, 1994.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the Connecticut Series (the "Series"). 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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.
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series 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 Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Series may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Series not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Series has an unused capital loss carryover of approximately $7,100
available for Federal income tax purposes to be applied against future net
securities profit, if any, realized subsequent to July 31, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through July 31, 1995 which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, the carryover expires in
fiscal 2003.
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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1994 through September 28, 1995 to
reduce the management fee and reimburse such excess expenses paid by the
Series, to the extent that the Series' aggregate expenses (excluding certain
expenses as described above) exceeded specified annual percentages of the
Series' average daily net assets. The expense reimbursement, pursuant to the
undertakings, amounted to $237,903 for the year ended July 31, 1995.
The Manager has currently undertaken through September 30, 1995, to
reduce the management fee paid by, or reimburse such excess expenses of the
Series, to the extent that the Series' aggregate annual expenses (excluding
12b-1 distribution plan fees and certain expenses as described above) exceed
an annual rate of 1.25 of 1% of the average daily value of the Series' net
assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
PREMIER INSURED MUNICIPAL BOND FUND, Connecticut Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Dreyfus Service Corporation retained $7,248 during the year ended July 31,
1995 from commissions earned on sales of the
Series' Class A shares.
(B) On August 3, 1994, Series' 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 Series' 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 Series pays Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares. Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service Agents.
During the year ended July 31, 1995, $54,945 was charged to the Series
pursuant to the Class B Distribution Plan and $2,244 was charged to the
Series pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994 through August 23,
1994, $1,362 and $1,122 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
July 31, 1995, $24,544 and $27,473 were charged to Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $25,299,055 and $12,225,638, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $682,493, consisting of $692,441 gross unrealized appreciation and $9,948
gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, Connecticut Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, CONNECTICUT SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, Connecticut Series, (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 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 July 31, 1995 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, Connecticut Series at July
31, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young signature logo]
New York, New York
September 6, 1995
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-99.7% AMOUNT VALUE
-------------- ------------
<S> <C> <C>
Boca Raton Community Redevelopment Agency, Tax Increment Revenue
(Mizner Park Project) 5.875%, 3/1/2013 (Insured; FGIC).................. $ 250,000 $ 252,585
Brevard County, IDR (NUI Corp. Project) 6.40%, 10/1/2024 (Insured; AMBAC)... 1,000,000 1,036,220
Broward County Tourist Development, Tax Special Revenue, Refunding
(Convention Center) 5.60%, 10/1/2009 (Insured; AMBAC)................... 350,000 351,410
Celebration Community Development District, Special Assessment
6.10%, 5/1/2016 (Insured; MBIA)......................................... 500,000 515,880
Collier County, Capital Improvement Revenue, Refunding
6%, 10/1/2012 (Insured; MBIA)........................................... 1,000,000 1,018,640
Collier County Water - Sewer District, Water Revenue 5%, 7/1/2016 (Insured; FGIC) 1,000,000 891,510
Dade County:
Aviation Revenue 6.125%, 10/1/2020 (Insured; MBIA)...................... 1,000,000 997,980
Public Facilities Revenue, Refunding (Jackson Memorial Hospital)
5.625%, 6/1/2018 (Insured; MBIA)...................................... 250,000 237,213
Seaport 6.50%, 10/1/2026 (Insured; AMBAC)............................... 1,000,000 1,040,150
Dade County Housing Finance Authority, MFMR, Refunding
(Lincoln Fields Apartments) 6.25%, 7/1/2024 (Insured; MBIA)............. 600,000 604,848
Escambia County, Sales Tax Revenue, Refunding 5.80%, 1/1/2015 (Insured; FGIC) 500,000 492,530
Florida Board of Education, Capital Outlay 5.80%, 6/1/2024 (Insured; FGIC).. 1,000,000 973,960
Florida Correctional Privatization Commission, COP:
(Correctional Facility Bay County Project) 6%, 8/1/2015 (Insured; MBIA). 250,000 252,505
(Glades County Correctional Facility) 6%, 8/1/2014 (Insured; MBIA)...... 350,000 363,741
Florida Department of General Services Division, Facilities Management
Revenue
6.125%, 9/1/2023 (Insured; AMBAC)....................................... 1,000,000 1,012,300
Florida Divison of Bond Finance Department, General Services Revenues:
(Department of Environmental-Preservation 2000):
5.625%, 7/1/2008 (Insured; AMBAC)..................................... 2,000,000 2,048,240
5.75%, 7/1/2013 (Insured; AMBAC)...................................... 1,000,000 1,002,350
(Department of Natural Resources-Preservation 2000)
5.80%, 7/1/2013 (Insured; FSA)........................................ 700,000 703,829
Florida Housing Finance Agency, Single Family Mortgage
6.65%, 7/1/2026 (Insured; MBIA)......................................... 1,930,000 1,996,469
Florida Municipal Power Agency, Revenue 5.10%, 10/1/2025 (Insured; AMBAC)... 1,000,000 873,870
Florida Turnpike Authority, Turnpike Revenue, Refunding
5%, 7/1/2019 (Insured; FGIC)............................................ 1,000,000 878,410
Fort Pierce Utilities Authority, Revenue, Refunding
5.25%, 10/1/2016 (Insured; AMBAC)....................................... 500,000 460,390
Gainesville, Guaranteed Entitlement Revenue, Refunding
5.50%, 8/1/2017 (Insured; AMBAC)........................................ 750,000 708,893
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
Hillsborough County Aviation Authority, Revenue (Tampa International
Airport):
5.375%, 10/1/2023 (Insured; FGIC)....................................... $ 1,000,000 $ 904,170
Refunding 5.50%, 10/1/2013 (Insured; FGIC).............................. 500,000 481,615
Hillsborough County Industrial Development Authority:
IDR:
(Allegany Health Systems-J. Knox Village) 5.75%, 12/1/2021 (Insured; MBIA). 2,950,000 2,826,395
(University Community Hospital) 5.80%, 8/15/2024 (Insured; MBIA)...... 500,000 482,980
PCR, Refunding (Tampa Electric Company Project)
6.25%, 12/1/2034 (Insured; MBIA)...................................... 1,000,000 1,020,240
Hillsborough County Port District, Special Revenue, Refunding
(Tampa Port Authority) 6%, 6/1/2020 (Insured; FSA)...................... 1,000,000 993,510
Hollywood, Water and Sewer Revenue 5.50%, 10/1/2015 (Insured; FGIC)......... 500,000 476,550
Jacksonville, Capital Improvement Revenue (Gator Bowl Project):
5.50%, 10/1/2019 (Insured; AMBAC)....................................... 1,000,000 937,750
5.875%, 10/1/2025 (Insured; AMBAC)...................................... 1,000,000 983,940
Jacksonville Health Facilities Authority, HR
(Memorial Regional Rehabilitation Center Project)
6.625%, 5/1/2022 (Insured; MBIA)........................................ 500,000 522,355
Lee County, Tourist Development Tax Revenue, Refunding
5.625%, 10/1/2011 (Insured; FGIC)....................................... 250,000 249,977
Miami Health Facilities Authority, Health Facilities Revenue, Refunding
(Mercy Hospital Project) 5.125%, 8/15/2020 (Insured; AMBAC)............. 200,000 175,590
Miramar:
Public Service Tax Revenue 6.15%, 10/1/2024 (Insured; FGIC)............. 1,000,000 1,013,330
Water Improvement Assessment Revenue 5.60%, 10/1/2024 (Insured; FGIC)... 200,000 189,288
Okeechobee, Water and Sewer Revenue 6.50%, 1/1/2017 (Insured; MBIA)......... 1,220,000 1,307,730
Orange County, Tourist Development Tax Revenue:
6.50%, 10/1/2019 (Insured; AMBAC)....................................... 1,000,000 1,041,190
6%, 10/1/2024 (Insured; MBIA)........................................... 200,000 200,464
Orlando and Orange County Expressway Authority, Expressway Revenue,
Refunding:
(Junior Lien) 5.25%, 7/1/2019 (Insured; FGIC)........................... 250,000 227,515
(Senior Lien) 5.50%, 7/1/2018 (Insured; FGIC)........................... 200,000 187,858
Osceola County School Board, COP 5.75%, 6/1/2014 (Insured; AMBAC)........... 250,000 246,445
Palm Beach County School Board, COP 5.375%, 8/1/2015 (Insured; AMBAC)....... 1,000,000 938,830
Polk County School Board, COP (Master Lease Program)
5.875%, 1/1/2015 (Insured; MBIA)........................................ 1,000,000 1,003,560
Port Saint Lucie, Utility Revenue 6%, 9/1/2024 (Insured; FGIC).............. 1,300,000 1,302,613
Reedy Creek Improvement District, Utilities Revenue, Refunding
5%, 10/1/2014 (Insured; MBIA)........................................... 1,000,000 894,250
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
Seminole County School Board, COP 6.125%, 7/1/2019 (Insured; MBIA).......... $ 325,000 $ 329,238
Tampa, Revenue (Allegany Health Systems - Saint Joseph)
6.50%, 12/1/2023 (Insured; MBIA)........................................ 1,000,000 1,043,930
Venice, Utility Revenue, Refunding 5.50%, 7/1/2014 (Insured; MBIA).......... 500,000 478,730
Volusia County, Sales Tax Improvement Revenue 5.75%, 10/1/2013 (Insured; MBIA) 500,000 501,010
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $38,564,442).................... $39,674,976
===========
SHORT-TERM MUNICIPAL INVESTMENTS-.3%
U.S. RELATED;
Puerto Rico Electric Power Authority, Power Revenue
3.56% (Insured; FSA) (a) (cost $100,000)................................ $ 100,000 $ 100,000
===========
TOTAL INVESTMENTS-100.0%
(cost $38,664,442)...................................................... $39,774,976
===========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation IDR Industrial Development Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance MFMR Multi-Family Mortgage Revenue
HR Hospital Revenue PCR Pollution Control Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (B) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <C> <C>
AAA Aaa AAA 99.7%
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 .3
-------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse Floater Security - the interest rate is subject to change
periodically.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At July 31, 1995, 31.5% of the Series' net assets are insured by AMBAC
and 40.7% are insured by MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $38,664,442)-see statement...................................... $39,774,976
Cash.................................................................... 517,708
Interest receivable..................................................... 560,721
Receivable for shares of Beneficial Interest subscribed................. 19,547
Prepaid expenses........................................................ 10,497
Due from The Dreyfus Corporation........................................ 8,144
-----------
40,891,593
LIABILITIES:
Due to Distributor...................................................... $17,718
Payable for shares of Beneficial Interest redeemed...................... 9,816
Accrued expenses and other liabilities.................................. 47,388 74,922
------- -----------
NET ASSETS.................................................................. $40,816,671
============
REPRESENTED BY:
Paid-in capital......................................................... $39,720,077
Accumulated net realized (loss) on investments.......................... (13,940)
Accumulated net unrealized appreciation on investments-Note 3........... 1,110,534
-----------
NET ASSETS at value......................................................... $40,816,671
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 1,494,713
============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 1,627,059
============
NET ASSET VALUE per share:
Class A Shares
($19,541,377 / 1,494,713 shares)...................................... $13.07
=======
Class B Shares
($21,275,294 / 1,627,059 shares)...................................... $13.08
=======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,892,525
EXPENSES:
Management fee-Note 2(a).............................................. $ 179,450
Shareholder servicing costs-Note 2(c)................................. 119,496
Distribution fees (Class B shares)-Note 2(b).......................... 83,774
Auditing fees......................................................... 18,617
Registration fees..................................................... 9,612
Legal fees............................................................ 8,047
Prospectus and shareholders' reports.................................. 5,688
Trustees' fees and expenses-Note 2(d)................................. 5,438
Custodian fees........................................................ 3,875
Miscellaneous......................................................... 9,702
----------
443,699
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 329,946
----------
TOTAL EXPENSES.................................................. 113,753
----------
INVESTMENT INCOME-NET........................................... 1,778,772
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (13,940)
Net unrealized appreciation on investments.............................. 1,006,080
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 992,140
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,770,912
==========
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
-------------------------------
1994* 1995
--------------------------
OPERATIONS:
Investment income-net................................................... $ 107,429 $ 1,778,772
Net realized (loss) on investments...................................... --- (13,940)
Net unrealized appreciation on investments for the year................. 104,454 1,006,080
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 211,883 2,770,912
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (54,853) (908,374)
Class B shares........................................................ (52,576) (870,398)
----------- -----------
TOTAL DIVIDENDS................................................... (107,429) (1,778,772)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 10,719,728 10,509,582
Class B shares........................................................ 12,540,671 10,076,918
Dividends reinvested:
Class A shares........................................................ 16,155 247,303
Class B shares........................................................ 15,330 207,188
Cost of shares redeemed:
Class A shares........................................................ (371,138) (2,204,011)
Class B shares........................................................ (300,000) (1,737,649)
----------- -----------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 22,620,746 17,099,331
----------- -----------
TOTAL INCREASE IN NET ASSETS.................................... 22,725,200 18,091,471
NET ASSETS:
Beginning of year....................................................... --- 22,725,200
----------- -----------
End of year............................................................. $22,725,200 $40,816,671
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------------------
CLASS A CLASS B
------------------------------- -------------------------------
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
------------------------------- -------------------------------
1994* 1995 1994* 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 841,413 835,533 985,948 788,466
Shares issued for dividends reinvested. 1,270 19,412 1,205 16,298
Shares redeemed........................ (28,948) (173,967) (23,346) (141,512)
----------- ----------- ----------- -----------
NET INCREASE IN SHARES OUTSTANDING 813,735 680,978 963,807 663,252
=========== =========== =========== ===========
* From May 4, 1994 (commencement of operations) to July 31, 1994.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the Florida Series (the "Series"). 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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.
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series 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 Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Series may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1994 through
September 28, 1995 to reduce the management fee and reimburse such excess
expenses paid by the Series, to the extent that the Series' aggregate
expenses (excluding certain expenses as described above) exceeded specified
annual percentages of the Series' average daily net assets. The expense
reimbursement, pursuant to the undertakings, amounted to $329,946 for the
year ended July 31, 1995.
The Manager has currently undertaken through September 30, 1995, to
reduce the management fees paid by, or reimburse such excess expenses of the
Series, to the extent that the Series aggregate annual expenses (excluding
12b-1 distribution plan fees and certain expenses as described above) exceed
an annual rate of 1.25 of 1% of the average daily value of the Series' net
assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
Dreyfus Service Corporation retained $12,615 during the year ended July
31, 1995 from commissions earned on sales of the Series' Class A shares.
PREMIER INSURED MUNICIPAL BOND FUND, Florida Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 3, 1994, the Series' 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 Series' 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 Series pay Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares. Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service Agent.
During the year ended July 31, 1995, $79,711 was charged to the Series
pursuant to the Class B Distribution Plan and $4,063 was charged to the
Series pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994 through August 23,
1994, $1,804 and $2,032 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
July 31, 1995, $37,877 and $39,855 were charged to Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $33,557,209 and $17,691,400, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $1,110,534, consisting of $1,172,285 gross unrealized appreciation and
$61,751 gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, Florida Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, FLORIDA SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, Florida Series (one of the series constituting the Premier Insured
Municipal Bond Fund) as of July 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 July 31, 1995 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, Florida Series at July 31,
1995, the results of its operations for the period then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 6, 1995
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-97.7% AMOUNT VALUE
_______ ______
<S> <C> <C>
CALIFORNIA-22.2%
Bay Area Association, Tax Allocation Revenue (California Redevelopment Agency
Pool)
6%, 12/15/2024 (Insured; CGIC).......................................... $ 250,000 $ 243,585
California Housing Finance Agency, Revenue 5.70%, 8/1/2016 (Insured; MBIA).. 200,000 190,824
California Pollution Control Financing Authority, PCR
(Southern California Edison Co.) 6.40%, 12/1/2024 (Insured; AMBAC)...... 400,000 406,692
California Veterans Bonds 6.375%, 2/1/2027 (Insured; AMBAC)................. 1,000,000 1,005,610
Los Angeles, Wastewater System Revenue:
5.20%, 11/1/2021 (Insured; FGIC)........................................ 200,000 177,518
Refunding, 5.875%, 6/1/2024 (Insured; MBIA)............................. 200,000 193,644
Redding Redevelopment Agency, Tax Allocation Notes
5%, 9/1/2023 (Insured; CGIC)............................................ 200,000 171,548
San Marcos Public Facilities Authority, Tax Allocation Revenue, Refunding
5.50%, 8/1/2023 (Insured; CGIC)......................................... 1,000,000 913,690
San Mateo County Joint Powers Financing Authority, LR
(San Mateo County Health Care Center) 5.75%, 7/15/2022 (Insured; FSA)... 500,000 471,310
FLORIDA-1.0%
Miami Health Facilities Authority, Health Facility Revenue, Refunding
(Mercy Hospital Project) 5.125%, 8/15/2020 (Insured; AMBAC)............. 200,000 175,590
ILLINOIS-7.7%
Chicago, Wastewater Transmission Revenue 6.375%, 1/1/2024 (Insured; MBIA)... 200,000 204,462
Chicago Midway Airport, Revenue 6.25%, 1/1/2024 (Insured; MBIA)............. 200,000 200,592
Chicago O'Hare International Airport, Revenue, Refunding
5.60%, 1/1/2018 (Insured; MBIA)......................................... 200,000 184,648
Illinois Health Facilities Authority, Revenue:
(Northwestern Medical Faculty Foundation-Health Care)
6.625%, 11/15/2025 (Insured; MBIA).................................... 500,000 524,880
Refunding (Lutheran General Health System) 6.25%, 4/1/2018 (Insured; FSA) 200,000 201,274
INDIANA-10.8%
Indiana Health Facility Financing Authority, HR:
(Lutheran Hospital of Indiana, Inc.) 7%, 2/15/2019 (Insured; AMBAC)..... 600,000 642,270
Refunding (County Hospital of Anderson Project) 6%, 1/1/2014 (Insured; MBIA). 1,000,000 995,520
Lafayette Redevelopment Authority, Redevelopment Lease Rent
5.95%, 1/1/2020 (Insured; MBIA)......................................... 200,000 196,452
IOWA-1.8%
Clinton, PCR, Refunding (Interstate Power Co. Project)
6.35%, 12/1/2012 (Insured; AMBAC)....................................... 300,000 310,176
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
MASSACHUSETTS-12.1%
Massachusetts Housing Finance Agency:
Housing Revenue, Refunding 6.75%, 7/1/2028 (Insured; AMBAC)............. $ 1,000,000 $ 1,026,330
SFHR 6.60%, 12/1/2026 (Insured; AMBAC).................................. 1,000,000 1,029,640
NEVADA-2.3%
Clark County Passenger Facility Charge, Revenue
(Las Vegas McCarran International Airport) 6.25%, 7/1/2022 (Insured; AMBAC) 200,000 198,442
Washoe County, Gas & Water Facilities Revenue (Sierra Pacific Power Co.)
5.90%, 6/1/2023 (Insured; MBIA)......................................... 200,000 193,356
NEW JERSEY-7.3%
New Jersey Economic Development Authority:
PCR (Public Service Electric & Gas Co.) 6.40%, 5/1/2032 (Insured; MBIA). 200,000 205,608
Water Facilities Revenue (New Jersey American Water Co., Inc. Project)
6.875%, 11/1/2034 (Insured; FGIC)..................................... 500,000 530,725
New Jersey Housing and Mortgage Finance Agency, Home Buyer Revenue
6.375%, 10/1/2026 (Insured; MBIA)...................................... 500,000 512,410
NEW MEXICO-6.9%
Farmington, PCR, Refunding (Southern California Edison Co.)
5.875%, 6/1/2023 (Insured; MBIA)........................................ 1,000,000 972,550
Santa Fe 6.30%, 6/1/2024 (Insured; AMBAC)................................... 200,000 204,046
NEW YORK-7.2%
New York City Municipal Water Financing Authority, Water and Sewer Systems
Revenue 6.20%, 6/15/2021 (Insured; AMBAC)............................... 1,000,000 1,022,120
New York State Energy Research and Development Authority, PCR, Refunding
(Rochester Gas & Electric Project) 6.50%, 5/15/2032 (Insured; MBIA)..... 200,000 204,402
NORTH DAKOTA-1.2%
Grand Forks, Health Care Facilities Revenue (United Hospital Obligated Group)
6.25%, 12/1/2019 (Insured; MBIA)........................................ 200,000 202,734
OKLAHOMA-2.5%
Oklahoma Industries Authority, HR (Baptist Medical Center)
7%, 8/15/2014 (Insured; AMBAC).......................................... 400,000 429,876
SOUTH CAROLINA-1.2%
South Carolina Public Service Authority, Revenue, Refunding
6.375%, 7/1/2021 (Insured; AMBAC)....................................... 200,000 204,002
TEXAS-1.2%
Gulf Coast Waste Disposal Authority, Revenue, Refunding
(Houston Light & Power Co. Project) 6.375%, 4/1/2012 (Insured; MBIA).... 200,000 206,488
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
VERMONT-1.6%
Vermont Student Assistance Corp. (Education Loan Revenue Financing Program)
6.70%, 12/15/2012 (Insured; FSA)........................................ $ 250,000 $ 261,075
WASHINGTON-6.3%
Washington, MFMR 7.40%, 1/1/2030 (Insured; FSA)............................. 1,000,000 1,070,000
U.S. RELATED-4.4%
Commonwealth of Puerto Rico 5.375%, 7/1/2022 (Insured; MBIA)................ 600,000 561,564
Puerto Rico Electric Public Buildings Authority, Guaranteed Public Education
& Health
Facilities, Refunding 5.50%, 7/1/2021 (Insured; FSA).................... 200,000 190,452
----------
TOTAL LONG_TERM MUNICIPAL INVESTMENTS
(cost $16,199,620)...................................................... $16,636,105
===========
SHORT_TERM MUNICIPAL INVESTMENTS-2.3%
NEW YORK;
New York City Municipal Water Financing Authority, Water and Sewer Systems
Revenue
VRDN 4.90% (Insured; FGIC) (a) (cost $400,000).......................... $ 400,000 $ 400,000
============
TOTAL MUNICIPAL INVESTMENTS-100.0%
(cost $16,599,620)...................................................... $17,036,105
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
CGIC Capital Guaranty Insurance Corporation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SFHR Single Family Housing Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<S> <C> <C> <C>
FITCH (B) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- ------- ------- ----------------- ---------------------
AAA Aaa AAA 100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At July 31, 1995, 36.9% of the Series' net assets are insured by
AMBAC and 28.8% are insured by MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $16,599,620)-see statement...................................... $17,036,105
Cash.................................................................... 681,856
Interest receivable..................................................... 229,005
Receivable for shares of Beneficial Interest subscribed................. 73,377
Prepaid expenses........................................................ 38,398
Due from The Dreyfus Corporation........................................ 10,831
-------
18,069,572
LIABILITIES:
Due to Distributor...................................................... $ 7,726
Accrued expenses and other liabilities.................................. 50,778 58,504
-------- --------
NET ASSETS.................................................................. $18,011,068
============
REPRESENTED BY:
Paid-in capital......................................................... $17,544,083
Accumulated undistributed net realized gain on investments.............. 30,500
Accumulated net unrealized appreciation on investments-Note 3........... 436,485
-------
NET ASSETS at value......................................................... $18,011,068
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 635,847
============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 748,375
============
NET ASSET VALUE per share:
Class A Shares
($8,272,145 / 635,847 shares)......................................... $13.01
=======
Class B Shares
($9,738,923 / 748,375 shares)......................................... $13.01
=======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 716,883
EXPENSES:
Management fee-Note 2(a).............................................. $ 64,630
Shareholder servicing costs-Note 2(c)................................. 48,942
Distribution fees (Class B shares)-Note 2(b).......................... 30,151
Registration fees..................................................... 14,950
Professional fees..................................................... 10,391
Organization expenses................................................. 7,668
Prospectus and shareholders' reports.................................. 4,172
Custodian fees........................................................ 1,637
Trustees' fees and expenses-Note 2(d)................................. 1,055
Miscellaneous......................................................... 5,220
------
188,816
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 148,356
------
TOTAL EXPENSES.................................................. 40,460
--------
INVESTMENT INCOME-NET........................................... 676,423
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 30,500
Net unrealized appreciation on investments.............................. 350,233
------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 380,733
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,057,156
==========
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
________________
1994* 1995
_______ ______
OPERATIONS:
Investment income-net................................................... $ 32,675 $ 676,423
Net realized gain on investments........................................ - 30,500
Net unrealized appreciation on investments for the year................. 86,252 350,233
------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 118,927 1,057,156
-------- ---------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (15,892) (344,399)
Class B shares........................................................ (16,783) (332,024)
-------- ---------
TOTAL DIVIDENDS................................................... (32,675) (676,423)
-------- ---------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,575,673 6,783,807
Class B shares........................................................ 3,600,764 6,636,400
Dividends reinvested:
Class A shares........................................................ 13,458 196,495
Class B shares........................................................ 13,568 220,212
Cost of shares redeemed:
Class A shares........................................................ (100,012) (1,446,725)
Class B shares........................................................ (321,396) (628,161)
-------- ---------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 5,782,055 11,762,028
-------- ---------
TOTAL INCREASE IN NET ASSETS.................................... 5,868,307 12,142,761
NET ASSETS:
Beginning of year....................................................... - 5,868,307
-------- ---------
End of year............................................................. $ 5,868,307 $18,011,068
======== =========
</TABLE>
<TABLE>
<CAPTION>
SHARES
__________________________________________________________________
CLASS A CLASS B
_____________________________ _____________________________
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
_________________________________ ______________________________
1994* 1995 1994* 1995
______ _______ _______ _______
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 201,758 542,334 281,840 522,906
Shares issued for dividends reinvested. 1,050 15,476 1,057 17,318
Shares redeemed........................ (7,681) (117,090) (24,803) (49,943)
______ _______ _______ _______
NET INCREASE IN SHARES OUTSTANDING 195,127 440,720 258,094 490,281
====== ======= ======= =======
</TABLE>
* From May 4, 1994 (commencement of operations) to July 31, 1994.
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the National Series (the "Series"). 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series 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 Series may make distributions on
a more frequent basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital gain can be
offset by capital loss carryovers, if any, it is the policy of the Series not
to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1994 through
September 28, 1995 to reduce the management fee and reimburse such excess
expenses paid by the Series', to the extent that the Series' aggregate
expenses (excluding certain expenses as described above) exceeded specified
annual percentages of the Series' average daily net assets. The expense
reimbursement, pursuant to the undertakings, amounted to $148,356 for the
year ended July 31, 1995.
The Manager has currently undertaken through September 30, 1995, to
reduce the management fee paid by, or reimburse such excess expenses of the
Series, to the extent that the Series' aggregate annual expenses (excluding
12b-1 distribution plan fees and certain expenses as described above) exceed
an annual rate of 1.25 of 1% of the average daily value of the Series' net
assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
Dreyfus Service Corporation retained $5,913 during the year ended July
31, 1995 from commissions earned on sales of the Series' Class A shares.
(B) On August 3, 1994, Series' 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 Series' Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
PREMIER INSURED MUNICIPAL BOND FUND, National Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Series pay Dreyfus
Service Corporation at an annual rate of .50 of 1% of the value of the
Series' Class B shares average daily net assets, for the costs and expenses
in connection with advertising, marketing and distributing the Series' Class
B shares. Dreyfus Service Corporation made payments to one or more Service
Agents based on the value of the Series' Class B shares owned by clients of
the Service Agent.
During the year ended July 31, 1995, $29,012 was charged to the Series
pursuant to the Class B Distribution Plan and $1,139 was charged to the
Series pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994, through August 23,
1994, $447 and $570 were charged to the Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
July 31, 1995, $13,854 and $14,506 were charged to the Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $24,195,572 and $12,451,000, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $436,485, consisting of $456,477 gross unrealized appreciation and
$19,992 gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, National Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, National Series (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 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 July 31, 1995 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, National Series at July 31,
1995, and the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and
the financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 6, 1995
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-96.1% AMOUNT VALUE
_______ ______
<S> <C> <C>
NEW JERSEY-92.9%
Cape May County Industrial Pollution Control Financing Authority, Revenue
(Atlantic City Electric Co. Project)
7.20%, 11/1/2029 (Insured; MBIA)........................................ $ 800,000 $ 928,744
Evesham Township Board of Education, COP
6.875%, 9/1/2011 (Insured; FGIC)........................................ 200,000 217,460
Gloucester Township Municipal Utilities Authority, Refunding
5.65%, 3/1/2018 (Insured; AMBAC)........................................ 200,000 195,010
New Jersey Economic Development Authority Revenue:
Market Transition Facility 5.80%, 7/1/2008 (Insured; MBIA).............. 350,000 359,090
Pollution Control (Public Service Electric and Gas) 6.40%, 5/1/2032 (Insured; MBIA) 365,000 375,235
(Rutgers State University - Civic Square)
6.10%, 7/1/2018 (Insured; AMBAC)...................................... 200,000 203,818
Water Facilities:
(Hackensack Water Co. Project)
Refunding 5.80%, 3/1/2024 (Insured; MBIA)......................... 350,000 339,535
(New Jersey American Water Co. Inc. Project)
6.875%, 11/1/2034 (Insured; FGIC)................................. 400,000 424,580
New Jersey Educational Facilities Authority, Revenue, Refunding:
(New Jersey Institute of Technology) 6%, 7/1/2024 (Insured; MBIA)....... 400,000 401,564
(Trenton State College) 6%, 7/1/2019 (Insured; AMBAC)................... 1,000,000 1,003,360
New Jersey Health Care Facilities Financing Authority, Revenue:
(General Hospital Center at Passaic) 6.75%, 7/1/2019 (Insured; FSA)..... 885,000 961,199
(Jersey Shore Medical Center) 6.25%, 7/1/2021 (Insured; AMBAC).......... 400,000 407,896
(Newark Beth Israel Medical Center) 6%, 7/1/2024 (Insured; FSA)......... 1,000,000 995,850
Refunding (Monmouth Medical Center):
6.25%, 7/1/2016 (Insured; CGIC)....................................... 250,000 255,942
6.25%, 7/1/2024 (Insured; CGIC)....................................... 200,000 203,628
(Saint Clares - Riverside Medical Center) 5.75%, 7/1/2014 (Insured; MBIA) 250,000 243,523
(Underwood Memorial Hospital) 5.70%, 7/1/2023 (Insured; AMBAC).......... 400,000 384,860
New Jersey Housing and Mortgage Finance Agency, Home Buyer Revenue:
6.20%, 10/1/2025 (Insured; MBIA)........................................ 450,000 454,846
6.375%, 10/1/2026 (Insured; MBIA)....................................... 230,000 235,708
Passaic Valley Sewer Commissioner, Sewer System Refunding
5.75%, 12/1/2015 (Insured; AMBAC)....................................... 500,000 485,380
Salem County Industrial Pollution Control Financing Authority, Revenue,
Refunding (Atlantic City Electric) 6.15%, 6/1/2029 (Insured; FSA)....... 400,000 404,368
U.S. RELATED-3.2%
Commonwealth of Puerto Rico, Refunding
5.375%, 7/1/2022 (Insured: MBIA)........................................ 350,000 327,579
--------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $9,569,273)....................................................... $ 9,809,175
=========
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS-3.9% AMOUNT VALUE
_______ ______
U.S. RELATED;
Puerto Rico Electric Power Authority, Power Revenue
(Insured; FSA) 3.56% (a)
(cost $400,000)......................................................... $ 400,000 $ 400,000
--------
TOTAL INVESTMENTS-100.0%
(cost $9,969,273)....................................................... $10,209,175
=========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FGIC Financial Guaranty Insurance Company
CGIC Capital Guaranty Insurance Corporation FSA Financial Security Assurance
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<S> <C> <C> <C>
FITCH (B) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- --------------------
AAA Aaa AAA 100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse Floater Security-the interest rate is subject to change
periodically.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At July 31, 1995, 31.0% of the Series' net assets are insured by MBIA.
(d) At July 31, 1995, the Series had $3,452,897 (29.2% of net assets)
invested in securities whose payment of principal and interest is dependent
upon revenues generated from health care projects.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $9,969,273)-see statement....................................... $10,209,175
Cash.................................................................... 2,610,057
Interest receivable..................................................... 102,311
Receivable for shares of Beneficial Interest subscribed................. 10,000
Prepaid expenses........................................................ 11,049
Due from The Dreyfus Corporation........................................ 2,678
------
12,945,270
LIABILITIES:
Due to Distributor...................................................... $ 5,331
Payable for investment securities purchased............................. 1,076,473
Accrued expenses and other liabilities.................................. 30,943 1,112,747
------ ------
NET ASSETS.................................................................. $11,832,523
==========
REPRESENTED BY:
Paid-in capital......................................................... $11,597,891
Accumulated net realized (loss) on investments.......................... (5,270)
Accumulated net unrealized appreciation on investments-Note 3........... 239,902
------
NET ASSETS at value......................................................... $11,832,523
==========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 391,871
==========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 539,157
==========
NET ASSET VALUE per share:
Class A Shares
($4,980,623 / 391,871 shares)......................................... $12.71
=====
Class B Shares
($6,851,900 / 539,157 shares)......................................... $12.71
=====
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $397,819
EXPENSES:
Management fee-Note 2(a).............................................. $ 38,710
Shareholder servicing costs-Note 2(c)................................. 34,594
Distribution fees (Class B shares)-Note 2(b).......................... 19,492
Registration fees..................................................... 8,193
Auditing fees......................................................... 6,439
Prospectus and shareholders' reports.................................. 2,954
Organization expenses................................................. 2,405
Legal fees............................................................ 1,330
Custodian fees........................................................ 1,138
Trustees' fees and expenses-Note 2(d)................................. 636
Miscellaneous......................................................... 3,556
-------
119,447
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 92,762
-------
TOTAL EXPENSES.................................................. 26,685
--------
INVESTMENT INCOME-NET........................................... 371,134
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (5,270)
Net unrealized appreciation on investments.............................. 221,333
========
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 216,063
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $587,197
==========
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
________________
1994* 1995
______ _______
OPERATIONS:
Investment income-net................................................... $ 26,971 $ 371,134
Net realized (loss) on investments...................................... _- (5,270)
Net unrealized appreciation on investments for the year................. 18,569 221,333
______ _______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 45,540 587,197
______ _______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (13,489) (176,046)
Class B shares........................................................ (13,482) (195,088)
______ _______
TOTAL DIVIDENDS................................................... (26,971) (371,134)
______ _______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,446,730 3,591,050
Class B shares........................................................ 2,511,009 5,060,548
Dividends reinvested:
Class A shares........................................................ 8,343 97,360
Class B shares........................................................ 6,037 81,648
Cost of shares redeemed:
Class A shares........................................................ (150,000) (1,128,148)
Class B shares........................................................ (150,000) (776,686)
______ _______
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 4,672,119 6,925,772
______ _______
TOTAL INCREASE IN NET ASSETS.................................... 4,690,688 7,141,835
NET ASSETS:
Beginning of year....................................................... _ 4,690,688
______ _______
End of year............................................................. $ 4,690,688 $11,832,523
====== =======
</TABLE>
<TABLE>
<CAPTION>
SHARES
__________________________________
CLASS A CLASS B
________________ ________________
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
________________ ________________
1994* 1995 1994* 1995
______ _______ _______ _______
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 195,433 291,207 200,021 406,583
Shares issued for dividends reinvested. 667 7,845 483 6,544
Shares redeemed........................ (11,839) (91,442) (11,839) (62,636)
______ _______ _______ _______
NET INCREASE IN SHARES OUTSTANDING 184,261 207,610 188,665 350,491
====== ======= ======= =======
</TABLE>
* From May 4, 1994 (commencement of operations) to July 31, 1994.
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the New Jersey Series (the "Series"). 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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 price
(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.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series 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 Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Series may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Series not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Series has an unused capital loss carryover of approximately $5,000
available for Federal income tax purposes to be applied against future net
securities profit, if any, realized subsequent to July 31, 1995. If not
applied, the carryover expires in fiscal 2003.
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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager has undertaken from August 1, 1994 through September 17, 1995 to
reduce the management fee and reimburse such excess expenses paid by the
Series', to the extent that the Series' aggregate expenses (excluding certain
expenses as described above) exceeded specified annual percentages of the
Series' average daily net assets. The expense reimbursement, pursuant to the
undertakings, amounted to $92,762 for the year ended July 31, 1995.
The Manager has currently undertaken from September 18, 1995 through
September 30, 1995, to reduce the management fees paid by, or reimburse such
excess expenses of the Series, to the extent that the Series' aggregate
annual expenses (excluding 12b-1 distribution plan fees and certain expenses
as described above) exceed an annual rate of 1.25 of 1% of the average daily
value of the Series' net assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
Dreyfus Service Corporation retained $1,602 during the year ended July
31, 1995 from commissions earned on sales of the Series' Class A shares.
PREMIER INSURED MUNICIPAL BOND FUND, New Jersey Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 3, 1994, Series' 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 Series' 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 Series pays Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares. Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service Agents.
During the year ended July 31, 1995, $18,803 was charged to the Series
pursuant to the Class B Distribution Plan and $689 was charged to the Series
pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994 through August 23,
1994, $329 and $344 were charged to Class A and Class B shares, respectively,
by Dreyfus Service Corporation. From August 24, 1994 through July 31, 1995,
$7,520 and $9,402 were charged to Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $17,073,874 and $11,024,576, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $239,902 consisting of $272,359 gross unrealized appreciation and $32,457
gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, New Jersey Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, NEW JERSEY SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, New Jersey Series (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 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 July 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 Insured Municipal Bond Fund, New Jersey Series at July
31, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 6, 1995
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
STATEMENT OF INVESTMENTS JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-100.0% AMOUNT VALUE
______ _______
<S> <C> <C>
NEW YORK-96.9%
Buffalo Municipal Water Finance Authority,
Water System Revenue 5%, 7/01/2025 (Insured; FGIC)...................... $ 750,000 $ 648,135
Erie County 5.50%, 6/15/2025 (Insured; FGIC)................................ 500,000 468,045
Metropolitan Transportation Authority,
Transit Facility Revenue 6.375%, 7/1/2020 (Insured; MBIA)............... 750,000 772,845
New York City Health and Hospital Corp., Revenue, Refunding:
5.625%, 2/15/2013 (Insured; AMBAC)...................................... 1,000,000 963,820
5.75%, 2/15/2022 (Insured; AMBAC)....................................... 200,000 192,626
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue:
6%, 6/15/2019 (Insured; FGIC)........................................... 200,000 201,352
6.20%, 6/15/2021 (Insured; AMBAC)....................................... 600,000 613,272
New York City Transit Authority, Transit Facility Revenue
(Livingston Plaza Project) 6%, 1/1/2021 (Insured; FSA).................. 200,000 198,954
New York State, COP (City University - John Jay College)
5.50%, 8/15/2009 (Insured; AMBAC)....................................... 200,000 200,430
New York State Dormitory Authority, Revenue:
(City University System - Third Resolution) 6.30%, 7/1/2024 (Insured; AMBAC) 200,000 204,902
(Refunding - Fordham University) 5.75%, 7/1/2015 (Insured; FGIC)........ 200,000 194,900
(Refunding - Skidmore College) 5.375%, 7/1/2023 (Insured; FSA).......... 200,000 184,168
(Rochester University) 5.90%, 7/1/2017 (Insured; MBIA).................. 950,000 940,719
New York State Energy Research and Development Authority, Revenue:
Facilities (Refunding - Con Edison Co. of New York Inc. Project)
5.25%, 8/15/2020 (Insured; MBIA)...................................... 200,000 180,206
Gas Facilities (Brooklyn Union Gas) 5.60%, 6/1/2025 (Insured; MBIA)..... 200,000 183,756
Pollution Control, Refunding:
(New York State Electric and Gas Corp.) 6.05%, 4/1/2034 (Insured; MBIA) 500,000 500,335
(Rochester Gas and Electric Project) 6.50%, 5/15/2032 (Insured; MBIA). 400,000 408,804
New York State Housing Finance Agency, MFMR
6.35%, 8/15/2023 (Insured; AMBAC)....................................... 500,000 506,710
New York State Medical Care Facilities Finance Agency, Revenue:
(Hospital and Nursing Home) 6.125%, 2/15/2015 (Insured; MBIA)........... 400,000 404,436
(Long Term Health Care) 6.50%, 11/1/2015 (Insured; CGIC)................ 200,000 207,138
(Mental Health Service Facilities Improvement)
5.80%, 2/15/2019 (Insured; CGIC)...................................... 400,000 386,548
(Refunding - Saint Mary's Hospital Project) 6.20%, 11/1/2014 (Insured; AMBAC) 200,000 202,242
Niagara Falls Bridge Commission, Toll Revenue, Refunding
5.25%, 10/1/2021 (Insured; FGIC)........................................ 200,000 181,526
Suffolk County Water Authority, Waterworks Revenue
5%, 6/1/2012 (Insured; MBIA)............................................ 200,000 183,740
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
______ _______
NEW YORK (CONTINUED)
Triboro Bridge and Tunnel Authority, Special Obligation Refunding
6%, 1/1/2019 (Insured; MBIA)............................................ $ 1,000,000 $ 998,690
U.S. RELATED-3.1%
Commonwealth of Puerto Rico, Refunding
5.375%, 7/01/2022 (Insured; MBIA)....................................... 350,000 327,578
---------
TOTAL INVESTMENTS (cost $10,358,322)........................................ $10,455,877
===========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
CGIC Capital Guaranty Insurance Corporation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (A) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- ------- ----------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Fitch currently provides creditworthiness information for a limited
number of investments.
(b) At July 31, 1995, 25.3% of the series' net assets are insured by
AMBAC and 43.0% are insured by MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $10,358,322)-see statement...................................... $10,455,877
Cash.................................................................... 782,528
Interest receivable..................................................... 144,080
Receivable for shares of Beneficial Interest subscribed................. 41,431
Prepaid expenses........................................................ 14,369
Due from The Dreyfus Corporation........................................ 3,058
-------
11,441,343
LIABILITIES:
Due to Distributor...................................................... $ 5,132
Accrued expenses and other liabilities.................................. 33,800 38,932
------- --------
NET ASSETS.................................................................. $11,402,411
=========
REPRESENTED BY:
Paid-in capital......................................................... 11,317,746
Accumulated net realized (loss) on investments.......................... (12,890)
Accumulated net unrealized appreciation on investments-Note 3........... 97,555
-------
NET ASSETS at value......................................................... $11,402,411
=========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 375,629
=========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 517,832
=========
NET ASSET VALUE per share:
Class A Shares
($4,790,734 / 375,629 shares)......................................... $12.75
=====
Class B Shares
($6,611,677 / 517,832 shares)......................................... $12.77
=====
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $400,649
EXPENSES:
Management fee-Note 2(a).............................................. $ 38,887
Shareholder servicing costs-Note 2(c)................................. 32,924
Distribution fees (Class B shares)-Note 2(b).......................... 20,096
Registration fees..................................................... 13,625
Auditing fees......................................................... 8,168
Prospectus and shareholders' reports.................................. 2,978
Organization expenses................................................. 2,620
Legal fees............................................................ 1,205
Custodian fees........................................................ 1,076
Trustees' fees and expenses-Note 2(d)................................. 689
Miscellaneous......................................................... 4,614
------
126,882
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 99,971
------
TOTAL EXPENSES.................................................. 26,911
-------
INVESTMENT INCOME-NET........................................... 373,738
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (12,890)
Net unrealized appreciation on investments.............................. 76,318
------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 63,428
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $437,166
=======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
________________________
1994(1) 1995
_______ ______
OPERATIONS:
Investment income-net................................................... $ 27,373 $ 373,738
Net realized (loss) on investments...................................... - (12,890)
Net unrealized appreciation on investments for the year................. 21,237 76,318
_______ ______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 48,610 437,166
_______ ______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (13,922) (172,061)
Class B shares........................................................ (13,451) (201,677)
_______ ______
TOTAL DIVIDENDS................................................... (27,373) (373,738)
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,104,443 3,665,511
Class B shares........................................................ 2,247,963 5,533,055
Dividends reinvested:
Class A shares........................................................ 8,502 98,623
Class B shares........................................................ 10,790 118,605
Cost of shares redeemed:
Class A shares........................................................ (70,000) (1,027,887)
Class B shares........................................................ (70,000) (1,301,859)
_______ ______
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 4,231,698 7,086,048
_______ ______
TOTAL INCREASE IN NET ASSETS.................................... 4,252,935 7,149,476
NET ASSETS:
Beginning of year....................................................... _ 4,252,935
_______ ______
End of year............................................................. $ 4,252,935 $11,402,411
======== =======
</TABLE>
<TABLE>
<CAPTION>
SHARES
________________________________________________
CLASS A CLASS B
________________ ________________
YEAR ENDED JULY 31, YEAR ENDED JULY 31,
________________ ________________
1994(1) 1995 1994(1) 1995
______ _______ _______ _______
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 165,298 292,256 176,308 441,378
Shares issued for dividends reinvested. 669 7,927 849 9,489
Shares redeemed........................ (5,356) (85,165) (5,356) (104,836)
______ _______ _______ _______
NET INCREASE IN SHARES OUTSTANDING. 160,611 215,018 171,801 346,031
====== ======= ======= =======
(1) From May 6, 1994 (commencement of operations) to July 31, 1994.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
FINANCIAL HIGHLIGHTS
Reference is made to page 6 of the Fund's Prospectus dated December 1,
1995.
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the New York Series (the "Series"). 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 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 Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series 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 Series' 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.
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series 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 Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Series may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series 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 Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager has undertaken from August 1, 1994 through September 17, 1995 to
reduce the management fee and reimburse such excess expenses paid by the
Series', to the extent that the Series' aggregate expenses (excludung certain
expenses as described above) exceeded specified annual percentages of the
Series' average daily net assets. The expense reimbursement, pursuant to the
undertakings, amounted to $99,971 for the year ended July 31, 1995.
The Manager has currently undertaken from September 18, 1995 through
September 30, 1995, to reduce the management fees paid by, or reimburse such
excess expenses of the Series, to the extent that the Series' aggregate
annual expenses (excluding 12b-1 distribution plan fees and certain expenses
as described above) exceed an annual rate of 1.25 of 1% of the average daily
value of the Series' net assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
Dreyfus Service Corporation retained $2,028 during the year ended July
31, 1995 from commissions earned on sales of the Series' Class A shares.
PREMIER INSURED MUNICIPAL BOND FUND, New York Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 3, 1994, the Series' 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 Series' 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 Series pay Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares. Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service Agent.
During the year ended July 31, 1995, $19,331 was charged to the Series
pursuant to the Class B Distribution Plan and $765 was charged to the Series
pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series 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 accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series 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 August 1, 1994 through August 23,
1994, $346 and $383 were charged to the Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
July 31, 1995, $7,282 and $9,665 were charged to the Class A and Class 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. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $16,601,710 and $10,071,400, respectively, for the year ended
July 31, 1995, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1995, accumulated net unrealized appreciation on investments
was $97,555, consisting of $114,128 gross unrealized appreciation and $16,573
gross unrealized depreciation.
At July 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 INSURED MUNICIPAL BOND FUND, New York Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, NEW YORK SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, New York Series (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 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 auditings
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 July 31, 1995 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, New York Series at July 31,
1995, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 6, 1995
PREMIER INSURED 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 for the California Series for
the period from August 19, 1993 (commencement of operations)
to July 31, 1994. Condensed Financial Information for the
Connecticut Series for the period from May 5, 1994
(commencement of operations) to July 31, 1994. Condensed
Financial Information for each of the Florida, National and
New Jersey Series for the period from May 4, 1994
(commencement of operations of each of the Florida, National
and New Jersey Series) to July 31, 1994. Condensed Financial
Information for the New York Series for the period from May
6, 1994 (commencement of operations) to July 31, 1994.
Condensed Financial Information for each of the Series for
the 1 year period ended July 31, 1995.
Included in Part B of the Registration Statement:
Statement of Investments-- July 31, 1995
Statement of Assets and Liabilities-- July 31, 1995
Statement of Operations--year ended July 31, 1995
Statement of Changes in Net Assets--for each of the
years ended July 31, 1994 and 1995.
Notes to Financial Statements
Reports of Ernst & Young LLP, Independent Auditors,
dated September 6, 1995
All Schedules 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 thereto 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, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on February 10, 1994.
(5) Management Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Distribution Plan Agreement.
(6)(c) Forms of Shareholder Services Plan Agreement.
(8)(a) Custody Agreement is incorporated by reference to Exhibit 8(a) of
Post-Effective Amendment No. 2 to the Registration Statement on
Form N-1A, filed on February 10, 1994.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on February 10, 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. 2 to the
Registration Statement on Form N-1A, filed on February 10, 1994.
(17) Financial Data Schedules.
(18) Rule 18f-3 Plan.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of the Trustees.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 4 to
the Registration Statement on Form N-1A, filed on
October 31, 1994.
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 October 23, 1995
______________ _____________________________
Beneficial Interest
(Par value $.001) Class A Class B
National Series 207 306
California Series 72 123
Connecticut Series 290 512
Florida Series 588 440
New Jersey Series 174 191
New York Series 132 222
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is insured or
indemnified in any manner against any liability which may be
incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own
protection, is incorporated by reference to Item 4 of Part II of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on July 16, 1993.
Reference is also made to the Distribution Agreement attached
hereto.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
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, manager and distributor 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 other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other investment
companies for which Dreyfus acts as investment adviser, sub-
investment adviser 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****
Mellon Bank, N.A.****
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*****
Vice Chairman of the Board:
Mellon Bank Corporation****
Mellon Bank, N.A.****
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President and Chief Mellon Bank Corporation****
Operating Officer The Boston Company*****
Deputy Director:
Mellon Trust****
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****
President:
Boston Safe Deposit and Trust Company*****
STEPHEN E. CANTER Former Chairman and Chief Executive Officer:
Vice Chairman and Kleinwort Benson Investment Management
Chief Investment Officer, Americas Inc.*
and a Director Director:
The Dreyfus Trust Company++
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*****
Laurel Capital Advisors****
Boston Group Holdings, Inc.
Executive Vice President:
Mellon Bank, N.A.****
Boston Safe Deposit & Trust*****
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company++;
and a Director Chairman of the Board and Chief Operating
Officer:
Major Trading Corporation*;
Director:
Dreyfus Precious Metals, Inc.*;
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, Inc.***;
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
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.*****
Dreyfus Service Corporation*
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, Inc.*
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 Acquisition Corporation*;
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director, Vice President and Treasurer:
Lion Management, Inc.*;
Director:
The Dreyfus Trust Company++;
Secretary:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
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
MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
Legal and Secretary Secretary:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.***;
Major Trading Corporation*;
The Truepenny Corporation*
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation
Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.***;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
Dreyfus Service Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit Corporation*;
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
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 131 Second Street, Lewes,
Delaware 19958.
**** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
***** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ 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) Dreyfus Edison Electric Index Fund, Inc.
18) Dreyfus Florida Intermediate Municipal Bond Fund
19) Dreyfus Florida Municipal Money Market Fund
20) Dreyfus Growth and Value Funds, Inc.
21) The Dreyfus Fund Incorporated
22) Dreyfus Global Bond Fund, Inc.
23) Dreyfus Global Growth, L.P. (A Strategic Fund)
24) Dreyfus GNMA Fund, Inc.
25) Dreyfus Government Cash Management
26) Dreyfus Growth and Income Fund, Inc.
27) Dreyfus Growth Opportunity Fund, Inc.
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Equity Fund, Inc.
33) Dreyfus Investors GNMA Fund
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) The Dreyfus/Laurel Investment Series
38) Dreyfus Life and Annuity Index Fund, Inc.
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus Michigan Municipal Money Market Fund, Inc.
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus Ohio Municipal Money Market Fund, Inc.
59) Dreyfus 100% U.S. Treasury Intermediate Term Fund
60) Dreyfus 100% U.S. Treasury Long Term Fund
61) Dreyfus 100% U.S. Treasury Money Market Fund
62) Dreyfus 100% U.S. Treasury Short Term Fund
63) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
64) Dreyfus Pennsylvania Municipal Money Market Fund
65) Dreyfus Short-Intermediate Government Fund
66) Dreyfus Short-Intermediate Municipal Bond Fund
67) Dreyfus Short-Term Income Fund, Inc.
68) The Dreyfus Socially Responsible Growth Fund, Inc.
69) Dreyfus Strategic Growth, L.P.
70) Dreyfus Strategic Income
71) Dreyfus Strategic Investing
72) Dreyfus Tax Exempt Cash Management
73) The Dreyfus Third Century Fund, Inc.
74) Dreyfus Treasury Cash Management
75) Dreyfus Treasury Prime Cash Management
76) Dreyfus Variable Investment Fund
77) Dreyfus-Wilshire Target Funds, Inc.
78) Dreyfus Worldwide Dollar Money Market Fund, Inc.
79) General California Municipal Bond Fund, Inc.
80) General California Municipal Money Market Fund
81) General Government Securities Money Market Fund, Inc.
82) General Money Market Fund, Inc.
83) General Municipal Bond Fund, Inc.
84) General Municipal Money Market Fund, Inc.
85) General New York Municipal Bond Fund, Inc.
86) General New York Municipal Money Market Fund
87) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
88) Peoples Index Fund, Inc.
89) Peoples S&P MidCap Index Fund, Inc.
90) Premier Insured Municipal Bond Fund
91) Premier California Municipal Bond Fund
92) Premier Capital Growth Fund, Inc.
93) Premier Global Investing, Inc.
94) Premier GNMA Fund
95) Premier Growth Fund, Inc.
96) Premier Municipal Bond Fund
97) Premier New York Municipal Bond Fund
98) 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
Lynn H. Johnson+ Vice President None
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of The Dreyfus Corporation
One American Express Plaza
Providence, Rhode Island 02903
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 trustee or trustees 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 certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and 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 24th day of November, 1995.
PREMIER INSURED 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.
Signatures Title Date
___________________________ ______________________________ ___________
/s/Marie E. Connolly* President (Principal Executive 11/24/95
______________________________ Officer
Marie E. Connolly
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 11/24/95
______________________________ Accounting and Financial Officer)
Joseph F. Tower, III
/s/Clifford L. Alexander, Jr.* Trustee 11/24/95
______________________________
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Trustee 11/24/95
______________________________
Peggy C. Davis
/s/Joseph S. DiMartino* Chairman of the Board 11/24/95
______________________________ of Trustees
Joseph S. DiMartino
/s/Ernest Kafka* Trustee 11/24/95
______________________________
Ernest Kafka
/s/Saul B. Klaman* Trustee 11/24/95
______________________________
Saul B. Klaman
/s/Nathan Leventhal* Trustee 11/24/95
______________________________
Nathan Leventhal
*BY: __________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
ITEM
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust
(5) Management Agreement
(6)(a) Distribution Agreement
(6)(b) Forms of Shareholder Services Plan Agreements
(6)(c) Forms of Distribution Plan Agreements
(9) Shareholders Services Plan
(10) Opinion and Consent of Registrant's Counsel
(11) Consent of Independent Auditors
(15) Distribution Plan
(17) Financial Data Schedules
(18) Rule 18f-3 Plan
EXHIBIT (1)(b)
PREMIER CALIFORNIA INSURED MUNICIPAL BOND FUND
(formerly, D 1992-9 Trust)
Amended and Restated Agreement and Declaration of Trust
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF
TRUST, made this 14th day of April, 1993, hereby amends and
restates in its entirety the Agreement and Declaration of Trust
made at Boston, Massachusetts, dated March 12, 1992, by the
Trustee 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 Insured 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; Derivative Suits.
Shareholders shall have no preemptive or other right to
subscribe for any additional Shares or other securities issued by
the Trust. No action may be brought by a Shareholder on behalf
of the Trust or a series unless a prior demand regarding such
matter has been made on the Trustees and the Shareholders of the
Trust or such series.
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 Shareholder 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 8, (v) with respect to the termination of the
Trust or a series of Shares as provided in Article IX, Section 5,
and (vi) 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 in the aggregate
as a single class without regard to series or classes of Shares,
except (i) when required by the 1940 Act or when the Trustees
shall have determined that the matter affects one or more series
or classes differently Shares shall be voted by individual series
or class and (ii) when the Trustees have determined that the
matter affects only the interests of one or more series or
classes then only Shareholders of such series or classes 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. Whenever no
Shares of any series or class are issued and outstanding, the
Trustees may exercise with respect to such series or class 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 an amount determined by the
Trustees 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 any
applicable charge, if and as fixed by 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 or who serves or has
served at the Trust's request as a director, officer or trustee
of another entity in which the Trust has or had any interest as a
shareholder, creditor or otherwise 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. 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 6. 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 7. 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 8. 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 outstanding and
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 classes of Shares shall be
authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of the series or classes 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 Trustee has
hereunto set his hand and seal for himself and his assigns as of
the day and year first above written.
/s/ Mark N. Jacobs
Mark N. Jacobs, Trustee
c/o The Dreyfus Corporation
200 Park Avenue, New York, NY
10166
Address of the Trust:
c/o The Dreyfus Corporation
200 Park Avenue Clifford L. Alexander, Jr.,
Trustee
New York, NY 10166 400 C Street NE
Washington, D.C. 20002
Resident Agent:
CT Corp. Peggy C. Davis, Trustee
2 Oliver Street New York University School of Law
Boston, MA 02109 249 Sullivan Street
New York, NY 10021
Saul B. Klaman, Trustee
431-B Dedham Street The Gables
Newton Center, MA 02159
Nathan Leventhal, Trustee
70 Lincoln Center Plaza
New York, NY 10166
Richard J. Moynihan, Trustee
200 Park Avenue
New York, NY 10166
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 14th day of April 1993, before me personally
came the above-named Trustee of the Fund, to me known, and known
to me to be the person described in and who executed the
foregoing instrument, and who duly acknowledged to me that he had
executed the same.
Notary Public
PREMIER CALIFORNIA INSURED MUNICIPAL BOND FUND
ARTICLES OF AMENDMENT
Premier California Insured Municipal Bond Fund, a
business trust formed by an Agreement and Declaration of Trust
dated March 12, 1992, pursuant to the laws of the Commonwealth
of Massachusetts (the "Trust"), hereby certifies to the
Secretary of State of the Commonwealth of Massachusetts that:
FIRST: The Agreement and Declaration of Trust of the
Trust is hereby amended by striking out Article I, Section 1 and
inserting in lieu thereof the following:
"Section 1. Name. This Trust shall
be known as 'Premier Insured Municipal Bond Fund.'"
SECOND: The amendment to the Agreement and Declaration
of Trust herein made was duly approved by a majority of the
Board of Trustees of the Trust as of December 15, 1993 pursuant
to Article IX, Section 8 of the Agreement and Declaration of
Trust.
IN WITNESS WHEREOF, Premier California Insured
Municipal Bond Fund has caused these Articles to be signed in
its name and on its behalf by its Board of Trustees.
PREMIER CALIFORNIA INSURED
MUNICIPAL BOND FUND
By: /s/ Clifford L. Alexander, Jr.
Clifford L. Alexander, Jr.,Trustee
/s/ Peggy C. Davis
Peggy C. Davis, Trustee
/s/ Ernest Kafka
Ernest Kafka, Trustee
/s/ Saul B. Klaman
Saul B. Klaman, Trustee
/s/ Nathan Levanthal
Nathan Levanthal, Trustee
/s/ Richard J. Moynihan
Richard J. Moynihan, Trustee
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 15th day of December 1993, before me
personally came Peggy C. Davis, Ernest Kafka, Saul B. Klaman, Nathan
Leventhal and Richard J. Moynihan, Trustees of the Fund, to me
known, and known to me to be the persons described in and who
executed the foregoing instrument, and who duly acknowledged to
me that they had executed the same.
_______________________
Notary Public
MANAGEMENT AGREEMENT
PREMIER INSURED 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")
consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"),
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 each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in the Fund's 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 each Series' investments and conduct
a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of such Series' assets. You
will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or
contemplate purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments materially
affecting any Series' 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 each Series'
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
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 one or more Series,
provided that nothing herein shall be deemed to protect or
purport to protect you against any liability to the Fund or a
Series 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 rate set forth opposite each Series'
name on Schedule 1 hereto. 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 each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' 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.
As to each Series, 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 Series, 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 one
or more Series or the size of the position obtainable for or
disposed of by one or more Series.
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.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day of
each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), 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 such Series' 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. As to each Series, this
Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board or by vote of holders of a majority of such
Series' shares or, upon not less than 90 days' notice, by you.
This Agreement also will terminate automatically, as to the
relevant Series, 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 investor
of the Fund individually and no Board member, officer or
investor of the Fund shall be individually liable for any of
said obligations.
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 INSURED MUNICIPAL
BOND FUND
By:_______________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
SCHEDULE 1
Annual Fee as
a Percentage
of Average
Daily Net
Name of Series Assets Reapproval Date Reapproval Day
California Series .55 of 1% January 31, 1995 January 31st
Connecticut Series .55 of 1% January 31, 1995 January 31st
Florida Series .55 of 1% January 31, 1995 January 31st
National Series .55 of 1% January 31, 1995 January 31st
New Jersey Series .55 of 1% January 31, 1995 January 31st
New York Series .55 of 1% January 31, 1995 January 31st
DISTRIBUTION AGREEMENT
PREMIER INSURED 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 INSURED MUNICIPAL BOND FUND
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
EXHIBIT A
Name of Series Reapproval Date Reapproval Day
California Series January 31, 1996 January 31st
Connecticut Series January 31, 1996 January 31st
Florida Series January 31, 1996 January 31st
National Series January 31, 1996 January 31st
New Jersey Series January 31, 1996 January 31st
New York Series January 31, 1996 January 31st
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,
- ------------------------------------------------------------------------------
Bank Name (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 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
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
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)
- ------------------------------------------------------------------------------
NAME OF FIRM
- ------------------------------------------------------------------------------
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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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,
- ------------------------------------------------------------------------------
Bank Name (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 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)
- ------------------------------------------------------------------------------
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 Bank.
- ------------------------------------------------------------------------------
NAME OF COMMERCIAL BANK TO RECEIVE ALL PAYMENTS - ABA NUMBER
- ------------------------------------------------------------------------------
ACCOUNT NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
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PREMIER INSURED MUNICIPAL BOND FUND
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-captioned
investment company (the "Fund") adopt a Shareholder Services Plan under
which the Fund would pay the Fund's distributor (the "Distributor") for
providing services to (a) shareholders of each series of the Fund or class
of Fund shares set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time, or (b) if no series or classes are set forth on
such Exhibit, shareholders of the Fund. The Distributor would be permitted
to pay certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") in respect of these
services. The Plan is not to be adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"), and the fee under
the Plan is intended to be a "service fee" as defined in Article III,
Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such information as
it deemed necessary to an informed determination as to whether a written
plan should be implemented and has considered such pertinent factors as it
deemed necessary to form the basis for a decision to use Fund assets for
such purposes.
In voting to approve the implementation of such a plan, the Board
has concluded, in the exercise of its reasonable business judgment and in
light of applicable fiduciary duties, that there is a reasonable likelihood
that the plan set forth below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as follows:
1. The Fund shall pay to the Distributor a fee at the annual
rate set forth on Exhibit A in respect of the provision of personal
services to shareholders and/or the maintenance of shareholder accounts.
The Distributor shall determine the amounts to be paid to Service Agents
and the basis on which such payments will be made. Payments to a Service
Agent are subject to compliance by the Service Agent with the terms of any
related Plan agreement between the Service Agent and the Distributor.
2. For the purpose of determining the fees payable under this
Plan, the value of the net assets of the Fund or the net assets
attributable to each series or class of Fund shares identified on Exhibit
A, as applicable, shall be computed in the manner specified in the Fund's
charter documents for the computation of net asset value.
3. The Board shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to this Plan. The report
shall state the purpose for which the amounts were expended.
4. This Plan will become effective immediately upon approval by
a majority of the Board members, including a majority of the Board members
who are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, pursuant to
a vote cast in person at a meeting called for the purpose of voting on the
approval of this Plan.
5. This Plan shall continue for a period of one year from its
effective date, unless earlier terminated in accordance with its terms, and
thereafter shall continue automatically for successive annual periods,
provided such continuance is approved at least annually in the manner
provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board, provided
that any material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph 4 hereof.
7. This Plan is terminable without penalty at any time by vote
of a majority of the Board members who are not "interested persons" (as
defined in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements entered into in
connection with this Plan.
8. The obligations hereunder and under any related Plan
agreement shall only be binding upon the assets and property of the Fund or
the affected series or class, as the case may be, and shall not be binding
upon any Board member, officer or shareholder of the Fund individually
Dated: April 21, 1993
As Amended: January 26, 1994
As Revised: April 12, 1995
EXHIBIT A
Fee as a percentage of
Name of Series and Classes average daily net assets
California Series
Class A .25
Class B .25
Class C .25
Connecticut Series
Class A .25
Class B .25
Class C .25
Florida Series
Class A .25
Class B .25
Class C .25
National Series
Class A .25
Class B .25
Class C .25
New Jersey Series
Class A .25
Class B .25
Class C .25
New York Series
Class A .25
Class B .25
Class C .25
[LETTERHEAD OF STROOCK & STROOCK & LAVAN]
EXHIBIT 10
August 12, 1993
Premier California Insured Municipal Bond Fund
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
Gentlemen:
We have acted as counsel to Premier California Insured Municipal
Bond Fund (the "Fund") in connection with the preparation of a
Registration Statement on Form N-1A, Registration No. 33-61738
(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 Fund 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 Fund, they will be
validly issued, fully paid and nonassessable by the Fund.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us in the
Prospectus 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
One International Place
Boston, Massachusetts 02110-2624
August 12, 1993
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
Insured Municipal Bond Fund (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, as amended.
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 in the form 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 which will be at least equal
to the par 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.
Sincerely,
Ropes & Gray
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information," "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our
reports dated September 6, 1995, in this Registration Statement
(Form N-1A 33-61738) of Premier Insured Municipal Bond Fund including
the California Series, National Series, Connecticut Series, New York
Series, New Jersey Series and the Florida Series.
ERNST & YOUNG LLP
New York, New York
November 24, 1995
PREMIER INSURED MUNICIPAL BOND FUND
DISTRIBUTION PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") in accordance with Rule 12b-1, promulgated
under the Investment Company Act of 1940, as amended (the
"Act"). The Plan would pertain to each class set forth on
Exhibit A hereto, as such Exhibit may be revised from time to
time (each, a "Class"). Under the Plan, the Fund would pay the
Fund's distributor (the "Distributor") for distributing shares
of each Class. If this proposal is to be implemented, the Act
and said Rule 12b-1 require that a written plan describing all
material aspects of the proposed financing be adopted by the
Fund.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets attributable to
each Class for such purposes.
In voting to approve the implementation of such a plan,
the Board members have concluded, in the exercise of their
reasonable business judgment and in light of their respective
fiduciary duties, that there is a reasonable likelihood that the
plan set forth below will benefit the Fund and shareholders of
each Class.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor for
distribution a fee in respect of each Class at the annual rate
set forth on Exhibit A.
2. For the purposes of determining the fees payable
under this Plan, the value of the Fund's net assets attributable
to each Class shall be computed in the manner specified in the
Fund's charter documents as then in effect for the computation
of the value of the Fund's net assets attributable to such
Class.
3. The Fund's Board shall be provided, at least
quarterly, with a written report of all amounts expended
pursuant to this Plan. The report shall state the purpose for
which the amounts were expended.
4. As to each Class, this Plan will become effective
upon approval by (a) holders of a majority of the outstanding
shares of such Class, and (b) a majority of the Board members,
including a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. As to each Class, this Plan may be amended at any
time by the Fund's Board, provided that (a) any amendment to
increase materially the costs which such Class may bear pursuant
to this Plan shall be effective only upon approval by a vote of
the holders of a majority of the outstanding shares of such
Class, and (b) any material amendments of the terms of this Plan
shall become effective only upon approval as provided in
paragraph 4(b) hereof.
7. As to each Class, this Plan is terminable without
penalty at any time by (a) vote of a majority of the Board
members who are not "interested persons" (as defined in the Act)
of the Fund and have no direct or indirect financial interest in
the operation of this Plan or in any agreements entered into in
connection with this Plan, or (b) vote of the holders of a
majority of the outstanding shares of such Class.
8. The obligations hereunder and under any related
Plan 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.
Dated: May 26, 1994
Revised: April 12, 1995
EXHIBIT A
Fee as a Percentage of
Name of Class Average Daily Net Assets
- ------------- ------------------------
California Series
Class B .50 of 1%
Class C .75 of 1%
Connecticut Series
Class B .50 of 1%
Class C .75 of 1%
Florida Series
Class B .50 of 1%
Class C .75 of 1%
National Series
Class B .50 of 1%
Class C .75 of 1%
New Jersey Series
Class B .50 of 1%
Class C .75 of 1%
New York Series
Class B .50 of 1%
Class C .75 of 1%
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000902976
<NAME> PREMIER INSURED MUNICIPAL BOND FUND
<SERIES>
<NUMBER> 8
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<MULTIPLIER> 1000
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</TABLE>
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<CIK> 0000902976
<NAME> PREMIER INSURED MUNICIPAL BOND FUND
<SERIES>
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<MULTIPLIER> 1000
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0000902976
<NAME> PREMIER INSURED MUNICIPAL BOND FUND
<SERIES>
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<NAME> FLORIDA SERIES - CLASS B
<MULTIPLIER> 1000
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<PAID-IN-CAPITAL-COMMON> 39720
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<ACCUMULATED-NET-GAINS> (14)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1111
<NET-ASSETS> 21275
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1893
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<EXPENSES-NET> 114
<NET-INVESTMENT-INCOME> 1779
<REALIZED-GAINS-CURRENT> (14)
<APPREC-INCREASE-CURRENT> 1006
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<NET-CHANGE-IN-ASSETS> 18091
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<GROSS-EXPENSE> 444
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<PER-SHARE-NAV-BEGIN> 12.78
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000902976
<NAME> PREMIER INSURED MUNICIPAL BOND FUND
<SERIES>
<NUMBER> 11
<NAME> NEW JERSEY SERIES - CLASS B
<MULTIPLIER> 1000
<S> <C>
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<PERIOD-END> JUL-31-1995
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 240
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<EXPENSES-NET> 27
<NET-INVESTMENT-INCOME> 371
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<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 7142
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<MULTIPLIER> 1000
<S> <C>
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<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11318
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<OVERDISTRIBUTION-GAINS> 0
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<OTHER-INCOME> 0
<EXPENSES-NET> 27
<NET-INVESTMENT-INCOME> 374
<REALIZED-GAINS-CURRENT> (13)
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
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<SHARES-REINVESTED> 9
<NET-CHANGE-IN-ASSETS> 7149
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<GROSS-EXPENSE> 127
<AVERAGE-NET-ASSETS> 4019
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</TABLE>
THE DREYFUS FAMILY OF FUNDS
(Premier Family of Fixed-Income Funds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), requires that the Board of an
investment company desiring to offer multiple classes pursuant
to said Rule adopt a plan setting forth the separate arrangement
and expense allocation of each class, and any related conversion
features or exchange privileges.
The Board, including a majority of the non-interested
Board members, of each of the investment companies, or series
thereof, listed on Schedule A attached hereto (each, a "Fund")
which desires to offer multiple classes has determined that the
following plan is in the best interests of each class
individually and the Fund as a whole:
1. Class Designation: Fund shares shall be divided
into Class A, Class B and Class C.
2. Differences in Services: The services offered to
shareholders of each Class shall be substantially the same,
except that Right of Accumulation, Letter of Intent,
Reinvestment Privilege and Checkwriting services shall be
available only to holders of Class A shares.
3. Differences in Distribution Arrangements: Class
A shares shall be offered with a front-end sales charge, as such
term is defined in Article III, Section 26(b), of the Rules of
Fair Practice of the National Association of Securities Dealers,
Inc., and a deferred sales charge (a "CDSC"), as such term is
defined in said Section 26(b), 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. The
amount of the sales charge and the amount of and provisions
relating to the CDSC pertaining to the Class A shares are set
forth on Schedule B hereto.
Class B shares shall not be subject to a front-end
sales charge, but shall be subject to a CDSC and shall be
charged an annual distribution fee under a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. The amount
of and provisions relating to the CDSC, and the amount of the
fees under the Distribution Plan pertaining to the Class B
shares, are set forth on Schedule C hereto.
Class C shares shall not be subject to a front-end
sales charge, but shall be subject to a CDSC and shall be
charged an annual distribution fee under a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. The amount
of and provisions relating to the CDSC, and the amount of the
fees under the Distribution Plan pertaining to the Class C
shares, are set forth on Schedule D hereto.
Each Class of shares shall be subject to an annual
service fee at the rate of .25% of the value of the average
daily net assets of such Class pursuant to a Shareholder
Services Plan.
4. Expense Allocation. The following expenses
shall be allocated, to the extent practicable, on a Class-by-
Class basis: (a) fees under the Distribution Plan and
Shareholder Services Plan; (b) printing and postage expenses
related to preparing and distributing materials, such as
shareholder reports, prospectuses and proxies, to current
shareholders of a specific Class; (c) Securities and Exchange
Commission and Blue Sky registration fees incurred by a specific
Class; (d) the expense of administrative personnel and services
as required to support the shareholders of a specific Class; (e)
litigation or other legal expenses relating solely to a specific
Class; (f) transfer agent fees identified by the Fund's transfer
agent as being attributable to a specific Class; and (g) Board
members' fees incurred as a result of issues relating to a
specific Class.
5. Conversion Features. Class B shares shall
automatically convert to Class A shares after a specified period
of time after the date of purchase, based on the relative net
asset value of each such Class without the imposition of any
sales charge, fee or other charge, as set forth on Schedule E
hereto. No other Class shall be subject to any automatic
conversion feature.
6. Exchange Privileges. Shares of a Class shall be
exchangeable only for (a) shares of the same Class of other
investment companies managed or administered by The Dreyfus
Corporation and (b) shares of certain other investment companies
specified from time to time.
Dated: April 12, 1995
SCHEDULE A
Premier California Municipal Bond Fund
Premier GNMA Fund
Premier Insured Municipal Bond Fund
Premier Municipal Bond Fund
Premier New York Municipal Bond Fund
Premier State Municipal Bond Fund
SCHEDULE B
Front-End Sales Charge--Class A Shares--The public offering
price for Class A shares shall be the net asset value per share
of that Class plus a sales load as shown below:
Total Sales Load
----------------------------
As a % of As a % of
offering net asset
price per value per
share share
----------- ------------
Amount of Transaction
Less than $50,000. . . . . . . . . . 4.50 4.70
$50,000 to less than $100,000 . . . 4.00 4.20
$100,000 to less than $250,000 . . . 3.00 3.10
$250,000 to less than $500,000 . . . 2.50 2.60
$500,000 to less than $1,000,000 . . 2.00 2.00
$1,000,000 or more . . . . . . . . . -0- -0-
Contingent Deferred Sales Charge--Class A Shares--A CDSC of 1%
shall be assessed at the time of redemption of Class A shares
purchased without an initial sales charge as part of an
investment of at least $1,000,000 and redeemed within two years
after purchase. The terms contained in Schedule C pertaining to
the CDSC assessed on redemptions of Class B shares (other than
the amount of the CDSC and its time periods), including the
provisions for waiving the CDSC, shall be applicable to the
Class A shares subject to a CDSC. Letter of Intent and Right of
Accumulation shall apply to such purchases of Class A shares.
SCHEDULE C
Contingent Deferred Sales Charge--Class B Shares--A CDSC payable
to the Fund's Distributor shall be imposed on any redemption of
Class B shares which reduces the current net asset value of such
Class B shares to an amount which is lower than the dollar
amount of all payments by the redeeming shareholder for the
purchase of Class B shares of the Fund held by such shareholder
at the time of redemption. No CDSC shall 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 the shareholder's Class B shares above the dollar amount of
all payments for the purchase of Class B shares of the Fund held
by such shareholder 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 shall depend on the number of years from the time
the shareholder 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 shall 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:
CDSC as a % of
Year Since Amount Invested
Purchase Payment 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 shall be made in a manner that
results in the lowest possible rate. Therefore, it shall 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.
Waiver of CDSC--The CDSC shall 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 Internal Revenue Code of
1986, as amended (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 Fund's 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, and (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. Any
Fund shares subject to a CDSC which were purchased prior to the
termination of such waiver shall have the CDSC waived as
provided in the Fund's prospectus at the time of the purchase of
such shares.
Amount of Distribution Plan Fees--Class B Shares--.50 of 1% of
the value of the average daily net assets of Class B.
SCHEDULE D
Contingent Deferred Sales Charge--Class C Shares--A CDSC of
1.00% payable to the Fund's Distributor shall be 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 shall be the method used in calculating the CDSC for Class
B shares. In addition, the provisions for waiving the CDSC
shall be those set forth for Class B shares.
Amount of Distribution Plan Fees--Class C Shares--.75 of 1% of
the value of the average daily net assets of Class C.
SCHEDULE E
Conversion of Class B Shares--Approximately six years after the
date of purchase, Class B shares automatically shall convert to
Class A shares, based on the relative net asset values for
shares of each such Class, and shall no longer be subject to the
distribution fee. At that time, Class B shares that have been
acquired through the reinvestment of dividends and distributions
("Dividend Shares") shall be converted in the proportion that a
shareholder's Class B shares (other than Dividend Shares)
converting to Class A shares bears to the total Class B shares
then held by the shareholder which were not acquired through the
reinvestment of dividends and distributions.
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.
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
