THE DREYFUS/LAUREL FUNDS, INC.
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
TO THE RETAIL CLASS SHAREHOLDERS OF DREYFUS DISCIPLINED STOCK FUND:
Dear Shareholder:
The attached Proxy Statement discusses a Proposal to be voted upon by the
holders of Retail Class shares of the Dreyfus Disciplined Stock Fund (the
"Fund"), a series of The Dreyfus/Laurel Funds, Inc. (the "Company"). As a
shareholder of the Fund's Retail Class, you are asked to review the Proxy
Statement and to cast your vote on the Proposal. The Company's Board of
Directors has recommended that Retail Class shareholders approve the Proposal.
The Proposal seeks approval of an amendment to the Fund's Distribution
Plan to authorize the Fund to compensate Mellon Bank, N.A. and its affiliates
for shareholder servicing activities and the Fund's distributor for shareholder
servicing activities and distribution expenses at the annual rate of .10 of 1%
of average daily net assets. The Proposal is discussed in greater detail in the
attached Proxy Statement.
We encourage you to review the Proxy Statement and cast your vote. Your
vote may be recorded on the enclosed proxy card. If you have any questions about
the Proposal, please call toll-free 1-800-645-6561.
Every vote counts, including yours! We urge you to sign, date and return
your proxy card promptly to permit the implementation of this very important
Proposal. We must receive your vote prior to the meeting on December 2, 1997.
We look forward to receiving your votes. Thank you for your support of the
Dreyfus Family of Funds.
Sincerely,
/s/ Marie E. Connolly
Marie E. Connolly
PRESIDENT,
THE DREYFUS/LAUREL FUNDS, INC.
October 6, 1997
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
DREYFUS DISCIPLINED STOCK FUND -- RETAIL CLASS SHARES
200 Park Avenue
New York, New York 10166
________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1997
________________________
Notice is hereby given that a Special Meeting of Retail Class shareholders
of the Dreyfus Disciplined Stock Fund (the "Fund"), a series of The
Dreyfus/Laurel Funds, Inc. (the "Company"), a Maryland corporation, will be held
at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor West, New
York, New York 10166 on December 2, 1997 at 10:00 a.m. Eastern time. The special
meeting is being held for the following purposes:
1. To approve an amendment to the Fund's distribution plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended, to authorize the Fund to spend annually .10 of 1% of the
average daily net assets attributable to the Fund's Retail Class
shares to pay for shareholder servicing and distribution expenses for
such shares.
2. To consider and vote upon such other matters as may properly
come before said meeting or any adjournments thereof.
Proposal 1 is discussed in greater detail in the attached Proxy Statement.
The Board of Directors of the Company has fixed the close of business on
September 29, 1997 as the record date for the determination of Retail Class
shareholders entitled to notice of and to vote at the meeting or any adjournment
or adjournments thereof.
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO COMPLETE, SIGN, DATE
AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES
ARE SET FORTH ON THE INSIDE COVER.
Sincerely,
John E. Pelletier
SECRETARY,
THE DREYFUS/LAUREL FUNDS, INC.
October 6, 1997
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and avoid the time and expense involved in validating your vote if you
fail to sign your proxy card(s) properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card(s).
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration
on the proxy card(s).
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card(s) should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
- ------------ ---------------
CORPORATE ACCOUNTS
- ------------------
(1) ABC Corp. John Doe, Treasurer
(2) ABC Corp.
c/o John Doe, Treasurer John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
- --------------
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe, Trustee
CUSTODIAL OR ESTATE ACCOUNTS
- ----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
DREYFUS DISCIPLINED STOCK FUND
RETAIL CLASS SHARES
200 PARK AVENUE
NEW YORK, NEW YORK 10166
1-800-645-6561
______________
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 2, 1997
______________
PROXY STATEMENT
The accompanying proxy is being solicited by the Board of Directors of The
Dreyfus/Laurel Funds, Inc. (the "Company") for use at a Special Meeting of
Retail Class shareholders of Dreyfus Disciplined Stock Fund (the "Fund"), to be
held on December 2, 1997 at 10:00 a.m. Eastern time, at the offices of The
Dreyfus Corporation ("Dreyfus"), 200 Park Avenue, 7th Floor West, New York, New
York 10166, and at any adjournments thereof (the "Meeting"). A Notice of Special
Meeting of Shareholders and a proxy card accompany this statement.
Proxy solicitations will be made primarily by mail, but may also be made
by telephone, facsimile, telegraph or personal interviews conducted by officers
and employees of Dreyfus, the investment adviser of the Fund, affiliates of
Dreyfus or other representatives of the Fund. This Proxy Statement is first
being mailed on or about October 14, 1997. The cost of solicitation and the
expenses incurred in connection with preparing this Proxy Statement and its
enclosures will be paid by Dreyfus.
If the enclosed proxy is properly executed and returned in time to be
voted at the Meeting, the shares represented by the Proxy will be voted in
accordance with the instructions marked on the proxy card. Unless instructions
to the contrary are marked on the proxy card, the proxy will be voted FOR
Proposal 1 (the "Proposal") described in the accompanying Notice of Special
Meeting of Shareholders. Proxies that reflect abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons entitled to vote or (ii)
the broker or nominee does not have discretionary voting power on a particular
matter) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. With respect to the Proposal,
abstentions and broker non-votes have the effect of a negative vote on the
Proposal. Any shareholder who has been given a proxy has the right to revoke it
any time prior to its exercise by attending the Meeting and voting his or her
Retail Class shares in person, or by submitting a letter of revocation or a
later-dated proxy to the Company at the address indicated on the enclosed
<PAGE>
envelope provided with this Proxy Statement. Any such letter of revocation or
later dated-proxy must be received by the Company prior to the Meeting to be
effective.
In the event a quorum is not present at the Meeting or in the event that 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. Any such adjournment can be made by
the affirmative vote of those Retail Class shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies that
they are entitled to vote in such manner as they determine to be in the best
interest of Retail Class shareholders with respect to any proposal to adjourn
the Meeting. A shareholder vote may be taken on the Proposal in this Proxy
Statement prior to such adjournment if sufficient votes have been received for
approval.
The Company is composed of a number of separate series (each a "fund"),
the interests of which are represented by shares of common stock of the Company.
Only Retail Class shares of the Fund are requested to vote at the Meeting. Under
the Company's Articles of Incorporation, as amended, one-third of the Fund's
Retail Class shares outstanding and entitled to vote shall be a quorum for the
transaction of business at the Meeting, except as otherwise provided by the
Investment Company Act of 1940, as amended (the "1940 Act"), or other applicable
law.
As of September 18, 1997, there were a total of 43,957,722 Retail Class
shares of the Fund outstanding. Of these, Dreyfus and its affiliates, including
Mellon Bank, N.A. ("Mellon Bank") and Boston Safe Deposit and Trust Company, had
voting control over 7,353,945 shares or 17% of the outstanding Retail Class
shares. These shares are held by Dreyfus and its affiliates in various fiduciary
capacities. For those Retail Class shares over which Dreyfus and its affiliates
have voting control, an independent fiduciary has been retained to vote the
Retail Class shares in the best interest of the beneficial owners of those
shares. In addition to these shares, as of September 18, 1997, the Corporate
Benefits Committee of the Mellon 401(k) Retirement Savings Plan, a committee
consisting of senior officers of Mellon Bank Corporation, had voting discretion
over 1,966,812 Retail Class shares or 4.5% of the outstanding Retail Class
shares. For those Retail Class shares over which it has voting discretion, the
Corporate Benefits Committee is presently considering the relative merits of (i)
passing through the vote to retirement plan participants, (ii) engaging an
independent fiduciary to vote the shares in its discretion, or (iii) voting the
shares in its own discretion. As of September 18, 1997, the Fund had total net
assets of approximately $1.541 billion, of which $54 million was attributable to
the Institutional Class and $1.487 billion was attributable to the Retail Class.
-2-
<PAGE>
To the knowledge of the Company, no other single shareholder or "group" (as
the term is used in Section 13(d) of the Securities Exchange Act of 1934 ("1934
Act")), owned beneficially more than 5% of the Fund's outstanding Retail Class
shares as of September 18, 1997.
At September 18, 1997, the Directors and officers of the Company as a
group beneficially owned less than 1% of the Retail Class shares of the Fund.
Each full Retail Class share of the Fund outstanding is entitled to one
vote and each fractional Retail Class share of the Fund outstanding is entitled
to a proportionate share of one vote for such purposes. In order to be
effective, the Proposal must be approved by the Fund's Retail Class
shareholders. See "Approval of the Amended Distribution Plan -- Required Vote."
Shareholders of the Fund may request copies of the Fund's Annual Report
for the fiscal year ended October 31, 1996, including audited financial
statements, and the Fund's Semi-Annual Report for the period ended April 30,
1997, at no charge by writing the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or by calling toll-free 1-800-645-6541.
In order that your shares may be represented at the Meeting, you are
requested to:
- indicate your instructions on the proxy card;
- date and sign the proxy card;
- mail the proxy card promptly in the enclosed envelope, which
requires no postage if mailed in the United States; and
- allow sufficient time for the proxy card to be received on or
before 5:00 p.m. on December 1, 1997.
-3-
<PAGE>
The principal office of the Company is located at 200 Park Avenue, New
York, New York 10166.
_____________________________
GENERAL OVERVIEW OF THE PROPOSAL
The following is a brief overview regarding the matter being presented for
your approval at the Meeting:
The Fund currently has a Distribution Plan adopted for the Fund's
Institutional Class shares pursuant to Rule 12b-1 under the 1940 Act (the
"Distribution Plan"). The Distribution Plan currently allows the Fund to spend
annually up to .25 of 1% of average daily net assets attributable to the
Institutional Class to compensate Dreyfus Service Corporation ("DSC"), an
affiliate of Dreyfus, for shareholder servicing activities, and Premier Mutual
Fund Services, Inc., the Fund's distributor (the "Distributor"), for shareholder
servicing activities and expenses primarily intended to result in the sale of
Institutional Class shares of the Fund. Amounts paid under plans such as the
Distribution Plan are known as "12b-1 fees." Retail Class shares of the Fund are
not currently covered by the Distribution Plan and no 12b-1 fees are paid with
respect to the Retail Class.
The Fund's Retail Class shareholders are being asked in the Proposal to
include the Fund's Retail Class shares under the Distribution Plan, amended as
described below (the "Amended Distribution Plan"). As discussed below, if the
Proposal is approved, the Retail Class and Institutional Class would be combined
into a single class, which would be subject to the Amended Distribution Plan.
Under the Amended Distribution Plan, the maximum percentage rate at which 12b-1
fees payable are calculated would be reduced to .10 of 1% annually, but the
assets to which such percentage would be applied would be expanded to include
the average daily net assets of the entire Fund, including those attributable to
the current Retail Class. The Amended Distribution Plan would also provide that
12b-1 fees could be used to compensate Mellon Bank or any of its affiliates
(including Dreyfus, as well as DSC) for shareholder servicing activities, and
the Distributor for shareholder servicing activities and expenses primarily
intended to result in the sale of any shares of the Fund. If the Proposal is
approved, the Amended Distribution Plan would increase the expenses indirectly
borne by the Fund's Retail Class shareholders by .10 of 1% of average daily net
assets, while reducing those indirectly borne by the Fund's Institutional Class
shareholders by .15 of 1% of average daily net assets.
Dreyfus has indicated to the Directors of the Company that the Amended
Distribution Plan is part of an overall restructuring of the Fund to reflect the
Fund's orientation toward retail investors. Dreyfus also believes that the
Amended Distribution Plan is appropriate in order for the Fund to be marketed
most effectively and for a high level of shareholder services to be maintained.
-4-
<PAGE>
_____________________________
PROPOSAL 1 - APPROVAL OF THE AMENDED DISTRIBUTION PLAN
The Board of Directors has approved, and recommends that Retail Class
shareholders of the Fund approve, the Amended Distribution Plan. The Amended
Distribution Plan would authorize the Fund to spend annually up to .10 of 1% of
its average daily net assets attributable to all shares of the Fund, including
those currently designated the Retail Class, to compensate Mellon Bank and its
affiliates for shareholder servicing activities and the Distributor for
shareholder servicing activities and expenses primarily intended to result in
the sale of shares of the Fund. The Amended Distribution Plan would continue to
allow the Distributor to make payments from the 12b-1 fees it receives to
compensate banks, brokers, dealers and other financial institutions that have
entered into Selling Agreements with the Distributor and provide distribution
related services and/or shareholder services to shareholders of the Fund. As
under the current Distribution Plan, the Fund would not be obligated under the
Amended Distribution Plan to compensate the Distributor or Mellon Bank or its
affiliates for expenses incurred in excess of the authorized 12b-1 fee, even if
the expenses incurred by them for servicing or, in the case of the Distributor,
distributing the Fund's shares exceed the 12b-1 fee payable under the Amended
Distribution Plan.
A comparison of the current expense ratio and the proposed expense ratio
(after giving effect to the Amended Distribution Plan) with respect to the
Retail Class shares of the Fund is shown in the table below under "Impact of the
Proposal". Pursuant to the current Investment Management Agreement under which
Dreyfus manages the Fund, Dreyfus is paid an annual fee of .90 of 1% of the
Fund's average daily net assets, and provides, or arranges and pays for third
parties to provide, all investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. Dreyfus pays all of the
Fund's expenses, except brokerage fees, taxes, interest, fees and expenses of
those Directors who are not "interested persons" as defined in the 1940 Act
(including counsel fees), 12b-1 fees, and extraordinary expenses. Although
Dreyfus is not obligated to pay the fees and expenses (including counsel fees)
of Directors who are not "interested persons", Dreyfus is contractually required
to reduce its management fee in an amount equal to the Fund's allocable share of
such fees and expenses.
A description of the Amended Distribution Plan and the services to be
provided by Mellon Bank and its affiliates and the Distributor is set forth
below. This description is qualified in its entirety by reference to the Amended
Distribution Plan, which is attached as Appendix A to this Proxy Statement. If
approved by Retail Class shareholders, the Amended Distribution Plan will become
effective on December 15, 1997 or within three days following the approval of
the Proposal by Retail Class shareholders, whichever is later, and will remain
in effect for one year thereafter, subject to continuation by the Board of
Directors.
-5-
<PAGE>
At a meeting held on July 31, 1997, the Directors of the Company,
including a majority of those Directors who are not "interested persons" (as
defined in the 1940 Act) and who do not have any direct or indirect financial
interest in the operation of the Amended Distribution Plan ("Non-interested
Directors"), approved the Amended Distribution Plan with respect to the Fund's
Retail Class shares. THE DIRECTORS OF THE COMPANY RECOMMEND THAT RETAIL CLASS
SHAREHOLDERS OF THE FUND VOTE TO APPROVE THE AMENDED DISTRIBUTION PLAN.
_____________________________
DESCRIPTION OF THE DISTRIBUTION PLAN AND THE AMENDED DISTRIBUTION Plan.
The following summarizes the principal distinctions between the Distribution
Plan and the Amended Distribution Plan.
Under the terms of the Distribution Plan, the Fund pays .25 of 1% of its
average daily net assets attributable to Institutional Class shares to
compensate DSC for shareholder servicing activities and the Distributor for
shareholder servicing activities and expenses primarily intended to result in
the sale of Institutional Class shares. This expense is borne solely by holders
of Institutional Class shares. Retail Class shareholders are not currently
subject to the Distribution Plan or the associated 12b-1 fee. The Distribution
Plan was approved by the initial shareholder of the Institutional Class (then
called Investor Class) on March 20, 1994, and was restated, without change in
the amount of the 12b-1 fee, as of October 17, 1994. The Distribution Plan was
most recently reviewed and approved by the Board of Directors on January 31,
1997, subject to continuation by the Board of Directors.
The Amended Distribution Plan would authorize the Fund to pay annually .10
of 1% of its average daily net assets attributable to all shares of the Fund,
including those currently designated the Retail Class, for distribution and
servicing activities. The Amended Distribution Plan would allow the Fund to
compensate Mellon Bank and its affiliates (including but not limited to DSC and
Dreyfus) for shareholder servicing activities, and the Distributor for
shareholder servicing activities and expenses primarily intended to result in
the sale of Fund shares. The current Distribution Plan provides that servicing
payments may be made directly to DSC, and that the Distributor may use a portion
of the 12b-1 fees it receives to compensate entities, such as Mellon Bank or its
affiliates, that have entered into Selling Agreements with the Distributor.
The services to be provided, and items for which compensation may be paid,
under both the Distribution Plan and the Amended Distribution Plan may include
but are not limited to: (a) responses to shareholder inquiries in person at
Dreyfus Financial Centers and through toll-free telephone access, such as those
relating to account balances, dividend payment, fund yield and performance,
account options and privileges and fund-related information and policies; (b)
periodic communications to shareholders in conjunction with their account
statements; (c) compensation to brokers, dealers and other intermediaries for
administrative and servicing activities; and (d) payments to the Distributor
and/or third parties who sell Fund shares.
-6-
<PAGE>
Like the Distribution Plan, the Amended Distribution Plan provides that a
report of the amounts expended under it, and the purposes for which such
expenditures were incurred, must be made to the Company's Board of Directors for
their review at least quarterly. In addition, the Amended Distribution Plan will
continue to provide that it may not be amended to increase materially the costs
that the Fund may bear pursuant to it without approval of the Fund's
shareholders, and that other material amendments to the Amended Distribution
Plan must be approved by the vote of a majority of the Directors and of the
Non-interested Directors, cast in person at a meeting called for the purpose of
considering such amendments. Like the Distribution Plan, the Amended
Distribution Plan is subject to annual approval by the entire Board of Directors
and by the Non-interested Directors, by vote cast in person at a meeting called
for the purpose of voting on the Amended Distribution Plan. Like the
Distribution Plan, the Amended Distribution Plan is terminable at any time by
vote of a majority of the Non-interested Directors or by vote of the holders of
a majority of the outstanding shares of the Fund. Finally, as is the case with
the current Distribution Plan, while the Amended Distribution Plan is in effect,
the selection and nomination of the Directors who are not interested persons of
the Company shall be committed to the discretion of the then current Directors
who are not interested persons of the Company.
CERTAIN OTHER CHANGES AS A RESULT OF THE PROPOSAL. In connection with the
consideration by the Fund's Retail Class shares of the Amended Distribution
Plan, the Board has approved several related changes to the Fund that will take
effect if, and only if, Retail Class shareholders approve the Proposal. The
effect of these changes would be to eliminate the distinctions between the
present Retail Class and Institutional Class shares of the Fund, so that the
Fund would have only one class of shares. First, the Board has approved the
Amended Distribution Plan for both Retail Class and Institutional Class shares.
Thus, the annual 12b-1 fee payable with respect to all shares of the Fund would
be .10 of 1% of average daily net assets. Second, the limitation on the sales of
Institutional Class shares to those occurring through entities having Selling
Agreements with the Distributor would be eliminated, so that all shares of the
Fund would be available to any investor. Third, the exchange privilege
applicable to the Fund's Institutional Class and Retail Class shares would be
formally modified so that any shareholder would be permitted to exchange into
any class of shares of another fund to the extent that the shareholder was
eligible to purchase that class. Currently, shares of each Class of the Fund are
exchangeable into the comparable class of shares of other funds managed or
administered by Dreyfus. Fourth, a one-time adjustment in the number of shares
outstanding would be effected with respect to the Institutional Class at the
time designated for combination of the Institutional Class and Retail Class so
that the net asset value per share ("NAV") of each Class would be the same. The
aggregate net asset value of shares held by each shareholder of the
Institutional Class would be unchanged, although the NAV would be reduced
slightly and the number of shares held would be proportionately increased
(having an effect comparable to what is commonly referred to as a "stock
split"). Finally, as there would be no differences between the Institutional
Class and Retail Class shares of the Fund, all shares of the Fund would be
redesignated simply as shares of the Fund without class designation.
Because the Fund would be converted to a single class structure, the
Amended Distribution Plan attached as Appendix A refers solely to Fund shares,
which includes the Fund's current Retail Class and Institutional shares.
-7-
<PAGE>
OTHER INFORMATION ABOUT THE CURRENT DISTRIBUTION PLAN. Under the current
Distribution Plan, which is only applicable to the Institutional Class, the Fund
paid the Distributor and DSC $14,348 and $42,752, respectively, for the fiscal
year ended October 31, 1996 (equivalent to .06% and .19%, respectively, of the
average daily net assets attributable to the Institutional Class).
_____________________________
IMPACT OF THE PROPOSAL. The overall fees and expenses that a holder of
Retail Class shares would bear would be increased under the Proposal. If the
Proposal is approved the Fund's current Retail Class shares would incur total
fund operating expenses of 1.00 of 1% of average daily net assets, composed of a
management fee of .90 of 1% and 12b-1 fees of .10 of 1% of average daily net
assets. The following table contains a comparison of the management fees,
distribution fees, other expenses, and total fund operating expenses that
holders of Retail Class shares of the Fund bear under the existing structure
with the fees and expenses such shareholders would bear if they approve the
Amended Distribution Plan:
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<PAGE>
Expense Ratio - Retail Class Shares
Current Expense Proposed
ESTIMATED ANNUAL FUND OPERATING EXPENSES Ratio Expense Ratio
(as a percentage of net assets) --------------- -------------
Management Fee.............................. .90% .90%
12b-1 Fees.................................. .00% .10%
Other Expenses*............................. .00% .00%
---- ----
Total Fund Operating Expenses................. .90% 1.00%
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) a 5%
annual return and (2) redemption at the
end of each time period:
CURRENT PROPOSED
------- --------
1 Year $ 9 $ 10
3 Years $ 29 $ 32
5 Years $ 50 $ 55
10 Years $111 $ 122
*Does not include fees and expenses of the Non-interested Directors (including
counsel). The investment manager is contractually required to reduce its
management fee in an amount equal to the Fund's allocable portion of such fees
and expenses, which are estimated to be less than .01% of the Fund's net assets.
- --------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN,
THE FUND'S ACTUAL PERFORMANCE WILL VARY AND RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
- --------------------------------------------------------------------------------
_____________________________
REASONS FOR THE PROPOSAL. Dreyfus recommended the Proposal to the Board of
Directors in light of the expenses associated with providing shareholder
servicing and distribution services to the Fund's Retail Class shares. Dreyfus
believes that the 12b-1 fee proposed for the Retail Class shares is appropriate
to defray a portion of the costs associated with these shareholder services and
potentially to support the marketing of the Fund. Dreyfus cited three principal
justifications for the implementation of the Amended Distribution Plan.
-9-
<PAGE>
First, the present structure of the Fund differs considerably from that
contemplated when the existing fee structure was put in place in April 1994.
Prior to January 1995, the Fund's Retail Class (formerly Class R) shares were
sold primarily to banks, including Mellon Bank and its affiliates, acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, and the Fund's Institutional (formerly
Investor) Class shares were offered primarily to retail investors by the
Distributor or entities that had entered into Selling Agreements with the
Distributor. Beginning in January, 1995, however, Retail Class shares of the
Fund were made available to any investor. Shares offered to retail investors
typically require more servicing support and related expenditures than are
associated with shares offered only in connection with the type of trust or
investment account or relationship for which the predecessor of Retail Class
(Class R) shares was originally designed. Dreyfus believes that the inclusion
within the Amended Distribution Plan of what has become an expanded Retail Class
of shares is appropriate to defray costs associated with selling and servicing
shares of that class to retail investors.
Second, the importance of third-party distribution channels, including
"fund supermarkets" and "wrap account" programs, in the sale of Retail Class
shares was not contemplated when the original fee structure of the Fund's Retail
Class shares was proposed in early 1994. Numerous competing funds are currently
offered through these channels and Dreyfus believes that the Fund must offer its
shares through these mechanisms to compete effectively and maintain asset levels
that are optimal for efficient operation. Supermarkets and wrap account programs
generally hold shares in an omnibus account and provide shareholder services,
including subaccounting, shareholder assistance, transaction processing
assistance, transaction processing and settlements, shareholder account
statement preparation and distribution, confirmation preparation and
distribution, payment of fund distributions, prospectus delivery to the extent
required, and account-level tax reporting. At the same time, however, the
providers of these services must be compensated. To date, the only available
source of such compensation with respect to shares of the Retail Class has been
payment by Dreyfus from its past profits, since the Retail Class pays no 12b-1
or service fee separate from the unitary fee paid to Dreyfus. Even after the
proposed .10 of 1% fee is in place under the Amended Distribution Plan, Dreyfus
expects it may be necessary for Dreyfus to supplement payments to fund
supermarkets or wrap program providers out of its past profits.
Third, Dreyfus believes that, even with the proposed 12b-1 fee of .10 of
1% of average daily net assets, total fund operating expenses for the Retail
Class shares of the Fund will remain below the median total operating expense
ratio of comparable funds as represented by the Lipper Growth and Income Funds
category. That category of funds had a median total operating expense ratio of
1.20% of average daily net assets based on data presented in the second edition
of the LIPPER DIRECTORS' ANALYTICAL DATA, while the anticipated total operating
expense ratio for the Fund assuming implementation of the Proposal would be
1.00% of average daily net assets. In addition, although a portion of the
proposed 12b-1 fees may be retained by Dreyfus or its affiliates, the
profitability of Dreyfus is expected to remain within reasonable levels.
In making this request, Dreyfus noted that distribution and shareholder
services offered, directly or indirectly, to the Fund by the Distributor, and
-10-
<PAGE>
the shareholder services provided, directly or indirectly, by Mellon Bank and
its affiliates, including DSC and Dreyfus, are expected to be comparable to
those services offered by other providers in the industry. Dreyfus further noted
that the Fund has performed well compared to its peers. For the periods ending
June 30, 1997, the one-, three- and five-year average annual returns of the
Fund's Retail Class of shares were 33.56%, 27.70% and 19.71%, respectively,
compared to approximately 28.07%, 23.54% and 17.25%, respectively, for
comparable funds, as measured by the Lipper Growth and Income Funds category.
Finally, Dreyfus indicated that it would bear all of the costs of the
implementation of the Amended Distribution Plan, including those of soliciting
proxies for the Proposal.
CONSIDERATION AND APPROVAL BY THE BOARD OF DIRECTORS. Prior to approving
the Amended Distribution Plan, the Directors were provided with detailed
information relating to it. Among other things, the Directors considered the
consequences of not approving the proposal, the potential costs and benefits of
the Amended Distribution Plan to existing shareholders and the likelihood that
the Amended Distribution Plan would succeed in producing its intended results.
The Directors also considered the extent to which the retention of assets and
additional sales of Fund shares would be likely to increase the amount of
compensation paid by the Fund to Dreyfus, because such fees are calculated as a
percentage of the Fund's assets and thus will increase if net assets increase.
The Directors further recognized that there can be no assurance that any of the
potential benefits described below will be achieved if the Amended Distribution
Plan is implemented.
The Directors believed that maintenance of strong marketing and
shareholder servicing efforts are of critical importance in the highly
competitive mutual fund industry. In order to be competitive, the Fund needs to
provide Dreyfus with the financial resources for its own shareholder services
activities, as well as the marketing and shareholder servicing provided by third
parties. The Directors believed that approval of the Amended Distribution Plan
should help provide the Fund with access to, and keep it competitive in, all
channels of distribution.
In addition, because an open-end fund redeems its shares upon demand at
prices based on the net asset value per share, the Directors felt it was likely
that, if redemptions are not offset by subscriptions (sales of new shares), the
Fund would shrink in size. The Directors believed that at low asset levels, the
viability of the Fund could be threatened and the Fund's ability to achieve its
investment objective could suffer. The Directors believed that offsetting
redemptions through sales efforts benefits shareholders by, among other things,
avoiding costs otherwise associated with redemptions (including potential
borrowing or sales of Fund securities) and providing cash for new purchases of
securities, thereby maintaining the viability of the Fund.
The Directors gave particular attention to the fact that payments made by
the Fund under the Amended Distribution Plan would increase the Fund's level of
expenses in the amount of such payments. The Directors recognized that the net
result of the Amended Distribution Plan will be to increase the operating
expenses of the Fund and, therefore, its expense ratio. The Directors weighed
this increase in expenses in their deliberations leading to their recommendation
to adopt the Amended Distribution Plan.
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<PAGE>
In approving the Amended Distribution Plan, the Directors consulted with
counsel for the Fund and for the Non-interested Directors and considered, among
other factors: (a) the circumstances that would make adoption of the Amended
Distribution Plan appropriate and the causes of such circumstances; (b) the way
in which the Amended Distribution Plan would address these circumstances; and
(c) the amounts of the expenses under the Amended Distribution Plan in
relationship to the overall cost structure of the Fund.
Taking the above factors into account, the Board of Directors determined
that approval of the Amended Distribution Plan was appropriate for four
principal reasons. First, competing mutual fund complexes provide mutual fund
shareholders with numerous shareholder and distribution services and Dreyfus
must offer Fund shareholders similar services to remain competitive. In order
for Dreyfus to offer the Fund's shares through third parties, those entities
must be compensated for providing shareholder servicing and/or distribution
services. The Board determined that the distribution and/or servicing fees under
the Amended Distribution Plan would be attractive to fund supermarkets and
others selling the Fund's shares, resulting in greater growth of the Fund or
maintenance of Fund assets at higher levels than might otherwise be the case.
Second, the Board found that the services offered, directly or indirectly, by
DSC, Dreyfus, Mellon Bank and their affiliates and others under the Amended
Distribution Plan would be comparable in nature to those in the mutual fund
industry. Third, the Board determined that the fees payable under the Amended
Distribution Plan are reasonable, since the Fund's total operating expense ratio
taking into account the proposed 12b-1 fee will be below the industry median
based on the Lipper Growth and Income Funds category, and in line with the
average of other comparable funds. Fourth, the Board noted that Dreyfus has
agreed to bear all costs of the implementation of the proposed Amended
Distribution Plan with respect to the Retail Class, including those of
soliciting proxies with respect to it.
Following their consideration, the Directors, including a majority of the
Non-interested Directors, concluded that the fees payable under the Amended
Distribution Plan were reasonable in view of the services to be provided,
directly or indirectly, by Dreyfus and its affiliates and others, and the
anticipated benefits of the Amended Distribution Plan. The Directors, including
a majority of the Non-interested Directors, determined that implementation of
the Amended Distribution Plan would be in the best interests of the Fund and its
shareholders and would have a reasonable likelihood of benefiting the Fund and
its shareholders. The Board, including a majority of the Non-interested
Directors, also determined that the Fund's shareholders, including those of both
the Retail Class and the Institutional Class, would continue to benefit under
the Amended Distribution Plan following the elimination of the distinction
between Retail Class and Institutional Class shares.
Accordingly, the Directors, including a majority of the Non-interested
Directors, voted to approve the Amended Distribution Plan, as set forth above,
and to recommend that Retail Class shareholders vote FOR the Proposal.
_____________________________
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<PAGE>
REQUIRED VOTE. Approval of the Amended Distribution Plan will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund's Retail Class shares, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding Retail Class shares of the
Fund or (2) 67% or more of the Retail Class shares of the Fund present at the
Meeting if more than 50% of the outstanding Retail Class shares of the Fund are
represented at the Meeting in person or by proxy. Institutional Class shares are
not being asked to vote on the Proposal.
IF THE AMENDED DISTRIBUTION PLAN IS NOT APPROVED BY THE FUND'S RETAIL CLASS
SHAREHOLDERS, THE CURRENT DISTRIBUTION PLAN WITH RESPECT TO THE FUND'S
INSTITUTIONAL CLASS WILL CONTINUE IN EFFECT. IN ADDITION, THE FUND WOULD FOREGO
THE CONVERSION OF THE FUND'S INSTITUTIONAL CLASS AND RETAIL CLASS SHARES INTO A
SINGLE CLASS OF SHARES.
THE BOARD OF DIRECTORS, INCLUDING A MAJORITY OF THE NON-INTERESTED
DIRECTORS, RECOMMENDS THAT THE RETAIL CLASS SHAREHOLDERS OF THE FUND VOTE TO
APPROVE THE AMENDED DISTRIBUTION PLAN.
OTHER INFORMATION
INFORMATION ABOUT DREYFUS. Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947 and is a wholly-owned subsidiary of Mellon
Bank, which is in turn a wholly-owned subsidiary of Mellon Bank Corporation. As
of September 30, 1997, Dreyfus managed or administered approximately $93 billion
in assets for more than 1.7 million investor accounts nationwide.
DISTRIBUTOR. Premier Mutual Fund Services, Inc., located at 60 State
Street, Boston, Massachusetts 02109, is the principal underwriter of the Fund
pursuant to a Distribution Agreement between the Company on behalf of the Fund
and the Distributor. The Distributor's ultimate parent is Boston Institutional
Group, Inc. During the fiscal year ended October 31, 1996, the Distributor
received $14,348 in distribution fees in connection with the sale of
Institutional Class shares of the Fund. The Distributor also serves as
Sub-Administrator to the Fund pursuant to a Sub-Administration Agreement with
Dreyfus.
OTHER MATTERS TO COME BEFORE THE MEETING. The Directors do not intend to
present any other business at the Meeting, nor are they aware that any
shareholder intends to do so. If, however, any other matters are properly
brought before the Meeting, the persons named in the accompanying proxy card
will vote on any other matter properly brought before the Meeting in accordance
with their judgment.
SHAREHOLDER PROPOSALS. Annual shareholder meetings are not held by the
Company. Shareholders wishing to submit proposals for consideration for
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<PAGE>
inclusion in a proxy statement for a subsequent shareholder meeting should send
their written proposals to the Company at 200 Park Avenue, New York, New York
10166, such that they will be received by the Company a reasonable period of
time prior to any such meeting.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING DIRECTORS AND THEIR Nominees.
Please advise the Company at 200 Park Avenue, New York, New York 10166, whether
other persons are beneficial owners of Retail Class shares for which proxies are
being solicited and, if so, the number of copies of this Proxy Statement needed
to supply copies to the beneficial owners of the respective shares.
October 6, 1997
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE SPECIAL MEETING ARE THEREFORE URGED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS NECESSARY IF IT IS MAILED IN THE UNITED STATES.
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<PAGE>
APPENDIX A TO PROXY STATEMENT
THE DREYFUS/LAUREL FUNDS, INC.
AMENDED AND RESTATED DISTRIBUTION PLAN
WHEREAS, The Dreyfus/Laurel Funds, Inc. (formerly, The Laurel Funds, Inc.)
(the "Investment Company") is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and consists of one or more distinct portfolios of shares of common stock
(collectively, the "Funds" and individually, a "Fund"), as may be established
and designated from time to time; and
WHEREAS, the Investment Company and its Distributor, a broker-dealer
registered under the Securities Act of 1934, as amended, have entered into a
Distribution Plan pursuant to which the Distributor will act as the distributor
of shares (the "Shares") of the Funds; and
WHEREAS, the Board of Directors of the Investment Company has adopted the
Distribution Plan in accordance with the requirements of the 1940 Act and Rule
12b-1 thereunder, and has concluded, in the exercise of it reasonable business
judgment and in light of its fiduciary duties, that there is a reasonable
likelihood that the Distribution Plan will benefit the Investment Company and
the holders of the Funds' Shares;
NOW THEREFORE, the Investment Company hereby restates the Distribution
Plan as set forth below in this Amended and Restated Distribution Plan (the
"Plan"):
SECTION 1. PAYMENTS FOR DISTRIBUTION-RELATED SERVICES AND SHAREHOLDER
SERVICING. The Investment Company may pay for any activities or expenses
primarily intended to result in the sale of Shares of the Funds and/or
shareholder servicing provided to the Funds, as listed on Exhibit A, as such
Exhibit may be amended from time to time. Payments by the Investment Company
under this Section of this Plan will be calculated daily and paid monthly at a
rate or rates set from time to time by the Investment Company's Board of
Directors, provided that no rate set by the Board for any Fund may exceed, on an
annual basis, 0.10% of the value of a Fund's average daily net assets.
SECTION 2. EXPENSES COVERED BY PLAN. The fees payable under Section 1 of
this Plan may be used to compensate (i) Mellon Bank, N.A. and/or any of its
affiliates for shareholder servicing services provided by such entities, and/or
(ii) the Distributor for distribution and/or shareholder servicing services
provided by it, and related expenses incurred, including payments by the
<PAGE>
Distributor to compensate banks, broker/dealers or other financial institutions
that have entered into written agreements with respect to shareholder services
and sales support services ("Agreements") with the Distributor ("Selling and
Servicing Agents"), for shareholder servicing and sales support services
provided, and related expenses incurred, by such Selling and Servicing Agents.
SECTION 3. AGREEMENTS. The Distributor may enter into written Agreements
with Selling and Servicing Agents, such Agreements to be substantially in such
forms as the Board of Directors of the Investment Company may duly approve from
time to time.
SECTION 4. LIMITATIONS ON PAYMENTS. Payments made by a particular Fund
under Section 1 must be for distribution and/or shareholder servicing rendered
for or on behalf of such Fund. However, joint distribution or sales support
financing with respect to a Fund (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission as in effect
from time to time.
Except for the payments specified in Section 1, no additional payments are
to be made by the Investment Company under this Plan, provided that nothing
herein shall be deemed to preclude the payments a Fund is otherwise obligated to
make to The Dreyfus Corporation ("Dreyfus") pursuant to the Investment
Management Agreement, and for the expenses otherwise incurred by such Fund and
the Investment Company on behalf of the Shares in the normal conduct of such
Fund's business pursuant to the Investment Management Agreement. To the extent
any payments by the Investment Company on behalf of a Fund to Dreyfus, or any
affiliate thereof, or to any party pursuant to any agreement, or, generally, by
the Investment Company on behalf of a Fund to any party, are deemed to be
payments for the financing of any activity primarily intended to result in the
sale of the Shares within the context of Rule 12b-1 under the 1940 Act, then
such payments shall be deemed to have been approved pursuant to this Plan
without regard to Section 1.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
SECTION 5. REPORTS. So long as this Plan is in effect, the Distributor
and/or Dreyfus shall provide to the Investment Company's Board of Directors, and
the Directors shall review at least quarterly, a written report of the amounts
expended by a Fund pursuant to the Plan, or by Selling and Servicing Agents
pursuant to Agreements, and the purposes for which such expenditures were made.
SECTION 6. MAJORITY VOTE. As used herein, the term "Majority Vote" of the
Shares of a Fund means a vote of the holders of the lesser of (a) more than
fifty percent (50%) of the outstanding Shares of such Fund or (b) sixty-seven
percent (67%) or more of the Shares of such Fund present at a shareholders'
meeting in person or by proxy.
SECTION 7. APPROVAL OF PLAN. This Plan will become effective at such time
as is specified by the Board of Directors, as to any Fund; provided, however,
that the Plan is approved by (a) Majority Vote of the Shares of such Fund, and
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<PAGE>
(b) a majority of the Board of Directors, including a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of the Investment
Company and who have no direct or indirect financial interest in the operation
of this Plan or in any Agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the purpose of voting
on the approval of this Plan.
SECTION 8. CONTINUANCE OF PLAN. This Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by the
Investment Company's Board of Directors in the manner described in Section 7(b)
hereof.
SECTION 9. AMENDMENTS. This Plan may be amended at any time by the Board
of Directors; provided, that (a) any amendment to increase materially the costs
which a Fund's Shares may bear for distribution pursuant to this Plan shall be
effective only upon the Majority Vote of the outstanding Shares of such Fund,
and (b) any material amendments of the terms of this Plan shall become effective
only upon approval as provided in Section 7(b) hereof.
SECTION 10. TERMINATION. This Plan is terminable, as to a Fund, without
penalty at any time by (a) a vote of a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act) of the Investment Company and
who have no direct or indirect financial interest in the operation of this Plan
or in any Agreements entered into in connection with this Plan, or (b) a
Majority Vote of the outstanding Shares of the Fund.
SECTION 11. SELECTION/NOMINATION OF DIRECTORS. While this Plan is in
effect, the selection and nomination of those Directors who are not "interested
persons" (as defined in the 1940 Act) of the Investment Company shall be
committed to the discretion of such non-interested Directors.
SECTION 12. RECORDS. The Investment Company will preserve copies of this
Plan, and any related Agreements and any written reports regarding this Plan
presented to the Board of Directors, for a period of not less than six (6) years
from the date of this Plan, such Agreement or written report, as the case may
be, the first two (2) years of such period in an easily accessible place.
SECTION 13. MISCELLANEOUS. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the Investment Company has adopted this Amended and
Restated Distribution Plan as of this 17th day of October, 1994, as revised,
October 25, 1995 and December __, 1997.
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<PAGE>
EXHIBIT A
THE DREYFUS/LAUREL FUNDS, INC.
Dreyfus Disciplined Stock Fund
<PAGE>
THE DREYFUS/LAUREL FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS -- DECEMBER 2, 1997
The undersigned hereby appoints Steven F. Newman and Jeff S. Prusnofsky, and
each of them, attorneys and proxies for the undersigned, with full powers of
substitution and revocation, to represent the undersigned and to vote on behalf
of the undersigned all Retail Class shares of Dreyfus Disciplined Stock Fund
(the "Fund"), a series of The Dreyfus/Laurel Funds, Inc., that the undersigned
is entitled to vote at a Special Meeting of Shareholders (the "Meeting") of the
Retail Class shares of the Fund to be held at the offices of The Dreyfus
Corporation, 200 Park Avenue, 7th Floor West, New York, New York 10166 on
December 2, 1997, at 10:00 a.m. (Eastern time) and at any adjournment(s)
thereof. The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement, and hereby instructs said attorneys
and proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other matters as may properly come
before the Meeting. The undersigned hereby revokes any proxy previously given.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
DATE: ___________________, 199_
NOTE: Please sign exactly as your name or names appear on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give your full
title as such.
-------------------------------------
Signature(s), Title(s), if applicable
<PAGE>
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
Retail Class shareholders of the Fund are requested to vote on the following
Proposal:
To approve an amendment to the Fund's distribution plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended, to authorize the Fund to spend annually .10 of 1% of the
average daily net assets attributable to the Fund's Retail Class
shares to pay for shareholder servicing and distribution expenses for
such shares.
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
In their discretion, the proxies are, and each of them is, authorized to vote
upon any other business that may properly come before the Meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain the
requisite quorums or "FOR" approvals.
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
