SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (ss.)240.14a-11(c) or (ss.)240.14a-12
Dreyfus A Bonds Plus, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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PRELIMINARY COPY
DREYFUS A BONDS PLUS, INC.
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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To the Stockholders:
A Special Meeting of Stockholders of Dreyfus A Bonds Plus, Inc. (the
"Fund") will be held at the offices of The Dreyfus Corporation, 200 Park Avenue,
7th Floor West, New York, New York, on Thursday, June 11, 1998 at 10:00 a.m.,
for the following purposes:
1. To approve changes to certain of the Fund's investment
restrictions.
2. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Stockholders of record at the close of business on April 27, 1998 will
be entitled to receive notice of and to vote at the Fund's meeting.
By Order of the Board
Michael S. Petrucelli
Assistant Secretary
New York, New York
May 6, 1998
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WE NEED YOUR PROXY VOTE IMMEDIATELY
A STOCKHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE MEETING OF STOCKHOLDERS OF THE FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS REPRESENTED. IN THAT EVENT, THE
FUND WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY,
YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND TO HOLD THE MEETING AS SCHEDULED,
SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS
WILL BENEFIT FROM YOUR COOPERATION.
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PRELIMINARY COPY
DREYFUS A BONDS PLUS, INC.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 11, 1998
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of Dreyfus A Bonds Plus, Inc. (the "Fund") to be used at
the Special Meeting of Stockholders (the "Meeting") of the Fund to be held on
Thursday, June 11, 1998 at 10:00 a.m., at the offices of The Dreyfus
Corporation, 200 Park Avenue, 7th Floor West, New York, New York, for the
purposes set forth in the accompanying Notice of Special Meeting of
Stockholders. Stockholders of record at the close of business on April 27, 1998
are entitled to receive notice of and to vote at the Meeting. Stockholders are
entitled to one vote for each Fund share held and fractional votes for each
fractional Fund share held. Shares represented by executed and unrevoked proxies
will be voted in accordance with the specifications made thereon. If the
enclosed form of proxy is executed and returned, it nevertheless may be revoked
by another proxy or by letter or telegram directed to the Fund, which must
indicate the stockholder's name and account number. To be effective, such
revocation must be received before the Meeting. In addition, any stockholder who
attends the Meeting in person may vote by ballot at the Meeting, thereby
canceling any proxy previously given. As of April 2, 1998, the Fund had
44,046,981.898 shares of common stock issued and outstanding.
It is estimated that proxy materials will be mailed to stockholders of
record on or about May 6, 1998. The principal executive offices of the Fund are
located at 200 Park Avenue, New York, New York 10166. COPIES OF THE FUND'S MOST
RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE AVAILABLE UPON REQUEST, WITHOUT
CHARGE, BY WRITING TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW
YORK 11556-0144, OR BY CALLING TOLL FREE 1-800-645- 6561.
PROPOSAL TO CHANGE CERTAIN OF THE FUND'S
INVESTMENT RESTRICTIONS
INTRODUCTION
The Fund's investment objective is to provide investors with the
maximum amount of current income to the extent consistent with the preservation
of capital and the maintenance of liquidity. The Fund seeks to achieve its
investment objective by investing principally in debt obligations of
corporations, the U.S. Government and its agencies and instrumentalities, and
major U.S. banking institutions. At least 80% of the value of the Fund's net
assets consist of obligations of corporations which, at the time of purchase by
the Fund, are rated at least A by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Group ("S&P"), or are determined to be of comparable
quality by The Dreyfus Corporation, and securities issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities. The Fund currently may invest up to 20% of the value of its
net assets in corporate obligations rated lower than A, but no lower than B, by
Moody's and S&P, and may invest no more than 5% of its net assets in bonds rated
Ba or B by Moody's and BB or B by S&P (the "20% Policy"). The Fund also may
invest in mortgage-related securities, asset-backed securities, municipal
obligations, zero coupon securities and, to a limited extent, money market
instruments, including entering into repurchase agreements. In addition, the
Fund may lend portfolio securities up to 10% of the value of its total assets
and borrow money for temporary or emergency (not leveraging) purposes. Pursuant
to the Fund's current investment restrictions, the Fund may not purchase
preferred stocks, convertible debt obligations, convertible preferred stocks or,
except under limited circumstances, securities of other investment companies,
nor may it engage in futures and options transactions, foreign currency
transactions or short-selling. The Fund proposes to change, subject to
stockholder approval, these and certain other restrictions as described below to
permit the Fund to purchase such securities and engage in such transactions. The
Fund also intends to enter into forward roll transactions and to change the 20%
Policy and its policy regarding borrowing as described below; these changes do
not require stockholder approval.
This Proposal does not involve any change to the Fund's investment
objective. Management believes, however, that the Fund's assets may be invested
more effectively if the permissible investments and investment techniques are
broadened to include those described below. Management believes that in a
rapidly changing market it is important for the Fund to have the flexibility to
purchase a variety of instruments and engage in various investment techniques,
because while under certain market conditions certain types of securities and
investment techniques may be deemed most appropriate for purchase or use by the
Fund, under other market conditions other types of securities and investment
techniques may be deemed preferable. By expanding the universe of securities the
Fund may purchase and the investment techniques in which the Fund may engage as
noted herein, the Fund's management will be given the opportunity to adjust the
Fund's portfolio from time to time in such manner as it then deems appropriate.
The proposed securities in which the Fund would become entitled to invest and
the investment techniques in which the Fund would be entitled to engage are
described below and in the Appendix to this proxy statement.
This Proposal involves changing the Fund's management policies and
certain investment restrictions which are fundamental policies that cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Fund's
outstanding shares. In addition, management believes it is appropriate to
change, and/or redesignate as non-fundamental, certain other investment
restrictions as described below. Non-fundamental policies may be changed by vote
of the Fund's Board members at any time.
The 1940 Act requires that a relatively limited number of investment
policies and restrictions be designated as fundamental policies which may not be
changed without stockholder approval. These policies relate to (a) the
classification and subclassification under the 1940 Act within which the Fund
may operate, (b) borrowing money, (c) issuing senior securities, (d) engaging in
the business of underwriting securities issued by other persons, (e)
concentrating investments in a particular industry or group of industries, (f)
purchasing and selling real estate or commodities, (g) making loans to other
persons, and (h) changing the nature of the business so as to cease to be an
investment company. When the Fund was formed, its Board designated a number of
other policies as fundamental, in large part in response to certain regulatory
requirements or business or industry conditions that have changed, and adopted
certain restrictions which now are believed to be unduly restrictive.
To enable the Fund to broaden its permissible investments as described
below, the Fund's Board, at a meeting held on March 9, 1998, unanimously
approved changes in the Fund's investment restrictions and directed that this
Proposal be submitted to stockholders for their approval.
The Fund's Board also authorized the Fund to enter into forward roll
transactions. The Board also approved a change to the Fund's policy regarding
borrowing money to authorize the Fund to borrow for investment purposes, which
is known as leveraging. Although the Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company to invest up
to 33-1/3% of the value of its total assets, the Fund currently borrows money
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of its total assets. In addition, the Fund's Board approved a
change in the 20% Policy to permit the Fund to invest up to 20% of the value of
the Fund's net assets in securities rated below investment grade. Securities
rated below investment grade carry a high degree of risk and are considered
speculative by the credit rating agencies. These changes are NOT required to be
submitted to stockholders for their approval and will be implemented by the Fund
regardless of whether stockholders approve this Proposal. For a discussion of
the risks related to forward roll transactions, leveraging and investing in
securities rated below investment grade, see the Appendix to this proxy
statement.
CHANGES TO MANAGEMENT POLICIES
If each component of this Proposal is approved, the Fund would be
permitted to purchase preferred stocks, convertible debt obligations,
convertible preferred stocks and securities of other investment companies and
engage in options and futures transactions, foreign currency transactions and
short-selling, as described below. The Fund also would be permitted to lend
portfolio securities up to 33-1/3% of the value of its total assets, the maximum
percentage permitted under the 1940 Act. Currently, the Fund may lend portfolio
securities up to 10% of its total assets. Stockholder approval for such changes
to the Fund's management policies will be sought by a separate vote as set forth
in the proxy card accompanying this proxy statement. FOR A MORE DETAILED
DISCUSSION OF THESE ADDITIONAL PORTFOLIO SECURITIES AND INVESTMENT TECHNIQUES,
AND THEIR RELATED RISKS, SEE THE APPENDIX TO THIS PROXY STATEMENT.
* PREFERRED STOCKS AND CONVERTIBLE SECURITIES. The Fund would be permitted to
purchase preferred stocks and convertible securities. Generally, preferred
stock has a specified dividend and ranks after bonds and before common
stocks in its claim on income for dividend payments and on assets should
the company be liquidated. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same
issuer, although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer.
* INVESTMENT COMPANY SECURITIES. The Fund would be permitted to invest, to
the extent permitted under the 1940 Act, in securities of other investment
companies which principally invest in securities of the type in which the
Fund invests. Under the 1940 Act, purchasers of the securities of other
investment companies, subject to certain exceptions, are limited to a
maximum of (i) 3% of the total voting stock of any one investment company,
(ii) 5% of the Fund's total assets with respect to any one investment
company and (ii) 10% of the Fund's total assets in the aggregate.
Investments in the securities of investment companies may involve
duplication of advisory fees and certain other expenses. Nonetheless, the
Board believes that this change will provide the Fund greater flexibility
to achieve its investment objective.
* OPTIONS AND FUTURES TRANSACTIONS. The Fund would be permitted to purchase
and write (i.e., sell) call or put options. The Fund also would be
permitted to enter into futures contracts and options on futures contracts.
The principal reason for writing options is to realize income in the form
of premiums. The Fund would purchase options and enter into futures
transactions for hedging purposes, as a substitute for purchasing or
selling particular securities, to manage the effective maturity or duration
of the Fund and to maintain liquidity while simulating full investment by
the Fund.
* FOREIGN CURRENCY TRANSACTIONS. The Fund would be permitted to engage in
foreign currency transactions which involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies, which would involve the Fund agreeing to
exchange an amount of a currency it did not currently own for another
currency at a future date in anticipation of a decline in the value of the
currency sold relative to the currency the Fund contracted to receive in
the exchange. Foreign currency transactions would be entered into to fix in
U.S. dollars, between trade and settlement date, the value of a security
the Fund has agreed to buy or sell; to hedge the U.S. dollar value of
securities the Fund already owns, particularly if it expects a decrease in
the value of the currency in which the foreign security is denominated; or
to gain exposure to the foreign currency in an attempt to realize gains.
* LENDING PORTFOLIO SECURITIES. To increase its income, the Fund would be
permitted to lend securities from its portfolio up to 33-1/3% of the value
of the Fund's total assets to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
The Fund currently is permitted to lend its portfolio securities up to 10%
of the value of its total assets.
* SHORT-SELLING. The Fund would be permitted to engage in short sales
transactions in which the Fund sells a security it does not own in
anticipation of a decline in the market value of the security. To complete
the transaction, the Fund must borrow the security to make delivery to the
buyer.
CORRESPONDING CHANGES IN INVESTMENT RESTRICTIONS
If this Proposal is approved by stockholders, the Fund's current
Investment Restrictions will be revised to the extent necessary to reflect the
Fund's proposed management policies described in this proxy statement, and
generally to clarify the extent to which the Fund may invest in certain types of
securities or engage in various investment techniques:
* Investment Restrictions numbered 1, 3 and 4 would be deleted.
* Investment Restrictions numbered 2, 5, 6, 7, 8, 9, 11 and 13 would be
revised and, except for Investment Restriction number 9, renumbered.
* New Investment Restrictions proposed to be numbered 7 and 8 would be added.
Investment Restriction No. 1, which prohibits the Fund from investing
in common stocks, preferred stocks, warrants, other equity securities, or
convertible bonds, would be deleted. As described above, the Fund seeks the
ability to invest in preferred stocks and convertible securities. Deleting the
restriction will involve no other change in the manner in which the Fund's
assets are invested.
Investment Restriction No. 2, proposed to be renumbered as Investment
Restriction No. 1, which prohibits the Fund from borrowing money, except to the
extent permitted under the 1940 Act, would be revised to clarify that the entry
into options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not be deemed to
constitute borrowing.
Investment Restriction No. 3, which prohibits the Fund from selling
securities short, would be deleted.
Investment Restriction No. 4, which prohibits the Fund from writing or
purchasing put or call options, would be deleted.
Investment Restriction No. 5, proposed to be renumbered as Investment
Restriction No. 2, which prohibits the Fund from underwriting the securities of
other issuers, would be revised to clarify that the Fund shall not be deemed an
underwriter by virtue of disposing of portfolio securities or purchasing
municipal obligations directly from an issuer. Without such revision, the Fund
could be unnecessarily restricted in its ability to dispose of portfolio
securities and purchase municipal obligations.
Investment Restriction No. 6, proposed to be renumbered as Investment
Restriction No. 3, which prohibits the Fund from purchasing or selling real
estate, commodities, or oil and gas interests, would be revised to clarify that
the Fund may invest in any security secured by real estate or issued by
companies that invest in real estate or real estate investment trusts and to
reserve for the Fund the freedom of action to hold and sell real estate acquired
as a result of the Fund's ownership of securities, and to clarify that the Fund
may invest in options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
Investment Restriction No. 7, proposed to be renumbered as Investment
Restriction No. 4, which prohibits the Fund from making loans, except through
the purchase of debt obligations, would be revised to clarify that the Fund may
enter into repurchase agreements and to permit the Fund lend its portfolio
securities in an amount not to exceed 33-1/3% of the value of its total assets.
Investment Restriction No. 8, proposed to be renumbered as Investment
Restriction No. 5, which pertains to the Fund's current classification as a
diversified investment company, would be revised. Under the 1940 Act, a
diversified fund is permitted to invest with respect to 75% of its total assets,
not more than 5% of such assets in the securities of a single issuer (the "5%
requirement"), provided the investment represents less than 10% of the
outstanding voting securities of such issuer (the "10% requirement"). Investment
Restriction No. 8 contains an unnecessarily restrictive version of the 5%
requirement and the 10% requirement, respectively, because it applies to 100%,
not 75%, of the Fund's total assets. The Board recommends revising this
Investment Restriction to conform to the 1940 Act's definition of
diversification, thus permitting the Fund additional investment flexibility in
pursuing its investment objective. If approved by stockholders, the Fund's new
policy on diversification will permit the Fund to invest, with respect to 25% of
its assets, more than 5% of its assets in an issuer. To the extent that the Fund
invests a greater proportion of its assets in a single issuer, it will be
subject to a correspondingly greater degree of risk associated with that
investment.
Investment Restriction No. 9, which prohibits the Fund from investing
in companies for the purposes of exercising control, would be designated as a
non-fundamental policy. This Investment Restriction was adopted to comply with
certain state securities law requirements, but it is not required to be a
fundamental policy.
Investment Restriction No. 10, which prohibits the Fund from investing
in securities of other investment companies, except as they may be acquired as
part of a merger, consolidation, acquisition or reorganization of assets, would
be revised to permit the acquisition of securities of other investment companies
to the extent permitted under the 1940 Act and would be designated as a
non-fundamental policy.
Investment Restriction No. 11, proposed to be renumbered as Investment
Restriction No. 6, which prohibits the Fund from investing more than 25% of its
total assets in any particular industry or industries, would be revised to
clarify that there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities. The
clarification will not involve any change in the manner in which the Fund's
assets are currently managed.
Investment Restriction No. 12, which prohibits the Fund from investing
more than 15% of its assets in illiquid securities, is proposed to be renumbered
as Investment Restriction No. 11. No other change to this restriction is
proposed.
Investment Restriction No. 13, proposed to be renumbered as Investment
Restriction No. 12, which prohibits the Fund from pledging, mortgaging or
hypothecating its assets, except to the extent necessary to secure permitted
borrowings, would be revised to clarify that the Fund may deposit assets in
escrow in connection with the purchase of securities on a when-issued or
delayed-delivery basis and may deposit collateral and make margin arrangements
with respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts and indices.
New Investment Restriction No. 7 would prohibit the Fund from issuing
any senior security, except to the extent that the activities permitted in
certain Investment Restrictions may be deemed to give rise to a senior security.
This Investment Restriction responds to a technical requirement under the 1940
Act and would be designated as a fundamental policy.
New Investment Restriction No. 8 would prohibit the Fund from
purchasing securities on margin, except that the Fund may make margin deposits
in connection with transactions in options, forward contracts, futures
contracts, including those related to indices, and options on futures contracts
or indices. This Investment Restriction responds to a technical requirement
under the 1940 Act and would be designated as a fundamental policy.
If approved by stockholders, the Fund's Investment Restrictions would
read as follows (new language is underscored and language to be deleted is in
brackets):
The Fund may NOT:
[1. Purchase common stocks, preferred stocks, warrants, other equity
securities or convertible bonds.]
1 [2]. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). FOR PURPOSES OF THIS INVESTMENT RESTRICTION, THE ENTRY
INTO OPTIONS, FORWARD CONTRACTS, FUTURES CONTRACTS, INCLUDING THOSE RELATING TO
INDICES, AND OPTIONS ON FUTURES CONTRACTS OR INDICES SHALL NOT CONSTITUTE
BORROWING.
[3. Sell securities short. ]
[4. Write or purchase put or call options.]
2 [5]. Underwrite the securities of other issuers, 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, AND 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.
3 [6]. Purchase or sell real estate, commodities, or oil and gas
interests, PROVIDED THAT THE FUND MAY PURCHASE AND SELL SECURITIES THAT ARE
SECURED BY REAL ESTATE OR INTERESTS THEREIN OR ISSUED BY COMPANIES THAT INVEST
OR DEAL IN REAL ESTATE OR INTERESTS THEREIN OR REAL ESTATE INVESTMENT TRUSTS AND
HOLD AND SELL REAL ESTATE AS A RESULT OF OWNERSHIP OF SUCH SECURITIES OR
INSTRUMENTS, AND PROVIDED FURTHER THAT THE FUND MAY PURCHASE AND SELL OPTIONS,
FORWARD CONTRACTS, FUTURES CONTRACTS, INCLUDING THOSE RELATING TO INDICES, AND
OPTIONS ON FUTURES CONTRACTS OR INDICES.
4 [7]. Make loans to others, except through the purchase of debt
obligations [referred to under "Description of the Fund--Management Policies" in
the Fund's Prospectus and "Investment Objective and Management Policies" in this
Statement of Additional Information. However, the Fund's Board may, on the
request of broker-dealers or other institutional investors which it deems
qualified, authorize the Fund to lend securities, but only when the borrower
pledges cash or equivalent securities as collateral to the Fund and agrees to
maintain such collateral so that it amounts to at least 100% of the value of the
securities. No such security loan will be made if, as a result, the aggregate of
loans exceeds 10% of the value of the Fund's total assets] OR THE ENTRY INTO
REPURCHASE AGREEMENTS. HOWEVER, THE FUND MAY LEND ITS PORTFOLIO SECURITIES IN AN
AMOUNT NOT TO EXCEED 33-1/3% OF THE VALUE OF THE FUND'S TOTAL ASSETS. ANY LOANS
OF PORTFOLIO SECURITIES WILL BE MADE ACCORDING TO GUIDELINES ESTABLISHED BY THE
SECURITIES AND EXCHANGE COMMISSION AND THE FUND'S BOARD.
5 [8]. WITH RESPECT TO 75% OF THE VALUE OF ITS TOTAL ASSETS, invest
more than 5% of its assets in the securities of any one issuer or hold more than
10% of the outstanding voting securities of such issuer except for securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, which may be purchased without limitation.
6 [11]. Invest more than 25% of its [total] assets IN THE SECURITIES
OF ISSUERS in any particular industry [or industries], PROVIDED THAT THERE SHALL
BE NO LIMITATION ON THE PURCHASE OF OBLIGATIONS ISSUED OR GUARANTEED BY THE U.S.
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES.
7. ISSUE ANY SENIOR SECURITY (AS SUCH TERM IS DEFINED IN SECTION 18(F)
OF THE 1940 ACT), EXCEPT TO THE EXTENT THAT THE ACTIVITIES PERMITTED IN
INVESTMENT RESTRICTION NOS. 1, 3, 8 AND 12 MAY BE DEEMED TO GIVE RISE TO A
SENIOR SECURITY.
8. PURCHASE SECURITIES ON MARGIN, BUT THE FUND MAY MAKE MARGIN
DEPOSITS IN CONNECTION WITH TRANSACTIONS IN OPTIONS, FORWARD CONTRACTS, FUTURES
CONTRACTS, INCLUDING THOSE RELATED TO INDICES, AND OPTIONS ON FUTURES CONTRACTS
OR INDICES.
9. Invest in companies for the purpose of exercising control.
10. Invest in securities of other investment companies, except [as
they may be acquired as part of a merger, consolidation or acquisition of
assets] TO THE EXTENT PERMITTED UNDER THE 1940 ACT.
11 [12]. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 15% of the value of the Fund's net assets would be
so invested.
12 [13]. Pledge, hypothecate, mortgage or otherwise encumber its
assets, except to the extent necessary to secure permitted borrowings AND TO THE
EXTENT RELATED TO THE DEPOSIT OF ASSETS IN ESCROW IN CONNECTION WITH THE
PURCHASE OF SECURITIES ON A WHEN-ISSUED OR DELAYED- DELIVERY BASIS AND
COLLATERAL AND INITIAL OR VARIATION MARGIN ARRANGEMENTS WITH RESPECT TO OPTIONS,
FORWARD CONTRACTS, FUTURES CONTRACTS, INCLUDING THOSE RELATED TO INDICES, AND
OPTIONS ON FUTURES CONTRACTS OR INDICES.
Investment Restrictions numbered 1 through 8 would be fundamental
policies of the Fund which cannot be changed without approval by the holders of
a majority (as defined in the 1940 Act) of the Fund's outstanding voting shares.
Investment Restrictions numbered 9 through 12 would not be fundamental policies
and may be changed by vote of a majority of the Fund's Board members at any
time.
VOTE REQUIRED AND BOARD MEMBERS' RECOMMENDATION
Approval of this Proposal will be sought by ten separate votes, as set
forth in the Proxy Card accompanying this Proxy Statement. Each of the eleven
votes is independent of the others and will be approved separately upon
obtaining the requisite vote described below.
Approval of this Proposal, with respect to each separate vote,
requires the affirmative vote of (a) 67% of the Fund's voting securities present
at the Meeting, if the holders of more than 50% of the Fund's outstanding voting
securities are present or represented by proxy, or (b) more than 50% of the
Fund's outstanding voting securities, whichever is less.
THE FUND'S BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE CHANGES
TO CERTAIN OF THE FUND'S FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS.
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ADDITIONAL INFORMATION
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, serves as the Fund's investment adviser.
Premier Mutual Fund Services, Inc., with principal offices at 60 State
Street, Boston, Massachusetts 02109, serves as the Fund's distributor.
Dreyfus Transfer, Inc., a wholly-owned subsidiary of The Dreyfus
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
transfer and dividend disbursing agent.
Mellon Bank, N.A., The Dreyfus Corporation's parent, One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258, acts as custodian of the Fund's
investments.
VOTING INFORMATION
The Fund will bear the cost of soliciting proxies. In addition to the
use of the mail, proxies may be solicited personally, by telephone or by
telegraph, and the Fund may pay persons holding Fund shares in their names or
those of their nominees for their expenses in sending soliciting materials to
their principals. Officers, employees or agents of the Fund, or its affiliates,
also may solicit proxies by contacting stockholders by telephone and telegram.
The Fund has retained Management Information Services Corp. ("MIS") to assist in
the solicitation of proxies in connection with the Proposal. MIS is expected to
charge a fee of approximately $23,300, which will be borne by the Fund.
Authorizations to execute proxies may be obtained by telephonic or
electronically transmitted instructions in accordance with procedures designed
to authenticate the stockholder's identity. In all cases where a telephonic
proxy is solicited, the stockholder will be asked to provide his or her address,
social security number (in the case of an individual) or taxpayer identification
number (in the case of a non-individual) and the number of shares owned and to
confirm that the stockholder has received the Fund's proxy statement and proxy
card in the mail. Within 72 hours of receiving a stockholder's telephonic or
electronically transmitted voting instructions, a confirmation will be sent to
the stockholder to ensure that the vote has been taken in accordance with the
stockholder's instructions and to provide a telephone number to call immediately
if the stockholder's instructions are not correctly reflected in the
confirmation. Any stockholder giving a proxy may revoke it at any time before it
is exercised by submitting to the Fund a written notice of revocation or a
subsequently executed proxy or by attending the meeting and voting in person.
If a proxy is properly executed and returned accompanied by
instructions to withhold authority to vote, represents a broker "non-vote" (that
is, a proxy from a broker or nominee indicating that such person has not
received instructions from the beneficial owner or other person entitled to vote
Fund shares on a particular matter with respect to which the broker or nominee
does not have a discretionary power) or is marked with an abstention
(collectively, "abstentions"), the Fund shares represented thereby will be
considered to be present at the Meeting for purposes of determining the
existence of a quorum for the transaction of business. Abstentions will not
constitute a vote "for" or "against" a matter and will be disregarded in
determining the "votes cast" on an issue.
If a quorum is not present at the Meeting, or if a quorum is present
but sufficient votes to approve a proposal are not received, the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies for the proposal. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the proposal,
the percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to stockholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the Meeting in person or by
proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" the proposals in favor of such
adjournment, and will vote those proxies required to be voted "AGAINST" the
proposals against any adjournment. A quorum is constituted by the presence in
person or by proxy of the holders of at least a majority of the Fund's
outstanding shares entitled to vote at the Meeting.
As of April 2, 1998, the following stockholders were known by the
Fund to own of record and beneficially 5% or more of the Fund's outstanding
voting securities: Nationwide QPVA, c/o IPO Co. 67, P.O. Box 182029, Columbus,
Ohio 43218-2029: 12.6302%; Charles Schwab & Co., Inc., Reinvestment Account,
Mutual Fund Department, 101 Montgomery Street, San Francisco, California
94104-4122: 11.0532%.
As of April 2, 1998, the Fund's Board members and officers, as a
group, beneficially owned less than 1% of the Fund's outstanding shares.
OTHER MATTERS
The Fund's Board is not aware of any other matters which may come
before the Meeting. However, should any such matters properly come before the
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Fund, in care of Dreyfus Transfer, Inc., Attention:
Dreyfus A Bonds Plus, Inc., P.O. Box 9671, Providence, Rhode Island 02940-9671,
whether other persons are the beneficial owners of Fund shares for which proxies
are being solicited from you, and, if so, the number of copies of the proxy
statement and other soliciting material you wish to receive in order to supply
copies to the beneficial owners of Fund shares.
<PAGE>
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN HIS OR HER PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: May 6, 1998
<PAGE>
APPENDIX
If the relevant components of Proposal 1 are approved, the Fund would
be permitted to purchase preferred stocks, convertible debt obligations,
convertible preferred stocks and securities of other investment companies and
engage in options and futures transactions, foreign currency transactions, short
selling and lend its portfolio securities up to 33-1/3% of its total assets as
described below. The following information supplements the information contained
in the proxy statement describing the Proposal under the caption "Changes to
Management Policies."
PREFERRED STOCKS AND CONVERTIBLE SECURITIES. Generally, preferred
stock has a specified dividend and ranks after bonds and before common stocks in
its claim on income for dividend payments and on assets should the company be
liquidated. While most preferred stocks pay a dividend, the Fund may purchase
preferred stock where the issuer has omitted, or is in danger of omitting,
payment of its dividend. Such investments would be made primarily for their
capital appreciation potential.
Convertible securities may be converted at either a stated price or
stated rate into underlying shares of common stock. Convertible securities have
characteristics similar to both fixed-income and equity securities. Convertible
securities generally are subordinated to other similar but non-convertible
securities of the same issuer, although convertible bonds, as corporate debt
obligations, enjoy seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the same issuer.
Because of the subordination feature, however, convertible securities typically
have lower ratings than similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There can be
no assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices fluctuate. Convertible
securities, however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.
OPTIONS AND FUTURES TRANSACTIONS. Options and futures are forms of
derivatives ("Derivatives") which are entered into for a variety of reasons,
including to hedge certain market risks, to provide a substitute for purchasing
or selling particular securities or to increase potential income gain.
Derivatives may provide a cheaper, quicker or more specifically focused way for
the Fund to invest than "traditional" securities.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit the Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk or change the character of the risk, of its portfolio by making investments
in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives could
have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Fund's return or
result in a loss. The Fund also could experience losses if its Derivatives were
poorly correlated with its other investments, or if the Fund were unable to
liquidate its position because of an illiquid secondary market. The market for
many Derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
Derivatives.
Although the Fund will not be a commodity pool, certain options and
futures transactions subject the Fund to the rules of the Commodity Futures
Trading Commission ("CFTC") which limit the extent to which the Fund can enter
into such transactions. The Fund may invest in futures contracts and options
with respect thereto for hedging purposes without limit. However, the Fund may
not invest in such contracts and options for other purposes if the sum of the
amount of initial margin deposits and premiums paid for unexpired options with
respect to such contracts, other than for bona fide hedging purposes, exceeds 5%
of the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts and options;
provided, however, that in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
The Fund may purchase call and put options and write (i.e., sell)
covered call and put option contracts. When required by the Securities and
Exchange Commission, the Fund will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its transactions in
Derivatives. To maintain this required cover, the Fund may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., variation margin requirements)
operated by the clearing agency in order to reduce overall credit risk. As a
result, unless the clearing agency defaults, there is relatively little
counterparty credit risk associated with Derivatives purchased on an exchange.
By contrast, no clearing agency guarantees over-the-counter Derivatives.
Therefore, each party to an over-the-counter Derivative bears the risk that the
counterparty will default. Accordingly, The Dreyfus Corporation will consider
the credit worthiness of counterparties to over-the-counter Derivatives in the
same manner as it would review the credit quality of a security to be purchased
by the Fund. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.
FUTURES CONTRACTS--The Fund may purchase and sell interest rate futures
contracts. An interest rate future obligates the Fund to purchase or sell an
amount of a specific debt security at a future date at a specific price.
Engaging in futures transactions involves risk of loss to the Fund which could
adversely affect the value of the Fund's net assets. 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 that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to The Dreyfus
Corporation's ability to predict correctly movements in the direction of the
relevant market, and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction being
hedged and the price movements of the futures contract. For example, if the Fund
uses futures to hedge against the possibility of a decline in the market value
of securities held in its portfolio and the prices of such securities instead
increase, the Fund will lose part or all of the benefit of the increased value
of securities which it has hedged because it will have offsetting losses in its
futures positions. Furthermore, if in such circumstances the Fund has
insufficient cash, it may have to sell securities to meet daily variation margin
requirements. The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Fund may be required to segregate permissible
liquid assets in connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The segregation of
such assets will have the effect of limiting the Fund's ability otherwise to
invest those assets.
OPTIONS--The Fund may purchase and write (i.e., sell) call or put options with
respect to specific securities (or groups or "baskets" of specific securities).
A call option gives the purchaser of the option the right to buy, and obligates
the writer to sell, the underlying security or securities at the exercise price
at any time during the option period, or at a specific date. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price at
any time during the option period, or at a specific date.
A covered call option written by the Fund is a call option with
respect to which the Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written by the
Fund is covered when, among other things, cash or liquid securities having a
value equal to or greater than the exercise price of the option are placed in a
segregated account with the Fund's custodian to fulfill the obligation
undertaken. The principal reason for writing covered call and put options is to
realize, through the receipt of premiums, a greater return than would be
realized on the underlying securities alone. The Fund receives a premium from
writing covered call or put options which it retains whether or not the option
is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
The Fund may purchase cash-settled options on interest rate swaps in
pursuit of its investment objective. A cash-settled option on a swap gives the
purchaser the right, but not the obligation, in return for the premium paid, to
receive an amount of cash equal to the value of the underlying swap as of the
exercise date. These options typically are purchased in privately negotiated
transactions from financial institutions, including securities brokerage firms.
Successful use by the Fund of options will be subject to The Dreyfus
Corporation's ability to predict correctly movements in interest rates and
prices of securities underlying options. To the extent The Dreyfus Corporation's
predictions are incorrect, the Fund may incur losses.
FOREIGN CURRENCY TRANSACTIONS. Foreign currency transactions may
involve, for example, the Fund's purchase of foreign currencies for U.S. dollars
or the maintenance of short positions in foreign currencies, which would involve
the Fund agreeing to exchange an amount of a currency it did not currently own
for another currency at a future date in anticipation of a decline in the value
of the currency sold relative to the currency the Fund contracted to receive in
the exchange. The Fund's success in these transactions will depend principally
on The Dreyfus Corporation's ability to predict accurately the future exchange
rates between foreign currencies and the U.S. dollar. Currency exchange rates
may fluctuate significantly over short periods of time. They generally are
determined by the forces of supply and demand in the foreign exchange markets
and the relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central banks,
or the failure to intervene, or by currency controls or political developments
in the United States or abroad.
SHORT-SELLING. In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of the security.
To complete the transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by the Fund, which would result in a loss or gain, respectively. The Fund
also may make short sales "against the box," in which the Fund enters into a
short sale of a security it owns. Securities will not be sold short if, after
effect is given to any such short sale, the total market value of all securities
sold short would exceed 25% of the value of the Fund's net assets.
Until the Fund closes its short position or replaces the borrowed
security, it will: (a) maintain a segregated account, containing permissible
liquid assets, at such a level that the amount deposited in the account plus the
amount deposited with the broker as collateral always equals the current value
of the security sold short; or (b) otherwise cover its short position.
LENDING PORTFOLIO SECURITIES. The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. The Fund will continue to be
entitled to payments in amounts equal to the interest, or other distributions
payable on the loaned securities which affords the Fund an opportunity to earn
interest on the amount of the loan and on the loaned securities' collateral.
Loans of portfolio securities may not exceed 33-1/3% of the value of the Fund's
total assets, and the Fund will receive collateral consisting of cash, U.S.
Government securities or irrevocable letters of credit which will be maintained
at all times in an amount equal to at least 100% of the current market value of
the loaned securities. Such loans are terminable by the Fund 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. In connection with its securities lending transactions, the Fund may
return to the borrower or a third party which is unaffiliated with the Fund, and
which is acting as a "placing broker," a part of the interest earned from the
investment of collateral received 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.
* * *
The following information supplements the information contained in the
proxy statement describing the Board's action to authorize the Fund to enter
into forward roll transactions and to change the Fund's borrowing policy and the
20% Policy.
FORWARD ROLL TRANSACTIONS. To enhance current income, the Fund may
enter into forward roll transactions with respect to mortgage-related
securities. In a forward roll transaction, the Fund sells a mortgage-related
security to a financial institution, such as a bank or broker-dealer, and
simultaneously agrees to purchase a similar security from the institution at a
later date at an agreed upon price. The securities that are purchased will bear
the same interest rate as those sold, but generally will be collateralized by
different pools of mortgages with different pre-payment histories than those
sold. During the period between the sale and purchase, the Fund will not be
entitled to receive interest and principal payments on the securities sold.
Proceeds of the sale typically will be invested in short-term instruments,
particularly repurchase agreements, and the income from these investments,
together with any additional fee income received on the sale will be expected to
generate income for the Fund exceeding the yield on the securities sold. Forward
roll transactions involve the risk that the market value of the securities sold
by the Fund may decline below the purchase price of those securities. The Fund
will establish a segregated account consisting of permissible liquid assets at
least equal to the amount of the repurchase price (including accrued interest).
LEVERAGE. Leveraging exaggerates the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio. Money borrowed
for leveraging is limited to 33-1/3% of the value of the Fund's total assets.
These borrowings would be subject to interest costs which may or may not be
recovered by appreciation of the securities purchased; in certain cases,
interest costs may exceed the return received on the securities purchased.
The Fund may enter into reverse repurchase agreements with banks,
brokers or dealers. This form of borrowing involves the transfer by the Fund of
an underlying debt instrument in return for cash proceeds based on a percentage
of the value of the security. The Fund retains the right to receive interest and
principal payments on the security. At an agreed upon future date, the Fund
repurchases the security at principal plus accrued interest. Except for these
transactions, the Fund's borrowings generally will be unsecured.
For borrowings for investment purposes, the 1940 Act requires the Fund
to maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the required coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell some of its
portfolio securities within three days to reduce the amount of its borrowings
and restore the 300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time. The Fund also may be
required to maintain minimum average balances in connection with such borrowing
or pay a commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
To the extent the Fund enters into a reverse repurchase agreement, the Fund will
maintain in a segregated account permissible liquid assets at least equal to the
aggregate amount of its reverse repurchase obligations, plus accrued interest,
in certain cases, in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund.
LOWER RATED SECURITIES. The Fund may invest up to 20% of its total
assets in higher yielding (and, therefore, higher risk) debt securities such as
those rated Ba by Moody's or BB by S&P, or as low as the lowest rating assigned
by Moody's or S&P (commonly known as junk bonds). They may be subject to certain
risks with respect to the issuing entity and to greater market fluctuations than
certain lower yielding, higher rated securities. The retail secondary market for
these securities may be less liquid than that of higher rated securities;
adverse conditions could make it difficult at times for the Fund to sell certain
securities or could result in lower prices than those used in calculating the
Fund's net asset value.
Securities 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. Securities
rated BB by S&P are regarded as having predominantly speculative characteristics
and, while such obligations have less near-term vulnerability to default than
other speculative grade debt, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Securities
rated C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Securities rated D by S&P are in
default, and payment of interest and/or repayment of principal is in arrears.
Such securities, though high yielding, are characterized by great risk.
<PAGE>
PRELIMINARY COPY
DREYFUS A BONDS PLUS, INC.
The undersigned stockholder of DREYFUS A BONDS PLUS, INC. (the "Fund")
hereby appoints Patricia A. Louie and Lawrence B. Stoller and each of them, the
attorneys and proxies of the undersigned, with full power of substitution, to
vote, as indicated herein, all of the shares of the Fund standing in the name of
the undersigned at the close of business on April 27, 1998 at a Special Meeting
of Stockholders to be held at the offices of The Dreyfus Corporation, 200 Park
Avenue, 7th Floor West, New York, New York, at 10:00 a.m. on Thursday, June 11,
1998, and at any and all adjournments thereof, with all of the powers the
undersigned possesses and especially (but without limiting the general
authorization and power hereby given) to vote as indicated on the Proposal, as
more fully described in the proxy statement for the Meeting.
Please mark boxes in blue or black ink.
1. (a) To permit the Fund to purchase preferred stocks, convertible
debt obligations and convertible preferred stocks, including
to delete Investment Restriction No. 1 (purchasing preferred
stocks or convertible bonds).
|_| FOR |_| AGAINST |_| ABSTAIN
(b) To permit the Fund to engage in options and futures
transactions, including to revise Investment Restrictions
numbered 2 (borrowing money), 4 (put and call options), 6
(as it pertains to commodities) and 13 (pledging assets),
and to add Investment Restrictions to be numbered 7 (issuing
senior securities) and 8 (purchasing securities on margin).
|_| FOR |_| AGAINST |_| ABSTAIN
(c) To permit the Fund to engage in foreign currency
transactions, including to revise Investment Restrictions
numbered 2 (borrowing money), 6 (as it pertains to
commodities) and 13 (pledging assets).
|_| FOR |_| AGAINST |_| ABSTAIN
(d) To permit the Fund to lend portfolio securities up to
33-1/3% of the value of its total assets, including revising
Investment Restriction numbered 7 (securities lending).
|_| FOR |_| AGAINST |_| ABSTAIN
(e) To permit the Fund to engage in short-selling, including to
delete Investment Restriction No. 3 (short-selling).
|_| FOR |_| AGAINST |_| ABSTAIN
(f) To permit the Fund to invest in the securities of other
investment companies, including revising Investment
Restriction No. 10 (other investment companies) and
redesignating it as a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
(g) To revise Investment Restriction No. 5 (acting as
underwriter).
|_| FOR |_| AGAINST |_| ABSTAIN
(h) To revise Investment Restriction No. 6 (as it pertains to
real estate).
|_| FOR |_| AGAINST |_| ABSTAIN
(i) To revise Investment Restriction No. 8 (diversification).
|_| FOR |_| AGAINST |_| ABSTAIN
(j) To redesignate Investment Restriction No. 9 (investing for
control) as a non-fundamental policy.
|_| FOR |_| AGAINST |_| ABSTAIN
(k) To revise Investment Restriction No. 11 (industry
concentration).
|_| FOR |_| AGAINST |_| ABSTAIN
2. To transact such other business as may properly come before
the Meeting, or any adjournment(s) thereof.
<PAGE>
THIS PROXY IS SOLICITED BY THE FUND'S BOARD AND WILL BE VOTED FOR THE ABOVE
PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as
name or names appearing on this
form. If shares are held jointly,
each holder should sign. If signing
is by attorney, executor,
administrator, trustee or guardian,
please give full title.
Dated: , 1998
-------------------------
Signature(s)
-------------------------
Signature(s)
Sign, Date and Return this Proxy Card
Promptly Using the Enclosed Envelope.
