-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HOjL1wmFs23DZAcRfKa9ySMl3iqXmojb9Y+wNZHScFYpiZOPlPj7kiiuW/Eg9Rjn i6pR5jYwikKU/0d6ojKrKg== 0000797923-94-000004.txt : 19940624 0000797923-94-000004.hdr.sgml : 19940624 ACCESSION NUMBER: 0000797923-94-000004 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19940623 EFFECTIVENESS DATE: 19940624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000797923 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-07496 FILM NUMBER: 94535415 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04764 FILM NUMBER: 94535416 BUSINESS ADDRESS: STREET 1: 144 GLENN CURTISS BLVD CITY: UNIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226805 MAIL ADDRESS: STREET 1: C/O DREYFUS CORP STREET 2: 200 PARK AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19900916 FORMER COMPANY: FORMER CONFORMED NAME: GARDEN CITY TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19860910 485BPOS 1 POST-EFFECTIVE AMENDMENT NO. 12 File No. 33-7496 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. 12 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. 12 [X] (Check appropriate box or boxes.) PREMIER 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) of Rule 485 ---- x on June 24, 1994 pursuant to paragraph (b) of Rule 485 ---- 60 days after filing pursuant to paragraph (a) of Rule 485 ---- on (date) pursuant to paragraph (a) of Rule 485 ---- 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 April 30, 1994 was filed on June 21, 1994. PREMIER MUNICIPAL BOND FUND Cross-Reference Sheet Pursuant to Rule 495(a) Items in Part A of Form N-1A Caption Page _________ _______ ____ 1 Cover Page Cover 2 Synopsis 3 3 Condensed Financial Information 4 4 General Description of Registrant 5, 31 5 Management of the Fund 16 5(a) Management's Discussion of Fund's Performance * 6 Capital Stock and Other Securities 28, 31 7 Purchase of Securities Being Offered 17 8 Redemption or Repurchase 23 9 Pending Legal Proceedings * Items in Part B of Form N-1A - --------- 10 Cover Page Cover 11 Table of Contents Cover 12 General Information and History B-26 13 Investment Objectives and Policies B-2 14 Management of the Fund B-9 15 Control Persons and Principal B-11 Holders of Securities 16 Investment Advisory and Other B-13 Services _____________________________________ NOTE: * Omitted since answer is negative or inapplicable. PREMIER MUNICIPAL BOND FUND Cross-Reference Sheet Pursuant to Rule 495(a) (continued) Items in Part B of Form N-1A Caption Page _________ _______ _____ 17 Brokerage Allocation B-23 18 Capital Stock and Other Securities B-26 19 Purchase, Redemption and Pricing B-14, 17, 21 of Securities Being Offered 20 Tax Status * 21 Underwriters Cover, B-14 22 Calculations of Performance Data B-24 23 Financial Statements B-36 Items in Part C of Form N-1A _________ 24 Financial Statements and Exhibits C-1 25 Persons Controlled by or Under C-4 Common Control with Registrant 26 Number of Holders of Securities C-4 27 Indemnification C-4 28 Business and Other Connections of C-5 Investment Adviser 29 Principal Underwriters C-29 30 Location of Accounts and Records C-38 31 Management Services C-38 32 Undertakings C-38 _____________________________________ NOTE: * Omitted since answer is negative or inapplicable. (Lion Logo) PREMIER MUNICIPAL BOND FUND PROSPECTUS JUNE 24, 1994 Premier Municipal Bond Fund (the "Fund") is an open-end, diversified, management investment company, known as a mutual fund. Its goal is to maximize current income exempt from Federal income tax to the extent consistent with the preservation of capital. By this Prospectus, Class A and Class B shares of the Fund are being offered. Class A shares are subject to a sales charge imposed at the time of purchase and Class B shares are subject to a contingent deferred sales charge imposed on redemptions made within five years of purchase. Other differences between the two Classes include the services offered to and the expenses borne by each Class and certain voting rights, as described herein. The Fund offers these alternatives to permit an investor to choose the method of purchasing shares that is most beneficial given the amount of the purchase, the length of time the investor expects to hold the shares and other circumstances. The Fund provides free redemption checks with respect to Class A, which you can use in amounts of $500 or more for cash or to pay bills. You continue to earn income on the amount of the check until it clears. You can purchase or redeem shares by telephone using the TELETRANSFER Privilege. The Dreyfus Corporation professionally manages the Fund's portfolio. This Prospectus sets forth concisely information about the Fund that you should know before investing. It should be read and retained for future reference. Part B (also known as the Statement of Additional Information), dated June 24, 1994, which may be revised from time to time, provides a further discussion of certain areas in this Prospectus and other matters which may be of interest to some investors. It has been filed with the Securities and Exchange Commission and is incorporated herein by reference. For a free copy, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call 1-800-554-4611. When telephoning, ask for Operator 666. A MUTUAL FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Page 1 TABLE OF CONTENTS Fee Table.......................................... 3 Condensed Financial Information.................... 4 Alternative Purchase Methods....................... 5 Description of the Fund............................ 5 Management of the Fund............................. 16 How to Buy Fund Shares............................. 17 Shareholder Services............................... 20 How to Redeem Fund Shares.......................... 23 Distribution Plan and Shareholder Services Plan.... 27 Dividends, Distributions and Taxes................. 28 Performance Information............................ 30 General Information................................ 31 Page 2
FEE TABLE CLASS A CLASS B Shareholder Transaction Expenses Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......................... 4.50% -- Maximum Deferred Sales Charge Imposed on Redemptions (as a percentage of the amount subject to charge).......... -- 3.00% Annual Fund Operating Expenses (as a percentage of average daily net assets) Management Fees....................................... .55% .55% 12b-1 Fees............................................ -- .50% Other Expenses ....................................... .36% .36% Total Fund Operating Expenses......................... .91% 1.41% Example An investor would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2) except where noted, redemption at the end of each time period: CLASS A CLASS B CLASS B* 1 Year...................................... $ 54 $ 44 $ 14 3 Years..................................... $ 73 $ 65 $ 45 5 Years..................................... $ 93 $ 87 $ 77 10 Years**.................................. $152 $143 $143 *Assuming no redemption of Class B shares. **Ten-year figures assume conversion of Class B shares to Class A shares at the end of the sixth year following the date of purchase.
- --------------------------------------------------------------------------- The amounts listed in the example should not be considered as representative of past or future expenses and actual expenses may be greater or less than those indicated. Moreover, while the example assumes a 5% annual return, the Fund's actual performance will vary and may result in an actual return greater or less than 5%. - --------------------------------------------------------------------------- The purpose of the foregoing table is to assist you in understanding the various costs and expenses that investors will bear, directly or indirectly, the payment of which will reduce investors' return on an annual basis. Total Fund Operating Expenses are limited to the expense limitation provision of the Management Agreement. Long-term investors in Class B shares could pay more in 12b-1 fees than the economic equivalent of paying a front-end sales charge. The information in the foregoing table does not reflect any fee waivers or expense reimbursement arrangements that may be in effect. Certain Service Agents (as defined below) may charge their clients direct fees for effecting transactions in Fund shares; such fees are not reflected in the foregoing table. See "Management of the Fund," "How to Buy Fund Shares" and "Distribution Plan and Shareholder Services Plan." Page 3 CONDENSED FINANCIAL INFORMATION The information in the following table has been audited by Ernst & Young, 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 information provided in the Fund's financial statements.
Class A Shares Class B Shares -------------- ------------------ Year Ended April 30, Year Ended April 30, -------------------------------------------------------------------------------- -------------- 1987(1) 1988 1989 1990 1991 1992 1993 1994 1993(2) 1994 ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Per Share Data: Net asset value, beginning of year... $14.00 $12.83 $12.30 $12.97 $12.77 $13.28 $13.75 $14.45 $14.02 $14.45 ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Investment Operations: Investment income-net... .43 .97 1.01 .99 .98 .94 .92 .89 .24 .80 Net realized and unrealized gain (loss) on investments... (1.17) (.53) .67 (.20) .51 .49 .91 (.59) .43 (.59) ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Total from Investment Operations... (.74) .44 1.68 .79 1.49 1.43 1.83 .30 .67 .21 ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Distributions: Dividends from investment income-net... (.43) (.97) (1.01) (.99) (.98) (.94) (.92) (.89) (.24) (.80) Dividends from net realized gain on investments..... -- -- -- -- -- (.02) (.21) (.05) -- (.05) Dividends from excess net realized gain on investments..... -- -- -- -- -- -- -- -- -- -- ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Total Distributions..... (.43) (.97) (1.01) (.99) (.98) (.96) (1.13) (.94) (.24) (.85) ------ ------- ------ ------ ------ ------- ------ ------ ------- ------ Net asset value, end of year......... $12.83 $12.30 $12.97 $12.77 $13.28 $13.75 $14.45 $13.81 $14.45 $13.81 ====== ====== ====== ====== ====== ====== ======= ====== ====== ====== TOTAL INVESTMENT RETURN(3). (12.87%)(4) 3.64% 14.13% 6.25% 12.13% 11.08% 13.76% 1.84% 16.80%(4) 1.26% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets -- -- -- -- .22% .54% .74% .85% 1.15%(4) 1.40% Ratio of net investment income to average net assets.... 6.53% 7.81% 7.72% 7.51% 7.43% 6.90% 6.43% 6.01% 5.13%(4) 5.33% Decrease reflected in above expense ratios due to undertakings by the Manager..... 1.50% 1.50% 1.50% 1.15% .82% .40% .20% .06% .10%(4) .05% Portfolio Turnover Rate.. 36.62%(5) 33.25% 143.20% 63.53% 41.30% 50.72% 30.99% 22.15% 30.99% 22.15% Net Assets, end of year (000's omitted).... $1,290 $5,650 $26,342 $100,784 $247,195 $388,793 $526,606 $546,036 $19,855 $95,643 - ------------------------ (1)From November 26, 1986 (commencement of operations) to April 30, 1987. (2)From January 15, 1993 (commencement of initial offering)to April 30, 1993. (3)Exclusive of sales charge. (4)Annualized. (5)Not annualized
Further information about the Fund's performance is contained in the Fund's annual report which may be obtained without charge by writing to the address or calling the number set forth on the cover page of this Prospectus. Page 4 ALTERNATIVE PURCHASE METHODS The Fund offers you two methods of purchasing Fund shares; you may choose the Class of shares that best suits your needs, given the amount of your purchase, the length of time you expect to hold your shares and any other relevant circumstances. Each Class A and Class B share represents an identical pro rata interest in the Fund's investment portfolio. Class A shares are sold at net asset value per share plus a maximum initial sales charge of 4.50% of the public offering price imposed at the time of purchase. The initial sales charge may be reduced or waived for certain purchases. See "How to Buy Fund Shares _ Class A Shares." These shares are subject to an annual service fee at the rate of .25 of 1% of the value of the average daily net assets of Class A. See "Distribution Plan and Shareholder Services Plan _ Shareholder Services Plan." Class B shares are sold at net asset value per share with no initial sales charge at the time of purchase; as a result, the entire purchase price is immediately invested in the Fund. Class B shares are subject to a maximum 3% contingent deferred sales charge ("CDSC"), which is assessed only if you redeem Class B shares within the first five years of their purchase. See "How to Buy Fund Shares _ Class B Shares" and "How to Redeem Fund Shares _ Contingent Deferred Sales Charge--Class B Shares." These shares also are subject to an annual service fee at the rate of .25 of 1% of the value of the average daily net assets of Class B. In addition, Class B shares are subject to an annual distribution fee at the rate of .50 of 1% of the value of the average daily net assets of Class B. See "Distribution Plan and Shareholder Services Plan." The distribution fee paid by Class B will cause such Class to have a higher expense ratio and to pay lower dividends than Class A. Approximately six years after the date of purchase, Class B shares automatically will convert to Class A shares, based on the relative net asset values for shares of each Class, and will no longer be subject to the distribution fee. Class B shares that have been acquired through the reinvestment of dividends and distributions will be converted on a pro rata basis together with other Class B shares, in the proportion that a shareholder's Class B shares converting to Class A shares bears to the total Class B shares not acquired through the reinvestment of dividends and distributions. You should consider whether, during the anticipated life of your investment in the Fund, the accumulated distribution fee and CDSC on Class B shares prior to conversion would be less than the initial sales charge on Class A shares purchased at the same time, and to what extent, if any, such differential would be offset by the return of Class A. In this regard, generally, Class B shares may be more appropriate for investors who invest less than $100,000 in Fund shares. Additionally, investors qualifying for reduced initial sales charges who expect to maintain their investment for an extended period of time might consider purchasing Class A shares because the accumulated continuing distribution fees on Class B shares may exceed the initial sales charge on Class A shares during the life of the investment. Generally, Class A shares may be more appropriate for investors who invest $250,000 or more in Fund shares. DESCRIPTION OF THE FUND INVESTMENT OBJECTIVE The Fund's goal is to maximize current income exempt from Federal income tax to the extent consistent with the preservation of capital. To accomplish this goal, the Fund invests primarily in Municipal Obligations (described below) rated at least Baa by Moody's Investors Service, Inc. ("Moody's ") or BBB by Standard & Poor's Corporation ("S&P") or Fitch Investors Service, Inc. ("Fitch"). The Fund's investment objective cannot be changed without approval by the holders of a majority (as defined in the Investment Company Act of 1940) of the Fund's outstanding voting shares. There can be no assurance that the Fund's investment objective will be achieved. Page 5 MUNICIPAL OBLIGATIONS Municipal Obligations are debt securities issued by states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, or multistate agencies or authorities, the interest from which is, in the opinion of bond counsel to the issuer, exempt from Federal income tax. Municipal Obligations generally include debt obligations issued to obtain funds for various public purposes as well as certain industrial development bonds issued by or on behalf of public authorities. Municipal Obligations are classified as general obligation bonds, revenue bonds and notes. General obligation bonds are secured by the issuer's pledge of its faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenue derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source, but not from the general taxing power. Tax exempt industrial development bonds, in most cases, are revenue bonds that do not carry the pledge of the credit of the issuing municipality, but generally are guaranteed by the corporate entity on whose behalf they are issued. Notes are short-term instruments which are obligations of the issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or receipt of other revenues. Municipal Obligations include municipal lease/purchase agreements which are similar to installment purchase contracts for property or equipment issued by municipalities. Municipal Obligations bear fixed, floating or variable rates of interest which are determined in some instances by formulas under which the Municipal Obligation's interest rate will change directly or inversely to changes in interest rates or an index, or multiples thereof, in many cases subject to a maximum and minimum. Certain Municipal Obligations are subject to redemption at a date earlier than their stated maturity pursuant to call options, which may be separated from the related Municipal Obligation and purchased and sold separately. MANAGEMENT POLICIES It is a fundamental policy of the Fund that it will invest at least 80% of the value of its net assets (except when maintaining a temporary defensive position) in Municipal Obligations. Generally, at least 65% of the value of the Fund's net assets (except when maintaining a temporary defensive position) will be invested in bonds and debentures. At least 70% of the value of the Fund's net assets must consist of Municipal Obligations which, in the case of bonds, are rated no lower than Baa by Moody's or BBB by S&P or Fitch. The Fund may invest up to 30% of the value of its net assets in Municipal Obligations which, in the case of bonds, are rated lower than Baa by Moody's and BBB by S&P and Fitch and as low as the lowest rating assigned by Moody's, S&P or Fitch. The Fund may invest in short-term Municipal Obligations which are rated in the two highest rating categories by Moody's, S&P or Fitch. See "Appendix" in the Statement of Additional Information. Municipal Obligations rated BBB by S&P or Fitch or Baa by Moody's are considered investment grade obligations; those rated BBB by S&P and Fitch are regarded as having an adequate capacity to pay principal and interest, while those rated Baa by Moody's are considered medium grade obligations which lack outstanding investment characteristics and have speculative characteristics. Investments rated Ba or lower by Moody's and BB or lower by S&P and Fitch ordinarily provide higher yields but involve greater risk because of their speculative characteristics. The Fund may invest in Municipal Obligations rated C by Moody's or D by S&P or Fitch, which is 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 "Risk Factors _ Lower Rated Bonds" below for a further discussion of certain risks. The Fund also may invest in securities which, while not rated, are determined by The Dreyfus Corporation to be of comparable quality to the rated securities in which the Fund may invest; for purposes of the 70% requirement described in this paragraph, such unrated securities shall be deemed to have the rating so determined. The Fund also may invest in Taxable Investments of the quality Page 6 described below. Under normal market conditions, the weighted average maturity of the Fund's portfolio is expected to exceed ten years. In addition to usual investment practices, the Fund may use speculative investment techniques such as short-selling and lending its portfolio securities. The Fund also may purchase, hold or deal in futures contracts and options on futures contracts for non-speculative purposes. See "Investment Techniques" below. The Fund may invest more than 25% of the value of its total assets in Municipal Obligations which are related in such a way that an economic, business or political development or change affecting one such security also would affect the other securities; for example, securities the interest upon which is paid from revenues of similar types of projects, or securities whose issuers are located in the same state. As a result, the Fund may be subject to greater risk as compared to a fund that does not follow this practice. From time to time, the Fund may invest more than 25% of the value of its total assets in industrial development bonds which, although issued by industrial development authorities, may be backed only by the assets and revenues of the non-governmental users. Interest on Municipal Obligations (including certain industrial development bonds) which are specified private activity bonds as defined in the Internal Revenue Code of 1986, as amended (the "Code"), issued after August 7, 1986, while exempt from Federal income tax, is a preference item for the purpose of the alternative minimum tax. Where a regulated investment company receives such interest, a proportionate share of any exempt-interest dividend paid by the investment company may be treated as such a preference item to shareholders. The Fund may invest without limitation in such Municipal Obligations if The Dreyfus Corporation determines that their purchase is consistent with the Fund's investment objective. See "Risk Factors _ Other Investment Considerations. " The Fund may purchase floating and variable rate demand notes and bonds, which are tax exempt obligations ordinarily having stated maturities in excess of one year, but which permit the holder to demand payment of principal at any time or at specified intervals. Variable rate demand notes include master demand notes which are obligations that permit the Fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between the Fund, as lender, and the borrower. The interest rates on these obligations fluctuate from time to time. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. Use of letters of credit or other credit support arrangements will not adversely affect the tax exempt status of these obligations. Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, the Fund's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Each obligation purchased by the Fund will meet the quality criteria established for the purchase of Municipal Obligations. The Dreyfus Corporation, on behalf of the Fund, will consider on an ongoing basis the creditworthiness of the issuers of the floating and variable rate demand obligations in the Fund's portfolio. The Fund will not invest more than 15% of the value of its net assets in floating or variable rate demand obligations as to which the Fund cannot exercise the demand feature on not more than seven days' notice if there is no secondary market available for these obligations, and in other illiquid securities. 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 Page 7 rates of interest. If the participation interest is unrated, the participation interest will be backed by an irrevocable letter of credit or guarantee of a bank that the Board of Trustees has determined meets the prescribed quality standards for banks set forth below, or the payment obligation otherwise will be collateralized by U.S. Government securities. For certain participation interests, the Fund will have the right to demand payment, on not more than seven days' notice, for all or any part of the Fund's participation interest in the Municipal Obligation, plus accrued interest. As to these instruments, the Fund intends to exercise its right to demand payment only upon a default under the terms of the Municipal Obligation, as needed to provide liquidity to meet redemptions, or to maintain or improve the quality of its investment portfolio. The Fund will not invest more than 15% of the value of its net assets in participation interests that do not have this demand feature if there is no secondary market available for these instruments, and in other illiquid securities. The Fund may purchase tender option bonds. A tender option bond is a Municipal Obligation (generally held pursuant to a custodial arrangement) having a relatively long maturity and bearing interest at a fixed rate substantially higher than prevailing short-term tax exempt rates, that has been coupled with the agreement of a third party, such as a bank, broker-dealer or other financial institution, pursuant to which such institution grants the security holders the option, at periodic intervals, to tender their securities to the institution and receive the face value thereof. As consideration for providing the option, the financial institution receives periodic fees equal to the difference between the Municipal Obligation's fixed coupon rate and the rate, as determined by a remarketing or similar agent at or near the commencement of such period, that would cause the securities, coupled with the tender option, to trade at par on the date of such determination. Thus, after payment of this fee, the security holder effectively holds a demand obligation that bears interest at the prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund, will consider on an ongoing basis the creditworthiness of the issuer of the underlying Municipal Obligations, of any custodian and of the third party provider of the tender option. In certain instances and for certain tender option bonds, the option may be terminable in the event of a default in payment of principal or interest on the underlying Municipal Obligations and for other reasons. The Fund will not invest more than 15% of the value of its net assets in securities that are illiquid, which could include tender option bonds as to which it cannot exercise the tender feature on not more than seven days' notice if there is no secondary market available for these obligations. The Fund may acquire "stand-by commitments" with respect to Municipal Obligations held in its portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer or bank to repurchase at the Fund's option specified securities at a specified price and, in this respect, stand-by commitments are comparable to put options. The exercise of a stand-by commitment, therefore, is subject to the ability of the seller to make payment on demand. The Fund will acquire stand-by commitments solely to facilitate portfolio liquidity and does not intend to exercise its rights thereunder for trading purposes. The Fund may pay for stand-by commitments if such action is deemed necessary, thus increasing to a degree the cost of the underlying Municipal Obligation and similarly decreasing such security's yield to investors. The Fund also may acquire call options on specific Municipal Obligations. The Fund generally would purchase these call options to protect the Fund from the issuer of the related Municipal Obligation redeeming, or other holder of the call option from calling away, the Municipal Obligation before maturity. The sale by the Fund of a call option that it owns on a specific Municipal Obligation could result in the receipt of taxable income by the Fund. The Fund may purchase custodial receipts representing the right to receive certain future principal and interest payments on Municipal Obligations which underlie the custodial receipts. A number of different arrangements are possible. In a typical custodial receipt arrangement, an issuer or a third party owner of Municipal Obligations deposits such obligations with a custodian in exchange for two classes of custodial receipts. The two classes have page 8 different characteristics, but, in each case, payments on the two classes are based on payments received on the underlying Municipal Obligations. One class has the characteristics of a typical auction rate security, where at specified intervals its interest rate is adjusted, and ownership changes, based on an auction mechanism. This class's interest rate generally is expected to be below the coupon rate of the underlying Municipal Obligations and generally is at a level comparable to that of a Municipal Obligation of similar quality and having a maturity equal to the period between interest rate adjustments. The second class bears interest at a rate that exceeds the interest rate typically borne by a security of comparable quality and maturity; this rate also is adjusted, but in this case inversely to changes in the rate of interest of the first class. If the interest rate on the first class exceeds the coupon rate of the underlying Municipal Obligations, its interest rate will exceed the rate paid on the second class. In no event will the aggregate interest paid with respect to the two classes exceed the interest paid by the underlying Municipal Obligations. The value of the second class and similar securities should be expected to fluctuate more than the value of a Municipal Obligation of comparable quality and maturity and their purchase by the Fund should increase the volatility of its net asset value and, thus, its price per share. These custodial receipts are sold in private placements. The Fund also may purchase directly from issuers, and not in a private placement, Municipal Obligations having characteristics similar to custodial receipts. These securities may be issued as part of a multi-class offering and the interest rate on certain classes may be subject to a cap or floor. The Fund may invest up to 15% of the value of its net assets in securities as to which a liquid trading market does not exist, provided such investments are consistent with the Fund's investment objective. Such securities may include securities that are not readily marketable, such as certain securities that are subject to legal or contractual restrictions on resale, and repurchase agreements providing for settlement in more than seven days after notice. As to these securities, the Fund is subject to a risk that should the Fund desire to sell them when a ready buyer is not available at a price that the Fund deems representative of their value, the value of the Fund's net assets could be adversely affected. However, if a substantial market of qualified institutional buyers develops pursuant to Rule 144A under the Securities Act of 1933, as amended, for certain of these securities held by the Fund, the Fund intends to treat such securities as liquid securities in accordance with procedures approved by the Fund's Board of Trustees. Because it is not possible to predict with assurance how the market for restricted securities pursuant to Rule 144A will develop, the Fund's Board of Trustees has directed The Dreyfus Corporation 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. The Fund may invest in zero coupon securities which are debt securities issued or sold at a discount from their face value which do not entitle the holder to any periodic payment of interest prior to maturity or a specified redemption date (or cash payment date). The amount of the discount varies depending on the time remaining until maturity or cash payment date, prevailing interest rates, liquidity of the security and perceived credit quality of the issuer. Zero coupon securities also may take the form of debt securities that have been stripped of their unmatured interest coupons, the coupons themselves and receipts or certificates representing interests in such stripped debt obligations and coupons. The market prices of zero coupon securities generally are more volatile than the market prices of interest-bearing securities and are likely to respond to a greater degree to changes in interest rates than interest-bearing securities having similar maturities and credit qualities. The Fund may invest up to 5% of its assets in zero coupon bonds which are rated below investment grade. See "Risk Factors _ Lower Rated Bonds" and "Other Investment Considerations" below, and "Investment Page 9 Objective and Management Policies - Risk Factors - Lower Rated Bonds" and "Dividends, Distributions and Taxes" in the Statement of Additional Information. From time to time, on a temporary basis other than for temporary defensive purposes (but not to exceed 20% of the value of the Fund's net assets) or for temporary defensive purposes, the Fund may invest in taxable short-term investments ("Taxable Investments") consisting of: notes of issuers having, at the time of purchase, a quality rating within the two highest grades of Moody's, S&P or Fitch; obligations of the U.S. Government, its agencies or instrumentalities; commercial paper rated not lower than P-l by Moody's, A-l by S&P or F-l 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. Under normal market conditions, the Fund anticipates that not more than 5% of its total assets will be invested in any one category of Taxable Investments. Taxable Investments are more fully described in the Statement of Additional Information, to which reference hereby is made. INVESTMENT TECHNIQUES The Fund may employ, among others, the investment techniques described below. Use of certain of these techniques may give rise to taxable income. WHEN-ISSUED SECURITIES New issues of Municipal Obligations usually are offered on a when-issued basis, which means that delivery and payment for such Municipal Obligations ordinarily take place within 45 days after the date of the commitment to purchase. The payment obligation and the interest rate that will be received on the Municipal Obligations are fixed at the time the Fund enters into the commitment. The Fund will make commitments to purchase such Municipal Obligations only with the intention of actually acquiring the securities, but the Fund may sell these securities before the settlement date if it is deemed advisable, although any gain realized on such sale would be taxable. The Fund will not accrue income in respect of a when-issued security prior to its stated delivery date. No additional when-issued commitments will be made if more than 20% of the value of the Fund's net assets would be so committed. Municipal Obligations purchased on a when-issued basis and the securities held in the Fund's portfolio are subject to changes in value (both generally changing in the same way, i.e., appreciating when interest rates decline and depreciating when interest rates rise) based upon the public's perception of the creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates. Municipal Obligations purchased on a when-issued basis may expose the Fund to risk because they may experience such fluctuations prior to their actual delivery. Purchasing Municipal Obligations on a when-issued basis can involve the additional risk that the yield available in the market when the delivery takes place actually may be higher than that obtained in the transaction itself. A segregated account of the Fund consisting of cash, cash equivalents or U.S. Government securities or other high quality liquid debt securities at least equal at all times to the amount of the when-issued commitments will be established and maintained at the Fund's custodian bank. Purchasing Municipal Obligations on a when-issued basis when the Fund is fully or almost fully invested may result in greater potential fluctuation in the value of the Fund's net assets and its net asset value per share. FUTURES TRANSACTIONS -- IN GENERAL The Fund is not a commodity pool. However, as a substitute for a comparable market position in the underlying securities and for hedging purposes, the Fund may engage in futures and options on futures transactions as described below. Page 10 The Fund's commodities transactions must constitute bona fide hedging or other permissible transactions pursuant to regulations promulgated by the Commodity Futures Trading Commission. In addition, the Fund may not engage in such transactions if the sum of the amount of initial margin deposits and premiums paid for unexpired commodity options, other than for bona fide hedging transactions, would exceed 5% of the liquidation value of the Fund's assets, after taking into account unrealized profits and unrealized losses on such contracts it has entered into; provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating the 5%. Pursuant to regulations and/or published positions of the Securities and Exchange Commission, the Fund may be required to segregate cash or high quality money market instruments in connection with its commodities transactions in an amount generally equal to the value of the underlying commodity. Initially, when purchasing or selling futures contracts the Fund will be required to deposit with its custodian in the broker's name an amount of cash or cash equivalents up to approximately 10% of the contract amount. This amount is subject to change by the exchange or board of trade on which the contract is traded and members of such exchange or board of trade may impose their own higher requirements. This amount is known as "initial margin" and is in the nature of a performance bond or good faith deposit on the contract which is returned to the Fund upon termination of the futures position, assuming all contractual obligations have been satisfied. Subsequent payments, known as "variation margin," to and from the broker will be made daily as the price of the index or securities underlying the futures contract fluctuates, making the long and short positions in the futures contract more or less valuable, a process known as "marking-to-market." At any time prior to the expiration of a futures contract, the Fund may elect to close the position by taking an opposite position at the then-prevailing price, which will operate to terminate the Fund's existing position in the contract. Although the Fund intends to purchase or sell futures contracts only if there is an active market for such contracts, no assurance can be given that a liquid market will exist for any particular contract at any particular time. Many futures exchanges and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily limit has been reached in a particular contract, no trades may be made that day at a price beyond the limit or trading may be suspended for specified periods during the trading day. Futures contract prices could move to the limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and potentially subjecting the Fund to substantial losses. If it is not possible or the Fund determines not to close a futures position in anticipation of adverse price movements, the Fund will be required to make daily cash payments of variation margin. In such circumstances, an increase in the value of the portion of the Fund's portfolio being hedged, if any, may offset partially or completely losses on the futures contract. However, no assurance can be given that the price of the securities being hedged will correlate with the price movements in a futures contract and thus provide an offset to losses on the futures contract. In addition, to the extent the Fund is engaging in a futures transaction as a hedging device, due to the risk of an imperfect correlation between securities in the Fund's portfolio that are the subject of a hedging transaction and the futures contract used as a hedging device, it is possible that the hedge will not be fully effective in that, for example, losses on the portfolio securities may be in excess of gains on the futures contract or losses on the futures contract may be in excess of gains on the portfolio securities that were the subject of the hedge. In futures contracts based on indexes, the risk of imperfect correlation increases as the composition of the Fund's portfolio varies from the composition of the index. In an effort to compensate for the imperfect correlation of movements in the price of the securities being hedged and movements in the price of futures contracts, the Fund may buy or sell futures contracts in a greater or lesser dollar amount than the dollar amount of the securities being hedged if the Page 11 historical volatility of the futures contract has been less or greater than that of the securities. Such "over hedging" or "under hedging" may adversely affect the Fund's net investment results if market movements are not as anticipated when the hedge is established. An option on a futures contract gives the purchaser the right, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the option exercise period. The writer of the option is required upon exercise to assume an offsetting futures position (a short position if the option is a call and a long position if the option is a put). Upon exercise of the option, the assumption of offsetting futures positions by the writer and holder of the option will be accompanied by delivery of the accumulated cash balance in the writer's futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the futures contract. Call options sold by the Fund with respect to futures contracts will be covered by, among other things, entering into a long position in the same contract at a price no higher than the strike price of the call option, or by ownership of the instruments underlying, or instruments the prices of which are expected to move relatively consistently with the instruments underlying, the futures contract. Put options sold by the Fund with respect to futures contracts will be covered when, among other things, cash or liquid securities are placed in a segregated account to fulfill the obligation undertaken. The Fund may utilize municipal bond index futures to protect against changes in the market value of the Municipal Obligations in its portfolio or which it intends to acquire. Municipal bond index futures contracts are based on an index of long-term Municipal Obligations. The index assigns relative values to the Municipal Obligations included in the index, and fluctuates with changes in the market value of such Municipal Obligations. The contract is an agreement pursuant to which two parties agree to take or make delivery of an amount of cash based upon the difference between the value of the index at the close of the last trading day of the contract and the price at which the index contract was originally written. The acquisition or sale of a municipal bond index futures contract enables the Fund to protect its assets from fluctuations in rates on tax exempt securities without actually buying or selling such securities. INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES CONTRACTS The Fund may purchase and sell interest rate futures contracts and options on interest rate futures contracts as a substitute for a comparable market position and to hedge against adverse movements in interest rates. To the extent the Fund has invested in interest rate futures contracts or options on interest rate futures contracts as a substitute for a comparable market position, the Fund will be subject to the investment risks of having purchased the securities underlying the contract. The Fund may purchase call options on interest rate futures contracts to hedge against a decline in interest rates and may purchase put options on interest rate futures contracts to hedge its portfolio securities against the risk of rising interest rates. If the Fund has hedged against the possibility of an increase in interest rates adversely affecting the value of securities held in its portfolio and rates decrease instead, the Fund will lose part or all of the benefit of the increased value of securities which it has hedged because it will have offsetting losses in its futures positions. In addition, in such situations, if the Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements at a time when it may be disadvantageous to do so. These sales of securities may, but will not necessarily, be at increased prices which reflect the decline in interest rates. The Fund may sell call options on interest rate futures contracts to partially hedge against declining prices of its portfolio securities. If the futures price at expiration of the option is below the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in the Fund's portfolio Page 12 holdings. The Fund may sell put options on interest rate futures contracts to hedge against increasing prices of the securities which are deliverable upon exercise of the futures contract. If the futures price at expiration of the option is higher than the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which the Fund intends to purchase. If a put or call option sold by the Fund is exercised, the Fund will incur a loss which will be reduced by the amount of the premium it receives. Depending on the degree of correlation between changes in the value of its portfolio securities and changes in the value of its futures positions, the Fund's losses from existing options on futures may, to some extent, be reduced or increased by changes in the value of its portfolio securities. The Fund also may sell options on interest rate futures contracts as part of closing purchase transactions to terminate its options positions. No assurance can be given that such closing transactions can be effected or that there will be a correlation between price movements in the options on interest rate futures and price movements in the Fund's portfolio securities which are the subject of the hedge. In addition, the Fund's purchase of such options will be based upon predictions as to anticipated interest rate trends, which could prove to be inaccurate. SHORT-SELLING The Fund may make short sales of securities, which are transactions in which the Fund sells a security it does not own in anticipation of a decline in the market value of that security. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund then is obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay to the lender amounts equal to any interest which accrues during the period of the loan. To borrow the security, the Fund also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. Until the Fund replaces a borrowed security in connection with a short sale, the Fund will: (a) maintain daily a segregated account, containing cash or U.S. Government securities, at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the securities sold short and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short; or (b) otherwise cover its short position. The Fund will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain if the security declines in price between those dates. This result is the opposite of what one would expect from a cash purchase of a long position in a security. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of any premium or amounts in lieu of interest the Fund may be required to pay in connection with a short sale. The Fund anticipates that the frequency of short sales will vary substantially in different periods, and it does not intend that any specified portion of its assets, as a matter of practice, will be invested in short sales. However, no securities will be sold short if, after effect is given to any such short sale, the total market value of all securities sold short would exceed 25% of the value of the Fund's net assets. The Fund may not sell short the securities of any single issuer listed on a national securities exchange to the extent of more than 5% of the value of the Fund's net assets. The Fund may not sell short the securities of any class of an issuer to the extent, at the time of the transaction, of more than 5% of the outstanding securities of that class. In addition to the short sales discussed above, the Fund may make short sales "against the box," a transaction in which the Fund enters into a short sale of a security which the Fund Page 13 owns. The proceeds of the short sale will be held by a broker until the settlement date at which time the Fund delivers the security to close the short position. The Fund receives the net proceeds from the short sale. At no time will the Fund have more than 15% of the value of its net assets in deposits on short sales against the box. LENDING PORTFOLIO SECURITIES From time to time, the Fund may lend securities from its portfolio to brokers, dealers and other financial institutions needing to borrow securities to complete certain transactions. Such loans may not exceed 331/3 % of the value of the Fund's total assets. In connection with such loans, the Fund will receive collateral consisting of cash, U.S. Government securities or irrevocable letters of credit which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. The Fund can increase its income through the investment of such collateral. The Fund continues to be entitled to payments in amounts equal to the interest or other distributions payable on the loaned security and receives interest on the amount of the loan. Such loans will be terminable at any time upon specified notice. The Fund might experience risk of loss if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund. CERTAIN FUNDAMENTAL POLICIES The Fund may (i) borrow money from banks, but only for temporary or emergency (not leveraging) purposes in an amount up to 15% of the value of the Fund's total assets (including the amount borrowed) valued at the lesser of cost or market, less liabilities (not including the amount borrowed) at the time the borrowing is made. While borrowings exceed 5% of the value of the Fund's total assets, the Fund will not make any additional investments; (ii) pledge, hypothecate, mortgage or otherwise encumber its assets, but only to secure borrowings for temporary or emergency purposes; and (iii) invest up to 25% of its assets in the securities of issuers in any industry, provided that there is no such limitation on investments in Municipal Obligations and, for temporary defensive purposes, obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. This paragraph describes fundamental policies that cannot be changed without approval by the holders of a majority (as defined in the Investment Company Act of 1940) of the Fund's outstanding voting shares. See "Investment Objective and Management Policies _ Investment Restrictions" in the Statement of Additional Information. ADDITIONAL NON-FUNDAMENTAL POLICY The Fund may invest up to 15% of the value of its net assets in repurchase agreements providing for settlement in more than seven days after notice and in other illiquid securities (which securities could include participation interests (including municipal lease/purchase agreements) that are not subject to the demand feature described above, and floating and variable rate demand obligations as to which the Fund cannot exercise the related demand feature described above and as to which there is no secondary market). See "Investment Objective and Management Policies _ Investment Restrictions" in the Statement of Additional Information. RISK FACTORS LOWER RATED BONDS You should carefully consider the relative risks of investing in the higher yielding (and, therefore, higher risk) debt securities in which the Fund may invest up to 30% of the value of its net assets. These are 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. They generally are not meant for short-term investing and may be subject to certain risks with respect to the issuing entity and to greater market fluctuations than certain lower yielding, higher rated fixed-income securities. Bonds rated Ba by Moody's are judged to have speculative elements; their future cannot be considered as well assured and often the protection of interest and principal payments may be very moderate. Bonds rated BB by S&P are regarded as having predominantly speculative Page 14 characteristics and, while such obligations have less near-term vulnerability to default than other speculative grade debt, they face major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. Bonds rated BB by Fitch are considered speculative and the payment of principal and interest may be affected at any time by adverse economic changes. Bonds rated C by Moody's are regarded as having extremely poor prospects of ever attaining any real investment standing. Bonds rated D by S&P are in default and the payment of interest and/or repayment of principal is in arrears. Bonds rated DDD, DD or D by Fitch are in actual or imminent default, are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the issuer; DDD represents the highest potential for recovery of such bonds; and D represents the lowest potential for recovery. Such bonds, though high yielding, are characterized by great risk. See "Appendix" in the Statement of Additional Information for a general description of Moody's, S&P and Fitch ratings of Municipal Obligations. The ratings of Moody's, S&P and Fitch represent their opinions as to the quality of the Municipal Obligations which they undertake to rate. It should be emphasized, however, that ratings are relative and subjective and, although ratings may be useful in evaluating the safety of interest and principal payments, they do not evaluate the market value risk of these bonds. Therefore, although these ratings may be an initial criterion for selection of portfolio investments, The Dreyfus Corporation also will evaluate these securities and the ability of the issuers of such securities to pay interest and principal. The Fund's ability to achieve its investment objective may be more dependent on The Dreyfus Corporation's credit analysis than might be the case for a fund that invested in higher rated securities. Once the rating of a portfolio security has been changed, the Fund will consider all circumstances deemed relevant in determining whether to continue to hold the security. The market price and yield of bonds rated Ba or lower by Moody's and BB or lower by S&P are more volatile than those of higher rated bonds. Factors adversely affecting the market price and yield of these securities will adversely affect the Fund's net asset value. In addition, the retail secondary market for these bonds may be less liquid than that of higher rated bonds; adverse market conditions could make it difficult at times for the Fund to sell certain securities or could result in lower prices than those used in calculating the Fund's net asset value. The Fund may invest up to 5% of the value of its net assets in zero coupon securities and pay-in-kind bonds (bonds which pay interest through the issuance of additional bonds) rated Ba or lower by Moody's and BB or lower by S&P and Fitch. These securities may be subject to greater fluctuations in value due to changes in interest rates than interest-bearing securities and thus may be considered more speculative than comparably rated interest-bearing securities. See "Other Investment Considerations" below, and "Investment Objective and Management Policies _ Risk Factors _ Lower Rated Bonds" and "Dividends, Distributions and Taxes" in the Statement of Additional Information. OTHER INVESTMENT CONSIDERATIONS Even though interest-bearing securities are investments which promise a stable stream of income, the prices of such securities are inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. Certain securities that may be purchased by the Fund, such as those with interest rates that fluctuate directly or indirectly based on multiples of a stated index, are designed to be highly sensitive to changes in interest rates and can subject the holders thereof to extreme reductions of yield and possibly loss of principal. The value of fixed-income securities also may be affected by changes in the credit rating or financial condition of the issuing entities. The Fund's net asset value generally will not be stable and should fluctuate based upon changes in the value of the Fund's portfolio securities. Securities in which the Fund invests may earn a higher level of current income than certain shorter-term or higher quality securities which generally have greater liquidity, less market risk and less fluctuation in market value. Page 15 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 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. 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 Fund shareholders, the Fund would reevaluate its investment objective and policies and submit possible changes in the Fund's structure to shareholders for their consideration. If legislation were enacted that would treat a type of Municipal Obligation as taxable, the Fund would treat such security as a permissible Taxable Investment within the applicable limits set forth herein. Investment decisions for the Fund are made independently from those of other investment companies advised by The Dreyfus Corporation. However, if such other investment companies are prepared to invest in, or desire to dispose of, Municipal Obligations or Taxable Investments at the same time as the Fund, available investments or opportunities for sales will be allocated equitably to each investment company. In some cases, this procedure may adversely affect the size of the position obtained for or disposed of by the Fund or the price paid or received by the Fund. MANAGEMENT OF THE FUND The Dreyfus Corporation, located at 200 Park Avenue, New York, New York 10166, was formed in 1947 and serves as the Fund's investment adviser. As of May 31, 1994, The Dreyfus Corporation managed or administered approximately $72 billion in assets for more than 1.9 million investor accounts nationwide. The Dreyfus Corporation supervises and assists in the overall management of the Fund's affairs under a Management Agreement with the Fund, subject to the overall authority of the Fund's Board of Trustees in accordance with Massachusetts law. The Fund's primary investment officer is Samuel J. Weinstock. He has held that position since August 1987 and has been employed by The Dreyfus Corporation since March 1987. The Fund's other investment officers are identified under "Management of the Fund" in the Fund's Statement of Additional Information. The Dreyfus Corporation also provides research services for the Fund as well as for other funds advised by The Dreyfus Corporation through a professional staff of portfolio managers and security analysts. Under the terms of the Management Agreement, the Fund has agreed to pay The Dreyfus Corporation a monthly fee at the annual rate of .55 of 1% of the value of the Fund's average daily net assets. From time to time, The Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume certain expenses of the Fund, which would have the effect of lowering Page 16 the overall expense ratio of the Fund and increasing yield to investors at the time such amounts are waived or assumed, as the case may be. The Fund will not pay The Dreyfus Corporation at a later time for any amounts it may waive, nor will the Fund reimburse The Dreyfus Corporation for any amounts it may assume. For the fiscal year ended April 30, 1994, the Fund paid The Dreyfus Corporation a management fee at the effective annual rate of .49 of 1% of the value of the Fund's average daily net assets pursuant to undertakings in effect. The Dreyfus Corporation may pay Dreyfus Service Corporation for shareholder and distribution services from The Dreyfus Corporation's own assets, including past profits but not including the management fee paid by the Fund. Dreyfus Service Corporation may use part or all of such payments to pay Service Agents in respect of these services. The Shareholder Services Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank of New York, 110 Washington Street, New York, New York 10286, is the Fund's Custodian. HOW TO BUY FUND SHARES The Fund's distributor is Dreyfus Service Corporation, a wholly-owned subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New York, New York 10166. The shares it distributes are not deposits or obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are not insured by the Federal Deposit Insurance Corporation. Fund shares may be purchased only by clients of certain financial institutions (which may include banks), securities dealers ("Selected Dealers") and other industry professionals (collectively, "Service Agents"), except that full-time or part-time employees of The Dreyfus Corporation or any of its affiliates or subsidiaries, directors of The Dreyfus Corporation, Board members of a fund advised by The Dreyfus Corporation, including members of the Fund's Board, or the spouse or minor child of any of the foregoing may purchase Class A shares directly through Dreyfus Service Corporation. Subsequent purchases may be sent directly to the Transfer Agent or your Service Agent. Service Agents may receive different levels of compensation for selling different Classes of shares. Management understands that some Service Agents may impose certain conditions on their clients which are different from those described in this Prospectus, and, to the extent permitted by applicable regulatory authority, may charge their clients direct fees which would be in addition to any amounts which might be received under the Shareholder Services Plan. Each Service Agent has agreed to transmit to its clients a schedule of such fees. You should consult your Service Agent in this regard. When purchasing Fund shares, you must specify whether the purchase is for Class A or Class B shares. Share certificates are issued only upon your written request. No certificates are issued for fractional shares. It is not recommended that the Fund be used as a vehicle for Keogh, IRA or other qualified retirement plans. The Fund reserves the right to reject any purchase order. The minimum initial investment is $1,000. Subsequent investments must be at least $100. The initial investment must be accompanied by the Fund's Account Application. You may purchase Fund shares by check or wire, or through the TELETRANSFER Privilege described below. Checks should be made payable to "Premier Municipal Bond Fund." Payments to open new accounts which are mailed should be sent to Premier Municipal Bond Fund, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with your Account Application indicating which Class of shares is being purchased. For subsequent investments, your Fund account number should appear on the check and an investment slip should be enclosed and sent to Premier Municipal Bond Fund, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor subsequent investments should be made by third party check. Wire payments may be made if your bank account is in a commercial bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York, Page 17 DDA#8900119292/Premier Municipal Bond Fund-Class A shares, or DDA#8900115017/Premier Municipal Bond Fund-Class B shares, as the case may be, for purchase of Fund shares in your name. The wire must include your Fund account number (for new accounts, your Taxpayer Identification Number ("TIN") should be included instead), account registration and dealer number, if applicable. If your initial purchase of Fund shares is by wire, please call 1-800-645-6561 after completing your wire payment to obtain your Fund account number. Please include your Fund account number on the Fund's Account Application and promptly mail the Account Application to the Fund, as no redemptions will be permitted until the Account Application is received. You may obtain further information about remitting funds in this manner from your bank. All payments should be made in U.S. dollars and, to avoid fees and delays, should be drawn only on U.S. banks. A charge will be imposed if any check used for investment in your account does not clear. The Fund makes available to certain large institutions the ability to issue purchase instructions through compatible computer facilities. Subsequent investments also may be made by electronic transfer of funds from an account maintained in a bank or other domestic financial institution that is an Automated Clearing House member. You must direct the institution to transmit immediately available funds through the Automated Clearing House to The Bank of New York with instructions to credit your Fund account. The instructions must specify your Fund account registration and your Fund account number PRECEDED BY THE DIGITS "1111." Fund shares are sold on a continuous basis. Net asset value per share is determined as of the close of trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New York time), on each day the New York Stock Exchange is open for business. For purposes of determining net asset value, options and futures contracts will be valued 15 minutes after the close of trading on the floor of the New York Stock Exchange. Net asset value per share of each Class is computed by dividing the value of the Fund's net assets represented by such Class (i.e., the value of its assets less liabilities) by the total number of shares of such Class outstanding. The Fund's investments are valued each business day by an independent pricing service approved by the Board of Trustees and are valued at fair value as determined by the pricing service. The pricing service's procedures are reviewed under the general supervision of the Board of Trustees. For further information regarding the methods employed in valuing Fund investments, see "Determination of Net Asset Value" in the Fund's Statement of Additional Information. Federal regulations require that you provide a certified TIN upon opening or reopening an account. See "Dividends, Distributions and Taxes" and the Fund's Account Application for further information concerning this requirement. Failure to furnish a certified TIN to the Fund could subject you to a $50 penalty imposed by the Internal Revenue Service (the "IRS"). If an order is received by the Transfer Agent by the close of trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New York time) on any business day, Fund shares will be purchased at the public offering price determined as of the close of trading on the floor of the New York Stock Exchange on that day. Otherwise, Fund shares will be purchased at the public offering price determined as of the close of trading on the floor of the New York Stock Exchange, on the next business day, except where shares are purchased through a dealer as provided below. Orders for the purchase of Fund shares received by dealers by the close of trading on the floor of the New York Stock Exchange on a business day and transmitted to Dreyfus Service Corporation by the close of its business day (normally 5:15 p.m., New York time) will be based on the public offering price per share determined as of the close of trading on the floor of the New York Stock Exchange on that day. Otherwise, the orders will be based on the next determined public offering price. It is the dealers' responsibility to transmit orders so that they will be received by Dreyfus Service Corporation before the close of its business day. Page 18 CLASS A SHARES The public offering price for Class A shares is the net asset value per share of that Class plus a sales load as shown below:
Total Sales Load -------------------------------------- As a % of As a % of Dealers' Reallowance offering price net asset value as a % of Amount of Transaction per share per share offering price -------------------- ---------------- ---------------- --------------------------- Less than $50,000................. 4.50 4.70 4.25 $50,000 to less than $100,000..... 4.00 4.20 3.75 $100,000 to less than $250,000.... 3.00 3.10 2.75 $250,000 to less than $500,000.... 2.50 2.60 2.25 $500,000 to less than $1,000,000... 2.00 2.00 1.75 $1,000,000 to less than $3,000,000... 1.00 1.00 1.00 $3,000,000 to less than $5,000,000... .50 .50 .50 $5,000,000 and over.................. .25 .25 .25
Full-time employees of NASD member firms and full-time employees of other financial institutions which have entered into an agreement with Dreyfus Service Corporation pertaining to the sale of Fund shares (or which otherwise have a brokerage-related or clearing arrangement with an NASD member firm or other financial institution with respect to sales of Fund shares) may purchase Class A shares for themselves directly or pursuant to an employee benefit plan or other program, or for their spouses or minor children at net asset value, provided that they have furnished Dreyfus Service Corporation with such information as it may request from time to time in order to verify eligibility for this privilege. This privilege also applies to full-time employees of financial institutions affiliated with NASD member firms whose full-time employees are eligible to purchase Class A shares at net asset value. In addition, Class A shares are offered at net asset value to full-time or part-time employees of The Dreyfus Corporation or any of its affiliates or subsidiaries, directors of The Dreyfus Corporation, Board members of a fund advised by The Dreyfus Corporation, including members of the Fund's Board, or the spouse or minor child of any of the foregoing. In fiscal 1994, Dreyfus Service Corporation retained $213,752 from sales loads on Class A shares. The dealer reallowance may be changed from time to time but will remain the same for all dealers. Dreyfus Service Corporation, at its own expense, may provide additional promotional incentives to dealers that sell shares of funds advised by The Dreyfus Corporation which are sold with a sales load, such as the Fund. In some instances, these incentives may be offered only to certain dealers who have sold or may sell significant amounts of such shares. CLASS B SHARES The public offering price for Class B shares is the net asset value per share of that Class. No initial sales charge is imposed at the time of purchase. A CDSC is imposed, however, on certain redemptions of Class B shares as described under "How to Redeem Fund Shares." Dreyfus Service Corporation compensates certain Service Agents for selling Class B shares at the time of purchase from Dreyfus Service Corporation's own assets. The proceeds of the CDSC and the distribution fee, in part, are used to defray these expenses. In fiscal 1994, $91,986 was retained by Dreyfus Service Corporation from the CDSC on Class B shares. RIGHT OF ACCUMULATION -- CLASS A SHARES Reduced sales loads apply to any purchase of Class A shares, shares of other funds in the Premier Family of Funds, shares of certain other funds advised by The Dreyfus Corporation which are sold with a sales load and shares of certain other funds acquired by a previous exchange of such shares (hereinafter referred to as "Eligible Funds"), by you and any related "purchaser" as defined in the Statement of Additional Information, where the aggregate investment, including such purchase, is $50,000 or more. If, for example, you have previously purchased Page 19 and still hold Class A shares of the Fund, or of any other Eligible Fund or combination thereof, with an aggregate current market value of $40,000 and subsequently purchase Class A shares of the Fund or an Eligible Fund having a current value of $20,000, the sales load applicable to the subsequent purchase would be reduced to 4% of the offering price. All present holdings of Eligible Funds may be combined to determine the current offering price of the aggregate investment in ascertaining the sales load applicable to each subsequent purchase. To qualify for reduced sales loads, at the time of a purchase you or your Service Agent must notify Dreyfus Service Corporation if orders are made by wire, or the Transfer Agent if orders are made by mail. The reduced sales load is subject to confirmation of your holdings through a check of appropriate records. TELETRANSFER PRIVILEGE You may purchase Fund shares (minimum $500, maximum $150,000 per day) by telephone if you have checked the appropriate box and supplied the necessary information on the Fund's Account Application or have filed a Shareholder Services Form with the Transfer Agent. The proceeds will be transferred between the bank account designated in one of these documents and your Fund account. Only a bank account maintained in a domestic financial institution which is an Automated Clearing House member may be so designated. The Fund may modify or terminate this Privilege at any time or charge a service fee upon notice to shareholders. No such fee currently is contemplated. If you have selected the TELETRANSFER Privilege, you may request a TELETRANSFER purchase of Fund shares by telephoning 1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. SHAREHOLDER SERVICES The services and privileges described under this heading may not be available to clients of certain Service Agents and some Service Agents may impose certain conditions on their clients which are different from those described in this Prospectus. You should consult your Service Agent in this regard. EXCHANGE PRIVILEGE The Exchange Privilege enables clients of certain Service Agents to purchase, in exchange for Class A or Class B shares of the Fund, shares of the same Class in certain other funds managed or administered by The Dreyfus Corporation, to the extent such shares are offered for sale in your state of residence. These funds have different investment objectives which may be of interest to you. If you desire to use this Privilege, you should consult your Service Agent or Dreyfus Service Corporation to determine if it is available and whether any conditions are imposed on its use. To use this Privilege, your Service Agent acting on your behalf must give exchange instructions to the Transfer Agent in writing, by wire or by telephone. If you previously have established the Telephone Exchange Privilege, you may telephone exchange instructions by calling 1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. See "How to Redeem Fund Shares _ Procedures." 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 from Dreyfus Service Corporation. 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. Telephone exchanges may be made only if the appropriate "YES" box has been checked on the Account Application, or a separate signed Shareholder Services Form is on file with the Transfer Agent. 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: Exchange Privilege, Check Redemption Privilege, Page 20 TELETRANSFER Privilege and the dividend/capital gain distribution option (except for Dividend Sweep) selected by the investor. Shares will be exchanged at the next determined net asset value; however, a sales load may be charged with respect to exchanges of Class A shares into funds sold with a sales load. No CDSC will be imposed on Class B shares at the time of an exchange; however, Class B shares acquired through an exchange will be subject on redemption to the higher CDSC applicable to the exchanged or acquired shares. The CDSC applicable on redemption of the acquired Class B shares will be calculated from the date of the initial purchase of the Class B shares exchanged. If you are exchanging Class A shares into a fund that charges a sales load, you may qualify for share prices which do not include the sales load or which reflect a reduced sales load, if the shares of the fund from which you are exchanging were: (a) purchased with a sales load, (b) acquired by a previous exchange from shares purchased with a sales load, or (c) acquired through reinvestment of dividends or distributions paid with respect to the foregoing categories of shares. To qualify, at the time of your exchange your Service Agent must notify Dreyfus Service Corporation. Any such qualification is subject to confirmation of your holdings through a check of appropriate records. See "Shareholder Services" in the Statement of Additional Information. No fees currently are charged shareholders directly in connection with exchanges, although the Fund reserves the right, upon not less than 60 days' written notice, to charge shareholders a nominal fee in accordance with the rules promulgated by the Securities and Exchange Commission. The Fund reserves the right to reject any exchange request in whole or in part. The Exchange Privilege may be modified or terminated at any time upon notice to shareholders. The exchange of shares of one fund for shares of another is treated for Federal income tax purposes as a sale of the shares given in exchange by the shareholder and, therefore, an exchanging shareholder may realize a taxable gain or loss. AUTO-EXCHANGE PRIVILEGE Auto-Exchange Privilege enables you to invest regularly (on a semi-monthly, monthly, quarterly or annual basis), in exchange for Class A or Class B shares of the Fund, in shares of the same Class of other funds in the Premier Family of Funds or certain other funds in the Dreyfus Family of Funds of which you are currently an investor. The amount you designate, which can be expressed either in terms of a specific dollar or share amount ($100 minimum), will be exchanged automatically on the first and/or fifteenth of the month according to the schedule you have selected. Shares will be exchanged at the then-current net asset value; however, a sales load may be charged with respect to exchanges of Class A shares into funds sold with a sales charge. No CDSC w ill be imposed on Class B shares at the time of an exchange; however, Class B shares acquired through an exchange will be subject on redemption to the higher CDSC applicable to the exchanged or acquired shares. The CDSC applicable on redemption of the acquired Class B shares will be calculated from the date of the initial purchase of the Class B shares exchanged. See "Shareholder Services" in the Statement of Additional Information. The right to exercise this Privilege may be modified or cancelled by the Fund or the Transfer Agent. You may modify or cancel your exercise of this Privilege at any time by writing to Premier Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. The Fund may charge a service fee for the use of this Privilege. No such fee currently is contemplated. The exchange of shares of one fund for shares of another is treated for Federal income tax purposes as a sale of the shares given in exchange by the shareholder and, therefore, an exchanging shareholder may realize a taxable gain or loss. For more information concerning this Privilege and the funds in the Premier Family of Funds or Dreyfus Family of Funds eligible to participate in this Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. Page 21 AUTOMATIC ASSET BUILDER AUTOMATIC Asset Builder permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per transaction) at regular intervals selected by you. Fund shares are purchased by transferring funds from the bank account designated by you. At your option, the bank account designated by you will be debited in the specified amount, and Fund shares will be purchased, once a month, on either the first or fifteenth day, or twice a month, on both days. Only an account maintained at a domestic financial institution which is an Automated Clearing House member may be so designated. To establish an Automatic Asset Builder account, you must file an authorization form with the Transfer Agent. You may obtain the necessary authorization form from Dreyfus Service Corporation. You may cancel your participation in this Privilege or change the amount of purchase at any time by mailing written notification to Premier Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587, and the notification will be effective three business days following receipt. The Fund may modify or terminate this Privilege at any time or charge a service fee. No such fee currently is contemplated. GOVERNMENT DIRECT DEPOSIT PRIVILEGE Government Direct Deposit Privilege enables you to purchase Fund shares (minimum of $100 and maximum of $50,000 per transaction) by having Federal salary, Social Security, or certain veterans', military or other payments from the Federal government automatically deposited into your Fund account. You may deposit as much of such payments as you elect. To enroll in Government Direct Deposit, you must file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each type of payment that you desire to include in this Privilege. The appropriate form may be obtained from Dreyfus Service Corporation or your Service Agent. Death or legal incapacity will terminate your participation in this Privilege. You may elect at any time to terminate your participation by notifying in writing the appropriate Federal agency. Further, the Fund may terminate your participation upon 30 days' notice to you. DIVIDEND OPTIONS Dividend Sweep enables you to invest automatically dividends or dividends and capital gain distributions, if any, paid by the Fund in shares of the same Class of another fund in the Premier Family of Funds or the Dreyfus Family of Funds of which you are a shareholder. Shares of the other fund will be purchased at the then-current net asset value; however, a sales load may be charged with respect to investments in shares of a fund sold with a sales load. If you are investing in a fund that charges a sales load, you may qualify for share prices which do not include the sales load or which reflect a reduced sales load. If you are investing in a fund that charges a CDSC, the shares purchased will be subject on redemption to the CDSC, if any, applicable to the purchased shares. See "Shareholder Services" in the Statement of Additional Information. Dividend ACHpermits you to transfer electronically on the payment date dividends or dividends and capital gain distributions, if any, from the Fund to a designated bank account. Only an account maintained at a domestic financial institution which is an Automated Clearing House member may be so designated. Banks may charge a fee for this service. For more information concerning these privileges, or to request a Dividend Options Form, please call toll free 1-800-645-6561. You may cancel these privileges by mailing written notification to Premier Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. To select a new fund after cancellation, you must submit a new Dividend Options Form. Enrollment in or cancellation of these privileges is effective three business days following receipt. These privileges are available only for existing accounts and may not be used to open new accounts. Minimum subsequent investments do not apply for Dividend Sweep. The Fund may modify or terminate these privileges at any time or charge a service fee. No such fee currently is contemplated. AUTOMATIC WITHDRAWAL PLAN The Automatic Withdrawal Plan permits you to request withdrawal of a specified dollar amount (minimum of $50) on either a monthly or quarterly basis if you have a $5,000 minimum Page 22 account. An application for the Automatic Withdrawal Plan can be obtained from Dreyfus Service Corporation. There is a service charge of 50cents for each withdrawal check. The Automatic Withdrawal Plan may be ended at any time by you, the Fund or the Transfer Agent. Shares for which certificates have been issued may not be redeemed through the Automatic Withdrawal Plan. Class B shares withdrawn pursuant to the Automatic Withdrawal Plan will be subject to any applicable CDSC. Purchases of additional Class A shares where the sales load is imposed concurrently with withdrawals of Class A shares generally are undesirable. LETTER OF INTENT -- CLASS A SHARES By signing a Letter of Intent form, available from Dreyfus Service Corporation, you become eligible for the reduced sales load applicable to the total number of Eligible Fund shares purchased in a 13-month period pursuant to the terms and conditions set forth in the Letter of Intent. A minimum initial purchase of $5,000 is required. To compute the applicable sales load, the offering price of shares you hold (on the date of submission of the Letter of Intent) in any Eligible Fund that may be used toward "Right of Accumulation" benefits described above may be used as a credit toward completion of the Letter of Intent. However, the reduced sales load will be applied only to new purchases. The Transfer Agent will hold in escrow 5% of the amount indicated in the Letter of Intent for payment of a higher sales load if you do not purchase the full amount indicated in the Letter of Intent. The escrow will be released when you fulfill the terms of the Letter of Intent by purchasing the specified amount. If your purchases qualify for a further sales load reduction, the sales load will be adjusted to reflect your total purchase at the end of 13 months. If total purchases are less than the amount specified, you will be requested to remit an amount equal to the difference between the sales load actually paid and the sales load applicable to the aggregate purchases actually made. If such remittance is not received within 20 days, the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an appropriate number of Class A shares held in escrow to realize the difference. Signing a Letter of Intent does not bind you to purchase, or the Fund to sell, the full amount indicated at the sales load in effect at the time of signing, but you must complete the intended purchase to obtain the reduced sales load. At the time you purchase Class A shares, you must indicate your intention to do so under a Letter of Intent. Purchases pursuant to a Letter of Intent will be made at the then-current net asset value plus the applicable sales load in effect at the time such Letter of Intent was executed. HOW TO REDEEM FUND SHARES GENERAL You may request redemption of your Class A or Class B shares at any time. Redemption requests should be transmitted to the Transfer Agent as described below. When a request is received in proper form, the Fund will redeem the shares at the next determined net asset value as described below. If you hold Fund shares of more than one Class, any request for redemption must specify the Class of shares being redeemed. If you fail to specify the Class of shares to be redeemed or if you own fewer shares of the Class than specified to be redeemed, the redemption request may be delayed until the Transfer Agent receives further instructions from you or your Service Agent. The Fund imposes no charges (other than any applicable CDSC with respect to Class B shares) when shares are redeemed directly through Dreyfus Service Corporation. Service Agents may charge a nominal fee for effecting redemptions of Fund shares. Any certificates representing Fund shares being redeemed must be submitted with the redemption request. The value of the shares redeemed may be more or less than their original cost, depending on the Fund's then-current net asset value. The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the Transfer Agent of a redemption request in proper form, except as provided by Page 23 the rules of the Securities and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER PURCHASE OR AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent has received your Account Application. The Fund reserves the right to redeem your account at its option upon not less than 30 days' written notice if your account's net asset value is $500 or less and remains so during the notice period. CONTINGENT DEFERRED SALES CHARGE -- CLASS B SHARES A CDSC payable to Dreyfus Service Corporation is imposed on any redemption of Class B shares which reduces the current net asset value of your Class B shares to an amount which is lower than the dollar amount of all payments by you for the purchase of Class B shares of the Fund held by you at the time of redemption. No CDSC will be imposed to the extent that the net asset value of the Class B shares redeemed does not exceed (i) the current net asset value of Class B shares acquired through reinvestment of dividends or capital gain distributions, plus (ii) increases in the net asset value of Class B shares above the dollar amount of all your payments for the purchase of Class B shares of the Fund held by you at the time of redemption. If the aggregate value of the Class B shares redeemed has declined below their original cost as a result of the Fund's performance, a CDSC may be applied to the then-current net asset value rather than the purchase price. In circumstances where the CDSC is imposed, the amount of the charge will depend on the number of years from the time you purchased the Class B shares until the time of redemption of such shares. Solely for purposes of determining the number of years from the time of any payment for the purchase of Class B shares, all payments during a month will be aggregated and deemed to have been made on the first day of the month. The following table sets forth the rates of the CDSC: Year Since CDSC as a % of Amount Purchase Payment Invested or Redemption Was Made Proceeds ----------------- ------------------------ First.......................................... 3.00 Second......................................... 3.00 Third.......................................... 2.00 Fourth......................................... 2.00 Fifth.......................................... 1.00 Sixth.......................................... 0.00 In determining whether a CDSC is applicable to a redemption, the calculation will be made in a manner that results in the lowest possible rate. It will be assumed that the redemption is made first of amounts representing shares acquired pursuant to the reinvestment of dividends and distributions; then of amounts representing the increase in net asset value of Class B shares above the total amount of payments for the purchase of Class B shares made Page 24 during the preceding five years; then of amounts representing the cost of shares purchased five years prior to the redemption; and finally, of amounts representing the cost of shares held for the longest period of time within the applicable five-year period. For example, assume an investor purchased 100 shares at $10 per share for a cost of $1,000. Subsequently, the shareholder acquired five additional shares through dividend reinvestment. During the second year after the purchase the investor decided to redeem $500 of his or her investment. Assuming at the time of the redemption the net asset value has appreciated to $12 per share, the value of the investor's shares would be $1,260 (105 shares at $12 per share). The CDSC would not be applied to the value of the reinvested dividend shares and the amount which represents appreciation ($260). Therefore, $240 of the $500 redemption proceeds ($500 minus $260) would be charged at a rate of 3% (the applicable rate in the second year after purchase) for a total CDSC of $7.20. WAIVER OF CDSC The CDSC will be waived in connection with (a) redemptions made within one year after the death or disability, as defined in Section 72(m)(7) of the Code, of the shareholder, (b) redemptions by employees participating in qualified or non-qualified employee benefit plans or other programs where (i) the employers or affiliated employers maintaining such plans or programs have a minimum of 250 employees eligible for participation in such plans or programs, or (ii) such plan's or program's aggregate investment in the Dreyfus Family of Funds or certain other products made available by Dreyfus Service Corporation exceeds one million dollars, (c) redemptions as a result of a combination of any investment company with the Fund by merger, acquisition of assets or otherwise, (d) a distribution following retirement under a tax-deferred retirement plan or upon attaining age 701/2 in the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b) of the Code, and (e) redemptions by such shareholders as the Securities and Exchange Commission or its staff may permit. If the Fund's Trustees determine to discontinue the waiver of the CDSC, the disclosure in the Fund's prospectus will be revised appropriately. Any Fund shares subject to a CDSC which were purchased prior to the termination of such waiver will have the CDSC waived as provided in the Fund's prospectus at the time of the purchase of such shares. To qualify for a waiver of the CDSC, at the time of redemption you must notify the Transfer Agent or your Service Agent must notify Dreyfus Service Corporation. Any such qualification is subject to confirmation of your entitlement. PROCEDURES You may redeem Fund shares by using the regular redemption procedure through the Transfer Agent, using the Check Redemption Privilege with respect to Class A shares only, through the TELETRANSFER Privilege or, if you are a client of a Selected Dealer, through the Selected Dealer. If you have given your Service Agent authority to instruct the Transfer Agent to redeem shares and to credit the proceeds of such redemptions to a designated account at your Service Agent, you may redeem shares only in this manner and in accordance with the regular redemption procedure described below. If you wish to use the other redemption methods described below, you must arrange with your Service Agent for delivery of the required application(s) to the Transfer Agent. Other redemption procedures may be in effect for clients of certain Service Agents. The Fund makes available to certain large institutions the ability to issue redemption instructions through compatible computer facilities. Your redemption request may direct that the redemption proceeds be used to purchase shares of other funds advised or administered by The Dreyfus Corporation that are not available through the Exchange Privilege. The applicable CDSC will be charged upon the redemption of Class B shares. Your redemption proceeds will be invested in shares of the other fund on the next business day. Before you make such a request, you must obtain and should review a copy of the current prospectus of the fund being purchased. Prospectuses may be obtained Page 25 from Dreyfus Service Corporation. The prospectus will contain information concerning minimum investment requirements and other conditions that may apply to your purchase. You may redeem or exchange Fund shares by telephone if you have checked the appropriate box on the Fund's Account Application or have filed a Shareholder Services Form with the Transfer Agent. If you select the TELETRANSFER Privilege or telephone exchange privilege, you authorize the Transfer Agent to act on telephone instructions from any person representing himself or herself to be you, or a representative of your Service Agent, and reasonably believed by the Transfer Agent to be genuine. The Fund will require the Transfer Agent to employ reasonable procedures, such as requiring a form of personal identification, to confirm that instructions are genuine and, if it does not follow such procedures, the Fund or the Transfer Agent may be liable for any losses due to unauthorized or fraudulent instructions. Neither the Fund nor the Transfer Agent will be liable for following telephone instructions reasonably believed to be genuine. During times of drastic economic or market conditions, you may experience difficulty in contacting the Transfer Agent by telephone to request a TELETRANSFER redemption or an exchange of Fund shares. In such cases, you should consider using the other redemption procedures described herein. Use of these other redemption procedures may result in your redemption request being processed at a later time than it would have been if TELETRANSFER redemption had been used. During the delay, the Fund's net asset value may fluctuate. REGULAR REDEMPTION Under the regular redemption procedure, you may redeem shares by written request mailed to Premier Municipal Bond Fund, P.O. Box 6527, Providence, Rhode Island 02940-6527. Written redemption requests must specify the Class of shares being redeemed. Redemption requests must be signed by each shareholder, including each owner of a joint account, and each signature must be guaranteed. The Transfer Agent has adopted standards and procedures pursuant to which signature-guarantees in proper form generally will be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program, the Securities Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion Program. If you have any questions with respect to signature-guarantees, please contact your Service Agent or call the telephone number listed on the cover of this Prospectus. Redemption proceeds of at least $1,000 will be wired to any member bank of the Federal Reserve System in accordance with a written signature-guaranteed request. CHECK REDEMPTION PRIVILEGE -- CLASS A SHARES If you hold Class A shares, you may request on the Account Application, Shareholder Services Form or by later written request that the Fund provide Redemption Checks drawn on the Fund's account. Redemption Checks may be made payable to the order of any person in the amount of $500 or more. Potential fluctuations in the net asset value of Class A shares should be considered in determining the amount of the check. Redemption Checks should not be used to close your account. Redemption Checks are free, but the Transfer Agent will impose a fee for stopping payment of a Redemption Check upon your request or if the Transfer Agent cannot honor the Redemption Check due to insufficient funds or other valid reason. You should date your Redemption Checks with the current date when you write them. Please do not postdate your Redemption Checks. If you do, the Transfer Agent will honor, upon presentment, even if presented before the date of the check, all postdated Redemption Checks which are dated within six months of presentment for payment, if they are otherwise in good order. Class A shares for which certificates have been issued may not be redeemed by Redemption Check. This Privilege may be modified or terminated at any time by the Fund or the Transfer Agent upon notice to holders of Class A shares. Page 26 TELETRANSFER PRIVILEGE You may redeem Fund shares (minimum $500 per day) without charge by telephone if you have checked the appropriate box and supplied the necessary information on the Fund's Account Application or have filed a Shareholder Services Form with the Transfer Agent. The proceeds will be transferred between your Fund account and the bank account designated in one of these documents. Only such an account maintained in a domestic financial institution which is an Automated Clearing House member may be so designated. Redemption proceeds will be on deposit in your account at an Automated Clearing House member bank ordinarily two days after receipt of the redemption request or, at your request, paid by check (maximum $150,000 per day) and mailed to your address. Holders of jointly registered Fund or bank accounts may redeem through the TELETRANSFER Privilege for transfer to their bank account only up to $250,000 within any 30-day period. The Fund reserves the right to refuse any request made by telephone, including requests made shortly after a change of address, and may limit the amount involved or the number of such requests. The Fund may modify or terminate this Privilege at any time or charge a service fee upon notice to shareholders. No such fee currently is contemplated. If you have selected the TELETRANSFER Privilege, you may request a TELETRANSFER redemption of Fund shares by telephoning 1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. Shares issued in certificate form are not eligible for this Privilege. REDEMPTION THROUGH A SELECTED DEALER If you are a customer of a Selected Dealer, you may make redemption requests to your Selected Dealer. If the Selected Dealer transmits the redemption request so that it is received by the Transfer Agent prior to the close of trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New York time), the redemption request will be effective on that day. If a redemption request is received by the Transfer Agent after the close of trading on the floor of the New York Stock Exchange, the redemption request will be effective on the next business day. It is the responsibility of the Selected Dealer to transmit a request so that it is received in a timely manner. The proceeds of the redemption are credited to your account with the Selected Dealer. See "How to Buy Fund Shares" for a discussion of additional conditions or fees that may be imposed upon redemption. In addition, Dreyfus Service Corporation will accept orders from Selected Dealers with which it has sales agreements for the repurchase of shares held by shareholders. Repurchase orders received by the dealer by the close of trading on the floor of the New York Stock Exchange on any business day and transmitted to Dreyfus Service Corporation prior to the close of its business day (normally 5:15 p.m., New York time) are effected at the price determined as of the close of trading on the floor of the New York Stock Exchange on that day. Otherwise, the shares will be redeemed at the next determined net asset value. It is the responsibility of the Selected Dealer to transmit orders on a timely basis. The Selected Dealer may charge the shareholder a fee for executing the order. This repurchase arrangement is discretionary and may be withdrawn at any time. REINVESTMENT PRIVILEGE -- CLASS A SHARES Upon written request, you may reinvest up to the number of Class A shares you have redeemed, within 30 days of redemption, at the then-prevailing net asset value without a sales load, or reinstate your account for the purpose of exercising the Exchange Privilege. The Reinvestment Privilege may be exercised only once. DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN Class A and Class B shares are subject to a Shareholder Services Plan and only Class B shares are subject to a Distribution Plan. DISTRIBUTION PLAN Under the Distribution Plan, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund pays Dreyfus Service Corporation for advertising, marketing Page 27 and distributing Class B shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B. Under the Distribution Plan, Dreyfus Service Corporation may make payments to Service Agents in respect of these services. Dreyfus Service Corporation determines the amounts to be paid to Service Agents. Service Agents receive such fees in respect of the average daily value of the Class B shares owned by their clients. From time to time, Dreyfus Service Corporation may defer or waive receipt of fees under the Distribution Plan while retaining the ability to be paid by the Fund under the Distribution Plan thereafter. The fees payable to Dreyfus Service Corporation under the Distribution Plan for advertising, marketing and distributing Class B shares and payments to Service Agents are payable without regard to actual expenses incurred. SHAREHOLDER SERVICES PLAN Under the Shareholder Services Plan, the Fund pays Dreyfus Service Corporation for the provision of certain services to the holders of Class A and Class B shares a fee at the annual rate of .25 of 1% of the value of the average daily net assets of Class A and Class B. 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. Dreyfus Service Corporation may make payments to Service Agents in respect of these services. Dreyfus Service Corporation determines the amounts to be paid to Service Agents. Each Service Agent is required to disclose to its clients any compensation payable to it by the Fund pursuant to the Shareholder Services Plan and any other compensation payable by their clients in connection with the investment of their assets in Class A or Class B shares. DIVIDENDS, DISTRIBUTIONS AND TAXES The Fund ordinarily declares dividends from its net investment income on each day the New York Stock Exchange is open for business. Fund shares begin earning income dividends on the day immediately available funds ("Federal Funds" (monies of member banks within the Federal Reserve System which are held on deposit at a Federal Reserve Bank)) are received by the Transfer Agent in written or telegraphic form. If a purchase order is not accompanied by remittance in Federal Funds, there may be a delay between the time the purchase order becomes effective and the time the shares purchased start earning dividends. If your payment is not made in Federal Funds, it must be converted into Federal Funds. This usually occurs within one business day of receipt of a bank wire and within two business days of receipt of a check drawn on a member bank of the Federal Reserve System. Checks drawn on banks which are not members of the Federal Reserve System may take considerably longer to convert into Federal Funds. Dividends usually are paid on the last calendar day of each month and are automatically reinvested in additional shares of the same Class from which they were paid at net asset value without a sales load or, at your option, paid in cash. The Fund's earnings for Saturdays, Sundays and holidays are declared as dividends on the preceding business day. If you redeem all shares in your account at any time during the month, all dividends to which you are entitled will be paid to you along with the proceeds of the redemption. Distributions from net realized securities gains, if any, generally are declared and paid once a year, but the Fund may make distributions on a more frequent basis to comply with the distribution requirements of the Code, in all events in a manner consistent with the provisions of the Investment Company Act of 1940. The Fund will not make distributions from net realized securities gains unless capital loss carryovers, if any, have been utilized or have expired. You may choose whether to receive distributions in cash or to reinvest in additional shares of the same Class from which they were paid at net asset value. All expenses are accrued daily and deducted before declaration of dividends to investors. Dividends paid by each Class will be calculated at the same time and in the same manner and will be of the same amount, except that the expenses attributable Page 28 solely to Class A or Class B will be borne exclusively by such Class. Class B shares will receive lower per share dividends than Class A shares because of the higher expenses borne by Class B. See "Fee Table." Except for dividends from Taxable Investments, the Fund anticipates that substantially all dividends paid by the Fund will not be subject to Federal income tax. No dividend paid by the Fund will qualify for the dividends received deduction allowable to certain U.S. corporations. Dividends derived from Taxable Investments, together with distributions from any net realized short-term securities gains and all or a portion of any gains realized from the sale or other disposition of certain market discount bonds, paid by the Fund are subject to Federal income tax as ordinary income whether or not reinvested. Distributions from net realized long-term securities gains of the Fund generally are subject to Federal income tax as long-term capital gains, if you are a citizen or resident of the United States. Dividends and distributions attributable to income or gain derived from securities transactions and from the use of certain of the investment techniques described under "Description of the Fund _ Investment Techniques," will be subject to Federal income tax. 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. Dividends and distributions may be subject to state and local taxes. The Code provides for the "carryover" of some or all of the sales load imposed on Class A shares if you exchange your Class A shares for shares of another fund advised by The Dreyfus Corporation within 91 days of purchase and such other fund reduces or eliminates its otherwise applicable sales load for the purpose of the exchange. In this case, the amount of the sales load charge for Class A shares, up to the amount of the reduction of the sales load charge on the exchange, is not included in the basis of your Class A shares for purposes of computing gain or loss on the exchange, and instead is added to the basis of the fund shares received on the exchange. Although all or a substantial portion of the dividends paid by the Fund may be excluded by shareholders of the Fund from their gross income for Federal income tax purposes, the Fund may purchase specified private activity bonds, the interest from which may be (i) a preference item for purposes of the alternative minimum tax, (ii) a component of the "adjusted current earnings" preference item for purposes of the corporate alternative minimum tax as well as a component in computing the corporate environmental tax or (iii) a factor in determining the extent to which a shareholder's Social Security benefits are taxable. If the Fund purchases such securities, the portion of the 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. Taxable dividends derived from net investment income, together with distributions from net realized short-term securities gains and all or a portion of any gains realized from the sale or other disposition of certain market discount bonds, paid by the Fund to a foreign investor generally are subject to U.S. nonresident withholding taxes at the rate of 30%, unless the foreign investor claims the benefit of a lower rate specified in a tax treaty. Distributions from net realized long-term securities gains paid by the Fund to a foreign investor as well as the proceeds of any redemptions from a foreign investor's account, regardless of the extent to which gain or loss may be realized, generally will not be subject to U.S. nonresident withholding tax. However, such distributions may be subject to backup withholding, as described below, unless the foreign investor certifies his non-U.S. residency status. 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 Page 29 amount, if any, subject to Federal tax. These dollar amounts will vary depending on the size and length of time of your investment in the Fund. If the Fund pays dividends derived from taxable income, it intends to designate as taxable the same percentage of the day's dividends as the actual taxable income earned on that day bears to total income earned on that day. Thus, the percentage of the dividend designated as taxable, if any, may vary from day to day. Federal regulations generally require the Fund to withhold ("backup withholding") and remit to the U.S. Treasury 31% of taxable dividends, distributions from net realized securities gains and the proceeds of any redemption, regardless of the extent to which gain or loss may be realized, paid to a shareholder if such shareholder fails to certify either that the TIN furnished in connection with opening an account is correct or that such shareholder has not received notice from the IRS of being subject to backup withholding as a result of a failure to properly report taxable dividend or interest income on a Federal income tax return. Furthermore, the IRS may notify the Fund to institute backup withholding if the IRS determines a shareholder's TIN is incorrect or if a shareholder has failed to properly report taxable dividend and interest income on a Federal income tax return. A TIN is either the Social Security number or employer identification number of the record owner of the account. Any tax withheld as a result of backup withholding does not constitute an additional tax imposed on the record owner of the account, and may be claimed as a credit on the record owner's Federal income tax return. Management of the Fund believes that the Fund has qualified for the fiscal year ended April 30, 1994 as a "regulated investment company" under the Code. The Fund intends to continue to so qualify, if such qualification is in the best interests of its shareholders. Such qualification relieves the Fund of any liability for Federal income taxes to the extent its earnings are distributed in accordance with applicable provisions of the Code. In addition, the Fund is subject to a non-deductible 4% excise tax, measured with respect to certain undistributed amounts of taxable investment income and capital gains, if any. You should consult your tax adviser regarding specific questions as to Federal, state or local income taxes. PERFORMANCE INFORMATION For purposes of advertising, performance for each Class of shares may be calculated on several bases, including current yield, tax equivalent yield, average annual total return and/or total return. These total return figures reflect changes in the price of the shares and assume that any income dividends and/or capital gains distributions made by the Fund during the measuring period were reinvested in shares of the same Class. Class A total return figures include the maximum initial sales charge and Class B total return figures include any applicable CDSC. These figures also take into account any applicable service and distribution fees. As a result, at any given time, the performance of Class B should be expected to be lower than that of Class A. Performance for each Class will be calculated separately. Current yield refers to the Fund's annualized net investment income per share over a 30-day period, expressed as a percentage of the maximum offering price per share in the case of Class A or the net asset value per share in the case of Class B at the end of the period. For purposes of calculating current yield, the amount of net investment income per share during that 30-day period, computed in accordance with regulatory requirements, is compounded by assuming that it is reinvested at a constant rate over a six-month period. An identical result is then assumed to have occurred during a second six-month period which, when added to the result for the first six months, provides an "annualized" yield for an entire one-year period. Calculations of the Fund's current yield may reflect absorbed expenses pursuant to any undertaking that may be in effect. See "Management of the Fund." Tax equivalent yield is calculated by determining the pre-tax yield which, after being taxed at a stated rate, would be equivalent to a stated current yield calculated as described above. Page 30 Average annual total return is calculated pursuant to a standardized formula which assumes that an investment in the Fund was purchased with an initial payment of $1,000 and that the investment was redeemed at the end of a stated period of time, after giving effect to the reinvestment of dividends and distributions during the period. The return is expressed as a percentage rate which, if applied on a compounded annual basis, would result in the redeemable value of the investment at the end of the period. Advertisements of the Fund's performance will include the Fund's average annual total return for Class A and Class B 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 maximum offering price per share in the case of Class A or the net asset value per share in the case of Class B at the beginning of the period. Advertisements may include the percentage rate of total return or may include the value of a hypothetical investment at the end of the period which assumes the application of the percentage rate of total return. Total return may also be calculated by using the net asset value per share at the beginning of the period instead of the maximum offering price per share at the beginning of the period for Class A shares or without giving effect to any applicable CDSC at the end of the period for Class B shares. Calculations based on the net asset value per share do not reflect the deduction of the applicable sales charge which, if reflected, would reduce the performance quoted. Performance will vary from time to time and past results are not necessarily representative of future results. Investors should remember that performance is a function of portfolio management in selecting the type and quality of portfolio securities and is affected by operating expenses. Performance information, such as that described above, may not provide a basis for comparison with other investments or other investment companies using a different method of calculating performance. Comparative performance information may be used from time to time in advertising the Fund's shares, including data from Lipper Analytical Services, Inc., Moody's Bond Survey Bond Index, Lehman Brothers Municipal Bond Index, Morningstar, Inc. and other industry publications. GENERAL INFORMATION The Fund was organized as an unincorporated business trust under the laws of the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of Trust (the "Trust Agreement") dated June 4, 1986, and commenced operations on November 26, 1986. On July 2, 1990, the Fund's name was changed from Premier Tax Exempt Bond Fund to Premier Municipal Bond Fund. The Fund is authorized to issue an unlimited number of shares of beneficial interest, par value $.001 per share. The Fund's shares are classified into two classes _ Class A and Class B. Each share has one vote and shareholders will vote in the aggregate and not by class except as otherwise required by law or when class voting is permitted by the Board of Trustees. Holders of Class A and Class B shares will be entitled to vote on matters submitted to shareholders pertaining to the Shareholder Services Plan and only holders of Class B shares will be entitled to vote on matters submitted to shareholders pertaining to the Distribution Plan. 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. Page 31 Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund itself would be unable to meet its obligations, a possibility which 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 Trustees intend to conduct the operations of the Fund in such a way so as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of the Fund. As discussed under "Management of the Fund" in the Statement of Additional Information, the Fund ordinarily will not hold shareholder meetings; however, shareholders under certain circumstances may have the right to call a meeting of shareholders for the purpose of voting to remove Trustees. The Transfer Agent maintains a record of your ownership and sends you confirmations and statements of account. Shareholder inquiries may be made to your Service Agent or by writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE. Page 32 __________________________________________________________________________ PREMIER MUNICIPAL BOND FUND CLASS A AND CLASS B SHARES PART B (STATEMENT OF ADDITIONAL INFORMATION) JUNE 24, 1994 __________________________________________________________________________ This Statement of Additional Information, which is not a prospectus, supplements and should be read in conjunction with the current Prospectus of Premier Municipal Bond Fund (the "Fund"), dated June 24, 1994, as it may be revised from time to time. To obtain a copy of the Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144. The Dreyfus Corporation (the "Manager") serves as the Fund's investment adviser. Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the Fund's shares. TABLE OF CONTENTS Page Investment Objective and Management Policies . . . . . . . . . . . . . B-2 Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . B-9 Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . B-13 Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-14 Distribution Plan and Shareholder Services Plan. . . . . . . . . . . . B-16 Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . B-17 Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . B-18 Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . B-21 Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . B-22 Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . B-23 Performance Information. . . . . . . . . . . . . . . . . . . . . . . . B-24 Information About the Fund . . . . . . . . . . . . . . . . . . . . . . B-26 Custodian, Transfer and Dividend Disbursing Agent, Counsel and Independent Auditors. . . . . . . . . . . . . . . . B-26 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . B-36 Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . B-50 INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "Description of the Fund." The average distribution of investments (at value) in Municipal Obligations by ratings for the fiscal year ended April 30, 1994, computed on a monthly basis, was as follows: Fitch Moody's Standard Investors Investors & Poor's Service, Inc. Service, Inc. Corporation Percentage ("Fitch") or ("Moody's") or ("S&P") of Value AAA Aaa AAA 12.0% AA Aa AA 9.8 A A A 24.7 BBB Baa BBB 37.3 BB Ba BB 3.4 F-1 VMIG 1, MIG 1 SP-1 .4 Not Rated Not Rated Not Rated 12.4 ------ 100.0% ====== ______________________________ * Included under the Not Rated category are securities comprising 10.3% of the Fund's market value which, while not rated, have been determined by the Manager to be of comparable quality to securities in the following rating categories: A/A (1.8%); Baa/BBB (6.2%); and D/D (2.3%). Municipal Obligations. The term "Municipal Obligations" generally includes debt obligations issued to obtain funds for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets and water and sewer works. Other public purposes for which Municipal Obligations may be issued include refunding outstanding obligations, obtaining funds for general operating expenses and lending such funds to other public institutions and facilities. In addition, certain types of industrial development bonds are issued by or on behalf of public authorities to obtain funds to provide for the construction, equipment, repair or improvement of privately operated housing facilities, sports facilities, convention or trade show facilities, airport, mass transit, industrial, port or parking facilities, air or water pollution control facilities and certain local facilities for water supply, gas, electricity or sewage or solid waste disposal; the interest paid on such obligations may be exempt from Federal income tax, although current tax laws place substantial limitations on the size of such issues. Such obligations are considered to be Municipal Obligations if the interest paid thereon qualifies as exempt from Federal income tax in the opinion of bond counsel to the issuer. There are, of course, variations in the security of Municipal Obligations both within a particular classification and between classifications. Floating and variable rate demand notes and bonds are tax exempt obligations ordinarily having stated maturities in excess of one year, but which permit the holder to demand payment of principal at any time, or at specified intervals. The issuer of such obligations ordinarily has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days' notice to the holders thereof. The interest rate on a floating rate demand obligation is based on a known lending rate, such as a bank's prime rate, and is adjusted automatically each time such rate is adjusted. The interest rate on a variable rate demand obligation is adjusted automatically at specified intervals. For the purpose of diversification under the Investment Company Act of 1940, as amended (the "Act"), the identification of the issuer of Municipal Obligations depends on the terms and conditions of the security. When the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government creating the subdivision and the security is backed only by the assets and revenues of the subdivision, such subdivision would be deemed to be the sole issuer. Similarly, in the case of an industrial development bond, if that bond is backed only by the assets and revenues of the non-governmental user, then such non-governmental user would be deemed to be the sole issuer. If, however, in either case, the creating government or some other entity guarantees a security, such a guaranty would be considered a separate security and will be treated as an issue of such government or other entity. Municipal lease obligations or installment purchase contract obligations (collectively, "lease obligations") have special risks not ordinarily associated with Municipal Obligations. Although lease obligations do not constitute general obligations of the municipality for which the municipality's taxing power is pledged, a lease obligation ordinarily is backed by the municipality's covenant to budget for, appropriate and make the payments due under the lease obligation. However, certain lease obligations contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. Although "non-appropriation" lease obligations are secured by the leased property, disposition of the property in the event of foreclosure might prove difficult. The staff of the Securities and Exchange Commission currently considers certain lease obligations to be illiquid. Determination as to the liquidity of such securities is made in accordance with guidelines established by the Fund's Board. Pursuant to such guidelines, the Board has directed the Manager to monitor carefully the Fund's investment in such securities with particular regard to (1) the frequency of trades and quotes for the lease obligation; (2) the number of dealers willing to purchase or sell the lease obligation and the number of other potential buyers; (3) the willingness of dealers to undertake to make a market in the lease obligation; (4) the nature of the marketplace trades including the time needed to dispose of the lease obligation, the method of soliciting offers and the mechanics of transfer; and (5) such other factors concerning the trading market for the lease obligation as the Manager may deem relevant. In addition, in evaluating the liquidity and credit quality of a lease obligation that is unrated, the Fund's Board has directed the Manager to consider (a) whether the lease can be cancelled; (b) what assurance there is that the assets represented by the lease can be sold; (c) the strength of the lessee's general credit (e.g., its debt, administrative, economic, and financial characteristics); (d) the likelihood that the municipality will discontinue appropriating funding for the leased property because the property is no longer deemed essential to the operations of the municipality (e.g., the potential for an "event of nonappropriation"); (e) the legal recourse in the event of failure to appropriate; and (f) such other factors concerning credit quality as the Manager may deem relevant. The Fund will not invest more than 15% of the value of its net assets in lease obligations that are illiquid and in other illiquid securities. See "Investment Restriction No. 6" below. The Fund will purchase tender option bonds only when it is satisfied that the custodial and tender option arrangements, including the fee payment arrangements, will not adversely affect the tax exempt status of the underlying Municipal Obligations and that payment of any tender fees will not have the effect of creating taxable income for the Fund. Based on the tender option bond agreement, the Fund expects to be able to value the tender option bond at par; however, the value of the instrument will be monitored to assure that it is valued at fair value. The yields on Municipal Obligations are dependent on a variety of factors, including general economic and monetary conditions, money market factors, conditions in the Municipal Obligations market, size of a particular offering, maturity of the obligation, and rating of the issue. The imposition of the Fund's management fee, as well as other operating expenses, including fees paid under the Fund's Shareholder Services Plan with respect to Class A and Class B shares and the Distribution Plan with respect to Class B shares only, will have the effect of reducing the yield to investors. Ratings of Municipal Obligations. Subsequent to its purchase by the Fund, an issue of rated Municipal Obligations may cease to be rated or its rating may be reduced below the minimum required for purchase by the Fund. Neither event will require the sale of such Municipal Obligations by the Fund, but the Manager will consider such event in determining whether the Fund should continue to hold the Municipal Obligations. To the extent that the ratings given by Moody's, S&P or Fitch for Municipal Obligations may change as a result of changes in such organizations or their rating systems, the Fund will attempt to use comparable ratings as standards for its investments in accordance with its 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 qual- ity of the Municipal Obligations which they undertake to rate. It should be emphasized, however, that ratings are relative and subjective and are not absolute standards of quality. Although these ratings may be an initial criterion for selection of portfolio investments, the Manager also will evaluate these securities. Futures Contracts and Options on Futures Contracts. Upon exercise of an option on a futures contract, the writer of the option delivers to the holder of the option the futures position and the accumulated balance in the writer's futures margin account, which represents the amount by which the market price of the futures contract exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the futures contract. The potential loss related to the purchase of options on futures contracts is limited to the premium paid for the option (plus transaction costs). Because the value of the option is fixed at the time of sale, there are no daily cash payments to reflect changes in the value of the underlying contract; however, the value of the option does change daily and that change would be reflected in the net asset value of the Fund. Lending Portfolio Securities. To a limited extent, the Fund may lend its portfolio securities to brokers, dealers and other financial institutions, provided it receives cash collateral which at all times is maintained in an amount equal to at least 100% of the current market value of the securities loaned. By lending its portfolio securities, the Fund can increase its income through the investment of the cash collateral. For purposes of this policy, the Fund considers collateral consisting of U.S. Government securities or irrevocable letters of credit issued by banks whose securities meet the standards for investment by the Fund to be the equivalent of cash. Such loans may not exceed 33-1/3% of the value of the Fund's total assets. From time to time, the Fund may return to the borrower or a third party which is unaffiliated with the Fund, and which is acting as a "placing broker," a part of the interest earned from the investment of collateral received for securities loaned. The Securities and Exchange Commission currently requires that the following conditions must be met whenever portfolio securities are loaned: (1) the Fund must receive at least 100% cash collateral from the borrower; (2) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (3) the Fund must be able to terminate the loan at any time; (4) the Fund must receive reasonable interest on the loan, as well as any interest or other distributions payable on the loaned securities, and any increase in market value; and (5) the Fund may pay only reasonable custodian fees in connection with the loan. These conditions may be subject to future modification. Taxable Investments. Securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities include U.S. Treasury securities, which differ in their interest rates, maturities and times of issuance. Treasury Bills have initial maturities of one year or less; Treasury Notes have initial maturities of one to ten years; and Treasury Bonds generally have initial maturities of greater than ten years. Some obligations issued or guaranteed by U.S. Government agencies and instrumentalities, for example, Government National Mortgage Association pass-through certificates, are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the right of the issuer to borrow from the U.S. Treasury; others, such as those issued by the Federal National Mortgage Association, by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others, such as those issued by the Student Loan Marketing Association, only by the credit of the agency or instrumentality. These securities bear fixed, floating or variable rates of interest. Principal and interest may fluctuate based on generally recognized reference rates or the relationship of rates. While the U.S. Government provides financial support to such U.S. Government - sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. The Fund will invest in such securities only when it is satisfied that the credit risk with respect to the issuer is minimal. Commercial paper consists of short-term, unsecured promissory notes issued to finance short-term credit needs. Certificates of deposit are negotiable certificates representing the obligation of a bank to repay funds deposited with it for a specified period of time. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Investments in time deposits generally are limited to London branches of domestic banks that have total assets in excess of one billion dollars. Time deposits which may be held by the Fund will not benefit from insurance from the Bank Insurance Fund or the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation. Bankers' acceptances are credit instruments evidencing the obligation of a bank to pay a draft drawn on it by a customer. These instruments reflect the obligation both of the bank and of the drawer to pay the face amount of the instrument upon maturity. Other short-term bank obligations may include uninsured, direct obligations bearing fixed, floating or variable interest rates. Repurchase agreements involve the acquisition by the Fund of an underlying debt instrument, subject to an obligation of the seller to repurchase, and the Fund to resell, the instrument at a fixed price, usually not more than one week after its purchase. The Fund's custodian or sub-custodian will have custody of, and will hold in a segregated account, securities acquired by the Fund under a repurchase agreement. Repurchase agreements are considered by the staff of the Securities and Exchange Commission to be loans by the Fund. In an attempt to reduce the risk of incurring a loss on a repurchase agreement, the Fund will enter into repurchase agreements only with domestic banks with total assets in excess of one billion dollars or primary government securities dealers reporting to the Federal Reserve Bank of New York, with respect to securities of the type in which the Fund may invest, and will require that additional securities be deposited with it if the value of the securities purchased should decrease below resale price. The Manager will monitor on an ongoing basis the value of the collateral to assure that it always equals or exceeds the repurchase price. Certain costs may be incurred by the Fund in connection with the sale of the securities if the seller does not repurchase them in accordance with the repurchase agreement. In addition, if bankruptcy proceedings are commenced with respect to the seller of the securities, realization on the securities by the Fund may be delayed or limited. The Fund will consider on an ongoing basis the creditworthiness of the institutions with which it enters into repurchase agreements. Risk Factors--Lower Rated Bonds. The Fund is permitted to invest in securities rated below Baa by Moody's and below BBB by S&P and Fitch. Such bonds, though higher yielding, are characterized by risk. See "Description of the Fund--Risk Factors--Lower Rated Bonds" in the Prospectus for a discussion of certain risks and "Appendix" for a general description of Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings may be useful in evaluating the safety of interest and principal payments, they do not evaluate the market value risk of these bonds. The Fund will rely on the Manager's judgment, analysis and experience in evaluating the creditworthiness of an issuer. In this evaluation, the Manager will take into consideration, among other things, the issuer's financial resources, its sensitivity to economic conditions and trends, the quality of the issuer's management and regulatory matters. It also is possible that a rating agency might not timely change the rating on a particular issue to reflect subsequent events. As stated above, once the rating of a bond in the Fund's portfolio has been changed, the Manager will consider all circumstances deemed relevant in determining whether the Fund should continue to hold the bond. Investors should be aware that the market values of many of these bonds tend to be more sensitive to economic conditions than are higher rated securities. These bonds generally are considered by Moody's, S&P and Fitch, to be predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation and generally will involve more credit risk than securities in the higher rating categories. Because there is no established retail secondary market for many of these securities, the Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a secondary trading market for these bonds does exist, it generally is not as liquid as the secondary market for higher rated securities. The lack of a liquid secondary market may have an adverse impact on market price and yield and the Fund's ability to dispose of particular issues when necessary to meet the Fund's liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the issuer. The lack of a liquid secondary market for certain securities also may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing the Fund's portfolio and calculating its net asset value. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of these securities. In such cases, judgment may play a greater role in valuation because less reliable objective data may be available. These bonds may be particularly susceptible to economic downturns. It is likely that any economic recession could disrupt severely the market for such securities and may have an adverse impact on the value of such securities. In addition, it is likely that any such economic downturn could adversely affect the ability of the issuers of such securities to repay principal and pay interest thereon and increase the incidence of default for such securities. The Fund may acquire these bonds during an initial offering. Such securities may involve special risks because they are new issues. The Fund has no arrangement with the Distributor or any other persons concerning the acquisition of such securities, and the Manager will review carefully the credit and other characteristics pertinent to such new issues. Lower rated zero coupon securities and pay-in-kind bonds, in which the Fund may invest up to 5% of its net assets, involve special considerations. The credit risk factors pertaining to lower rated securities also apply to lower rated zero coupon bonds and pay-in-kind bonds. Such zero coupon, pay-in-kind or delayed interest bonds carry an additional risk in that, unlike bonds which pay interest throughout the period to maturity, the Fund will realize no cash until the cash payment date unless a portion of such securities are sold and, if the issuer defaults, the Fund may obtain no return at all on its investment. See "Dividends, Distributions and Taxes." Investment Restrictions. The Fund has adopted investment restrictions numbered 1 through 5 and 7 through 12 as fundamental policies. These restrictions cannot be changed without approval by the holders of a majority (as defined in the Act) of the Fund's outstanding voting shares. Investment restriction number 6 is not a fundamental policy and may be changed by vote of a majority of the Trustees at any time. The Fund may not: 1. Purchase securities other than Municipal Obligations and Taxable Investments as those terms are defined above and in the Prospectus and those arising out of transactions in futures and options. 2. Borrow money, except from banks for temporary or emergency (not leveraging) purposes in an amount up to 15% of the value of the Fund's total assets (including the amount borrowed) based on the lesser of cost or market, less liabilities (not including the amount borrowed) at the time the borrowing is made. While borrowings exceed 5% of the value of the Fund's total assets, the Fund will not make any additional investments. Transactions in futures and options and the entry into short sales transactions do not involve any borrowing for purposes of this restriction. 3. Pledge, hypothecate, mortgage or otherwise encumber its assets, except to secure borrowings for temporary or emergency purposes. The deposit of assets in escrow in connection with the writing of covered put and call options and the purchase of securities on a when-issued or delayed-delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts and options on futures contracts or indexes will not be deemed to be pledges of the Fund's assets. 4. Purchase securities on margin, but the Fund may make margin deposits in connection with transactions in futures, including those related to indexes, and options on futures or indexes. 5. Underwrite the securities of other issuers, except that the Fund may bid separately or as part of a group for the purchase of Municipal Obligations directly from an issuer for its own portfolio to take advantage of the lower purchase price available, and except to the extent the Fund may be deemed an underwriter under the Securities Act of 1933, as amended, by virtue of disposing of portfolio securities. 6. Enter into repurchase agreements providing for settlement in more than seven days after notice or purchase securities which are illiquid (which securities could include participation interests that are not subject to the demand feature described in the Fund's Prospectus and floating and variable rate demand obligations as to which no secondary market exists and the Fund cannot exercise the demand feature described in the Fund's Prospectus on less than seven days' notice), if, in the aggregate, more than 15% of the value of its net assets would be so invested. 7. Purchase or sell real estate, real estate investment trust securities, commodities or commodity contracts, or oil and gas interests, but this shall not prevent the Fund from investing in Municipal Obligations secured by real estate or interests therein or prevent the Fund from purchasing and selling futures contracts, including those related to indexes, and options on futures contracts or indexes. 8. Make loans to others except through the purchase of qualified debt obligations and the entry into repurchase agreements referred to above and in the Fund's Prospectus; however, the Fund may lend its portfolio securities in an amount not to exceed 33-1/3% of the value of its total assets. Any loans of portfolio securities will be made according to guidelines established by the Securities and Exchange Commission and the Fund's Trustees. 9. Invest more than 15% of its assets in the obligations of any one bank for temporary defensive purposes, or invest more than 5% of its assets in the obligations of any other issuer, except that up to 25% of the value of the Fund's total assets may be invested, and securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities may be purchased, without regard to any such limitations. Notwithstanding the foregoing, to the extent required by the rules of the Securities and Exchange Commission, the Fund will not invest more than 5% of its assets in the obligations of any one bank, except that up to 25% of the value of the Fund's total assets may be invested without regard to such limitation. 10. Invest more than 25% of its total assets in the securities of issuers in any single industry; provided that there shall be no such limitation on the purchase of Municipal Obligations and, for temporary defensive purposes, obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. 11. Invest in companies for the purpose of exercising control. 12. Invest in securities of other investment companies, except as they may be acquired as part of a merger, consolidation or acquisition of assets. For purposes of Investment Restriction No. 10, industrial development bonds, where the payment of principal and interest is the ultimate responsibility of companies within the same industry, are grouped together as an "industry." If a percentage restriction is adhered to at the time of investment, a later increase in percentage resulting from a change in values or assets will not constitute a violation of such restriction. The Fund may make commitments more restrictive than the restrictions listed above so as to permit the sale of Fund shares in certain states. Should the Fund determine that a commitment is no longer in the best interests of the Fund and its shareholders, the Fund reserves the right to revoke the commitment by terminating the sale of Fund shares in the state involved. MANAGEMENT OF THE FUND Trustees and officers of the Fund, together with information as to their principal business occupations during at least the last five years, are shown below. Each Trustee who is deemed to be an "interested person" of the Fund (as defined in the Act) is indicated by an asterisk. Trustees and Officers of the Fund CLIFFORD L. ALEXANDER, JR., Trustee. President of Alexander & Associates, Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander served as Secretary of the Army and Chairman of the Board of the Panama Canal Company, and from 1975 to 1977, he was a member of the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and Alexander. He is a director of American Home Products Corporation, The Dun & Bradstreet Corporation, MCI Communications Corporation, Mutual of America Life Insurance Company and Equitable Resources, Inc., a producer and distributor of natural gas and crude petroleum. His address is 400 C Street, N.E., Washington, D.C. 20002. PEGGY C. DAVIS, Trustee. Professor of Law, New York University School of Law. Professor Davis has been a member of the New York University law faculty since 1983. Prior to that time, she served for three years as a judge in the courts of New York State; was engaged for eight years in the practice of law, working in both corporate and non-profit sectors; and served for two years as a criminal justice administrator in the government of the City of New York. She writes and teaches in the fields of evidence, constitutional theory, family law, social sciences and the law, legal process and professional methodology and training. Her address is c/o New York University School of Law, 249 Sullivan Street, New York, New York 10012. ERNEST KAFKA, Trustee. A physician engaged in private practice specializing in the psychoanalysis of adults and adolescents. Since 1981, he has served as an Instructor at the New York Psychoanalytic Institute and, prior thereto, held other teaching positions. For more than the past five years, Dr. Kafka has held numerous administrative positions and has published many articles on subjects in the field of psychoanalysis. His address is 23 East 92nd Street, New York, New York 10128. SAUL B. KLAMAN, Trustee. Chairman and Chief Executive Officer of SBK Associates, which provides research and consulting services to financial institutions. Dr. Klaman was President of the National Association of Mutual Savings Banks until November 1983, President of the National Council of Savings Institutions until June 1985, Vice Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and Chairman Emeritus of BEI Golembe, Inc. until November, 1992. He also served as an Economist to the Board of Governors of the Federal Reserve System and on several Presidential Commissions and has held numerous consulting and advisory positions in the fields of economics and housing finance. His address is 431-B Dedham Street, The Gables, Newton Center, Massachusetts 02159. NATHAN LEVENTHAL, Trustee. President of Lincoln Center for the Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York City from September 1979 to March 1984 and Commissioner of the Department of Housing Preservation and Development of New York City from February 1978 to September 1979. Mr. Leventhal was an associate and then a member of the New York law firm of Poletti Freidin Prashker Feldman and Gartner from 1974 to 1978. He was Commissioner of Rent and Housing Maintenance for New York City from 1972 to 1973. His address is 70 Lincoln Center Plaza, New York, New York 10023-6583. *RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An employee of the Manager and an officer, director or trustee of other investment companies advised or administered by the Manager. His address is 200 Park Avenue, New York, New York 10166. Each of the "non-interested" Trustees is also a trustee of General California Municipal Money Market Fund, General New York Municipal Money Market Fund, Premier California Municipal Bond Fund, Premier GNMA Fund, Premier Insured Municipal Bond Fund, Premier New York Municipal Bond Fund and Premier State Municipal Bond Fund and a director of Dreyfus Appreciation Fund, Inc., General Government Securities Money Market Fund, Inc., General Money Market Fund, Inc., General Municipal Bond Fund, Inc., General Municipal Money Market Fund, Inc., General New York Municipal Bond Fund, Inc. and Premier Growth Fund, Inc. Mr. Alexander is also a director of The Dreyfus Socially Responsible Growth Fund, Inc. and The Dreyfus Third Century Fund, Inc. For so long as the Fund's plans described in the section captioned "Distribution Plan and Shareholder Services Plan" remain in effect, the Trustees of the Fund who are not "interested persons" of the Fund, as defined in the Act, will be selected and nominated by the Trustees who are not "interested persons" of the Fund. Ordinarily meetings of shareholders for the purpose of electing Trustees will not be held unless and until such time as less than a majority of the Trustees holding office have been elected by shareholders, at which time the Trustees then in office will call a shareholders' meeting for the election of Trustees. Under the Act, shareholders of record of not less than two-thirds of the outstanding shares of the Fund may remove a Trustee through a declaration in writing or by vote cast in person or by proxy at a meeting called for that purpose. Under the Fund's Agreement and Declaration of Trust, the Trustees are required to call a meeting of shareholders for the purpose of voting upon the question of removal of any such Trustee when requested in writing to do so by the shareholders of record of not less than 10% of the Fund's outstanding shares. The Fund does not pay any remuneration to its officers and Trustees other than fees and expenses of Trustees who are not officers, directors, employees or holders of 5% or more of the outstanding voting securities of the Manager, which totalled $18,941 for the fiscal year ended April 30, 1994 for such Trustees as a group. Officers of the Fund Not Listed Above A. PAUL DISDIER, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. KAREN M. HAND, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. STEPHEN C. KRIS, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of the Manager and an officer of other investment companies advised and administered by the Manager. ELIE M. GENADRY, Vice President. Vice President--Institutional Sales of the Manager, Executive Vice President of the Distributor and an officer of other investment companies advised or administered by the Manager. DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of the Manager, Secretary of the Distributor and an officer of other investment companies advised or administered by the Manager. DONALD A. NANFELDT, Vice President. Executive Vice President of the Distributor and an officer of other investment companies advised or administered by the Manager. JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund Accounting of the Manager and an officer of other investment companies advised or administered by the Manager. JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an officer of other investment companies advised or administered by the Manager. GREGORY S. GRUBER, Controller. Senior Accounting Manager in the Fund Accounting Department of the Manager and an officer of other investment companies advised or administered by the Manager. MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the Manager and an officer of other investment companies advised or administered by the Manager. STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of the Manager and an officer of other investment companies advised or administered by the Manager. CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the Manager, the Distributor and other investment companies advised or administered by the Manager. The address of each officer of the Fund is 200 Park Avenue, New York, New York 10166. Trustees and officers of the Fund, as a group, owned less than 1% of the Fund's shares of beneficial interest outstanding on June 3, 1994. The following persons also are officers and/or directors of the Manager: Howard Stein, Chairman of the Board and Chief Executive Officer; Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S. DiMartino, President, Chief Operating Officer and a director; Alan M. Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice President and Chief Administrative Officer; Robert F. Dubuss, Vice President; Peter A. Santoriello, Vice President; Robert H. Schmidt, Vice President; Kirk V. Stumpp, Vice President--New Product Development; Philip L. Toia, Vice President; Katherine C. Wickham, Assistant Vice President-- Human Resources; Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman, directors. 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 September 5, 1986, as amended, with the Fund, which is subject to annual approval by (i) the Fund's Board of Trustees or (ii) vote of a majority (as defined in the Act) of the outstanding voting securities of the Fund, provided that in either event the continuance also is approved by a majority of Trustees who are not "interested persons" (as defined in the Act) of the Fund or the Manager, by vote cast in person at a meeting called for the purpose of voting on such approval. The Agreement was approved by shareholders on August 26, 1992 and was last approved by the Fund's Board of Trustees, including a majority of the Trustees who are not "interested persons" of any party to the Agreement, at a meeting held on July 21, 1993. The Agreement is terminable without penalty, on 60 days' notice, by the Board of Trustees or by vote of the holders of a majority of the Fund's shares, or, on not less than 90 days' notice, by the Manager. The Agreement will terminate automatically in the event of its assignment (as defined in the Act). The Manager manages the Fund's portfolio of investments in accordance with the stated policies of the Fund, subject to the approval of the Fund's Board of Trustees. The Manager is responsible for investment decisions, and provides the Fund with Investment Officers who are authorized by the Board of Trustees to execute purchases and sales of securities. The Fund's Investment Officers are A. Paul Disdier, Karen M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also maintains a research department with a professional staff of portfolio managers and securities analysts who provide research services for the Fund as well as for other funds advised by the Manager. All purchases and sales are reported for the Board of Trustees' review at the meeting subsequent to such transactions. All expenses incurred in the operation of the Fund are borne by the Fund, except to the extent specifically assumed by the Manager. The expenses borne by the Fund include: taxes, interest, brokerage fees and commissions, if any, fees of Trustees who are not officers, directors, employees or holders of 5% or more of the outstanding voting securities of the Manager, Securities and Exchange Commission fees, state Blue Sky qualification fees, advisory fees, charges of custodians, transfer and dividend disbursing agents' fees, certain insurance premiums, industry association fees, outside auditing and legal expenses, costs of independent pricing services, costs of maintaining the Fund's existence, costs attributable to investor services (including, without limitation, telephone and personnel expenses), costs of shareholders' reports and meetings, and any extraordinary expenses. Class A and Class B shares are subject to an annual service fee for ongoing personal services relating to shareholder accounts and services related to the maintenance of shareholder accounts. In addition, Class B shares are subject to an annual distribution fee for advertising, marketing and distributing Class B shares pursuant to a distribution plan adopted in accordance with Rule 12b-1 under the Act. See "Distribution Plan and Shareholder Services Plan." The Manager pays the salaries of all officers and employees employed by both it and the Fund, maintains office facilities, and furnishes statistical and research data, clerical help, accounting, data processing, bookkeeping and internal auditing and certain other required services. The Manager also may make such advertising and promotional expenditures, using its own resources, as it from time to time deems appropriate. As compensation for the Manager's services to the Fund, the Fund has agreed to pay the Manager a monthly management fee at the annual rate of .55 of 1% of the value of the Fund's average daily net assets. The management fees payable for the fiscal years ended April 30, 1992, 1993 and 1994 amounted to $1,785,103, $2,525,162 and $3,526,429, respectively, which fees were reduced by $1,311,098, $904,536 and $399,146, respectively, pursuant to undertakings in effect, resulting in net fees paid to the Manager of $474,005 in fiscal 1992, $1,620,626 in fiscal 1993 and $3,127,283 in fiscal 1994. 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 FUND SHARES The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "How to Buy Fund Shares." The Distributor. The Distributor serves as the Fund's distributor pursuant to an agreement which is renewable annually. The Distributor also acts as distributor for the other funds in the Premier Family of Funds, for the funds in the Dreyfus Family of Funds and for certain other investment companies. Using Federal Funds. The Shareholder Services Group, Inc., the Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt to notify the investor upon receipt of checks drawn on banks that are not members of the Federal Reserve System as to the possible delay in conversion into Federal Funds and may attempt to arrange for a better means of transmitting the money. If the investor is a customer of a securities dealer ("Selected Dealer") and his order to purchase Fund shares is paid for other than in Federal Funds, the Selected Dealer, acting on behalf of its customer, will complete the conversion into, or itself advance, Federal Funds generally on the business day following receipt of the customers order. The order is effective only when so converted and received by the Transfer Agent. An order for the purchase of Fund shares placed by an investor with sufficient Federal Funds or a cash balance in his brokerage account with a Selected Dealer will become effective on the day that the order, including Federal Funds, is received by the Transfer Agent. Sales Loads -- Class A. The scale of sales loads applies to purchases of Class A shares made by any "purchaser," which term includes an individual and/or spouse purchasing securities for his, her or their own account or for the account of any minor children, or a trustee or other fiduciary purchasing securities for a single trust estate or a single fiduciary account (including a pension, profit-sharing or other employee benefit trust created pursuant to a plan qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code")) although more than one beneficiary is involved; or a group of accounts established by or on behalf of the employees of an employer or affiliated employers pursuant to an employee benefit plan or other program (including accounts established pursuant to Sections 403(b), 408(k) and 457 of the Code); or an organized group which has been in existence for more than six months, provided that it is not organized for the purpose of buying redeemable securities of a registered investment company and provided that the purchases are made through a central administration or a single dealer, or by other means which result in economy of sales effort or expense. TeleTransfer Privilege. TeleTransfer purchase orders may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time, on any business day that the Transfer Agent and the New York Stock Exchange are open. Such purchases will be credited to the shareholder's Fund account on the next bank business day. To qualify to use the TeleTransfer Privilege, the initial payment for purchase of Fund shares must be drawn on, and redemption proceeds paid to, the same bank and account as are designated on the Account Application or Shareholder Services Form on file. If the proceeds of a particular redemption are to be wired to an account at any other bank, the request must be in writing and signature - guaranteed. See "Redemption of Fund Shares--TeleTransfer Privilege." Reopening an Account. An investor may reopen an account with a minimum investment of $100 without filing a new Account Application during the calendar year the account is closed or during the following calendar year, provided the information on the old Account Application is still applicable. DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "Distribution Plan and Shareholder Services Plan." Class A and Class B shares are subject to a Shareholder Services Plan and only Class B shares are subject to a Distribution Plan. Distribution Plan. Rule 12b-1 (the "Rule"), adopted by the Securities and Exchange Commission under the Act, provides, among other things, that an investment company may bear expenses of distributing its shares only pursuant to a plan adopted in accordance with the Rule. The Fund's Board of Trustees has adopted such a plan (the "Distribution Plan") with respect to Class B shares pursuant to which the Fund pays the Distributor for advertising, marketing and distributing Class B shares. Under the Distribution Plan, the Distributor may make payments to certain securities dealers, financial institutions (which may include banks) and other financial industry professionals (collectively, "Service Agents") in respect of these services. The Fund's Board of Trustees believes that there is a reasonable likelihood that the Distribution Plan will benefit the Fund and holders of its Class B shares. In some states, certain institutions effecting transactions in Fund shares may be required to register as dealers pursuant to state law. A quarterly report of the amounts expended under the Distribution Plan, and the purposes for which such expenditures were incurred, must be made to the Trustees for their review. In addition, the Distribution Plan provides that it may not be amended to increase materially the costs which holders of Class B shares may bear for distribution pursuant to the Distribution Plan without the approval of the holders of Class B shares and that other material amendments of the Distribution Plan must be approved by the Board of Trustees, and by the Trustees who are not "interested persons" (as defined in the Act) of the Fund or the Manager and have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreements entered into in connection with the Distribution Plan, by vote cast in person at a meeting called for the purpose of considering such amendments. The Distribution Plan is subject to annual approval by such vote of the Trustees cast in person at a meeting called for the purpose of voting on the Distribution Plan. The Distribution Plan was so approved on July 21, 1993. The Distribution Plan is terminable at any time by vote of a majority of the Trustees who are not "interested persons" and have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreements entered into in connection with the Distribution Plan, or by vote of the holders of a majority of Class B shares. For the fiscal year ended April 30, 1994, $324,814 was charged to the Fund, with respect to Class B, under the Distribution Plan. Shareholder Services Plan. The Fund has adopted a Shareholder Services Plan, pursuant to which the Fund pays the Distributor for the provision of certain services to the holders of Class A and Class B shares. A quarterly report of the amounts expended under the Shareholder Services Plan, and the purposes for which such expenditures were incurred, must be made to the Trustees for their review. In addition, the Shareholder Services Plan provides that it may not be amended without approval of the Board of Trustees, and by the Trustees who are not "interested persons" (as defined in the Act) of the Fund and have no direct or indirect financial interest in the operation of the Shareholder Services Plan or in any agreements entered into in connection with the Shareholder Services Plan, by vote cast in person at a meeting called for the purpose of considering such amendments. The Shareholder Services Plan is subject to annual approval by such vote cast in person at a meeting called for the purpose of voting on the Shareholder Services Plan. The Shareholder Services Plan was so approved on July 21, 1993. The Shareholder Services Plan is terminable at any time by vote of a majority of the Trustees who are not "interested persons" and who have no direct or indirect financial interest in the operation of the Shareholder Services Plan or in any agreements entered into in connection with the Shareholder Services Plan. For the fiscal year ended April 30, 1994, $1,440,515 was charged to the Fund, with respect to Class A, and $162,407 was charged to the Fund, with respect to Class B, under the Shareholder Services Plan. REDEMPTION OF FUND SHARES The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "How to Redeem Fund Shares." Check Redemption Privilege - Class A. An investor may indicate on the appropriate Application or by later written request that the Fund provide Redemption Checks ("Checks") drawn on the Fund's account. Checks will be sent only to the registered owner(s) of the account and only to the address of record. The Account Application or later written request must be manually signed by the registered owner(s). Checks may be made payable to the order of any person in an amount of $500 or more. When a check is presented to the Transfer Agent for payment, the Transfer Agent, as the investor's agent, will cause the Fund to redeem a sufficient number of full and fractional Class A shares in the investor's account to cover the amount of the Check. Dividends are earned until the Check clears. After clearance, a copy of the Check will be returned to the investor. Investors generally will be subject to the same rules and regulations that apply to checking accounts, although election of this Privilege creates only a shareholder-transfer agent relationship with the Transfer Agent. If the amount of the Check is greater than the value of the shares in an investor's account, the Check will be returned marked insufficient funds. Checks should not be used to close an account. TeleTransfer Privilege. Investors should be aware that if they have selected the TeleTransfer Privilege, any request for a TeleTransfer transaction will be effected through the Automated Clearing House ("ACH") system unless more prompt transmittal specifically is requested. Redemption proceeds will be on deposit in the investor's account at an ACH member bank ordinarily two business days after receipt of the redemption request. See "Purchase of Fund Shares--TeleTransfer Privilege." Share Certificates; Signatures. Any certificates representing Fund shares to be redeemed must be submitted with the redemption request. Written redemption requests must be signed by each shareholder, including each owner of a joint account, and each signature must be guaranteed. Signatures on endorsed certificates submitted for redemption also must be guaranteed. The Transfer Agent has adopted standards and procedures pursuant to which signature-guarantees in proper form generally will be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program, the Securities Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be signed by an authorized signatory of the guarantor and "Signature-Guaranteed" must appear with the signature. The Transfer Agent may request additional documentation from corporations, executors, administrators, trustees or guardians, and may accept other suitable verification arrangements from foreign investors, such as consular verification. Redemption Commitment. The Fund has committed itself to pay in cash all redemption requests by any shareholder of record, limited in amount during any 90-day period to the lesser of $250,000 or 1% of the value of the Fund's net assets at the beginning of such period. Such commitment is irrevocable without the prior approval of the Securities and Exchange Commission. In the case of requests for redemption in excess of such amount, the Board of Trustees reserves the right to make payments in whole or in part in readily 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 Redemption. 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." Exchange Privilege. Class A and Class B shares of the Fund may be exchanged for shares of the respective Class of certain other funds advised or administered by the Manager. Shares of the same Class of such funds purchased by exchange will be purchased on the basis of relative net asset value per share as follows: A. Class A shares of funds purchased without a sales load may be exchanged for Class A shares of other funds sold with a sales load, and the applicable sales load will be deducted. B. Class A shares of funds purchased with or without a sales load may be exchanged without a sales load for Class A shares of other funds sold without a sales load. C. Class A shares of funds purchased with a sales load, Class A shares of funds acquired by a previous exchange from Class A shares purchased with a sales load, and additional Class A shares acquired through reinvestment of dividends or distributions of any such funds (collectively referred to herein as "Purchased Shares") may be exchanged for Class A shares of other funds sold with a sales load (referred to herein as "Offered Shares"), provided that, if the sales load applicable to the Offered Shares exceeds the maximum sales load that could have been imposed in connection with the Purchased Shares (at the time the Purchased Shares were acquired), without giving effect to any reduced loads, the difference will be deducted. D. Class B shares of any fund may be exchanged for Class B shares of other funds without a sales load. Class B shares of any fund exchanged for Class B shares of another fund will be subject to the higher applicable contingent deferred sales charge ("CDSC") of the two funds and, for purposes of calculating CDSC rates and conversion periods, will be deemed to have been held since the date the Class B shares being exchanged were initially purchased. To accomplish an exchange under item C above, an investor's Service Agent must notify the Transfer Agent of the investor's prior ownership of such Class A shares and the investor's account number. To use this Privilege, the investor's Service Agent acting on the investor's behalf must give exchange instructions to the Transfer Agent in writing, by wire or by telephone. Telephone exchanges may be made only if the appropriate "YES" box has been checked on the Account Application or a separate signed Shareholder Services Form is on file with the Transfer Agent. By using this Privilege, the investor authorizes the Transfer Agent to act on telephonic, telegraphic or written exchange instructions from any person representing himself or herself to be the investor or a representative of the investor's Service Agent, and reasonably believed by the Transfer Agent to be genuine. Telephone exchanges may be subject to limitations as to the amount involved or the number of telephone exchanges permitted. Shares issued in certificate form are not eligible for telephone exchange. To establish a Personal Retirement Plan by exchange, shares of the fund being exchanged must have a value of at least the minimum initial investment being required for the shares of the same class of fund into which the exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs and SEP-IRAs with only one participant, the minimum initial investment is $750. To exchange shares held in Corporate Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum initial investment is $100 if the plan has at least $2,500 invested among shares of the same class of the funds in the Dreyfus Family of Funds. To exchange shares held in Personal Retirement Plans, the shares exchanged must have a current value of at least $100. Auto-Exchange Privilege. The Auto-Exchange Privilege permits an investor to purchase, in exchange for Class A or Class B shares of the Fund, shares of the same Class of another fund in the Premier Family of Funds or the Dreyfus Family of Funds. This Privilege is available only for existing accounts. Shares will be exchanged on the basis of relative net asset value as described above under "Exchange Privilege." Enrollment in or modification or cancellation of this Privilege is effective three business days following notification by the investor. An investor will be notified if his account falls below the amount designated to be exchanged under this Privilege. In this case, an investor's account will fall to zero unless additional investments are made in excess of the designated amount prior to the next Auto-Exchange transaction. Shares held under IRA and other retirement plans are eligible for this Privilege. Exchanges of IRA shares may be made between IRA accounts and from regular accounts to IRA accounts, but not from IRA accounts to regular accounts. With respect to all other retirement accounts, exchanges may be made only among those accounts. The Exchange Privilege and 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 from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144. The Fund reserves the right to reject any exchange request in whole or in part. The Exchange Privilege or Auto-Exchange Privilege may be modified or terminated at any time upon notice to shareholders. Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an investor with a $5,000 minimum account to request withdrawal of a specified dollar amount (minimum of $50) on either a monthly or quarterly basis. Withdrawal payments are the proceeds from sales of Fund shares, not the yield on the shares. If withdrawal payments exceed reinvested dividends and distributions, the investor's shares will be reduced and eventually may be depleted. An Automatic Withdrawal Plan may be established by completing the appropriate application available from the Distributor. There is a service charge of $.50 for each withdrawal check. Automatic Withdrawal may be terminated at any time by the investor, the Fund or the Transfer Agent. Shares for which certificates have been issued may not be redeemed through the Automatic Withdrawal Plan. Class B shares withdrawn pursuant to the Automatic Withdrawal Plan will be subject to any applicable CDSC. Dividend Sweep. Dividend Sweep allows investors to invest on the payment date their dividends or dividends and capital gain distributions, if any, from the Fund in shares of the same Class of another fund in the Premier Family of Funds or the Dreyfus Family of Funds of which the investor is a shareholder. Shares of the same class of other funds purchased pursuant to this Privilege will be purchased on the basis of relative net asset value per share as follows: A. Dividends and distributions paid with respect to Class A shares by a fund may be invested without imposition of a sales load in Class A shares of other funds that are offered without a sales load. B. Dividends and distributions paid with respect to Class A shares by a fund which does not charge a sales load may be invested in Class A shares of other funds sold with a sales load, and the applicable sales load will be deducted. C. Dividends and distributions paid with respect to Class A shares by a fund which charges a sales load may be invested in Class A shares of other funds sold with a sales load (referred to herein as "Offered Shares"), provided that, if the sales load applicable to the Offered Shares exceeds the maximum sales load charged by the fund from which dividends or distributions are being swept, without giving effect to any reduced loads, the difference will be deducted. D. Dividends and distributions paid with respect to Class B shares by a fund may be invested without imposition of any applicable CDSC in Class B shares of other funds and the Class B shares of such other funds will be subject on redemption to any applicable CDSC. DETERMINATION OF NET ASSET VALUE The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "How to Buy Fund Shares." Valuation of Portfolio Securities. The Fund's investments are valued each business day by an independent pricing service (the "Service") approved by the Board of Trustees. When, in the judgment of the Service, quoted bid prices for investments are readily available and are representative of the bid side of the market, these investments are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of municipal bonds of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. The Service may employ electronic data processing techniques and/or a matrix system to determine valuations. The Service's procedures are reviewed by the Fund's officers under the general supervision of the Board of Trustees. Expenses and fees, including the management fee (reduced by the expense limitation, if any) and fees pursuant to the Shareholder Services Plan, with respect to the Class A and Class B shares, and fees pursuant to the Distribution Plan, with respect to the Class B shares only, are accrued daily and are taken into account for the purpose of determining the net asset value of the relevant Class of shares. Because of the difference in operating expenses incurred by each Class, the per share net asset value of each Class will differ. New York Stock Exchange Closings. The holidays (as observed) on which the New York Stock Exchange is closed currently are: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. DIVIDENDS, DISTRIBUTIONS AND TAXES The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "Dividends, Distributions and Taxes." Management believes that the Fund qualified as a "regulated investment company" under the Code for the fiscal year ended April 30, 1994 and the Fund intends to continue to so qualify so long as such qualification is in the best interests of its shareholders. As a regulated investment company, the Fund will pay no Federal income tax on net investment income and net realized capital gains to the extent that such income and gains are distributed to shareholders in accordance with applicable provisions of the Code. To qualify as a regulated investment company, the Fund must pay out to its shareholders at least 90% of its net income (consisting of net investment income from tax exempt obligations and taxable obligations, if any, and net short-term capital gains) must derive less than 30% of its annual gross income from gain on the sale of securities held for less than three months, and must meet certain asset diversification and other requirements. Accordingly, the Fund may be restricted in the selling of securities held for less than three months, and in the utilization of certain of the investment techniques described in the Prospectus under "Description of the Fund--Investment Techniques." The Code, however, allows the Fund to net certain offsetting positions making it easier for the Fund to satisfy the 30% test. The term "regulated investment company" does not imply the supervision of management or investment practices or policies by any government agency. Any dividend or distribution paid shortly after an investor's purchase may have the effect of reducing the net asset value of his shares below the cost of his investment. Such a distribution would be a return on investment in an economic sense although taxable as stated in "Dividends, Distributions and Taxes" in the Prospectus. In addition, the Code provides that if a shareholder has not held his shares for more than six months (or such shorter period as the Internal Revenue Service may prescribe by regulation) and has received an exempt-interest dividend with respect to such shares, any loss incurred on the sale of such shares will be disallowed to the extent of the exempt-interest dividend received. Exempt-interest dividends received with respect to Fund shares may be partially exempt from certain state or local taxes for the residents of such state or locality. Ordinarily, gains and losses realized from portfolio transactions will be treated as capital gain or loss. However, all or a portion of any gains realized from the sale or other disposition of certain market discount bonds will be treated as ordinary income under Section 1276 of the Code. In addition, all or a portion of the gain realized from engaging in "conversion transactions" may be treated as ordinary income under Section 1258. "Conversion transactions" are defined to include certain forward, futures, option and "straddle" transactions marketed or sold to produce capital gains, or transactions described in Treasury regulations to be issued in the future. Under Section 1256 of the Code, gain or loss the Fund realizes from certain financial futures and options transactions will be treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss. Gain or loss will arise upon exercise or lapse of such futures and options as well as from closing transactions. In addition, such futures and options remaining unexercised at the end of the Fund's taxable year will be treated as sold for their then fair market value, resulting in additional gain or loss to the Fund characterized in the manner described above. Offsetting positions held by the Fund involving certain futures and options transactions may be considered, for tax purposes, to constitute "straddles." "Straddles" are defined to include "offsetting positions" in actively traded personal property. The tax treatment of "straddles" is governed by Sections 1092 and 1258 of the Code, which, in certain circumstances, overrides or modifies the provisions of Section 1256. As such, all or a portion of any short- or long-term capital gain from certain "straddle" and/or conversion transactions may be recharacterized to ordinary income. If the Fund were treated as entering into "straddles" by reason of its engaging in certain futures or options transactions, such "straddles" would be characterized as "mixed straddles" if the futures or options transactions comprising a part of such "straddles" were governed by Section 1256. The Fund may make one or more elections with respect to "mixed straddles." Depending on which election is made, if any, the results to the Fund may differ. If no election is made, to the extent the "straddle" rules apply to positions established by the Fund, losses realized by the Fund will be deferred to the extent of unrealized gain in the offsetting position. Moreover, as a result of the "straddle" and the conversion transaction rules, short-term capital losses on "straddle" positions may be recharacterized as long-term capital losses, and long-term capital gains may be treated as short-term capital gains or ordinary income. Investment by the Fund in securities issued at a discount or providing for deferred interest or for payment of interest in the form of additional obligations could, under special tax rules, affect the amount, timing and character of distributions to shareholders. For example, the Fund could be required to take into account annually a portion of the discount (or deemed discount) at which such securities were issued and to distribute such portion in order to maintain its qualification as a regulated investment company. In such case, the Fund may have to dispose of securities which it might otherwise have continued to hold in order to generate cash to satisfy these distribution requirements. PORTFOLIO TRANSACTIONS Portfolio securities ordinarily are purchased from and sold to parties acting as either principal or agent. Newly-issued securities ordinarily are purchased directly from the issuer or from an underwriter; other purchases and sales usually are placed with those dealers from which it appears that the best price or execution will be obtained. Usually no brokerage commissions, as such, are paid by the Fund for such purchases and sales, although the price paid usually includes an undisclosed compensation to the dealer acting as agent. The prices paid to underwriters of newly-issued securities usually include a concession paid by the issuer to the underwriter, and purchases of after-market securities from dealers ordinarily are executed at a price between the bid and asked price. No brokerage commissions have been paid by the Fund to date. Transactions are allocated to various dealers by the Fund's Investment Officers in their best judgment. The primary consideration is prompt and effective execution of orders at the most favorable price. Subject to that primary consideration, dealers may be selected for research, statistical or other services to enable the Manager to supplement its own research and analysis with the views and information of other securities firms. Research services furnished by brokers through which the Fund effects securities transactions may be used by the Manager in advising other funds it advises and, conversely, research services furnished to the Manager by brokers in connection with other funds the Manager advises may be used by the Manager in advising the Fund. Although it is not possible to place a dollar value on these services, it is the opinion of the Manager that the receipt and study of such services should not reduce the overall expenses of its research department. The Fund's portfolio turnover rate for the fiscal years ended April 30, 1993 and 1994 was 30.99% and 22.15%, respectively. The Fund anticipates that its annual portfolio turnover rate generally will not exceed 100%, but the turnover rate will not be a limiting factor when the Fund deems it desirable to sell or purchase securities. Therefore, depending upon market conditions, the Fund's annual portfolio turnover rate may exceed 100% in particular years. PERFORMANCE INFORMATION The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "Performance Information." Current yield for the 30-day period ended April 30, 1994 for Class A was 5.94% and for Class B was 5.61%. Current yield is computed pursuant to a formula which operates as follows: The amount of 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) during the period. That result is then divided by the product of: (a) the average daily number of shares outstanding during the period that were entitled to receive dividends, and (b) the maximum offering price per share in the case of Class A or the net asset value per share in the case of Class B 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 1994 Federal tax rate of 39.60%, the tax equivalent yield for the 30-day period ended April 30, 1994 for Class A was 9.83% and for Class B was 9.29%. Tax equivalent yield is computed by dividing that portion of the current yield (calculated as described above) which is tax exempt by 1 minus a stated tax rate and adding the quotient to that portion, if any, of the yield that is not tax exempt. The tax equivalent yield noted above represents the application of the highest Federal marginal personal income tax rate presently in effect. The tax equivalent yield figure, however, does not reflect the potential effect of any state or 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 rate or yield. Each investor should consult its tax adviser, and consider its own factual circumstances and applicable tax laws, in order to ascertain the relevant tax equivalent yield. The average annual total return for the 1, 5 and 7.427 year periods ended April 30, 1994 for Class A was -2.73%, 7.93% and 6.86%, respec- tively. The average annual total return for the 1 and 1.290 year periods ended April 30, 1994 for Class B was -1.61% and 2.45, 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. A Class's average annual total return calculated in accordance with such formula provides that in the case of Class A the maximum sales load has been deducted from the hypothetical initial investment at the time of purchase or in the case of Class B the maximum applicable CDSC has been paid upon redemption at the end of the period. The total return for the period November 26, 1986 through April 30, 1994 for Class A was 63.67%. Based on net asset value per share, the total return for Class A was 71.39% for this period. The total return for the period January 15, 1993 through April 30, 1994 for Class B was 3.17%. Without giving effect to the applicable CDSC, the total return for Class B was 6.12% for this period. Total return is calculated by subtracting the amount of the maximum offering price per share in the case of Class A or the net asset value in the case of Class B at the beginning of a stated period from the net asset value per share at the end of the period (after giving effect to the reinvestment of dividends and distributions during the period and in the case of Class B any applicable CDSC), and dividing the result by the maximum offering price per share in the case of Class A or the net asset value in the case of Class B at the beginning of the period. Total return also may be calculated based on the net asset value per share at the beginning of the period instead of the maximum offering price per share at the beginning of the period for Class A shares or without giving effect to any applicable CDSC at the end of the period for Class B shares. In such cases, the calculation would not reflect the deduction of the sales load with respect to Class A shares or any applicable CDSC with respect to Class B shares, which, if reflected, would reduce the performance quoted. From time to time, the Fund may use hypothetical tax equivalent yields or charts in its advertising. These hypothetical yields or charts will be used for illustrative purposes only and not as representative of the Fund's past or future performance. From time to time, advertising materials for the Fund may refer to or discuss then-current or past economic conditions, developments and/or events, including those relating to actual or proposed tax legislation. From time to time, advertising materials for the Fund may also refer to statistical or other information concerning trends relating to investment companies, as compiled by industry associations such as the Investment Company Institute. From time to time, advertising materials for the Fund also may refer to Morningstar ratings and related analysis supporting such ratings. INFORMATION ABOUT THE FUND The following information supplements and should be read in conjunction with the section in the Fund's Prospectus entitled "General Information." Each Fund share has one vote and, when issued and paid for in accordance with the terms of the offering, is fully paid and non-assessable. Shares have no preemptive or subscription rights and are freely transferable. The Fund sends annual and semi-annual financial statements to all its shareholders. On August 26, 1992, the Fund's shareholders approved a proposal to change certain of the Fund's fundamental policies and investment restrictions, among other things, to increase (i) the amount the Fund may borrow from banks for temporary or emergency purposes, (ii) the amount of the Fund's assets that it may pledge to secure such borrowings, (iii) the percentage of the Fund's assets which may be invested in illiquid securities and make such policy non-fundamental and (iv) the amount of the Fund's portfolio securities which it may lend. The Manager's legislative efforts led to the 1976 Congressional amendment to the Code permitting an incorporated mutual fund to pass through tax exempt income to its shareholders. The Manager offered to the public the first incorporated tax exempt fund and currently manages or administers over $24 billion in tax exempt assets. CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL AND INDEPENDENT AUDITORS The Bank of New York, 110 Washington Street, New York, New York 10286, is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and dividend disbursing agent. Neither The Bank of New York nor The Shareholder Services Group, Inc. has any part in determining the investment policies of the Fund or which securities are to be purchased or sold by the Fund. Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-2696, as counsel for the Fund, has rendered its opinion as to certain legal matters regarding the due authorization and valid issuance of the shares of beneficial interest being sold pursuant to the Fund's Prospectus. Ernst & Young, 787 Seventh Avenue, New York, New York 10019, independent auditors, has been selected as auditors of the Fund. APPENDIX Description of S&P, Moody's and Fitch ratings: S&P Municipal Bond Ratings An S&P municipal bond rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation. The ratings are based on current information furnished by the issuer or obtained by S&P from other sources it considers reliable, and will include: (1) likelihood of default--capacity and willingness of the obligor as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation; (2) nature and provisions of the obligation; and (3) protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree. A Principal and interest payments on bonds in this category are regarded as safe. This rating describes the third strongest capacity for payment of debt service. It differs from the two higher ratings because: General Obligation Bonds -- There is some weakness in the local economic base, in debt burden, in the balance between revenues and expenditures, or in quality of management. Under certain adverse circumstances, any one such weakness might impair the ability of the issuer to meet debt obligations at some future date. Revenue Bonds -- Debt service coverage is good, but not exceptional. Stability of the pledged revenues could show some variations because of increased competition or economic influences on revenues. Basic security provisions, while satisfactory, are less stringent. Management performance appears adequate. BBB Of the investment grade, this is the lowest. General Obligation Bonds -- Under certain adverse conditions, several of the above factors could contribute to a lesser capacity for payment of debt service. The difference between an A and BBB rating is that the latter shows more than one fundamental weakness, or one very substantial fundamental weakness, whereas the former shows only one deficiency among the factors considered. Revenue Bonds -- Debt coverage is only fair. Stability of the pledged revenues could show substantial variations, with the revenue flow possibly being subject to erosion over time. Basic security provisions are no more than adequate. Management performance could be stronger. BB, B, CCC, CC, C Debt rated BB, B, CCC, CC or C is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the least degree of speculation and C the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. BB Debt rated BB has less near-term vulnerability to default than other speculative grade debt. However, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to inadequate capacity to meet timely interest and principal payment. B Debt rated B has a greater vulnerability to default but presently has the capacity to meet interest payments and principal repayments. Adverse business, financial or economic conditions would likely impair capacity or willingness to pay interest and repay principal. CCC Debt rated CCC has a current identifiable vulnerability to default, and is dependent upon favorable business, financial and economic conditions to meet timely payments of interest and repayment of principal. In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal. CC The rating CC is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC rating. C The rating C is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC- debt rating. D Bonds rated D are in default, and payment of interest and/or payment of principal is in arrears. Plus (+) or minus (-): The ratings from AA to CCC may be modified by the addition of a plus or minus designation to show relative standing within the major rating 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 (+) designation. SP-2 The issuers of these municipal notes exhibit satisfactory capacity to pay principal and interest. SP-3 The issuers of these municipal notes exhibit speculative capacity to pay principal and interest. Commercial Paper Ratings An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days. Issues assigned an A rating are regarded as having the greatest capacity for timely payment. Issues in this category are delineated with the numbers 1, 2 and 3 to indicate the relative degree of safety. A-1 This designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) designation. A-2 Capacity for timely payment on issues with this designation is strong. However, the relative degree of safety is not as high as for issues designated A-1. A-3 Issues carrying this designation have a satisfactory capacity for timely payment. They are, however, somewhat more vulnerable to the adverse effects of changes in circumstances than obligations carrying the higher designations. B Issues rated B are regarded as having only an adequate capacity for timely payment; such capacity may be damaged by changing conditions or short-term adversities. C This rating is assigned to short-term debt obligations with a doubtful capacity for payment. 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 sometime 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 the 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 difference between short-term credit risk and long-term risk. Factors affecting the liquidity of the borrower and short-term cyclical elements are critical in short-term ratings, while other factors of major importance in bond risk, long-term secular trends for example, may be less important over the short run. A short-term rating may also be assigned on an issue having a demand feature. Such ratings will be designated as VMIG or, if the demand feature is not rated, as NR. Short-term ratings on issues with demand features are differentiated by the use of the VMIG symbol to reflect such characteristics as payment upon periodic demand rather than fixed maturity dates and payment relying on external liquidity. Additionally, investors should be alert to the fact that the source of payment may be limited to the external liquidity with no or limited legal recourse to the issuer in the event the demand is not met. Moody's short-term ratings are designated Moody's Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's assigns a MIG or VMIG rating, all categories define an investment grade situation. MIG 1/VMIG 1 This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. MIG 2/VMIG 2 This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group. MIG 3/VMIG 3 This designation denotes favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. MIG 4/VMIG 4 This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk. Commercial Paper Ratings The rating Prime-1 (P-1) is the highest commercial paper rating assigned by Moody's. Issuers of P-1 paper must have a superior capacity for repayment of short-term promissory obligations, and ordinarily will be evidenced by leading market positions in well established industries, high rates of return on funds employed, conservative capitalization structures with moderate reliance on debt and ample asset protection, broad margins in earnings coverage of fixed financial charges and high internal cash generation, and well established access to a range of financial markets and assured sources of alternate liquidity. Issuers (or related supporting institutions) rated Prime-2 (P-2) have a strong capacity for repayment of short-term promissory obligations. This ordinarily will be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Issuers (or related supporting institutions) rated Prime-3 (P-3) have an acceptable capacity for repayment of short-term promissory obligations. The effect of industry characteristics and market composition may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and the requirements for relatively high financial leverage. Adequate alternate liquidity is maintained. Fitch Municipal Bond Ratings The ratings represent Fitch's assessment of the issuer's ability to meet the obligations of a specific debt issue or class of debt. The ratings take into consideration special features of the issue, its relationship to other obligations of the issuer, the current financial condition and operative performance of the issuer and of any guarantor, as well as the political and economic environment that might affect the issuer's future financial strength and credit quality. AAA Bonds rated AAA are considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA Bonds rated AA are considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated F-1+. A Bonds rated A are considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings. BBB Bonds rated BBB are considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have an adverse impact on these bonds and, therefore, impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings. BB Bonds rated BB are considered speculative. The obligor's ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified which could assist the obligor in satisfying its debt service requirements. B Bonds rated B are considered highly speculative. While bonds in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor's limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue. CCC Bonds rated CCC have certain identifiable characteristics, which, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment. CC Bonds rated CC are minimally protected. Default payment of interest and/or principal seems probable over time. C Bonds rated C are in imminent default in payment of interest or principal. DDD, DD and D Bonds rated DDD, DD and D are in actual or imminent default of interest and/or principal payments. Such bonds are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. DDD represents the highest potential for recovery on these bonds and D represents the lowest potential for recovery. Plus (+) and minus (-) signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the AAA category covering 12-36 months or the DDD, DD or D categories. Short-Term Ratings Fitch's short-term ratings apply to debt obligations that are payable on demand or have original maturities of up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes. Although the credit analysis is similar to Fitch's bond rating analysis, the short-term rating places greater emphasis than bond ratings on the existence of liquidity necessary to meet the issuer's obligations in a timely manner. F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1 Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated F-1+. F-2 Good Credit Quality. Issues carrying this rating have a satisfactory degree of assurance for timely payments, but the margin of safety is not as great as the F-1+ and F-1 categories. Demand Bond or Notes Ratings Certain demand securities empower the holder at his option to require the issuer, usually through a remarketing agent, to repurchase the security upon notice at par with accrued interest. This is also referred to as a put option. The ratings of the demand provision may be changed or withdrawn at any time if, in Fitch's judgment, changing circumstances warrant such action. Fitch demand provision ratings carry the same symbols and related definitions as its short-term ratings.
PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS-98.1% AMOUNT VALUE ------------- ------------- ALABAMA-1.3% Courtland Industrial Development Board, SWDR (Champion International Corp. Project) 6.375%, 3/1/2029........................................................ $ 8,700,000 $ 8,023,227 ARIZONA-1.5% Maricopa County Pollution Control Corp., PCR, Refunding (Public Service Co. - Palo Verde) 6.375%, 8/15/2023..................... 7,000,000 6,243,650 Tucson Airport Authority, Inc., Special Facility Revenue (Lockheed Aermod Center, Inc.) 8.70%, 9/1/2019.......................... 2,500,000 2,839,150 COLORADO-7.2% City and County of Denver, Airport Revenue: 7.75%, 11/15/2021....................................................... 8,000,000 8,075,600 7.25%, 11/15/2023....................................................... 10,000,000 9,613,300 7%, 11/15/2025.......................................................... 18,225,000 16,965,288 Colorado Health Facilities Authority, Retirement Facilities Revenue (Liberty Heights) Zero Coupon, 7/15/2024................................ 10,000,000 1,129,600 Dawson Ridge, Metropolitan District Number 1, Refunding: Zero Coupon, 10/1/2017.................................................. 9,930,000 2,050,247 Zero Coupon, 10/1/2022.................................................. 47,535,000 7,008,560 CONNECTICUT-2.9% Connecticut Development Authority, First Mortgage Gross Revenue (Elim Park Baptist Home, Inc. Project) 9%, 12/1/2020.................... 3,000,000 3,189,810 Connecticut Health and Educational Facilities Authority, Revenue (Sacred Heart University) 5.80%, 7/1/2023............................... 1,700,000 1,478,303 Connecticut Housing Finance Authority (Housing Mortgage Finance Program) 6.70%, 11/15/2022....................................................... 13,000,000 13,126,490 FLORIDA-1.9% Lake County Resources Recreation, IDR, Refunding (NRG/Recovery Group) 5.85%, 10/1/2009........................................................ 5,750,000 5,314,610 Palm Beach County, Solid Waste IDR (Okeelanta Power LP Project) 6.85%, 2/15/2021........................................................ 6,750,000 6,299,302 GEORGIA-1.4% Atlanta, Airport Facilities, Refunding 7.25%, 1/1/2017...................... 5,000,000 5,302,750 Hogansville, Combined Public Utility System Revenue, Refunding (Asset Guaranty) 6%, 10/1/2023........................................................... 3,475,000 3,279,288 ILLINOIS-12.3% Alton, Health Facilities Revenue (Barnes-Jewish, Inc. Christian) 5.50%, 5/15/2021 7,000,000 6,113,730 Chicago O'Hare International Airport, Special Facility Revenue: (American Airlines, Inc. Project) 7.875%, 11/1/2025..................... 6,000,000 6,202,200 (United Airlines, Inc.): 8.20%, 5/1/2018....................................................... 2,195,000 2,346,455 8.50%, 5/1/2018....................................................... 3,500,000 3,748,430 East Chicago, PCR, Refunding (Inland Steel Co. Project Number 10) 6.80%, 6/1/2013 9,000,000 8,566,110 PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE ------------- ------------- ILLINOIS (CONTINUED) Illinois Development Finance Authority, Revenue: (Community Rehabilitation Providers Facility): 8.75%, 3/1/2010....................................................... $ 2,725,000 $ 2,937,359 8.50%, 9/1/2010....................................................... 4,535,000 4,887,642 8.25%, 8/1/2012....................................................... 4,380,000 4,464,359 Retirement Housing (Regency Park) Zero Coupon, 7/15/2023................ 85,000,000 10,319,850 Illinois Health Facilities Authority, Revenue: (Beverly Farm Foundation) 9.125%, 12/15/2015............................ 2,000,000 2,165,780 (Delnor Community Hospital Project) 8%, 5/15/2019 (Prerefunded 5/15/1999) (a) 5,500,000 6,299,920 (Refunding - Masonic Medical Center) 5.50%, 10/1/2019 .................. 5,000,000 4,197,350 (Trinity Medical Center) 7%, 7/1/2012................................... 6,750,000 6,782,400 Illinois Housing Development Authority, Multi-Family Program 6.75%, 9/1/2021. 7,350,000 7,393,953 INDIANA-1.2% Indianapolis Local Public Improvement Bond Bank, Refunding 6.75%, 2/1/2020.. 7,500,000 7,473,825 IOWA-1.5% Council Bluffs, PCR, Refunding (Midwest Power Systems, Inc.) 5.95%, 5/1/2023. 10,000,000 9,237,300 LOUISIANA-4.1% Lake Charles Non-Profit Housing Development Corp., First Mortgage Revenue, Refunding (Chateau Project) 7.875%, 2/15/2025 (Insured; FHA)............ 1,000,000 1,005,070 Louisiana Public Facilities Authority, Revenue (Student Loan) 7%, 9/1/2006.. 3,000,000 3,081,720 Parish of Saint Charles, PCR (Louisiana Power and Light Co. Project) 7.50%, 6/1/2021......................................................... 3,750,000 3,894,900 Parish of West Feliciana, PCR: (Gulf States Utilities - II) 7.70%, 12/1/2014........................... 10,000,000 10,677,800 (Gulf States Utilities - III) 7.70%, 12/1/2014.......................... 6,500,000 6,925,425 MARYLAND-.3% Maryland Community Development Administration, Department of Housing and Community Development (Single Family Program) 7.70%, 4/1/2015........... 2,085,000 2,195,693 MASSACHUSETTS-1.6% Massachusetts Health and Educational Facilities Authority, Revenue (Tufts University) 8.25%, 8/15/2018 (b)................................. 4,000,000 3,517,600 Massachusetts Housing Finance Agency, SFHR 7.95%, 6/1/2023.................. 2,000,000 2,089,300 New England Education Loan Marketing Corp., Student Loan Revenue 6.90%, 11/1/2009........................................................ 4,000,000 4,127,120 MICHIGAN-4.4% Detroit, Sewer Disposal Revenue 8.33%, 7/1/2023 (Insured; FGIC) (b)......... 7,500,000 6,375,000 Greater Detroit Resources Recovery Authority, Revenue: 9.25%, Series A, 12/13/2008............................................. 8,440,000 9,019,490 9.25%, Series D, 12/13/2008............................................. 250,000 267,165 9.25%, Series E, 12/13/2008............................................. 1,000,000 1,068,660 9.25%, Series H, 12/13/2008............................................. 2,045,000 2,185,410 Michigan Hospital Finance Authority, Revenue, Refunding (Detroit Medical Center) 6.50%, 8/15/2018........................................................ 5,000,000 4,886,050 PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE ------------- ------------- MICHIGAN (CONTINUED) Wayne County Building Authority 8%, 3/1/2017................................ $ 1,500,000 $ 1,754,580 Western Townships Utilities Authority, Sewer Disposal System (Limited Tax) 8.20%, 1/1/2018......................................................... 1,500,000 1,682,970 MISSISSIPPI-.3% Medical Center Educational Building Corp., Revenue (University Medical Center Project) 5.90%, 12/1/2023.................... 2,250,000 2,115,967 NEBRASKA-2.0% Nebraska Higher Education Loan Program, Inc., Revenue 6.40%, 6/1/2013....... 12,500,000 12,533,250 NEVADA-4.0% Clark County, IDR (Southwest Gas Corp.): 7.50%, 9/1/2032......................................................... 13,000,000 13,307,450 6.50%, 12/1/2033........................................................ 13,000,000 11,703,380 NEW HAMPSHIRE-.6% New Hampshire Housing Finance Authority, Single Family Residential Mortgage 7.70%, 7/1/2029......................................................... 3,675,000 3,818,546 NEW JERSEY-2.8% Camden County Pollution Control Financing Authority, Solid Waste RRR 7.50%, 12/1/2010........................................................ 2,000,000 2,051,980 New Jersey Economic Development Authority, First Mortgage Gross Revenue (The Evergreens) 9.25%, 10/1/2022....................................... 15,000,000 15,630,300 NEW MEXICO-.3% New Mexico Educational Assistance Foundation, Student Loan Revenue 6.85%, 12/1/2005........................................................ 2,000,000 2,028,380 NEW YORK-17.7% Metropolitan Transportation Authority, Service Contract, Commuter Facilities 7.50%, 7/1/2016 (Prerefunded 7/1/2000) (a).............................. 3,000,000 3,425,970 New York City: 8%, 6/1/2000............................................................ 2,200,000 2,473,900 7.50%, 2/1/2001......................................................... 5,000,000 5,509,750 6%, 5/15/2008........................................................... 8,970,000 8,768,893 7.50%, 8/15/2008........................................................ 2,000,000 2,152,660 7.10%, 2/1/2009......................................................... 5,000,000 5,330,900 6%, 5/15/2009........................................................... 5,000,000 4,853,950 7%, 2/1/2020............................................................ 12,000,000 12,547,920 Refunding 5.70%, 8/1/2009............................................... 3,450,000 3,241,413 New York City Industrial Development Agency, Special Facilities Revenue (American Airlines, Inc. Project) 8%, 7/1/2020.......................... 3,250,000 3,412,402 New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue: 7%, 6/15/2001........................................................... 2,490,000 2,779,039 7.375%, 6/15/2009 (Prerefunded 6/15/1999) (a)........................... 4,000,000 4,450,160 7%, 6/15/2015 (Prerefunded 6/15/2001) (a)............................... 2,510,000 2,623,402 New York State Dormitory Authority, Revenue: City University Systems 7.625%, 7/1/2020 (Prerefunded 7/1/2000) (a)..... 4,000,000 4,594,160 State University Educational Facilities 7%, 5/15/2018 (Prerefunded 5/15/2000) (a) 3,295,000 3,671,658 PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE ------------- ------------- NEW YORK (CONTINUED) New York State Dormitory Authority, Revenue (continued): Upstate Community Colleges: 5.25%, 7/1/2005....................................................... $ 1,770,000 $ 1,671,800 5.375%, 7/1/2006...................................................... 1,995,000 1,893,514 New York State Energy Research and Development Authority, Electric Facilities Revenue: (Consolidated Edison Co. of New York, Inc.): 7.50%, 7/1/2025................................................... 3,000,000 3,219,300 7.50%, 1/1/2026................................................... 2,000,000 2,138,600 (Long Island Lighting Co.) 7.15%, 6/1/2020............................ 4,000,000 4,073,920 New York State Housing Finance Agency, Revenue: (Refunding - Health Facilities - New York City) 8%, 11/1/2008........... 5,000,000 5,586,150 Service Contract Obligation 7.30%, 3/15/2021 (Prerefunded 9/15/2001) (a) 5,000,000 5,684,800 New York State Local Government Assistance Corp. 7%, 4/1/2016 (Prerefunded 4/1/2001) (a)................................. 5,500,000 6,156,370 New York State Medical Care Facilities Finance Agency, Revenue 6.622%, 8/15/2006 (Insured; FSA) (b,c).................................. 8,300,000 7,075,750 (Mental Health Service Facilities Improvement): 7.875%, 8/15/2020..................................................... 1,335,000 1,477,151 Refunding 7.875%, 8/15/2000 (Prerefunded 8/15/2000) (a)............... 1,150,000 1,330,527 NORTH CAROLINA-1.1% North Carolina Eastern Municipal Power Agency, Power System Revenue 8.397%, 1/1/2019 (b,c).................................................. 8,400,000 7,182,000 OHIO-.6% Gateway Economic Development Corp., Greater Cleveland Excise Tax Revenue 7.50%, 9/1/2005......................................................... 3,500,000 3,852,905 OKLAHOMA-.7% Tulsa Municipal Airport Trust, Revenue (American Airlines, Inc.) 7.375%, 12/1/2020 4,300,000 4,326,746 PENNSYLVANIA-6.2% Blair County Hospital Authority, Revenue (Altoona Hospital) 8.46%, 7/1/2013 (b) 5,000,000 5,124,850 Lancaster County Hospital Authority, Revenue (Health Center - United Church Homes Project) 9.125%, 10/1/2014........................................ 1,465,000 1,618,722 Lehigh County General Purpose Authority, Revenue (Wiley House): 8.75%, 11/1/2014........................................................ 2,000,000 2,000,000 9.50%, 11/1/2016........................................................ 3,000,000 3,085,470 Montgomery County Higher Education and Health Authority, Revenue (AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020......................... 3,500,000 3,757,600 Pennsylvania Economic Development Financing Authority, RRR (Northampton Generating - A): 6.40%, 1/1/2009....................................................... 2,500,000 2,371,600 6.50%, 1/1/2013....................................................... 3,500,000 3,280,795 Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue (Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 5,500,000 6,023,655 Philadelphia, Water and Sewer Revenue 7.35%, 9/1/2004....................... 4,980,000 5,564,403 PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE ------------- ------------- PENNSYLVANIA (CONTINUED) Philadelphia Hospital and Higher Education Facility Authority, HR (Graduate Health Systems) 7.25%, 7/1/2018............................... $ 6,100,000 $ 6,172,773 RHODE ISLAND-.4% Rhode Island Depositors Economic Protection Corp., Special Obligation 6.95%, 8/1/2022 (Prerefunded 8/1/2002) (a).............................. 2,000,000 2,232,840 TENNESSEE-1.6% McMinn County Industrial Development Board, PCR (Calhoun Newsprint Co. Project) 7.625%, 3/1/2016........................ 3,000,000 3,150,180 Metropolitan Government of Nashville and Davidson County, IDB, Revenue (Refunding - Multi-Family Mortgage - Picadilly) 6.95%, 7/1/2027 (Insured; FHA) 6,705,000 6,898,238 TEXAS-9.3% Alliance Airport Authority, Inc., Special Facilities Revenue (American Airlines, Inc. Project): 7%, 12/1/2011......................................................... 10,700,000 10,566,678 7.50%, 12/1/2029...................................................... 6,000,000 6,058,020 Brazos Higher Education Authority, Inc., Student Loan Revenue, Refunding 5.875%, 6/1/2004........................................................ 6,000,000 5,921,160 Brazos River Authority, PCR (Collateralized, Texas Utilities Electric Co. Project) 7.875%, 3/1/2021........................................................ 490,000 528,499 Dallas - Fort Worth International Airport Facility Improvement Corp., Revenue (American Airlines, Inc.) 7.50%, 11/1/2025.............................. 13,000,000 13,126,230 Gulf Coast Waste Disposal Authority, Revenue (Champion International Corp.) 7.45%, 5/1/2026......................................................... 7,000,000 7,283,150 Port Corpus Christi Authority, PCR, Refunding (Hoechst Celanese Co. Project) 7.50%, 8/1/2012......................................................... 4,000,000 4,351,960 Texas Housing Agency, SFMR 7.875%, 9/1/2012................................. 985,000 1,012,176 Texas Public Property Finance Corp., Revenue (Mental Health and Retardation Center) 8.20%, 10/1/2012 (Prerefunded 10/1/2002) (a)............................ 9,075,000 9,392,625 UTAH-3.3% Carbon County, SWDR, Refunding: (East Carbon Development Corp.) 9%, 7/1/2012............................ 4,000,000 4,188,680 (Sunnyside Cogeneration) 9.25%, 7/1/2018................................ 15,000,000 16,113,600 VIRGINIA-.8% Albemarle County Industrial Development Authority, HR, Refunding (Martha Jefferson Hospital) 5.875%, 10/1/2013........................... 2,360,000 2,238,248 Virginia Housing Development Authority, Commonwealth Mortgage 6.20%, 7/1/2021 3,255,000 3,081,346 WASHINGTON-1.4% Pierce County Economic Development Corp., Revenue (Solid Waste - Occidental Petrol) 5.80%, 9/1/2029......................................................... 6,750,000 5,905,778 Pilchuck Development Public Corp., Revenue, Refunding (Industrial - Little Neck Properties Project) 6.25%, 8/1/2010 (LOC; US Bank of Washington) (d).... 3,090,000 3,049,336 PREMIER MUNICIPAL BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994 PRINCIPAL MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE ------------- ------------- WEST VIRGINIA-1.6% West Virginia Parkways Economic Development and Tourism Authority: 7.380%, 5/15/2013 (b)................................................... $ 5,000,000 $ 4,198,550 8.595%, 5/16/2019 (Insured; FGIC) (b)................................... 4,000,000 3,530,000 West Virginia Water Development Authority, Water Development Revenue (Loan Program II) 7.50%, 11/1/2029 (Prerefunded 11/1/1999) (a).......... 1,900,000 2,146,183 WYOMING-.6% Wyoming Community Development Authority, Single Family Mortgage 8%, 6/1/2021. 3,600,000 3,740,652 U.S. RELATED-1.2% Guam Government 5.40%, 11/15/2018........................................... 3,775,000 3,249,897 Puerto Rico Commonwealth, Refunding 5.50%, 7/1/2013......................... 5,000,000 4,544,450 ------------- TOTAL MUNICIPAL BONDS (cost $606,166,272)................................... $612,033,098 ------------- ------------- CONTRACTS SUBJECT TO PUT OPTIONS-.1% PUT ------------- U.S. Treasury Notes: June '94 @ $108......................................................... 100 $ 278,125 June '94 @ $109......................................................... 100 373,438 ------------- TOTAL PUT OPTIONS (cost $334,537)........................................... $ 651,563 ------------- ------------- PRINCIPAL SHORT-TERM MUNICIPAL INVESTMENT-1.8% AMOUNT ------------- FLORIDA; Orange County Health Facilities Authority, Revenue, VRDN (Adventist Health Systems/Sunbelt) 3.20% (LOC; Banque Paribas) (d,e) (cost $11,000,000)...................................................... $ 11,000,000 $ 11,000,000 ------------- ------------- TOTAL INVESTMENTS-100.0% (cost $617,500,809)..................................................... $623,684,661 ------------- -------------
PREMIER MUNICIPAL BOND FUND SUMMARY OF ABBREVIATIONS FGIC Financial Guaranty Insurance Corporation PCR Pollution Control Revenue FHA Federal Housing Administration RRR Resource Recovery Revenue FSA Financial Security Assurance SFHR Single Family Housing Revenue HR Hospital Revenue SFMR Single Family Mortgage Revenue IDB Industrial Development Board SWDR Solid Waste Disposal Revenue IDR Industrial Development Revenue VRDN Variable Rate Demand Notes LOC Letter of Credit
SUMMARY OF COMBINED RATINGS (UNAUDITED) FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE - --------- --------- -------------------- ---------------------- AAA Aaa AAA 15.9% AA Aa AA 9.5 A A A 22.5 BBB Baa BBB 34.2 BB Ba BB 2.4 F-1 MIGI, VMIG1 & P1 SP1 & A1 1.8 Not Rated (g) Not Rated (g) Not Rated (g) 13.7 -------- 100.0% -------- --------
NOTES TO STATEMENT OF INVESTMENTS: (a) Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the tax-exempt issue and to retire the bonds in full at the earliest refunding date. (b) Residual interest security - the interest rate is subject to change periodically. (c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 1994, these securities amounted to $14,257,750 or 2.2% of net assets. (d) Secured by letters of credit. (e) Securities payable on demand. The interest rate, which is subject to change, is based on bank prime rates or an index of market interest rates. (f) Fitch currently provides creditworthiness information for a limited amount of investments. (g) Securities which, while not rated by Fitch, Moody's or Standard & Poor's, have been determined by the Fund's Board of Trustees to be of comparable quality to those rated securities in which the Fund may invest.
STATEMENT OF PUT OPTIONS WRITTEN APRIL 30, 1994 CONTRACTS SUBJECT TO ISSUER PUT VALUE - ------ ---------- --------- U.S. Treasury Notes: June '94 @ $106......................................................... 200 $(250,000) June '94 @ $107......................................................... 200 (387,500) --------- (premiums received $296,552).......................................... $(637,500) --------- --------- See notes to financial statements. PREMIER MUNICIPAL BOND FUND STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1994 ASSETS: Investments in securities, at value (cost $617,500,809)-see statement..................................... $623,684,661 Cash.................................................................... 4,099,668 Interest receivable..................................................... 14,134,626 Receivable for shares of Beneficial Interest subscribed................. 1,393,285 Prepaid expenses........................................................ 52,308 -------------- 643,364,548 LIABILITIES: Due to The Dreyfus Corporation.......................................... $460,521 Outstanding put options written, at value (premiums received $296,552)-see statement............................ 637,500 Payable for shares of Beneficial Interest redeemed...................... 398,614 Accrued expenses........................................................ 188,279 1,684,914 ---------- -------------- NET ASSETS ................................................................ $641,679,634 -------------- -------------- REPRESENTED BY: Paid-in capital......................................................... $637,350,126 Accumulated net realized capital losses and distributions in excess of net realized gain on investments-Note 1(c)......................................... (1,513,396) Accumulated net unrealized appreciation on investments-Note 3(b)........ 5,842,904 -------------- NET ASSETS at value......................................................... $641,679,634 -------------- -------------- Shares of Beneficial Interest outstanding: Class A Shares (unlimited number of $.001 par value shares authorized)............... 39,544,149 -------------- -------------- Class B Shares (unlimited number of $.001 par value shares authorized)............... 6,924,450 -------------- -------------- NET ASSET VALUE per share: Class A Shares ($546,036,245 / 39,544,149 shares).................................... $13.81 ------- ------- Class B Shares ($95,643,389 / 6,924,450 shares)...................................... $13.81 ------- ------- See notes to financial statements. PREMIER MUNICIPAL BOND FUND STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1994 INVESTMENT INCOME: INTEREST INCOME......................................................... $ 43,891,883 EXPENSES: Management fee-Note 2(a).............................................. $ 3,526,429 Shareholder servicing costs-Note 2(c)................................. 1,962,965 Distribution fees (Class B shares)-Note 2(b).......................... 324,814 Registration fees..................................................... 109,195 Prospectus and shareholders' reports.................................. 79,905 Custodian fees........................................................ 59,319 Professional fees..................................................... 55,345 Trustees' fees and expenses-Note 2(d)................................. 18,941 Miscellaneous......................................................... 48,901 ------------- 6,185,814 Less-reduction in management fee due to undertakings-Note 2(a)............................................ 399,146 ------------- TOTAL EXPENSES.................................................. 5,786,668 ------------- INVESTMENT INCOME-NET........................................... 38,105,215 REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS: Net realized (loss) on investments-Note 3(a)............................ $ (1,468,275) Net unrealized (depreciation) on investments............................ (29,828,947) ------------- NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (31,297,222) ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 6,807,993 ------------- ------------- See notes to financial statements. PREMIER MUNICIPAL BOND FUND STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED APRIL 30, -------------------------------- 1993 1994 --------------- ------------- OPERATIONS: Investment income-net................................................... $ 29,484,374 $ 38,105,215 Net realized gain (loss) on investments................................. 5,305,331 (1,468,275) Net unrealized appreciation (depreciation) on investments for the year.. 23,331,904 (29,828,947) --------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 58,121,609 6,807,993 --------------- ------------- DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net: Class A shares........................................................ (29,366,677) (34,640,947) Class B shares........................................................ (117,697) (3,464,268) Net realized gain on investments: Class A shares........................................................ (6,801,408) (1,935,559) Class B shares........................................................ --- (249,175) Excess net realized gain on investments: Class A shares........................................................ --- (39,975) Class B shares........................................................ --- (5,146) --------------- ------------- TOTAL DIVIDENDS................................................... (36,285,782) (40,335,070) --------------- ------------- BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold: Class A shares........................................................ 148,668,994 104,748,904 Class B shares........................................................ 19,857,135 83,821,633 Dividends reinvested: Class A shares........................................................ 22,354,888 22,085,600 Class B shares........................................................ 64,777 2,282,208 Cost of shares redeemed: Class A shares........................................................ (55,003,691) (80,102,730) Class B shares........................................................ (109,103) (4,090,771) --------------- ------------- INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 135,833,000 128,744,844 --------------- ------------- TOTAL INCREASE IN NET ASSETS.................................... 157,668,827 95,217,767 NET ASSETS: Beginning of year....................................................... 388,793,040 546,461,867 --------------- ------------- End of year............................................................. $546,461,867 $641,679,634 --------------- ------------- --------------- -------------
SHARES ---------------------------------------------------------------------------- CLASS A CLASS B ---------------------------------- ---------------------------------- YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, ---------------------------------- ---------------------------------- 1993 1994 1993* 1994 --------------- --------------- --------------- --------------- CAPITAL SHARE TRANSACTIONS: Shares sold......................... 10,464,001 7,100,350 1,376,724 5,676,601 Shares issued for dividends reinvested 1,577,117 1,502,278 4,490 155,727 Shares redeemed..................... (3,868,910) (5,500,645) (7,565) (281,527) --------------- --------------- --------------- --------------- NET INCREASE IN SHARES OUTSTANDING 8,172,208 3,101,983 1,373,649 5,550,801 --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- - ----------------------- * From January 15, 1993 (commencement of initial offering) to April 30, 1993. See notes to financial statements.
PREMIER MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS Reference is made to page 4 of the Fund's Prospectus dated June 24, 1994. See notes to financial statements. PREMIER MUNICIPAL BOND FUND NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES: The Fund is registered under the Investment Company Act of 1940 ("Act") as a diversified open-end management investment company. Dreyfus Service Corporation ("Distributor") acts as the distributor of the Fund's shares. The Distributor is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager"). The Fund offers both Class A and Class B shares. Class A shares are subject to a sales charge imposed at the time of purchase and Class B shares are subject to a contingent deferred sales charge imposed at the time of redemption on redemptions made within five years of purchase. Other differences between the two Classes include the services offered to and the expenses borne by each Class and certain voting rights. (A) PORTFOLIO VALUATION: The Fund's investments (excluding options and financial futures on municipal and U.S. treasury securities) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. Investments for which quoted bid prices in the judgment of the Service are readily available and are representative of the bid side of the market 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, when appropriate, 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. (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Fund not to distribute such gain. Dividends in excess of net realized gains on investments for financial statement purposes result from current period wash sale loss deferrals to be recognized in future years and other losses from security transactions during the year ended April 30, 1994 which are treated for Federal income tax purposes as arising in fiscal 1995. (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 provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of income and net realized capital gain sufficient to relieve it from all, or substantially all, Federal income taxes. PREMIER MUNICIPAL BOND FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to a management agreement ("Agreement") with the Manager, the management fee is computed at the annual rate of .55 of 1% of the average daily value of the Fund's net assets and is payable monthly. The Agreement provides for an expense reimbursement from the Manager should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Fund for any full fiscal year. However, the Manager had undertaken from May 1, 1993 through January 18, 1994 to reduce the management fee paid by the Fund, to the extent that the Fund's aggregate expenses (excluding certain expenses as described above) exceeded specified annual percentages of the Fund's average daily net assets. The reduction in management fee, pursuant to the undertakings, amounted to $399,146 for the year ended April 30, 1994. The Distributor retained $213,752 during the year ended April 30, 1994 from commissions earned on sales of the Fund's Class A shares. The Distributor retained $91,986 during the year ended April 30, 1994 from contingent deferred sales charges imposed upon redemptions of the Fund's Class B shares. (B) Under the Distribution Plan ("Class B Distribution Plan") adopted pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor, at an annual rate of .50 of 1% of the value of the Fund's Class B shares average daily net assets, for costs and expenses in connection with advertising, marketing and distributing the Fund's Class B shares. The Distributor may make payments to one or more Service Agents (a securities dealer, financial institution, or other industry professional) based on the value of the Fund's Class B shares owned by clients of the Service Agent. During the year ended April 30, 1994, $324,814 was charged to the Fund pursuant to the Class B Distribution Plan. (C) Under the Shareholder Services Plan, the Fund pays the Distributor, at an annual rate of .25 of 1% of the value of the average daily net assets of Class A and Class B shares for servicing shareholder accounts. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents in respect of these services. The Distributor determines the amounts to be paid to Service Agents. For the year ended April 30, 1994, $1,440,515 and $162,407 were charged to the Class A and Class B shares, respectively, pursuant to the Shareholder Services Plan. (D) Certain officers and trustees of the Fund are "affiliated persons," as defined in the Act, of the Manager and/or the Distributor. Each trustee who is not an "affiliated person" receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. (E) On December 5, 1993, the Manager entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the merger of the Manager with a subsidiary of Mellon Bank Corporation ("Mellon"). Following the merger, it is planned that the Manager will be a direct subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number of contingencies, including receipt of certain regulatory approvals and approvals of the stockholders of the Manager and of Mellon. The merger is expected to occur in mid-1994, but could occur later. PREMIER MUNICIPAL BOND FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) As a result of regulatory requirements and the terms of the Merger Agreement, the Manager will seek various approvals from the Fund's board and shareholders before completion of the merger. Shareholder approval will be solicited by a proxy statement. NOTE 3-SECURITIES TRANSACTIONS: (A) Purchases and sales of securities, excluding option transactions, amounted to $292,478,175 and $168,116,003, respectively, for the year ended April 30, 1994, and consisted entirely of municipal bonds and short-term municipal investments. In addition, the following table summarizes the Fund's put options written transactions for the year ended April 30, 1994:
NUMBER OF PREMIUMS CONTRACTS RECEIVED ------------- ------------ OPTIONS WRITTEN: Contracts outstanding April 30, 1993......... - - Contracts Written............................ 400 $296,552 ---- ------------ Contracts outstanding April 30, 1994......... 400 $296,552 ---- ------------ ---- ------------
As a writer of put options, the Fund receives a premium at the outset and then bears the market risk of unfavorable changes in the price of the financial instrument underlying the option. Generally, the Fund would incur a loss if the price of the underlying financial instrument declines between the date the option is written and the date on which the option is terminated. Generally, the Fund would realize a gain, to the extent of the premiums, if the price of the financial instrument increases between those dates. (B) At April 30, 1994, accumulated net unrealized appreciation on investments was $5,842,904, consisting of $24,571,806 gross unrealized appreciation and $18,728,902 gross unrealized depreciation. At April 30, 1994, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). PREMIER MUNICIPAL BOND FUND REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES PREMIER MUNICIPAL BOND FUND We have audited the accompanying statement of assets and liabilities of Premier Municipal Bond Fund, including the statements of investments and put options written, as of April 30, 1994, 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 April 30, 1994 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Premier Municipal Bond Fund at April 30, 1994, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. (Ernst and Young Signature Logo) New York, New York June 3, 1994 PREMIER 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 November 26, 1986 (commencement of operations) to April 30, 1987 and for each of the seven years ended April 30, 1994. Included in Part B of the Registration Statement: Statement of Investments--April 30, 1994. Statement of Assets and Liabilities--April 30, 1994. Statement of Operations--year ended April 30, 1994. Statement of Changes in Net Assets--for the years ended April 30, 1993 and 1994. Notes to Financial Statements. Report of Ernst & Young, Independent Auditors dated June 3, 1994. Schedule No. I through VII and other financial statement information, for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission, are either omitted because they are not required under the related instructions, they are inapplicable, or the required information is presented in the financial statements or notes thereto which are included in Part B of the Registration Statement. Item 24. Financial Statements and Exhibits - List (continued) (b) Exhibits: (1) Registrant's Amended and Restated Agreement and Declaration of Trust is incorporated by reference to Exhibit (1) of Post- Effective Amendment No. 7. to the Registration Statement on Form N-1A, filed on June 30, 1992. (2) Registrant's By-Laws. (5) Management Agreement between the Registrant and The Dreyfus Corporation is incorporated by reference to Exhibit (5) of Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on October 30, 1992. (6)(a) Distribution Agreement between the Registrant and Dreyfus Service Corporation is incorporated by reference to Exhibit (6)(a) of Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on October 30, 1992. (6)(b) Forms of Service Agreements are incorporated by reference to Exhibit (6)(b) of Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on October 30, 1992. (6)(c) Forms of Distribution Plan Agreements are incorporated by reference to Exhibit (6)(c) of Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on October 30, 1992. (8)(a) Registrant's Custody Agreement is incorporated by reference to Exhibit (8)(a) of Post-Effective Amendment No. 5 to the Registration Statement on Form N-1A, filed on August 18, 1990. (8)(b) Forms of Sub-Custodial Agreements. (9) Shareholder Services Plan. (10) Opinion and consent on Registrant's counsel are incorporated by reference to Exhibit (10) of Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A, filed on September 10, 1986. Item 24. Financial Statements and Exhibits - List (continued) (11) Consent of Independent Auditors. (15) Distribution Plan. (16) Schedules of Computation of Performance Data. Other Exhibits (a) Powers-of-Attorney of the Trustees and Officers are incorporated by reference to Other Exhibits (a) of Post- Effective Amendment No. 6 to the Registration Statement on Form N-1A, filed on August 21, 1991. (b) Certificate of Secretary is incorporated by reference to Other Exhibits (b) of Post-Effective Amendment No. 6 to the Registration Statement on Form N-1A, filed on August 21, 1991. 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 June 3, 1994 Beneficial Interest (par value $.001) Class A 13,708 Class B 3,492 Item 27. Indemnification The statement as to the general effect of any contract, arrangements or statute under which a trustee, officer, underwriter or affiliated person of the Registrant is indemnified is incorporated by reference to Item 27 of Part C of Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A, filed on September 10, 1986. Reference is also made to the Distribution Agreement filed as Exhibit (6)(a) of Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on October 30, 1992. Item 28. Business and Other Connections of Investment Adviser Investment Adviser - The Dreyfus Corporation The Dreyfus Corporation ("Dreyfus") and subsidiary companies comprise a financial service organization whose business consists primarily of providing investment management services as the investment adviser, 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 distributor of shares of investment companies sponsored by Dreyfus and of other investment companies for which Dreyfus acts as sub- investment adviser and administrator. Dreyfus Management, Inc., another wholly-owned subsidiary, provides investment management services to various pension plans, institutions and individuals. Item 28. Business and Other Connections of Investment Adviser (continued) ________ ________________________________________________________________ Officers and Directors of Investment Adviser ____________________________________________ Name and Position with Dreyfus Other Businesses _________________ ________________ MANDELL L. BERMAN Real estate consultant and private investor Director 29100 Northwestern Highway, Suite 370 Southfield, Michigan 48034; Past Chairman of the Board of Trustees of Skillman Foundation. Member of The Board of Vintners Intl. 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.** ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational Director consultant 2126 Connecticut Avenue Washington, D.C. 20008 DAVID B. TRUMAN Educational consultant; Director Past President of the Russell Sage Foundation 230 Park Avenue New York, New York 10017; Past President of Mount Holyoke College South Hadley, Massachusetts 01075; Former Director: Student Loan Marketing Association 1055 Thomas Jefferson Street, N.W. Washington, D.C. 20006; Former Trustee: College Retirement Equities Fund 730 Third Avenue New York, New York 10017 HOWARD STEIN Chairman of the Board, President and Investment Chairman of the Board and Officer: Chief Executive Officer Dreyfus Capital Growth Fund (A Premier Fund)++; Chairman of the Board and Investment Officer: The Dreyfus Fund Incorporated++; Dreyfus New Leaders Fund, Inc.++; The Dreyfus Socially Responsible Growth Fund, Inc. ++; The Dreyfus Third Century Fund, Inc.++; Chairman of the Board: Dreyfus Acquisition Corporation*; Dreyfus America Fund++++; The Dreyfus Consumer Credit Corporation*; HOWARD STEIN Dreyfus Land Development Corporation*; (cont'd) Dreyfus Management, Inc.*; Dreyfus Service Corporation*; Chairman of the Board and Chief Executive Officer: Major Trading Corporation*; President, Managing General Partner and Investment Officer: Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus Strategic Growth, L.P. ++; Director, President and Investment Officer: Dreyfus Appreciation Fund, Inc.++; Dreyfus Asset Allocation Fund, Inc.++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Focus Funds, Inc.++; Dreyfus Global Investing++; Dreyfus Growth Opportunity Fund, Inc.++; Premier Growth Fund, Inc.++; Dreyfus Growth Allocation Fund, Inc.++ Director and Investment Officer: Dreyfus Growth and Income Fund, Inc.++; President: Dreyfus Consumer Life Insurance Company*; Director: Avnet, Inc.**; Comstock Partners Strategy Fund, Inc.***; Dreyfus A Bonds Plus, Inc.++; Dreyfus BASIC Money Market Fund, Inc.++; The Dreyfus Fund International Limited++++++; Dreyfus Global Bond Fund, Inc.++; Dreyfus Insured Municipal Bond Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Municipal Bond Fund, Inc.++; Dreyfus Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Municipal Bond Fund, Inc.++; Dreyfus Partnership Management, Inc.*; Dreyfus Personal Management, Inc.*; Dreyfus Precious Metals, Inc.*; Dreyfus Realty Advisors, Inc.+++; Dreyfus Service Organization, Inc.*; Dreyfus Strategic Governments Income, Inc.++; The Dreyfus Trust Company++; General Government Securities Money Market Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Money Market Fund, Inc.++; HOWARD STEIN Seven Six Seven Agency, Inc.*; (cont'd) World Balanced Fund++++; Trustee and Investment Officer: Dreyfus Short-Intermediate Government Fund++; Dreyfus Strategic Investing++; Dreyfus Variable Investment Fund++; Trustee: Corporate Property Investors New York, New York; Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Institutional Money Market Fund++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus Investors GNMA Fund++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Strategic Income++ JULIAN M. SMERLING Director and Executive Vice President: Vice Chairman of the Dreyfus Service Corporation*; Board of Directors Director and Vice President: Dreyfus Consumer Life Insurance Company*; Dreyfus Service Organization, Inc.*; Vice Chairman and Director: The Dreyfus Trust Company++; The Dreyfus Trust Company (N.J.)++; Director: The Dreyfus Consumer Credit Corporation*; Dreyfus Partnership Management, Inc.*; Seven Six Seven Agency, Inc.* JOSEPH S. DiMARTINO Director and Chairman of the Board: President, Chief Operating The Dreyfus Trust Company++; Officer and Director Director, President and Investment Officer: Dreyfus Cash Management Plus, Inc.++; Dreyfus Global Bond Fund, Inc.++; Dreyfus International Equity Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; General Government Securities Money Market Fund, Inc.++; General Money Market Fund, Inc.++; Director and President: Dreyfus Acquisition Corporation*; The Dreyfus Consumer Credit Corporation*; JOSEPH S. DiMARTINO Dreyfus Edison Electric Index Fund, (cont'd) Inc.++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Partnership Management, Inc.*; The Dreyfus Trust Company (N.J.)++; Dreyfus-Wilshire Target Funds, Inc.++; First Prairie Tax Exempt Bond Fund, Inc. ++; Peoples Index Fund, Inc.++; Peoples S&P MidCap Index Fund, Inc.++; Trustee, President and Investment Officer: Dreyfus Cash Management++; Dreyfus Government Cash Management++; Dreyfus Institutional Money Market Fund++; Dreyfus Short-Intermediate Government Fund++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus Variable Investment Fund++; Premier GNMA Fund++; Trustee and President: First Prairie Cash Management++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Municipal Money Market Fund++; First Prairie U.S. Government Income Fund++; First Prairie U.S. Treasury Securities Cash Management++; Trustee, Vice President and Investment Officer: Dreyfus Institutional Short Term Treasury Fund++; Trustee and Investment Officer: Premier GNMA Fund++; Director and Executive Vice President: Dreyfus Service Corporation*; Director, Vice President and Investment Officer: Dreyfus Balanced Fund, Inc.++; Director and Vice President: Dreyfus Service Organization, Inc.*; General Municipal Bond Fund, Inc.++; General Municipal Money Market Fund, Inc.++; Director and Investment Officer: Dreyfus A Bonds Plus, Inc.++; Dreyfus Appreciation Fund, Inc.++; Dreyfus Short-Term Income Fund, Inc.++; Premier Growth Fund, Inc.++; Director: Dreyfus Management, Inc.*; Dreyfus Personal Management, Inc.*; Noel Group, Inc. 667 Madison Avenue New York, New York 10021; JOSEPH S. DiMARTINO Trustee: (cont'd) Bucknell University Lewisburg, Pennsylvania 17837; President and Investment Officer: Dreyfus BASIC Money Market Fund, Inc.++; Dreyfus BASIC U.S. Government Money Market Fund++; Vice President and former Treasurer and Director: National Muscular Dystrophy Association 810 Seventh Avenue New York, New York 10019; Vice President: Dreyfus Consumer Life Insurance Company*; Investment Officer: The Dreyfus Fund Incorporated++; Dreyfus Investors GNMA Fund++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; President, Chief Operating Officer and Director: Major Trading Corporation* LAWRENCE M. GREENE Chairman of the Board: Legal Consultant and The Dreyfus Security Savings Director Bank, F.S.B.+; Director and Executive Vice President: Dreyfus Service Corporation*; Director and Vice President: Dreyfus Acquisition Corporation*; Dreyfus Consumer Life Insurance Company*; Dreyfus Service Organization, Inc.*; Director: Dreyfus America Fund++++; Dreyfus BASIC Municipal Fund ++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; Dreyfus GNMA Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus-Lincoln, Inc.*; Dreyfus Management, Inc.*; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++; (cont'd) Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Dreyfus Precious Metals, Inc.*; Dreyfus Thrift & Commerce+++; The Dreyfus Trust Company (N.J.)++; Seven Six Seven Agency, Inc.*; Vice President: Dreyfus Growth Opportunity Fund, Inc.++; Trustee: Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Pennsylvania Municipal Money Market Fund++; Investment Officer: The Dreyfus Fund Incorporated++ ROBERT F. DUBUSS Director and Treasurer: Vice President Major Trading Corporation*; Director and Vice President: The Dreyfus Consumer Credit Corporation*; The Truepenny Corporation*; Vice President: Dreyfus Consumer Life Insurance Company*; Treasurer: Dreyfus Management, Inc.*; Dreyfus Precious Metals, Inc.*; Dreyfus Service Corporation*; Assistant Treasurer: The Dreyfus Fund Incorporated++; Director: The Dreyfus Trust Company++; The Dreyfus Trust Company (N.J.)++; Dreyfus Thrift & Commerce**** ALAN M. EISNER Director and President: Vice President and Chief The Truepenny Corporation*; Financial Officer Vice President and Chief Financial Officer: Dreyfus Acquisition Corporation*; Dreyfus Consumer Life Insurance Company*; Treasurer: Dreyfus Realty Advisors, Inc.+++; Treasurer, Financial Officer and Director: The Dreyfus Trust Company++; The Dreyfus Trust Company (N.J.)++; Director: Dreyfus Thrift & Commerce****; Vice President and Director: The Dreyfus Consumer Credit Corporation* DAVID W. BURKE Vice President and Director: Vice President and Chief The Dreyfus Trust Company++; Administrative Officer Formerly, President: CBS News, a division of CBS, Inc. 524 West 57th Street New York, New York 10019 Director: Dreyfus BASIC Municipal Fund++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Trustee: Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Intermediate Municipal Bond Fund++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Cash Management++; Dreyfus Connecticut Intermediate Municipal Bond Fund++; Dreyfus Government Cash Management++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus Massachusetts Intermediate Municipal Bond Fund++; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Municipal Cash Management Plus++; Dreyfus New Jersey Intermediate Municipal Bond Fund++; Dreyfus New York Municipal Cash Management++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus Pennsylvania Intermediate Municipal Bond Fund++; DAVID W. BURKE Dreyfus Pennsylvania Municipal Money (cont'd) Market Fund++; Dreyfus Short-Intermediate Government Fund++ Dreyfus Strategic Income++; Dreyfus Strategic Investing++; Dreyfus Tax Exempt Cash Management++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++ 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.*; Senior Vice President: Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Edison Electric Index Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus New York Municipal Cash Management++; Dreyfus Tax Exempt Cash Management++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus-Wilshire Target Funds, Inc.++; Peoples Index Fund, Inc.++; Peoples S&P MidCap Index Fund, Inc.++; Vice President: The Dreyfus Trust Company++; Premier Insured Municipal Bond Fund++; Premier California Municipal Bond Fund++; Premier Municipal Bond Fund++; Premier New York Municipal Bond Fund++; Vice President-Sales: The Dreyfus Trust Company (N.J.)++; Treasurer: Pacific American Fund+++++ DANIEL C. MACLEAN Director, Vice President and Secretary: Vice President and General Dreyfus Precious Metals, Inc.*; Counsel Director and Vice President: The Dreyfus Consumer Credit Corporation*; The Dreyfus Trust Company (N.J.)++; Director and Secretary: Dreyfus Partnership Management, Inc.*; Major Trading Corporation*; The Truepenny Corporation+; Director: Dreyfus America Fund++++; Dreyfus Consumer Life Insurance Company*; The Dreyfus Trust Company++; Vice President: Dreyfus Appreciation Fund, Inc.++; Dreyfus BASIC Municipal Fund++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; Dreyfus Edison Electric Index Fund, Inc.++; Dreyfus Florida Intermediate Municipal Bond Fund++; Dreyfus Focus Funds, Inc.++; Dreyfus GNMA Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Growth and Income Fund, Inc.++; Dreyfus Growth Opportunity Fund, Inc.++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus Insured Municipal Bond Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus Investors GNMA Fund++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New Leaders Fund, Inc.++; DANIEL C. MACLEAN Dreyfus New York Insured Tax Exempt Bond (cont'd) Fund++; Dreyfus New York Municipal Cash Management++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Dreyfus Pennsylvania Municipal Money Market Fund++; Dreyfus Short-Intermediate Government Fund++; Dreyfus Short-Intermediate Municipal Bond Fund++; The Dreyfus Socially Responsible Growth Fund, Inc.++; Dreyfus Tax Exempt Cash Management++; The Dreyfus Third Century Fund, Inc.++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus-Wilshire Target Funds, Inc.++; First Prairie Cash Management++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Municipal Money Market Fund++; First Prairie Tax Exempt Bond Fund, Inc. ++; First Prairie U.S. Government Income Fund++; First Prairie U.S. Treasury Securities Cash Management++; General California Municipal Money Market Fund++; General Government Securities Money Market Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Bond Fund, Inc.++; General Municipal Money Market Fund, Inc.++; General New York Municipal Bond Fund, Inc.++; General New York Municipal Money Market Fund++; Peoples Index Fund, Inc.++; Peoples S&P MidCap Index Fund, Inc.++; Premier Insured Municipal Bond Fund++; Premier California Municipal Bond Fund++; Premier GNMA Fund++; Premier Growth Fund, Inc.++; Premier Municipal Bond Fund++; DANIEL C. MACLEAN Premier New York Municipal Bond Fund++; (cont'd) Premier State Municipal Bond Fund++; Secretary: Dreyfus A Bonds Plus, Inc.++; Dreyfus Acquisition Corporation*; Dreyfus Asset Allocation Fund, Inc.++; Dreyfus Balanced Fund, Inc.++; Dreyfus BASIC Money Market Fund, Inc.++; Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Intermediate Municipal Bond Fund++; Dreyfus California Municipal Income, Inc.++; Dreyfus Capital Growth Fund (A Premier Fund)++; Dreyfus Connecticut Intermediate Municipal Bond Fund++; Dreyfus Florida Municipal Money Market Fund++; The Dreyfus Fund Incorporated++; Dreyfus Global Bond Fund, Inc.++; Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus Global Investing++; Dreyfus Growth Allocation Fund, Inc.++; Dreyfus Institutional Money Market Fund++; Dreyfus International Equity Fund, Inc.++; Dreyfus Massachusetts Intermediate Municipal Bond Fund++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Municipal Bond Fund, Inc.++; Dreyfus Municipal Income, Inc.++; Dreyfus Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Intermediate Municipal Bond Fund++; Dreyfus New Jersey Municipal Bond Fund, Inc.++; Dreyfus New York Municipal Income, Inc.++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Pennsylvania Intermediate Municipal Bond Fund++; Dreyfus Service Corporation*; Dreyfus Service Organization, Inc.*; Dreyfus Short-Term Income Fund, Inc.++; Dreyfus Strategic Governments Income, Inc.++; Dreyfus Strategic Growth, L.P.++; Dreyfus Strategic Income++; Dreyfus Strategic Investing++; DANIEL C. MACLEAN Dreyfus Strategic Municipal Bond Fund, (cont'd) Inc.++; Dreyfus Strategic Municipals, Inc.++; Dreyfus Variable Investment Fund++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; General California Municipal Bond Fund, Inc.++; Seven Six Seven Agency, Inc.*; Director and Assistant Secretary: The Dreyfus Fund International Limited++++++ JEFFREY N. NACHMAN Vice President-Financial: Vice President - Mutual Dreyfus A Bonds Plus, Inc.++; Fund Accounting Dreyfus Appreciation Fund, Inc.++; Dreyfus California Municipal Income, Inc.++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Capital Growth Fund (A Premier Fund)++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; The Dreyfus Fund Incorporated++; Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus GNMA Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Growth Opportunity Fund, Inc.++; Dreyfus Institutional Money Market Fund++; Dreyfus Insured Municipal Bond Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus Investors GNMA Fund++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Municipal Bond Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus Municipal Income, Inc.++; Dreyfus Municipal Money Market Fund, Inc.++; JEFFREY N. NACHMAN Dreyfus New Jersey Municipal Bond Fund, (cont'd) Inc.++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New Leaders Fund, Inc.++; Dreyfus New York Insured Tax Exempt Bond Fund++; Dreyfus New York Municipal Income, Inc.++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Pennsylvania Municipal Money Market Fund++; Dreyfus Short-Intermediate Government Fund++; Dreyfus Short-Intermediate Municipal Bond Fund++; Dreyfus Strategic Governments Income, Inc.++; Dreyfus Strategic Growth, L.P.++; Dreyfus Strategic Income++; Dreyfus Strategic Investing++; Dreyfus Strategic Municipal Bond Fund, Inc.++; Dreyfus Strategic Municipals, Inc.++; Dreyfus Tax Exempt Cash Management++; The Dreyfus Third Century Fund, Inc.++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus Variable Investment Fund++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Municipal Money Market Fund++; First Prairie Tax Exempt Bond Fund, Inc.++; General California Municipal Bond Fund, Inc.++; General California Municipal Money Market Fund++; JEFFREY N. NACHMAN General Government Securities Money Market (cont'd) Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Bond Fund, Inc.++; General Municipal Money Market Fund, Inc.++; General New York Municipal Bond Fund, Inc.++; General New York Municipal Money Market Fund++; Peoples Index Fund, Inc.++; Premier California Municipal Bond Fund++; Premier GNMA Fund++; Premier Municipal Bond Fund++; Premier New York Municipal Bond Fund++; Premier State Municipal Bond Fund++; Vice President and Treasurer: Dreyfus Asset Allocation Fund, Inc.++; Dreyfus Balanced Fund, Inc.++; Dreyfus BASIC Money Market Fund, Inc.++; Dreyfus BASIC Municipal Fund++; Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Intermediate Municipal Bond Fund++; Dreyfus Connecticut Intermediate Municipal Bond Fund++; Dreyfus Edison Electric Index Fund, Inc.++; Dreyfus Florida Intermediate Municipal Bond Fund++; Dreyfus Florida Municipal Money Market Fund++; Dreyfus Focus Funds, Inc.++; Dreyfus Global Bond Fund, Inc.++; Dreyfus Global Investing++; Dreyfus Growth Allocation Fund, Inc.++; Dreyfus Growth and Income Fund, Inc.++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus International Equity Fund, Inc.++; Dreyfus Massachusetts Intermediate Municipal Bond Fund++; Dreyfus New Jersey Intermediate Municipal Bond Fund++; Dreyfus New York Municipal Cash Management++; Dreyfus Pennsylvania Intermediate Municipal Bond Fund++; Dreyfus Short-Term Income Fund, Inc.++; The Dreyfus Socially Responsible Growth Fund, Inc.++; Dreyfus-Wilshire Target Funds, Inc.++; First Prairie Cash Management++; First Prairie U.S. Government Income Fund++; JEFFREY N. NACHMAN First Prairie U.S. Treasury Securities (Cont'd) Cash Management++; Peoples S&P MidCap Index Fund, Inc.++; Premier Growth Fund, Inc.++; Premier Insured Municipal Bond Fund++; Assistant Treasurer: Pacific American Fund+++++ PETER A. SANTORIELLO Director, President and Investment Vice President Officer: Dreyfus Balanced Fund, Inc.++; Director and President: Dreyfus Management, Inc.*; Vice President: Dreyfus Personal Management, Inc.* ROBERT H. SCHMIDT President and Director: Vice President Dreyfus Service Corporation*; Seven Six Seven Agency, Inc.*; Formerly, Chairman and Chief Executive Officer: Levine, Huntley, Schmidt & Beaver 250 Park Avenue New York, New York 10017 KIRK V. STUMPP Senior Vice President and Vice President - Director of Marketing: New Product Development Dreyfus Service Corporation* PHILIP L. TOIA Chairman of the Board and Vice President: Vice President and Dreyfus Thrift & Commerce****; Director of Fixed- Director: Income Research The Dreyfus Security Savings Bank F.S.B.+; Senior Loan Officer and Director: The Dreyfus Trust Company++; Vice President: The Dreyfus Consumer Credit Corporation*; President and Director: Dreyfus Personal Management, Inc.*; Director: Dreyfus Realty Advisors, Inc.+++; 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 KATHERINE C. WICKHAM Vice President: Assistant Vice President - Dreyfus Consumer Life Insurance Human Resources Company++; Formerly, Assistant Commissioner: Department of Parks and Recreation of the City of New York 830 Fifth Avenue New York, New York 10022 JOHN J. PYBURN Treasurer and Assistant Secretary: Assistant Vice President The Dreyfus Fund International Limited++++++; Treasurer: Dreyfus A Bonds Plus, Inc.++; Dreyfus Appreciation Fund, Inc.++; Dreyfus California Municipal Income, Inc.++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Capital Growth Fund (A Premier Fund)++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; The Dreyfus Fund Incorporated++; Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus GNMA Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Growth Opportunity Fund, Inc.++; Dreyfus Institutional Money Market Fund++; Dreyfus Insured Municipal Bond Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus Investors GNMA Fund++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Municipal Bond Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus Municipal Income, Inc.++; Dreyfus Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Municipal Bond Fund, Inc.++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New Leaders Fund, Inc.++; Dreyfus New York Insured Tax Exempt Bond Fund++; Dreyfus New York Municipal Income, Inc.++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; JOHN J. PYBURN Dreyfus New York Tax Exempt Intermediate (cont'd) Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Pennsylvania Municipal Money Market Fund++; Dreyfus Short-Intermediate Government Fund++; Dreyfus Short-Intermediate Municipal Bond Fund++; Dreyfus Strategic Governments Income, Inc.++; Dreyfus Strategic Growth, L.P.++; Dreyfus Strategic Income++; Dreyfus Strategic Investing++; Dreyfus Strategic Municipal Bond Fund, Inc.++; Dreyfus Strategic Municipals, Inc.++; Dreyfus Tax Exempt Cash Management++; The Dreyfus Third Century Fund, Inc.++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus Variable Investment Fund++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Municipal Money Market Fund++; First Prairie Tax Exempt Bond Fund, Inc. ++; General California Municipal Bond Fund, Inc.++; General California Municipal Money Market Fund++; General Government Securities Money Market Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Bond Fund, Inc.++; General Municipal Money Market Fund, Inc.++; General New York Municipal Bond Fund, Inc.++; General New York Municipal Money Market Fund++; Peoples Index Fund, Inc.++; JOHN J. PYBURN Premier California Municipal Bond Fund++; (cont'd) Premier GNMA Fund++; Premier Municipal Bond Fund++; Premier New York Municipal Bond Fund++; Premier State Municipal Bond Fund++ MAURICE BENDRIHEM Treasurer: Controller Dreyfus Consumer Life Insurance Company*; Dreyfus Partnership Management, Inc.*; Dreyfus Service Organization, Inc.*; Seven Six Seven Agency, Inc.*; The Truepenny Corporation*; Controller: Dreyfus Acquisition Corporation*; The Dreyfus Trust Company++; The Dreyfus Trust Company (N.J.)++; The Dreyfus Consumer Credit Corporation*; Assistant Treasurer: Dreyfus Precious Metals* Formerly, Vice President-Financial Planning, Administration and Tax: Showtime/The Movie Channel, Inc. 1633 Broadway New York, New York 10019 MARK N. JACOBS Vice President: Secretary and Deputy Dreyfus A Bonds Plus, Inc.++; General Counsel Dreyfus Asset Allocation Fund, Inc.++; Dreyfus Balanced Fund, Inc.++; Dreyfus BASIC Money Market Fund, Inc.++; Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Intermediate Municipal Bond Fund++; Dreyfus Capital Growth Fund (A Premier Fund)++; Dreyfus Connecticut Intermediate Municipal Bond Fund++; Dreyfus Edison Electric Index Fund, Inc.++; Dreyfus Florida Municipal Money Market Fund++; Dreyfus Focus Funds, Inc.++; The Dreyfus Fund Incorporated++; Dreyfus Global Bond Fund, Inc.++; Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus Global Investing++; Dreyfus Growth Allocation Fund, Inc.++; Dreyfus Institutional Money Market Fund++; Dreyfus International Equity Fund, Inc.++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Massachusetts Intermediate Municipal Bond Fund++; Dreyfus Money Market Instruments, Inc.++; MARK N. JACOBS Dreyfus Municipal Bond Fund, Inc.++; (cont'd) Dreyfus Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Intermediate Municipal Bond Fund++; Dreyfus New Jersey Municipal Bond Fund, Inc.++; Dreyfus 100% U.S. Treasury Intermediate Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Pennsylvania Intermediate Municipal Bond Fund++; Dreyfus Short-Term Income Fund, Inc.++; Dreyfus Strategic Growth, L.P.++; Dreyfus Strategic Income++; Dreyfus Strategic Investing++; Dreyfus Strategic Municipal Bond Fund, Inc.++; Dreyfus Strategic Municipals, Inc.++; Dreyfus Variable Investment Fund++; Dreyfus-Wilshire Target Funds, Inc.++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; General California Municipal Bond Fund, Inc.++; Peoples Index Fund, Inc.++; Peoples S&P MidCap Index Fund, Inc.++; Director: World Balanced Fund++++; Secretary: Dreyfus Appreciation Fund, Inc.++; Dreyfus BASIC Municipal Fund++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Capital Value Fund (A Premier Fund)++; Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; The Dreyfus Consumer Credit Corporation*; Dreyfus Consumer Life Insurance Company*; Dreyfus Florida Intermediate Municipal Bond Fund++; Dreyfus GNMA Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Growth and Income Fund, Inc.++; Dreyfus Growth Opportunity Fund, Inc.++; Dreyfus Institutional Short Term Treasury Fund++; MARK N. JACOBS Dreyfus Insured Municipal Bond Fund, (cont'd) Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus Investors GNMA Fund++; Dreyfus Management, Inc.*; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New Leaders Fund, Inc.++; Dreyfus New York Insured Tax Exempt Bond Fund++; Dreyfus New York Municipal Cash Management++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; Dreyfus Pennsylvania Municipal Money Market Fund++; Dreyfus Short-Intermediate Government Fund++; Dreyfus Short-Intermediate Municipal Bond Fund++; The Dreyfus Socially Responsible Growth Fund, Inc.++; Dreyfus Tax Exempt Cash Management++; The Dreyfus Third Century Fund, Inc.++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; First Prairie Cash Management++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Municipal Money Market Fund++; First Prairie Tax Exempt Bond Fund, Inc. ++; First Prairie U.S. Government Income Fund++; First Prairie U.S. Treasury Securities Cash Management++; General California Municipal Money Market Fund++; MARK N. JACOBS General Government Securities Money Market (cont'd) Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Bond Fund, Inc.++; General Municipal Money Market Fund, Inc.++; General New York Municipal Bond Fund, Inc.++; General New York Municipal Money Market Fund++; Pacific American Fund+++++; Premier Insured Municipal Bond Fund++; Premier California Municipal Bond Fund++; Premier GNMA Fund++; Premier Growth Fund, Inc.++; Premier Municipal Bond Fund++; Premier New York Municipal Bond Fund++; Premier State Municipal Bond Fund++; Assistant Secretary: Dreyfus Service Organization, Inc.*; Major Trading Corporation*; The Truepenny Corporation* CHRISTINE PAVALOS Assistant Secretary: Assistant Secretary Dreyfus A Bonds Plus, Inc.++; Dreyfus Acquisition Corporation*; Dreyfus Appreciation Fund, Inc.++; Dreyfus Asset Allocation Fund, Inc.++; Dreyfus Balanced Fund, Inc.++; Dreyfus BASIC Money Market Fund, Inc.++; Dreyfus BASIC Municipal Fund++; Dreyfus BASIC U.S. Government Money Market Fund++; Dreyfus California Intermediate Municipal Bond Fund++; Dreyfus California Municipal Income, Inc.++; Dreyfus California Tax Exempt Bond Fund, Inc.++; Dreyfus California Tax Exempt Money Market Fund++; Dreyfus Capital Growth Fund (A Premier Fund)++; Dreyfus Capital Value Fund, (A Premier Fund)++; Dreyfus Cash Management++; Dreyfus Cash Management Plus, Inc.++; Dreyfus Connecticut Intermediate Municipal Bond Fund++; Dreyfus Connecticut Municipal Money Market Fund, Inc.++; Dreyfus Edison Electric Index Fund, Inc.++; Dreyfus Florida Intermediate Municipal Bond Fund++; Dreyfus Florida Municipal Money Market Fund++; Dreyfus Focus Funds, Inc.++; The Dreyfus Fund Incorporated++; CHRISTINE PAVALOS Dreyfus Global Bond Fund, Inc.++; (cont'd) Dreyfus Global Growth, L.P. (A Strategic Fund)++; Dreyfus Global Investing++; Dreyfus GNMA Fund, Inc.++; Dreyfus Government Cash Management++; Dreyfus Growth Allocation Fund, Inc.++; Dreyfus Growth and Income, Inc.++; Dreyfus Growth Opportunity Fund, Inc.++; Dreyfus Institutional Money Market Fund++; Dreyfus Institutional Short Term Treasury Fund++; Dreyfus Insured Municipal Bond Fund, Inc.++; Dreyfus Intermediate Municipal Bond Fund, Inc.++; Dreyfus International Equity Fund, Inc.++; Dreyfus Investors GNMA Fund++; Dreyfus Life and Annuity Index Fund, Inc.++; Dreyfus Liquid Assets, Inc.++; Dreyfus Management, Inc.*; Dreyfus Massachusetts Intermediate Municipal Bond Fund++; Dreyfus Massachusetts Municipal Money Market Fund++; Dreyfus Massachusetts Tax Exempt Bond Fund++; Dreyfus Michigan Municipal Money Market Fund, Inc.++; Dreyfus Money Market Instruments, Inc.++; Dreyfus Municipal Bond Fund, Inc.++; Dreyfus Municipal Cash Management Plus++; Dreyfus Municipal Income, Inc.++; Dreyfus Municipal Money Market Fund, Inc.++; Dreyfus New Jersey Intermediate Municipal Bond Fund++; Dreyfus New Jersey Municipal Bond Fund, Inc.++; Dreyfus New Jersey Municipal Money Market Fund, Inc.++; Dreyfus New Leaders Fund, Inc.++; Dreyfus New York Insured Tax Exempt Bond Fund++; Dreyfus New York Municipal Cash Management++; Dreyfus New York Municipal Income, Inc.++; Dreyfus New York Tax Exempt Bond Fund, Inc.++; Dreyfus New York Tax Exempt Intermediate Bond Fund++; Dreyfus New York Tax Exempt Money Market Fund++; Dreyfus Ohio Municipal Money Market Fund, Inc.++; CHRISTINE PAVALOS Dreyfus 100% U.S. Treasury Intermediate (cont'd) Term Fund++; Dreyfus 100% U.S. Treasury Long Term Fund++; Dreyfus 100% U.S. Treasury Money Market Fund++; Dreyfus 100% U.S. Treasury Short Term Fund++; Dreyfus Pennsylvania Intermediate Municipal Bond Fund++; Dreyfus Pennsylvania Municipal Money Market Fund++; Dreyfus Service Corporation*; Dreyfus Short-Intermediate Government Fund++; Dreyfus Short-Intermediate Municipal Bond Fund++; Dreyfus Short-Term Income Fund, Inc.++; The Dreyfus Socially Responsible Growth Fund, Inc.++; Dreyfus Strategic Governments Income, Inc.++; Dreyfus Strategic Growth, L.P.++; Dreyfus Strategic Income++; Dreyfus Strategic Investing++; Dreyfus Strategic Municipal Bond Fund, Inc.++; Dreyfus Strategic Municipals, Inc.++; Dreyfus Tax Exempt Cash Management++; The Dreyfus Third Century Fund, Inc.++; Dreyfus Treasury Cash Management++; Dreyfus Treasury Prime Cash Management++; Dreyfus Variable Investment Fund++; Dreyfus-Wilshire Target Funds, Inc.++; Dreyfus Worldwide Dollar Money Market Fund, Inc.++; First Prairie Cash Management++; First Prairie Diversified Asset Fund++; First Prairie Money Market Fund++; First Prairie Tax Exempt Bond Fund, Inc. ++; First Prairie Municipal Money Market Fund++; First Prairie U.S. Government Income Fund++; First Prairie U.S. Treasury Securities Cash Management++; General California Municipal Bond Fund, Inc.++; General California Municipal Money Market Fund++; General Government Securities Money Market Fund, Inc.++; General Money Market Fund, Inc.++; General Municipal Bond Fund, Inc.++; CHRISTINE PAVALOS General Municipal Money Market Fund, (cont'd) Inc.++; General New York Municipal Bond Fund, Inc.++; General New York Municipal Money Market Fund++; Peoples Index Fund, Inc.++; Peoples S&P MidCap Index Fund, Inc.++; Premier Insured Municipal Bond Fund++; Premier California Municipal Bond Fund++; Premier GNMA Fund++; Premier Growth Fund, Inc.++; Premier Municipal Bond Fund++; Premier New York Municipal Bond Fund++; Premier State Municipal Bond Fund++; The Truepenny Corporation* ______________________________________ * The address of the business so indicated is 200 Park Avenue, New York, New York 10166. ** The address of the business so indicated is 80 Cutter Mill Road, Great Neck, New York 11021. *** The address of the business so indicated is 45 Broadway, New York, New York 10006. **** The address of the business so indicated is Five Triad Center, Salt Lake City, Utah 84180. + The address of the business so indicated is Atrium Building, 80 Route 4 East, Paramus, New Jersey 07652. ++ The address of the business so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144. +++ The address of the business so indicated is One Rockefeller Plaza, New York, New York 10020. ++++ The address of the business so indicated is 2 Boulevard Royal, Luxembourg. +++++ The address of the business so indicated is 800 West Sixth Street, Suite 1000, Los Angeles, California 90017. ++++++ The address of the business so indicated is Nassau, Bahama Islands. Item 29. Principal Underwriters ________ ______________________ (a) Other investment companies for which Registrant's principal underwriter (exclusive distributor) acts as principal underwriter or exclusive distributor: 1) Comstock Partners Strategy Fund, Inc. 2) Dreyfus A Bonds Plus, Inc. 3) Dreyfus Appreciation Fund, Inc. 4) Dreyfus Asset Allocation Fund, Inc. 5) Dreyfus Balanced Fund, Inc. 6) Dreyfus BASIC Money Market Fund, Inc. 7) Dreyfus BASIC Municipal Fund 8) Dreyfus BASIC U.S. Government Money Market Fund 9) Dreyfus California Intermediate Municipal Bond Fund 10) Dreyfus California Tax Exempt Bond Fund, Inc. 11) Dreyfus California Tax Exempt Money Market Fund 12) Dreyfus Capital Value Fund, Inc. 13) Dreyfus Cash Management 14) Dreyfus Cash Management Plus, Inc. 15) Dreyfus Connecticut Intermediate Municipal Bond Fund 16) Dreyfus Connecticut Municipal Money Market Fund, Inc. 17) The Dreyfus Convertible Securities Fund, Inc. 18) Dreyfus Edison Electric Index Fund, Inc. 19) Dreyfus Florida Intermediate Municipal Bond Fund 20) Dreyfus Florida Municipal Money Market Fund 21) Dreyfus Focus Funds, Inc. 22) The Dreyfus Fund Incorporated 23) Dreyfus Global Bond Fund, Inc. 24) Dreyfus Global Growth, L.P. (A Strategic Fund) 25) Dreyfus Global Investing, Inc. 26) Dreyfus GNMA Fund, Inc. 27) Dreyfus Government Cash Management 28) Dreyfus Growth and Income Fund, Inc. 29) Dreyfus Growth Opportunity Fund, Inc. 30) Dreyfus Institutional Money Market Fund 31) Dreyfus Institutional Short Term Treasury Fund 32) Dreyfus Insured Municipal Bond Fund, Inc. 33) Dreyfus Intermediate Municipal Bond Fund, Inc. 34) Dreyfus International Equity Fund, Inc. 35) Dreyfus Investors GNMA Fund 36) The Dreyfus Leverage Fund, Inc. 37) Dreyfus Life and Annuity Index Fund, Inc. 38) Dreyfus Liquid Assets, Inc. 39) Dreyfus Massachusetts Intermediate Municipal Bond Fund 40) Dreyfus Massachusetts Municipal Money Market Fund 41) Dreyfus Massachusetts Tax Exempt Bond Fund 42) Dreyfus Michigan Municipal Money Market Fund, Inc. 43) Dreyfus Money Market Instruments, Inc. 44) Dreyfus Municipal Bond Fund, Inc. 45) Dreyfus Municipal Cash Management Plus 46) Dreyfus Municipal Money Market Fund, Inc. 47) Dreyfus New Jersey Intermediate Municipal Bond Fund 48) Dreyfus New Jersey Municipal Bond Fund, Inc. 49) Dreyfus New Jersey Municipal Money Market Fund, Inc. 50) Dreyfus New Leaders Fund, Inc. 51) Dreyfus New York Insured Tax Exempt Bond Fund 52) Dreyfus New York Municipal Cash Management 53) Dreyfus New York Tax Exempt Bond Fund, Inc. 54) Dreyfus New York Tax Exempt Intermediate Bond Fund 55) Dreyfus New York Tax Exempt Money Market Fund 56) Dreyfus Ohio Municipal Money Market Fund, Inc. 57) Dreyfus 100% U.S. Treasury Intermediate Term Fund 58) Dreyfus 100% U.S. Treasury Long Term Fund 59) Dreyfus 100% U.S. Treasury Money Market Fund 60) Dreyfus 100% U.S. Treasury Short Term Fund 61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund 62) Dreyfus Pennsylvania Municipal Money Market Fund 63) Dreyfus Short-Intermediate Government Fund 64) Dreyfus Short-Intermediate Municipal Bond Fund 65) Dreyfus Short-Term Income Fund, Inc. 66) The Dreyfus Socially Responsible Growth Fund, Inc. 67) Dreyfus Strategic Growth, L.P. 68) Dreyfus Strategic Income 69) Dreyfus Strategic Investing 70) Dreyfus Tax Exempt Cash Management 71) The Dreyfus Third Century Fund, Inc. 72) Dreyfus Treasury Cash Management 73) Dreyfus Treasury Prime Cash Management 74) Dreyfus Variable Investment Fund 75) Dreyfus-Wilshire Target Funds, Inc. 76) Dreyfus Worldwide Dollar Money Market Fund, Inc. 77) First Prairie Cash Management 78) First Prairie Diversified Asset Fund 79) First Prairie Money Market Fund 80) First Prairie Municipal Money Market Fund 81) First Prairie Tax Exempt Bond Fund, Inc. 82) First Prairie U.S. Government Income Fund 83) First Prairie U.S. Treasury Securities Cash Management 84) General California Municipal Bond Fund, Inc. 85) General California Municipal Money Market Fund 86) General Government Securities Money Market Fund, Inc. 87) General Money Market Fund, Inc. 88) General Municipal Bond Fund, Inc. 89) General Municipal Money Market Fund, Inc. 90) General New York Municipal Bond Fund, Inc. 91) General New York Municipal Money Market Fund 92) Pacific American Fund 93) Peoples Index Fund, Inc. 94) Peoples S&P MidCap Index Fund, Inc. 95) Premier Insured Municipal Bond Fund 96) Premier California Municipal Bond Fund 97) Premier GNMA Fund 98) Premier Growth Fund, Inc. 99) Premier Municipal Bond Fund 100) Premier New York Municipal Bond Fund 101) Premier State Municipal Bond Fund (b) Positions and Name and principal Positions and offices with offices with business address Dreyfus Service Corporation Registrant __________________ ___________________________ _____________ Howard Stein* Chairman of the Board None Robert H. Schmidt* President and Director None Joseph S. DiMartino* Executive Vice President and Director None Lawrence M. Greene* Executive Vice President and Director None Julian M. Smerling* Executive Vice President and Director None Elie M. Genadry* Executive Vice President Vice President Henry D. Gottmann* Executive Vice President None Donald A. Nanfeldt* Executive Vice President Vice President Kevin Flood* Senior Vice President None Roy Gross* Senior Vice President None Irene Papadoulis** Senior Vice President None Kirk Stumpp* Senior Vice President and None Director of Marketing Diane M. Coffey* Vice President None Walter T. Harris* Vice President None William Harvey* Vice President None Adwick Pinnock** Vice President None George Pirrone* Vice President/Trading None Karen Rubin Waldmann* Vice President None Peter D. Schwab* Vice President/New Products None Michael Anderson* Assistant Vice President None Carolyn Sobering* Assistant Vice President-Trading None Daniel C. Maclean* Secretary Vice President Robert F. Dubuss* Treasurer None Maurice Bendrihem* Controller None Michael J. Dolitsky* Assistant Controller None Susan Verbil Goldgraben* Assistant Treasurer None Christine Pavalos* Assistant Secretary Assistant Secretary Broker-Dealer Division of Dreyfus Service Corporation ===================================================== Positions and offices with Positions and Name and principal Broker-Dealer Division of offices with business address Dreyfus Service Corporation Registrant __________________ ___________________________ _____________ Elie M. Genadry* President Vice President Craig E. Smith* Executive Vice President None Peter Moeller* Vice President and Sales Manager None Kristina Williams Pomano Beach, FL Vice President-Administration None James Barr Newton, MA Regional Vice President None Mary B. Brundage Pasadena, CA Regional Vice President None Edward Donley Latham, NY Regional Vice President None Thomas Ellis Ranchero Murietta, CA Regional Vice President None Glenn Farinacci* Regional Vice President None Peter S. Ferrentino San Francisco, CA Regional Vice President None William Frey Hoffman Estates, IL Regional Vice President None Suzanne Haley Tampa, FL Regional Vice President None Philip Jochem Warrington, PA Regional Vice President None Richard P. Kundracik Waterford, MI Regional Vice President None Michael Lane Beaver Falls, PA Regional Vice President None Fred Lanier Atlanta, GA Regional Vice President None Beth Presson Colchester, VT Regional Vice President None Joseph Reaves New Orleans, LA Regional Vice President None Christian Renninger Germantown, MD Regional Vice President None Robert J. Richardson Houston, TX Regional Vice President None Kurt Wiessner Minneapolis, MN Regional Vice President None Institutional Services Division of Dreyfus Service Corporation ============================================================== Positions and offices with Positions and Name and principal Institutional Services Division offices with business address of Dreyfus Service Corporation Registrant __________________ _______________________________ _____________ Elie M. Genadry* President Vice President Donald A. Nanfeldt* Executive Vice President Vice President Kathleen M. Lewis++ Vice President-Institutional None Sales Manager Charles Cardona** Senior Vice President- None Institutional Services Stacy Alexander* Vice President-Bank Wholesale None Eric Almquist* Vice President-Eastern Regional None Sales Manager James E. Baskin+++++++ Vice President-Institutional Sales None Kenneth Bernstein Boca Raton, FL Vice President-Bank Wholesale None Stephen Burke* Vice President-Bank Wholesaler None Sales Manager Laurel A. Diedrick Burrows*** Vice President-Bank Wholesale None Gary F. Callahan Somerville, NJ Vice President-Bank Wholesale None Daniel L. Clawson++++ Vice President-Institutional Sales None Anthony T. Corallo San Francisco, CA Vice President-Institutional Sales None Bonnie M. Cymbryla Brewerton, NY Vice President-Bank Wholesale None William Davis Bellevue, WA Vice President None William E. Findley**** Vice President None Melinda Miller Gordon* Vice President None Christina Haydt++ Vice President-Institutional Sales None Carol Anne Kelty* Vice President-Institutional Sales None Gwenn Kessler***** Vice President-Bank Wholesale None Bradford Lange* Vice President-Bank Wholesale None Eva Machek***** Vice President-Institutional Sales None Bradley R. Maybury Seattle, WA Vice President-Bank Wholesale None Mary McCabe*** Vice President-Bank Wholesale None James McNamara***** Vice President-Institutional Sales None James Neiland* Vice President-Bank Wholesale- None National Accounts Manager Susan M. O'Connor* Vice President-Institutional Seminars None Andrew Pearson+++ Vice President-Institutional Sales None Jean Heitzman Penny***** Vice President-Institutional Sales None Dwight Pierce+ Vice President-Bank Wholesale None Lorianne Pinto* Vice President-Bank Wholesale None Douglas Rentschler Grosse Point Park, MI Vice President-Bank Wholesale None Leah Ryan**** Vice President-Institutional Sales None Edward Sands* Vice President-Institutional Administration None William Schalda* Vice President-Institutional None Administration Sue Ann Seefeld++++ Vice President-Institutional Sales None Brant Snavely Charlotte, NC Vice President-Bank Wholesale None Thomas Stallings Richmond, VA Vice President-Institutional Sales None Elizabeth Biordi Vice President-Institutional Wieland* Administration None Thomas Winnick Malverne, PA Vice President-Bank Wholesale None Jeanne Butler* Assistant Vice President- Institutional Operations None Roberta Hall***** Assistant Vice President- Institutional Servicing None Tracy Hopkins** Assistant Vice President- Institutional Operations None Lois Paterson* Assistant Vice President- Institutional Operations None Mary Rogers** Assistant Vice President- Institutional Servicing None Karen Markovic Shpall++++++ Assistant Vice President None Patrick Synan** Assistant Vice President- Institutional Support None Emilie Tongalson** Assistant Vice President- Institutional Servicing None Tonda Watson**** Assistant Vice President- Institutional Sales None Group Retirement Plans Division of Dreyfus Service Corporation ============================================================== Positions and offices with Positions and Name and principal Group Retirement Plans Division offices with business address of Dreyfus Service Corporation Registrant __________________ _______________________________ _____________ Elie M. Genadry* President Vice President Robert W. Stone* Executive Vice President None Leonard Larrabee* Vice President and Senior Counsel None George Anastasakos* Vice President None Bart Ballinger++ Vice President-Sales None Paula Cleary* Vice President-Marketing None Ellen S. Dinas* Vice President-Marketing/Communications None William Gallagher* Vice President-Sales None Jeffrey Lejune Dallas, TX Vice President-Sales None Samuel Mancino** Vice President-Installation None Joanna Morris* Vice President-Sales None Joseph Pickert++ Vice President-Sales None Alison Saunders** Vice President-Enrollment None Scott Zeleznik* Vice President-Sales None Alana Zion* Vice President-Sales None Jeffrey Blake* Assistant Vice President-Sales None _____________________________________________________ * The address of the offices so indicated is 200 Park Avenue, New York, New York 10166 ** The address of the offices so indicated is 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144. *** The address of the offices so indicated is 580 California Street, San Francisco, California 94104. **** The address of the offices so indicated is 3384 Peachtree Road, Suite 100, Atlanta, Georgia 30326-1106. ***** The address of the offices so indicated is 190 South LaSalle Street, Suite 2850, Chicago, Illinois 60603. + The address of the offices so indicated is P.O. Box 1657, Duxbury, Massachusetts 02331. ++ The address of the offices so indicated is 800 West Sixth Street, Suite 1000, Los Angeles, California 90017. +++ The address of the offices so indicated is 11 Berwick Lane, Edgewood, Rhode Island 02905. ++++ The address of the offices so indicated is 1700 Lincoln Street, Suite 3940, Denver, Colorado 80203. +++++ The address of the offices so indicated is 6767 Forest Hill Avenue, Richmond, Virginia 23225. ++++++ The address of the offices so indicated is 2117 Diamond Street, San Diego, California 92109. +++++++ The address of the offices so indicated is P.O. Box 757, Holliston, Massachusetts 01746. Item 30. Location of Accounts and Records ________________________________ 1. The Shareholder Services Group, Inc., a subsidiary of First Data Corporation P.O. Box 9671 Providence, Rhode Island 02940-9671 2. The Bank of New York 110 Washington Street New York, New York 10286 3. The Dreyfus Corporation 200 Park Avenue New York, New York 10166 Item 31. Management Services _______ ___________________ Not Applicable Item 32. Undertakings ________ ____________ (1) To furnish each person to whom a prospectus is delivered with a copy of it latest annual report to shareholders, upon request and without change. (2) To call a meeting of shareholders for the purpose of voting upon the question of removal of a trustee or trustees when requested in writing to do so by the holders of at least 10% of the Registrant's outstanding shares of beneficial interest 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. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Amendment to the Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, and State of New York on the 23rd day of June, 1994. PREMIER MUNICIPAL BOND FUND (Registrant) By: /s/ Richard J. Moynihan* ________________________________________________ RICHARD J. MOYNIHAN, 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. Signature Title Date ________________________________ _____________________ _________ /s/ Richard J. Moynihan* President (Principal 06/23/94 ________________________________ Executive Officer) and Richard J. Moynihan Trustee /s/ John J. Pyburn* Treasurer (Principal 06/23/94 ________________________________ Financial and John J. Pyburn Accounting Officer) /s/ Clifford L. Alexander, Jr.* Trustee 06/23/94 ________________________________ Clifford L. Alexander, Jr. /s/ Peggy C. Davis* Trustee 06/23/94 ________________________________ Peggy C. Davis /s/ Ernest Kafka* Trustee 06/23/94 ________________________________ Ernest Kafka /s/ Saul B. Klaman* Trustee 06/23/94 ________________________________ Saul B. Klaman /s/ Nathan Leventhal* Trustee 06/23/94 ________________________________ Nathan Leventhal *By:___________________________________ Robert R. Mullery, Attorney-in-Fact EX-3.(II) 2 BY LAWS BY-LAWS OF PREMIER TAX EXEMPT 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 Except as from time to time otherwise provided by the Trustees, the fiscal year of the Trust shall end on July 31st in each year. 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 of shares, but not a meeting of all shareholders of the Trust, then only the shareholders of such one or more series 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, at the applicants' expense, 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 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 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 5, 1986 EX-99.B8B 3 SUB-CUSTODIAN AGREEMENT SUBCUSTODIAN AGREEMENT The undersigned custodian (the "custodian") for the investment company identified below (the "Fund") hereby appoints on the following terms and conditions Bankers Trust Company as subcustodian (the "Subcustodian") for it and the Subcustodian hereby accepts such appointment on the following terms and con- ditions as of the date set forth below. 1. QUALIFICATION. The Custodian and the Subcustodian each represents to the other and to the Fund that it is qualified to act as a custodian for a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). 2. SUBCUSTODY. The Subcustodian agrees to maintain a separate account and to hold segregated at all times from the Subcustodian's securities and from all other customers' securities held by the Subcustodian, all the Fund's securities and evidence of rights thereto ("Fund Securities") deposited, from time to time by the Custodian with the Subcustodian. The Subcustodian will accept, hold or dispose of and take other actions with respect to Fund Securities in accordance with the Instructions of the Custodian given in the manner set forth in Section 4 and will take certain other actions as specified in Section 3. The Subcustodian hereby waives any claim against or lien on any Fund Securities. The Subcustodian may take steps to register and continue to hold Fund Securities in the name of the Subcustodian's nominee and shall take such other steps as the Subcustodian believes necessary or appropriate to carry out efficiently the terms of this Agreement. To the extent that ownership of Fund Securities may be recorded by a book entry system maintained by any transfer agent or registrar for such Fund Securities or by Depository Trust Company, the Subcustodian may hold Fund Securities as a book entry reflecting the ownership of such Fund Securities by its nominee and need not possess certificates or any other evidence of ownership of Fund Securities. 3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except as otherwise instructed pursuant to Section 4, the Subcustodian will (i) present all Fund Securities requiring presentation for any payment thereon, (ii) distribute to the Custodian cash received thereon, (iii) collect and distribute to the Custodian interest and any dividends and distributions on Fund Securities, (iv) at the request of the Custodian, or on its behalf, execute any necessary declarations or certificates of ownership (provided by the Custodian or on its behalf) under any tax law now or here- after in effect, (v) forward to the Custodian, or notify it by telephone of, confirmations, notices, proxies or proxy soliciting materials relating to the Fund Securities received by it as registered holder (and the Custodian agrees to forward same to the Fund), and (vi) promptly report to the Custodian any missed payment or other default upon any Fund Securities known to it as Subcustodian hereunder (the Subcustodian shall be deemed to have knowledge of any payment default on any Fund Securities in respect of which it acts as paying agent). All cash distributions from the Subcustodian to the Custodian will be in same day funds, on the same day that same day funds are received by the Subcustodian unless such distribution required instructions from the Custodian which were not timely received. Promptly after the Subcustodian is furnished with any report of its independent public accountants on an examination of its internal accounting controls and procedures for safeguarding securities held in its custody as subcustodian under this Agreement or under similar agreements, the Subcustodian will furnish a copy thereof to the Custodian. 4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of the Custodian designated from time to time by letter to the Subcustodian, signed by the President or any Vice President and any Assistant Vice President, Assistant Secretary or Assistant Treasurer of the Custodian, as an officer of the Custodian authorized to give instructions to the Subcustodian with respect to Fund Securities (an "Authorized Officer"), shall be authorized to instruct the Subcustodian as to the acceptance, holding, presentation, disposition or any other action with respect to Fund Securities from time to time by telephone, or in writing signed by such Authorized Officer and delivered by tested telex, tested computer printout or such other reasonable method as the Custodian and Subcustodian shall agree is designed to prevent unauthorized officer's instructions; provided, however, the Subcustodian is authorized to accept and act upon orders from the Custodian, whether given orally, by telephone or otherwise, which the Subcustodian reasonably believes to be given by an authorized person. The Subcustodian will promptly transmit to the Custodian all receipts and transaction confirmations in respect of Fund Securities as to which the Subcustodian has received any instructions. The Authorized Officers shall be as set forth on Exhibit A attached hereto and, as amended from time to time, made a part hereof. 5. LIABILITIES. (i) The Subcustodian shall not be liable for any action taken or omitted to be taken in carrying out the terms and provision of this Agreement if done without willful malfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties under this Agreement. Except as otherwise set forth herein, the Subcustodian shall have no responsibility for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rate changes or similar matters relating to the Fund Securities (except at the instructions of the Custodian), nor for informing the Custodian with respect thereto, whether or not the Subcustodian has, or is deemed to have, knowledge of the aforesaid. The Subcustodian is under no duty to supervise or to provide investment counseling or advice to the Custodian or to the Fund relative to the purchase, sale, retention or other disposition of any Fund Securities held hereunder. The Subcustodian shall for the benefit of the Custodian and the Fund use the same care with respect to receiving, safekeeping, handling and delivery of Fund Securities as it uses in respect of its own securities. (ii) The Subcustodian will indemnify, defend and save harmless the Custodian and the Fund from and against all loss, liability, claims and demands incurred by the Custodian or the Fund arising out of or in connection with the Subcustodian's willful malfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties under this Agreement. (iii) The Custodian agrees to be responsible for and indemnify the Subcustodian and any nominee in whose name the Fund Securities are registered, from and against all loss, liability, claims and demands incurred by the Subcustodian and the nominee in connection with the performance of any activity pursuant to this Agreement, done in good faith and without negligence, including any expenses, taxes or other charges which the Subcustodian is required to pay in connection therewith. 6. Each party may terminate this Agreement at any time by not less than ten (10) business days' prior written notice. In the event that such notice is given, the Subcustodian shall make delivery of the Fund Securities held in the Subcustodian account to the Custodian or to any third party within the Borough of Manhattan, specified by the Custodian in writing within ten (10) days of receipt of the termination notice, at the Custodian's expense. 7. All communications required or permitted to be given under this Agreement, unless otherwise agreed by the parties, shall be addressed a follows: (i) to the Subcustodian: Bankers Trust Company 1 Bankers Trust Plaza 14th Floor New York, NY 10015 Attention: Barara Walter RMO Safekeeping Unit (ii) to the Custodian: The Bank of New York 110 Washington Street New York, New York 10286 8. MISCELLANEOUS: this Agreement (i) shall be governed by and construed in accordance with the laws of the State of New York, (ii) may be executed in counterparts each of which shall be deemed an original but all of which shall constitute the same instrument, and (iii) may be amended by the parties hereto in writing. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth below. Dated: April 13, 1992 THE BANK OF NEW YORK Custodian By: ______________________________________ Title: ____________________________________ As Custodian For PREMIER MUNICIPAL BOND FUND BANKERS TRUST COMPANY As Subcustodian By: ___________________________________ Title: ___________________________________ EXHIBIT A TO SUBCUSTODIAN AGREEMENT DATED: APRIL 13, 1992 The Authorized Officers pursuant to Section 4 of the Agreement shall be: _________________________ __________________________ _________________________ __________________________ _________________________ __________________________ _________________________ __________________________ _________________________ __________________________ _________________________ __________________________ Dated: April 13, 1992 THE BANK OF NEW YORK As Custodian By: ___________________________ Title: ________________________ SUBCUSTODIAN AGREEMENT The undersigned custodian (the "Custodian") for the investment company identified in Schedule A attached (collectively, the "Funds") hereby appoints on the following terms and conditions Chemical Bank as subcustodian (the "Subcustodian") for it and the Subcustodian hereby accepts such appointment on the following terms and conditions as of the date set forth below. 1. QUALIFICATION. The Custodian and the Subcustodian each represent to the other and to each Fund that it is qualified to act as custodian for a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). 2. SUBCUSTODY. The Subcustodian agrees to hold in a separate account, segregated at all times from all other accounts maintained by the Subcustodian, all securities and evidence of rights thereto of each of the Funds (collectively, "Fund Securities") deposited, from time to time by the Custodian with the Subcustodian. The Subcustodian will accept, hold or dispose of and take such other reasonable actions with respect to Fund Securities, in addition to those specified in Section 3, in accordance with the instructions of the Custodian relating to Fund Securities given in the manner set forth in Section 4 ("Instructions"). The Subcustodian hereby waives any claim against, or lien on, any Fund Securities for any claim hereunder. Registered Fund Securities may be held in the name of the Subcustodian or nominee. To the extent that ownership of Fund Securities may be recorded by a book entry system maintained by any transfer agent or registrar for such Fund Securities (including, but not limited to, any such system operated by the Subcustodian) or by Depositary Trust Company, the Subcustodian may hold Fund Securities as a book entry reflecting the ownership of such Fund Securities by it or its nominee and need not possess certificates or any other evidence of ownership. 3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except as otherwise instructed pursuant to Section 4, the Subcustodian will (i) present all Fund Securities requiring presentation for any payment thereon, (ii) distribute to the Custodian cash received thereupon, (iii) collect and distribute to the Custodian interest and any dividends and distributions on Fund Securities, (iv) forward to the Custodian all confirmations, notices, proxies or proxy soliciting materials relating to the Fund Securities received by it (and the Custodian agrees to forward same to the Fund), (v) report to the Custodian any missed payment or other default upon any Fund Securities known to it as Subcustodian hereunder, (the Subcustodian shall be deemed to have knowledge of any payment default on any Fund Securities in respect of which it acts as paying agent); all cash distributions from the Subcustodian to the Custodian will be on same day funds, or the same day that same day funds are received by the Subcustodians unless such distribution required instructions from the Custodian which were not timely received, and (vi) at the request of the Custodian, or on its behalf, execute any necessary declarations or certificates of ownership (provided by the Custodian or on its behalf) under any tax law nor or hereafter in effect. The Subcustodian will furnish to the Custodian, upon the Custodian's request, any report of the Subcustodian's independent public accountants on an examination of its internal accounting controls and procedures for safeguarding securities held in its custody for the account of others. 4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of the Custodian designated from time to time by letter to the Subcustodian, signed by the President or any Vice President and any Assistant Vice President, Assistant Secretary or Assistant Treasurer of the Custodian, as an officer of the Custodian authorized to give Instructions to the Subcustodian with respect to Fund Securities (an "Authorized Officer") shall be authorized to instruct the Subcustodian as to the acceptance, holding, voting, presentation, disposition or any other action with respect to Fund Securities from time to time in writing signed by such Authorized Officer and delivered by hand, mail, telecopier, tested telex, tested computer printout or such other reasonable method as the Custodian and Subcustodian shall agree is designed to prevent unauthorized officer's instructions. The Subcustodian is also authorized to accept an act upon Instructions regardless of the manner in which given (whether orally, by telephone or otherwise) if the Subcustodian reasonably believes such Instructions are given by an Authorized Officer. The Subcustodian will promptly transmit to the Custodian all receipts, confirmations or other transactional evidence received by it in respect of Fund Securities as to which the Subcustodian has received any Instructions. Instructions and other communications to the Subcustodian shall be given to Chemical Bank, 55 Water Street, Room 504, New York, New York, Attention: Debt Securities Administration, Phone: (212)820-5616 Telex: (212)269-8510 (or to such other address as the Custodian or the Fund or Funds giving such notice, shall specify by notice to the Subcustodian. 5. THE SUBCUSTODIAN. The Subcustodian shall not be liable for any action taken or omitted to be taken in carrying out the terms and provisions of this Agreement if done without willful malfeasance, bad faith, negligence or reckless disregard of its obligations and duties under this Agreement. The Subcustodian shall not have any responsibility for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest rate changes or similar matters relating to the Fund Securities, except upon Instructions from the Custodian, nor for informing the Custodian with respect thereto, unless the Subcustodian has knowledge or is deemed to have knowledge of the aforesaid. The Subcustodian shall be deemed to have knowledge in circumstances where it is acting as tender agent or paying agent for the Fund Securities. The Subcustodian shall not be under a duty to supervise or to provide advice (other than notice) to the Custodian or any of the Funds relative to any purchase, sale, retention or other disposition of any Fund Securities held hereunder. The Subcustodian shall for the benefit of the Custodian and the Funds be required to exercise the same care with respect to the receiving, safekeeping, handling and delivery of Fund Securities than it customarily exercises in respect of its own securities. The Subcustodian will indemnify, defend and save harmless the Custodian and the Funds from any loss or liability incurred by the Custodian arising out of or in connection with the Subcustodian's willful malfeasance, bad faith, negligence or reckless disregard of its obligations and duties under this Agreement; PROVIDED, HOWEVER, that the Subcustodian shall in no event be liable for any special, indirect or consequential damages. The Custodian agrees to be responsible for, and will indemnify, defend and save harmless the Subcustodian (or any nominee in whose name any Fund Securities are registered) for, any loss or liability incurred by the Subcustodian (or such nominee) arising out of or in connection with any action taken by the Subcustodian (or such nominee) in accordance with any Instructions or any other action taken by the Subcustodian (or such nominee) in good faith and without negligence pursuant to this Agreement, including any expenses, taxes or other charges which the Subcustodian (or such nominee) is required to incur or pay in connection therewith. 6. RESIGNATION. The Subcustodian may resign as such at any time upon not less than five business days' prior written notice to the Custodian. In the event of such resignation or any other termination of this Agreement, the Subcustodian shall deliver all Fund Securities then held by it to the Custodian, or as otherwise directed by the Custodian pursuant to Instructions received by the Subcustodian, at the Custodian's expense; PROVIDED, HOWEVER, that the Subcustodian shall not be required to effect any such delivery outside the Borough of Manhattan. 7. MISCELLANEOUS. This Agreement (i) shall be governed by and construed in accordance with the laws of the State of New York, (ii) may be executed in counterparts each of which shall be deemed an original but all of which shall constitute the same instrument, and (iii) may be amended only by written agreement executed by the parties hereto. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth below. Dated: ______________________________ By: ______________________________ [Address] Telephone: Telex: As Custodian for the Funds Listed in Schedule A attached CHEMICAL BANK By: ______________________________ EX-99.B9A 4 SHAREHOLDER SERVICES PLAN PREMIER MUNICIPAL BOND SHAREHOLDER SERVICES PLAN Introduction: It has been proposed that the above- captioned investment company (the "Fund") adopt a Shareholder Services Plan (the "Plan") under which the Fund would pay the Fund's distributor, Dreyfus Service Corporation (the "Distributor"), for providing personal services and/or maintaining shareholder accounts. The Distributor would be permitted to pay certain financial institutions, securities dealers and other industry professionals (collectively, "Service Agents") in respect of these services. The Plan is not to be adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act"), and the fee under the Plan is intended to be a "service fee" as defined in Article III, Section 26, of the NASD Rules of Fair Practice. The Fund's Board, in considering whether the Fund should implement a written plan, has requested and evaluated such information as it deemed necessary to an informed determination as to whether a written plan should be implemented and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use Fund assets for such purposes. In voting to approve the implementation of such a plan, the Board has concluded, in the exercise of its reasonable business judgment and in light of applicable fiduciary duties, that there is a reasonable likelihood that the plan set forth below will benefit the Fund and its shareholders. The Plan: The material aspects of this Plan are as follows: 1. The Fund shall pay to the Distributor a fee at an annual rate of .25 of 1% of the value of the Fund's average daily net assets attributable to each class of Fund shares, in respect of the provision of personal services to shareholders of the respective class and/or maintenance of shareholder accounts. The Distributor shall determine the amounts to be paid to Service Agents and the basis on which such payments will be made. Payments to a Service Agent are subject to compliance by the Service Agent with the terms of any related Plan agreement between the Service Agent and the Distributor. 2. For the purposes of determining the fees payable under this Plan, the value of the net assets attributable to each class of Fund shares shall be computed in the manner specified in the Fund's Declaration of Trust for the computation of the value of the Fund's net assets attributable to such a class. 3. The Board shall be provided, at least quarterly, with a written report of all amounts expended pursuant to this Plan. The report shall state the purpose for which the amounts were expended. 4. This Plan will become effective immediately upon approval by a majority of the Board members, including a majority of the Board members who are not "interested persons" (as defined in the Act) of the Fund and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan, pursuant to a vote cast in person at a meeting called for the purpose of voting on the approval of this Plan. 5. This Plan shall continue for a period of one year from its effective date, unless earlier terminated in accordance with its terms, and thereafter shall continue automatically for successive annual periods ending September 5, provided such continuance is approved at least annually in the manner provided in paragraph 4 hereof. 6. This Plan may be amended at any time by the Board, provided that any material amendments of the terms of this Plan shall become effective only upon approval as provided in paragraph 4 hereof. 7. This Plan is terminable without penalty at any time by vote of a majority of the Board members who are not "interested persons" (as defined in the Act) of the Fund and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan. 8. The obligations hereunder and under any related Plan agreement shall only be binding upon the assets and property of the Fund and shall not be binding upon any Trustee, officer or shareholder of the Fund individually. Dated: October 19, 1992 Effective: January 15, 1993 EX-23 5 CONSENT OF INDEPENDENT ACCOUNTANT CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the captions "Condensed Financial Information" and "Custodian,Transfer and Dividend Disbursing Agent, Counsel, and Independent Auditors" and to the use of our report dated June 3, 1994, in this Registration Statement (Form N-1A 33-7496) of Premier Municipal Bond Fund. ERNST & YOUNG New York, New York June 21, 1994 EX-99.B10 6 DISTRIBUTION PLAN PREMIER MUNICIPAL BOND FUND DISTRIBUTION PLAN Introduction: It has been proposed that the above- captioned investment company (the "Fund") adopt a Distribution Plan (the "Plan") relating to its Class B shares in accordance with Rule 12b-1 promulgated under the Investment Company Act of 1940, as amended (the "Act"). Under the Plan, the Fund would pay the Fund's distributor, Dreyfus Service Corporation (the "Distributor"), for advertising, marketing and distributing the Fund's Class B shares. The Distributor would be permitted to pay certain financial institutions, securities dealers and other industry professionals (collectively, "Service Agents") in respect of these services. If the proposal is to be implemented, the Act and Rule 12b-1 require that a written plan describing all material aspects of the proposed financing be adopted by the Fund. The Fund's Board, in considering whether the Fund should implement a written plan, has requested and evaluated such information as it deemed necessary to an informed determination as to whether a written plan should be implemented and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use assets attributable to the Fund's Class B shares for such purposes. In voting to approve the implementation of such a plan, the Board has concluded, in the exercise of its reasonable business judgment and in light of applicable fiduciary duties, that there is a reasonable likelihood that the plan set forth below will benefit the Fund and holders of its Class B shares. The Plan: The material aspects of this Plan are as follows: 1. The Fund shall pay to the Distributor a fee at an annual rate of .50 of 1% of the value of the Fund's average daily net assets attributable to Class B for advertising, marketing and distributing the Fund's Class B shares. The Distributor may pay one or more Service Agents a fee in respect of these services. The Distributor shall determine the amounts to be paid to Service Agents and the basis on which such payments will be made. Payments to a Service Agent are subject to compliance by the Service Agent with the terms of any related Plan agreement between the Service Agent and the Distributor. 2. For the purposes of determining the fees payable under this Plan, the value of the net assets attributable to Class B shall be computed in the manner specified in the Fund's Declaration of Trust for the computation of the value of the Fund's net assets attributable to such a class. 3. The Board shall be provided, at least quarterly, with a written report of all amounts expended pursuant to this Plan. The report shall state the purpose for which the amounts were expended. 4. This Plan will become effective immediately upon approval by (a) holders of a majority of the Fund's outstanding Class B shares, and (b) a majority of the Board members, including a majority of the Board members who are not "interested persons" (as defined in the Act) of the Fund and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan, pursuant to a vote cast in person at a meeting called for the purpose of voting on the approval of this Plan. 5. This Plan shall continue for a period of one year from its effective date, unless earlier terminated in accordance with its terms, and thereafter shall continue automatically for successive annual periods, provided such continuance is approved at least annually in the manner provided in paragraph 4(b) hereof. 6. This Plan may be amended at any time by the Board, provided that (a) any amendment to increase materially the costs which the Fund may bear pursuant to this Plan shall be effective only upon approval by a vote of holders of a majority of the Fund's outstanding Class B shares, and (b) any material amendments of the terms of this Plan shall become effective only upon approval as provided in paragraph 4(b) hereof. 7. This Plan is terminable without penalty at any time by (a) vote of a majority of the Board members who are not "interested persons" (as defined in the Act) of the Fund and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan, or (b) vote of holders of a majority of the Fund's outstanding Class B shares. 8. The obligations hereunder and under any related Plan agreement shall only be binding upon the assets and property of the Fund and shall not be binding upon any Trustee, officer or shareholder of the Fund individually. Dated: October 19, 1992 Effective: January 15, 1993 EX-99.B16 7 SCHEDULE OF CALCULATION OF PERFORMANCE DATA PREMIER MUNICIPAL BOND FUND - CLASS A AVERAGE ANNUAL TOTAL RETURN COMPUTATION Average annual total return computation from inception through 4/30/94 based upon the following formula: n P( 1 + T ) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value as of 4/30/94 of a $1,000 hypothetical investment made on 11/26/86 (inception) 7.427 1000( 1 + T ) = 1,636.73 T = 6.86% ========== PREMIER MUNICIPAL BOND FUND - CLASS A TOTAL RETURN COMPUTATION Total return computation from inception through 4/30/94 based upon the following formula: [ C + ( C x B ) ] - A --------------------- T = A where: A = NAV at beginning of period B = Additional shares purchased through dividend reinvestment C = NAV at end of period T = Total return T = [ 13.81 + ( 13.81 x 0.73747 ) ] - 14.00 -------------------------------------------- 14.00 T = 71.39% ======== PREMIER MUNICIPAL BOND FUND - CLASS A SEC 30 DAY YIELD CALCULATION INCOME 4/1/94 - 4/30/94 $3,218,642.39 EXPENSES 4/1/94 - 4/30/94 $413,089.71 Average Shares Entitled to Dividend 4/1/94 - 4/30/94 39,702,782.766 Maximum Offering Price per share 4/30/94 $14.46 x = 3,218,642.39 - 413,089.71 ------------------------------------------ 39,702,782.766 x 14.46 x = 0.004887 6 30 Day yield = 2 [( 1 + x) -1] 6 30 Day yield = 2 [ ( 1 + 0.004887 ) -1] 30 Day yield = 5.94% ================= TAX EQUIVALENT YIELD Taxable portion of yield = 0.00% Tax exempt portion of yield = 5.94% ---------------- Yield = 5.94% ================ Federal Tax Bracket = 39.60% ================ 5.94 Tax Equivalent Yield = -------------------- = 9.83% ( 1 - 0.3960 ) ================ PREMIER MUNICIPAL BOND FUND - CLASS A AVERAGE ANNUAL TOTAL RETURN COMPUTATION Average annual total return computation from 4/30/93 through 4/30/94 based upon the following formula: n P( 1 + T ) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value as of 4/30/94 of a $1,000 hypothetical investment made on 4/30/93 1.00 1000( 1 + T ) = 972.67 T = -2.73% ============ PREMIER MUNICIPAL BOND FUND - CLASS A AVERAGE ANNUAL TOTAL RETURN COMPUTATION Average annual total return computation from 4/30/89 through 4/30/94 based upon the following formula: n P( 1 + T ) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value as of 4/30/94 of a $1,000 hypothetical investment made on 4/30/89 5.00 1000( 1 + T ) = 1,464.37 T = 7.93% ============ PREMIER MUNICIPAL BOND FUND - CLASS A TOTAL RETURN COMPUTATION Total return computation from inception through 4/30/94 based upon the following formula: [ C + ( C x B ) ] - A --------------------- T = A where: A = Maximum Offering Price at beginning of period B = Additional shares purchased through dividend reinvestment C = NAV at end of period T = Total return T = [ 13.81 + ( 13.81 x 0.73747 ) ] - 14.66 -------------------------------------------- 14.66 T = 63.67% ======== PREMIER MUNICIPAL BOND FUND - CLASS B AVERAGE ANNUAL TOTAL RETURN COMPUTATION Average annual total return computation from inception through 4/30/94 based upon the following formula: n P( 1 + T ) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value as of 4/30/94 of a $1,000 hypothetical investment made on 1/15/93 (inception) 1.290 1000( 1 + T ) = 1,031.68 T = 2.45% ========== PREMIER MUNICIPAL BOND FUND - CLASS B TOTAL RETURN COMPUTATION Total return computation from inception through 4/30/94 based upon the following formula: [ C + ( C x B ) ] - A --------------------- T = A where: A = NAV at beginning of period B = Additional shares purchased through dividend reinvestment C = NAV at end of period T = Total return T = [ 13.81 + ( 13.81 x 0.07736 ) ] - 14.02 -------------------------------------------- 14.02 T = 6.12% ======== PREMIER MUNICIPAL BOND FUND - CLASS B SEC 30 DAY YIELD CALCULATION INCOME 4/1/94 - 4/30/94 $547,903.48 EXPENSES 4/1/94 - 4/30/94 $116,594.44 Average Shares Entitled to Dividend 4/1/94 - 4/30/94 6,758,889.595 NAV per share 4/30/94 $13.81 x = 547,903.48 - 116,594.44 ------------------------------------------ 6,758,889.595 x 13.81 x = 0.004621 6 30 Day yield = 2 [( 1 + x) -1] 6 30 Day yield = 2 [ ( 1 + 0.004621 ) -1] 30 Day yield = 5.61% ================= TAX EQUIVALENT YIELD Taxable portion of yield = 0.00% Tax exempt portion of yield = 5.61% ---------------- Yield = 5.61% ================ Federal Tax Bracket = 39.60% ================ 5.61 Tax Equivalent Yield = -------------------- = 9.29% ( 1 - 0.3960 ) ================ PREMIER MUNICIPAL BOND FUND - CLASS B AVERAGE ANNUAL TOTAL RETURN COMPUTATION Average annual total return computation from 4/30/93 through 4/30/94 based upon the following formula: n P( 1 + T ) = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value as of 4/30/94 of a $1,000 hypothetical investment made on 4/30/93 1.00 1000( 1 + T ) = 983.91 T = -1.61% ============ PREMIER MUNICIPAL BOND FUND - CLASS B TOTAL RETURN COMPUTATION Total return computation from inception through 4/30/94 based upon the following formula: [ C + ( C x B ) ] - A D x ( E x F ) --------------------- --- ------------- T = A G where: A = NAV at beginning of period B = Additional shares purchased through dividend reinvestment C = NAV at end of period D = Applicable CDSC E = Lower of A or C F = Original shares G = Original investment T = Total return T = [ 13.81 + (13.81 x 0.07736 ) ] - 14.02 -- 0.03 x ( 13.81 x 71.327 ) ----------------------------------------- ------------------------ 14.02 1000 T = 3.17% ====== -----END PRIVACY-ENHANCED MESSAGE-----