DREYFUS SHORT TERM HIGH YIELD FUND
---------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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To the Shareholders:
A Special Meeting of Shareholders of Dreyfus Short Term High Yield Fund
(the "Fund"), a series of Dreyfus Debt and Equity Funds (the "Trust"), will be
held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, Room
7G, New York, New York 10166, on Friday, September 8, 2000, at 10:00 a.m., for
the following purposes:
1. To consider an Agreement and Plan of Reorganization providing for the
transfer of all of the assets, subject to liabilities, of the Fund to Dreyfus
Premier Limited Term High Income Fund (the "Acquiring Fund") in exchange for the
Acquiring Fund's Class A shares and the assumption by the Acquiring Fund of the
Fund's stated liabilities (the "Exchange"). Class A shares of the Acquiring Fund
received in the Exchange will be distributed by the Fund to its shareholders in
liquidation of the Fund, after which the Fund will be terminated as a series of
the Trust; and
2. To transact such other business as may properly come before the meeting,
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on July 21, 2000, will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board of Trustees
John B. Hammalian,
Secretary
New York, New York
July 20, 2000
WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE MEETING OF SHAREHOLDERS OF THE FUND WILL HAVE TO BE ADJOURNED WITHOUT
CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM OF ITS SHARES ELIGIBLE TO VOTE 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 SHAREHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
<PAGE>
DREYFUS SHORT TERM HIGH YIELD FUND
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Shareholder:
As a shareholder of Dreyfus Short Term High Yield Fund (the "Fund"), a series of
Dreyfus Debt and Equity Funds (the "Trust"), you are entitled to vote on the
proposal described below and in the enclosed materials.
Management of the Trust has determined that it would be in the best
interest of the Fund and its shareholders if the Fund were to exchange its
assets (subject to liabilities) for shares of a larger fund advised by The
Dreyfus Corporation that has the same investment objective and substantially
similar management policies as the Fund. A larger fund should enhance the
ability of the portfolio managers to select a larger number of portfolio
securities on more favorable terms and thereby diversify investments through a
larger number of portfolio issues. It is proposed that this exchange take place
with Dreyfus Premier Limited Term High Income Fund (the "Acquiring Fund"), a
series of The Dreyfus/Laurel Funds Trust.
The proposal provides that the Fund exchange all of its assets, subject to
liabilities, for Class A shares of the Acquiring Fund (the "Exchange"). Promptly
thereafter, the Fund will distribute pro rata the Acquiring Fund shares received
in the Exchange to its shareholders in complete liquidation of the Fund. Thus,
each shareholder will receive for his or her Fund shares a number of Class A
shares of the Acquiring Fund equal to the aggregate net asset value of the
shareholder' s Fund shares as of the date of the Exchange. NO SALES CHARGE WILL
BE IMPOSED AT THE TIME OF THE EXCHANGE, NOR WILL YOU BE SUBJECT TO A SALES
CHARGE ON ANY ADDITIONAL INVESTMENTS YOU MAKE IN CLASS A SHARES OF THE ACQUIRING
FUND. THE EXCHANGE WILL NOT RESULT IN THE IMPOSITION OF FEDERAL INCOME TAX ON
YOU. Shareholders who do not wish to participate in the Exchange may redeem
their shares prior to the Exchange.
Further information about the transaction is contained in the enclosed
materials, which you should review carefully.
Please take the time to consider the enclosed materials and then vote by
completing, dating and signing the enclosed proxy card. A self-addressed,
postage-paid envelope has been enclosed for your convenience.
THE TRUST'S BOARD MEMBERS UNANIMOUSLY RECOMMEND THAT THE FUND'S
SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED TRANSACTION.
If you have any questions after considering the enclosed materials, please
call 1-800-645-6561.
Sincerely,
Stephen E. Canter,
President
July 20, 2000
<PAGE>
July 20, 2000
ACQUISITION OF THE ASSETS OF
DREYFUS SHORT TERM HIGH YIELD FUND
BY AND IN EXCHANGE FOR CLASS A SHARES OF
DREYFUS PREMIER LIMITED TERM HIGH INCOME FUND
PROSPECTUS/PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, SEPTEMBER 8, 2000
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Dreyfus Debt and Equity Funds (the
"Trust") on behalf of its series Dreyfus Short Term High Yield Fund (the
"Fund"), to be used at the Special Meeting of Shareholders (the "Meeting") of
the Fund to be held on Friday, September 8, 2000, at 10:00 a.m., at the offices
of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, Room 7G, New York, New
York 10166, for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders. Shareholders of record at the close of business on July
21, 2000, are entitled to receive notice of and to vote at the Meeting.
It is proposed that the Fund transfer all of its assets, subject to
liabilities, to Dreyfus Premier Limited Term High Income Fund (the "Acquiring
Fund" ) in exchange for Class A shares of the Acquiring Fund, all as more fully
described in this Prospectus/Proxy Statement (the "Exchange"). Upon consummation
of the Exchange, the Acquiring Fund shares received by the Fund will be
distributed to Fund shareholders, with each shareholder receiving a pro rata
distribution of Acquiring Fund shares (or fractions thereof) for Fund shares
held prior to the Exchange. Thus, it is contemplated that each shareholder will
receive for his or her Fund shares a number of Class A shares (or fractions
thereof) of the Acquiring Fund equal in value to the aggregate net asset value
of the shareholder's Fund shares as of the date of the Exchange.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely information about the Acquiring Fund that Fund
shareholders should know before voting on the proposal or investing in the
Acquiring Fund.
A Statement of Additional Information ("SAI") dated July 20, 2000, relating
to this Prospectus/Proxy Statement, has been filed with the Securities and
Exchange Commission (the "Commission") and is incorporated by reference in its
entirety. The Commission maintains a Web site (http://www.sec.gov) that contains
the SAI, material incorporated in this Prospectus/Proxy Statement by reference,
and other information regarding the Acquiring Fund and the Fund. A copy of the
SAI is available without charge by calling 1-800-645-6561 or writing to the
Acquiring Fund at its offices at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144.
--------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. MUTUAL
FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
--------------------------------------------------------------------------------
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE ACQUIRING FUND SHARES OR PASSED UPON THE ADEQUACY OF
THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
The Fund and the Acquiring Fund are open-end, management investment
companies advised by The Dreyfus Corporation ("Dreyfus"). They also have the
same primary portfolio manager and investment objective and substantially
similar management policies. The Acquiring Fund is a separate series of The
Dreyfus/Laurel Funds Trust. The substantive differences between the Fund and the
Acquiring Fund are set forth in this Prospectus/Proxy Statement.
The Acquiring Fund's Prospectus dated May 1, 2000, and the Acquiring Fund's
Annual Report for the fiscal year ended December 31, 1999, including its audited
financial statements for the fiscal year, each accompany this Prospectus/Proxy
Statement. Such Prospectus and financial statements are incorporated in this
Prospectus/Proxy Statement by reference. FOR A FREE COPY OF THE FUND'S
PROSPECTUS DATED MARCH 1, 2000, THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR
ENDED OCTOBER 31, 1999, AND THE FUND'S SEMI-ANNUAL REPORT FOR THE SIX MONTHS
ENDED APRIL 30, 2000, WRITE TO THE FUND AT ITS OFFICES LOCATED AT 144 GLENN
CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561.
Shareholders are entitled to one vote for each share held and fractional
votes for each fractional Fund share held. Fund 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 giving another proxy or by letter or telegram directed to the
Fund, which must indicate the shareholder' s name and account number. To be
effective, such revocation must be received before the Meeting. Also, any
shareholder who attends the Meeting in person may vote by ballot at the Meeting,
thereby canceling any proxy previously given. As of July 19, 2000, there were
16,738,661.56 Fund shares issued and outstanding.
Proxy materials will be mailed to shareholders of record on or about July 28,
2000.
<PAGE>
TABLE OF CONTENTS
Page
Summary. . . . . . . . . . . . . . . . . . . . 4
Reasons for the Exchange . . . . . . . . . . . 10
Information about the Exchange . . . . . . . . 10
Additional Information about the Acquiring Fund and the Fund . 12
Voting Information . . . . . . . . . . . . . . 12
Financial Statements and Experts . . . . . . . 14
Other Matters. . . . . . . . . . . . . . . . . 14
Notice to Banks, Broker/Dealers and
Voting Trustees and Their Nominees . . . . . . 14
Exhibit A: Agreement and Plan of Reorganization. . A-1
<PAGE>
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION PROVIDING FOR THE TRANSFER
OF ALL OF THE ASSETS OF THE FUND TO THE ACQUIRING FUND
SUMMARY
This Summary is qualified by reference to the more complete information
contained elsewhere in this Prospectus/Proxy Statement, the Acquiring Fund
Prospectus, the Fund Prospectus and the form of Agreement and Plan of
Reorganization attached to this Prospectus/Proxy Statement as Exhibit A.
PROPOSED TRANSACTION. The Trust's Board, including the Board members who
are not "interested persons" (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act" )), has unanimously approved an Agreement and Plan of
Reorganization (the "Plan" ). The Plan provides that, subject to the requisite
approval of the Fund' s shareholders, on the date of the Exchange the Fund
assign, transfer and convey to the Acquiring Fund all of the assets (subject to
liabilities) of the Fund, including all securities and cash, in exchange for
Class A shares of the Acquiring Fund having an aggregate net asset value equal
to the value of the Fund's net assets. The Fund will distribute all Acquiring
Fund shares received by it among its shareholders so that each Fund shareholder
will receive a pro rata distribution of Class A shares (or fractions thereof) of
the Acquiring Fund having an aggregate net asset value equal to the aggregate
net asset value of the shareholder's Fund shares as of the date of the Exchange.
Thereafter, the Fund will be terminated as a series of the Trust.
As a result of the Exchange, each Fund shareholder will cease to be a
shareholder of the Fund and will become a shareholder of the Acquiring Fund as
of the close of business on the date of the Exchange.
The Trust's Board has concluded unanimously that the Exchange would be in
the best interests of shareholders of the Fund and the interests of existing
shareholders of the Fund would not be diluted as a result of the transactions
contemplated thereby. See "Reasons for the Exchange."
TAX CONSEQUENCES. As a condition to the closing of the Exchange, the Fund
and the Acquiring Fund will receive an opinion of counsel to the effect that,
for Federal income tax purposes, (a) no gain or loss will be recognized by the
Fund' s shareholders as a result of the Exchange, (b) the holding period and
aggregate tax basis of Acquiring Fund shares received by a Fund shareholder will
be the same as the holding period and aggregate tax basis of the shareholder's
Fund shares, and (c) the holding period and tax basis of the Fund's assets
transferred to the Acquiring Fund as a result of the Exchange will be the same
as the holding period and tax basis of such assets held by the Fund immediately
prior to the Exchange. See "Information about the Exchange--Federal Income Tax
Consequences."
COMPARISON OF THE FUND AND ACQUIRING FUND. The following discussion is
primarily a summary of certain parts of the Fund Prospectus and the Acquiring
Fund Prospectus. Information contained in this Prospectus/Proxy Statement is
qualified by the more complete information set forth in the Fund Prospectus and
Acquiring Fund Prospectus, which are incorporated herein by reference.
Goal/Approach. The Fund and the Acquiring Fund have the same investment
goals. Each seeks high current income. To pursue their respective goals, the
Fund and the Acquiring Fund each normally invests at least 65% of its net assets
in "high yield" bonds (" junk" bonds) . High yield bonds are fixed-income
securities rated at the time of purchase below BBB or Baa by credit rating
agencies such as Standard & Poor's Ratings Group or Moody's Investors Service,
Inc., or the unrated equivalent as determined by Dreyfus. Because their issuers
may be at an early stage of development or may have been unable to repay past
debts, these bonds typically must offer higher yields than investment grade
bonds to compensate investors for greater credit risk. The respective portfolios
of the Fund and the Acquiring Fund may include various types of high yield
fixed-income securities, including corporate bonds and notes, mortgage-related
securities, asset-backed securities, zero coupon securities, convertible
securities, preferred stock and other debt instruments of U.S. and foreign
issuers.
In choosing securities for the Fund and Acquiring Fund, the portfolio
manager seeks to capture the higher yields offered by junk bonds. The investment
process is based on fundamental credit research, at times focusing on companies
that are currently out-of-favor. Each of the Fund and Acquiring Fund looks at a
variety of factors when assessing a potential investment, including the
company's financial strength, the state of the industry or sector it belongs to,
the long-term fundamentals of that industry or sector, the company' s
management, and whether there is sufficient equity value in the company. Under
certain circumstances, the Fund and Acquiring Fund also may invest in investment
grade bonds.
The Fund and Acquiring Fund each attempt to manage credit risk and the
volatility caused by interest rate movements by limiting average effective
portfolio maturity and duration. The Fund maintains an average effective
portfolio maturity and duration of 3 years or less, whereas the Acquiring Fund
maintains an average effective portfolio maturity of 4 years or less and an
average effective portfolio duration of 3.5 years or less. In calculating
average effective maturity, each fund may treat a security that can be
repurchased by its issuer on an earlier date (known as a "call date") as
maturing on the call date rather than on its stated maturity date. Duration is
an indication of an investment's "interest rate risk," or how sensitive a bond
or mutual fund portfolio may be to changes in interest rates. Generally, the
longer a fund's duration, the more it will react to interest rate fluctuations.
There are some differences in the policies that the Fund and the Acquiring
Fund have regarding the use of derivative instruments, and in effecting
transactions with borrowed money (which is a form of leveraging). For example,
the Acquiring Fund' s policy is to use futures and options only to hedge its
portfolio. The Fund' s policy is to use them to hedge its portfolio or to
increase returns. Also, the Acquiring Fund will borrow money only for certain
purposes, such as temporary or emergency purposes, in anticipation of share
redemptions, or to facilitate portfolio securities trades. The Fund may borrow
for any purpose, including for investment purposes.
In all other material respects, the management policies of the Fund and the
Acquiring Fund are the same. For a more complete discussion of the Fund's or
Acquiring Fund's management policies, see "Goal/Approach" in the Fund Prospectus
or the Acquiring Fund Prospectus, respectively.
The Fund and Acquiring Fund are separate diversified portfolios of the Trust
and The Dreyfus/Laurel Funds Trust, respectively, which are unincorporated
business trusts organized under the laws of The Commonwealth of Massachusetts
Main Risks. The risks associated with an investment in the Fund and
Acquiring Fund are substantially similar and include interest rate, credit,
market, liquidity, and call risks. As a result, the value of your investment in
the Acquiring Fund, as in the Fund, will fluctuate, which means that you could
lose money.
High yield bonds involve greater credit risk than investment grade bonds.
They tend to be more volatile in price and less liquid and are considered
speculative. As with stocks, the prices of high yield bonds can fall in response
to bad news about the issuer, the issuer's industry or the economy in general.
The Acquiring Fund's or Fund's share price also could be hurt if it holds bonds
of issuers that default on payments of principal or interest, or if there is a
decline in the credit quality of a bond it holds, or the perception of a
decline.
Other risk factors could have an adverse effect on the Acquiring Fund's or
Fund's performance:
(pound) if the high yield market becomes "illiquid," typically when there are
many more sellers than buyers for the securities, the value of such
securities, and the fund' s share price, may fall
dramatically;
(pound) under certain market conditions, usually during periods of market
illiquidity or rising interest rates, prices of the fund's "callable"
issues are subject to increased fluctuation because they can be
expected to perform more like longer term securities than shorter term
securities;
(pound) price and yield of any foreign debt security the fund may own may be
affected by factors such as political/economic instability, changes
in currency exchange rates and less liquid markets.
(pound) prices of the fund's mortgage-related securities may be impacted if
the loans underlying the securities are prepaid, and the value of
the fund's stripped mortgage-backed securities may move in the same
direction as interest rates.
Under adverse market conditions, the Fund or Acquiring Fund could invest
some or all of its assets in money market instruments. Although the Fund or
Acquiring Fund would do this to avoid losses, it could have the effect of
reducing the benefit from any upswing in the market. During such periods, the
Fund or Acquiring Fund may not achieve its investment objective.
The Acquiring Fund and the Fund, at times, may invest in certain
derivatives, such as futures and options. Derivatives can be illiquid and highly
volatile. To the extent the Fund uses derivatives for speculative purposes or
engages in leverage, its gains or losses, as compared to those of the Acquiring
Fund, potentially could be magnified.
The Acquiring Fund and the Fund also may borrow money, which is a form of
leverage. The Acquiring Fund is permitted to leverage to the extent necessary to
facilitate portfolio trades or for emergency purposes. The Fund is permitted to
borrow for these same reasons, but also may borrow to increase returns, which if
used could make the Fund' s portfolio more volatile.
The Acquiring Fund is permitted to maintain a longer average effective
maturity and duration (4 and 3.5 years, respectively) than the Fund (3 years).
To the extent the Acquiring Fund maintains an average effective maturity or
duration longer than 3 years, the Acquiring Fund's share price may be more
volatile than the Fund' s share price when interest rates change. Since its
inception, the Acquiring Fund has maintained an average effective maturity and
duration of less than 3 years; however, there can be no assurance that, in the
future, it will maintain an average effective maturity and duration of less than
3 years.
See "Main Risks" in the relevant Prospectus for a more complete description
of investment risks.
Sales Charges. The Fund' s shares are sold at net asset value per share ("
NAV") without a sales charge (load). Class A shares of the Acquiring Fund are
subject to a maximum front-end sales charge of 4.5% of the offering price. In
addition, Class A shares of the Acquiring Fund purchased without an initial
sales charge as part of an investment of at least $1,000,000 and redeemed within
one year after purchase are subject to a 1% contingent deferred sales charge ("
CDSC" ). HOWEVER, CLASS A SHARES OF THE ACQUIRING FUND RECEIVED BY FUND
SHAREHOLDERS IN THE EXCHANGE WILL NOT BE SUBJECT TO A FRONT-END SALES CHARGE OR
CDSC. IN ADDITION, EACH FUND SHAREHOLDER WHO PARTICIPATES IN THE EXCHANGE WILL
BE ABLE TO PURCHASE AT NAV (WITHOUT THE IMPOSITION OF ANY FRONT-END SALES CHARGE
OR CDSC) ADDITIONAL CLASS A SHARES OF THE ACQUIRING FUND FOR SUCH SHAREHOLDER'S
ACCOUNT OPENED AT THE TIME OF THE EXCHANGE. See in the Acquiring Fund Prospectus
" Account Policies-Share Class Charges" for a discussion of the initial sales
charge and CDSC imposed on Class A shares of the Acquiring Fund.
Fees and Expenses. The management fee structure of the Fund and Acquiring
Fund differ. Unlike the arrangements between most investment advisers and the
funds they manage, the Acquiring Fund pays Dreyfus a "unitary" fee at the annual
rate of .70% of the value of the Acquiring Fund's average daily net assets.
Under the unitary fee structure, Dreyfus pays all of the Acquiring Fund's
expenses, except: brokerage commissions, taxes, interest, fees and expenses of
the non-interested Trustees (including counsel expenses), the Rule 12b-1 fees
described below, and extraordinary expenses. Although Dreyfus does not pay for
the fees and expenses of the non-interested Trustees (including counsel fees),
Dreyfus is contractually required to reduce its investment management fee by an
amount equal to the Acquiring Fund's allocable share of such fees and expenses.
The Fund pays Dreyfus a separate management fee at the annual rate of .65% of
the value of the Fund's average daily net assets, pays other service providers
directly, and bears other Fund expenses directly.
The following information concerning fees and expenses of the Fund and
Acquiring Fund is derived from information set forth under the caption "
Expenses" in the relevant Prospectus. The fees and expenses of the Fund and
Acquiring Fund set forth below are for the fiscal year ended October 31, 1999
for the Fund, and December 31, 1999 for the Acquiring Fund. The "Pro Forma After
Exchange" information is based on net assets and fund accruals of the Fund and
Acquiring Fund as of May 19, 2000. Annual fund operating expenses are paid out
of fund assets, so their effect is reflected in the respective share price.
ANNUAL FUND
OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
(PERCENTAGE OF AVERAGE NET ASSETS):
<TABLE>
<CAPTION>
Pro Forma After Exchange
Fund Shares Acquiring Fund Shares Acquiring Fund Shares
<S> <C> <C> <C>
Management fees .65% .70% .70%
Rule 12b-1 fee None .25% .25%
Shareholder services fee .25% None None
Other expenses .28% .00% .00%
Total 1.18% .95% .95%
</TABLE>
<PAGE>
EXAMPLE
This example shows what you could pay in expenses over time. It uses the
same hypothetical conditions other funds use in their prospectuses: $10,000
initial investment, 5% total return each year and no changes in expenses.
BECAUSE EACH FUND SHAREHOLDER WHO PARTICIPATES IN THE EXCHANGE WILL BE ABLE TO
PURCHASE ADDITIONAL CLASS A SHARES IN SUCH ACCOUNTS AT NAV WITHOUT THE
IMPOSITION OF ANY FRONT-END SALES CHARGE OR CDSC, THE EXAMPLE DOES NOT REFLECT
THE SALES CHARGES OTHERWISE APPLICABLE TO CLASS A SHAREHOLDERS (IF THE SALES
CHARGE WAS REFLECTED, THE FIGURES WOULD BE HIGHER). The figures shown would be
the same whether you sold your shares at the end of a period or kept them.
Because actual return and expenses will be different, the example is for
comparison only.
<TABLE>
<CAPTION>
Acquiring Fund Shares
Fund Shares Acquiring Fund Shares Pro Forma After Exchange
<S> <C> <C> <C>
1 Year $120 $97 $97
3 Years $375 $303 $303
5 Years $649 $525 $525
10 Years $1,432 $1,166 $1,166
</TABLE>
Past Performance of the Acquiring Fund. The bar chart and table below show
some of the risks of investing in the Acquiring Fund, and have been derived from
the Acquiring Fund' s prospectus dated May 1, 2000. The bar chart shows the
changes in the Acquiring Fund's Class A share performance from year to year.
Sales loads are not reflected in the chart; if they were, the returns shown
would have been lower. The table compares the Acquiring Fund's Class A share
average annual total return to that of the Merrill Lynch High Yield Master II
Index, an unmanaged index of high yield bond performance, and a Dreyfus
customized index. The chart and table assume reinvestment of dividends and
distributions. For performance information of the Fund, see the Fund Prospectus
under the caption "Past Performance." Past performance is no guarantee of future
results.
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
CLASS A SHARES OF THE ACQUIRING FUND
Best Quarter: Q1 '98 3.84%
Worst Quarter: Q3 '98 -5.15%
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/99
Since Inception
1 Year (6/2/97)
Class A Shares (with maxium sales charge) -2.56% 0.97%
Class A Shares (without sales charge) 1.99% 2.79%
Merrill Lynch High Yield Master II
Index 2.51% 5.40%*
Dreyfus Customized Limited Term
High Yield Index** 5.23% 6.30%*
--------------------
*FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 5/31/97 IS USED AS THE
BEGINNING VALUE ON 6/2/97.
**THIS IS A BLENDED AND MARKET WEIGHTED INDEX CONSTRUCTED BY DREYFUS THAT
IS COMPRISED OF THE FOUR SHORTER-TERM SUB-INDEXES OF THE MERRILL LYNCH HIGH
YIELD MASTER II INDEX. THE FOUR SUB-INDEXES ARE (I) BB-RATED 1-3 YEARS; (II)
B-RATED 1-3 YEARS; (III) BB-RATED 3-5 YEARS; AND (IV) B-RATED 3-5 YEARS.
<PAGE>
Performance Comparison of the Fund and the Acquiring Fund. Set forth below
below is a comparison of the 30-day yields and average annual total returns for
the Fund and Class A shares of the Acquiring Fund at NAV. Note that the Fund and
the Acquiring Fund have different inception dates, so that the returns since
inception are not exactly comparable. BECAUSE EACH FUND SHAREHOLDER WHO
PARTICIPATES IN THE EXCHANGE WILL BE ABLE TO PURCHASE ADDITIONAL CLASS A SHARES
IN THEIR ACCOUNTS AT NAV WITHOUT THE IMPOSITION OF ANY FRONT-END SALES CHARGE OR
CDSC, THE EXAMPLE DOES NOT REFLECT THE SALES CHARGE OTHERWISE APPLICABLE TO
CLASS A SHAREHOLDERS (IF THE SALES CHARGE WAS REFLECTED, RETURNS FOR CLASS A
SHARES OF THE ACQUIRING FUND WOULD BE LOWER). ALL FIGURES ARE AS OF JUNE 30,
2000.
<TABLE>
<CAPTION>
Average Annual Total Return
1-year 3-years Since Inception 30-day Yield
<S> <C> <C> <C> <C>
Fund -4.19% 0.60% 3.68% (8/16/96) 11.71%
Acquiring Fund 0.44% 2.30% 2.48% (5/30/97) 11.31%
(Class A Shares)
</TABLE>
Of course, returns are historical for the periods noted and not indicative
of future results. Also, market volatility and interest rate changes, among
other factors, can dramatically affect a fund's short-term returns. Shareholders
are encouraged to call Dreyfus for the most recent performance of the Fund or
the Acquiring Fund.
Investment Adviser. The investment adviser for the Fund and Acquiring Fund
is Dreyfus, 200 Park Avenue, New York, New York 10166. Founded in 1947, Dreyfus
manages approximately $130 billion in over 160 mutual fund portfolios. Dreyfus
is the primary mutual fund business of Mellon Financial Corporation ("Mellon"),
a global financial services company with approximately $2.5 trillion of assets
under management, administration or custody, including over $500 billion under
management. Mellon provides wealth management, global investment services and a
comprehensive array of banking services for individuals, businesses and
institutions. Mellon is headquartered in Pittsburgh, Pennsylvania.
Primary Portfolio Manager. The primary portfolio manager for the Fund and
Acquiring Fund is Roger King. He has managed the Fund and Acquiring Fund since
their respective inception. Mr. King is Senior Portfolio Manager and Head of
Taxable High Yield Investments at Dreyfus where he has been employed since
February 1996. Prior thereto, he was Vice President and Director of High Yield
Research at Citibank Securities, Inc.
Board Members. The Trust and The Dreyfus/Laurel Funds Trust have different
Board members. For a description of the Board members, see the Acquiring Fund
Statement of Additional Information under the caption "Management of the Trust"
and the Fund Statement of Additional Information under the caption "Management
of the Company."
Capitalization. Fund shares are of one class. The Acquiring Fund has
classified its shares into four classes--Class A, Class B, Class C and Class R.
The following table sets forth, as of May 19, 2000, (1) the capitalization of
the Fund, (2) the capitalization of Class A shares of the Acquiring Fund and (3)
the pro forma capitalization of Class A shares of the Acquiring Fund, as
adjusted showing the effect of the Exchange had it occurred on such date.
<TABLE>
<CAPTION>
Pro Forma After Exchange
Fund Acquiring Fund Class A Shares Acquiring Fund Class A
<S> <C> <C> <C>
Total net assets $88,047,750 $87,881,878 $175,929,628
Net asset value
per share $9.72 $10.01 $10.01
Shares outstanding 9,055,477 8,782,374 17,578,353
</TABLE>
Total net assets of the Acquiring Fund (Classes A, B, C and R), as of May
19, 2000, were approximately $758 million.
Purchase Procedures. The purchase procedures of the Fund and Acquiring Fund
are substantially similar, but differ in that the Acquiring Fund is designed
primarily for people who are investing through a third party, such as a bank,
broker-dealer or financial adviser, or in a 401(k) or other retirement plan. For
Fund shareholders participating in the Exchange, Dreyfus Service Corporation
(each fund' s distributor) will act as broker-dealer. The automatic investment
services are the same, except that the Acquiring Fund does not offer the Dreyfus
Payroll Savings Plan (and would not for Fund shareholders holding Class A
shares). See " Account Policies -- Buying Shares" in the relevant Prospectus for
a discussion of purchase procedures.
Distribution Plan. Acquiring Fund Class A shares are subject to a Rule
12b-1 Distribution Plan ("Rule 12b-1 Plan"). Under the Rule 12b-1 Plan, the
Acquiring Fund pays the distributor an annual fee of .25% of the average daily
net assets of Class A shares to finance the sale of Class A shares and for
shareholder servicing. Because this fee is paid out of the assets attributable
to Class A shares on an ongoing basis, over time it will increase the cost of
your investment in Class A shares of the Acquiring Fund and may cost you more
than paying other types of sales charges. The Fund has not adopted a
distribution plan under Rule 12b-1, but has adopted a Shareholder Services Plan
described below. See "Distribution and Service Plans" in the Acquiring Fund
Statement of Additional Information for a discussion of the Rule 12b-1 Plan.
Shareholder Services Plan. Fund shares are subject to a Shareholder
Services Plan pursuant to which the Fund pays the distributor an annual fee of
.25% of the Fund' s average daily net assets for shareholder account service and
maintenance. The Acquiring Fund has no Shareholder Services Plan with respect to
its Class A shares, but has adopted a Rule 12b-1 Plan described above. See "
Distribution Plan and Shareholder Services Plan--Shareholder Services Plan" in
the Fund' s Statement of Additional Information for a discussion of the
Shareholder Services Plan.
Redemption Procedures. The redemption procedures of the Fund and Acquiring
Fund are substantially similar, but differ in that the Acquiring Fund does not
offer the Wire Redemption Privilege but does offer a Checkwriting Privilege. See
"Account Policies -- Selling Shares" in the relevant Prospectus for a discussion
of redemption procedures. If the Exchange is consummated, shareholders can
contact Dreyfus to establish the Checkwriting Privilege.
Distributions. The dividend and distributions policies of the Fund and
Acquiring Fund are identical. See "Distributions and Taxes" in the relevant
Prospectus for a discussion of such policies.
The actual amount of dividends paid per share by the Fund and Acquiring
Fund have varied historically, and can be expected to be different from month to
month. To illustrate, the following table sets forth, as of April 28, 2000, the
approximate daily dividend rate per share, monthly dividend rate per share, and
monthly dividend payment for the Fund and on a pro forma basis as adjusted to
show the effect of the Exchange had it occurred on such date. The data in the
table has been prepared using the Fund's actual dividend rates for April 2000,
and assumes a 30-day period for monthly dividend payment and that the Fund
shareholder owned 1,000 shares of the Fund on April 28, 2000 which, based on the
net asset value of the Fund and Acquiring Fund on such date, would be exchanged
for approximately 974.2 shares of the Acquiring Fund.
Pro Forma After
Exchange Acquiring
As of April 28, 2000 Fund Shares Fund Class A Shares
Net asset value
per share $9.81 $10.07
Daily dividend rate
per share $0.0030739 $0.0031313
Monthly dividend
paid per share $0.09222 $0.09394
Number of shares held 1,000.00 974.20
Monthly Dividend Payment
on number of shares held $92.22 $91.52
Of course, past performance is no guarantee of future results, and there
can be no guarantee that any fund will achieve any particular dividend or return
level at any point in the future.
Shareholder Services. The shareholder services offered by the Fund and
Acquiring Fund are substantially similar, except that the Acquiring Fund does
not offer the Dreyfus Payroll Savings Plan or the Wire Redemption Privilege.
However, the Acquiring Fund offers the Checkwriting Privilege which the Fund
does not offer. See "Services for Fund Investors" in the relevant Prospectus for
a description of shareholder services.
REASONS FOR THE EXCHANGE
The Boards of Trustees of The Dreyfus/Laurel Funds Trust and the Trust have
concluded that the Exchange is in the best interests of their respective
shareholders. Each Board believes that the Exchange will permit shareholders to
pursue identical investment goals in a larger fund without diluting
shareholders' interests. A larger fund should enhance the portfolio managers'
ability to select a larger number of portfolio securities on more favorable
terms and give the portfolio managers greater investment flexibility. As of May
19, 2000, the Fund was approximately $88 million in asset size, and the
Acquiring Fund was approximately $758 million in asset size. Also, the expense
ratio of the Fund is higher than that of the Acquiring Fund. See "Fees and
Expenses" above for a discussion of the Acquiring Fund's unitary fee structure.
In determining whether to recommend approval of the Exchange, each Board
considered the following factors, among others: (1) the compatibility of the
Fund' s and the Acquiring Fund's investment objective, management policies and
investment restrictions, as well as shareholder services offered by the Fund and
Acquiring Fund; (2) the terms and conditions of the Exchange and whether the
Exchange would result in dilution of the interests of the respective
shareholders; (3) expense ratios and information regarding the fees and expenses
of the Fund and Acquiring Fund, as well as the estimated expense ratio of the
combined Acquiring Fund; (4) the tax consequences of the Exchange; and (5) the
fact that the costs to be incurred by the Fund and the Acquiring Fund in
connection with the Exchange are to be borne entirely by Dreyfus. In addition,
the Trust' s Board considered the Fund' s inability to attract and retain
sufficient assets to operate efficiently.
INFORMATION ABOUT THE EXCHANGE
Plan of Exchange. The following summary of the Plan is qualified in its
entirety by reference to the form of Plan attached to this Prospectus/Proxy
Statement as Exhibit A. The Plan provides that the Acquiring Fund will acquire
all of the assets of the Fund in exchange for Class A shares of the Acquiring
Fund and the assumption by the Acquiring Fund of the Fund's stated liabilities
on the date which is five business days following the date on which Fund
shareholders vote to approve the Plan, or such other date as may be agreed upon
by the duly authorized officers of the parties (the "Closing Date"). The number
of Acquiring Fund shares to be issued to the Fund will be determined on the
basis of the relative NAVs and aggregate net assets of the Fund and Class A
shares of the Acquiring Fund, computed on the Closing Date as of the close of
trading on the floor of the New York Stock Exchange (currently at 4:00 p.m., New
York time) , except for options and futures contracts, if any, which will be
valued 15 minutes after the close of trading. Portfolio securities of the Fund
and the Acquiring Fund will be valued in accordance with the valuation practices
of the Acquiring Fund, which are described under the caption "Account
Policies-Buying Shares" in the Acquiring Fund Prospectus and under the caption
"Determination of Net Asset Value" in the Acquiring Fund Statement of Additional
Information.
Prior to the Closing Date, the Fund will declare a dividend or dividends
which, together with all dividends that have been declared previously, will have
the effect of distributing to Fund shareholders all of the Fund's previously
undistributed investment company taxable income, if any, for the tax period
ending on or prior to the Closing Date (computed without regard to any deduction
for dividends paid), its net exempt interest income for the tax period ending on
or prior to the Closing Date, and all of its previously undistributed net
capital gain realized in the tax period ending on or prior to the Closing Date
(after reduction for any capital loss carry forward).
As conveniently as practicable after the Closing Date, the Fund will
liquidate and distribute pro rata to its shareholders of record as of the close
of business on the Closing Date Class A shares of the Acquiring Fund received by
it in the Exchange. Such liquidation and distribution will be accomplished by
establishing accounts on the share records of the Acquiring Fund in the name of
each Fund shareholder, each account representing the respective pro rata number
of Acquiring Fund shares due to the shareholder. After such distribution and the
winding up of its affairs, the Fund will be terminated as a series of the Trust.
After the Closing Date, any outstanding certificates representing Fund shares
will represent Acquiring Fund Class A shares distributed to the record holders
of the Fund. Upon presentation to the transfer agent of the Acquiring Fund, Fund
share certificates will be exchanged for Acquiring Fund share certificates, at
the applicable exchange rate. Certificates for Acquiring Fund shares will be
issued only upon the investor' s written request.
The Plan may be amended at any time prior to the Exchange. The Trust will
provide Fund shareholders with information describing any material amendment to
the Plan prior to shareholder consideration. The obligations of the Fund and
Acquiring Fund under the Plan are subject to various conditions, including
approval by Fund shareholders holding the requisite number of Fund shares and
the continuing accuracy of various representations and warranties of the Fund
and the Acquiring Fund being confirmed by the respective parties.
The total expenses of the Exchange will be borne entirely by Dreyfus.
If the Exchange is not approved by the Fund's shareholders, the Trust's
Board will consider other appropriate courses of action, including liquidating
the Fund.
Temporary Suspension of Certain of the Fund's Investment Restrictions.
Since certain of the Fund's existing investment restrictions could preclude the
Fund from consummating the Exchange in the manner contemplated in the Plan, Fund
shareholders are requested to authorize the temporary suspension of certain
investment restrictions which restrict the Fund's ability to (i) invest more
than 5% of its assets in the obligations of any single issuer and (ii) invest
more than 25% of its total assets in the securities of issuers in any single
industry, as set forth in the Fund Statement of Additional Information, as well
as the temporary suspension of any other investment restriction of the Fund to
the extent necessary to permit the consummation of the Exchange. The temporary
suspension of the Fund's investment restrictions will not affect the investment
restrictions of the Acquiring Fund. A vote in favor of the Proposal is deemed to
be a vote in favor of the temporary suspensions.
Federal Income Tax Consequences. The exchange of the Fund's assets for
Acquiring Fund shares is intended to qualify for Federal income tax purposes as
a tax-free reorganization under Section 368(a) of the United States Internal
Revenue Code of 1986, as amended (the "Code"). As a condition to the closing of
the Exchange, the Acquiring Fund and Fund will receive the opinion of Stroock &
Stroock & Lavan LLP, counsel to the Fund, to the effect that, on the basis of
the existing provisions of the Code, Treasury regulations issued thereunder,
current administrative regulations and pronouncements and court decisions, and
certain facts, assumptions and representations, for Federal income tax purposes:
(1) the transfer of all of the Fund's assets in exchange for Acquiring Fund
shares and the assumption by the Acquiring Fund of the Fund's liabilities will
constitute a "reorganization" within the meaning of Section 368(a)(1)(C) with
respect to the Fund; (2) no gain or loss will be recognized by the Acquiring
Fund upon the receipt of the Fund's assets solely in exchange for Acquiring Fund
shares and the assumption by the Acquiring Fund of liabilities of the Fund; (3)
no gain or loss will be recognized by the Fund upon the transfer of its assets
to the Acquiring Fund in exchange for Acquiring Fund shares and the assumption
by the Acquiring Fund of the Fund' s liabilities or upon the distribution
(whether actual or constructive) of Acquiring Fund shares to Fund shareholders
in exchange for their Fund shares; (4) no gain or loss will be recognized by the
Fund shareholders upon the exchange of Fund shares for Acquiring Fund shares;
(5) the aggregate tax basis for Acquiring Fund shares received by each Fund
shareholder pursuant to the Exchange will be the same as the aggregate tax basis
for Fund shares held by such shareholder immediately prior to the Exchange, and
the holding period of Acquiring Fund shares to be received by the Fund
shareholder will include the period during which Fund shares surrendered in
exchange therefor were held by such shareholder (provided Fund shares were held
as capital assets on the date of the Exchange); and (6) the tax basis of Fund
assets acquired by the Acquiring Fund will be the same as the tax basis of such
assets to the Fund immediately prior to the Exchange, and the holding period of
Fund assets in the hands of the Acquiring Fund will include the period during
which those assets were held by the Fund.
NEITHER THE FUND NOR THE ACQUIRING FUND HAS SOUGHT A TAX RULING FROM THE
INTERNAL REVENUE SERVICE ("IRS"). THE OPINION OF COUNSEL IS NOT BINDING ON THE
IRS NOR DOES IT PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Fund
shareholders should consult their tax advisers regarding the effect, if any, of
the proposed Exchange in light of their individual circumstances.
Since the foregoing discussion relates only to the Federal income tax
consequences of the Exchange, Fund shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the Exchange.
REQUIRED VOTE AND BOARD'S RECOMMENDATION
The Trust' s Board has approved the Plan and the Exchange and has
determined that (i) participation in the Exchange is in the Fund's best
interests and (ii) the interests of shareholders of the Fund will not be diluted
as a result of the Exchange. Pursuant to the Trust's charter documents, an
affirmative vote of a majority of the Fund's shares outstanding and entitled to
vote is required to approve the Plan and the Exchange.
THE TRUST'S BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, UNANIMOUSLY
RECOMMENDS THAT THE FUND'S SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PLAN AND THE
EXCHANGE.
ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND AND THE FUND
Information about the Acquiring Fund is incorporated by reference into this
Prospectus/Proxy Statement from the Acquiring Fund Prospectus forming a part of
the Registration Statement on Form N-1A (File No. 33-43846). Information about
the Fund is incorporated by reference into this Prospectus/Proxy Statement from
the Fund Prospectus forming a part of the Trust's Registration Statement on Form
N-1A (File No. 33-7172).
The Fund and Acquiring Fund are subject to the requirements of the 1940
Act, and file reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by the Fund or
Acquiring Fund may be inspected and copied at the Public Reference Facilities of
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at the Northeast regional office of the Commission at 7 World Trade Center,
Suite 1300, New York, New York 10048. Text-only versions of fund documents can
be viewed on-line or downloaded from www.sec.gov. Copies of such material also
can be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
VOTING INFORMATION
In addition to the use of the mails, proxies may be solicited personally or
by telephone, and persons holding Fund shares in their names or in nominee name
may be paid for their expenses in sending soliciting materials to their
principals. Authorizations to execute proxies may be obtained by telephonic or
electronically transmitted instructions in accordance with procedures designed
to authenticate the shareholder' s identity. In all cases where a telephonic
proxy is solicited, the shareholder 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 shareholder has received the Fund's proxy statement and proxy
card in the mail. Within 72 hours of receiving a shareholder's telephonic or
electronically transmitted voting instructions, a confirmation will be sent to
the shareholder to ensure that the vote has been taken in accordance with the
shareholder's instructions and to provide a telephone number to call immediately
if the shareholder' s instructions are not correctly reflected in the
confirmation. Any shareholder 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 discretionary power) or is marked with an abstention (collectively, "
abstentions" ), the Fund shares represented thereby will be considered to be
present at a Meeting for purposes of determining the existence of a quorum for
the transaction of business. Abstentions will have the effect of a "no" vote for
the purpose of obtaining requisite approval for the Proposal.
In the event that a quorum is not present at the Meeting, or if a quorum is
present but sufficient votes to approve the Proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. 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 Fund shareholders 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 Proposal in favor of such
adjournment, and will vote those proxies required to be voted "AGAINST" the
Proposal against any adjournment. A quorum is constituted with respect to the
Fund by the presence in person or by proxy of the holders of more than 30% of
the outstanding Fund shares entitled to vote at the Meeting.
The votes of the Acquiring Fund's shareholders are not being solicited
since their approval or consent is not necessary for the Exchange.
As of May 31, 2000, the following were known by the Fund to own of record
5% or more of the outstanding voting shares of the Fund:
Percentage Outstanding
Name and Address Before Exchange After Exchange
Charles Schwab & Co., Inc. 11.28% 5.75%
Reinvest Account (Class A)
101 Montgomery Street
San Francisco, CA 94101
As of May 31, 2000, the following were known by the Acquiring Fund to own
of record 5% or more of the outstanding voting shares of the Acquiring Fund:
<TABLE>
<CAPTION>
Percentage Outstanding
Name and Address Before Exchange After Exchange
<S> <C> <C>
Merrill Lynch Pierce Fenner & Smith 19.62% 10.00%
For the Sole Benefit of its Customers (Class A) (Class A)
Attn: Fund Administration
4800 Deer Lake Drive East
Jacksonville, FL 32246
First Union Securities, Inc. 10.98% 5.60%
Tifkat L.P. (Class A) (Class A)
111 East Kilbourn Avenue
Milwaukee, WI 53202
Merrill Lynch Pierce Fenner & Smith 36.78% 36.78%
For the Sole Benefit of its Customers (Class B) (Class B)
Attn: Fund Administration
4800 Deer Lake Drive East
Jacksonville, FL 32246
Merrill Lynch Pierce Fenner & Smith 46.27% 46.27%
For the Sole Benefit of its Customers (Class C) (Class C)
Attn: Fund Administration
4800 Deer Lake Drive East
Jacksonville, FL 32246
MBCIC 51.60% 51.60%
c/o Mellon Bank, N.A. (Class R) (Class R)
919 North Market Street
Wilmington, DE 19801
Boston & Co. 39.22% 39.22%
P.O. Box 534005 (Class R) (Class R)
Pittsburgh, PA 15253
</TABLE>
As of May 31, 2000, Trustees and officers of The Dreyfus/Laurel Funds
Trust, as a group, owned less than 1% of the Acquiring Fund's outstanding
shares. As of May 31, 2000, Trustees and officers of the Trust, as a group,
owned less than 1% of the Fund's outstanding shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Fund for the fiscal year ended
October 31, 1999, and the audited financial statements of the Acquiring Fund for
the fiscal year ended December 31, 1999, have been incorporated herein by
reference in reliance upon the authority of the reports given, respectively, by
Ernst & Young LLP, the Fund's independent auditors, and KPMG LLP, the Acquiring
Fund's independent auditors, as experts in accounting and auditing. In addition,
the unaudited financial statements of the Fund for the six months ended April
30, 2000, also have been incorporated herein by reference.
OTHER MATTERS
The Trust's Trustees are 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 Trust, in care of Dreyfus Transfer, Inc., Attention:
Dreyfus Debt and Equity Funds--Dreyfus Short Term High Yield Fund, 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 Prospectus/Proxy Statement and other
soliciting material you wish to receive in order to supply copies to the
beneficial owners of Fund shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated June 7, 2000 (the "Agreement"),
between DREYFUS DEBT AND EQUITY FUNDS, a Massachusetts business trust (the "
Trust"), on behalf of DREYFUS SHORT TERM HIGH YIELD FUND (the "Fund"), and THE
DREYFUS/LAUREL FUNDS TRUST, a Massachusetts business trust (the "Dreyfus/Laurel
Trust" ), on behalf of DREYFUS PREMIER LIMITED TERM HIGH INCOME FUND (the
"Acquiring Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of the Fund,
in exchange solely for Class A shares (the "Acquiring Fund Shares") of
beneficial interest, par value $.001 per share, of the Acquiring Fund and the
assumption by the Acquiring Fund of certain liabilities of the Fund and the
distribution, after the Closing Date hereinafter referred to, of the Acquiring
Fund Shares to the shareholders of the Fund in liquidation of the Fund as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Fund is a diversified series of the Trust, a registered
open-end management investment company, and the Acquiring Fund is a diversified
series of the Dreyfus/Laurel Trust, a registered, open-end management investment
company, and the Fund owns securities which are assets of the character in which
the Acquiring Fund is permitted to invest;
WHEREAS, both the Acquiring Fund and the Fund are authorized to issue their
shares of beneficial interest;
WHEREAS, the Board of the Dreyfus/Laurel Trust has determined that the
exchange of all of the assets of the Fund and certain liabilities of the Fund
for Acquiring Fund Shares and the assumption of such liabilities is in the best
interests of the Acquiring Fund's shareholders and that the interests of the
Acquiring Fund's existing shareholders would not be diluted as a result of this
transaction; and
WHEREAS, the Board of the Trust has determined that the exchange of all of
the assets and certain of the liabilities of the Fund for Acquiring Fund Shares
and the assumption of such liabilities is in the best interests of the Fund's
shareholders and that the interests of the Fund's existing shareholders would
not be diluted as a result of this transaction:
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES
AND ASSUMPTION OF FUND LIABILITIES AND LIQUIDATION OF THE FUND.
1.1 Subject to the terms and conditions contained herein, the Fund agrees
to assign, transfer and convey to the Acquiring Fund all of the assets of the
Fund, including all securities and cash (subject to liabilities), and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the Fund the number
of Acquiring Fund Shares, including fractional Acquiring Fund Shares, determined
as set forth in paragraph 2.3; and (ii) to assume certain liabilities of the
Fund, as set forth in paragraph 1.2. Such transactions shall take place at the
closing (the "Closing") on the closing date (the "Closing Date") provided for in
paragraph 3.1. In lieu of delivering certificates for the Acquiring Fund Shares,
the Acquiring Fund shall credit the Acquiring Fund Shares to the Fund's account
on the books of the Acquiring Fund and shall deliver a confirmation thereof to
the Fund.
1.2 The Fund will endeavor to discharge all of its known liabilities and
obligations prior to the Closing Date. The Acquiring Fund shall assume all
liabilities, expenses, costs, charges and reserves reflected on an unaudited
statement of assets and liabilities of the Fund prepared by The Dreyfus
Corporation ("Dreyfus"), as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently applied
from the prior audited period. The Acquiring Fund shall assume only those
liabilities of the Fund reflected in that unaudited statement of assets and
liabilities and shall not assume any other liabilities, whether absolute or
contingent.
1.3 Delivery of the assets of the Fund to be transferred shall be made on
the Closing Date and shall be delivered to Mellon Bank, N.A., the Acquiring
Fund' s custodian (the "Custodian"), for the account of the Acquiring Fund, with
all securities not in bearer or book-entry form duly endorsed, or accompanied by
duly executed separate assignments or stock powers, in proper form for transfer,
with signatures guaranteed, and with all necessary stock transfer stamps,
sufficient to transfer good and marketable title thereto (including all accrued
interest and dividends and rights pertaining thereto) to the Custodian for the
account of the Acquiring Fund free and clear of all liens, encumbrances, rights,
restrictions and claims. All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account of the
Acquiring Fund.
1.4 The Fund will pay or cause to be paid to the Acquiring Fund any
interest received on or after the Closing Date with respect to assets
transferred to the Acquiring Fund hereunder. The Fund will transfer to the
Acquiring Fund any distributions, rights or other assets received by the Fund
after the Closing Date as distributions on or with respect to the securities
transferred. Such assets shall be deemed included in assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately valued.
1.5 As soon after the Closing Date as is conveniently practicable (the "
Liquidation Date" ), the Fund will liquidate and distribute pro rata to the
Fund' s shareholders of record, determined as of the close of business on the
Closing Date (the "Fund Shareholders"), Acquiring Fund Shares received by the
Fund pursuant to paragraph 1.1. Such liquidation and distribution will be
accomplished by the transfer of the applicable Acquiring Fund Shares then
credited to the account of the Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the names of the Fund
Shareholders and representing the respective pro rata number of the applicable
Acquiring Fund Shares due such shareholders. All issued and outstanding shares
of the Fund simultaneously will be canceled on the books of the Fund.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued in
the manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquiring Fund shares on the
books of the Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.8 Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the Closing Date and such later
date on which the Fund's existence is terminated.
2. VALUATION.
2.1 The value of the Fund's assets to be acquired by the Acquiring Fund
hereunder shall be the value of such assets computed as of the close of trading
on the floor of the New York Stock Exchange (currently, 4:00 p.m., New York
time), except that options and futures contracts will be valued 15 minutes after
the close of trading on the floor of the New York Stock Exchange, on the Closing
Date (such time and date being hereinafter called the "Valuation Date"), using
the valuation procedures set forth in the Dreyfus/Laurel Trust's Second Amended
and Restated Agreement and Declaration of Trust, as amended (the "Trust
Agreement" ), and the Acquiring Fund's then-current prospectus or statement of
additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the net asset
value per share computed as of the Valuation Date, using the valuation
procedures set forth in the Dreyfus/Laurel Trust's Trust Agreement and the
Acquiring Fund's then-current prospectus or statement of additional information
2.3 The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Fund's net assets shall be determined by
dividing the value of the net assets of the Fund determined using the same
valuation procedures referred to in paragraph 2.1 by the net asset value of one
Acquiring Fund Share, determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the regular
practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be five (5) business days following the date
shareholders of the Fund approve this Agreement, or such other date as the
parties, through their duly authorized officers, may mutually agree. All acts
taking place at the Closing shall be deemed to take place simultaneously as of
the close of business on the Closing Date unless otherwise provided. The Closing
shall be held at 10:00 a.m., New York time, at the offices of Dreyfus, 200 Park
Avenue, New York, New York, or such other time and/or place as the parties may
mutually agree.
3.2 The Custodian shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the Fund's portfolio securities, cash and
any other assets have been delivered in proper form to the Acquiring Fund within
two business days prior to or on the Closing Date; and (b) all necessary taxes
including all applicable stock transfer stamps have been paid, or provision for
payment shall have been made, in conjunction with the delivery of portfolio
securities.
3.3 If on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Fund or the
Fund shall be closed to trading or trading thereon shall be restricted; or (b)
trading or the reporting of trading on said Exchange or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Fund is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been fully
resumed and reporting shall have been restored.
3.4 The transfer agent for the Fund shall deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Fund Shareholders and the number and percentage ownership
of outstanding Fund shares owned by each such shareholder immediately prior to
the Closing. The Acquiring Fund shall issue and deliver a confirmation
evidencing the Acquiring Fund Shares to be credited on the Closing Date to the
Secretary of the Trust, or provide evidence satisfactory to the Fund that such
Acquiring Fund Shares have been credited to the Fund's account on the books of
the Acquiring Fund. At the Closing, each party shall deliver to the other such
bills of sale, checks, assignments, receipts or other documents as such other
party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Trust represents and warrants to the Acquiring Fund as follows:
(a) The Fund is a series of the Trust, a business trust duly organized and
validly existing and in good standing under the laws of The Commonwealth of
Massachusetts, and has power to own all of its properties and assets and to
carry out this Agreement.
(b) The Trust is registered under the Investment Company Act of 1940, as
amended (the "1940 Act" ), as an open-end, management investment company, of
which the Fund is a duly established and designated separate, diversified
series, and such registration has not been revoked or rescinded and is in full
force and effect.
(c) The current prospectus and statement of additional information of the
Fund conform in all material respects to the applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act and the
rules and regulations of the Securities and Exchange Commission (the "SEC")
thereunder and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading.
(d) The Fund is not, and the execution, delivery and performance of this
Agreement will not result, in material violation of the Trust's Agreement and
Declaration of Trust dated March 12, 1992, as the same may have been amended
(the "Charter" ), or its Bylaws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Fund is a party or by which it
is bound.
(e) The Fund has no material contracts or other commitments outstanding
(other than this Agreement) which will be terminated with liability to it on or
prior to the Closing Date.
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Fund or any of its properties or assets which, if
adversely, determined, would materially and adversely affect its financial
condition or the conduct of its business. The Fund knows of no facts which might
form the basis for the institution of such proceedings, and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated.
(g) The Statements of Assets and Liabilities of the Fund for the four
fiscal years ended October 31, 1999, have been audited by Ernst & Young LLP,
independent auditors, and are in accordance with generally accepted accounting
principles, consistently applied, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of the
Fund as of such dates, and there are no known contingent liabilities of the Fund
as of such dates not disclosed therein.
(h) Since October 31, 1999, there has not been any material adverse change
in the Fund's financial condition, assets, liabilities or business other than
changes occurring in the ordinary course of business, or any incurrence by the
Fund of indebtedness maturing more than one year from the date such indebtedness
was incurred, except as disclosed on the statement of assets and liabilities
referred to in Section 1.2 hereof.
(i) At the Closing Date, all Federal and other tax returns and reports of
the Fund required by law to have been filed by such dates shall have been filed,
and all Federal and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of the Trust's
knowledge no such return is currently under audit and no assessment has been
asserted with respect to such returns.
(j) For each fiscal year of its operation, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(k) All issued and outstanding shares of the Fund are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by the Fund. All of the issued and outstanding shares of the Fund
will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in paragraph 3.4. The
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of the Fund's shares, nor is there outstanding any
security convertible into any of the Fund's shares.
(l) On the Closing Date, the Fund will have full right, power and authority
to sell, assign, transfer and deliver the assets to be transferred by it
hereunder.
(m) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Trust' s Board and, subject to the approval of the Fund
Shareholders, this Agreement will constitute the valid and legally binding
obligation of the Fund, enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the enforceability
is considered in a proceeding in equity or at law).
(n) The proxy statement of the Fund (the "Proxy Statement"), included in
the Registration Statement referred to in paragraph 5.5 (other than information
therein that has been furnished by the Acquiring Fund), will, on the effective
date of the Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially misleading.
4.2 The Dreyfus/Laurel Trust represents and warrants as follows:
(a) The Acquiring Fund is a series of the Dreyfus/Laurel Trust, a business
trust duly organized, validly existing and in good standing under the laws of
The Commonwealth of Massachusetts, and has power to carry on its business as it
is now being conducted and to carry out this Agreement.
(b) The Dreyfus/Laurel Trust is registered under the 1940 Act as an
open-end, diversified management investment company, of which the Acquiring Fund
is a duly established and designated, separate, diversified series, and such
registration has not been revoked or rescinded and is in full force and effect.
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable requirements
of the 1933 Act and the 1940 Act, and the rules and regulations of the SEC
thereunder, and do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not materially misleading.
(d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not result, in material violation of the Dreyfus/Laurel
Trust' s Trust Agreement or its Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquiring Fund is
a party or by which it is bound.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquiring Fund or any of its properties or assets which,
if adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Acquiring Fund knows of no facts
which might form the basis for the institution of such proceedings, and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions contemplated herein.
(f) The Statements of Assets and Liabilities of the Acquiring Fund for the
three fiscal years ended December 31, 1999, have been audited by KPMG LLP,
independent auditors, and are in accordance with generally accepted accounting
principles, consistently applied, and such statements (copies of which have been
furnished to the Fund) fairly reflect the financial condition of the Acquiring
Fund as of such dates.
(g) Since December 31, 1999, there has not been any material adverse change
in the Acquiring Fund' s financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as disclosed on the
statement of assets and liabilities referred to in Section 4.2(f) hereof.
(h) At the Closing Date, all Federal and other tax returns and reports of
the Acquiring Fund required by law then to be filed shall have been filed, and
all Federal and other taxes shown as due on said returns and reports shall have
been paid or provision shall have been made for the payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by the Acquiring Fund. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any of the Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares.
(k) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Dreyfus/Laurel Trust's Trustees and Acquiring Fund
shareholders, and this Agreement will constitute the valid and legally binding
obligation of the Acquiring Fund enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(l) The Proxy Statement included in the Registration Statement (only
insofar as it relates to the Acquiring Fund and is based on information
furnished by the Acquiring Fund) will, on the effective date of the Registration
Statement and on the Closing Date, not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which such statements were made, not materially misleading.
5. COVENANTS OF THE ACQUIRING FUND AND THE FUND.
5.1 The Acquiring Fund and the Fund each will operate its business in the
ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include payment of
customary dividends and distributions.
5.2 The Trust will call a meeting of the Fund Shareholders to consider and
act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund and the
Fund will each take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days after the
Closing Date, the Fund shall furnish the Acquiring Fund, in such form as is
reasonably satisfactory to the Acquiring Fund, a statement of the earnings and
profits of the Fund for Federal income tax purposes which will be carried over
to the Acquiring Fund as a result of Section 381 of the Code and which will be
certified by the Trust's President or its Vice President and Treasurer.
5.5 The Trust will provide the Acquiring Fund with information reasonably
necessary for the preparation of a prospectus (the "Prospectus") which will
include the Proxy Statement, referred to in paragraph 4.1(n), all to be included
in a Registration Statement on Form N-14 of the Acquiring Fund (the "
Registration Statement" ), in compliance with the 1933 Act, the Securities
Exchange Act of 1934, as amended, and the 1940 Act in connection with the
meeting of the Fund Shareholders to consider approval of this Agreement and the
transactions contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be subject, at its election, to the performance by the Fund of
all the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of the Trust on behalf of the Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
6.2 The Fund shall have delivered to the Acquiring Fund a statement of the
Fund's assets and liabilities, together with a list of the Fund's portfolio
securities showing the tax basis of such securities by lot and the holding
periods of such securities, as of the Closing Date, certified by the Treasurer
of the Trust.
6.3 The Trust shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in its name by the Trust's President or Vice
President and its Treasurer, in form and substance satisfactory to the Acquiring
Fund, to the effect that the representations and warranties of the Trust made in
this Agreement on behalf of the Fund are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquiring Fund shall
reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND.
The obligations of the Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Acquiring
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Dreyfus/Laurel Trust on
behalf of the Acquiring Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
7.2 The Acquiring Fund shall have delivered to the Fund on the Closing Date
a certificate executed in its name by the Dreyfus/Laurel Trust's President or
Vice President and its Treasurer, in form and substance reasonably satisfactory
to the Fund, to the effect that the representations and warranties of the
Dreyfus/Laurel Trust made in this Agreement on behalf of the Acquiring Fund are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Fund or the Acquiring Fund, the other party to
this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Fund in accordance with the provisions of the Trust's Charter.
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the SEC and of state Blue Sky and securities authorities) deemed necessary by
the Acquiring Fund or the Fund to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a risk of
a material adverse effect on the assets or properties of the Acquiring Fund or
the Fund, provided that either party hereto may for itself waive any of such
conditions.
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5 The Fund shall have declared a dividend or dividends which, together
with all previous such dividends, shall have the effect of distributing to the
Fund Shareholders all of the Fund's investment company taxable income for all
taxable years or periods ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid); the excess of its interest
income excludable from gross income under Section 103(a) of the Code over its
disallowed deductions under Sections 265 and 171(a)(2) of the Code, for all
taxable years or periods ending on or prior to the Closing Date; and all of its
net capital gain realized in all taxable years or periods ending on or prior to
the Closing Date (after reduction for any capital loss carry forward).
8.6 The parties shall have received an opinion of Stroock & Stroock & Lavan
LLP substantially to the effect that for Federal income tax purposes
(a) The transfer of all or substantially all of the Fund's assets in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund
of certain identified liabilities of the Fund will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) of the Code; (b) No gain or loss will
be recognized by the Acquiring Fund upon the receipt of the assets of the Fund
solely in exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain identified liabilities of the Fund; (c) No gain or
loss will be recognized by the Fund upon the transfer of the Fund's assets to
the Acquiring Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain identified liabilities of the Fund or upon the
distribution (whether actual or constructive) of the Fund Shares to Fund
Shareholders in exchange for their shares of the Fund; (d) No gain or loss will
be recognized by the Fund Shareholders upon the exchange of their Fund shares
for the Acquiring Fund Shares; (e) The aggregate tax basis for the Acquiring
Fund Shares received by each of the Fund Shareholders pursuant to the
Reorganization will be the same as the aggregate tax basis of the Fund shares
held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares to be received by each Fund
Shareholder will include the period during which the Fund shares exchanged
therefor were held by such shareholder (provided the Fund shares were held as
capital assets on the date of the Reorganization) ; and (f) The tax basis of the
Fund assets acquired by the Acquiring Fund will be the same as the tax basis of
such assets to the Fund immediately prior to the Reorganization, and the holding
period of the assets of the Fund in the hands of the Acquiring Fund will include
the period during which those assets were held by the Funds.
No opinion will be expressed as to the effect of the reorganization on (i)
the Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for Federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting, and (ii) any shareholder
of the Fund that is required to recognize unrealized gains and losses for
Federal income tax purposes under a mark-to-market system of accounting.
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transaction contemplated hereby may be
terminated and abandoned by resolution of the Board of the Trust or of the
Dreyfus/Laurel Trust, as the case may be, at any time prior to the Closing Date
(and notwithstanding any vote of the Fund Shareholders) if circumstances should
develop that, in the opinion of either of the parties' Board, make proceeding
with the Agreement inadvisable.
9.2 If this Agreement is terminated and the transaction contemplated hereby
is abandoned pursuant to the provisions of this Section 9, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the trustees, officers or shareholders of the Dreyfus/Laurel Trust or
of the Trust, as the case may be, in respect of this Agreement
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions may
be waived by the Board of the Dreyfus/Laurel Trust or of the Trust if, in the
judgment of either, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the shareholders of the Acquiring Fund
or of the Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided for
herein shall survive consummation of the transactions contemplated hereby.
11.2 This agreement contains the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof, and merges and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them relating to the subject matter hereof. Neither party
shall be bound by any condition, definition, warranty or representation, other
than as set forth or provided in this Agreement or as may be, on or subsequent
to the date hereof, set forth in a writing signed by the party to be bound
thereby.
11.3 This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without giving effect to principles of
conflict of laws; provided, however, that the due authorization, execution and
delivery of this Agreement by the Acquiring Fund and the Fund shall be governed
and construed in accordance with the internal laws of The Commonwealth of
Massachusetts without giving effect to principles of conflict of laws.
11.4 This Agreement may be amended only by a signed writing between the
parties.
11.5 This Agreement may be executed in counterparts, each of which, when
executed and delivered, shall be deemed to be an original.
11.6 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
11.7 (a) The names "The Dreyfus/Laurel Funds Trust" and "Trustees of The
Dreyfus/Laurel Fund Trust" refer respectively to the Dreyfus/Laurel Trust and
its Trustees, as trustees but not individually or personally, acting from time
to time under the Trust Agreement, a copy of which is on file at the office of
the Secretary of The Commonwealth of Massachusetts and at the principal office
of the Dreyfus/Laurel Trust. The obligations of the Acquiring Fund entered into
in the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders or representatives of the Acquiring Fund
personally, but bind only the Acquiring Fund's property, and all persons dealing
with any class of shares of the Acquiring Fund must look solely to the Acquiring
Fund's property belonging to such class for the enforcement of any claims
against the Acquiring Fund.
(b) The names "Dreyfus Debt and Equity Funds" and "Trustees of Dreyfus Debt
and Equity Funds" refer respectively to the Trust and its Trustees, as trustees
but not individually or personally, acting from time to time under the Charter,
a copy of which is on file at the office of the Secretary of The Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of the
Trust entered into in the name or on behalf of the Fund by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the Fund's property, and all persons dealing
with the Fund must look solely to the Fund's property for the enforcement of any
claims against the Fund.
11.8 Any references in this Agreement to actions taken, deliveries by or
to, representations and warranties made by or to, or obligations of, the Fund
shall be deemed references to actions taken, deliveries by or to,
representations and warranties made by or to, or obligations of, the Trust on
behalf of the Fund.
<PAGE>
IN WITNESS WHEREOF, the Dreyfus/Laurel Trust and the Trust have caused this
Agreement and Plan of Reorganization to be executed and attested on its behalf
by its duly authorized representatives as of the date first above written.
THE DREYFUS / LAUREL FUNDS TRUST,
on behalf of Dreyfus Premier Limited Term
High Income Fund
By: /s/ Stephen E. Canter
Stephen E. Canter,
President
ATTEST: /s/ Steven F. Newman
Steven F. Newman,
Secretary
DREYFUS DEBT AND EQUITY FUNDS,
on behalf of Dreyfus Short Term High
Yield Fund
By: /s/ Stephen E. Canter
Stephen E. Canter,
President
ATTEST: /s/ John B. Hammalian
John B. Hammalian,
Secretary
