File No. 33-50211
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. 3 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 3 [X]
(Check appropriate box or boxes.)
Dreyfus Pennsylvania Intermediate 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 April 1, 1996 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
X 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 November 30, 1995 was filed on or about
January 29, 1996.
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
Cross-Reference Sheet Pursuant to Rule 495(b)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 1
3 Condensed Financial Information 4
4 General Description of Registrant 4
5 Management of the Fund 8
5(a) Management's Discussion of Fund's Performance 18
6 Capital Stock and Other Securities 19
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 14
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
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10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-*
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-15
Holders of Securities
16 Investment Advisory and Other B-16
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
Cross-Reference Sheet Pursuant to Rule 495(b) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-24
18 Capital Stock and Other Securities B-23
19 Purchase, Redemption and Pricing B-17; B-19;
of Securities Being Offered B-23
20 Tax Status B-24
21 Underwriters B-17
22 Calculations of Performance Data B-26
23 Financial Statements B-44
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS APRIL 1, 1996
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND (THE "FUND") IS
AN OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A
MUTUAL FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH AS HIGH A
LEVEL OF CURRENT INCOME EXEMPT FROM FEDERAL AND PENNSYLVANIA INCOME TAXES AS
IS CONSISTENT WITH THE PRESERVATION OF CAPITAL. THE DOLLAR-WEIGHTED AVERAGE
MATURITY OF THE FUND'S PORTFOLIO RANGES BETWEEN THREE AND TEN YEARS.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
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 APRIL 1, 1996, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.................... 3
Condensed Financial Information................... 3
Description of the Fund........................... 4
Management of the Fund............................ 8
How to Buy Shares................................. 9
Shareholder Services.............................. 11
How to Redeem Shares.............................. 14
Shareholder Services Plan......................... 16
Dividends, Distributions and Taxes................ 16
Performance Information........................... 18
General Information............................... 19
Appendix.......................................... 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C>
Management Fees (after fee waiver)................................................. .30%
Other Expenses..................................................................... .50%
Total Fund Operating Expenses (after fee waiver)................................... .80%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $8 $26 $44 $99
</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, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. Total Fund Operating Expenses noted above reflect
an undertaking by The Dreyfus Corporation that if, in the fiscal year ending
November 30, 1996, Fund expenses, including the management fee, exceed .80%
of the value of the Fund's average net assets for the fiscal year, The
Dreyfus Corporation may waive its management fee or bear certain other
expenses to the extent of such excess expense. The expenses noted above,
without reimbursement, would have been: Management Fees_.60% and Total Fund
Operating Expenses_1.10%. The information in the foregoing table does not
reflect any other fee waivers or expense reimbursement arrangements that may
be in effect. You can purchase Fund shares without charge directly from the
Fund's distributor; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund" and "Shareholder Services
Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of beneficial interest outstanding, total investment return, ratios to
average net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
----------------------------
1994(1) 1995
------- -------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year........................................... $12.50 $11.84
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INVESTMENT OPERATIONS:
Investment income--net ...................................................... .61 .63
Net realized and unrealized gain (loss) on investments....................... (.66) 1.28
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TOTAL FROM INVESTMENT OPERATIONS............................................. (.05) 1.91
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DISTRIBUTIONS:
Dividends from investment income-net......................................... (.61) (.63)
------- -------
Net asset value, end of year................................................. $11.84 $13.12
======= =======
TOTAL INVESTMENT RETURN........................................................ (.60%)(2) 16.47%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets ..................................... -- .48%
Ratio of net investment income to average net assets ........................ 5.19%(2) 4.93%
Decrease reflected in above expense ratios due to
undertaking by The Dreyfus Corporation....................................... 1.39%(2) .62%
Portfolio Turnover Rate...................................................... 20.13%(3) 5.07%
Net Assets, end of year (000's omitted)...................................... $22,599 $40,079
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(1) From December 16, 1993 (commencement of operations) to November 30, 1994.
(2) Annualized.
(3) Not annualized.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as high a
level of current income exempt from Federal and Pennsylvania income taxes as
is consistent with the preservation of capital. To accomplish its investment
objective, the Fund invests primarily in the debt securities of the
Commonwealth of Pennsylvania, its political subdivisions, authorities and
corporations, and certain other specified securities, the interest from which
is, in the opinion of bond counsel to the issuer, exempt from Federal and
Pennsylvania income taxes (collectively, "Pennsylvania Municipal
Obligations"). To the extent acceptable Pennsylvania Municipal Obligations
are at any time unavailable for investment by the Fund, the Fund will invest
temporarily in other debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal, but not
Pennsylvania, income tax. The dollar-weighted average maturity of the Fund's
portfolio ranges between three and ten years. The Fund's investment objective
cannot be changed without approval by the holders of a majority (as defined
in the Investment Company Act of 1940, as amended (the "1940 Act")) of the
Fund's outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
Page 4
MUNICIPAL OBLIGATIONS
Debt securities, the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax ("Municipal
Obligations") generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds
issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds or 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 generally
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 formulae under which the rate will
change directly or inversely to changes in interest rates or an index, or
multiples thereof, in many cases subject to a maximum and minimum. Certain
Municipal Obligations are subject to redemption at a date earlier than their
stated maturity pursuant to call options, which may be separated from the
related Municipal Obligation and purchased and sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least
80% of the value of its net assets (except when maintaining a temporary
defensive position) in Municipal Obligations. At least 65% of the value of
the Fund's net assets (except when maintaining a temporary defensive
position) will be invested in bonds, debentures and other debt instruments.
Under normal circumstances, at least 65% of the value of the Fund's net
assets will be invested in Pennsylvania Municipal Obligations and the remainde
r may be invested in securities that are not Pennsylvania Municipal
Obligations and therefore may be subject to Pennsylvania income taxes. See
"Investment Considerations and Risks_Investing in Pennsylvania Municipal
Obligations" below, and "Dividends, Distributions and Taxes." The Fund will
not be limited in the maturities of the securities in which it will invest;
currently the longest available maturity of Pennsylvania Municipal
Obligations is 40 years.
At least 80% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard &
Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. ("S&P"),
or Fitch Investors Service, L.P. ("Fitch"). The Fund may invest up to 20% of
the value of its net assets in Municipal Obligations which, in the case of
bonds, are rated lower than Baa by Moody's and BBB by S&P and Fitch and as
low as the lowest rating assigned by Moody's, S&P or Fitch, but it currently
is the intention of the Fund that this portion of the Fund's portfolio be
invested primarily in Municipal Obligations rated no lower than Baa by
Moody's or BBB by S&P or Fitch. The Fund may invest in short-term Municipal
Obligations which are rated in the two highest rating categories by Moody's,
S&P or Fitch. See "Appendix B" in the Statement of Additional Information.
Municipal Obligations rated BBB by S&P or Fitch or Baa by Moody's are
considered investment grade obligations; those rated BBB by S&P and Fitch are
regarded as having an adequate capacity to pay principal and interest, while
those rated Baa by Moody's are considered medium grade obligations which lack
outstanding investment characteristics and have speculative characteristics.
Investments rated Ba or lower by Moody's and BB or lower by S&P and Fitch
ordinarily provide higher yields but involve greater risk because of their
spec-
Page 5
ulative characteristics. The Fund may invest in Municipal Obligations
rated C by Moody's or D by S&P or Fitch, which is the lowest rating assigned
by such rating organizations and indicates that the Municipal Obligation is
in default and interest and/or repayment of principal is in arrears. See
"Investment Considerations and Risks_Lower Rated Bonds" below for a further
discussion of certain risks. The Fund also may invest in securities which,
while not rated, are determined by The Dreyfus Corporation to be of
comparable quality to the rated securities in which the Fund may invest; for
purposes of the 80% requirement described above, such unrated securities
shall be deemed to have the rating so determined. The Fund also may invest in
Taxable Investments of the quality described under "Appendix_Certain
Portfolio Securities_Taxable Investments."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
The annual portfolio turnover rate for the Fund is not expected to
exceed 100%. The Fund may engage in various investment techniques, such as
options and futures transactions and lending portfolio securities. Use of
certain of these techniques may give rise to taxable income. See also
"Investment Considerations and Risks," "Appendix--Investment Techniques" and
"Dividends, Distributions and Taxes" below and "Investment Objective and
Management Policies--Management Policies" in the Statement of Additional
Information.
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 Fund, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to
be highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and possibly loss of principal. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities. Once the rating
of a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold the
security. The Fund's net asset value generally will not be stable and should
fluctuate based upon changes in the value of its respective portfolio
securities. Securities in which the Fund invests may earn a higher level of
current income than certain shorter-term or higher quality securities which
generally have greater liquidity, less market risk and less fluctuation in
market value.
INVESTING IN PENNSYLVANIA MUNICIPAL OBLIGATIONS -- You should consider
carefully the special risks inherent in the Fund's investment in Pennsylvania
Municipal Obligations. Pennsylvania has been historically identified as a
heavy industry state although that reputation has changed recently as the
coal, steel and railroad industries declined. A more diversified economy has
developed in Pennsylvania as a long-term shift in jobs, investment and
workers away from the northeast part of the nation took place. The major
sources of growth currently are in the service sector, including trade,
medical and health services, education and financial institutions.
Pennsylvania is highly urbanized, with approximately 50% of its total
population contained in the metropolitan areas which include the cities of
Philadelphia and Pittsburgh.
Page 6
The five year period from fiscal 1990 through fiscal 1994 was
distinguished by slow economic growth and a rapid expansion of the costs of
certain governmental programs that together produced a significant stress on
the Commonwealth's budget. These problems were particularly evident during
fiscal years 1990 and 1991 when revenues were significantly below projections
and expenditures, largely driven by demand for public welfare services, rose
above budgeted amounts. As a result, each of those fiscal years ended with a
negative unreserved-undesignated fund balance. Actions taken during fiscal
1992 to bring the General Fund budget into balance, including tax increases
and expenditure restraints, resulted in a $1.1 billion reduction to the
unreserved-undesignated fund deficit for combined governmental fund types and
a return to a positive fund balance. Financial performance continued to
improve during the 1993 through 1995 fiscal years. Fiscal 1995 was the fourth
consecutive fiscal year the Commonwealth reported an increase in the fiscal
year-end unappropriated balance. Prior to reserves for transfer to the Tax
Stabilization Reserve Fund, the fiscal 1995 closing unappropriated surplus
was $540 million, an increase of $204 million over the fiscal 1994 closing
unappropriated surplus prior to transfers. You should obtain and review a
copy of the Statement of Additional Information which more fully sets forth
these and other risk factors.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than 25% of
the value of its total assets in Municipal Obligations which are related in
such a way that an economic, business or political development or change
affecting one such security also would affect the other securities; for
example, securities the interest upon which is paid from revenues of similar
types of projects. As a result, the Fund may be subject to greater risk as
compared to a fund that does not follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce 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 its
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in its 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, the Fund may be required to distribute
such income accrued with respect to these securities and may have to dispose
of portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
LOWER RATED BONDS -- The Fund may invest up to 20% of the value of its net
assets in higher yielding (and, therefore, higher risk) debt securities such
as those rated Ba by Moody's or BB by S&P or Fitch or as low as the lowest
rating assigned by Moody's, S&P or Fitch (commonly known as junk bonds). They
generally
Page 7
are not meant for short-term investing and may be subject to certain risks
with respect to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated fixed-income securities. The retail
secondary market for these bonds may be less liquid than that of higher rated
bonds; adverse conditions could make it difficult at times for the Fund to
sell certain securities or could result in lower prices than those used in
calculating the Fund's net asset value. See "Appendix--Certain Portfolio
Securities--Ratings."
USE OF DERIVATIVES -- The Fund 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 Fund may use include
options and futures. While Derivatives can be used effectively in furtherance
of the Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's portfolio and make more difficult the accurate
pricing of the Fund's portfolio. See "Appendix--Investment Techniques--Use of
Derivatives" below, and "Investment Objective and Management
Policies--Management Policies--Derivatives"in the Statement of Additional
Information.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the Fund's
assets that may be invested in the securities of a single issuer is not
limited by the 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 the Fund's assets may be invested in the
obligations of a limited number of issuers, the Fund's 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 the
Fund may not have more than 25% of its total assets invested in any one
issuer and, with respect to 50% of its total assets, not 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 desire to invest in,
or dispose of, the same securities 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
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of February 29, 1996, The Dreyfus Corporation
managed or administered approximately $85 billion in assets for more than 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Massachusetts
law. The Fund's primary portfolio manager is Douglas Gaylor. He has held that
position since February 1996 and has been employed by The Dreyfus Corporation
since January 1996. From 1993 through 1995, he was a Portfolio Manager in the
Investment Management and Research group at PNC Bank and, from 1990 to 1993,
he was a Senior Municipal Investment Officer with Wilmington Trust Company.
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.
Page 8
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
$233 billion in assets as of December 31, 1995, including approximately $81
billion in proprietary mutual fund assets. As of December 31, 1995, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $786 billion in assets
including approximately $60 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .60 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
November 30, 1995, no management fee was paid by the Fund pursuant to
undertakings by The Dreyfus Corporation. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors. 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.
In allocating brokerage transactions for the Fund, The Dreyfus
Corporation seeks to obtain the best execution of orders at the most
favorable net price. Subject to this determination, The Dreyfus Corporation
may consider, among other things, the receipt of research services and/or the
sale of shares of the Fund or other funds advised by The Dreyfus Corporation
as factors in the selection of broker-dealers to execute portfolio
transactions for the Fund. See "Portfolio Transactions"in the Statement of Add
itional Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or
other financial institutions in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O.Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Share certificates are issued
only upon your written request. No certificates are issued for fractional
shares. It is not recommended that the Fund be used as a vehicle for Keogh,
IRA or other qualified plans. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by
Page 9
the Account Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing, the minimum initial investment is $1,000. For full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries who elect to have a portion of their pay directly deposited into
their Fund account, the minimum initial investment is $50. The Fund reserves
the right to vary further the initial and subsequent investment minimum
requirements at any time. Fund shares also are offered without regard to the
minimum initial investment requirements through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step Program 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.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor subseq
uent investments should be made by third party check. Purchase orders may be
delivered in person only to a Dreyfus Financial Center. THESE ORDERS WILL BE
FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call the
telephone number listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900118393/Dreyfus
Pennsylvania Intermediate Municipal Bond Fund, for purchase of Fund shares in
your name. The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Account Application and promptly mail
the Account Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain further information
about remitting funds in this manner from your bank. All payments should be
made in U.S. dollars and, to avoid fees and delays, should be drawn only on
U.S. banks. A charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value per share, options and futures
contracts will be valued 15 minutes after the close of trading on the
Page 10
floor of the New York Stock Exchange. Net asset value per share is computed by
dividing the value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The Fund's
investments are valued by an independent pricing service approved by the
Fund's Board and are valued at fair value as determined by the pricing
service. For further information regarding the methods employed in valuing
Fund investments, see "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE
You may purchase shares (minimum $500, maximum $150,000 per day)
without charge by telephone if you have checked the appropriate box and
supplied the necessary information on the 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 investors. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by telephoning
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES
You may purchase, in exchange for shares of the Fund, shares of
certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange instructions by
calling 1-800-645-6561 or, if you are calling from overseas, call
516-794-5452. See "How to Redeem Shares _ Procedures." Upon an exchange into
a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
Page 11
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares 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 the exchange you must notify the
Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged to
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. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of other funds in the Dreyfus Family of Funds of which
you are currently an investor. The amount you designate, which can be
expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth of
the month according to the schedule you have selected. Shares will be exchange
d at the then-current net asset value; however, a sales load may be charged
with respect to exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of Additional Information. The right to exercise
this Privilege may be modified or cancelled by the Fund or the Transfer
Agent. You may modify or cancel your exercise of this Privilege at any time
by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a service fee
for the use of this Privilege. No such fee currently is contemplated. For
more information concerning this Privilege and the funds in the Dreyfus
Family of Funds eligible to participate in this Privilege, or to obtain a
Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-AUTOMATIC Asset Builder account, you must
file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling toll free 1-800-645-6561. You may
cancel your participation in this Privilege or change the amount of purchase
at any time by mailing written notification to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, and the notification will
be effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. To
enroll in Dreyfus Government
Page 12
Direct Deposit, you must file with the Transfer Agent a completed Direct
Deposit Sign-Up Form for each type of payment that you desire to include in
this Privilege. The appropriate form may be obtained by calling toll free
1-800-645-6561. Death or legal incapacity will terminate your participation
in this Privilege. You may elect at any time to terminate your participation
by notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon your employer's direct deposit program, you may have part or all of your
paycheck transferred to your existing Dreyfus account electronically through
the Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must complete the
reverse side of the form and return it to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus Payroll Savings
Plan. The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares without
regard to the Fund's minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Account Application and file
the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dreyfus Dividend ACHpermits 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
your participation in these privileges by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
To select a new fund after cancellation, you must submit a new Dividend
Options Form. Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are available only
for existing accounts and may not be used to open new accounts. Minimum
subsequent invest-
Page 13
ments do not apply for Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated.
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.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge 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 Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. 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.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or, if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, through the Check
Redemption Privilege, the Wire Redemption Privilege, the Telephone Redemption
Privilege or the Dreyfus TELETRANSFER Privilege. The Fund makes available to
certain large institutions the ability to issue redemption instructions
through compatible computer facilities. The Fund reserves the right to
Page 14
refuse any request made by wire or 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 any redemption Privilege
at any time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated. Shares for which certificates have been issued are
not eligible for the Check Redemption, Wire Redemption, Telephone Redemption
or Dreyfus TELETRANSFER Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to confirm that instructions are genuine
and, if it does not follow such procedures, the Fund or the Transfer Agent
may be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. 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 The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call the
telephone number listed under "General Information." Redemption requests must
be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
If you have any questions with respect to signature-guarantees, please call
the telephone number listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- You may write Redemption Checks drawn on your
Fund 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 the Fund's 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 of payment, if they are otherwise in good order.
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").
Page 15
Any redemption check written on an account which has become subject to
backup withholding on redemptions will not be honored by the Transfer Agent.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day) made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
DREYFUS TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-645-6561 or, if you are calling from overseas, call
516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from 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 following the date of purchase. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the next business day. Dividends usually are paid on the last business day
of each month, and are automatically reinvested in additional Fund shares at
net asset value or, at your option, paid in cash. 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 from net realized
securities gains, if any, generally are declared and paid once a year, but
the Fund may make distributions on a more frequent basis to comply with the
distribution
Page 16
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional Fund shares at net asset value. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Dividends paid by the Fund will not be subject to the Pennsylvania
personal income tax or to the Philadelphia School District investment net
income tax to the extent that the dividends are attributable to interest
received by the Fund from its investments in Pennsylvania Municipal
Obligations and U.S. Government obligations, including obligations issued by
U.S. possessions. Dividends or distributions by the Fund to a Pennsylvania
resident that are attributable to most other sources may be subject to the
Pennsylvania personal income tax and (for residents of Philadelphia) to the
Philadelphia School District investment net income tax.
Dividends paid by the Fund which are considered "exempt-interest
dividends" for Federal income tax purposes are not subject to the
Pennsylvania Corporate Net Income Tax, but other dividends or distributions
paid by the Fund may be subject to that tax. An additional deduction from
Pennsylvania taxable income is permitted for dividends or distributions paid
by the Fund attributable to interest received by the Fund from its
investments in Pennsylvania Municipal Obligations and U.S. Government
obligations to the extent included in Federal taxable income, but such a
deduction is reduced by any interest on indebtedness incurred to carry the
securities and other expenses incurred in the production of such interest
income, including expenses deducted on the Federal income tax return that
would not have been allowed under the Code if the interest were exempt from
Federal income tax. It is the current position of the Department of Revenue
of the Commonwealth of Pennsylvania that Fund shares are not considered exempt
assets (with a pro rata exclusion based on the value of the Fund
attributable to its investments in Pennsylvania Municipal Obligations and
U.S. Government obligations, including obligations issued by U.S.
possessions) for purposes of determining a corporation's capital stock value
subject to the Pennsylvania Capital Stock/Franchise Tax.
Shares of the Fund are exempt from Pennsylvania county personal
property taxes to the extent that the portfolio of the Fund consists of
Pennsylvania Municipal Obligations and U.S. Government obligations, including
obligations issued by U.S. possessions.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends from net investment income paid by the Fund
will not be subject to Federal income tax. Dividends derived from Taxable
Investments, together with distributions from any net realized short-term
securities gains and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds paid by the Fund, are
subject to Federal income tax as ordinary income whether or not reinvested.
No dividend paid by the Fund will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of the Fund generally are 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 from gain
derived from securities transactions and from the use of the investment
techniques described under "Appendix _ Investment Techniques" also 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 Fund shares which is deemed to relate to
exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by its shareholders from their gross income for Federal
income tax purposes, the Fund may purchase specified private activity bonds,
the interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of
Page 17
the corporate alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the extent to
which a shareholder's Social Security benefits are taxable. If the Fund
purchases such securities, the portion of dividends related thereto will not
necessarily be tax exempt to an investor who is subject to the alternative
minimum tax and/or tax on Social Security benefits and may cause an investor
to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's 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.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss. Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury 31% of
taxable dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an account
is correct or that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding if
the IRS determines a shareholder's TIN is incorrect or if a shareholder has
failed to properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended November 30, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, tax equivalent yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value 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
"annual-
Page 18
ized" yield for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased with an
initial payment of $1,000 and that the investment was redeemed at the end of
a stated period of time, after giving effect to the reinvestment of dividends
and distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total return
for one, five and ten year periods, or for shorter periods depending upon the
length of time during which the Fund 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 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.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Moody's Bond Survey Bond Index, Lehman Brothers
Municipal Bond Index, Morningstar, Inc. and other industry publications. The F
und's yield should generally be higher than money market funds (the Fund,
however, does not seek to maintain a stabilized price per share and may not
be able to return an investor's principal), and its price per share should
fluctuate less than long-term bond funds (which generally have somewhat
higher yields).
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 December 16, 1993. The Fund is authorized to issue an
unlimited number of shares of beneficial interest, par value $.001 per share.
Each share has one vote.
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
Page 19
"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 will send
confirmations and statements of account. The Fund sends an annual and
semi-annual financial report to all its shareholders.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561.
Page 20
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund 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 its total assets. The Fund currently
intends to borrow money only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of the Fund's total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the Fund's total assets, the Fund will
not make any additional investments.
FORWARD COMMITMENTS -- The Fund may purchase 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
when the Fund enters into the commitment, but the Fund does not make a
payment until it receives delivery from the counterparty. The Fund will
commit to purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. A segregated account of the Fund
consisting of cash, cash equivalents or U.S. Government securities or other
high quality liquid debt securities at least equal at all times to the amount
of the commitments will be established and maintained at the Fund's custodian
bank.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations and
Risks -- Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investment Objective and Management
Policies _ Management Policies _ Derivatives" in the Statement of Additional
Information.
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 the Fund to increase or decrease
the level of risk, or change the character of the risk, to which its
portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
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 Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if it 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.
Although the Fund will not be a commodity pool, Derivatives subject
the Fund to the rules of the Commodity Futures Trading Commission which limit
the extent to which the Fund can invest in certain Derivatives. The Fund may
invest in futures contracts and options with respect thereto for hedging
purposes without limit. However, the Fund may not 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 Fund's 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.
Page 21
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund 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 Fund will set
aside permissible liquid assets in a segregated account to cover its
obligations relating to its transactions in Derivatives. To maintain this
required cover, the Fund 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.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest or other distributions
payable on the loaned securities which affords the Fund an opportunity to
earn interest on the amount of the loan and on the loaned securities'
collateral. Loans of portfolio securities may not exceed 331/3% of the value
of the Fund's total assets, and the Fund will receive collateral consisting
of cash, U.S. Government securities or irrevocable letters of credit which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Such loans are terminable at
any time upon specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and variable
rate demand notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit the holder
to demand payment of principal at any time or at specified intervals.
Variable rate demand notes include master demand notes which are obligations
that permit the Fund to invest in fluctuating amounts, at varying rates of
interest, pursuant to direct arrangements between the Fund, as lender, and
the borrower. These obligations permit daily changes in the amount borrowed.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest. If the participation
interest is unrated, it will be backed by an irrevocable letter of credit or
guarantee of a bank that the Fund's Board has determined meets the prescribed
quality standards for banks set forth below, or the payment obligation
otherwise will be collateralized by U.S. Government securities. For certain
participation interests, the Fund will have the right to demand payment, on
not more than seven days notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest. As
to these instruments, the Fund intends to exercise its right to demand
payment only upon a default under the terms of the Municipal Obligation, as
needed to provide liquidity to meet redemptions, or to maintain or improve
the quality of its investment portfolio.
TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a
fixed rate substantially higher than prevailing short-term tax exempt
Page 22
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 -- The Fund may purchase custodial receipts representing
the right to receive certain future principal and interest payments on
Municipal Obligations which underlie the custodial receipts. A number of
different arrangements are possible. In a typical custodial receipt
arrangement, an issuer or a third party owner of Municipal Obligations
deposits such obligations with a custodian in exchange for two classes of
custodial receipts. The two classes have different characteristics, but, in
each case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest rate
is adjusted, and ownership changes, based on an auction mechanism. This
class's interest rate generally is expected to be below the coupon rate of
the underlying Municipal Obligations and generally is at a level comparable
to that of a Municipal Obligation of similar quality and having a maturity
equal to the period between interest rate adjustments. The second class bears
interest at a rate that exceeds the interest rate typically borne by a
security of comparable quality and maturity; this rate also is adjusted, but
in this case inversely to changes in the rate of interest of the first class.
If the interest rate on the first class exceeds the coupon rate of the
underlying Municipal Obligations, its interest rate will exceed the rate paid
on the second class. In no event will the aggregate interest paid with
respect to the two classes exceed the interest paid by the underlying
Municipal Obligations. The value of the second class and similar securities
should be expected to fluctuate more than the value of a Municipal Obligation
of comparable quality and maturity and their purchase by the Fund should
increase the volatility of its net asset value and, thus, its price per
share. These custodial receipts are sold in private placements. The Fund also
may purchase directly from issuers, and not in a private placement, Municipal
Obligations having characteristics similar to custodial receipts. These
securities may be issued as part of a multi-class offering and the interest
rate on certain classes may be subject to a cap or a floor.
STAND-BY COMMITMENTS -- The Fund may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to repurchase, at the
Fund's option, specified securities at a specified price and, in this
respect, stand-by commitments are comparable to put options. The exercise of
a stand-by commitment therefore is subject to the ability of the seller to
make payment on demand. The Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise any such
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. Gains realized in connection with stand-by
commitments will be taxable. The Fund also may acquire call options on
specific Municipal Obligations. The Fund generally would purchase these call
options to protect it from the issuer of the related Municipal Obligation
redeeming, or other holder of the call option from calling away, the
Municipal Obligation
Page 23
before maturity. The sale by the Fund of a call option that it owns on a
specific Municipal Obligation could result in the receipt of taxable income
by the Fund.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon securities which
are debt securities issued or sold at a discount from their face value which
do not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). The amount of
the discount varies depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of the security and
perceived credit quality of the issuer. Zero coupon securities also may take
the form of debt securities that have been stripped of their unmatured
interest coupons, the coupons themselves and receipts or certificates
representing interest 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.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. By investing in these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
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 its net
assets) or for temporary defensive purposes, the Fund may invest in taxable
short-term investments ("Taxable Investments") consisting of: notes of
issuers having, at the time of purchase, a quality rating within the two
highest grades of Moody's, S&P or Fitch; obligations of the U.S. Government,
its agencies or instrumentalities; commercial paper rated not lower than P-2
by Moody's, A-2 by S&P or F-2 by Fitch; certificates of deposit of U.S.
domestic banks, including foreign branches of domestic banks, with assets of
one billion dollars or more; time deposits; bankers' acceptances and other
short-term bank obligations; and repurchase agreements in respect of any of
the foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors. See
"Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net assets
be invested in Taxable Investments. When the Fund has adopted a temporary
defensive position, including when acceptable Pennsylvania Municipal
Obligations are unavailable for investment by the Fund, in excess of 35% of
the Fund's net assets may be invested in securities that are not exempt from
Pennsylvania personal income taxes. Under normal market conditions, the Fund
anticipates that not more than 5% of the value of its total assets will be
invested in any one category of Taxable Investments. Taxable Investments are
more fully described in the Statement of Additional Information, to which
reference hereby is made.
RATINGS -- Bonds rated Ba by Moody's are judged to have speculative elements;
their future cannot be considered as well assured and often the protection of
interest and principal payments may be very moderate. Bonds rated BB by S&P
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Bonds
rated BB by Fitch are considered speculative and the payment of principal and
interest may be affected at any time by adverse economic changes. Bonds rated
C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in default
and the payment of interest and/or repayment of principal is in arrears.
Bonds rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their
Page 24
ultimate recovery value in liquidation or reorganization of the issues;
DDD represents the highest potential for recovery of such bonds; and D
represents the lowest potential for recovery. Such bonds, though high
yielding, are characterized by great risk. See "Appendix B" in the Statement
of Additional Information for a general description of Moody's, S&P and
Fitch ratings of Municipal Obligations.
The ratings of Moody's, S&P and Fitch represent their opinions as to
the quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
bonds. Although these ratings may be an initial criterion for selection of
portfolio investments, The Dreyfus Corporation also will evaluate these
securities and the ability of the issuers of such securities to pay interest
and principal. The Fund's ability to achieve its investment objective may be
more dependent on The Dreyfus Corporation's credit analysis than might be the
case for a fund that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 25
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Page 27
DREYFUS
Pennsylvania Intermediate
Municipal
Bond Fund
Prospectus
(LION LOGO)
Copy Rights 1996 Dreyfus Service Corporation
105p040196
Registration Mark
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 1, 1996
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Dreyfus Pennsylvania Intermediate
Municipal Bond Fund (the "Fund"), dated April 1, 1996 as it may
be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call the following
numbers:
Call Toll Free 1-800-645-6561
In New York City--Call 1-718-895-1206
Outside the U.S. and Canada--Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . B-12
Management Agreement . . . . . . . . . . . . . . . . . . B-15
Purchase of Shares . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services Plan. . . . . . . . . . . . . . . . B-18
Redemption of Shares . . . . . . . . . . . . . . . . . . B-19
Shareholder Services . . . . . . . . . . . . . . . . . . B-21
Determination of Net Asset Value . . . . . . . . . . . . B-23
Portfolio Transactions . . . . . . . . . . . . . . . . . B-24
Dividends, Distributions and Taxes . . . . . . . . . . . B-24
Performance Information. . . . . . . . . . . . . . . . . B-26
Information About the Fund . . . . . . . . . . . . . . . B-28
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors . . . . . . . . . . . B-28
Appendix A . . . . . . . . . . . . . . . . . . . . . . . B-29
Appendix B . . . . . . . . . . . . . . . . . . . . . . . B-36
Financial Statements . . . . . . . . . . . . . . . . . . B-44
Report of Independent Auditors . . . . . . . . . . . . . B-54
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Portfolio Securities
The average distribution of investments (at value) in
Municipal Obligations (including notes) by ratings for the year
ended November 30, 1995, computed on a monthly basis, was as
follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, L.P. Service, Inc. Ratings Group Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
AAA Aaa AAA 38.6%
AA Aa AA 21.8
A A A 12.8
BBB Baa BBB 16.7
BB Ba BB 2.0
F-1, F-1+ MIG 1, P-1, VMIG 1 SP-1, A-1, SP-1+ 4.3
Not Rated Not Rated Not Rated 3.8*
------
100.0%
======
_____________________________________________
* Included in the Not Rated category are securities comprising
3.8% of the Fund's market value which, while not rated, have
been determined by the Manager to be of comparable quality
to the following rating categories: Baa/BBB (2.2%), Ba/BB
(1.6%).
Municipal Obligations. The term "Municipal Obligations"
generally includes debt obligations issued to obtain funds for
various public purposes, including the construction of a wide
range of public facilities such as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities.
In addition, certain types of industrial development bonds are
issued by or on behalf of public authorities to obtain funds to
provide for the construction, equipment, repair or improvement of
privately operated housing facilities, sports facilities,
convention or trade show facilities, airport, mass transit,
industrial, port or parking facilities, air or water pollution
control facilities and certain local facilities for water supply,
gas, electricity or sewage or solid waste disposal; the interest
paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the
size of such issues. Such obligations are considered to be
Municipal Obligations if the interest paid thereon qualifies as
exempt from Federal income tax in the opinion of bond counsel to
the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification
and between classifications.
Floating and variable rate demand notes and bonds are tax
exempt obligations ordinarily having stated maturities in excess
of one year, but which permit the holder to demand payment of
principal at any time, or at specified intervals. The issuer of
such obligations ordinarily has a corresponding right, after a
given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a
specified number of days notice to the holders thereof. The
interest rate on a floating rate demand obligation is based on a
known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate
on a variable rate demand obligation is adjusted automatically at
specified intervals.
The yields on Municipal Obligations are dependent on a
variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation and rating of the issue. The imposition of the
Fund's management fee, as well as other operating expenses, will
have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special
risks not ordinarily associated with Municipal Obligations.
Although lease obligations do not constitute general obligations
of the municipality for which the municipality's taxing power is
pledged, a lease obligation ordinarily is backed by the
municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease
obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is
appropriated for such purpose on a yearly basis. Although "non-
appropriation" lease obligations are secured by the leased
property, disposition of the property in the event of foreclosure
might prove difficult. The 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 "non-appropriation"); (e) the legal
recourse in the event of failure to appropriate; and (f) such
other factors concerning credit quality as the Manager may deem
relevant. The Fund will not invest more than 15% of the value of
its net assets in lease obligations that are illiquid and in
other illiquid securities. See "Investment Restriction No. 11"
below.
The Fund will purchase tender option bonds only when it is
satisfied that the custodial and tender option arrangements,
including the fee payment arrangements, will not adversely affect
the tax exempt status of the underlying Municipal Obligations and
that payment of any tender fees will not have the effect of
creating taxable income for the Fund. Based on the tender option
bond agreement, the Fund expects to be able to value the tender
option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. Subsequent to its
purchase by the Fund, an issue of rated Municipal Obligations may
cease to be rated or its rating may be reduced below the minimum
required for purchase by the Fund. Neither event will require
the sale of such Municipal Obligations by the Fund, but the
Manager will consider such event in determining whether the Fund
should continue to hold the Municipal Obligations. To the extent
that the ratings given by Moody's, S&P or Fitch for Municipal
Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to
use comparable ratings as standards for its investments in
accordance with the investment policies contained in the Fund's
Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P and Fitch represent their opinions as to
the quality of the Municipal Obligations which they undertake to
rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for
selection of portfolio investments, the Manager also will
evaluate these securities and the creditworthiness of the issuers
of such securities.
Illiquid Securities. Where a substantial market of
qualified institutional buyers develops for certain restricted
securities purchased by the Fund pursuant to Rule 144A under the
Securities Act of 1933, as amended, the Fund intends to treat
such securities as liquid securities in accordance with
procedures approved by the Fund's Board. Because it is not
possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, the Fund's Board
has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading
activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time,
qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such
securities may have the effect of increasing the level of
illiquidity in the Fund's portfolio during such period.
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 are
supported by the full faith and credit of the U.S. Treasury;
others by the right of the issuer to borrow from the U.S.
Treasury; others by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest may fluctuate based on
generally recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no
assurance can be given that it will always do so, since it is not
so obligated by law.
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 (in no event
longer than seven days) 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 Fund buys, and the seller
agrees to repurchase, a security at a mutually agreed upon time
and price (usually within seven days). The repurchase agreement
thereby 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 Fund.
In an attempt to reduce the risk of incurring a loss on a
repurchase agreement, the Fund will enter into repurchase
agreements only with domestic banks with total assets in excess
of $1 billion or primary government securities dealers reporting
to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the
value of the securities purchased should decrease below 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 Fund's ability
to dispose of the underlying securities.
Management Policies
Derivatives. The Fund may invest in Derivatives 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 a
Fund to invest than "traditional" securities would.
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., variation 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 the Fund. 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. The Fund 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 the Fund which could adversely affect the value of the
Fund's net assets. Although each Fund intends to purchase or
sell futures contracts only if there is an active market for such
contracts, no assurance can be given that a liquid market will
exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond 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 Fund to
substantial losses.
Successful use of futures by the Fund also is subject to the
Manager's ability 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 the Fund 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, such Portfolio will lose
part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in its
futures positions. Furthermore, if in such circumstances the
Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. The Fund may have to
sell such securities at a time when it may be disadvantageous to
do so.
Pursuant to regulations and/or published positions of the
Securities and Exchange Commission, the Fund may be required to
segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The
segregation of such assets will have the effect of limiting the
Fund's ability otherwise to invest those assets.
Specific Futures Transactions. The Fund may purchase and sell
interest rate futures contracts. An interest rate future
obligates the Fund to purchase or sell an amount of a specific
debt security at a future date at a specific price.
Options--In General. The Fund may purchase and write (i.e.,
sell) call or put options with respect to interest rate futures
contracts. 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.
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.
Successful use by the Fund of options will be subject to the
Manager's ability to predict correctly movements in interest
rates. To the extent the Manager's predictions are incorrect,
the Fund may incur losses.
Future Developments. The Fund may take advantage of
opportunities in the area of options and futures contracts and
options on futures contracts and any other Derivatives which are
not presently contemplated for use by the Fund or which are not
currently available but which may be developed, to the extent
such opportunities are both consistent with the Portfolio's
investment objective and legally permissible for the Fund.
Before entering into such transactions or making any such
investment the Fund will provide appropriate disclosure in its
Prospectus or Statement of Additional Information.
Lending Portfolio Securities. In connection with its
securities lending transactions, the Fund may return to the
borrower or a third party which is unaffiliated with the Fund,
and which is acting as a "placing broker," a part of the interest
earned from the investment of collateral received from securities
loaned.
The Securities and Exchange Commission currently requires
that the following conditions must be met whenever portfolio
securities are loaned: (1) the Fund must receive at least 100%
cash collateral from the borrower; (2) the borrower must increase
such collateral whenever the market value of the securities rises
above the level of such collateral; (3) the Fund must be able to
terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase
in market value; and (5) the Fund may pay only reasonable
custodian fees in connection with the loan. These conditions may
be subject to future modification.
Short Sales. Until the Fund closes its short position or
replaces the borrowed security, it will: (a) maintain daily 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
always equals the current value of the security sold short; or
(b) otherwise cover its short position.
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 when-issued basis may expose a Fund to risks
because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis
can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than
that obtained in the transaction itself. Purchasing securities
on a when-issued basis when a Fund is fully or almost fully
invested may result in greater potential fluctuation in the value
of the Fund's net assets and its net asset value per share.
Investment Considerations and Risks
Lower Rated Bonds. The Fund is permitted to invest in
securities rated Ba by Moody's or BB by S&P or Fitch and as low
as the lowest rating assigned by Moody's, S&P and Fitch. Such
bonds, though higher yielding, are characterized by risk. See
"Description of the Fund--Investment Considerations and
Risks--Lower Rated Bonds" in the Prospectus for a discussion of
certain risks and "Appendix B" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations.
Although ratings may be useful in evaluating the safety of
interest and principal payments, they do not evaluate the market
value risk of these bonds. The Fund will rely on the Manager's
judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of
these bonds tend to be more sensitive to economic conditions than
are higher rated securities. These bonds generally are
considered by S&P, Moody's and Fitch to be, on balance,
predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than
securities in the higher rating categories.
Because there is no established retail secondary market for
many of these securities, the Fund anticipates that such
securities could be sold only to a limited number of dealers or
institutional investors. To the extent a secondary trading
market for these bonds does exist, it generally is not as liquid
as the secondary market for higher rated securities. The lack of
a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular
issues when necessary to meet its liquidity needs or in response
to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary
market for certain securities also may make it more difficult for
the Fund to obtain accurate market quotations for purposes of
valuing the Fund's portfolio and calculating its net asset value.
Adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity of
these securities. In such cases, judgment may play a greater
role in valuation because less reliable objective data may be
available.
These bonds may be particularly susceptible to economic
downturns. It is likely that any economic recession could
severely disrupt the market for such securities and may have an
adverse impact on the value of such securities. In addition, it
is likely that any such economic downturn could adversely affect
the ability of the issuers of such securities to repay principal
and pay interest thereon and increase the incidence of default of
such securities.
The Fund may acquire these bonds during an initial offering.
Such securities may involve special risks because they are new
issues. The Fund has no arrangement with any persons concerning
the acquisition of such securities, and the Manager will review
carefully the credit and other characteristics pertinent to such
new issues.
The credit risk factors pertaining to lower rated securities
also apply to lower rated zero coupon securities, in which the
Fund may invest up to 5% of its net assets. Zero coupon bonds
carry an additional risk in that, unlike bonds which pay interest
throughout the period to maturity, the Fund will realize no cash
until the cash payment date unless a portion of such securities
are sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. See "Dividends, Distributions
and Taxes."
Investing in Pennsylvania Municipal Obligations. Investors
should consider carefully the special risks inherent in the
Fund's investment in Pennsylvania Municipal Obligations. These
risks result from the financial condition of the Commonwealth of
Pennsylvania (the "Commonwealth"). If there should be a default
or other financial crisis relating to the Commonwealth or an
agency or municipality thereof, the market value and
marketability of Pennsylvania Municipal Obligations held by the
Fund and the interest income to the Fund could be adversely
affected. The Commonwealth has been historically identified as a
heavy industry state although that reputation has recently
changed as the coal, steel and railroad industries declined. A
more diversified economy has developed in the Commonwealth as a
long-term shift in jobs, investment and workers away from the
northeast part of the nation took place. The major new sources
of growth currently are in the service sector, including trade,
medical and health services, education and financial
institutions. The Commonwealth is highly urbanized, with
approximately 50% of its total population contained in the
metropolitan areas which include the cities of Philadelphia and
Pittsburgh.
The five year period from fiscal 1990 through fiscal 1994
was distinguished by slow economic growth and a rapid expansion
of the costs of certain governmental programs that together
produced a significant stress on the Commonwealth's budget.
These problems were particularly evident during fiscal years 1990
and 1991 when revenues were significantly below projections and
expenditures, largely driven by demand for public welfare
services, rose above budgeted amounts. As a result, each of
those fiscal years ended with a negative unreserved-undesignated
fund balance. Actions taken during fiscal 1992 to bring the
General Fund budget into balance, including tax increases and
expenditure restraints, resulted in a $1.1 billion reduction to
the unreserved-undesignated fund deficit for combined
governmental fund types and a return to a positive fund balance.
Financial performance continued to improve during the 1993
through 1995 fiscal years. Fiscal 1995 was the fourth
consecutive fiscal year the Commonwealth reported an increase in
the fiscal year-end unappropriated balance. Prior to reserves
for transfer to the Tax Stabilization Reserve Fund, the fiscal
1995 closing unappropriated surplus was $540 million, an increase
of $204 million over the fiscal 1994 closing unappropriated
surplus prior to transfers. Fiscal 1995 was the fourth consecutive
fiscal year the Commonwealth reported and increase in the fiscal
year-end unappropriated balance. Prior to reserves for transfer to
the Tax Stabilization Reserve Fund, the fiscal 1995 closing
unappropriated surplus was $540 million, an increase of $204 million
over the fiscal 1994 closing unappropriated surplus prior to
transfers. Investors should review "Appendix A" which sets forth
additional information relating to investing in Pennsylvania
Municipal Obligations.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1
through 6 below as fundamental policies, which 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
the Fund's outstanding voting shares. Investment restrictions
numbered 7 through 12 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any
time. The Fund may not:
1. Borrow money, except to the extent permitted under the
1940 Act (which currently limits borrowing to no more than 33-
1/3% of the Fund's 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.
2. Purchase or sell real estate, real estate investment
trust securities, commodities or commodity contracts, or oil and
gas interests, but this shall not prevent the Fund from investing
in Municipal Obligations secured by real estate or interests
therein, or prevent the Fund from purchasing and selling options,
forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Underwrite the securities of other issuers, except that
the Fund may bid separately or as part of a group for the
purchase of Municipal Obligations directly from an issuer for its
own portfolio to take advantage of the lower purchase price
available, and except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
4. Make loans to others, except through the purchase of
debt obligations and the entry into repurchase agreements;
however, the Fund may lend its portfolio securities in an amount
not to exceed 33-1/3% of the value of its total assets. Any
loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission
and the Fund's Board.
5. Invest more than 25% of its total assets in the
securities of issuers in any single industry; provided that there
shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
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 Restriction Nos. 1, 2, 8 and
10 may be deemed to give rise to a senior security.
7. 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.
8. Purchase securities on margin, but the Fund may make
margin deposits in connection with transactions in options,
forward contracts, futures, including those relating to indices,
and options on futures contracts or indices.
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 the deposit of assets in
escrow in connection with writing covered put and call options
and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating 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
participation interests (including municipal lease/purchase
agreements) and floating and variable rate demand obligations as
to which the Fund cannot exercise the demand feature as described
in the Fund's Prospectus on less than seven days notice and as to
which there is no secondary market), if, in the aggregate, more
than 15% of its net assets would be so invested.
12. Invest in companies for the purpose of exercising
control.
For purposes of Investment Restriction No. 5, industrial
development bonds, where the payment of principal and interest is
the ultimate responsibility of companies within the same
industry, are grouped together as an "industry." If a percentage
restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in
values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund shares
in certain states. Should the Fund determine that a commitment
is no longer in the best interest of the Fund and its
shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the
state involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with
information as to their principal business occupations during at
least the last five years, are shown below. Each Board member
who is deemed to be an "interested person" of the Fund, as
defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Fund
*DAVID W. BURKE, Board Member. Chairman of the Broadcasting
Board of Governors, an independent board within the United
States Information Agency, since August 1995. From August
1994 to August 1995, Mr. Burke was a Consultant to the
Manager, and from October 1990 to August 1994, he was Vice
President and Chief Administrative Officer of the Manager.
From 1977 to 1990, Mr. Burke was involved in the management
of national television news, as Vice President and Executive
Vice President of ABC News, and subsequently as President of
CBS News. He is 59 years old and his address is Box 654,
Eastham, Massachusetts 02642.
*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 the Noel Group, Inc.; a trustee
of Bucknell University; and a director of the Muscular
Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway Company, Inc., Curtis Industries, Inc. and
Staffing Resources, Inc. He is 52 years old and his address
is 200 Park Avenue, New York, New York 10166.
DIANE DUNST, Board Member. Since January 1992, President of
Diane Dunst Promotion, Inc., a full service promotion
agency. From January 1989 to January 1992, Director of
Promotion Services, Lear's Magazine. From 1985 to January
1989, she was Sales Promotion Manager of ELLE Magazine. She
is 56 years old and her address is 120 East 87th Street, New
York, New York 10128.
ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise
and Marketing for Corporate Property Investors, a real
estate investment company. From 1974 to 1976, she was owner
and manager of a merchandise and marketing consulting firm.
Prior to 1974, she was a Vice President of Macy's, New York.
She is 70 years old and her address is c/o Corporate
Property Investors, 305 East 47th Street, New York, New York
10017.
JAY I. MELTZER, Board Member. Physician engaged in private
practice specializing in internal medicine. He is also a
member of the Advisory Board of the Section of Society and
Medicine, College of Physicians and Surgeons, Columbia
University and a Clinical Professor of Medicine, Department
of Medicine, Columbia University College of Physicians and
Surgeons. He is 67 years old and his address is 903 Park
Avenue, New York, New York 10021.
DANIEL ROSE, Board Member. President and Chief Executive Officer
of Rose Associates, Inc., a New York based real estate
development and management firm. He is also Chairman of the
Housing Committee of The Real Estate Board of New York,
Inc., and a Trustee of Corporate Property Investors, a real
estate investment company. He is 66 years old and his
address is c/o Rose Associates, Inc., 380 Madison Avenue,
New York, New York 10017.
WARREN B. RUDMAN, Board Member. Since January 1993, Partner in
the law firm of Paul, Weiss, Rifkind, Wharton & Garrison.
From January 1981 to January 1993, Mr. Rudman served as a
United States Senator from the State of New Hampshire. Mr.
Rudman has served as a director of Collins & Aikman, a
manufacturing company since June 1995, and Chubb
Corporation, since January 1993, and Raytheon Company, since
September 1993. Since 1988, Mr. Rudman also has served as a
trustee of Boston College and since 1986 as a member of the
Senior Advisory Board of the Institute of Politics of the
Kennedy School of Government at Harvard University. He also
serves as Deputy Chairman of the President's Foreign
Intelligence Advisory Board. He is 65 years old and his
address is c/o Paul, Weiss, Rifkind, Wharton & Garrison,
1615 L Street, N.W., Suite 1300, Washington, D.C. 20036.
SANDER VANOCUR, Board Member. Since January 1992, President of
Old Owl Communications, a full-service communications firm.
Since November 1989, Mr. Vanocur has served as a Director of
the Damon Runyon-Walter Winchell Cancer Research Fund. From
June 1986 to December 1991, he was a Senior Correspondent of
ABC News and, from October 1977 to December 31, 1991, he was
Anchor of the ABC News program "Business World," a weekly
business program on the ABC television network. He is 68
years old and his address is 2928 P Street, N.W.,
Washington, D.C. 20007.
For so long as the Fund's plan described in the section
captioned "Shareholder Services Plan" remains in effect, the
Board members of the Fund who are not "interested persons" of the
Fund (as defined in the 1940 Act) will be selected and nominated
by the Trustees who are not "interested persons" of the Fund.
Ordinarily, meetings of shareholders for the purpose of
electing Board members will not be held unless and until such
time as less than a majority of the Board members holding office
have been elected by shareholders, at which time the Board
members then in office will call a shareholders' meeting for the
election of Board members. Under the 1940 Act, shareholders of
record of not less than two-thirds of the outstanding shares of
the Fund may remove a Board member through a declaration in
writing or by vote cast in person or by proxy at a meeting called
for that purpose. The Fund's Board is required to call a meeting
of shareholders for the purpose of voting upon the question of
removal of any such Board member 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 Board members 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 Board member for the fiscal year ended November 30,
1995, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total
compensation) for the year ended December 31, 1995 were as
follows:
<TABLE>
<CAPTION>
(5) Total
(3) Pension or Compensation From
(2) Aggregate Retirement Benefits (4)Estimated Annual Fund and Fund
(1) 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>
David W. Burke $2,250 None None $253,654 (52)
Joseph S. DiMartino $2,0891 None None $448,618 (93)
Diane Dunst $2,250 None None $ 39,000 (9)
Rosalind Gersten Jacobs $2,250 None None $ 92,500 (20)
Jay I. Meltzer $2,250 None None $ 37,500 (9)
Daniel Rose $2,250 None None $ 80,250 (21)
Warren B. Rudman $2,250 None None $ 85,500 (17)
Sander Vanocur $2,250 None None $ 79,750 (21)
</TABLE>
_____________________
* Amount does not include reimbursed expenses for attending
Board meetings which amounted to $358 for all Board members
as a group.
1 Elected to the Board by shareholders on March 31, 1995.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Executive 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 of which is The 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 34 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer
of other investment companies advised or administered by the
Manager. From September 1992 to August 1994, he was an
attorney with the Board of Governors of the Federal Reserve
System. He is 31 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary.
Assistant Vice President of the Distributor and an officer
of other investment companies advised or administered by the
Manager. She is 26 years old.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice
President, 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.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the
Distributor and an officer of other investment companies
advised or administered by the Manager. From June 1992 to
April 1995, she was a medical Coordination Officer at ORBIS
International. Prior to June 1992, she worked as Program
Coordinator at Physicians World Communications Group. She
is 27 years old.
The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.
Board members and officers of the Fund, as a group, owned
less than 1% of the Fund's shares of outstanding on March 8,
1996.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."
The Manager provides management services pursuant to the
Management Agreement (the "Agreement") dated August 24, 1994 with
the Fund, which is subject to annual approval by (i) the Fund's
Board or (ii) vote of a majority (as defined in the 1940 Act) of
the outstanding voting securities of the Fund, provided that in
either event the continuance also is approved by a majority of
the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval.
The Agreement was approved by shareholders on August 3, 1994, and
was last approved by the Fund's Board, including a majority of
the Board members who are not "interested persons" (as defined in
the 1940 Act) of any party to the Agreement, at a meeting held on
May 8, 1995. The Agreement is terminable without penalty, on 60
days notice, by the Fund's Board or by vote of the holders of a
majority of the Fund's shares, or, on not less than 90 days
notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the
1940 Act).
The following persons are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive
Officer; W. Keith Smith, Vice Chairman and a director;
Christopher M. Condron, President, Chief Operating Officer and a
director; Stephen E. Canter, Vice Chairman--Chief Investment
Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Philip L. Toia, Vice Chairman--
Operations and Administration and a director; William T.
Sandalls, Jr., Senior Vice President and Chief Financial Officer;
Barbara Casey, Vice President--Dreyfus Retirement Services;
Diane Coffey, Vice President--Corporate Communications; Elie M.
Genadry, Vice President--Institutional Sales; William F. Glavin,
Jr., Vice President--Corporate Development; Mark N. Jacobs, Vice
President--Secretary and General Counsel; Mary Beth Leibig, Vice
President--Human Resources; Jeffrey N. Nachman, Vice President--
Fund Administration; Maurice Bendrihem, Controller; Elvira
Oslapas--Assistant Secretary; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene and Julian
Smerling, directors.
The Manager manages the Fund's portfolio of investments in
accordance with the stated policies of the Fund, subject to the
approval of the Fund's Board. The Manager is responsible for
investment decisions, and provides the Fund with portfolio
managers who are authorized by the Board to execute purchases and
sales of securities. The Fund's portfolio managers are Richard
J. Moynihan, Joseph A. Darcy, A. Paul Disdier, Douglas Gaylor,
Karen M. Hand, Stephen C. Kris, 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
Board's review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the
Fund and furnishes statistical and research data, clerical help,
accounting, data processing, bookkeeping and internal auditing
and certain other required services to the Fund. The Manager
also may make such advertising and promotional expenditures,
using its own resources, as it from time to time deems
appropriate.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by the
Manager. The expenses borne by the Fund include: organizational
costs, taxes, interest, brokerage fees and commissions, if any,
fees of 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, state Blue
Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses.
As compensation for the Manager's services, the Fund has
agreed to pay the Manager a monthly management fee at the annual
rate of .60 of 1% of the value of the Fund's average daily net
assets. All fees and expenses are accrued daily and deducted
before the declaration of dividends to shareholders. For the
period December 16, 1993 (commencement of operations) through
November 30, 1994, and for the fiscal year ended November 30,
1995, the management fees payable by the Fund amounted to $93,306
and $184,633, respectively, which amounts were waived by the
Manager, resulting in no management fees paid by the Fund for
such periods.
The Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of the
necessary state securities commissions) extraordinary expenses,
but including the management fee, exceed the expense limitation
of any state having jurisdiction over the Fund, the Fund may
deduct from the payment to be made to the Manager under the
Agreement, or the Manager will bear, such excess expense to the
extent required by state law. Such deduction or payment, if any,
will be estimated daily, and reconciled and effected or paid, as
the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Fund's net assets
increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Shares."
The Distributor. The Distributor serves as the Fund's
distributor on a best efforts basis pursuant to an agreement
which is renewable annually. The Distributor also acts as
distributor for the other funds in the Dreyfus Family of Funds
and for certain other investment companies. In some states,
banks or other institutions effecting transactions in Fund shares
may be required to register as dealers pursuant to state law.
Services Charges. There is no sales or service charge by
the Fund or the Distributor, although investment dealers, banks
and other institutions may make reasonable charges to investors
for their services. The services provided and the applicable
fees are established by each dealer or other institution acting
independently of the Fund. The Fund has been given to understand
that these fees may be charged for customer services including,
but not limited to, same-day investment of client funds; same-day
access to client funds; advice to customers about the status of
their accounts, yield currently being paid or income earned to
date; provision of periodic account statements showing security
and money market positions; other services available from the
dealer, bank or other institution; and assistance with inquiries
related to their investment. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts
could constitute a substantial portion of distributions. Small,
inactive, long-term accounts involving monthly service charges
may not be in the best interest of investors. Investors should
be aware that they may purchase shares of the Fund directly from
the Fund without imposition of any maintenance or service
charges, other than those already described herein.
Dreyfus TeleTransfer Privilege. Dreyfus 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
Dreyfus Transfer, Inc., the Fund's transfer and dividend
disbursing agent (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 Dreyfus
TeleTransfer Privilege, the initial payment for purchase of Fund
shares must be drawn on, and redemption proceeds paid to, the
same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the
proceeds of a particular redemption are to be wired to an account
at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Shares--Dreyfus 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, provided the information on
the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the
"Plan") pursuant to which the Fund reimburses Dreyfus Service
Corporation for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services
provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries and providing
reports and other information, and services related to the
maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan,
and the purposes for which such expenditures were incurred, must
be made to the Fund's Board for its review. In addition, the
Plan provides that material amendments of the Plan must be
approved by the Fund's Board, and by the Board members who are
not "interested persons" (as defined in the 1940 Act) of the Fund
and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called
for the purpose of considering such amendments. The Plan is
subject to annual approval by such vote of the Board members cast
in person at a meeting called for the purpose of voting on the
Plan. The Plan was last so approved on February 8, 1995. The
Plan is terminable at any time by vote of a majority of the Board
members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Plan.
For the fiscal year ended November 30, 1995, $25,477 was
charged to the Fund under the Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Shares."
Check Redemption Privilege. 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 investor's Fund 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 shares in the investor's account to cover
the amount of the Check. Dividends are earned until the Check
clears. After clearance, a copy of the Check will be returned to
the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although
election of this Privilege creates only a shareholder-transfer
agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the
shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close an
account.
Wire Redemption Privilege. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or herself to be the investor and reasonably believed by
the Transfer Agent to be genuine. Ordinarily, the Fund will
initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt if the Transfer Agent
receives the redemption request in proper form. Redemption
proceeds ($1,000 minimum) will be transferred by Federal Reserve
wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form,
or to a correspondent bank if the investor's bank is not a member
of the Federal Reserve System. Fees ordinarily are imposed by
such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the
investor's bank account.
Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator at 1-800-654-7171, toll free. Investors should
advise the operator that the above transmittal code must be used
and should also inform the operator of the Transfer Agent's
answer back sign.
To change the commercial bank or account designated to
receive wire redemption proceeds, a written request must be sent
to the Transfer Agent. This request must be signed by each
shareholder, with each signature guaranteed as described below
under "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware
that if they have also selected the Dreyfus TeleTransfer
Privilege, any request for a wire redemption will be effected as
a Dreyfus TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the
investor's account at an ACH member bank ordinarily two business
days after receipt of the redemption request. See "Purchase of
Shares--Dreyfus 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 holder of a joint
account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must appear
with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular
verification. For more information with respect to signature-
guarantees, please call the telephone number listed on the cover.
Redemption Commitment. The Fund has committed itself to pay
in cash all redemption requests by any shareholder of record,
limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of the Fund's net assets at the
beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In
the case of requests for redemption in excess of such amount, the
Fund's Board reserves the right to make payments in whole or in
part in securities (which may include non-marketable securities)
or other assets in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities,
brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets
the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange
will be purchased on the basis of relative net asset value per
share as follows:
A. Exchanges for shares of funds that are offered without
a sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other
funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of
funds acquired by a previous exchange from shares
purchased with a sales load and additional shares
acquired through reinvestment of dividends or
distributions of any such funds (collectively referred
to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred
to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the
maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time the
Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
To accomplish an exchange or transfer under item D above,
shareholders must notify the Transfer Agent of their prior
ownership of fund shares and their account number.
To request an exchange, an investor must give exchange
instructions to the Transfer Agent in writing, by wire or by
telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless
the investor checks the applicable "No" box on the Account
Application, indicating that the investor specifically refuses
this Privilege. By using the Telephone Exchange Privilege, the
investor authorizes the Transfer Agent to act on telephonic
instructions from any person representing himself or herself to
be the investor, and reasonably believed by the Transfer Agent to
be genuine. Telephone exchanges may be subject to limitations as
to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible
for telephone exchange.
To establish a personal retirement plan by exchange, shares
of the fund being exchanged must have a value of at least the
minimum initial investment required for the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and IRAs set up under a Simplified Employee Pension Plan ("SEP-
IRAs") with only one participant, the minimum initial investment
is $750. To exchange shares held in corporate plans, 403(b)(7)
Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500
invested among the funds in the Dreyfus Family of Funds. To
exchange shares held in personal retirement plans, the shares
exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange
Privilege permits an investor to purchase, in exchange for shares
of the Fund, shares of another fund in the Dreyfus Family of
Funds. This Privilege is available only for existing accounts.
Shares will be exchanged on the basis of relative net asset value
as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three
business days following notification by the investor. An
investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case,
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. Exchange
of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular
accounts. With respect to all other retirement accounts,
exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares
of the fund being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other
identifying designations.
Shareholder Services Forms and prospectuses of the other
funds may be obtained by calling toll free 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 Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are the
proceeds from sales of Fund shares, not the yield on the shares.
If withdrawal payments exceed reinvested dividends and distribu-
tions, the investor's shares will be reduced and eventually may
be depleted. There is a service charge of $.50 for each with-
drawal check. Automatic Withdrawal may be terminated at any time
by the investor, the Fund or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from the Fund
in shares of another fund in the Dreyfus Family of Funds of which
the investor is a shareholder. Shares of other funds purchased
pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon
redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Shares."
Valuation of Portfolio Securities. The Fund's investments
are valued by an independent pricing service (the "Service")
approved by the Fund's 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 Fund's Board. Expenses and fees,
including the management fee (reduced by the expense limitation,
if any), are accrued daily and are taken into account for the
purpose of determining the net asset value of Fund shares.
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.
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.
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."
The Internal Revenue Code of 1986, as amended (the "Code"),
provides that if a shareholder has not held his Fund shares for
more than six months (or such shorter time 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 shall be disallowed to the
extent of the exempt-interest dividend received. In addition,
any dividend or distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of
his or her shares below the cost of his or her investment. Such
a distribution should be a return on the investment in an
economic sense although taxable as stated in "Dividends,
Distributions and Taxes" in the Prospectus.
Dividends paid by the Fund which are excludable as exempt
income for Federal tax purposes are not subject to the
Pennsylvania corporate net income tax. An additional deduction
from Pennsylvania taxable income is permitted for the amount of
dividends paid by the Fund attributable to interest received by
the Fund from its investments in Pennsylvania Municipal
Obligations and U.S. Government Obligations, including
obligations issued by U.S. possessions, to the extent included in
Federal taxable income, but such a deduction is reduced by any
interest on indebtedness incurred to carry the securities and
other expenses incurred in the production of such interest
income, including expenses deducted on the Federal income tax
return that would not have been allowed under the Internal
Revenue Code if the interest were exempt from Federal income tax.
Dividends or distributions by the Fund attributable to most other
sources may be subject to the Pennsylvania corporate net income
tax. It is the current position of the Pennsylvania Department
of Revenue that Fund shares are considered exempt assets (with a
pro rata exclusion based on the value of the Fund attributable to
its investments in Pennsylvania Municipal Obligations and U.S.
Government Obligations) for purposes of determining a
corporation's capital stock value subject to the Pennsylvania
capital stock/franchise tax.
Shares of the Fund are exempt from Pennsylvania county
personal property taxes and (as to residents of Pittsburgh) from
personal property taxes imposed by the City of Pittsburgh and the
School District of Pittsburgh to the extent that the Fund's
portfolio consists of Pennsylvania Municipal Obligations and U.S.
Government obligations, including obligations issued by U.S.
possessions.
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 realized by the
Fund 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, any such futures and options
remaining unexercised at the end of the Fund's taxable year will
be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner
described above.
Offsetting positions held by the Fund involving certain
futures contracts or options transactions may be considered, for
tax purposes, to constitute "straddles." Straddles are defined
to include "offsetting positions" in actively traded personal
property. The tax treatment of straddles is governed by Sections
1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256. As such,
all or a portion of any short or long-term capital gain from
certain straddle and/or conversion transactions may be
recharacterized as ordinary income.
If the Fund were treated as entering into straddles by
reason of its engaging in futures or options transactions, such
straddles would be characterized as "mixed straddles" if the
futures or options comprising a part of such straddles were
governed by Section 1256 of the Code. The Fund may make one or
more elections with respect to mixed straddles. If no election
is made, to the extent the straddle rules apply to positions
established by the Fund, losses realized by the Fund will be
deferred to the extent of unrealized gain in any offsetting
positions. 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 recharacterized as short-term
capital gain or ordinary income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the
form of additional obligations could, under special tax rules,
affect the amount, timing and character of distributions to
shareholders. For example, the Fund could be required to take
into account annually a portion of the discount (or deemed
discount) at which such securities were issued and to distribute
such portion in order to maintain its qualification as a
regulated investment company. In that case, the Fund may have to
dispose of securities which it might otherwise have continued to
hold in order to generate cash to satisfy these distribution
requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
For the 30-day period ended November 30, 1995, the Fund's
yield was 4.41%. The Fund's yield reflects the absorption of
certain expenses by the Manager and the waiver of the management
fee without which the Fund's yield for the 30-day period ended
November 30, 1995 would have been 4.07%. Current yield is
computed pursuant to a formula which operates as follows: The
amount of the Fund's expenses accrued for the 30-day period (net
of reimbursements) is subtracted from the amount of the dividends
and interest earned (computed in accordance with regulatory
requirements) by the Fund during the period. That result is then
divided by the product of: (a) the average daily number of
shares outstanding during the period that were entitled to
receive dividends and (b) the net asset value 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 a combined 1996 Federal and Pennsylvania personal
income tax rate of 41.29%, the Fund's tax equivalent yield for
the 30-day period ended November 30, 1995 was 7.51%. Without the
absorption of certain expenses and the waiver of the management
fee, the Fund's tax equivalent yield for the 30-day period ended
November 30, 1995 would have been 6.93%. Tax equivalent yield is
computed by dividing that portion of the yield or effective yield
(calculated as described above) which is tax exempt by 1 minus a
stated tax rate and adding the quotient to that portion, if any,
of the yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the
application of the highest Federal and Commonwealth of
Pennsylvania marginal personal income tax rates in effect during
1994. For Federal income tax purposes, a 39.60% tax rate has
been used and, for Pennsylvania personal income tax purposes, a
2.80% tax rate has been used. The tax equivalent figure,
however, does not reflect the potential effect of any local
(including, but not limited to, county, district or city) taxes,
including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rates or
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 Fund's average annual total return for the one year
period ended November 30, 1995 and for the period December 16,
1993 (commencement of operations) through November 30, 1995, were
16.47% and 7.78%, respectively. Average annual total return is
calculated by determining the ending redeemable value of an
investment purchased 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.
The Fund's total return for the period December 16, 1993
(commencement of operations) through November 30, 1995, was
15.80%. Total return is calculated by subtracting the amount of
the Fund's net asset value 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 periods), and dividing the result by the
net asset value per share at the beginning of the period.
From time to time, the Fund may use hypothetical tax
equivalent yields or charts in its advertising. These
hypothetical yields or charts will be used for illustrative
purposes only and are not indicative of the Fund's past or future
performance.
Advertising materials for the Fund may also refer to or
discuss then current or past economic conditions, developments
and/or events, including those relating to actual or proposed tax
legislation. From time to time, advertising materials for the
Fund also may refer to statistical or other information
concerning trends relating to investment companies, as compiled
by industry associations such as the Investment Company
Institute. From time to time, advertising materials for the Fund
also may refer to Morningstar, Inc. ratings and related analyses
supporting the ratings. From time to time, advertising material
for the Fund may include biographical information relating to its
portfolio manager and may refer to, or include commentary by the
portfolio manager relating to investment strategy, asset growth,
current or past business, political, economic or financial
conditions and other matters of general interest to investors.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."
Each Fund share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal
rights as to dividends and in liquidation. Shares have no
preemptive, subscription or conversion rights and are freely
transferable.
The Fund sends annual and semi-annual financial statements
to shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, P.O. Box 9671, Providence, Rhode Island 02940-9671, is
the Fund's transfer and dividend disbursing agent. Under a
transfer agency agreement with the Fund, the Transfer Agent
arranges for the maintenance of shareholder account records for
the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of
the number of shareholder accounts it maintains for the Fund
during the month, and is reimbursed for certain out-of-pocket
expenses. The Bank of New York, 90 Washington Street, New York,
New York 10286, is the Fund's custodian. Neither The Bank of New
York nor the Transfer Agent 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 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 PENNSYLVANIA 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 Commonwealth of Pennsylvania (the
"Commonwealth") and various local agencies available as of the
date of this Statement of Additional Information. While the Fund
has not independently verified this information, it has no reason
to believe that such information is not correct in all material
respects.
General. The Commonwealth historically has been identified
as a heavy industry state, although that reputation has changed
with the decline of the coal, steel and railroad industries and
the resulting diversification of the Commonwealth's economy. The
major new sources of economic growth in the Commonwealth
currently are in the service sector, including trade, medical and
health services, education and financial institutions.
Agriculture continues to be an important component of the
Commonwealth's economic structure, with nearly one-fourth of the
Commonwealth's total land area devoted to cropland, pasture and
farm woodlands.
The population of the Commonwealth experienced a slight
increase in the period from 1985 to 1994 and has a high
proportion of persons 65 or older. The Commonwealth is highly
urbanized, with almost 79% of the 1990 census population residing
in metropolitan statistical areas. The cities of Philadelphia
and Pittsburgh, the Commonwealth's largest metropolitan
statistical areas, together comprise approximately 44% of the
Commonwealth's total population.
The Commonwealth's average annual unemployment rate remained
below the national average between 1986 and 1990. Slower
economic growth caused the rate to rise to 6.9% in 1991, 7.5% in
1992 and 7.1% in 1993, slightly above the national average.
Seasonally adjusted data for October 1995, however, shows an
unemployment rate of 5.1% compared to an unemployment rate of
5.5% for the United States as a whole.
Financial Accounting. The Commonwealth utilizes the fund
method of accounting and over 150 funds have been established for
purposes of recording receipts and disbursements, of which the
General Fund is the largest. Most of the Commonwealth's
operating and administrative expenses are payable from the
General Fund. Debt service on all bond indebtedness of the
Commonwealth, except that issued for highway purposes or for the
benefit of other special revenue funds, is payable from the
General Fund. The Motor License Fund is a special revenue fund
that receives tax and fee revenues relating to motor fuels and
vehicles (except one-half cent per gallon of the liquid fuels tax
which is deposited in the Liquid Fuels Tax Fund for distribution
to local municipalities) and all such revenues are required to be
used for highway purposes. Other special revenue funds have been
established to receive specified revenues appropriated to
specific departments, boards and/or commissions. Such funds
include the Game, Fish, Boat, Banking Department, Milk Marketing,
State Farm Products Show, State Racing and State Lottery Funds.
The General Fund, all special revenue funds, the Debt Service
Funds and the Capital Project Funds combine to form the
Governmental Fund Types.
The Tax Stabilization Reserve Fund and the Sunny Day Fund
were established in 1986 and provided with initial funding from
General Fund appropriations. Income for both of these funds is
from recurrent appropriations from other Commonwealth funds and
from investment earnings. Beginning with fiscal 1992, the Tax
Stabilization Reserve Fund has received 10% of any budgetary
basis fiscal year-end surplus and all proceeds from the
disposition of assets of the Commonwealth not designated for
deposit elsewhere. The Tax Stabilization Reserve Fund is to be
used for emergencies threatening the health, safety or welfare of
citizens or to offset unanticipated revenue shortfalls due to
economic downturns. The Sunny Day Fund is available to attract
new business enterprises to the Commonwealth. On September 29,
1995, the balance in the Tax Stabilization Reserve Fund was
$121.3 million.
Enterprise funds are maintained for departments or programs
operated like private enterprises. The largest of the Enterprise
funds is the State Stores Fund, which is used for the receipts
and disbursements of the Commonwealth's liquor store system.
Sale and distribution of all liquor within the Commonwealth is a
government enterprise.
Financial information for the funds is maintained on a
budgetary basis of accounting ("Budgetary"). Since 1984, the
Commonwealth has also prepared financial statements in accordance
with generally accepted accounting principles ("GAAP"). The GAAP
statements have been audited jointly by the Auditor General of
the Commonwealth and an independent public accounting firm. The
Budgetary information is adjusted at fiscal year end to reflect
appropriate accruals for financial reporting in conformity with
GAAP. The Commonwealth maintains a June 30th fiscal year end.
The Constitution of the Commonwealth provides that operating
budget appropriations may not exceed the estimated revenues and
available surplus in the fiscal year for which funds are
appropriated. Annual budgets are enacted for the General Fund
and for certain special revenue funds which represent the
majority of expenditures of the Commonwealth.
Revenues and Expenditures. The Commonwealth's Governmental
Fund Types receive over 57% of their revenues from taxes levied
by the Commonwealth. Interest earnings, licenses and fees,
lottery ticket sales, liquor store profits, miscellaneous
revenues, augmentations and federal government grants supply the
balance of the receipts of these funds. Revenues not required to
be deposited in another fund are deposited in the General Fund.
The major tax sources for the General Fund are the 6% sales and
use tax (34.1% of General Fund revenues in fiscal 1995), the 2.8%
personal income tax (31.3% of General Fund revenues in fiscal
1995) and the 9.99% corporate net income tax (11.7% of General
Fund revenues in fiscal 1995). Tax and fee proceeds relating to
motor fuels and vehicles are constitutionally dedicated to
highway purposes and are deposited into the Motor License Fund.
The major sources of revenue for the Motor License Fund include
the liquid fuels tax, the oil company franchise tax, aviation
taxes and revenues from fees levied on heavy trucks. These
revenues are restricted to the repair and construction of highway
bridges and aviation programs. Lottery ticket sales revenues are
deposited in the State Lottery Fund and are reserved by statute
for programs to benefit senior citizens.
The Commonwealth's major expenditures include funding for
education ($6.4 billion of fiscal 1994 expenditures and $6.7
billion of the fiscal 1995 budget) and public health and human
services ($12.4 billion of fiscal 1995 expenditures).
Governmental Fund Types: Financial Condition/Results of
Operations (GAAP Basis). Financial conditions during the fiscal
years 1990 through 1994 were distinguished by slow economic
growth and a rapid expansion of the costs of certain governmental
programs that together produced a significant stress on the
Commonwealth's budget. These problems were particularly evident
during fiscal years 1990 and 1991 when revenues were
significantly below projections and expenditures, largely driven
by demand for public welfare services, rose above budgeted
amounts. As a result, each of those fiscal years ended with a
negative unreserved-undesignated fund balance. The negative
unreserved-undesignated fund balances at the end of the 1990 and
1991 fiscal years were due largely to operating deficits in the
General Fund and the State Lottery Fund during those fiscal
years. Actions taken during fiscal 1992 to bring the General
Fund budget into balance, including tax increases and expenditure
restraints, resulted in a $1.1 billion reduction to the
unreserved-undesignated fund deficit for combined governmental
fund types and a return to a positive fund balance. Financial
performance continued to improve during the 1993 and 1994 fiscal
years. The fund balance for the governmental fund types
increased from $1.693 billion on June 30, 1993, as restated, to
$1.982 billion on June 30, 1994, an increase of $289.2 million.
An unreserved-undesignated fund balance $334.7 million was
recorded for fiscal 1994 year end.
General Fund: Financial Condition/Results of Operations.
Five Year Overview (GAAP Basis). The five year period from
fiscal 1990 through fiscal 1994 was marked by public health and
welfare costs growing at a rate double the growth rate for all
the state expenditures. Rising caseloads, increased utilization
of services and rising prices joined to produce the rapid rise of
public health and welfare costs at a time when a national
recession caused tax revenues to stagnate and even decline.
During the period from fiscal 1990 through fiscal 1994, public
health and welfare costs rose by an average annual rate of 9.4%
while tax revenues were growing at an average annual rate of
5.8%. Consequently, spending on other budget programs was
restrained to a growth rate below 4.7% and sources of revenues
other than taxes became larger components of fund revenues.
Among those sources included transfers from other funds and
hospital and nursing home pooling of contributions to use as
federal matching funds.
Tax revenues declined in fiscal 1991 as a result of the
recession in the economy. A $2.7 billion tax increase enacted
for fiscal 1992 brought financial stability to the General Fund.
That tax increase included several taxes with retroactive
effective dates which generated some one-time revenues during
fiscal 1992. The absence of those revenues and a reduction in
the personal income tax rate in fiscal 1993 contributed to the
decline in tax revenues shown for fiscal 1993. Fiscal 1994 tax
revenues increased by 4.1%, but a decline in other revenues
caused by the end of medical assistance pooled financing in
fiscal 1993 held total revenues to a 1.8% gain. Expenditures for
fiscal 1994 rose by 4.3%.
Fiscal 1994 Financial Results (GAAP Basis). The fund
balance of the General Fund increased by $194 million during the
fiscal year due largely to an increased reserve for encumbrances
and an increase in other designated funds. The unreserved-
undesignated balance increased by $14.8 million to $79.2 million.
Revenues and other sources increased by 1.8% over the prior
fiscal year while expenditures and other uses increased by 4.3%.
Consequently, the operating surplus declined to $179.4 million
for fiscal 1994 from $686.3 million for fiscal 1993.
Fiscal 1995 Fiscal Results (Budgetary Basis). Commonwealth
revenues for the fiscal year were above estimates and exceeded
fiscal year expenditures and encumbrances. Fiscal 1995 was the
fourth consecutive fiscal year the Commonwealth reported an
increase in the fiscal year-end unappropriated balance. Prior to
reserves for transfer to the Tax Stabilization Reserve Fund, the
fiscal 1995 closing unappropriated surplus was $540 million, an
increase of $204.2 million over the fiscal 1994 closing
unappropriated surplus prior to transfers.
Commonwealth revenues were $459.4 million, 2.9% above the
estimate of revenues used at the time the budget was enacted.
Corporation taxes contributed $329.4 million of the additional
receipts largely due to higher receipts from the corporate net
income tax.
Fiscal 1996 Budget. The enacted fiscal 1996 budget provides
for expenditures from Commonwealth revenues of $16.162 billion, a
2.7% increase over total appropriations from Commonwealth
revenues in fiscal 1995. The appropriations percentage increase
for fiscal 1996 is one of the lowest rates in recent years. The
fiscal 1996 budget is based on anticipated Commonwealth revenues,
net of enacted tax changes, of $16.269 billion, an increase over
actual fiscal 1995 Commonwealth revenues of 0.3%. Excluding the
estimated effects of the tax changes enacted in 1994 and 1995,
Commonwealth revenues for fiscal 1996 are estimated to increase
by approximately 2.9%
For the fiscal year through October, revenue receipts have
totaled $24.2 million above estimate representing approximately
0.5% over the estimate for the period. The above-estimate
receipts are due to corporate tax collections during the period
that were $27.0 million above estimate. Expenditures in certain
items have been above estimated levels during the first four
months of the fiscal year. These areas are being analyzed for
any potential need for supplemental appropriations for the fiscal
year.
Commonwealth Debt. Current constitutional provisions permit
the Commonwealth to issue the following types of debt: (i) debt
to suppress insurrection or rehabilitate areas affected by
disaster, (ii) electorate approved debt, (iii) debt for capital
projects subject to an aggregate debt limit of 1.75 times the
annual average tax revenues of the preceding five fiscal years
and (iv) tax anticipation notes payable in the fiscal year of
issuance. All debt except tax anticipation notes must be
amortized in substantial and regular amounts.
General obligation debt totaled $5.045 billion at June 30,
1995. Over the 10-year period ended June 30, 1995, total
outstanding general obligation debt increased at an annual rate
of 1.1%; for the five year period ended June 30, 1995, it
increased at an annual rate of 1.7%. All outstanding general
obligation bonds of the Commonwealth are rated AA- by Standard &
Poor's Ratings Group, A1 by Moody's Investors Service, Inc., and AA-
by Fitch Investors Service, L.P. The ratings reflect only the views
of the rating agencies.
The Commonwealth engages in short-term borrowing to fund
expenses within a fiscal year through the sale of tax
anticipation notes which must mature within the fiscal year of
issuance. The principal amount issued, when added to that
already outstanding, may not exceed in the aggregate 20% of the
revenues estimated to accrue to the appropriate fund in the
fiscal year. The Commonwealth is not permitted to fund deficits
between fiscal years with any form of debt. All year-end deficit
balances must be funded within the succeeding fiscal year's
budget. The Commonwealth issued a total of $500 million of tax
anticipation notes for the account of the General Fund in fiscal
1996, all of which will mature on June 28, 1996, and will be paid
from fiscal 1996 General Fund receipts.
Pending the issuance of bonds, the commonwealth may issue
bond anticipation notes subject to the applicable statutory and
constitutional limitations generally imposed on bonds. The term
of such borrowings may not exceed three years. The Commonwealth
currently has no bond anticipation notes outstanding.
State-related Obligations. Certain state-created agencies
have statutory authorization to incur debt for which legislation
providing for state appropriations to pay debt service thereon is
not required. The debt of these agencies is supported by assets
of, or revenues derived from, the various projects financed and
the debt of such agencies is not an obligation of Pennsylvania
although some of the agencies are indirectly dependent on
Commonwealth appropriations. The following agencies had debt
currently outstanding as of June 30, 1995: Delaware River Joint
Toll Bridge Commission ($56.3 million), Delaware River Port
Authority ($185.5 million), Pennsylvania Economic Development
Financing Authority ($380.8 million), Pennsylvania Energy
Development Authority ($123.1 million), Pennsylvania Higher
Education Assistance Agency ($2,103 billion), Pennsylvania Higher
Education Facilities Authority ($2.103 billion), Pennsylvania
Industrial Development Authority ($350 million), Pennsylvania
Infrastructure Investment Authority ($213.1 million),
Pennsylvania Turnpike Commission ($1.253 billion), Philadelphia
Regional Port Authority ($63.9 million) and the State Public
School Building Authority ($316.2 million). In addition, the
Governor is statutorily required to place in the budget of the
Commonwealth an amount sufficient to make up any deficiency in
the capital reserve fund created for, or to avoid default on,
bonds issued by the Pennsylvania Housing Finance Agency ($2.130
billion of revenue bonds and $24 million notes outstanding as of
June 30, 1995), and an amount of funds sufficient to alleviate
any deficiency that may arise in the debt service reserve fund
for bonds issued by The Hospitals and Higher Education Facilities
Authority of Philadelphia. The budget as finally adopted by the
legislation may or may not include the amounts requested by the
Governor.
Local Government Debt. Local government in the Commonwealth
consists of numerous individual units. Each unit is distinct and
independent of other local units, although they may overlap
geographically. There is extensive general legislation applying
to local government. For example, the Local Government Unit Debt
Act provides for uniform debt limits for local government units
(except the City of Philadelphia), including municipalities and
school districts, and prescribes methods of incurring,
evidencing, securing and collecting debt. Under the Local
Government Unit Debt Act, the ability of the Commonwealth's
municipalities and school districts to engage in general
obligation borrowing without electoral approval is generally
limited by their recent revenue collection experience.
Generally, such subdivisions can levy real property taxes
unlimited as to rate or amount to pay debt service on general
obligation borrowings. City of Philadelphia debt is limited by
the Commonwealth Constitution to a percentage of the assessed
value of taxable realty in the City, except debt which is
supported by project revenues and is excluded from this limit.
Municipalities may also issue revenue obligations without
limit and without affecting their general obligation borrowing
capacity if the obligations are projected to be paid solely from
project revenues. Municipal authorities and industrial
development authorities are also widespread in the Commonwealth.
An authority is organized by a municipality acting singly or
jointly with another municipality and is governed by a Board
appointed by the governing unit of the creating municipality or
municipalities. Typically, authorities are established to
acquire, own and lease or operate one or more projects and to
borrow money and issue revenue bonds to finance them. Projects
of municipal authorities may include public facilities, such as
public buildings, parking facilities, airports, waterworks and
sewage facilities as well as projects for certain private not-
for-profit entities, such as hospitals and universities. A
project may be leased by a municipal authority to a municipality
or school district or to a private user, in which event the
lessee is obligated to make rental payments sufficient to pay the
debt service on obligations issued by the authority. In cases
involving revenue producing public facilities, such as water or
sewer systems, a municipal authority may operate the system
itself. The debt of municipal authorities is not governed by the
Local Government Unit Debt Act except indirectly when the debt is
guaranteed by a local government unit or the project is leased to
such a unit. Industrial development authorities issue bonds to
acquire or construct facilities for use by private companies, and
the debt service is normally dependent solely on the credit of
the private user.
Litigation. Certain litigation is pending against the
Commonwealth that could adversely affect the ability of the
Commonwealth to pay debt service on its obligations, including
suits relating to the following matters: (a) approximately 3,500
tort suits are pending against the Commonwealth pursuant to the
General Assembly's 1978 approval of a limited waiver of sovereign
immunity which permits recovery of damages for any loss up to
$250,000 per person and $1,000,000 per accident ($27 million
appropriated from the Motor License Fund for fiscal 1996), (b)
the ACLU filed suit in April 1990 in federal court demanding
additional funding for child welfare services (no available
estimates of potential liability), which the Commonwealth is
seeking to have dismissed based on, among other things, the
settlement in a similar Commonwealth court action that provided
for more funding in fiscal 1991 as well as a commitment to pay to
counties $30.0 million over 5 years; (c) in 1987, the Supreme
Court of Pennsylvania held that the statutory scheme for county
funding of the judicial system was in conflict with the
Pennsylvania Constitution but stayed judgment pending enactment
by the legislature of funding consistent with the opinion (the
legislature has yet to consider legislation implementing the
judgment); (d) litigation has been filed in both state and
federal court by an association of rural and small schools and
several individual school districts and parents challenging the
constitutionality of the Commonwealth's system for funding local
school districts -- the federal case has been stayed pending
resolution of the state case and the state case is in the pre-
trial discovery stage (no available estimate of potential
liability); and (e) in May 1995, Envirotest/Synterra Partners
("Envirotest"), which acquired land and constructed approximately
85 automobile emissions inspection facilities pursuant to a
"Contract for Centralized Emissions Inspection Facilities" with
the Commonwealth, filed suit asserting damages in excess of $350
million which allegedly occurred when the General Assembly
suspended the Commonwealth's emissions testing program and
prohibited expenditures to implement the program.
Philadelphia. The audit findings for the fiscal year ending
June 30, 1992 place the cumulative General Fund balance deficit
at $224.9 million.
Legislation providing for the establishment of the
Pennsylvania Intergovernmental Cooperation Authority ("PICA") to
assist first class cities in remedying fiscal emergencies was
enacted by the General Assembly and approved by the Governor in
June 1991. PICA is designed to provide assistance through the
issuance of funding debt to liquidate budget deficits and to make
factual findings and recommendations to the assisted city
concerning its budgetary and fiscal affairs. At this time,
Philadelphia is operating under a five year fiscal plan approved
by PICA on April 7, 1995.
PICA has issued $1.419 billion of its Special Tax Revenue
Bonds to provide financial assistance to Philadelphia and to
liquidate the cumulative General Fund balance deficit. The
audited General Fund balance of the city as of June 30, 1994,
showed a surplus of approximately $15.4 million, up from
approximately $3 million as of June 30, 1993. City preliminary
unaudited General Fund financial statements at June 30, 1995
projected a surplus of approximately $59.6 million.
No further bonds are to be issued by PICA for the purpose of
financing a capital project deficit as the authority for such
bond sales expired December 31, 1994. PICA's authority to issue
debt for the purpose of financing a cash flow deficit expires on
December 31, 1996. Its ability to refund existing outstanding
debt is unrestricted.
APPENDIX B
Description of Standard & Poor's Ratings Group ("S&P"),
Moody's Investors Service, Inc. ("Moody's") and Fitch Investors
Service, L.P. ("Fitch") ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation.
The ratings are based on current information furnished by
the issuer or obtained by S&P from other sources it considers
reliable, and will include: (1) likelihood of default -capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms
of the obligation; (2) nature and provisions of the obligation;
and (3) protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in
a small degree.
A
Principal and interest payments on bonds in this category
are regarded as safe. This rating describes the third strongest
capacity for payment of debt service. It differs from the two
higher ratings because:
General Obligation Bonds -- There is some weakness in the
local economic base, in debt burden, in the balance between
revenues and expenditures, or in quality of management. Under
certain adverse circumstances, any one such weakness might impair
the ability of the issuer to meet debt obligations at some future
date.
Revenue Bonds -- Debt service coverage is good, but not
exceptional. Stability of the pledged revenues could show some
variations because of increased competition or economic
influences on revenues. Basic security provisions, while
satisfactory, are less stringent. Management performance appears
adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse
conditions, several of the above factors could contribute to a
lesser capacity for payment of debt service. The difference
between "A" and "BBB" rating is that the latter shows more than
one fundamental weakness, or one very substantial fundamental
weakness, whereas the former shows only one deficiency among the
factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of
the pledged revenues could show substantial variations, with the
revenue flow possibly being subject to erosion over time. Basic
security provisions are no more than adequate. Management
performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC and C is regarded as having
predominantly speculative characteristics with respect to
capacity to pay interest and repay principal. BB indicates the
least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default
than other speculative grade debt. However, it faces major
ongoing uncertainties or exposure to adverse business, financial
or economic conditions which could lead to inadequate capacity to
meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but
presently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions would likely impair capacity or willingness to pay
interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to
default, and is dependent upon favorable business, financial and
economic conditions to meet timely payments of principal. In the
event of adverse business, financial or economic conditions, it
is not likely to have the capacity to pay interest and repay
principal.
CC
The rating CC is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC- debt
rating.
D
Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be
modified by the addition of a plus or minus sign 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.
A
Issues assigned this 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.
Ba
Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate, and therefore not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.
Ca
Bonds which are rated Ca present obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in
the Aaa category and in categories below B. The modifier 1
indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a
rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade (MIG).
Such ratings recognize the differences between short-term credit
risk and long-term risk. Factors affecting the liquidity of the
borrower and short-term cyclical elements are critical in short-
term ratings, while other factors of major importance in bond
risk, long-term secular trends for example, may be less important
over the short run.
A short-term rating may also be assigned on an issue having
a demand feature. Such ratings will be designated as VMIG or, if
the demand feature is not rated, as NR. Short-term ratings on
issues with demand features are differentiated by the use of the
VMIG symbol to reflect such characteristics as payment upon
periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be
alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the
issuer in the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment
Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name
implies, when Moody's assigns a MIG or VMIG rating, all
categories define an investment grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for
refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding
group.
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 will normally be evidenced by leading market
positions in well established industries, high rates of return on
funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2
(P-2) have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced by many
of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class
of debt. The ratings take into consideration special features of
the issue, its relationship to other obligations of the issuer,
the current financial condition and operative performance of the
issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest
and repay principal is very strong, although not quite as strong
as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated
F-1+.
A
Bonds rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and
financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity
throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to meet
obligations requires an advantageous business and economic
environment.
CC
Bonds rated CC are minimally protected. Default payment of
interest and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest
or principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default
of interest and/or principal payments. Such bonds are extremely
speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the obligor.
DDD represents the highest potential for recovery on these bonds
and D represents the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category. Plus and minus signs, however, are not used in the AAA
category covering 12-36 months or the DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to three
years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to meet
the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a
satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-96.3% AMOUNT VALUE
______ _______
<S> <C> <C>
PENNSYLVANIA-86.4%
Allegheny County Hospital Development Authority, Revenue, Refunding
(Magee Womens Hospital) 5.875%, 10/1/2002 (Insured; FGIC)............... $ 500,000 $ 537,300
Berks County, Refunding 5.60%, 11/15/2007 (Insured; FGIC)................... 545,000 565,138
Bucks County 6.05%, 3/1/2002................................................ 500,000 543,350
Cambria County, Refunding 5.875%, 8/15/2008 (Insured; FGIC)................. 700,000 748,153
Chester County Health and Education Facilities Authority, Health System
Revenue
(Main Line Health System):
4.90%, 5/15/2004...................................................... 350,000 348,915
5.40%, 5/15/2009...................................................... 500,000 494,620
Clinton County Industrial Development Authority, PCR, Refunding
(International Paper Co. Project) 5.375%, 5/1/2004...................... 500,000 515,160
Dauphin County General Authority, Revenue:
6%, 12/1/2006 (LOC; The Sakura Bank Ltd., Prerefunded 6/1/2001) (a,b)... 785,000 807,161
5%, 6/1/2026 (Insured; AMBAC, Prerefunded 12/1/1998) (b)................ 500,000 506,950
Delaware County Authority:
Health Care Revenue, Refunding (Mercy Health Corp.-Southeastern)
6%, 11/15/2007........................................................ 1,000,000 988,230
HR (Crozer-Chester Medical Center) 4.75%, 12/15/2003 (Insured; MBIA).... 430,000 432,133
Delaware County Industrial Development Authority, Revenue, Refunding
(Martins Run Project) 5.60%, 12/15/2002................................. 750,000 737,588
Geisinger Authority, Health System Revenue 5.375%, 7/1/2000................. 850,000 881,832
Harrisburg Authority, Water Revenue, Refunding 5.30%, 7/15/2004 (Insured; FGIC) 300,000 312,735
Lackawanna County, Refunding 4.90%, 12/1/2006 (Insured; AMBAC).............. 500,000 502,935
Lancaster Higher Education Authority, College Revenue
(Franklin and Marshall College Project) 5%, 4/15/2002 (Insured; MBIA)... 350,000 359,684
Lehigh County General Purpose Authority, Revenue (Saint Lukes Hospital
Bethlehem Project) 4.75%, 11/15/2000 (Insured; AMBAC)................... 345,000 351,938
Lycoming County Authority, HR (Divine Providence Hospital)
5.25%, 11/15/2006 (Insured; Connie Lee) (c)............................. 1,000,000 1,006,600
Northeastern Hospital and Education Authority, College Revenue
(Luzerne County Community College) 6.20%, 8/15/2005 (Insured; AMBAC).... 500,000 551,760
Pennsylvania:
5%, 9/1/2007............................................................ 350,000 350,406
5%, 11/15/2009 (c)...................................................... 1,000,000 988,600
Refunding 5%, 5/1/2003.................................................. 500,000 512,590
Pennsylvania Convention Center Authority, Revenue, Refunding 6.25%, 9/1/2004 750,000 792,855
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating Project) 6.40%, 1/1/2009........................ 500,000 506,260
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
______ _______
PENNSYLVANIA (CONTINUED)
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue
4.625%, 12/1/2000....................................................... $ 1,000,000 $ 998,010
Pennsylvania Higher Educational Facilities Authority:
College and University Revenue (Delaware Valley College of Science and
Agriculture)
6.50%, 4/1/2008....................................................... 790,000 839,730
Health Services Revenue (University of Pennsylvania) 5.75%, 1/1/2006.... 500,000 538,845
Pennsylvania Housing Finance Agency, Single Family Mortgage:
5.95%, 10/1/2003........................................................ 365,000 382,407
6.20%, 4/1/2005......................................................... 410,000 422,968
6.20%, 10/1/2005........................................................ 420,000 433,818
5.75%, 4/1/2006......................................................... 400,000 408,560
6.10%, 4/1/2006......................................................... 455,000 472,340
5.75%, 10/1/2006........................................................ 415,000 424,201
6.10%, 10/1/2006........................................................ 465,000 483,349
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(Philadelphia Funding Program) 5.45%, 6/15/2008 (Insured; FGIC) (d)..... 1,000,000 1,016,030
Pennsylvania Turnpike Commission, Turnpike Revenue, Refunding:
5.35%, 12/1/2002 (Insured; FGIC)........................................ 255,000 267,974
5.45%, 12/1/2002........................................................ 500,000 525,505
Pennsylvania University, Refunding 5.55%, 8/15/2007......................... 1,000,000 1,042,310
Philadelphia:
5.70%, 11/15/2006 (Insured; FGIC)....................................... 1,000,000 1,072,010
Gas Works Revenue 4.60%, 8/1/2003 (Insured; MBIA)....................... 500,000 497,575
Water and Wastewater Revenue, Refunding:
4.25%, 6/15/1996...................................................... 500,000 501,560
5.50%, 6/15/2003 (Insured; FGIC)...................................... 1,000,000 1,057,110
5.50%, 6/15/2006...................................................... 250,000 249,795
Philadelphia Hospital and Higher Education Facilities Authority, Revenue:
(Community College) 5.90%, 5/1/2007 (Insured; MBIA)..................... 445,000 479,634
(Graduate Health System) 5.90%, 7/1/2003................................ 500,000 502,700
Refunding (Temple University Hospital) 6.50%, 11/15/2008................ 1,000,000 1,075,420
Philadelphia Municipal Authority, LR, Refunding:
6%, 7/15/2003........................................................... 500,000 517,565
5.40%, 11/15/2006 (Insured; FGIC)....................................... 500,000 520,105
Philadelphia School District 5.75%, 7/1/2007 (Insured; MBIA)................ 600,000 636,822
Pittsburgh Water and Sewer Authority, Water and Sewer Systems Revenue,
Refunding
4.70%, 9/1/2004 (Insured; FGIC)......................................... 300,000 300,513
Pleasant Valley School District, Refunding 5%, 11/15/2006 (Insured; FGIC)... 1,000,000 1,008,960
Robinson Township Municipal Authority, Water and Sewer Revenue, Refunding
5.10%, 5/15/2007 (Insured; FGIC) (d).................................... 1,000,000 1,009,920
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
PENNSYLVANIA (CONTINUED)
Schuylkill County Industrial Development Authority, RRR, Refunding
(Schuylkill Energy Resource, Inc.) 6.50%, 1/1/2010...................... $ 1,295,000 $ 1,330,561
Scranton-Lackawanna Health and Welfare Authority, Revenue, Refunding
(University of Scranton Project) 5.80%, 3/1/2000........................ 500,000 518,985
Southeastern Transportation Authority, Special Revenue
5.875%, 3/1/2009 (Insured; FGIC)........................................ 750,000 793,748
Wilkinsburg Joint Water Authority, Water Revenue
6.15%, 8/15/2006 (Insured; AMBAC, Prerefunded 8/15/2002) (b)............ 500,000 551,230
U.S. RELATED-9.9%
Guam Government 5.625%, 9/1/2002............................................ 1,295,000 1,303,184
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue, Refunding 5%, 7/1/2002................................. 225,000 229,671
Puerto Rico Electric Power Authority, Power Revenue:
5.90%, 7/1/2002......................................................... 250,000 267,835
6%, 7/1/2006............................................................ 225,000 243,311
Refunding:
4.25%, 7/1/1997....................................................... 1,000,000 1,004,540
5.25%, 7/1/2007....................................................... 700,000 707,238
Puerto Rico Housing Bank and Finance Agency, Single Family, Refunding
5%, 12/1/2002........................................................... 300,000 299,475
______
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $37,937,247).................... $39,278,407
======
SHORT-TERM MUNICIPAL INVESTMENTS-3.7%
Pennsylvania Higher Educational Facilities Authority, College and
University Revenue, VRDN (Temple University)
3.70% (LOC; Morgan Guaranty Trust Co.) (a,e)............................ $ 1,000,000 $ 1,000,000
Warren County Hospital Authority, Revenue, VRDN (Warren General Hospital
Project)
3.95% (LOC; PNC Bank) (a,e)............................................. 500,000 500,000
______
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $1,500,000).................... $ 1,500,000
======
TOTAL INVESTMENTS-100.0%
(cost $39,437,247)...................................................... $40,778,407
======
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
HR Hospital Revenue PCR Pollution Control Revenue
LOC Letter of Credit RRR Resources Recovery Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- ------- ---------------- -------------------
<S> <C> <S> <C>
AAA Aaa AAA 41.9%
AA Aa AA 19.0
A A A 14.4
BBB Baa BBB 18.0
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 3.7
Not Rated (g) Not Rated (g) Not Rated (g) 3.0
-----
100.0%
=====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Secured by letters of credit.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(c) Purchased on a delayed delivery basis.
(d) Wholly held by the custodian in a segregated account as collateral
for delayed delivery securities.
(e) 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.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $39,437,247)-see statement...................................... $40,778,407
Cash.................................................................... 588,182
Interest receivable..................................................... 567,578
Receivable for shares of Beneficial Interest subscribed................. 154,710
Prepaid expenses........................................................ 38,280
______
42,127,157
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 17,083
Payable for investment securities purchased............................. 1,977,535
Accrued expenses and other liabilities.................................. 53,134 2,047,752
_____ _________
NET ASSETS ................................................................ $40,079,405
======
REPRESENTED BY:
Paid-in capital......................................................... $38,877,016
Accumulated net realized (loss) on investments.......................... (138,771)
Accumulated net unrealized appreciation on investments-Note 3........... 1,341,160
______
NET ASSETS at value applicable to 3,053,772 shares outstanding
(unlimited number of $.001 par value shares of Beneficial
Interest authorized).................................................... $40,079,405
======
NET ASSET VALUE, offering and redemption price per share
($40,079,405 / 3,053,772 shares)........................................ $13.12
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,664,239
EXPENSES:
Management fee-Note 2(a).............................................. $ 184,633
Shareholder servicing costs-Note 2(b)................................. 62,500
Auditing fees......................................................... 21,750
Trustees' fees and expenses-Note 2(c)................................. 14,182
Legal fees............................................................ 11,535
Organization expenses................................................. 11,074
Registration fees..................................................... 9,448
Prospectus and shareholders' reports.................................. 6,857
Custodian fees........................................................ 4,080
Miscellaneous......................................................... 12,339
_____
TOTAL EXPENSES.................................................. 338,398
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 191,927
_____
NET EXPENSES.................................................... 146,471
_____
INVESTMENT INCOME-NET........................................... 1,517,768
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (31,441)
Net unrealized appreciation on investments.............................. 2,912,463
_____
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 2,881,022
_____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,398,790
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED NOVEMBER 30,
________________________________
1994* 1995
______ ______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 806,326 $ 1,517,768
Net realized (loss) on investments...................................... (107,330) (31,441)
Net unrealized appreciation (depreciation) on investments for the year.. (1,571,303) 2,912,463
______ ______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (872,307) 4,398,790
______ ______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................... (806,326) (1,517,768)
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................... 35,130,538 29,535,143
Dividends reinvested.................................................... 590,723 1,114,040
Cost of shares redeemed................................................. (11,543,635) (16,049,793)
______ ______
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 24,177,626 14,599,390
______ ______
TOTAL INCREASE IN NET ASSETS...................................... 22,498,993 17,480,412
NET ASSETS:
Beginning of year....................................................... 100,000 22,598,993
______ ______
End of year............................................................. $ 22,598,993 $ 40,079,405
====== ======
SHARES SHARES
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 2,782,274 2,327,964
Shares issued for dividends reinvested.................................. 47,728 87,444
Shares redeemed......................................................... (928,551) (1,271,087)
______ ______
NET INCREASE IN SHARES OUTSTANDING.................................... 1,901,451 1,144,321
====== ======
* From December 16, 1993 (commencement of operations) to November 30,
1994.
See notes to financial statements.
</TABLE>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated April 1, 1996.
See notes to financial statements.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Premier Mutual
Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $138,800
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
November 30, 1995. If not applied, $1,400 of the carryover expires in fiscal
2002 and $137,400 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 .60 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. However, the Manager had
undertaken from December 1, 1994 through January 2, 1995, to reimburse all
fees and expenses of the Fund, and thereafter, had undertaken through
November 17, 1995, to reduce other expenses paid by the Fund, to the extent
that the Fund's aggregate expenses (excluding certain expenses as described
above) exceeded specified annual percentages of the Fund's average daily net
assets. The Manager has currently undertaken from November 18, 1995 through
November 30, 1996 to reduce the management fee paid by or reimburse such
excess expenses of the Fund, to the extent that the Fund's aggregate annual
expenses (exclusive of certain expenses as described above) exceed an annual
rate of .80 of 1% of the average daily value of the Fund's net assets. The
expense reimbursement, pursuant to the undertakings, amounted to $191,927 for
the year ended November 30, 1995.
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.
Effective December 1, 1995, Dreyfus Transfer, Inc., a wholly-owned
subsidiary of the Manager, serves as the Fund's Transfer and Dividend
Disbursing Agent.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended November 30, 1995, $25,477 was charged to the Fund
pursuant to the Shareholder Services Plan.
(C) Each trustee who is not an "affiliated person" as defined in the Act
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,
excluding short-term securities, during the year ended November 30, 1995
amounted to $16,470,772 and $1,480,996, respectively.
At November 30, 1995, accumulated net unrealized appreciation on
investments was $1,341,160, consisting of $1,356,808 gross unrealized
appreciation and $15,648 gross unrealized depreciation.
At November 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Pennsylvania Intermediate Municipal Bond Fund, including the
statement of investments, as of November 30, 1995, and the related statement
of operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Pennsylvania Intermediate Municipal Bond Fund at November
30, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
January 3, 1996
DREYFUS PENNSYLVANIA INTERMEDIATE 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 period from December 16,
1993 (commencement of operations) to November 30, 1994 and for the
fiscal year ended November 30, 1995.
Included in Part B of the Registration Statement:
Statement of Investments--November 30, 1995.
Statement of Assets and Liabilities--November 30, 1995.
Statement of Operations for the year ended November 30,
1995.
Statement of Changes in Net Assets--for the period from
December 16, 1993 (commencement of operations) to
November 30, 1994 and for the fiscal year ended November
30, 1995.
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors, dated
January 3, 1996.
All Schedules and financial 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 Declaration of Trust.
(2) Registrant's By-Laws, as amended.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on December 13, 1993.
(5) Management Agreement is incorporated by reference to Exhibit (5)
of Post-Effective Amendment No. 2 to the Registration Statement on
Form N-1A filed on January 30, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(8)(a) Amended and Restated Custody Agreement.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on June 20, 1994.
(9) Shareholder Services Plan is incorporated by reference to Exhibit
(9) of Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(10) Opinion and consent of Registrant's counsel.
(11) Consent of Independent Auditors.
(16) Schedules of Computation of Performance Data. Reference is made
to Exhibit (16) of Post-Effective Amendment to the Registration
Statement on Form N-1A, filed on June 10, 1994.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney of David Burke, Diane Dunst, Rosalind
Gersten Jacobs, Jay Meltzer, Daniel Rose, Warren Rudman
and Sander Vanocur incorporated by reference to "Other
Exhibits (a)" of Post-Effective Amendment No. 2.
(b) Certificate of Secretary is incorporated by reference to
"Other Exhibits (b)" of Post-Effective Amendment No. 2.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of March 8, 1996
______________ _______________________________
Beneficial Interest
(Par value $.001) 1716
Item 27. Indemnification
_______ _______________
Reference is made to Article VIII of the Registrant's Amended and
Restated Agreement and Declaration of Trust, dated March 12, 1992,
as amended and restated on September 9, 1993, filed as Exhibit 1
hereto and the laws of The Commonwealth of Massachusetts. The
application of these provisions is limited by Article 10 of the
Registrant's By-Laws filed as Exhibit 2 hereto and by the following
undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted Board members, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement incorporated
by reference to Exhibit 24(b)(6) of Post-Effective Amendment No. 2
to the Registration Statement on Form N-1A, filed on January 30,
1995.
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:
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
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, Chief Mellon Bank Corporation****;
Operating Officer The Boston Company*****;
and a Director Deputy Director:
Mellon Trust****;
Chief Executive Officer:
The Boston Company Asset Management,
Inc.*****;
President:
Boston Safe Deposit and Trust
Company*****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive
Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
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 and Trust
Company*****;
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*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903
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
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
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++
MARY BETH LEIBIG
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
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
MARK N. JACOBS Vice President, Secretary and Director:
Vice President- Lion Management, Inc.*;
General Counsel Secretary:
and 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
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 GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Capital Value Fund, Inc.
14) Dreyfus Cash Management
15) Dreyfus Cash Management Plus, Inc.
16) Dreyfus Connecticut Intermediate Municipal Bond Fund
17) Dreyfus Connecticut Municipal Money Market Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) The Dreyfus Fund Incorporated
22) Dreyfus Global Bond Fund, Inc.
23) Dreyfus Global Growth Fund
24) Dreyfus GNMA Fund, Inc.
25) Dreyfus Government Cash Management
26) Dreyfus Growth and Income Fund, Inc.
27) Dreyfus Growth and Value Funds, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
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 Income Funds
70) Premier Strategic Investing
71) Dreyfus Tax Exempt Cash Management
72) The Dreyfus Third Century Fund, Inc.
73) Dreyfus Treasury Cash Management
74) Dreyfus Treasury Prime Cash Management
75) Dreyfus Variable Investment Fund
76) Dreyfus-Wilshire Target Funds, Inc.
77) Dreyfus Worldwide Dollar Money Market Fund, Inc.
78) General California Municipal Bond Fund, Inc.
79) General California Municipal Money Market Fund
80) General Government Securities Money Market Fund, Inc.
81) General Money Market Fund, Inc.
82) General Municipal Bond Fund, Inc.
83) General Municipal Money Market Fund, Inc.
84) General New York Municipal Bond Fund, Inc.
85) General New York Municipal Money Market Fund
86) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
87) Peoples Index Fund, Inc.
88) Peoples S&P MidCap Index Fund, Inc.
89) Premier Insured Municipal Bond Fund
90) Premier California Municipal Bond Fund
91) Premier Capital Growth Fund, Inc.
92) Premier Global Investing, Inc.
93) Premier GNMA Fund
94) Premier Growth Fund, Inc.
95) Premier Municipal Bond Fund
96) Premier New York Municipal Bond Fund
97) Premier State Municipal Bond Fund
98) Premier Strategic Growth 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
Executive 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
Paul Prescott+ Vice President None
Elizabeth Bachman++ Assistant Vice President Vice President
and Assistant
Secretary
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. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of common stock and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York on
the 19 day of March, 1996.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
BY: /s/Marie, E. Connolly*
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, 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 03/19/96
______________________________ Officer, Financial and Accounting
Marie E. Connolly Officer) and Treasurer
/s/David W. Burke* Trustee 03/19/96
______________________________
David W. Burke
/s/Joseph S. DiMartino Trustree 03/19/96
______________________________
Joseph S. DiMartino
/s/Diane Dunst* Trustee 03/19/96
______________________________
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee 03/19/96
______________________________
Rosalind Gersten Jacobs
/s/Dr. Jay I. Meltzer* Trustee 03/19/96
______________________________
Dr. Jay I. Meltzer
/s/Daniel Rose* Trustee 03/19/96
______________________________
Daniel Rose
/s/Warren B. Rudman* Trustee 03/19/96
______________________________
Warren B. Rudman
/s/Sander Vanocur* Trustee 03/19/96
______________________________
Sander Vanocur
BY: /s/Eric B. Fischman
Eric B. Fischman,
Attorney-in-Fact
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
Amended and Restated Agreement and Declaration of Trust
THIS AMENDED AND RESTATED AGREEMENT AND DECLARATION OF
TRUST, made this 17th day of November, 1993, by the Trustees
hereunder (hereinafter with any additional and successor
trustees referred to as the "Trustees") and by the holders of
shares of beneficial interest to be issued hereunder as
hereinafter provided, hereby amends and restates in its entirety
the Amended and Restated Agreement and Declaration of Trust of
the Trust dated September 9, 1993.
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
"Dreyfus Pennsylvania Intermediate 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, each undersigned Trustee has
hereunto set his/her hand and seal for him/herself and his/her
assigns as of the day and year first above written.
Diane Dunst
David P. Feldman
Jay I. Meltzer
Richard J. Moynihan
Daniel Rose
Warren B. Rudman
Sander Vanocur
The address of each Trustee is as follows:
Diane Dunst
1070 Park Avenue
New York, New York 10021
David P. Feldman
One Oak Way
Berkely Heights, New Jersey 07922
Jay I. Meltzer
903 Park Avenue
New York, New York 10021
Richard J. Moynihan
200 Park Avenue
New York, New York 10166
Daniel Rose
c/o Rose Associates, Inc.
380 Madison Avenue
New York, New York 10017
Warren B. Rudman
Paul, Weiss, Rifkind, Wherton
& Garrison
1615 L Street, N.W.
Washington, D.C. 20036
Sander Vanocur
2928 P Street, N.W.
Washington, D.C. 20007
The address of the Trust is 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 17th day of November 1993, before me
personally came each 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/she had executed the same.
Notary Public
BY-LAWS
OF
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These By-Laws
shall be subject to the Agreement and Declaration of Trust, as
from time to time in effect (the "Declaration of Trust"), of the
above-captioned Massachusetts business trust established by the
Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The principal
office of the Trust shall be located in New York, New York. Its
resident agent in Massachusetts shall be CT Corporation System, 2
Oliver Street, Boston, Massachusetts, or such other person as the
Trustees from time to time may select.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the
Trustees may be held without call or notice at such places and at
such times as the Trustees from time to time may determine,
provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the
Trustees may be held at any time and at any place designated in
the call of the meeting when called by the President or the
Treasurer or by two or more Trustees, sufficient notice thereof
being given to each Trustee by the Secretary or an Assistant
Secretary or by the officer or the Trustees calling the meeting.
2.3. Notice of Special Meetings. It shall be
sufficient notice to a Trustee of a special meeting to send notice
by mail at least forty-eight hours or by telegram at least twenty-
four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give
notice to him or her in person or by telephone at least twenty-
four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by
him or her before or after the meeting, is filed with the records
of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice
to him or her. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
2.4. Notice of Certain Actions by Consent. If in
accordance with the provisions of the Declaration of Trust any
action is taken by the Trustees by a written consent of less than
all of the Trustees, then prompt notice of any such action shall
be furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not
be impaired by any delay or failure to furnish such notice.
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the
Trust shall be a President, a Treasurer, a Secretary, and such
other officers, if any, as the Trustees from time to time may in
their discretion elect. The Trust also may have such agents as
the Trustees from time to time may in their discretion appoint.
Officers may be but need not be a Trustee or shareholder. Any two
or more offices may be held by the same person.
3.2. Election. The President, the Treasurer and the
Secretary shall be elected by the Trustees upon the occurrence of
any vacancy in any such office. Other officers, if any, may be
elected or appointed by the Trustees at any time. Vacancies in
any such other office may be filled at any time.
3.3. Tenure. The President, Treasurer and Secretary
shall hold office in each case until he or she sooner dies,
resigns, is removed or becomes disqualified. Each other officer
shall hold office and each agent shall retain authority at the
pleasure of the Trustees.
3.4. Powers. Subject to the other provisions of these
By-Laws, each officer shall have, in addition to the duties and
powers herein and in the Declaration of Trust set forth, such
duties and powers as commonly are incident to the office occupied
by him or her as if the Trust were organized as a Massachusetts
business corporation or such other duties and powers as the
Trustees may from time to time designate.
3.5. President. Unless the Trustees otherwise provide,
the President shall preside at all meetings of the shareholders
and of the Trustees. Unless the Trustees otherwise provide, the
President shall be the chief executive officer.
3.6. Treasurer. The Treasurer shall be the chief
financial and accounting officer of the Trust, and, subject to the
provisions of the Declaration of Trust and to any arrangement made
by the Trustees with a custodian, investment adviser or manager,
or transfer, shareholder servicing or similar agent, shall be in
charge of the valuable papers, books of account and accounting
records of the Trust, and shall have such other duties and powers
as may be designated from time to time by the Trustees or by the
President.
3.7. Secretary. The Secretary shall record all
proceedings of the shareholders and the Trustees in books to be
kept therefor, which books or a copy thereof shall be kept at the
principal office of the Trust. In the absence of the Secretary
from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a
temporary Secretary chosen at such meeting shall record the
proceedings thereof in the aforesaid books.
3.8. Resignations and Removals. Any Trustee or officer
may resign at any time by written instrument signed by him or her
and delivered to the President or Secretary or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time. The Trustees may
remove any officer elected by them with or without cause. Except
to the extent expressly provided in a written agreement with the
Trust, no Trustee or officer resigning and no officer removed
shall have any right to any compensation for any period following
his or her resignation or removal, or any right to damages on
account of such removal.
ARTICLE 4
Committees
4.1. Appointment. The Trustees may appoint from their
number an executive committee and other committees. Except as the
Trustees otherwise may determine, any such committee may make
rules for conduct of its business.
4.2. Quorum; Voting. A majority of the members of any
Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may be
taken at a meeting by a vote of a majority of the members present
(a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or any
applicable law. Officers and Committees shall render such
additional reports as they may deem desirable or as may from time
to time be required by the Trustees.
ARTICLE 6
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall
be subject to change, by the Board of Trustees.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die
with the word "Massachusetts," together with the name of the Trust
and the year of its organization cut or engraved thereon but,
unless otherwise required by the Trustees, the seal shall not be
necessary to be placed on, and in its absence shall not impair the
validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases
may authorize the execution thereof in some other manner, all
deeds, leases, contracts, notes and other obligations made by the
Trustees shall be signed by the President, any Vice President, or
by the Treasurer and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1. Sale of Shares. Except as otherwise determined by
the Trustees, the Trust will issue and sell for cash or securities
from time to time, full and fractional shares of its shares of
beneficial interest, such shares to be issued and sold at a price
of not less than net asset value per share as from time to time
determined in accordance with the Declaration of Trust and these
By-Laws and, in the case of fractional shares, at a proportionate
reduction in such price. In the case of shares sold for
securities, such securities shall be valued in accordance with the
provisions for determining value of assets of the Trust as stated
in the Declaration of Trust and these By-Laws. The officers of
the Trust are severally authorized to take all such actions as may
be necessary or desirable to carry out this Section 9.1.
9.2. Share Certificates. In lieu of issuing
certificates for shares, the Trustees or the transfer agent either
may issue receipts therefor or may keep accounts upon the books of
the Trust for the record holders of such shares, who shall in
either case, for all purposes hereunder, be deemed to be the
holders of certificates for such shares as if they had accepted
such certificates and shall be held to have expressly assented and
agreed to the terms hereof.
The Trustees at any time may authorize the issuance of
share certificates. In that event, each shareholder shall be
entitled to a certificate stating the number of shares owned by
him, in such form as shall be prescribed from time to time by the
Trustees. Such certificate shall be signed by the President or
Vice President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimile if the certificate is signed by a
transfer agent, or by a registrar, other than a Trustee, officer
or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate
shall cease to be such officer before such certificate is issued,
it may be issued by the Trust with the same effect as if he or she
were such officer at the time of its issue.
9.3. Loss of Certificates. The Trust, or if any
transfer agent is appointed for the Trust, the transfer agent with
the approval of any two officers of the Trust, is authorized to
issue and countersign replacement certificates for the shares of
the Trust which have been lost, stolen or destroyed subject to the
deposit of a bond or other indemnity in such form and with such
security, if any, as the Trustees may require.
9.4. Discontinuance of Issuance of Certificates. The
Trustees at any time may discontinue the issuance of share
certificates and by written notice to each shareholder, may
require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
ARTICLE 10
Indemnification
10.1. Trustees, Officers, etc. The Trust shall
indemnify each of its Trustees and officers (including persons who
serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a
"Covered Person") against all liabilities and expenses, including
but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees reasonably
incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil
or criminal, before any court or administrative or legislative
body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be
or may have been threatened, while in office or thereafter, by
reason of being or having been such a Trustee or officer, except
with respect to any matter as to which such Covered Person shall
have been finally adjudicated in a decision on the merits in any
such action, suit or other proceeding not to have acted in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust and except that no Covered
Person shall be indemnified against any liability to the Trust or
its Shareholders to which such Covered Person would otherwise be
subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including
counsel fees so incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Trust in
advance of the final disposition or any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is not
authorized under this Article, provided that (a) such Covered
Person shall provide security for his undertaking, (b) the Trust
shall be insured against losses arising by reason of such Covered
Person's failure to fulfill his undertaking, or (c) a majority of
the Trustees who are disinterested persons and who are not
Interested Persons (as that term is defined in the Investment
Company Act of 1940) (provided that a majority of such Trustees
then in office act on the matter), or independent legal counsel in
a written opinion, shall determine, based on a review of readily
available facts (but not a full trial-type inquiry), that there is
reason to believe such Covered Person ultimately will be entitled
to indemnification.
10.2. Compromise Payment. As to any matter disposed of
(whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication in a decision on the merits by
a court, or by any other body before which the proceeding was
brought, that such Covered Person either (a) did not act in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust or (b) is liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best
interest of the Trust, after notice that it involves such
indemnification, by at least a majority of the Trustees who are
disinterested persons and are not Interested Persons (provided
that a majority of such Trustees then in office act on the
matter), upon a determination, based upon a review of readily
available facts (but not a full trial-type inquiry) that such
Covered Person acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust and is not liable to the Trust or its Shareholders by reason
of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered
Person's office, or (b) there has been obtained an opinion in
writing of independent legal counsel, based upon a review of
readily available facts (but not a full trial-type inquiry) to the
effect that such Covered Person appears to have acted in good
faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust and that such
indemnification would not protect such Covered Person against any
liability to the Trust to which such Covered Person would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his office. Any approval pursuant to this Section
shall not prevent the recovery from any Covered Person of any
amount paid to such Covered Person in accordance with this Section
as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's
action was in the best interests of the Trust or to have been
liable to the Trust or its shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
10.3. Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or
affect any other rights to which any such Covered Person may be
entitled. As used in this Article 10, the term "Covered Person"
shall include such person's heirs, executors and administrators,
and a "disinterested person" is a person against whom none of the
actions, suits or other proceedings in question or another action,
suit, or other proceeding on the same or similar grounds is then
or has been pending. Nothing contained in this article shall
affect any rights to indemnification to which personnel of the
Trust, other than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of
such person.
10.4. Limitation. Notwithstanding any provisions in
the Declaration of Trust and these By-Laws pertaining to
indemnification, all such provisions are limited by the following
undertaking set forth in the rules promulgated by the Securities
and Exchange Commission:
In the event that a claim for
indemnification is asserted by a Trustee,
officer or controlling person of the Trust in
connection with the registered securities of
the Trust, the Trust will not make such
indemnification unless (i) the Trust has
submitted, before a court or other body, the
question of whether the person to be
indemnified was liable by reason of wilful
misfeasance, bad faith, gross negligence, or
reckless disregard of duties, and has obtained
a final decision on the merits that such
person was not liable by reason of such
conduct or (ii) in the absence of such
decision, the Trust shall have obtained a
reasonable determination, based upon a review
of the facts, that such person was not liable
by virtue of such conduct, by (a) the vote of
a majority of Trustees who are neither
interested persons as such term is defined in
the Investment Company Act of 1940, nor
parties to the proceeding or (b) an
independent legal counsel in a written
opinion.
The Trust will not advance attorneys'
fees or other expenses incurred by the person
to be indemnified unless the Trust shall have
(i) received an undertaking by or on behalf of
such person to repay the advance unless it is
ultimately determined that such person is
entitled to indemnification and one of the
following conditions shall have occurred:
(x) such person shall provide security for his
undertaking, (y) the Trust shall be insured
against losses arising by reason of any lawful
advances or (z) a majority of the
disinterested, non-party Trustees of the
Trust, or an independent legal counsel in a
written opinion, shall have determined that
based on a review of readily available facts
there is reason to believe that such person
ultimately will be found entitled to
indemnification.
ARTICLE 11
Shareholders
11.1. Meetings. A meeting of the shareholders shall be
called by the Secretary whenever ordered by the Trustees, or
requested in writing by the holder or holders of at least 10% of
the outstanding shares entitled to vote at such meeting. If the
meeting is a meeting of the shareholders of one or more series or
class of shares, but not a meeting of all shareholders of the
Trust, then only the shareholders of such one or more series or
classes shall be entitled to notice of and to vote at the meeting.
If the Secretary, when so ordered or requested, refuses or
neglects for more than five days to call such meeting, the
Trustees, or the shareholders so requesting may, in the name of
the Secretary, call the meeting by giving notice thereof in the
manner required when notice is given by the Secretary.
11.2. Access to Shareholder List. Shareholders of
record may apply to the Trustees for assistance in communicating
with other shareholders for the purpose of calling a meeting in
order to vote upon the question of removal of a Trustee. When ten
or more shareholders of record who have been such for at least six
months preceding the date of application and who hold in the
aggregate shares having a net asset value of at least $25,000 or
at least 1% of the outstanding shares, whichever is less, so
apply, the Trustees shall within five business days either:
(i) afford to such applicants access to a list of
names and addresses of all shareholders as recorded on the books
of the Trust; or
(ii) inform such applicants of the approximate
number of shareholders of record and the approximate cost of
mailing material to them and, within a reasonable time thereafter,
mail, materials submitted by the applicants, to all such
shareholders of record. The Trustees shall not be obligated to
mail materials which they believe to be misleading or in violation
of applicable law.
11.3. Record Dates. For the purpose of determining the
shareholders of any series or class who are entitled to vote or
act at any meeting or any adjournment thereof, or who are entitled
to receive payment of any dividend or of any other distribution,
the Trustees from time to time may fix a time, which shall be not
more than 90 days before the date of any meeting of shareholders
or the date of payment of any dividend or of any other
distribution, as the record date for determining the shareholders
of such series or class having the right to notice of and to vote
at such meeting and any adjournment thereof or the right to
receive such dividend or distribution, and in such case only
shareholders of record on such record date shall have such right
notwithstanding any transfer of shares on the books of the Trust
after the record date; or without fixing such record date the
Trustees may for any such purposes close the register or transfer
books for all or part of such period.
11.4. Place of Meetings. All meetings of the
shareholders shall be held at the principal office of the Trust or
at such other place within the United States as shall be
designated by the Trustees or the President of the Trust.
11.5. Notice of Meetings. A written notice of each
meeting of shareholders, stating the place, date and hour and the
purposes of the meeting, shall be given at least ten days before
the meeting to each shareholder entitled to vote thereat by
leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such
shareholder at his address as it appears in the records of the
Trust. Such notice shall be given by the Secretary or an
Assistant Secretary or by an officer designated by the Trustees.
No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his attorney thereunto
duly authorized, is filed with the records of the meeting.
11.6. Ballots. No ballot shall be required for any
election unless requested by a shareholder present or represented
at the meeting and entitled to vote in the election.
11.7. Proxies. Shareholders entitled to vote may vote
either in person or by proxy in writing dated not more than six
months before the meeting named therein, which proxies shall be
filed with the Secretary or other person responsible to record the
proceedings of the meeting before being voted. Unless otherwise
specifically limited by their terms, such proxies shall entitle
the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting
of the Trustees, or by one or more writings signed by such a
majority.
Dated: September 9, 1993
CUSTODY AGREEMENT
Custody Agreement made as of September 29, 1993 between
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND, a business
trust organized and existing under the laws of the Commonwealth
of Massachusetts, having as an address 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144 (hereinafter called the
"Fund"), and THE BANK OF NEW YORK, a New York corporation
authorized to do a banking business, having its principal office
and place of business at 110 Washington Street, New York, New
York 10286 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter
set forth the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have
the following meanings:
1. "Authorized Person" shall be deemed to include the
Treasurer, the Controller or any other person, whether or not any
such person is an Officer or employee of the Fund, duly
authorized by the Trustees of the Fund to give Oral Instructions
and Written Instructions on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to
time.
2. "Available Balance" shall mean for any given day
during a calendar year the aggregate amount of Federal Funds held
in the Fund's custody account(s) at The Bank of New York, or its
successors, as of the close of such day or, if such day is not a
business day, the close of the preceding business day.
3. "Bankruptcy" shall mean with respect to a party
such party's making a general assignment, arrangement or
composition with or for the benefit of its creditors, or
instituting or having instituted against it a proceeding seeking
a judgment of insolvency or bankruptcy or the entry of an order
for relief under the Federal bankruptcy law or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or if a petition is presented for
the winding up or liquidation of the party or a resolution is
passed for its winding up or liquidation, or it seeks, or becomes
subject to, the appointment of an administrator, receiver,
trustee, custodian or other similar official for it or for all or
substantially all of its assets or its taking any action in
furtherance of, or indicating its consent to approval of, or
acquiescence in, any of the foregoing.
4. "Book-Entry System" shall mean the Federal
Reserve/ Treasury book-entry system for United States and Federal
agency securities, its successor or successors and its nominee or
nominees.
5. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts and Futures Contract Options entitling the
holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the
specified underlying Securities.
6. "Certificate" shall mean any notice, instruction,
or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the Fund by any
two Officers of the Fund.
7. "Clearing Member" shall mean a registered broker-
dealer which is a clearing member under the rules of O.C.C. and a
member of a national securities exchange qualified to act as a
custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing
member.
8. "Collateral Account" shall mean a segregated
account so denominated and pledged to the Custodian as security
for, and in consideration of, the Custodian's issuance of (a) any
Put Option guarantee letter or similar document described in
paragraph 8 of Article V herein, or (b) any receipt described in
Article V or VIII herein.
9. "Consumer Price Index" shall mean the U.S. Consumer
Price Index, all items and all urban consumers, U.S. city average
l982-84 equals l00, as first published without seasonal
adjustment by the Bureau of Labor Statistics, the Department of
Labor, without regard to subsequent revisions or corrections by
such Bureau.
10. "Covered Call Option" shall mean an exchange
traded option entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to purchase
from the writer thereof the specified Securities (excluding
Futures Contracts) which are owned by the writer thereof and
subject to appropriate restrictions.
11. "Depository" shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the Securities
and Exchange Commission, its successor or successors and its
nominee or nominees, provided the Custodian has received a
certified copy of a resolution of the Fund's Trustees
specifically approving deposits in DTC. The term "Depository"
shall further mean and include any other person authorized to act
as a depository under the Investment Company Act of 1940, its
successor or successors and its nominee or nominees, specifically
identified in a certified copy of a resolution of the Fund's
Trustees specifically approving deposits therein by the
Custodian.
12. "Earnings Credit" shall mean for any given day
during a calendar year the product of (a) the Federal Funds Rate
for such date minus .25%, and (b) 82% of the Available Balance.
13. "Federal Funds" shall mean immediately available
same day funds.
14. "Federal Funds Rate" shall mean, for any day, the
Federal Funds (Effective) interest rate so denominated as
published in Federal Reserve Statistical Release H.15 (519) and
applicable to such day and each succeeding day which is not a
business day.
15. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities, including,
without limitation, U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds, domestic bank certificates of deposit, and
Eurodollar certificates of deposit, during a specified month at
an agreed upon price.
16. "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
17. "Futures Contract Option" shall mean an option
with respect to a Futures Contract.
18. "Margin Account" shall mean a segregated account
in the name of a broker, dealer, futures commission merchant or
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant or Clearing Member,
or otherwise, in accordance with an agreement between the Fund,
the Custodian and a broker, dealer, futures commission merchant
or Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities
and/or money of the Fund shall be deposited and withdrawn from
time to time in connection with such transactions as the Fund may
from time to time determine. Securities held in the Book-Entry
System or the Depository shall be deemed to have been deposited
in, or withdrawn from, a Margin Account upon the Custodian's
effecting an appropriate entry on its books and records.
19. "Merger" shall mean (a) with respect to the Fund,
the consolidation or amalgamation with, merger into, or transfer
of all or substantially all of its assets to, another entity,
where the Fund is not the surviving entity, and (b) with respect
to the Custodian, any consolidation or amalgamation with, merger
into, or transfer of all or substantially all of its assets to,
another entity, except for any such consolidation, amalgamation,
merger or transfer of assets between the Custodian and The Bank
of New York Company, Inc. or any subsidiary thereof, or the
Irving Bank Corporation or any subsidiary thereof, provided that
the surviving entity agrees to be bound by the terms of this
Agreement.
20. "Money Market Security" shall be deemed to
include, without limitation, debt obligations issued or
guaranteed as to principal and interest by the government of the
United States or agencies or instrumentalities thereof,
commercial paper, certificates of deposit and bankers'
acceptances, repurchase and reverse repurchase agreements with
respect to the same and bank time deposits, where the purchase
and sale of such securities normally requires settlement in
Federal funds on the same date as such purchase or sale.
21. "O.C.C." shall mean Options Clearing Corporation,
a clearing agency registered under Section 17A of the Securities
Exchange Act of 1934, its successor or successors, and its
nominee or nominees.
22. "Officers" shall be deemed to include the
President, any Vice President, the Secretary, the Treasurer, the
Controller, any Assistant Secretary, any Assistant Treasurer or
any other person or persons duly authorized by the Trustees of
the Fund to execute any Certificate, instruction, notice or other
instrument on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
23. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.
24. "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from an Authorized Person or
from a person reasonably believed by the Custodian to be an
Authorized Person.
25. "Put Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and tender of the specified
underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
26. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Fund sells Securities and agrees
to repurchase such Securities at a described or specified date
and price.
27. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options,
Stock Index Options, Stock Index Futures Contracts, Stock Index
Futures Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, common
stock and other instruments or rights having characteristics
similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public
authorities (including, without limitation, general obligation
bonds, revenue bonds and industrial bonds and industrial
development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase, sell or
subscribe for the same, or evidencing or representing any other
rights or interest therein, or any property or assets.
28. "Segregated Security Account" shall mean an
account maintained under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the
custody account in which certain Securities and/or other assets
of the Fund shall be deposited and withdrawn from time to time in
accordance with Certificates received by the Custodian in
connection with such transactions as the Fund may from time to
time determine.
29. "Shares" shall mean the shares of beneficial
interest of the Fund, each of which, in the case of a Fund having
Series, is allocated to a particular Series.
30. "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties agree to take
or make delivery of an amount of cash equal to a specified dollar
amount times the difference between the value of a particular
stock index at the close of the last business day of the contract
and the price at which the futures contract is originally struck.
31. "Stock Index Option" shall mean an exchange traded
option entitling the holder, upon timely exercise, to receive an
amount of cash determined by reference to the difference between
the exercise price and the value of the index on the date of
exercise.
32. "Written Instructions" shall mean written
communications actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to
verify by codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of all the Securities and moneys at any
time owned by the Fund during the period of this Agreement,
except that (a) if the Custodian fails to provide for the custody
of any of the Fund's Securities and moneys located or to be
located outside the United States in a manner satisfactory to the
Fund, the Fund shall be permitted to arrange for the custody of
such Securities and moneys located or to be located outside the
United States other than through the Custodian at rates to be
negotiated and borne by the Fund and (b) if the Custodian fails
to continue any existing sub-custodial or similar arrangements on
substantially the same terms as exist on the date of this
Agreement, the Fund shall be permitted to arrange for such or
similar services other than through the Custodian at rates to be
negotiated and borne by the Fund. The Custodian shall not charge
the Fund for any such terminated services after the date of such
termination.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, the Fund will deliver or cause to be
delivered to the Custodian all Securities and all moneys owned by
it, including cash received for the issuance of its shares, at
any time during the period of this Agreement. The Custodian will
not be responsible for such Securities and such moneys until
actually received by it. The Custodian will be entitled to
reverse any credits made on the Fund's behalf where such credits
have been previously made and moneys are not finally collected.
The Fund shall deliver to the Custodian a certified resolution of
the Trustees of the Fund approving, authorizing and instructing
the Custodian on a continuous and on-going basis to deposit in
the Book-Entry System all Securities eligible for deposit therein
and to utilize the Book-Entry System to the extent possible in
connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales
of Securities, loans of Securities, and deliveries and returns of
Securities collateral. Prior to a deposit of Securities of the
Fund in the Depository the Fund shall deliver to the Custodian a
certified resolution of the Trustees of the Fund approving,
authorizing and instructing the Custodian on a continuous and on-
going basis until instructed to the contrary by a Certificate
actually received by the Custodian to deposit in the Depository
all Securities eligible for deposit therein and to utilize the
Depository to the extent possible in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities
collateral. Securities and moneys of the Fund deposited in
either the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the
Custodian for customers, including, but not limited to, accounts
in which the Custodian acts in a fiduciary or representative
capacity. Prior to the Custodian's accepting, utilizing and
acting with respect to Clearing Member confirmations for Options
and transactions in Options as provided in this Agreement, the
Custodian shall have received a certified resolution of the
Fund's Board of Trustees approving, authorizing and instructing
the Custodian on a continuous and on-going basis, until
instructed to the contrary by a Certificate actually received by
the Custodian, to accept, utilize and act in accordance with such
confirmations as provided in this Agreement.
2. The Custodian shall credit to a separate account in
the name of the Fund all moneys received by it for the account of
the Fund, and shall disburse the same only:
(a) In payment for Securities purchased, as provided
in Article IV hereof;
(b) In payment of dividends or distributions, as
provided in Article XI hereof;
(c) In payment of original issue or other taxes, as
provided in Article XII hereof;
(d) In payment for Shares redeemed by it, as provided
in Article XII hereof;
(e) Pursuant to Certificates setting forth the name
and address of the person to whom the payment is to be made, and
the purpose for which payment is to be made; or
(f) In payment of the fees and in reimbursement of the
expenses and liabilities of the Custodian, as provided in Article
XV hereof.
3. Promptly after the close of business on each day,
the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund
during said day. Where Securities are transferred to the account
of the Fund, the Custodian shall also by book-entry or otherwise
identify as belonging to the Fund a quantity of Securities in a
fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on
the books of the Book-Entry System or the Depository. At least
monthly and from time to time, the Custodian shall furnish the
Fund with a detailed statement of the Securities and moneys held
for the Fund under this Agreement.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held for the Fund,
which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by
the Custodian in that form; all other Securities held for the
Fund may be registered in the name of the Fund, in the name of
any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the
Book-Entry System or the Depository or their successor or
successors, or their nominee or nominees. The Fund agrees to
furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee or in the name of
the Book-Entry System or the Depository, any Securities which it
may hold for the account of the Fund and which may from time to
time be registered in the name of the Fund. The Custodian shall
hold all such Securities which are not held in the Book-Entry
System or in the Depository in a separate account in the name of
the Fund physically segregated at all times from those of any
other person or persons.
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate, the
Custodian by itself, or through the use of the Book-Entry System
or the Depository with respect to Securities therein deposited,
shall with respect to all Securities held for the Fund in
accordance with this Agreement:
(a) Collect all income due or payable and, in any
event, if the Custodian receives a written notice from the Fund
specifying that an amount of income should have been received by
the Custodian within the last 90 days, the Custodian will provide
a conditional payment of income within 60 days from the date the
Custodian received such notice, unless the Custodian reasonably
concludes that such income was not due or payable to the Fund,
provided that the Custodian may reverse any such conditional
payment upon its reasonably concluding that all or any portion of
such income was not due or payable, and provided further that the
Custodian shall not be liable for failing to collect on a timely
basis the full amount of income due or payable in respect of a
"floating rate instrument" or "variable rate instrument" (as such
terms are defined under Rule 2a-7 under the Investment Company
Act of l940, as amended) if it has acted in good faith, without
negligence or willful misconduct.
(b) Present for payment and collect the amount payable
upon such Securities which are called, but only if either (i) the
Custodian receives a written notice of such call, or (ii) notice
of such call appears in one or more of the publications listed in
Appendix C annexed hereto, which may be amended at any time by
the Custodian upon five business days' prior notification to the
Fund;
(c) Present for payment and collect the amount payable
upon all Securities which may mature;
(d) Surrender Securities in temporary form for
definitive Securities;
(e) Execute, as Custodian, any necessary declarations
or certificates of ownership under the Federal Income Tax Laws or
the laws or regulations of any other taxing authority now or
hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or
the Depository with respect to Securities therein deposited, for
the account of the Fund all rights and similar securities issued
with respect to any Securities held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise,
the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
(a) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations,
and any other instruments whereby the authority of the Fund as
owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in
exchange for other Securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
(c) Deliver any Securities held for the Fund to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such
delivery;
(d) Make such transfers or exchanges of the assets of
the Fund and take such other steps as shall be stated in said
order to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) Present for payment and collect the amount payable
upon Securities not described in preceding paragraph 5(b) of this
Article which may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain possession
of any instrument or certificate representing any Futures
Contract, Option or Futures Contract Option until after it shall
have determined, or shall have received a Certificate from the
Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the
availability of any such instrument or certificate. Prior to
such availability, the Custodian shall comply with Section 17(f)
of the Investment Company Act of 1940, as amended, in connection
with the purchase, sale, settlement, closing out or writing of
Futures Contracts, Options or Futures Contract Options by making
payments or deliveries specified in Certificates received by the
Custodian in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer
or futures commission merchant of a statement or confirmation
reasonably believed by the Custodian to be in the form
customarily used by brokers, dealers, or futures commission
merchants with respect to such Futures Contracts, Options or
Futures Contract Options, as the case may be, confirming that
such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the name
of the Custodian (or any nominee of the Custodian) as custodian
for the Fund, provided, however, that payments to or deliveries
from the Margin Account shall be made in accordance with the
terms and conditions of the Margin Account Agreement. Whenever
any such instruments or certificates are available, the Custodian
shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option or
Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the
Custodian of such instrument or such certificate, and deliver any
Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against
receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be
held by the Custodian hereunder in accordance with, and subject
to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN OPTIONS,
FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS
1. Promptly after each purchase of Securities by the
Fund, other than a purchase of any Option, Futures Contract,
Futures Contract Option or Reverse Repurchase Agreement, the Fund
shall deliver to the Custodian (i) with respect to each purchase
of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each purchase of Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such purchase: (a)
the name of the issuer and the title of the Securities; (b) the
number of shares or the principal amount purchased and accrued
interest, if any; (c) the date of purchase and settlement; (d)
the purchase price per unit; (e) the total amount payable upon
such purchase; (f) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing
broker, if any; and (g) the name of the broker to which payment
is to be made. The Custodian shall, upon receipt of Securities
purchased by or for the Fund, pay out of the moneys held for the
account of the Fund the total amount payable to the person from
whom, or the broker through whom, the purchase was made, provided
that the same conforms to the total amount payable as set forth
in such Certificate, Oral Instructions or Written Instructions.
2. Promptly after each sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures
Contract Option or Reverse Repurchase Agreement, the Fund shall
deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each sale of Money Market Securities, a
Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such sale: (a) the name of the
issuer and the title of the Security; (b) the number of shares or
principal amount sold, and accrued interest, if any; (c) the date
of sale; (d) the sale price per unit; (e) the total amount
payable to the Fund upon such sale; (f) the name of the broker
through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (g) the name of the
broker to whom the Securities are to be delivered. The Custodian
shall deliver the Securities upon receipt of the total amount
payable to the Fund upon such sale, provided that the same
conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions. Subject
to the foregoing, the Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing
among dealers in Securities.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the
Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each Option purchased: (a) the type
of Option (put or call); (b) the name of the issuer and the
title and number of shares subject to such Option or, in the case
of a Stock Index Option, the stock index to which such Option
relates and the number of Stock Index Options purchased; (c) the
expiration date; (d) the exercise price; (e) the dates of
purchase and settlement; (f) the total amount payable by the Fund
in connection with such purchase; (g) the name of the Clearing
Member through which such Option was purchased; and (h) the name
of the broker to whom payment is to be made. The Custodian shall
pay, upon receipt of a Clearing Member's statement confirming the
purchase of such Option held by such Clearing Member for the
account of the Custodian (or any duly appointed and registered
nominee of the Custodian) as custodian for the Fund, out of
moneys held for the account of the Fund, the total amount payable
upon such purchase to the Clearing Member through whom the
purchase was made, provided that the same conforms to the total
amount payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to each
such sale: (a) the type of Option (put or call); (b) the name of
the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Stock Index
Options sold; (c) the date of sale; (d) the sale price; (e) the
date of settlement; (f) the total amount payable to the Fund upon
such sale; and (g) the name of the Clearing Member through which
the sale was made. The Custodian shall consent to the delivery
of the Option sold by the Clearing Member which previously
supplied the confirmation described in preceding paragraph 1 of
this Article with respect to such Option against payment to the
Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in
such Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Call Option: (a) the name of the issuer and the
title and number of shares subject to the Call Option; (b) the
expiration date; (c) the date of exercise and settlement; (d) the
exercise price per share; (e) the total amount to be paid by the
Fund upon such exercise; and (f) the name of the Clearing Member
through which such Call Option was exercised. The Custodian
shall, upon receipt of the Securities underlying the Call Option
which was exercised, pay out of the moneys held for the account
of the Fund the total amount payable to the Clearing Member
through whom the Call Option was exercised, provided that the
same conforms to the total amount payable as set forth in such
Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Put Option: (a) the name of the issuer and the
title and number of shares subject to the Put Option; (b) the
expiration date; (c) the date of exercise and settlement; (d) the
exercise price per share; (e) the total amount to be paid to the
Fund upon such exercise; and (f) the name of the Clearing Member
through which such Put Option was exercised. The Custodian
shall, upon receipt of the amount payable upon the exercise of
the Put Option, deliver or direct the Depository to deliver the
Securities, provided the same conforms to the amount payable to
the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any
Stock Index Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) the type
of Stock Index Option (put or call); (b) the number of Options
being exercised; (c) the stock index to which such Option
relates; (d) the expiration date; (e) the exercise price; (f) the
total amount to be received by the Fund in connection with such
exercise; and (g) the Clearing Member from which such payment is
to be received.
6. Whenever the Fund writes a Covered Call Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Covered Call Option: (a) the
name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same;
(b) the expiration date; (c) the exercise price; (d) the premium
to be received by the Fund; (e) the date such Covered Call Option
was written; and (f) the name of the Clearing Member through
which the premium is to be received. The Custodian shall deliver
or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call
Option, such receipts as are required in accordance with the
customs prevailing among Clearing Members dealing in Covered Call
Options and shall impose, or direct the Depository to impose,
upon the underlying Securities specified in the Certificate such
restrictions as may be required by such receipts.
Notwithstanding the foregoing, the Custodian has the right, upon
prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the
Custodian and not deposited with the Depository underlying a
Covered Call Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate instructing the Custodian to deliver, or to direct
the Depository to deliver, the Securities subject to such Covered
Call Option and specifying: (a) the name of the issuer and the
title and number of shares subject to the Covered Call Option;
(b) the Clearing Member to whom the underlying Securities are to
be delivered; and (c) the total amount payable to the Fund upon
such delivery. Upon the return and/or cancellation of any
receipts delivered pursuant to paragraph 6 of this Article, the
Custodian shall deliver, or direct the Depository to deliver, the
underlying Securities as specified in the Certificate for the
amount to be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to such Put Option: (a) the name of the issuer and
the title and number of shares for which the Put Option is
written and which underlie the same; (b) the expiration date;
(c) the exercise price; (d) the premium to be received by the
Fund; (e) the date such Put Option is written; (f) the name of
the Clearing Member through which the premium is to be received
and to whom a Put Option guarantee letter is to be delivered;
(g) the amount of cash, and/or the amount and kind of Securities,
if any, to be deposited in the Segregated Security Account; and
(h) the amount of cash and/or the amount and kind of Securities
to be deposited into the Collateral Account. The Custodian
shall, after making the deposits into the Collateral Account
specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date
hereof, and deliver the same to the Clearing Member specified in
the Certificate against receipt of the premium specified in said
Certificate. Notwithstanding the foregoing, the Custodian shall
be under no obligation to issue any Put Option guarantee letter
or similar document if it is unable to make any of the represen-
tations contained therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund shall
promptly deliver to the Custodian a Certificate specifying:
(a) the name of the issuer and title and number of shares subject
to the Put Option; (b) the Clearing Member from which the
underlying Securities are to be received; (c) the total amount
payable by the Fund upon such delivery; (d) the amount of cash
and/or the amount and kind of Securities to be withdrawn from the
Collateral Account; and (e) the amount of cash and/or the amount
and kind of Securities, if any, to be withdrawn from the
Segregated Security Account. Upon the return and/or cancellation
of any Put Option guarantee letter or similar document issued by
the Custodian in connection with such Put Option, the Custodian
shall pay out of the moneys held for the account of the Fund the
total amount payable to the Clearing Member specified in the
Certificate as set forth in such Certificate, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) whether
such Stock Index Option is a put or a call; (b) the number of
Options written; (c) the stock index to which such Option
relates; (d) the expiration date; (e) the exercise price; (f) the
Clearing Member through which such Option was written; (g) the
premium to be received by the Fund; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in the
Segregated Security Account; (i) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Collateral Account; and (j) the amount of cash and/or the amount
and kind of Securities, if any, to be deposited in a Margin
Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium
specified in the Certificate, make the deposits, if any, into the
Segregated Security Account specified in the Certificate, and
either (1) deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with the
customs prevailing among Clearing Members in Stock Index Options
and make the deposits into the Collateral Account specified in
the Certificate, or (2) make the deposits into the Margin Account
specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Stock Index Option:
(a) such information as may be necessary to identify the Stock
Index Option being exercised; (b) the Clearing Member through
which such Stock Index Option is being exercised; (c) the total
amount payable upon such exercise, and whether such amount is to
be paid by or to the Fund; (d) the amount of cash and/or amount
and kind of Securities, if any, to be withdrawn from the Margin
Account; and (e) the amount of cash and/or amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account and the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account.
Upon the return and/or cancellation of the receipt, if any,
delivered pursuant to the preceding paragraph of this Article,
the Custodian shall pay to the Clearing Member specified in the
Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical
to a previously written Option described in paragraphs 6, 8 or 10
of this Article in a transaction expressly designated as a
"Closing Purchase Transaction" in order to liquidate its position
as a writer of an Option, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the name of the issuer and the title and number
of shares subject to the Option, or, in the case of a Stock Index
Option, the stock index to which such Option relates and the
number of Options held; (c) the exercise price; (d) the premium
to be paid by the Fund; (e) the expiration date; (f) the type of
Option (put or call); (g) the date of such purchase; (h) the name
of the Clearing Member to which the premium is to be paid; and
(i) the amount of cash and/or the amount and kind of Securities,
if any, to be withdrawn from the Collateral Account, a specified
Margin Account or the Segregated Security Account. Upon the
Custodian's payment of the premium and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8 or
10 of this Article with respect to the Option being liquidated
through the Closing Purchase Transaction, the Custodian shall
remove, or direct the Depository to remove, the previously
imposed restrictions on the Securities underlying the Call
Option.
13. Upon the expiration or exercise of, or
consummation of a Closing Purchase Transaction with respect to,
any Option purchased or written by the Fund and described in this
Article, the Custodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 3 of
Article III herein, and upon the return and/or cancellation of
any receipts issued by the Custodian, shall make such withdrawals
from the Collateral Account, the Margin Account and/or the
Segregated Security Account as may be specified in a Certificate
received in connection with such expiration, exercise, or
consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract (or with respect
to any number of identical Futures Contract(s)): (a) the
category of Futures Contract (the name of the underlying stock
index or financial instrument); (b) the number of identical
Futures Contracts entered into; (c) the delivery or settlement
date of the Futures Contract(s); (d) the date the Futures
Contract(s) was (were) entered into and the maturity date; (e)
whether the Fund is buying (going long) or selling (going short)
on such Futures Contract(s); (f) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Segregated Security Account; (g) the name of the broker, dealer
or futures commission merchant through which the Futures Contract
was entered into; and (h) the amount of fee or commission, if
any, to be paid and the name of the broker, dealer or futures
commission merchant to whom such amount is to be paid. The
Custodian shall make the deposits, if any, to the Margin Account
in accordance with the terms and conditions of the Margin Account
Agreement. The Custodian shall make payment of the fee or
commission, if any, specified in the Certificate and deposit in
the Segregated Security Account the amount of cash and/or the
amount and kind of Securities specified in said Certificate.
2. (a) Any variation margin payment or similar
payment required to be made by the Fund to a broker, dealer or
futures commission merchant with respect to an outstanding
Futures Contract shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar
payment from a broker, dealer or futures commission merchant to
the Fund with respect to an outstanding Futures Contract shall be
received and dealt with by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement is
made on such Futures Contract, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the Futures Contract;
(b) with respect to a Stock Index Futures Contract, the total
cash settlement amount to be paid or received, and with respect
to a Financial Futures Contract, the Securities and/or amount of
cash to be delivered or received; (c) the broker, dealer or
futures commission merchant to or from which payment or delivery
is to be made or received; and (d) the amount of cash and/or
Securities to be withdrawn from the Segregated Security Account.
The Custodian shall make the payment or delivery specified in the
Certificate and delete such Futures Contract from the statements
delivered to the Fund pursuant to paragraph 3 of Article III
herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the
Futures Contract being offset. The Custodian shall make payment
of the fee or commission, if any, specified in the Certificate
and delete the Futures Contract being offset from the statements
delivered to the Fund pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Segregated Security
Account as may be specified in such Certificate. The
withdrawals, if any, to be made from the Margin Account shall be
made by the Custodian in accordance with the terms and conditions
of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract
Option by the Fund, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Futures Contract
Option: (a) the type of Futures Contract Option (put or call);
(b) the type of Futures Contract and such other information as
may be necessary to identify the Futures Contract underlying the
Futures Contract Option purchased; (c) the expiration date; (d)
the exercise price; (e) the dates of purchase and settlement; (f)
the amount of premium to be paid by the Fund upon such purchase;
(g) the name of the broker or futures commission merchant through
which such option was purchased; and (h) the name of the broker
or futures commission merchant to whom payment is to be made.
The Custodian shall pay the total amount to be paid upon such
purchase to the broker or futures commission merchant through
whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) the type of
Futures Contract Option (put or call); (b) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (c) the date of sale; (d) the sale price; (e) the date of
settlement; (f) the total amount payable to the Fund upon such
sale; and (g) the name of the broker or futures commission
merchant through which the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option being
closed against payment to the Custodian of the total amount
payable to the Fund, provided the same conforms to the total
amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the
Fund pursuant to paragraph 1 is exercised by the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying:
(a) the particular Futures Contract Option (put or call) being
exercised; (b) the type of Futures Contract underlying the
Futures Contract Option; (c) the date of exercise; (d) the name
of the broker or futures commission merchant through which the
Futures Contract Option is exercised; (e) the net total amount,
if any, payable by the Fund; (f) the amount, if any, to be
received by the Fund; and (g) the amount of cash and/or the
amount and kind of Securities to be deposited in the Segregated
Security Account. The Custodian shall make the payments, if any,
and the deposits, if any, into the Segregated Security Account as
specified in the Certificate. The deposits, if any, to be made
to the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
4. Whenever the Fund writes a Futures Contract Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a) the
type of Futures Contract Option (put or call); (b) the type of
Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract
Option; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the name of the broker or
futures commission merchant through which the premium is to be
received; and (g) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in the Segregated Security
Account. The Custodian shall, upon receipt of the premium
specified in the Certificate, make the deposits into the
Segregated Security Account, if any, as specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the
particular Futures Contract Option exercised; (b) the type of
Futures Contract underlying the Futures Contract Option; (c) the
name of the broker or futures commission merchant through which
such Futures Contract Option was exercised; (d) the net total
amount, if any, payable to the Fund upon such exercise; (e) the
net total amount, if any, payable by the Fund upon such exercise;
and (f) the amount of cash and/or the amount and kind of
Securities to be deposited in the Segregated Security Account.
The Custodian shall, upon its receipt of the net total amount
payable to the Fund, if any, specified in such Certificate make
the payments, if any, and the deposits, if any, into the
Segregated Security Account as specified in the Certificate. The
deposits, if any, to be made to the Margin Account shall be made
by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written
by the Fund and which is a Put Option is exercised, the Fund
shall promptly deliver to the Custodian a Certificate specifying:
(a) the particular Futures Contract Option exercised; (b) the
type of Futures Contract underlying such Futures Contract Option;
(c) the name of the broker or futures commission merchant through
which such Futures Contract Option is exercised; (d) the net
total amount, if any, payable to the Fund upon such exercise; (e)
the net total amount, if any, payable by the Fund upon such
exercise; and (f) the amount and kind of Securities and/or cash
to be withdrawn from or deposited in the Segregated Security
Account, if any. The Custodian shall, upon its receipt of the
net total amount payable to the Fund, if any, specified in the
Certificate, make the payments, if any, and the deposits, if any,
into the Segregated Security Account as specified in the
Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
7. Whenever the Fund purchases any Futures Contract
Option identical to a previously written Futures Contract Option
described in this Article in order to liquidate its position as a
writer of such Futures Contract Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) that the
transaction is a closing transaction; (b) the type of Futures
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract
Option; (c) the exercise price; (d) the premium to be paid by the
Fund; (e) the expiration date; (f) the name of the broker or
futures commission merchant to which the premium is to be paid;
and (g) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Segregated Security
Account. The Custodian shall effect the withdrawals from the
Segregated Security Account specified in the Certificate. The
withdrawals, if any, to be made from the Margin Account shall be
made by the Custodian in accordance with the terms and conditions
of the Margin Account Agreement.
8. Upon the expiration or exercise of, or consummation
of a closing transaction with respect to, any Futures Contract
Option written or purchased by the Fund and described in this
Article, the Custodian shall (a) delete such Futures Contract
Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article III herein, and (b) make such withdrawals
from, and/or, in the case of an exercise, such deposits into, the
Segregated Security Account as may be specified in a Certificate.
The deposits to and/or withdrawals from the Margin Account, if
any, shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article
shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sale, the Fund shall
deliver to the Custodian a Certificate specifying: (a) the name
of the issuer and the title of the Security; (b) the number of
shares or principal amount sold, and accrued interest or
dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the
Fund upon such sales, if any; (f) the amount of cash and/or the
amount and kind of Securities, if any, which are to be deposited
in a Margin Account and the name in which such Margin Account has
been or is to be established; (g) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in a
Segregated Security Account; and (h) the name of the broker
through which such short sale was made. The Custodian shall upon
its receipt of a statement from such broker confirming such sale
and that the total amount credited to the Fund upon such sale, if
any, as specified in the Certificate is held by such broker for
the account of the Custodian (or any nominee of the Custodian) as
custodian of the Fund, issue a receipt or make the deposits into
the Margin Account and the Segregated Security Account specified
in the Certificate.
2. In connection with the closing-out of any short
sale, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such closing-out:
(a) the name of the issuer and the title of the Security; (b) the
number of shares or the principal amount, and accrued interest or
dividends, if any, required to effect such closing-out to be
delivered to the broker; (c) the dates of the closing-out and
settlement; (d) the purchase price per unit; (e) the net total
amount payable to the Fund upon such closing-out; (f) the net
total amount payable to the broker upon such closing-out; (g) the
amount of cash and the amount and kind of Securities to be
withdrawn, if any, from the Margin Account; (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Segregated Security Account; and (i) the name
of the broker through which the Fund is effecting such closing-
out. The Custodian shall, upon receipt of the net total amount
payable to the Fund upon such closing-out and the return and/or
cancellation of the receipts, if any, issued by the custodian
with respect to the short sale being closed-out, pay out of the
moneys held for the account of the Fund to the broker the net
total amount payable to the broker, and make the withdrawals from
the Margin Account and the Segregated Security Account, as the
same are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse
Repurchase Agreement with respect to Securities and money held by
the Custodian hereunder, the Fund shall deliver to the Custodian
a Certificate or in the event such Reverse Repurchase Agreement
is a Money Market Security, a Certificate, Oral Instructions or
Written Instructions specifying: (a) the total amount payable to
the Fund in connection with such Reverse Repurchase Agreement;
(b) the broker or dealer through or with which the Reverse
Repurchase Agreement is entered; (c) the amount and kind of
Securities to be delivered by the Fund to such broker or dealer;
(d) the date of such Reverse Repurchase Agreement; and (e) the
amount of cash and/or the amount and kind of Securities, if any,
to be deposited in a Segregated Security Account in connection
with such Reverse Repurchase Agreement. The Custodian shall,
upon receipt of the total amount payable to the Fund specified in
the Certificate, Oral Instructions or Written Instructions make
the delivery to the broker or dealer, and the deposits, if any,
to the Segregated Security Account, specified in such
Certificate, Oral Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in paragraph 1 of this Article, the Fund
shall promptly deliver a Certificate or, in the event such
Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions or Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being
terminated; (b) the total amount payable by the Fund in
connection with such termination; (c) the amount and kind of
Securities to be received by the Fund in connection with such
termination; (d) the date of termination; (e) the name of the
broker or dealer with or through which the Reverse Repurchase
Agreement is to be terminated; and (f) the amount of cash and/or
the amount and kind of Securities to be withdrawn from the
Segregated Security Account. The Custodian shall, upon receipt
of the amount and kind of Securities to be received by the Fund
specified in the Certificate, Oral Instructions or Written
Instructions, make the payment to the broker or dealer, and the
withdrawals, if any, from the Segregated Security Account,
specified in such Certificate, Oral Instructions or Written
Instructions.
ARTICLE X
CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Segregated Security Account
as specified in a Certificate received by the Custodian. Such
Certificate shall specify the amount of cash and/or the amount
and kind of Securities to be deposited in, or withdrawn from, the
Segregated Security Account. In the event that the Fund fails to
specify in a Certificate the name of the issuer, the title and
the number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn
from, a Segregated Securities Account, the Custodian shall be
under no obligation to make any such deposit or withdrawal and
shall so notify the Fund.
2. The Custodian shall make deliveries or payments
from a Margin Account to the broker, dealer, futures commission
merchant or Clearing Member in whose name, or for whose benefit,
the account was established as specified in the Margin Account
Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by the
Custodian in any Collateral Account described herein. In
accordance with applicable law, the Custodian may enforce its
lien and realize on any such property whenever the Custodian has
made payment or delivery pursuant to any Put Option guarantee
letter or similar document or any receipt issued hereunder by the
Custodian. In the event the Custodian should realize on any such
property net proceeds which are less than the Custodian's
obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the
Custodian by the Fund within the scope of Article XIII herein.
5. On each business day, the Custodian shall furnish
the Fund with a statement with respect to each Margin Account in
which money or Securities are held specifying as of the close of
business on the previous business day: (a) the name of the
Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian
shall make available upon request to any broker, dealer or
futures commission merchant specified in the name of a Margin
Account a copy of the statement furnished the Fund with respect
to such Margin Account.
6. Promptly after the close of business on each
business day in which cash and/or Securities are maintained in a
Collateral Account, the Custodian shall furnish the Fund with a
Statement with respect to such Collateral Account specifying the
amount of cash and/or the amount and kind of Securities held
therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to
the Custodian a Certificate or Written Instructions specifying
the then market value of the securities described in such
statement. In the event such then market value is indicated to
be less than the Custodian's obligation with respect to any
outstanding Put Option, guarantee letter or similar document, the
Fund shall promptly specify in a Certificate the additional cash
and/or Securities to be deposited in such Collateral Account to
eliminate such deficiency.
ARTICLE XI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of
the resolution of the Trustees, certified by the Secretary or any
Assistant Secretary, either (i) setting forth the date of the
declaration of a dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per share to the
shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment date, or
(ii) authorizing the declaration of dividends and distributions
on a daily basis and authorizing the Custodian to rely on Oral
Instructions, Written Instructions or a Certificate setting forth
the date of the declaration of such dividend or distribution, the
date of payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the total
amount payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution,
Oral Instructions, Written Instructions or Certificate, as the
case may be, the Custodian shall pay out of the moneys held for
the account of the Fund the total amount payable to the Dividend
Agent of the Fund.
ARTICLE XII
SALE AND REDEMPTION OF SHARES OF BENEFICIAL INTEREST
1. Whenever the Fund shall sell any of its Shares, it
shall deliver to the Custodian a Certificate duly specifying:
(a) The number of Shares sold, trade date, and price;
and
(b) The amount of money to be received by the
Custodian for the sale of such Shares.
2. Upon receipt of such money from the Transfer Agent,
the Custodian shall credit such money to the account of the Fund.
3. Upon issuance of any of the Fund's Shares in
accordance with the foregoing provisions of this Article, the
Custodian shall pay, out of the money held for the account of the
Fund, all original issue or other taxes required to be paid by
the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund
shall hereafter redeem any of its Shares, it shall furnish to the
Custodian a Certificate specifying:
(a) The number of Shares redeemed; and
(b) The amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent of an advice
setting forth the number of Shares received by the Transfer Agent
for redemption and that such Shares are valid and in good form
for redemption, the Custodian shall make payment to the Transfer
Agent out of the moneys held for the account of the Fund of the
total amount specified in the Certificate issued pursuant to the
foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the
redemption of any of the Fund's Shares, whenever its Shares are
redeemed pursuant to any check redemption privilege which may
from time to time be offered by the Fund, the Custodian, unless
otherwise instructed by a Certificate, shall, upon receipt of an
advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the
check redemption procedure, honor the check presented as part of
such check redemption privilege out of the money held in the
account of the Fund for such purposes.
ARTICLE XIII
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion
advance funds on behalf of the Fund which results in an overdraft
because the moneys held by the Custodian for the account of the
Fund shall be insufficient to pay the total amount payable upon a
purchase of Securities as set forth in a Certificate or Oral
Instructions issued pursuant to Article IV, or which results in
an overdraft for some other reason, or if the Fund is for any
other reason indebted to the Custodian (except a borrowing for
investment or for temporary or emergency purposes using
Securities as collateral pursuant to a separate agreement and
subject to the provisions of paragraph 2 of this Article XIII),
such overdraft or indebtedness shall be deemed to be a loan made
by the Custodian to the Fund payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to the
Federal Funds Rate plus l/2%, such rate to be adjusted on the
effective date of any change in such Federal Funds Rate but in no
event to be less than 6% per annum, except that any overdraft
resulting from an error by the Custodian shall bear no interest.
Any such overdraft or indebtedness shall be reduced by an amount
equal to the total of all amounts due the Fund which have not
been collected by the Custodian on behalf of the Fund when due
because of the failure of the Custodian to make timely demand or
presentment for payment. In addition, the Fund hereby agrees
that the Custodian shall have a continuing lien and security
interest in and to any property at any time held by it for the
benefit of the Fund or in which the Fund may have an interest
which is then in the Custodian's possession or control or in
possession or control of any third party acting in the
Custodian's behalf. The Fund authorizes the Custodian, in its
sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any
balance of account standing to the Fund's credit on the
Custodian's books. For purposes of this Section 1 of
Article XIII, "overdraft" shall mean a negative Available
Balance.
2. The Fund will cause to be delivered to the
Custodian by any bank (including, if the borrowing is pursuant to
a separate agreement, the Custodian) from which it borrows money
for investment or for temporary or emergency purposes using
Securities as collateral for such borrowings, a notice or
undertaking in the form currently employed by any such bank
setting forth the amount which such bank will loan to the Fund
against delivery of a stated amount of collateral. The Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to each such borrowing: (a) the name of the bank;
(b) the amount and terms of the borrowing, which may be set forth
by incorporating by reference an attached promissory note, duly
endorsed by the Fund, or other loan agreement; (c) the time and
date, if known, on which the loan is to be entered into; (d) the
date on which the loan becomes due and payable; (e) the total
amount payable to the Fund on the borrowing date; (f) the market
value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities; and
(g) a statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such
loan is in conformance with the Investment Company Act of 1940
and the Fund's prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount
payable as set forth in the Certificate. The Custodian may, at
the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note
or loan agreement. The Custodian shall deliver such Securities
as additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this para-
graph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and
the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund
fails to specify in a Certificate the name of the issuer, the
title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by the
Custodian, the Custodian shall not be under any obligation to
deliver any Securities.
ARTICLE XIV
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its
Declaration of Trust and as disclosed in its most recent and
currently effective prospectus to lend its portfolio Securities,
within 24 hours after each loan of portfolio Securities the Fund
shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan: (a) the
name of the issuer and the title of the Securities; (b) the
number of shares or the principal amount loaned; (c) the date of
loan and delivery; (d) the total amount to be delivered to the
Custodian against the loan of the Securities, including the
amount of cash collateral and the premium, if any, separately
identified; and (e) the name of the broker, dealer or financial
institution to which the loan was made. The Custodian shall
deliver the Securities thus designated to the broker, dealer or
financial institution to which the loan was made upon receipt of
the total amount designated as to be delivered against the loan
of Securities. The Custodian may accept payment in connection
with a delivery otherwise than through the Book-Entry System or
Depository only in the form of a certified or bank cashier's
check payable to the order of the Fund or the Custodian drawn on
New York Clearing House funds and may deliver Securities in
accordance with the customs prevailing among dealers in
securities.
2. Promptly after each termination of the loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect
to each such loan termination and return of Securities: (a) the
name of the issuer and the title of the Securities to be
returned; (b) the number of shares or the principal amount to be
returned; (c) the date of termination; (d) the total amount to be
delivered by the Custodian (including the cash collateral for
such Securities minus any offsetting credits as described in said
Certificate); and (e) the name of the broker, dealer or financial
institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker,
dealer, or financial institution to which such Securities were
loaned and upon receipt thereof shall pay, out of the moneys held
for the account of the Fund, the total amount payable upon such
return of Securities as set forth in the Certificate.
ARTICLE XV
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, neither the
Custodian nor its nominee shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to
act or otherwise, either hereunder or under any Margin Account
Agreement, except for any such loss or damage arising out of its
own negligence or willful misconduct. The Custodian may, with
respect to questions of law arising hereunder or under any Margin
Account Agreement, apply for and obtain the advice and opinion of
counsel to the Fund or of its own counsel, at the expense of the
Fund, and shall be fully protected with respect to anything done
or omitted by it in good faith in conformity with such advice or
opinion. The Custodian shall be liable to the Fund for any loss
or damage resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence, misfeasance or
willful misconduct on the part of the Custodian or any of its
employees or agents.
2. Without limiting the generality of the foregoing,
the Custodian shall be under no obligation to inquire into, and
shall not be liable for:
(a) The validity of the issue of any Securities
purchased, sold or written by or for the Fund, the legality of
the purchase, sale or writing thereof, or the propriety of the
amount paid or received therefor;
(b) The legality of the issue or sale of any of the
Fund's Shares, or the sufficiency of the amount to be received
therefor;
(c) The legality of the redemption of any of the
Fund's Shares, or the propriety of the amount to be paid
therefor;
(d) The legality of the declaration or payment of any
dividend by the Fund;
(e) The legality of any borrowing by the Fund using
Securities as collateral;
(f) The legality of any loan of portfolio Securities
pursuant to Article XIV of this Agreement, nor shall the
Custodian be under any duty or obligation to see to it that any
cash collateral delivered to it by a broker, dealer or financial
institution or held by it at any time as a result of such loan of
portfolio Securities of the Fund is adequate collateral for the
Fund against any loss it might sustain as a result of such loan.
The Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or
notify the Fund that the amount of such cash collateral held by
it for the Fund is sufficient collateral for the Fund, but such
duty or obligation shall be the sole responsibility of the Fund.
In addition, the Custodian shall be under no duty or obligation
to see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article XIV
of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such
loan, provided, however, that the Custodian shall promptly notify
the Fund in the event that such dividends or interest are not
paid and received when due; or
(g) The sufficiency or value of any amounts of money
and/or Securities held in any Margin Account, Segregated Security
Account or Collateral Account in connection with transactions by
the Fund. In addition, the Custodian shall be under no duty or
obligation to see that any broker, dealer, futures commission
merchant or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be
entitled to receive from such broker, dealer, futures commission
merchant or Clearing Member, to see that any payment received by
the Custodian from any broker, dealer, futures commission
merchant or Clearing Member is the amount the Fund is entitled to
receive, or to notify the Fund of the Custodian's receipt or non-
receipt of any such payment; provided however that the Custodian,
upon the Fund's written request, shall, as Custodian, demand from
any broker, dealer, futures commission merchant or Clearing
Member identified by the Fund the payment of any variation margin
payment or similar payment that the Fund asserts it is entitled
to receive pursuant to the terms of a Margin Account Agreement or
otherwise from such broker, dealer, futures commission merchant
or Clearing Member.
3. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not
represented by any check, draft or other instrument for the
payment of money, received by it on behalf of the Fund until the
Custodian actually receives and collects such money directly or
by the final crediting of the account representing the Fund's
interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and
shall not be liable for ascertaining or acting upon any calls,
conversions, exchange, offers, tenders, interest rate changes or
similar matters relating to Securities held in the Depository,
unless the Custodian shall have actually received timely notice
from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the
Depository of any amount payable upon Securities deposited in the
Depository which may mature or be redeemed, retired, called or
otherwise become payable. However, upon receipt of a Certificate
from the Fund of an overdue amount on Securities held in the
Depository, the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian shall
not be under any obligation to appear in, prosecute or defend any
action, suit or proceeding in respect to any Securities held by
the Depository which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all
expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount due
to the Fund from the Transfer Agent of the Fund nor to take any
action to effect payment or distribution by the Transfer Agent of
the Fund of any amount paid by the Custodian to the Transfer
Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default,
or if payment is refused after due demand or presentation, unless
and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any
such action.
7. The Custodian may appoint one or more banking
institutions as Depository or Depositories or as Sub-Custodian or
Sub-Custodians, including, but not limited to, banking
institutions located in foreign countries, of Securities and
moneys at any time owned by the Fund, upon terms and conditions
approved in a Certificate, which shall, if requested by the
Custodian, be accompanied by an approving resolution of the
Fund's Board of Trustees adopted in accordance with Rule 17f-5
under the Investment Company Act of 1940, as amended.
Notwithstanding anything to the contrary contained in this
Agreement, the Custodian shall hold harmless and indemnify the
Fund from and against any losses, actions, claims, demands,
expenses and proceedings, including counsel fees, that occur as a
result of any act or omission of any Foreign Sub-Custodian or
Depository with respect to the safekeeping of moneys and
securities of the Fund.
8. The Custodian shall not be under any duty or
obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Fund are such
as properly may be held by the Fund under the provisions of its
Declaration of Trust.
9. (a) The Custodian shall be entitled to receive and
the Fund agrees to pay to the Custodian all reasonable out-of-
pocket expenses and such compensation and fees as are specified
on Schedule A hereto. The Custodian shall not deem amounts
payable in respect of foreign custodial services to be out-of-
pocket expenses, it being the parties' intention that all fees
for such services shall be as set forth on Schedule B hereto and
shall be provided for the term of this Agreement without any
automatic or unilateral increase. The Custodian shall have the
right to unilaterally increase the figures on Schedule A on or
after March 1, 1994 and on or after each succeeding March 1
thereafter by an amount equal to 50% of the increase in the
Consumer Price Index for the calendar year ending on the
December 31 immediately preceding the calendar year in which such
March 1 occurs, provided, however, that during each such annual
period commencing on a March 1, the aggregate increase during
such period shall not be in excess of 10%. Any increase by the
Custodian shall be specified in a written notice delivered to the
Fund at least thirty days prior to the effective date of the
increase. The Custodian may charge such compensation and any
expenses incurred by the Custodian in the performance of its
duties pursuant to such agreement against any money held by it
for the account of the Fund. The Custodian shall also be
entitled to charge against any money held by it for the account
of the Fund the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. The
expenses which the Custodian may charge against the account of
the Fund include, but are not limited to, the expenses of Sub-
Custodians and foreign branches of the Custodian incurred in
settling outside of New York City transactions involving the
purchase and sale of Securities of the Fund.
(b) The Fund shall receive a credit for each
calendar month against such compensation and fees of the
Custodian as may be payable by the Fund with respect to such
calendar month in an amount equal to the aggregate of its
Earnings Credit for such calendar month. In no event may any
Earnings Credits be carried forward to any fiscal year other than
the fiscal year in which it was earned, or, unless permitted by
applicable law, transferred to, or utilized by, any other person
or entity, provided that any such transferred Earnings Credit can
be used only to offset compensation and fees of the Custodian for
services rendered to such transferee and cannot be used to pay
the Custodian's out-of-pocket expenses. For purposes of this
sub-section (b), the Fund is permitted to transfer Earnings
Credits only to The Dreyfus Corporation, its affiliates and/or
any investment company now or in the future sponsored by The
Dreyfus Corporation or any of its affiliates or for which The
Dreyfus Corporation or any of its affiliates acts as the sole
investment adviser or as the principal distributor. For purposes
of this sub-section (b), a fiscal year shall mean the twelve-
month period commencing on the effective date of this Agreement
and on each anniversary thereof.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the Custodian and reasonably believed by the Custodian to be a
Certificate. The Custodian shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received
by the Custodian pursuant to Article IV or XI hereof. The Fund
agrees to forward to the Custodian a Certificate or facsimile
thereof, confirming such Oral Instructions or Written
Instructions in such manner so that such Certificate or facsimile
thereof is received by the Custodian, whether by hand delivery,
telex or otherwise, by the close of business of the same day that
such Oral Instructions or Written Instructions are given to the
Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way
affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Fund. The Fund agrees that
the Custodian shall incur no liability to the Fund in acting upon
Oral Instructions given to the Custodian hereunder concerning
such transactions, provided such instructions reasonably appear
to have been received from an Authorized Person.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably believed by the Custodian to be given in accordance
with the terms and conditions of any Margin Account Agreement.
Without limiting the generality of the foregoing, the Custodian
shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained
in any such instrument or other notice including, without
limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or Clearing Member.
12. The books and records pertaining to the Fund which
are in the possession of the Custodian shall be the property of
the Fund. Such books and records shall be prepared and
maintained as required by the Investment Company Act of 1940, as
amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives,
shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records shall be
provided by the Custodian to the Fund or the Fund's authorized
representative at the Fund's expense.
13. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System or the Depository, or
O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time
to time.
14. The Fund agrees to indemnify the Custodian against
and save the Custodian harmless from all liability, claims,
losses and demands whatsoever, including attorney's fees,
howsoever arising or incurred because of or in connection with
the Custodian's payment or non-payment of checks pursuant to
paragraph 6 of Article XII as part of any check redemption
privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, the Custodian may deliver and receive Securities, and
receipts with respect to such Securities, and arrange for
payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or
dealers in such Securities.
16. The Custodian shall have no duties or responsi-
bilities whatsoever except such duties and responsibilities as
are specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the
Custodian.
ARTICLE XVI
TERMINATION
1. (a) Except as provided in subparagraphs (b), (c)
and (d) herein, termination may be effected only by the
terminating party giving to the other party a notice in writing
specifying the date of such termination, which shall be not less
than two hundred seventy (270) days after the date of giving of
such notice.
(b) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under this Agreement and such breach has remained
uncured for a period of thirty days after the Custodian's receipt
from the Fund of written notice specifying such breach.
(c) Either party, immediately upon written notice
to the other party, may terminate this Agreement upon the Merger
or Bankruptcy of the other party.
(d) The Fund may at any time terminate this
Agreement if the Custodian has materially breached its
obligations under the "Amendment to Transfer Agency Agreements"
dated August 18, 1989 and has not cured such breach as promptly
as practicable and in any event within seven days of its receipt
of written notice of such breach, provided that the Custodian
shall not be permitted to cure any such material breach arising
from the willful misconduct of the Custodian.
In the event notice of termination is given by the
Fund, it shall be accompanied by a copy of a resolution of the
Trustees of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating a
successor custodian or custodians, each of which shall be a bank
or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. In the event notice of
termination is given by the Custodian, the Fund shall, on or
before the termination date, deliver to the Custodian a copy of a
resolution of its Trustees, certified by the Secretary or any
Assistant Secretary, designating a successor custodian or
custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth
in such notice, this Agreement shall terminate and the Custodian
shall, upon receipt of a notice of acceptance by the successor
custodian, on that date deliver directly to the successor
custodian all Securities and moneys then owned by the Fund and
held by it as Custodian, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall
then be entitled.
2. If a successor custodian is not designated by the
Fund or the Custodian in accordance with the preceding paragraph,
the Fund shall, upon the date specified in the notice of
termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and
moneys then owned by the Fund, be deemed to be its own custodian,
and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book-Entry System, in any
Depository or by a Clearing Member which cannot be delivered to
the Fund, to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE XVII
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate
setting forth the names of the present Authorized Persons. The
Fund agrees to furnish to the Custodian a new Certificate in
similar form in the event that any such present Authorized Person
ceases to be an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until
such new Certificate shall be received, the Custodian shall be
fully protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as set forth in the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate
signed by two of the present Officers of the Fund setting forth
the names of the present Officers of the Fund. The Fund agrees
to furnish to the Custodian a new Certificate in similar form in
the event any such present Officer ceases to be an Officer of the
Fund, or in the event that other or additional Officers are
elected or appointed. Until such new Certificate shall be
received, the Custodian shall be fully protected in acting under
the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the
Custodian and mailed or delivered to it at its offices at 110
Washington Street, New York, New York 10286, or at such other
place as the Custodian may from time to time designate in
writing.
4. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Fund,
shall be sufficiently given if addressed to the Fund and mailed
or delivered to it at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or at such other place as the Fund may from time
to time designate in writing.
5. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties
with the same formality as this Agreement and approved by a
resolution of the Trustees of the Fund.
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of its Trustees.
7. This Agreement shall be construed in accordance
with the laws of the State of New York.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
9. 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 Trustee, officer or shareholder of
the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized, as of the day and year first above written.
DREYFUS PENNSYLVANIA INTERMEDIATE
MUNICIPAL BOND FUND
By:
Attest:
THE BANK OF NEW YORK
By:
Attest:
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
AUTHORIZED SIGNATORIES:
CASH ACCOUNT AND/OR CUSTODIAN ACCOUNT
FOR PORTFOLIO SECURITIES TRANSACTIONS
APPENDIX A
Group I Group II
All current Fund officers, Paul Casti, Jr. Alan Eisner
Anna Mancini, Frank Jeffrey N. Nachman Lawrence Greene
Brensic, Frank Greene and John Pyburn Julian Smerling
Phyllis Meiner Joseph DiMartino Thomas Durante
Robert Dubuss James Windels
Joseph Connolly Paul Molloy
Gregory Gruber
Cash Account
1. Fees payable to The Bank of New York pursuant to written
agreement with the Fund for services rendered in its
capacity as Custodian or agent of the Fund, or to The
Shareholder Services Group, Inc. in its capacity as Transfer
Agent or agent of the Fund:
Two (2) signatures required, one of which must be from
Group II, except that an officer of the Fund who also
is listed in Group II shall sign only once.
2. Other expenses of the Fund, $5,000 and under:
Any combination of two (2) signatures from either Group
I or Group II, or both such Groups, except that an
officer of the Fund who also is listed in Group II
shall sign only once.
3. Other expenses of the Fund, over $5,000 but not over
$25,000:
Two (2) signatures required, one of which must be from
Group II, except that an officer of the Fund who also
is listed in Group II shall sign only once.
4. Other expenses of the Fund, over $25,000:
Two (2) signatures required, one from Group I or Group
II, including any one of the following: Paul Casti,
Jr., James Windels, Jeffrey Nachman, John Pyburn or
Alan Eisner, except that no individual shall be
authorized to sign more than once.
Custodian Account for Portfolio Securities Transactions
Two (2) signatures required from any of the following:
All current Fund officers, and Joseph DiMartino,
Robert Dubuss, Alan Eisner, Lawrence Greene,
Julian Smerling, Paul Casti, Jr., Thomas Durante,
Frank Brensic, Mike Fiore, Nancy Jones, Andrew Oh,
Marc Weiden and Anna Mancini:
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
CUSTODY AGREEMENT
APPENDIX B
The undersigned Officers of the Fund do hereby certify
that the following individuals, whose specimen signatures are on
file with The Bank of New York, have been duly elected or
appointed by the Fund's Board to the position set forth opposite
their names and have qualified therefor:
Name Position
Richard J. Moynihan President and
Investment Officer
Mark N. Jacobs Vice President
Jeffrey N. Nachman Vice President and
Treasurer
Daniel C. Maclean Secretary
Jean Farley Controller
Christine Pavalos Assistant Secretary
A. Thomas Smith III Assistant Secretary
A. Paul Disdier Vice President and
Investment Officer
Karen M. Hand Vice President and
Investment Officer
Stephen C. Kris Vice President and
Investment Officer
Jill C. Shaffro Vice President and
Investment Officer
L. Lawrence Troutman Vice President and
Investment Officer
Samuel J. Weinstock Vice President and
Investment Officer
Monica S. Wieboldt Vice President and
Investment Officer
Title: Title:
CUSTODY AGREEMENT
APPENDIX C
The following are designated publications for purposes
of paragraph 5(b) of Article III:
The Bond Buyer
The Depository Trust Company Notices
Financial Daily Card Service
The New York Times
Standard & Poor's Called Bond Record
The Wall Street Journal
Schedule A
The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
Domestic Custody Fees
Basic Fee: 1/100 of 1% per annum of the first $500MM, and
1/200 of 1% of the excess over $500MM per annum of
the total market value of domestic securities
held.
Custodial Transactions:
$8.00 per transaction for each receipt and
delivery of book entry securities through DTC/FRB.
$20.00 per transaction for physical settlements,
municipal sub-custodian settlements, writing
options (preparation of depository or escrow
receipts) and initial futures transactions.
$5.00 for futures variation margin maintenance.
$200.00 for collection of interest on securities
held in "street name".
Schedule B
The fees payable to the Custodian with respect to
securities held in foreign custody are as set forth in a letter
dated May 14, 1993 from Jerome P. Isoldi of The Bank of New York
to Jeffrey Nachman of The Dreyfus Corporation.
EXHIBIT 10
December 7, 1993
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
Gentlemen:
We have acted as counsel to Dreyfus Pennsylvania Intermediate
Municipal Bond Fund (the "Fund") in connection with the
preparation of a Registration Statement on Form N-1A,
Registration No. 33-50211 (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
December 7, 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 Dreyfus Pennsylvania
Intermediate 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 such other documents as we deem
necessary for the purposes of this opinion.
We assume that, upon sale of the Shares, the Trust will
receive the net asset value thereof. We also assume that, in
connection with any offer and sale of the Shares, the Trust will
take proper steps to effect compliance with applicable federal and
state laws regulating offerings and sales of securities.
Based upon the foregoing, we are of the opinion that the Trust
is authorized to issue an unlimited number of Shares, and that,
when the Shares are issued and sold after the Registration
Statement has been declared effective 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" and "Transfer and Dividend Disbursing
Agent, Custodian, Counsel and Independent Auditors" and to the use of our report
dated January 3, 1996, in this Registration Statement (Form N-1A 33-50211)
of Dreyfus Pennsylvania Intermediate Municipal Bond Fund.
ERNST & YOUNG LLP
New York, New York
March 18, 1996
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<PERIOD-END> NOV-30-1994
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<NUMBER-OF-SHARES-REDEEMED> (929)
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<PER-SHARE-NAV-BEGIN> 12.50
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<PER-SHARE-GAIN-APPREC> (.66)
<PER-SHARE-DIVIDEND> (.61)
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</TABLE>
