DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
The Annual Meeting of Stockholders of Dreyfus Strategic Governments
Income, Inc. (the "Fund") will be held at the offices of The Dreyfus
Corporation, 200 Park Avenue, 7th Floor West, New York, New York, on Friday,
August 18, 1995 at 10:30 a.m. for the following purposes:
1. To consider a proposal to convert the Fund from a closed-end
investment company to an open-end investment company. This
proposal includes:
a. Changing the Fund's subclassification from a closed-end
investment company to an open-end investment company;
b. Amending and restating the Fund's Articles of
Incorporation; and
c. Changing certain fundamental investment policies of the
Fund.
2. To approve a new Management Agreement between the Fund and The
Dreyfus Corporation and a Sub-Investment Advisory Agreement
between The Dreyfus Corporation and S.A.M. Finance, S.A.
3. To elect Directors as follows:
a. If Proposal 1 is not approved, to elect one Class I
Director and two Class III Directors to serve for a
specified term and until their successors are duly elected
and qualified.
b. If Proposal 1 is approved, to elect eight Directors to
hold office until their successors are duly elected and
qualified.
4. To ratify the selection of Ernst & Young LLP as independent
auditors of the Fund.
5. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Stockholders of record at the close of business on June 23, 1995
will be entitled to receive notice of and to vote at the meeting.
By Order of the Board
John E. Pelletier
Secretary
New York, New York
June 28, 1995
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WE NEED YOUR PROXY VOTE IMMEDIATELY
A STOCKHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT IT IS VITAL.
BY LAW, THE ANNUAL MEETING OF STOCKHOLDERS OF THE FUND WILL HAVE TO BE
ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS
REPRESENTED. IN THAT EVENT, THE FUND, AT STOCKHOLDERS' EXPENSE, WOULD
CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY,
YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND TO HOLD THE MEETING AS
SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL
OTHER STOCKHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
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DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 18, 1995
This Proxy Statement is furnished in connection with a solicitation
of proxies by the Board of Directors of Dreyfus Strategic Governments Income,
Inc. (the "Fund") to be used at the Annual Meeting of Stockholders (the
"Meeting") of the Fund, to be held on Friday, August 18, 1995 at 10:30 a.m.,
at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th Floor West,
New York, New York, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. Stockholders of record at the close of
business on June 23, 1995 are entitled to receive notice of and to vote at
the Meeting. Each share of common stock of the Fund is entitled to one vote.
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 stockholder's name. To be effective, such revocation must be
received before the Meeting. In addition, any stockholder who attends the
Meeting in person may vote by ballot at the Meeting, thereby cancelling any
proxy previously given. As of June 8, 1995, 11,726,652 shares of the Fund's
common stock were issued and outstanding.
It is estimated that proxy materials will be mailed to stockholders
of record on or about June 30, 1995. The Fund's principal executive offices
are located at 200 Park Avenue, New York, New York 10166. COPIES OF THE
FUND'S MOST RECENT ANNUAL REPORT ARE AVAILABLE UPON REQUEST, WITHOUT CHARGE,
BY WRITING TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR BY CALLING TOLL-FREE 1-800-334-6899.
PROPOSAL 1. TO CONVERT THE FUND FROM A CLOSED-END INVESTMENT COMPANY TO AN
OPEN-END INVESTMENT COMPANY
**THE FUND'S BOARD OF DIRECTORS DOES NOT FAVOR THIS PROPOSAL**
INTRODUCTION
The Fund has operated as a non-diversified, closed-end management
investment company since its inception in 1988. As a closed-end fund, the
Fund's shares are bought and sold in the securities markets at prevailing
prices, which may be equal to, less than, or greater than its net asset
value. The Fund's Prospectus provides, in relevant part, that, commencing on
January 1, 1993, and in each year thereafter, if shares of the Fund have
traded on the New York Stock Exchange (the "NYSE") at an average discount
from net asset value of more than 10%, determined on the basis of the
discount as of the end of the last trading day in each week during a period
of 12 calendar weeks preceding the beginning of such year, the Fund will
submit (the "Required Submission") to its stockholders at the next succeeding
annual meeting of stockholders a proposal to convert the Fund from a
closed-end investment company to an open-end investment company. For the 12
calendar week period from October 10, 1994 through December 30, 1994, the
Fund's shares traded on the NYSE at an average discount from net asset value
of 11.08%, determined in accordance with the provisions of the Fund's
Prospectus. As a result, the Fund is required to submit Proposal 1 for
stockholders' consideration at the Meeting.
Page 1
CONSIDERATION AND RECOMMENDATION OF BOARD OF DIRECTORS
At a meeting held on June 14, 1995, the Fund's Board of Directors
reviewed detailed information concerning the legal and operational
differences between closed-end and open-end investment companies, the Fund's
performance to date as a closed-end fund, the historical relationship between
the market price of its shares and their net asset value and the possible
effects of conversion on the Fund. The Board also considered attempts by the
Fund to reduce the market value discount from net asset value by repurchasing
Fund shares in the open market. AT THAT MEETING, ALTHOUGH IT RECOGNIZED THAT
THE REQUIRED SUBMISSION MUST BE MADE, THE BOARD DETERMINED NOT TO SUPPORT
PROPOSAL 1.
The Board believes that conversion to an open-end investment company
could expose the Fund to the risk of a substantial reduction in its size and
a possible loss of economies of scale and an increase in the Fund's expenses
as a percentage of net asset value, as described under "Certain Effects of
Conversion on the Fund-Potential Increase in Expense Ratio and Decrease in
Size" below. The Board believes that conversion also presents the possibility
that the functioning of the Fund's portfolio management and its investment
performance, as described under "Certain Effects of Conversion on the
Fund-Portfolio Management" below, could be adversely affected. ACCORDINGLY,
THE BOARD DOES NOT BELIEVE THAT CONVERSION OF THE FUND TO AN OPEN-END
INVESTMENT COMPANY IS IN THE BEST INTERESTS OF THE FUND AND ITS STOCKHOLDERS.
While conversion would eliminate the possibility of the Fund's
shares ever trading at a discount from net asset value, the Board took note
of the fact that, from inception through December 31, 1994, the Fund's shares
from time to time have traded at a premium, and that, notwithstanding the
more recent discounts during the last 12 calendar weeks of 1994, the shares
have traded from inception through December 31, 1994 at an average discount
of 0.73%. See "Differences Between Open-End and Closed-End Investment
Companies-Redeemable Shares; Elimination of Discount and Premium" below. The
Fund's average annual premium/discount by year is as follows:
YEAR PREMIUM/DISCOUNT
---- ----------------
1988 -1.46%
1989 -2.48%
1990 -5.38%
1991 1.99%
1992 4.85%
1993 3.38%
1994 -6.55%
1995 (through June 23) -9.63%
On June 23, 1995, the closing price of a Fund share on the NYSE was 10.80%
below its net asset value.
At this time, the Board does not believe that eliminating the
possibility of a discount justifies the risk of reduced size, changes to the
Fund's portfolio management that might be required and the potential adverse
effect on its investment performance that conversion could entail.
If Proposal 1 is not approved by stockholders, the Fund will remain
a closed-end investment company and the Board of Directors will consider
whether any other actions should be taken with respect to the market discount
from net asset value at which the Fund's shares trade.
As described below, if stockholders vote to convert the Fund to an
open-end investment company, the Board will cause the Fund to impose a
redemption fee for a period of 12 months from the conversion date of 1% of
the amount redeemed.
Page 2
DIFFERENCES BETWEEN OPEN-END AND CLOSED-END INVESTMENT COMPANIES
FLUCTUATION OF CAPITAL. The Fund currently is registered as a
"closed-end" investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). Closed-end investment companies generally neither
redeem their outstanding stock nor engage in the continuous sale of new
securities, and thus operate with a relatively fixed capitalization. The
stock of closed-end investment companies ordinarily is bought and sold on
national securities exchanges; the Fund's shares since inception have been
traded on the NYSE.
In contrast, open-end investment companies, commonly referred to as
"mutual funds," issue redeemable securities. The holders of redeemable
securities have the right to surrender such securities to the mutual fund and
obtain in return their proportionate share of the value of the mutual fund's
net assets at the time of redemption (less any redemption fee charged by the
fund or contingent deferred sales charge imposed by the fund's distributor).
Most mutual funds (including the Fund, if the proposed conversion is
effected) also continuously issue new shares of stock to investors at a price
based on the fund's net asset value at the time of such issuance.
Accordingly, an open-end investment company will experience continuing
inflows and outflows of cash, and may experience net sales or net redemptions
of its shares.
REDEEMABLE SHARES; ELIMINATION OF DISCOUNT AND PREMIUM. Open-end
investment companies are required to redeem their shares at a price based
upon their then-current net asset value (except under certain circumstances,
such as when the NYSE is closed or trading thereon is restricted, or when
redemptions may otherwise be suspended in an emergency as permitted by the
1940 Act). The open-end fund structure thus precludes the possibility of the
mutual fund's shares trading at a discount from, or a premium to, net asset
value. Mutual funds generally are required to value their assets on each
business day in order to determine the current net asset value on the basis
of which their shares may be redeemed by stockholders or purchased by
investors. Net asset values of most mutual funds are published daily by
leading financial publications. The shares of closed-end investment
companies, on the other hand, are bought and sold in the securities markets
at prevailing market prices, which may be equal to, less than, or more than,
net asset value.
If approved by stockholders, upon conversion of the Fund to an
open-end investment company, stockholders who wish to realize the value of
their shares would be able to do so by redeeming their shares at net asset
value (less the redemption fee discussed below). As a result, the discount
from net asset value at which the Fund's shares currently trade on the NYSE
would be eliminated. Conversion also would eliminate, however, any
possibility that the Fund's shares could trade at a premium over net asset
value and could result in the potential adverse effects on the Fund's
portfolio management and expense ratio described on pages 2 and 5 of this
Proxy Statement.
RAISING CAPITAL. Closed-end investment companies may not issue new
shares at a price below net asset value except in rights offerings to
existing shareholders, in payment of distributions, and in certain other
limited circumstances. Accordingly, the ability of closed-end investment
companies to raise new capital is restricted, particularly at times when
their shares are trading at a discount to net asset value. The shares of
open-end investment companies, on the other hand, generally are offered on a
continuous basis at net asset value, or at net asset value plus a sales
charge.
REGISTRATION OF SECURITIES. The Fund's shares are currently listed
and traded on the NYSE (Symbol: DSI). If the Fund converts to an open-end
investment company, its shares would immediately be delisted from the NYSE.
Delisting would save the Fund the annual exchange listing fees of
approximately $14,000; but, as noted below, the Fund would have to pay
Federal and state registration fees on sales of new shares. Any net savings
or increased cost to the Fund because of the different expenses is not
expected to materially affect the Fund's expense ratio.
As an open-end investment company not listed on a stock exchange,
the Fund would be required to register its shares under the securities laws
of most states and would be subject to certain investment restrictions
imposed by the securities laws and regulations of the states where it
registers its shares. However, it is not anticipated that these restrictions
would have a material affect on the Fund.
UNDERWRITING; BROKERAGE COMMISSIONS OR SALES CHARGES ON PURCHASES
AND SALES. Open-end investment companies typically seek to sell new shares on
a continuous basis in order to offset redemptions and avoid reduction in
asset size. Shares of "load" open-end investment companies ordinarily are
offered and sold through a principal underwriter, which deducts a sales
charge from the purchase price at the time of purchase or from the redemption
proceeds at the time of redemption, or receives a distribution fee from the
fund, or both, to compensate it and securities dealers for sales and
marketing services (see below). Shares of "no-load" open-end investment
companies are sold at net asset value, without a sales charge, with the
fund's investment adviser or distributor ordinarily bearing the cost of sales
and marketing from its own resources. Shares of closed-
Page 3
end investment companies, on the other hand, are bought and sold in secondary
market transactions at prevailing market prices subject to the brokerage
commissions charged by the broker-dealer firms executing such transactions.
STOCKHOLDER SERVICES. Open-end investment companies typically
provide more services to stockholders and incur correspondingly higher
servicing expenses. To compensate the Fund's distributor for the provision of
certain services to stockholders of the Fund as an open-end investment
company, the Fund would adopt a Shareholder Services Plan. Pursuant to such
plan, the Fund would pay an annual fee of .25% of the value of its average
daily net assets for the provision of personal services relating to
stockholder accounts, such as answering stockholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of stockholder accounts.
Other services generally offered by a family of open-end funds
include enabling stockholders to exchange their investment from one fund into
another fund that is part of the same family of open-end funds. The Dreyfus
Family of Funds currently consists of 153 separate portfolios, with different
investment objectives and policies. Shares of the various funds in the
Dreyfus Family of Funds generally are eligible to be exchanged, in a taxable
transaction, for shares of certain other Dreyfus-managed funds. If the Fund
converts to an open-end investment company, the Fund would offer the exchange
service as well as certain other stockholder services and privileges
currently offered stockholders of other Dreyfus-managed funds.
SENIOR SECURITIES AND BORROWINGS. The 1940 Act prohibits open-end
investment companies from issuing "senior securities" representing
indebtedness (i.e., bonds, debentures, notes and other similar securities),
other than indebtedness to banks when there is an asset coverage of at least
300% for all borrowings. Closed-end investment companies, on the other hand,
are permitted to issue senior securities representing indebtedness to any
lender if the 300% asset coverage is met. In addition, closed-end investment
companies may issue preferred stock (subject to various limitations), whereas
open-end investment companies generally may not issue preferred stock. This
ability to issue senior securities may give closed-end investment companies
more flexibility than mutual funds in "leveraging" their stockholders'
investments. The Fund currently has no indebtedness to banks or other lenders
and has no authorized class of senior securities or any plan for issuing any.
The Board of Directors does not believe that the limitations on leverage
imposed by the 1940 Act on mutual funds would impair the Fund's operations as
an open-end investment company.
ANNUAL STOCKHOLDERS MEETINGS. As a closed-end investment company
listed on the NYSE, the Fund is required by the rules of the NYSE to hold
annual meetings of its stockholders. If the Fund were converted to an
open-end investment company, it would no longer be subject to these NYSE rules
and annual stockholder meetings would be eliminated, except when required
for certain 1940 Act matters. By not having to hold annual stockholders
meetings, the Fund would save the costs of preparing proxy materials and
soliciting stockholders' votes on the usual proposals contained therein.
Based on the number of outstanding shares and stockholders as of the record
date, such costs aggregate approximately $40,000 per year; however, these
savings would not be expected to materially affect the Fund's expense ratio,
and stockholder meetings may have to be held from time to time to obtain
various approvals from stockholders. Under the 1940 Act, the Fund would be
required to hold a stockholders meeting if, among other reasons, the number
of Directors elected by the stockholders were less than a majority of the
total number of Directors or if a change were sought in the fundamental
investment policies of the Fund. In addition, holders of at least 10% of the
Fund's outstanding shares may require the Fund to hold a stockholder's
meeting for the purpose of voting on the removal of any Director or for any
other purpose.
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. As a closed-end
investment company, the Fund's current Dividend Reinvestment and Cash
Purchase Plan (the "DRIP") permits stockholders to elect to reinvest their
dividends and distributions on a different basis than would be the case if
the Fund converted to an open-end investment company. Currently, if shares
are trading at a discount, the agent for the DRIP will attempt to buy as many
shares as are needed of the Fund on the NYSE or elsewhere. This permits a
reinvesting stockholder to benefit by purchasing additional shares at a
discount and this buying activity may tend to lessen any discount. If, before
the agent for the DRIP completes such purchases, the market price exceeds the
net asset value, then the average per share purchase price of the reinvested
shares may exceed the net asset value per share. If shares are trading at a
premium, reinvesting shareholders are issued shares at the higher of net
asset value or 95% of the market price. As an open-end investment company,
all dividends and distributions would have to be reinvested at net asset
value.
Page 4
CERTAIN EFFECTS OF CONVERSION ON THE FUND
In addition to the inherent characteristics of open-end investment
companies described above, the Fund's conversion to an open-end investment
company potentially would have the consequences described below.
POTENTIAL INCREASE IN EXPENSE RATIO AND DECREASE IN SIZE. Conversion
to an open-end investment company would raise the possibility of the Fund
suffering substantial redemptions of its shares, particularly in the period
immediately following the conversion, although the redemption fee of 1%
described below may reduce the number of initial redemptions that would
otherwise occur. Unless the Fund's principal underwriter were able to
generate sales of new shares sufficient to offset these redemptions, the
asset size of the Fund would shrink. Because certain of the Fund's operating
expenses are fixed or substantially fixed, a decrease in the Fund's asset
size would likely increase the ratio of its operating expenses to its income
and net assets and thereby decrease the Fund's net income available for
dividends. Such a decrease in asset size also would result in a reduction in
the amount of fees paid to Dreyfus.
If the Fund were to experience substantial redemptions of its shares
following its conversion to an open-end investment company, it would likely
be required to sell portfolio securities and incur increased transaction
costs in order to raise cash to meet such redemptions. Any sale of portfolio
securities effected to fund redemption obligations would be a taxable
transaction. Neither the Fund nor its stockholders will realize any gain or
loss for tax purposes as a direct result of the Fund's conversion. However,
the stockholders will recognize a gain or loss if they later redeem their
shares to the extent that the redemption proceeds are greater or less than
the respective adjusted tax basis of their shares.
PORTFOLIO MANAGEMENT. As noted above, a closed-end investment
company operates with a relatively fixed capitalization, while the
capitalization of an open-end investment company fluctuates depending upon
whether it experiences net sales or net redemptions of its shares. Most
open-end investment companies maintain reserves of cash or cash equivalents
in order to meet net redemptions as they arise. Because closed-end investment
companies do not have to meet redemptions, their level of cash reserves
depends primarily on management's perception of market conditions and on
decisions to use fund assets to repurchase shares. The larger reserves of
cash or cash equivalents required to operate prudently as an open-end
investment company when net redemptions are anticipated could reduce the
Fund's investment flexibility and the scope of its investment opportunities.
As an open-end investment company, the Fund may have to sell portfolio
securities in order to accommodate the need for larger reserves of cash or
cash equivalents, and such sales may be expected to occur under unfavorable
market conditions. While the Fund is a closed-end fund, however, The Dreyfus
Corporation ("Dreyfus"), the Fund's investment adviser, is not required to
invest new money or liquidate portfolio holdings at inopportune times, and
can manage the Fund's portfolio with a greater emphasis on long-term
considerations.
Currently, the Fund is not limited as to the amount of its assets
which may be invested in illiquid securities. If the Fund were converted to
an open-end fund, it would not be permitted to have more than 15% of the
value of its net assets invested in illiquid securities (the SEC is
considering limiting to 10% the illiquid securities that may be held by any
open-end fund). As of May 31, 1995, none of the Fund's net assets were
invested in illiquid securities.
MINIMUM INVESTMENT AND INVOLUNTARY REDEMPTIONS. If the Fund is
converted to an open-end investment company, it will adopt requirements that
an initial investment in Fund shares and any subsequent investment must be in
a specified minimum amount, in order to reduce the administrative burdens and
costs incurred in monitoring numerous small accounts. The Fund expects that
the minimum initial investment requirement will be $1,000 and the minimum
subsequent investment requirement will be $100. The Fund also would reserve
the right to redeem, upon notice, the shares of any stockholder whose account
has a net asset value of less than $500, other than an account which is an
IRA or other tax-deferred retirement plan.
CONVERSION COSTS. The process of converting the Fund to an open-end
investment company would involve legal and other expenses to the Fund,
estimated to be approximately $50,000. Based on the Fund's total net assets
as of May 31, 1995 and its expenses for the first six months of fiscal year
1995 on an annualized basis, it currently is anticipated that conversion
costs would result in an increase of approximately 3.50% in the Fund's
expense ratio in the year of conversion.
MEASURES TO BE ADOPTED TO CONVERT THE FUND TO AN OPEN-END INVESTMENT COMPANY
To convert the Fund to an open-end investment company, stockholders
must approve changing the Fund's subclassification under the 1940 Act from a
closed-end investment company to an open-end investment company. In
connection therewith, the Fund would have to amend and restate its Articles
of Incorporation and the Board believes it would then be appropriate to
change certain of the Fund's fundamental investment policies and
restrictions.
Page 5
AMENDING AND RESTATING THE FUND'S ARTICLES OF INCORPORATION. To
operate as an open-end investment company, the Fund will be required to amend
its Articles of Incorporation to authorize the issuance of redeemable
securities at net asset value and to provide that its outstanding common
stock will be redeemable at the option of stockholders. Other amendments to
the Articles of Incorporation include changing the Fund's name to "Premier
Global Governments Income Fund, Inc." and declassifying the Fund's Board, as
described below. The Articles of Incorporation also would be amended to
remove other provisions applicable only to closed-end investment companies
and to include provisions commonly found in the charter of other open-end
investment companies in the Dreyfus Family of Funds, as described below. A
copy of the proposed Amended and Restated Articles of Incorporation, in the
form approved by the Fund's Board of Directors, is attached to this Proxy
Statement as Exhibit A.
NAME CHANGE. If Proposal 1 is approved, the Fund's Articles of
Incorporation would be amended to change the name of the Fund to Premier
Global Governments Income Fund, Inc. The purpose of this amendment would be
to reflect the Fund's global investment strategy and to identify it with the
distribution structure of Dreyfus' Premier Family of Funds.
DECLASSIFIED BOARD. The Fund's Articles of Incorporation would be
amended to declassify the Board of Directors. Currently, the Fund's Articles
of Incorporation provide that the Board of Directors be divided into three
classes of Directors. Each Director serves for three years with one class
being elected each year. The classified Board was intended, in part, to
reduce the Fund's vulnerability to an unsolicited takeover proposal or
similar action that does not contemplate an acquisition of all outstanding
voting stock of the Fund by making it more difficult and time-consuming to
change majority control of the Board of Directors without its consent. As an
open-end investment company, the Fund would not have a classified Board.
AMENDMENT TO MANAGEMENT AGREEMENT. If Proposal 1 is approved, the
Fund's Management Agreement with Dreyfus would be amended to delete certain
expenses payable by the Fund which are inapplicable to an open-end investment
company such as those relating to listing the Fund's common stock on the NYSE
and administering the Fund's DRIP.
ISSUANCE OF ADDITIONAL CLASSES OF SHARES. The Fund's Charter
currently provides for the issuance of one class of shares with each share
representing an equal proportionate interest in the Fund. If stockholders
approve the conversion of the Fund to an open-end investment company, the
Fund's Board of Directors recommends that the Fund's Articles of
Incorporation be amended to permit the Directors, without further stockholder
action, to cause to be issued one or more additional classes of shares having
such preferences or special or relative rights and privileges as the
Directors may determine, to the extent permitted under the 1940 Act.
The purpose of the amendment would be to permit the Fund to take
advantage of alternative methods of selling Fund shares. The Board of
Directors believes that providing investors with alternative methods of
purchasing Fund shares, if it is operated as an open-end investment company,
would (i) enable investors to choose the purchase method which best suits
their individual situation, thereby encouraging current stockholders to make
additional investments in the Fund and attempting to attract new investors
and assets to the Fund, thus benefiting stockholders by increasing investment
flexibility for the Fund and reducing operating expense ratios as a result of
economies of scale; (ii) facilitate distribution of the Fund's shares; and
(iii) maintain the competitive position of the Fund in relation to other
open-end funds that have implemented or are seeking to implement similar
distribution arrangements. As described below, the classes most likely would
differ principally in the method of offering shares to investors (e.g.,
pursuant to a front-end sales load or contingent deferred sales charge and/or
Rule 12b-1 Distribution Plan or non-Rule 12b-1 Shareholder Services Plan).
If Proposal 1 is approved, the Board currently anticipates proposing
four classes of Fund shares: Class A, Class B, Class C and Class R shares.
Current Fund stockholders would receive, in exchange for their existing Fund
shares, a number of Class A shares equal in value to the net asset value of
their existing Fund shares held immediately prior to the exchange. These
Class A shares would not be subject to any front-end sales load, contingent
deferred sales charge or Rule 12b-1 plan charges, but would be subject to an
annual service fee pursuant to a non-Rule 12b-1 Shareholder Services Plan at
the rate of .25 of 1% of the value of the average daily net assets of Class
A. It is contemplated that all other Class A shares would be subject to a
front-end sales load and the annual service fee referred to above (including
future purchases by existing Fund stockholders). Class B and Class C shares
would be subject to a contingent deferred sales charge, with differing
schedules, imposed on redemptions. Class B and Class C shares also would be
subject to annual distribution fees pursuant to a Distribution Plan, adopted
in accordance with Rule 12b-1 under the 1940 Act, as well as the annual
service fee referred to above. Class R shares, which are currently anticipated
to be available only to certain qualified retirement plans, would not be
subject to any front-end sales load, contingent deferred sales charge or
distribution or service fee.
Page 6
Each class of Fund shares would represent an identical interest in
the Fund's portfolio and would participate on an equal proportionate basis in
the investment income and realized and unrealized gains and losses on
portfolio investments. All classes of shares will vote together as a single
class at meetings of stockholders except that shares of a class which is
affected by any matter in a manner materially different from shares of other
classes will vote as a separate class and holders of shares of a class not
affected by a matter will not vote on that matter.
CHANGING CERTAIN FUNDAMENTAL INVESTMENT POLICIES. The Fund's
investment objective, which is to maximize current income to the extent
consistent with the preservation of capital, will remain unchanged if the
conversion of the Fund to an open-end investment company is approved. The
1940 Act requires that a relatively limited number of investment policies and
restrictions be designated as fundamental policies that cannot be changed
without stockholder approval. Certain of the Fund's fundamental investment
policies and restrictions are proposed to be amended, as described below.
These amendments are necessitated by certain requirements for open-end
investment companies under the 1940 Act and will standardize certain
provisions of the Fund's investment restrictions with those of other similar
open-end funds in the Dreyfus Family of Funds. In addition, the Board
recommends that certain of these investment restrictions be made
non-fundamental investment policies as described below. Non-fundamental
investment policies may be changed by vote of the Directors without further
stockholder approval. Dreyfus does not anticipate that these amendments will
change materially the current investment practices of the Fund.
As proposed to be amended, the investment restrictions of the Fund
as an open-end investment company are set forth on Exhibit B hereto. The
current investment restrictions of the Fund are set forth on Exhibit C hereto
and may be found in the Fund's Prospectus under "Investment Restrictions."
Stockholders are urged to review the complete text of the current investment
restrictions of the Fund and the proposed investment restrictions of the Fund
as an open-end investment company.
Specific changes include a change in investment restriction number 1
which limits the Fund's ability to borrow money. Currently, the Fund, as a
closed-end fund, may borrow money for temporary or emergency purposes or for
clearance of transactions in amounts not exceeding 10% of its total assets
(not including the amount borrowed), or in connection with repurchases of, or
tenders for, the Fund's shares, but only if after each such borrowing the
ratio which the value of the total assets of the Fund less all liabilities
and indebtedness not represented by senior securities bears to the aggregate
amount of senior securities representing indebtedness of the Fund is at least
300%. Leveraging may exaggerate the effect on net asset value of any increase
or decrease in the market value of the Fund's portfolio. As an open-end fund,
the Fund would be permitted to borrow to the fullest extent permitted under
the 1940 Act. Currently, the 1940 Act limits total borrowings to 33-1/3% of
the value of an open-end investment company's total assets. However, the Fund
intends to adopt a non-fundamental policy limiting its ability to borrow
money for temporary or emergency (not leveraging) purposes only to 15% of the
value of its total assets. While borrowings exceed 5% of the Fund's total
assets, the Fund will not make any additional investments.
Investment restriction number 2 relating to pledging, mortgaging or
hypothecating Fund assets is currently a fundamental policy of the Fund. As
an open-end fund, this investment restriction would be a non-fundamental
policy of the Fund and may be changed by vote of the Directors without
further shareholder approval.
Investment restriction number 3 limits the ability of the Fund to
sell securities short or purchase securities on margin, except for such
short-term credits as are necessary for the clearance of transactions. The
restriction makes clear that margin deposits in connection with transactions
in currencies, options, futures and options on futures do not constitute
purchasing securities on margin. As an open-end fund, the Fund would be
permitted to engage in short sales. Short sales are transactions in which the
Fund sells a security it does not own in anticipation of a decline in the
market value of that security. The Fund would incur a loss as a result of a
short sale if the price of the security increases between the date of the
short sale and the date on which the Fund replaces the borrowed security.
Prior to the Fund's entry into such transactions, the Fund's Prospectus would
be revised appropriately.
Investment restriction number 7 limits the ability of the Fund to
lend its portfolio securities in an amount not to exceed 30% of the value of
its total assets. Investment restriction number 7, as revised, would permit
the Fund to lend its portfolio securities in an amount not to exceed 33-1/3%
of the value of its total assets.
As a closed-end fund, the Fund may invest without limitation in
illiquid securities, including repurchase agreements providing for settlement
in more than seven days after notice, provided such investments are
consistent with the Fund's investment objective. As an open-end fund, the
Fund would adopt a non-fundamental policy limiting its ability to purchase
illiquid securities, including such repurchase agreements, to 15% of the
value of its net assets.
Page 7
BOARD ACTIONS. If the proposed conversion to open-end status is
approved, the Board will take the following actions in connection with the
conversion.
DISTRIBUTION AND UNDERWRITING. Since shares of an open-end
investment company are offered to the public on a continuous basis, the
Fund's Board anticipates adopting a distribution agreement (the "Distribution
Agreement"), subject to stockholder approval of Proposal 1. The principal
underwriter for open-end investment companies in the Dreyfus Family of Funds
currently is Premier Mutual Fund Services, Inc. (the "Distributor"). Pursuant
to the Distribution Agreement, Fund shares would be offered and sold directly
by the Distributor itself and other broker-dealers which have entered into
selling agreements with the Distributor. There is no assurance, however, that
the Distributor or any such broker-dealer would be able to generate
sufficient sales of Fund shares to offset redemptions, particularly during
the initial months following conversion.
REDEMPTION FEE. In an attempt to reduce the number of redemptions of
Fund shares immediately following conversion (thereby reducing possible
disruption of the Fund's ordinary portfolio management), and to offset the
brokerage and other costs of such redemptions, for a period of 12 months
following the Fund's conversion to an open-end investment company, the Board
will impose a fee payable to the Fund of 1% of all redemption proceeds.
TIMING. If the stockholders approve Proposal 1, a number of steps
will be required to implement the conversion of the Fund to an open-end
investment company, including the preparation, filing and effectiveness of a
registration statement under the Securities Act of 1933 covering the offering
of the Fund's shares and the negotiation and execution of a new or amended
agreement with its transfer agent. It is anticipated that such conversion
would become effective within approximately six months following a vote
approving Proposal 1. The amendments to the Fund's Articles of Incorporation
and fundamental investment policies would become effective simultaneously with
the effectiveness of the registration statement referred to above under the
Securities Act of 1933.
REQUIRED VOTE AND DIRECTORS' RECOMMENDATION. Approval of Proposal 1,
which includes changing the Fund's subclassification from a closed-end
investment company to an open-end investment company, amending and restating
the Fund's Articles of Incorporation and changing certain fundamental
investment policies and restrictions of the Fund, requires the affirmative
vote of the holders of a majority of the Fund's outstanding voting
securities.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS,
INCLUDING THE "NON-INTERESTED" DIRECTORS, DOES NOT FAVOR PROPOSAL 1.
PROPOSAL 2. TO APPROVE A NEW MANAGEMENT AGREEMENT BETWEEN THE FUND AND
DREYFUS AND A SUB-INVESTMENT ADVISORY AGREEMENT BETWEEN
DREYFUS AND S.A.M. FINANCE, S.A.
At the Meeting, stockholders will be asked to approve a new
Management Agreement between the Fund and Dreyfus (the "New Agreement") and a
Sub-Investment Advisory Agreement between Dreyfus and S.A.M. Finance, S.A.
("CCF S.A.M.") (the "Sub-Advisory Agreement"). At a Board meeting held on
June 14, 1995, the Fund's Board of Directors approved the New Agreement,
terminated the Fund's Management Agreement currently in effect with Dreyfus
dated August 24, 1994 (the "Current Agreement"), and approved the Sub-Advisory
Agreement. On the same day, Dreyfus agreed to terminate the Current
Agreement, subject to and effective upon the approval and implementation of
the New Agreement and the Sub-Advisory Agreement. The Current Agreement was
last approved by the Board of Directors of the Fund, including a majority of
the Directors who are not "interested persons" of any party to the Current
Agreement, on May 3, 1995, and was approved by stockholders on August 3,
1994. Under the Current Agreement, Dreyfus provides investment management of
the Fund's portfolio in accordance with the Fund's investment objective and
policies, subject to the supervision of the Fund's Board of Directors. In
connection therewith, Dreyfus obtains and provides investment research,
supervises the Fund's investments and conducts a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Fund's assets. Under the Current Agreement, the Fund pays Dreyfus a
management fee at an annual rate of .70 of 1% of the value of the Fund's
average weekly net assets. For the 12-month period ended November 30, 1994,
the Fund paid Dreyfus a management fee of $1,083,959.(1)
- -------------------
(1) On November 9, 1994, the Fund changed its fiscal year end from May 31 to
November 30.
Page 8
The New Agreement is substantially identical to the Current
Agreement, except for its commencement date and various provisions relating
to the employment of CCF S.A.M. as sub-investment adviser. A copy of the New
Agreement in the form approved by the Fund's Board of Directors is attached
to this Proxy Statement as Exhibit D. Dreyfus would continue to receive the
same annual fee under the New Agreement and would pay a portion of its fee to
CCF S.A.M. under the Sub-Advisory Agreement.
THE DREYFUS CORPORATION. Dreyfus, located at 200 Park Avenue, New
York, New York 10166, serves as the Fund's investment adviser under the
Current Agreement. Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of May 31, 1995, Dreyfus managed or administered approximately $76 billion in
assets for more than 1.8 million investor accounts nationwide.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Credit Corporati
on and a number of companies known as Mellon Financial Services Corporations.
Through its subsidiaries, including Dreyfus, Mellon managed more than $200
billion in assets as of March 31, 1995, including approximately $72 billion
in mutual fund assets. As of March 31, 1995, various subsidiaries of Mellon
provided non-investment services, such as custodial or administration
services, for more than $680 billion in assets, including approximately $67
billion in mutual fund assets.
The Chairman of the Board and Chief Executive Officer of Dreyfus is
Howard Stein. Other directors of Dreyfus are Mandell L. Berman, real estate
consultant and private investor, Southfield, Michigan; Frank V. Cahouet,
Chairman of the Board, President and Chief Executive Officer of Mellon,
Pittsburgh, Pennsylvania; Lawrence S. Kash, Vice Chairman-Distribution of
Dreyfus; Robert E. Riley, President and Chief Operating Officer of Dreyfus;
Stephen E. Canter, Vice Chairman and Chief Investment Officer of Dreyfus;
Alvin E. Friedman, Senior Adviser to Dillon, Read & Co., Inc., investment
bankers, New York, New York; Lawrence M. Greene, former Legal Consultant to
Dreyfus; Julian M. Smerling, former Vice Chairman of the Board of Directors
of Dreyfus; W. Keith Smith, Vice Chairman of the Board of Directors of
Dreyfus; and Dr. David B. Truman, educational consultant and past President
of Mt. Holyoke College and the Russell Sage Foundation, Hillsdale, New York.
DESCRIPTION OF THE NEW AGREEMENT. The terms of the New Agreement are
substantially identical to those of the Current Agreement, except for its
commencement date and various provisions relating to the employment of CCF
S.A.M. as the Fund's sub-investment adviser as described below.
The New Agreement provides for the employment by Dreyfus of CCF
S.A.M. to provide day-to-day management of that portion of the Fund's
portfolio as Dreyfus may determine from time to time (the "sub-advised
assets"). In connection therewith, Dreyfus has agreed to pay CCF S.A.M., out
of the management fee Dreyfus receives from the Fund and only to the extent
thereof, for CCF S.A.M.'s services rendered pursuant to the Sub-Advisory
Agreement.
CCF S.A.M. CCF S.A.M. is a wholly-owned subsidiary of Credit
Commercial de France ("CCF") with its principal office at 115 Avenue des
Champs-Elysees, Paris, France 75008. CCF S.A.M. is a French corporation
organized in 1989 and has been registered as an investment adviser under the
1940 Act since February, 1993. As of March 31, 1995, CCF S.A.M. managed
approximately $2 billion in assets worldwide. CCF was founded in 1894 and is
one of Europe's largest commercial banks with 370 offices in France as well
as 40 other offices around the world. CCF's European investment management
business dates back to 1945 and currently manages over $30 billion divided
among 210 open-end mutual funds and over 100 commingled investment portfolios
out of offices in Paris, London, Geneva, Milan and Tokyo.
SUB-ADVISORY AGREEMENT. Under the terms of the Sub-Advisory
Agreement, CCF S.A.M., subject to the supervision and approval of Dreyfus and
the Fund's Board of Directors, will provide investment advisory assistance
and the day-to-day management of the sub-advised assets, as well as
investment research and statistical information with respect to the
sub-advised assets.
As compensation for CCF S.A.M.'s services to the Fund under the
Sub-Advisory Agreement, Dreyfus has agreed to pay CCF S.A.M. a fee at the
annual rate of .20 of 1% of the value of the Fund's average weekly net
sub-advised assets for the preceding month.
The Sub-Advisory Agreement will continue until June 1, 1996 and
thereafter automatically for successive annual periods ending on June 1st of
each year, provided such continuance is specifically approved at least
annually by the Board of
Page 9
Directors or by a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund, and provided that, in either event, the
continuance also is approved by a majority of Directors who are not
"interested persons" of any party to the Sub-Advisory Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Sub-Advisory Agreement may be terminated without penalty (i) by
Dreyfus on 60 days' notice to CCF S.A.M., (ii) by the Fund's Board of
Directors or by vote of the holders of a majority of the Fund's outstanding
voting securities on 60 days' notice to CCF S.A.M., or (iii) by CCF S.A.M. on
not less than 90 days' notice to the Fund and Dreyfus. The Sub-Advisory
Agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act) or upon the termination of the New Agreement for any
reason. A copy of the Sub-Advisory Agreement in the form being presented for
approval, and as approved by the Board of Directors, is set forth as Exhibit
E to this Proxy Statement.
BOARD CONSIDERATION. In considering whether to approve the New
Agreement and the Sub-Advisory Agreement and to submit each agreement to the
stockholders for their approval, the Board of Directors concluded that it was
satisfied with the advisory services provided to the Fund by Dreyfus and that
there would be no increase in the management fee. The Board also determined
that, based on CCF S.A.M.'s international investing experience, the
employment of CCF S.A.M. as sub-investment adviser was in the best interests
of the Fund and its stockholders and that there would be no diminution in the
scope and quality of advisory and other services provided to the Fund under
the New Agreement and Sub-Advisory Agreement structure.
VOTE REQUIRED AND DIRECTORS' RECOMMENDATION. Approval of this
proposal requires the affirmative vote of (a) 67% of the voting securities
present at this meeting, if the holders of more than 50% of the Fund's
outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the Fund's outstanding voting securities, whichever is less.
If stockholders do not approve the New Agreement and the Sub-Advisory
Agreement, the Current Agreement will remain in effect.
THE BOARD OF DIRECTORS, INCLUDING THE
"NON-INTERESTED" DIRECTORS, RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL 3. ELECTION OF DIRECTORS.
(a) The Fund's Board of Directors is divided into three
classes with the term of office of one class expiring each year. If Proposal 1
is not approved, Mr. DiMartino would be considered for election as a Class I
Director to serve until the Fund's 1996 Annual Meeting of Stockholders and
until his successor has been elected and qualified, and Mss. Dunst and Jacobs
would be considered for election as Class III Directors to serve until the
Fund's 1998 Annual Meeting of Stockholders and until their successors have
been elected and qualified. In that event, the Board will remain classified
and it is the intention of the persons named in the enclosed proxy to vote in
favor of the election of such Directors.
(b) If, however, Proposal 1 is approved by stockholders, the
Fund's Board would be declassified and it would be proposed that stockholders
elect each person who is currently a Board member, regardless of class, to
hold office for a term of unlimited duration and until their successors are
elected and qualified. It is the intention of the persons named in the
enclosed proxy to vote in favor of the election of Messrs. Burke, DiMartino,
Meltzer, Rose, Rudman and Vanocur and Mss. Dunst and Jacobs. Each of the
nominees has consented to be named in this Proxy Statement and to serve
as a Director if elected.
If Proposal 1 is approved, the Fund does not intend to hold annual
meetings of stockholders in the future unless stockholder action is required.
Accordingly, Directors elected at the Meeting will hold office until the Fund
is required by law to hold an election of Directors and until their
successors are duly elected and qualified.
If Proposal 1 is not approved, only the proposal in paragraph (a)
above would be presented at the Meeting.
If Proposal 1 is approved, only the proposal in paragraph (b) above
would be presented at the Meeting.
The following table sets forth certain information concerning each
of the Directors of the Fund. Each of the nominees is currently a Director of
the Fund.
Page 10
<TABLE>
<CAPTION>
INFORMATION REGARDING DIRECTORS
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE EXPIRES
- ------------------------------- ----- ------------ ----------
<S> <C> <C> <C>
CLASS I:
WARREN B. RUDMAN 65 1993 1996
Since January 1993, Partner in the law firm of Paul,
Weiss, Rifkind, Wharton & Garrison. From January 1981 to January
1993, Mr. Rudman served as a United States Senator from the State
of New Hampshire. Also, since January 1993, Mr. Rudman has served
as Vice Chairman of the Federal Reserve Bank of Boston and as a director
of Chubb Corporation and Raytheon Company. Since 1988, Mr. Rudman has
served as a trustee of Boston College and since 1986 as a member of
the Senior Advisory Board of the Institute of Politics of the Kennedy
School of Government at Harvard University. He also serves as Deputy
Chairman of the President's Foreign Intelligence Advisory Board. He
also is a director of Collins & Aikman Corporation, a supplier of
fabrics and other products.
SANDER VANOCUR 67 1992 1996
Since January 1992, President of Old Owl Communications,
a full-service communications firm. Since November 1989, Mr.
Vanocur has served as a Director of the Damon Runyon-Walter Winchell
Cancer Research Fund. From June 1986 to December 1991, he was a Senior
Correspondent of ABC News and, from October 1986 to December 31, 1991,
he was Anchor of the ABC News program "Business World," a weekly
business program on the ABC television network.
*JOSEPH S. DIMARTINO 51 (1988-1991) 1996
1995**
Since January 1995, Chairman of the Board of various funds in
the Dreyfus Family of Funds. For more than five years prior thereto,
he was President, a director and, until August 1994, Chief Operating
Officer of Dreyfus, and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus.
From August 24, 1994 to December 31, 1994, he was a director of Mellon.
Mr. DiMartino is a trustee of Bucknell University; Chairman of the
Board of Directors of Noel Group Inc., a venture capital company; and
a director of The Muscular Dystrophy
* "Interested person" as defined in the 1940 Act.
** Mr. Dimartino previously was a Director of the Fund from April 27, 1988
to November 21, 1991. He was re-elected to the Board on February 8, 1995.
Page 11
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE EXPIRES
- ---------------- ---- --------- ------------
CLASS I CONTINUED:
Association, HealthPlan Services Corporation, Simmons Outdoor
Corporation, Belding Heminway Company, Inc., a manufacturer and
marketer of industrial threads, specialty yarns, home furnishings
and fabrics, Curtis Industries, Inc., a national distributor of
security products, chemicals and automotive and other hardware, and
Staffing Resources, Inc.
CLASS II:
*DAVID W. BURKE 59 1994 1997
Since August 1994, Consultant to Dreyfus. From October 1990 to
August 1994, Vice President and Chief Administrative Officer of
Dreyfus. From 1977 to 1990, Mr. Burke was involved in the management
of national television news, as Vice President and Executive Vice
President of ABC News, and subsequently as President of CBS News.
JAY I. MELTZER 66 1991 1997
Physician engaged in private practice specializing in internal
medicine. He also is a member of the Advisory Board of the Section of
Society and Medicine, College of Physicians and Surgeons, Columbia
University and a Clinical Professor of Medicine, Department of
Medicine, Columbia University College of Physicians and Surgeons.
DANIEL ROSE 65 1992 1997
President and Chief Executive Officer of Rose Associates, Inc.,
a New York based real estate development and management firm. In
July 1994, Mr. Rose received a Presidential appointment to serve as
a director of the Baltic-American Enterprise Fund, which will provide
financing and technical business assistance to new business concerns
in the Baltic states. He is Chairman of the Housing Committee of The
Real Estate Board of New York, Inc. and a Trustee of Corporate Property
Investors, a real estate investment company.
* "Interested person" as defined in the 1940 Act.
Page 12
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE EXPIRES
- ---------------- ----- ---------- ------------
CLASS III:
DIANE DUNST 55 1990 1995
Since January 1992, President of Diane Dunst Promotion, Inc.,
a full service promotion agency. From January 1989 to January 1992,
Director of Promotion Services, Lear's Magazine. From 1985 to
January 1989, she was Sales Promotion Manager of ELLE Magazine.
ROSALIND GERSTEN JACOBS 70 1994 1995
Director of Merchandise and Marketing for Corporate Property
Investors, a real estate investment company. From 1974 to
1976, she was owner and manager of a merchandise and marketing
consulting firm. Prior to 1974, she was Vice President of Macy's,
New York.
</TABLE>
In connection with the merger of Dreyfus and a subsidiary of Mellon
Bank, N.A. on August 24, 1994, 33,698 shares of Dreyfus common stock held by
Mr. DiMartino under The Dreyfus Corporation Retirement Profit-Sharing Plan
(the "Plan") were converted into 29,660 shares of common stock of Mellon,
having a market value of $58.375 per share on such date. In addition, two
outstanding options separately granted in 1982 and 1989 to Mr. DiMartino to
purchase an aggregate of 200,000 shares of Dreyfus common stock were
converted into two options to purchase an aggregate of 176,034 shares of
Mellon common stock. In November 1994, Mellon's common stock split in a 3 for
2 proportion, and all shares of Mellon common stock held under the Plan, and
all outstanding options, were adjusted accordingly. In February 1995, Mr.
DiMartino exercised his two outstanding options. At that time, Mr. DiMartino
sold a total of 309,264 shares of Mellon common stock in the secondary market
at an average price of $38.650 per share.
The persons named in the accompanying form of proxy intend to vote
each such proxy for the election of the Nominees, unless stockholders
specifically indicate on their proxies the desire to withhold authority to
vote for any one or more of the Nominees. It is not contemplated that any
Nominee will be unable to serve as a Board member for any reason, but if that
should occur prior to the Meeting, the proxyholders reserve the right to
substitute another person or persons of their choice as nominee or nominees.
The Fund has an audit committee comprised of its Directors who are
not "interested persons" of the Fund, the function of which is to routinely
review financial statements and other audit-related matters as they arise
throughout the year. The Fund does not have a standing nominating or
compensation committee or any committee performing similar functions,
although if Proposal 1 is approved and the Fund adopts a Distribution Plan
with respect to its Class B and Class C shares, the Fund will be required to
create a Nominating Committee comprised solely of Directors who are not
"interested persons" of the Fund. As of May 31, 1995, directors and officers
of the Fund, as a group (16 persons), owned less than 1% of the Fund's
outstanding shares.
The Fund pays the Directors an annual retainer of $4,500 and a fee
per meeting of $500, and reimburses them for their expenses. The Chairman of
the Board, which position is held by Mr. DiMartino, receives an additional
25% in annual retainer and per meeting attendance fees. The Fund does not pay
any other remuneration to its officers and Directors, except as described
below with respect to Mr. DiMartino, and does not have a bonus, pension,
profit-sharing or retirement plan. There were nine Board and committee
meetings held during the 12-month period ended November 30, 1994. All of the
Directors, except Mr. Rudman, attended 75% or more of all Board and committee
meetings held during the 12-month period ended November 30, 1994 during the
period the Director was in office.
Page 13
The compensation paid to each Nominee by the Fund for the 12-month
period ended November 30, 1994 and by all other funds in the Dreyfus Family
of Funds for which such Nominee is a Board member (the number of which is set
forth in parenthesis next to each Nominee's total compensation) for the year
ended December 31, 1994, was as follows:
<TABLE>
<CAPTION>
(5)
(3) TOTAL
PENSION OR (4) COMPENSATION
(2) RETIREMENT ESTIMATED FROM FUND AND
AGGREGATE BENEFITS ACCRUED ANNUAL BENEFITS FUND COMPLEX
(1) COMPENSATION AS PART OF THE FROM THE FUND PAID TO
NAME OF BOARD MEMBER FROM THE FUND* FUND'S EXPENSES UPON RETIREMENT BOARD MEMBER
<S> <C> <C> <C> <C>
David W. Burke $2,220 none none $ 27,898 (57)
Joseph S. DiMartino** $8,750 none none $ 445,000 (93)
Diane Dunst $7,000 none none $ 32,602 (9)
Rosalind Gersten Jacobs $2,979 none none $ 57,638 (20)
Jay I. Meltzer $7,000 none none $ 32,102 (9)
Daniel Rose $7,000 none none $ 62,006 (21)
Warren B. Rudman $5,000 none none $ 29,602 (17)
Sander Vanocur $7,000 none none $ 62,006 (21)
</TABLE>
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $158 for all Directors as a group.
** With respect to aggregate compensation from the Fund, estimated
amounts for the fiscal year ending November 30, 1995. With respect
to total compensation from the Fund and fund complex, estimated
amounts for the year ending December 31, 1995. Mr. DiMartino and
his family also are entitled to certain health insurance benefits,
with a portion of the annual premium, such portion estimated to be
approximately $16,500 for the year ending December 31, 1995, to be
allocated among the funds in the Dreyfus Family of Funds for which
he serves as Chairman of the Board.
Page 14
The following sets forth information relevant to the executive
officers of the Fund:
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUND AGE EXPERIENCE FOR PAST FIVE YEARS
- ----------- --- ---------------------------------
<S> <C> <C>
MARIE E. CONNOLLY
President and Treasurer 37 President and Chief Operating Officer of the
Distributor, and an officer of other investment
companies advised or administered by Dreyfus.
From December 1991 to July 1994, she was
President and Chief Compliance Officer of Funds
Distributor, Inc., a wholly-owned subsidiary of
The Boston Company, Inc. Prior to December
1991, she served as Vice President and
Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc.
JOHN E. PELLETIER
Vice President and Secretary 31 Senior Vice President and General Counsel of
the Distributor and an officer of other
investment companies advised or administered by
Dreyfus. From February 1992 to July 1994, he
served as Counsel for The Boston Company
Advisors, Inc. From August 1990 to February
1992, he was employed as an Associate at Rope
& Gray, and prior to August 1990, he was
employed as an Associate at Sidley & Austin.
FREDERICK C. DEY
Vice President and Assistant Treasurer 33 Senior Vice President of the Distributor and an
officer of other investment companies advised
or administered by Dreyfus. From 1988 to August
1994, he was Manager of the High Performance
Fabric Division of Springs Industries Inc.
ERIC B. FISCHMAN
Vice President and Assistant Secretary 30 Associate General Counsel of the Distributor
and an officer of other investment companies
advised or administered by Dreyfus.
From September 1992 to August 1994, he was
an attorney with the Board of Governors of the
Federal Reserve System.
Page 15
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUND AGE EXPERIENCE FOR PAST FIVE YEARS
- ----------------- --- -----------------------------------
JOSEPH S. TOWER, III
Assistant Treasurer 33 Senior Vice President, Treasurer and Chief
Financial Officer of the Distributor and an
officer of other investment companies advised
or administered by Dreyfus. From July 1988 to
August 1994, he was employed by The Boston
Company, Inc. where he held various management
positions in the Corporate Finance and Treasury
areas.
JOHN J. PYBURN
Assistant Treasurer 59 Vice President of the Distributor and an
officer of other investment companies advised
or administered by Dreyfus. From 1984 to July
1994, he was Assistant Vice President in the
Mutual Fund Accounting Department of Dreyfus.
PAUL FURCINITO
Assistant Secretary 28 Assistant Vice President of the Distributor and
an officer of other investment companies
advised or administered by Dreyfus. From
January 1992 to July 1994, he was a Senior
Legal Product Manager and, from January 1990 to
January 1992, a mutual fund accountant for The
Boston Company Advisors, Inc.
RUTH D. LEIBERT
Assistant Secretary 50 Assistant Vice President of the Distributor and
an officer of other investment companies
advised or administered by Dreyfus. From March
1992 to July 1994, she was a Compliance Officer
for The Managers Funds, a registered investment
company. From March 1990 until September 1991,
she was Development Director of The Rockland
Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau
of National Affairs.
</TABLE>
The address of each officer of the Fund is 200 Park Avenue, New
York, New York 10166.
PROPOSAL 4. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Fund's independent auditors be
selected by a majority of those Directors who are not "interested persons"
(as defined in the 1940 Act) of the Fund; that such selection be submitted
for ratification or rejection at the Meeting and that the employment of such
independent auditors be conditioned upon the right of the Fund, by vote of a
majority of its outstanding securities at any meeting called for that
purpose, to terminate such employment forthwith without penalty. The Fund's
Board of Directors, including a majority of its Directors who are not
"interested persons" of the Fund, approved the selection of Ernst & Young LLP
for the current fiscal year ending November 30, 1995 at a Board meeting held
on June 14, 1995.
Page 16
Accordingly, the selection by the Fund's Board of Directors of Ernst
& Young LLP as independent auditors of the Fund for the fiscal year ending
November 30, 1995 is submitted to stockholders for ratification or rejection
Apart from its fees received as independent auditors, neither the firm of
Ernst & Young LLP nor any of its partners has a direct, or material indirect,
financial interest in the Fund or Dreyfus.
Ernst & Young LLP, a major international accounting firm, has acted
as auditors of the Fund since the Fund's organization. The Directors believe
that the continued employment of the services of Ernst & Young LLP would be
in the best interests of the Fund.
A representative of Ernst & Young LLP is expected to be present at
the Meeting, will have the opportunity to make a statement and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS, INCLUDING A MAJORITY OF THE
"NON-INTERESTED" DIRECTORS, RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT AUDITORS OF THE FUND.
ADDITIONAL INFORMATION
Prior to commencing operations, the Fund issued 6,334 shares of
common stock (the "Initial Shares") to Dreyfus, as sponsor, for a $100,000
initial investment pursuant to Section 14(a) of the 1940 Act. The Initial
Shares issued to Dreyfus by the Fund were enrolled in the Fund's DRIP. A Form
5 for each of the four fiscal years ended May 1991, 1992, 1993 and 1994 was
filed by Dreyfus on January 13, 1995 pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). During those
fiscal years, Dreyfus was issued shares pursuant to the DRIP in the following
number of transactions: 1991-12, 1992-11, 1993-14 and 1994-12.
On August 24, 1994, Dreyfus merged with a subsidiary of Mellon Bank
N.A. In connection with the merger, Dreyfus first transferred its Initial
Shares, together with its DRIP-acquired shares, to its wholly-owned
subsidiary, Major Trading Corporation ("MTC"). An amended Form 5 reflecting
this transfer was filed pursuant to Section 16(a) of the Exchange Act on
January 27, 1995. Dreyfus subsequently transferred the outstanding shares of
MTC to MBC Investment Corp., a wholly-owned subsidiary of Mellon, the parent
of Mellon Bank, N.A. In anticipation of, and/or as a result of, the merger
of Dreyfus, certain individuals were elected as directors and/or officers of
Dreyfus. None of these individuals had any ownership of, or engaged in any
transactions with respect to, the Fund's shares at the time each assumed such
positions and filed a Form 3 pursuant to Section 16(a) of the Exchange Act. A
Form 3 for each of the following individuals was filed on September 28, 1994:
Frank V. Cahouet, Barbara F. Casey, Diane M. Coffey, Henry D. Gottmann,
Lawrence S. Kash, W. Keith Smith and Paul H. Snyder.
OTHER MATTERS
The Fund's Board members 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.
If Proposal 1 is not approved, proposals that stockholders wish to
include in the Fund's proxy statement for the Fund's next Annual Meeting of
Stockholders must be sent to and received by the Fund no later than December
15, 1995 at the principal executive offices of the Fund at 200 Park Avenue,
New York, New York 10166, Attention: General Counsel.
VOTING INFORMATION
The Fund will bear the cost of soliciting proxies. In addition to
the use of the mails, proxies may be solicited personally, by telephone or by
telegraph, and the Fund may pay persons holding Fund shares in their names or
those of their nominees for their expenses in sending soliciting materials to
their principals. In addition, the Fund may retain an outside firm to solicit
proxies on behalf of the Fund's Board. The cost to the Fund of any such
outside firm solicitation is estimated to be approximately $45,000.
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 shares repre-
Page 17
sented thereby will be considered to be present at the Meeting for purposes
of determining the existence of a quorum for the transaction of business.
Abstentions, however, will have the effect of a "no" vote for the purpose of
obtaining requisite approval for Proposals 1 and 2.
In the event that a quorum is not present at the Meeting, or if a
quorum is present but sufficient votes to approve any of the proposals 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 proposals that are the subject of the Meeting,
the percentage of votes actually cast, the percentage of negative votes
actually cast, the nature of any further solicitation and the information to be
provided to stockholders with respect to the reasons for the solicitation.
Any adjournment will require the affirmative vote of a majority of those
shares affected by the adjournment that are represented at the Meeting in
person or by proxy. A stockholder vote may be taken for one or more of the
proposals in this Proxy Statement prior to any adjournment if sufficient
votes have been received for approval. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote
"FOR" a Proposal in favor of any adjournment, and will vote those proxies
required to be voted "AGAINST" a 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 one-third of the outstanding shares of the Fund
entitled to vote at the Meeting. If a proxy is properly executed and returned
and is marked with an abstention, the shares represented thereby will be
considered to be present at the Meeting for the purpose of determining the
existence of a quorum for the transaction of business, but will not be voted
on any matter as to which the abstention applies.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Fund, in care of Mellon Bank, N.A., c/o Corporate
Investor Communications, 111 Commerce Road, Carlstadt, N.J. 07072, whether
other persons are the beneficial owners of Fund shares for which proxies are
being solicited from you, and, if so, the number of copies of the proxy
statement and other soliciting material you wish to receive in order to
supply copies to the beneficial owners of Fund shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
Dated: June 28, 1995
Page 18
EXHIBIT A
PROPOSED AMENDED AND RESTATED CHARTER
FIRST: DREYFUS STRATEGIC GOVERNMENTS INCOME, INC., a Maryland
corporation, having its principal office in the City of Baltimore, Maryland,
hereby amends and restates its Charter as follows:
SECOND: The name of the corporation (hereinafter called the
"corporation") is Premier Global Governments Income Fund, Inc.
THIRD: The corporation is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of an
investment company;
(b) to subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, lend, write options
on, exchange, distribute or otherwise dispose of and deal in and with
securities of every nature, kind, character, type and form, including without
limitation of the generality of the foregoing, all types of stocks, shares,
futures contracts, bonds, debentures, notes, bills and other negotiable or
non-negotiable instruments, obligations, evidences of interest, certificates
of interest, certificates of participation, certificates, interests,
evidences of ownership, guarantees, warrants, options or evidences of
indebtedness issued or created by or guaranteed as to principal and interest
by any state or local government or any agency or instrumentality thereof, by
the United States Government or any agency, instrumentality, territory,
district or possession thereof, by any foreign government or any agency,
instrumentality, territory, district or possession thereof, by any
corporation organized under the laws of any state, the United States or any
territory or possession thereof or under the laws of any foreign country,
bank certificates of deposit, bank time deposits, bankers' acceptances and
commercial paper; to pay for the same in cash or by the issue of stock,
including treasury stock, bonds or notes of the corporation or otherwise; and
to exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of every kind and
description, including without limitation, the right to consent and otherwise
act with respect thereto, with power to designate one or more persons, firms,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any said instruments;
(c) to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as security the
assets of the corporation;
(d) to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in,
shares of stock of the corporation, including shares of stock of the
corporation in fractional denominations, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of shares of stock of the
corporation any funds or property of the corporation whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the
laws of the State of Maryland;
(e) to conduct its business, promote its purposes and carry
on its operations in any and all of its branches and maintain offices both
within and without the State of Maryland, in any States of the United States
of America, in the District of Columbia and in any other parts of the world;
and
(f) to do all and everything necessary, suitable, convenient,
or proper for the conduct, promotion and attainment of any of the businesses
and purposes herein specified or which at any time may be incidental thereto
or may appear conducive to or expedient for the accomplishment of any of such
businesses and purposes and which might be engaged in or carried on by a
corporation incorporated or organized under the Maryland General Corporation
Law, and to have and exercise all of the powers conferred by the laws of the
State of Maryland upon corporations incorporated or organized under the
Maryland General Corporation Law.
The foregoing provisions of this Article THIRD shall be construed
both as purposes and powers and each as an independent purpose and power.
The foregoing enumeration of specific purposes and powers shall not be held to
limit or restrict in any manner the purposes and powers of the corporation,
and the purposes and powers herein specified shall, except when otherwise
provided in this Article THIRD, be in no wise limited or restricted by
reference to, or inference from, the terms of any provision of this or any
other Article of these Articles of Incorporation; provided, that the
corporation shall not conduct any business, promote any purpose, or exercise
any power or privilege within or without the State of Maryland which, under
the laws thereof, the corporation may not lawfully conduct, promote, or
exercise.
Page A-1
FOURTH: The post office address of the principal office of the
corporation within the State of Maryland, and of the resident agent of the
corporation within the State of Maryland, is The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202.
FIFTH: (1) The total number of shares of stock which the corporation
has authority to issue is _____________________ (___________) shares of
Common Stock, all of which are of a par value of one tenth of one cent
($.001) each. ________________ _______ (___________) of the authorized but
unissued shares of Common Stock are classified as Class A Common Stock, ___
_____________________ (___________) of the authorized but unissued shares of
Common Stock are classified as Class B Common Stock,________(_________) of
the authorized but unissued shares of Common Stock are classified as Class C
Common Stock, and ___________ (____________) of the authorized but unissued
shares of Common Stock are classified as Class R Common Stock.
(2) The aggregate par value of all the authorized shares of stock is
______________________________ dollars ($_______.00).
(3) The Board of Directors of the corporation is authorized, from
time to time, to fix the price or the minimum price or the consideration or
minimum consideration for, and to authorize the issuance of, the shares of
stock of the corporation.
(4) The Board of Directors of the corporation is authorized, from
time to time, to further classify or to reclassify, as the case may be, any
unissued shares of stock of the corporation by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or conditions of
redemption of the stock.
(5) Subject to the power of the Board of Directors to reclassify
unissued shares, the shares of each class of stock of the corporation shall
have the following preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption:
(a)(i) All consideration received by the corporation for the
issuance or sale of shares together with all income, earnings, profits and
proceeds thereof, shall irrevocably belong to such class for all purposes,
subject only to the rights of creditors, and are herein referred to as
"assets belonging to" such class.
(ii) The assets belonging to such class shall be charged
with the liabilities of the corporation in respect of such class and with
such class's share of the general liabilities of the corporation, in the
latter case in proportion that the net asset value of such class bears to
the net asset value of all classes. The determination of the Board of
Directors shall be conclusive as to the allocation of liabilities, including
accrued expenses and reserves, to a class.
(iii) Dividends or distributions on shares of each class,
whether payable in stock or cash, shall be paid only out of earnings,
surplus or other assets belonging to such class.
(iv) In the event of the liquidation or dissolution of the
corporation, stockholders of each class shall be entitled to receive, as a
class, out of the assets of the corporation available for distribution to
stockholders, the assets belonging to such class and the assets so
distributable to the stockholders of such class shall be distributed among
such stockholders in proportion to the number of shares of such class
held by them.
(b) A class may be invested with one or more other classes
in a common investment portfolio. Notwithstanding the provisions of
paragraph (5)(a) of this Article FIFTH, if two or more classes are invested
in a common investment portfolio, the shares of each such class of stock of
the corporation shall be subject to the following preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption, and, if there are
other classes of stock invested in a different investment portfolio, shall
also be subject to the provisions of paragraph (5)(a) of this Article FIFTH
at the portfolio level as if the classes invested in the common investment
portfolio were one class:
(i) The income and expenses of the investment portfolio
shall be allocated among the classes invested in the investment portfolio
in accordance with the number of shares outstanding of each such class or
as otherwise determined by the Board of Directors.
(ii) As more fully set forth in this paragraph (5)(b) of
Article FIFTH, the liabilities and expenses of the classes invested in the
same investment portfolio shall be determined separately from those of each
other and, accordingly, the net asset value, the dividends and distributions
payable to holders, and the amounts distributable in the event of liquidation
of the corporation to holders of shares of the corporation's stock may vary
from class to class invested in the same investment portfolio. Except for
these differences and certain other differences set forth in this paragraph
(5) of Article FIFTH, the classes invested in the same investment portfolio
shall have the same preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption.
Page A-2
(iii) The dividends and distributions of investment income and
capital gains with respect to the classes invested in the same investment
portfolio shall be in such amounts as may be declared from time to time by
the Board of Directors, and such dividends and distributions may vary among
the classes invested in the same investment portfolio to reflect differing
allocations of the expenses of the corporation among the classes and any
resultant differences between the net asset values per share of the classes,
to such extent and for such purposes as the Board of Directors may deem
appropriate. The allocation of investment income, capital gains, expenses and
liabilities of the corporation among the classes shall be determined by the
Board of Directors in a manner that is consistent with Rule 18f-3, or its
successor, promulgated under the Investment Company Act of 1940, or any order,
other rule or position of the Securities and Exchange Commission under said
Act.
(c) On each matter submitted to a vote of the stockholders,
each holder of a share of stock shall be entitled to one vote for each share
standing in his name on the books of the corporation irrespective of the class
thereof. All holders of shares of stock shall vote as a single class except as
may otherwise be required by law pursuant to any applicable order, rule or
interpretation issued by the Securities and Exchange Commission, or otherwise,
or except with respect to any matter which affects only one or more classes of
stock, in which case only the holders of shares of the class or classes
affected shall be entitled to vote.
Except as provided above, all provisions of the Articles
of Incorporation relating to stock of the corporation shall apply to shares of,
and to the holders of, all classes of stock.
(6) Notwithstanding any provisions of the Maryland General
Corporation Law requiring a greater proportion than a majority of the votes
of stockholders entitled to be cast in order to take or authorize any action,
any such action may be taken or authorized upon the concurrence of a majority
of the aggregate number of votes entitled to be cast thereon.
(7) The presence in person or by proxy of the holders of one-third
of the shares of stock of the corporation entitled to vote (without regard to
class) shall constitute a quorum at any meeting of the stockholders, except
with respect to any matter which, under applicable statutes or regulatory
requirements, requires approval by a separate vote of one or more classes of
stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class required to vote as a class on
the matter shall constitute a quorum.
(8) The corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in
fractional denominations shall be shares of stock having proportionately to
the respective fractions represented thereby all the rights of whole shares,
including, without limitation, the right to vote, the right to receive
dividends and distributions and the right to participate upon liquidation of
the corporation, but excluding the right to receive a stock certificate
evidencing a fractional share.
(9) No holder of any shares of any class of the corporation shall
be entitled as of right to subscribe for, purchase, or otherwise acquire any
shares of any class which the corporation proposes to issue, or any rights or
options which the corporation proposes to issue or to grant for the purchase
of shares of any class or for the purchase of any shares, bonds, securities,
or obligations of the corporation which are convertible into or exchangeable
for, or which carry any rights to subscribe for, purchase, or otherwise
acquire shares of any class of the corporation; and any and all of such
shares, bonds, securities or obligations of the corporation, whether now or
hereafter authorized or created, may be issued, or may be reissued or
transferred if the same have been reacquired and have treasury status, and
any and all of such rights and options may be granted by the Board of
Directors to such persons, firms, corporations and associations, and for such
lawful consideration, and on such terms, as the Board of Directors in its
discretion may determine, without first offering the same, or any thereof, to
any said holder.
SIXTH: (1) The number of directors of the corporation, until such
number shall be increased or decreased pursuant to the by-laws of the
corporation, is eight. The number of directors shall never be less than the
minimum number prescribed by the Maryland General Corporation Law.
(2) The names of the persons who shall act as directors of the
corporation until the next annual meeting and until their successors are
duly chosen and qualify are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
David W. Burke Joseph S. DiMartino
Diane Dunst Daniel Rose
Rosalind Gersten Jacobs Warren B. Rudman
Jay I. Meltzer Sander Vanocur
</TABLE>
(3) The power to make, alter, and repeal the by-laws of the
corporation shall be vested in the Board of Directors of the corporation.
Page A-3
(4) Any determination made in good faith by or pursuant to the
direction of the Board of Directors, as to: the amount of the assets, debts,
obligations, or liabilities of the corporation; the amount of any reserves or
charges set up and the propriety thereof; the time of or purpose for creating
such reserves or charges; the use, alteration or cancellation of any reserves
or charges (whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged);
the value of any investment or fair value of any other asset of the
corporation; the amount of net investment income; the number of shares of
stock outstanding; the estimated expense in connection with purchases or
redemptions of the corporation's stock; the ability to liquidate investments
in orderly fashion; the extent to which it is practicable to deliver a
cross-section of the portfolio of the corporation in payment for any such
shares, or as to any other matters relating to the issue, sale, purchase,
redemption and/or other acquisition or disposition of investments or shares
of the corporation, or the determination of the net asset value of shares of
the corporation shall be final and conclusive, and shall be binding upon the
corporation and all holders of its shares, past, present and future, and
shares of the corporation are issued and sold on the condition and
understanding that any and all such determinations shall be binding as
aforesaid.
SEVENTH: (1) To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland General
Corporation Law, no director or officer of the corporation shall have any
liability to the corporation or its stockholders for damages. This limitation
on liability applies to events occurring at the time a person serves as a
director or officer of the corporation whether or not such person is a
director or officer at the time of any proceeding in which liability is
asserted.
(2) The corporation shall indemnify and advance expenses to its
currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The corporation shall indemnify and advance expenses to its officers to
the same extent as its directors and to such further extent as is consistent
with law. The board of directors may, through a by-law, resolution or
agreement, make further provisions for indemnification of directors, officers
employees and agents to the fullest extent permitted by the Maryland General
Corporation Law.
(3) No provision of this Article SEVENTH shall be effective to
protect or purport to protect any director or officer of the corporation
against any liability to the corporation or its stockholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
(4) References to the Maryland General Corporation Law in this
Article SEVENTH are to the law as from time to time amended. No amendment to
the Articles of Incorporation of the corporation shall affect any right of
any person under this Article SEVENTH based on any event, omission or
proceeding prior to such amendment.
EIGHTH: Any holder of shares of stock of the corporation may
require the corporation to redeem and the corporation shall be obligated to
redeem at the option of such holder all or any part of the shares of the
corporation owned by said holder, at the redemption price, pursuant to the
method, upon the terms and subject to the conditions hereinafter set forth:
(a) The redemption price per share shall be the net asset
value per share determined at such time or times as the Board of Directors of
the corporation shall designate in accordance with any provision of the
Investment Company Act of 1940, any rule or regulation thereunder or exemption
or exception therefrom, or any rule or regulation made or adopted by any
securities association registered under the Securities Exchange Act of 1934.
(b) Net asset value per share of a class shall be determined
by dividing:
(i) The total value of the assets of such class or, in the
case of a class invested in a common investment portfolio with other classes,
such class's proportionate share of the total value of the assets of the common
investment portfolio, such value determined as provided in Subsection (c) below
less, to the extent determined by or pursuant to the direction of the Board of
Directors, all debts, obligations and liabilities of such class (which debts,
obligations and liabilities shall include, without limitation of the generality
of the foregoing, any and all debts, obligations, liabilities, or claims, of
any and every kind and nature, fixed, accrued and otherwise, including the
estimated accrued expenses of management and supervision, administration and
distribution and any reserves or charges for any or all of the foregoing,
whether for taxes, expenses or otherwise) but excluding such class' liability
upon its shares and its surplus, by
(ii) The total number of shares of such class outstanding.
The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such
other methods are deemed by it to be necessary in order to enable the
corporation to comply with, or are deemed by it to be desirable provided they
are not inconsistent with, any provision of the Investment Company Act of 1940
or any rule or regulation thereunder.
Page A-4
(c) In determining for the purposes of these Articles of
Incorporation the total value of the assets of the corporation at any time,
investments and any other assets of the corporation shall be valued in such
manner as may be determined from time to time by the Board of Directors.
(d) Payment of the redemption price by the corporation may
be made either in cash or in securities or other assets at the time owned by
the corporation or partly in cash and partly in securities or other assets at
the time owned by the corporation. The value of any part of such payment to be
made in securities or other assets of the corporation shall be the value
employed in determining the redemption price. Payment of the redemption price
shall be made on or before the seventh day following the day on which the
shares are properly presented for redemption hereunder, except that delivery
of any securities included in any such payment shall be made as promptly as
any necessary transfers on the books of the issuers whose securities are to be
delivered may be made.
The corporation, pursuant to resolution of the Board of Directors,
may deduct from the payment made for any shares redeemed a liquidating charge
not in excess of five percent (5%) of the redemption price of the shares so
redeemed, and the Board of Directors may alter or suspend any such
liquidating charge from time to time.
(e) Redemption of shares of stock by the corporation is
conditional upon the corporation having funds or property legally available
therefor.
(f) The corporation, either directly or through an agent,
may repurchase its shares, out of funds legally available therefor, upon such
terms and conditions and for such consideration as the Board of Directors
shall deem advisable, by agreement with the owner at a price not exceeding
the net asset value per share as determined by the corporation at such time
or times as the Board of Directors of the corporation shall designate, less
a liquidating charge not to exceed five percent (5%) of such net asset value,
if and as fixed by resolution of the Board of Directors of the corporation
from time to time, and take all other steps deemed necessary or advisable in
connection therewith.
(g) The corporation, pursuant to resolution of the Board of
Directors, may cause the redemption, upon the terms set forth in such
resolution and in subsections (a) through (e) and subsection (h) of this
Article EIGHTH, of shares of stock owned by stockholders whose shares have
an aggregate net asset value of less than such amount as may be fixed from
time to time by the Board of Directors. Notwithstanding any other provision
of this Article EIGHTH, if certificates representing such shares have been
issued, the redemption price need not be paid by the corporation until such
certificates are presented in proper form for transfer to the corporation or
the agent of the corporation appointed for such purpose; however, the
redemption shall be effective, in accordance with the resolution of the Board
of Directors, regardless of whether or not such presentation has been made.
(h) The obligations set forth in this Article EIGHTH may be
suspended or postponed as may be permissible under the Investment Company Act
of 1940 and the rules and regulations thereunder.
(i) The Board of Directors may establish other terms and
conditions and procedures for redemption, including requirements as to delivery
of certificates evidencing shares, if issued.
NINTH: All persons who shall acquire stock or other securities of
the corporation shall acquire the same subject to the provisions of the
corporation's Charter, as from time to time amended.
TENTH: From time to time any of the provisions of the Charter of
the corporation may be amended, altered or repealed, including amendments
which alter the contract rights of any class of stock outstanding, and other
provisions authorized by the Maryland General Corporation Law at the time in
force may be added or inserted in the manner and at the time prescribed by
said Law, and all rights at any time conferred upon the stockholders of the
corporation by its Charter are granted subject to the provisions of this
Article.
Page A-5
EXHIBIT B
PROPOSED INVESTMENT RESTRICTIONS OF THE FUND
AS AN OPEN-END INVESTMENT COMPANY
Investment restrictions numbered 1 through 7 are proposed to be
fundamental policies. Fundamental policies cannot be changed without approval
by the holders of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting shares. Investment restrictions numbered 8 through 13 are
proposed to be non-fundamental policies and may be changed by vote of a
majority of the Fund's Directors at any time. The Fund may not:
1. Invest in commodities, except that the Fund may purchase and
sell options, forward contracts, futures contracts, including those relating
to indices, and options on futures contracts or indices.
2. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but the Fund may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate or real estate investment
trusts.
3. Borrow money, except to the extent permitted under the Act,
which currently limits total borrowings to not more than 33-1/3% of the value
of the investment company's total assets. For purposes of this Investment
Restriction, the entry into options, forward contracts, futures contracts,
including those relating to indices, and options on futures contracts or
indices shall not constitute borrowing.
4. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities will be made according
to guidelines established by the Securities and Exchange Commission and the
Fund's Board of Directors.
5. Act as an underwriter of securities of other issuers, except to
the extent the Fund may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio securities.
6. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 1, 3, 10, and 11 may be deemed to give rise to a
senior security.
7. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, futures contracts,
including those relating to indices, and options on futures contracts or
indices.
8. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
9. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
10. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
11. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and Statement of Additional
Information.
12. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are illiquid,
if, in the aggregate, more than 15% of the value of the Fund's net assets
would be so invested.
13. Purchase securities of other investment companies, except to the
extent permitted under the Act.
If a percentage restriction is adhered to at the time of investment,
a later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
Page B-1
EXHIBIT C
CURRENT INVESTMENT RESTRICTIONS OF THE FUND
The following investment restrictions have been adopted by the Fund
as fundamental policies that cannot be changed without the affirmative vote
of the holders of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting shares. The Fund may not:
1. Borrow money, except (a) for temporary or emergency purposes or
for clearance of transactions in amounts not exceeding 10% of its total
assets (not including the amount borrowed); while such borrowings exceed 5%
of the Fund's assets, the Fund will not make any additional investments; (b)
in connection with repurchases of, or tenders for, the Fund's shares, but
only if after each such borrowing the ratio which the value of the total
assets of the Fund less all liabilities and indebtedness not represented by
senior securities bears to the aggregate amount of senior securities
representing indebtedness of the Fund is at least 300%; and (c) as otherwise
described in this Prospectus.
2. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with the writing of covered put and
call options and the purchase of securities on a forward commitment or
delayed-delivery basis and collateral arrangements with respect to currency
transactions, options, futures contracts, including those relating to
indexes, and options on futures contracts or indexes and collateral
arrangements with respect to initial or variation margin for futures contracts
3. Sell securities short or purchase securities on margin, except
for such short-term credits as are necessary for the clearance of
transactions, but the Fund may make margin deposits in connection with
transactions in currencies, options, futures and options on futures.
4. Underwrite any issue of securities, except to the extent that
the sale of portfolio securities by the Fund may be deemed to be an
underwriting.
5. Purchase, hold or deal in real estate or oil and gas interests,
but the Fund may purchase and sell securities that are secured by real estate
or interests therein and may purchase mortgage-related securities.
6. Invest in commodities, except that the Fund may purchase and
sell futures contracts, including those relating to indexes, and options on
futures contracts or indexes and commodities or currencies underlying or
related to any such futures contracts as described in this Prospectus.
7. Lend any funds or other assets except through the purchase of
all or a portion of an issue of securities or obligations of the type in
which it may invest; however, the Fund may lend its portfolio securities in
an amount not to exceed 30% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of Directors.
8. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act) except as permitted in Investment Restriction Nos. 1,
2, 3 and 6.
Page C-1
EXHIBIT D
MANAGEMENT AGREEMENT
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
June 14, 1995
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund") herewith confirms
its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting
the same in investments of the type and in accordance with the limitations
specified in its charter documents and in its Prospectus as from time to time
in effect, copies of which have been or will be submitted to you, and in such
manner and to such extent as from time to time may be approved by the Fund's
Board. The Fund desires to employ you to act as its investment adviser.
In this connection it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe
to be particularly fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any such
respect. We have discussed and concur in your employing on this basis S.A.M.
Finance, S.A. to act as the Fund's sub-investment adviser (the
"Sub-Investment Adviser") to provide day-to-day investment management of that
portion of the Fund's investments as you may determine from time to time. The
services of the Sub-Investment Adviser will be limited to those described in
the Sub-Investment Advisory Agreement between you and the Sub-Investment
Adviser, a copy of which is attached hereto as Exhibit A.
Subject to the supervision and approval of the Fund's Board, you
will provide investment management of the Fund's portfolio in accordance with
the Fund's investment objectives and policies as stated in its Prospectus as
from time to time in effect. In connection therewith, you will obtain and
provide investment research and will supervise the Fund's investments and
conduct, and, with respect to certain assets, supervise the Sub-Investment
Adviser's conducting of, a continuous program of investment, evaluation and,
if appropriate, sale and reinvestment of the Fund's assets. You will furnish
to the Fund such statistical information, with respect to the investments
which the Fund may hold or contemplate purchasing, as the Fund may reasonably
request. The Fund wishes to be informed of important developments materially
affecting its portfolio and shall expect you, on your own initiative, to
furnish to the Fund from time to time such information as you may believe
appropriate for this purpose.
In addition, you will supply office facilities (which may be in your
own offices), data processing services, clerical, accounting and bookkeeping
services, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; prepare reports
to the Fund's stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; calculate
the net asset value of the Fund's shares; and generally assist in all aspects
of the Fund's operations. You shall have the right, at your expense, to
engage other entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such entity enters
into an agreement with you in form and substance reasonably satisfactory to
the Fund. You agree to be liable for the acts or omissions of each such
entity to the same extent as if you had acted or failed to act under the
circumstances.
You shall exercise your best judgment in rendering the services to
be provided to the Fund hereunder and the Fund agrees as an inducement to
your undertaking the same that neither you nor the Sub-Investment Adviser
shall be liable hereunder for any error of judgment or mistake of law or for
any loss suffered by the Fund, provided that nothing herein shall be deemed
to protect or purport to protect you or the Sub-Investment Adviser against
any liability to the Fund or to its security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder, or to which the
Sub-Investment Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
sub-investment advisory duties under its Sub-Investment Advisory Agreement
with you or by reason of its reckless disregard of its obligations and
sub-investment advisory duties under said Agreement.
Page D-1
In consideration of services rendered pursuant to this Agreement,
the Fund will pay you on the first business day of each month a fee at the
annual rate of .70 of 1% of the value of the Fund's average weekly net
assets. Net asset value shall be computed on such days and at such time or
times as described in the Fund's then-current Prospectus. Upon any
termination of this Agreement before the end of any month, the fee for such
part of a month shall be pro-rated according to the proportion which such
period bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you, the value of the
Fund's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Fund's net assets.
You will bear all expenses in connection with the performance of
your services under this Agreement and will pay all fees of the
Sub-Investment Adviser in connection with its duties in respect of the Fund.
All other expenses to be incurred in the operation of the Fund (other than
those borne by the Sub-Investment Adviser) will be borne by the Fund, except
to the extent specifically assumed by you. The expenses to be borne by the
Fund include, without limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, and other expenses in any
way related to the execution, recording and settlement of portfolio
securities transactions, fees of Board members who are not officers,
directors, partners or employees or holders of 5% or more of the outstanding
voting securities of you or the Sub-Investment Adviser or any affiliate of
you or the Sub-Investment Adviser, Securities and Exchange Commission fees
and state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend paying agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, expenses of
listing, and maintaining the listing of, the Fund's common stock on any stock
exchange, costs of independent pricing services, costs of maintaining the
Fund's existence, expenses of reacquiring shares, expenses in connection with
the Fund's Dividend Reinvestment and Cash Purchase Plan, costs of maintaining
the required books and accounts (including the costs of calculating the net
asset value of the Fund's shares), costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing, printing and mailing share certificates, proxy statements and
prospectuses, costs of stockholders' reports and meetings, and any
extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement, but excluding interest, taxes, brokerage
and, with the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense to the extent
required by state law. Your obligation pursuant hereto will be limited to the
amount of your fees hereunder. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be, on
a monthly basis.
The Fund understands that you and the Sub-Investment Adviser now
act, and that from time to time hereafter you or the Sub-Investment Adviser
may act, as investment adviser to one or more other investment companies and
fiduciary or other managed accounts, and the Fund has no objection to your
and the Sub-Investment Adviser's so acting, provided that when the purchase
or sale of securities of the same issuer is suitable for the investment
objectives of two or more such companies or accounts which have available
funds for investment, the available securities will be allocated in a manner
believed to be equitable to each company or account. It is recognized that in
some cases this procedure may adversely affect the price paid or received by
the Fund or the size of the position obtainable for or disposed of by the
Fund.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict your right or the right of any of your affiliates to engage in and
devote time and attention to other businesses or to render services of
whatever kind or nature.
Neither you nor the Sub-Investment Adviser shall be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except for a
loss resulting from willful misfeasance, bad faith or gross negligence on
your part in the performance of your duties or from reckless disregard by you
of your obligations and duties under this Agreement and, in the case of the
Sub-Investment Adviser, for a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under its
Sub-Investment Advisory Agreement. Any person, even though also your officer,
director, partner, employee or agent, who may be or become an officer, Board
member, employee or agent of the Fund, shall be deemed, when rendering
services to the Fund or acting on any business of the Fund, to be rendering
such services to or acting solely for the Fund and not as your officer,
director, partner, employee or agent or one under your control or direction
even though paid by you.
Page D-2
This Agreement shall continue until June 1, 1996, and thereafter
shall continue automatically for successive annual periods ending on June 1st
of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved by
a majority of the Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of the Fund's shares or, upon not
less than 90 days' notice, by you. This Agreement also will terminate
automatically in the event of its assignment (as defined in said Act).
The Fund is agreeing to the provisions of this Agreement that limit
the Sub-Investment Adviser's liability and other provisions relating to the
Sub-Investment Adviser so as to induce the Sub-Investment Adviser to enter
into its Sub-Investment Advisory Agreement with you and to perform its
obligations thereunder. The Sub-Investment Adviser is expressly made a third
party beneficiary of this Agreement, solely in connection with the provisions
that limit the Sub-Investment Adviser's liability, with rights as respects
the Fund to the same extent as if it had been a party hereto.
The Fund recognizes that from time to time your directors, officers
and employees may serve as directors, trustees, partners, officers and
employees of other corporations, business trusts, partnerships or other
entities (including other investment companies) and that such other entities
may include the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory or other
agreements with such other entities. If you cease to act as the Fund's
investment adviser, the Fund agrees that, at your request, the Fund will take
all necessary action to change the name of the Fund to a name not including
"Dreyfus" in any form or combination of words.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS STRATEGIC GOVERNMENTS
INCOME, INC.
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_________________________
Page D-3
EXHIBIT A
SUB-INVESTMENT ADVISORY AGREEMENT
THE DREYFUS CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166
June 14, 1995
S.A.M. Finance, S.A.
115 Avenue des Champs-Elysees
Paris, France 75008
Dear Sirs:
As you are aware, Dreyfus Strategic Governments Income, Inc. (the
"Fund") desires to employ its capital by investing and reinvesting the same
in investments of the type and in accordance with the limitations specified
in its charter documents and in its Prospectus as from time to time in
effect, copies of which have been or will be submitted to you, and in such
manner and to such extent as from time to time may be approved by the Fund's
Board. The Fund currently employs The Dreyfus Corporation (the "Adviser") to
act as its investment adviser pursuant to a written agreement (the
"Management Agreement"), a copy of which has been furnished to you. The
Adviser desires to employ you to act as the Fund's sub-investment adviser.
In this connection, it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe
to be particularly fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any such
respect.
Subject to the supervision and approval of the Adviser, you will
provide investment management of that portion of the Fund's portfolio as the
Adviser determines from time to time (the "sub-advised assets"). Your
advisory duties and responsibilities hereunder shall pertain only to the
sub-advised assets. You will perform such activity in accordance with the
Fund's investment objectives and policies as stated in the Fund's Prospectus
as from time to time in effect. In connection therewith, you will supervise
the Fund's investment in the sub-advised assets and conduct a continuous
program of investment, evaluation and, if appropriate, sale and reinvestment
of such assets. You will furnish to the Adviser or the Fund such statistical
information, with respect to the sub-advised assets, as the Adviser or the
Fund may reasonably request. The Fund and the Adviser wish to be informed of
important developments materially affecting the Fund's portfolio and shall
expect you, on your own initiative, to furnish to the Fund or the Adviser
from time to time such information as you may believe appropriate for this
purpose. You agree to notify the Adviser and the Fund of any change in your
membership within a reasonable time after such change.
You shall exercise your best judgment in rendering the services to
be provided hereunder, and the Adviser agrees as an inducement to your
undertaking the same that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by the Fund or the
Adviser, provided that nothing herein shall be deemed to protect or purport
to protect you against any liability to the Adviser, the Fund or the Fund's
security holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your
investment advisory duties hereunder, or by reason of your reckless disregard
of your obligations and investment advisory duties hereunder.
In consideration of services rendered pursuant to this Agreement,
the Adviser will pay you, on the first business day of each month, out of the
management fee it receives and only to the extent thereof, a fee at the
annual rate of .20 of 1% of the Fund's average weekly net sub-advised assets
for the preceding month.
Net asset value shall be computed on such days and at such time or
times as described in the Fund's then-current Prospectus. The fee for the
period from the date hereof to the end of the month hereof shall be pro-rated
according to the proportion which such period bears to the full monthly
period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable within 10 business days of the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of the
Fund's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Fund's net assets.
Page D-4
You will bear all expenses in connection with the performance of
your services under this Agreement. All other expenses to be incurred in the
operation of the Fund (other than those borne by the Adviser) will be borne
by the Fund, except to the extent specifically assumed by you. The expenses
to be borne by the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and commissions,
if any, and other expenses in any way related to the execution, recording and
settlement of portfolio securities transactions, fees of Board members who
are not officers, partners, directors, employees or holders of 5% or more of
the outstanding voting securities of you or the Adviser or any affiliate of
you or the Adviser, Securities and Exchange Commission fees and state Blue
Sky qualification fees, advisory fees, charges of custodians, transfer and
dividend paying agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, expenses of listing,
and maintaining the listing of, the Fund's common stock on any stock
exchange, costs of independent pricing services, costs of maintaining the
Fund's existence, expenses of reacquiring shares, expenses in connection with
the Fund's Dividend Reinvestment and Cash Purchase Plan, costs of maintaining
the required books and accounts (including the costs of calculating the net
asset value of the Fund's shares), costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing, printing and mailing share certificates, proxy statements and
prospectuses, costs of stockholders' reports and meetings, and any
extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to the Fund's Management Agreement, but excluding interest,
taxes, brokerage and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the expense limitation
of any state having jurisdiction over the Fund, the Adviser may deduct from
the fees to be paid hereunder, or you will bear such excess expense on a
pro-rata basis with the Adviser, in the proportion ("Your Proportion") that
the sub-advisory fee payable to you pursuant to this Agreement bears to the
fee payable to the Adviser pursuant to the Management Agreement, to the
extent required by state law. If the Adviser waives, for any other reason, or
fails to receive any portion of its fees under the Management Agreement, your
fee under this Agreement shall be reduced by Your Proportion of the amount
which the Adviser shall have waived or not received. The Adviser agrees to
notify you in advance of any such waiver. Your obligation pursuant hereto
will be limited to the amount of your fees hereunder. Any such deduction or
payment, if any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.
The Adviser understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Adviser has no
objection to your so acting, provided that when the purchase or sale of
securities of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a manner
believed by you to be equitable to each company or account. It is recognized
that in some cases this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for or disposed
of by the Fund.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such services and nothing contained herein shall be deemed to limit
or restrict your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature.
You shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund or the Adviser in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
your officer, director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of the Fund, to be
rendering such services to or acting solely for the Fund and not as your
officer, director, partner, employee, or agent or one under your control or
direction even though paid by you.
This Agreement shall continue until June 1, 1996, and thereafter
shall continue automatically for successive annual periods ending on June 1st
of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding
voting securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty (i) by the Adviser
upon
Page D-5
60 days' notice to you, (ii) by the Fund's Board or by vote of the
holders of a majority of the Fund's shares upon 60 days' notice to you, or
(iii) by you upon not less than 90 days' notice to the Fund and the Adviser.
This Agreement also will terminate automatically in the event of its
assignment (as defined in said Act). In addition, notwithstanding anything
herein to the contrary, if the Management Agreement terminates for any
reason, this Agreement shall terminate effective upon the date the Management
Agreement terminates.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE DREYFUS CORPORATION
By:_________________________
Accepted:
S.A.M. FINANCE, S.A.
By:__________________________
Page D-6
EXHIBIT E
SUB-INVESTMENT ADVISORY AGREEMENT
THE DREYFUS CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166
June 14, 1995
S.A.M. Finance, S.A.
115 Avenue des Champs-Elysees
Paris, France 75008
Dear Sirs:
As you are aware, Dreyfus Strategic Governments Income, Inc. (the
"Fund") desires to employ its capital by investing and reinvesting the same
in investments of the type and in accordance with the limitations specified
in its charter documents and in its Prospectus as from time to time in
effect, copies of which have been or will be submitted to you, and in such
manner and to such extent as from time to time may be approved by the Fund's
Board. The Fund currently employs The Dreyfus Corporation (the "Adviser") to
act as its investment adviser pursuant to a written agreement (the
"Management Agreement"), a copy of which has been furnished to you. The
Adviser desires to employ you to act as the Fund's sub-investment adviser.
In this connection, it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe
to be particularly fitted to assist you in the performance of this Agreement.
Such person or persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons shall be paid by
you and no obligation may be incurred on the Fund's behalf in any such
respect.
Subject to the supervision and approval of the Adviser, you will
provide investment management of that portion of the Fund's portfolio as the
Adviser determines from time to time (the "sub-advised assets"). Your
advisory duties and responsibilities hereunder shall pertain only to the
sub-advised assets. You will perform such activity in accordance with the
Fund's investment objectives and policies as stated in the Fund's Prospectus
as from time to time in effect. In connection therewith, you will supervise
the Fund's investment in the sub-advised assets and conduct a continuous
program of investment, evaluation and, if appropriate, sale and reinvestment
of such assets. You will furnish to the Adviser or the Fund such statistical
information, with respect to the sub-advised assets, as the Adviser or the
Fund may reasonably request. The Fund and the Adviser wish to be informed of
important developments materially affecting the Fund's portfolio and shall
expect you, on your own initiative, to furnish to the Fund or the Adviser
from time to time such information as you may believe appropriate for this
purpose. You agree to notify the Adviser and the Fund of any change in your
membership within a reasonable time after such change.
You shall exercise your best judgment in rendering the services to
be provided hereunder, and the Adviser agrees as an inducement to your
undertaking the same that you shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by the Fund or the
Adviser, provided that nothing herein shall be deemed to protect or purport
to protect you against any liability to the Adviser, the Fund or the Fund's
security holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your
investment advisory duties hereunder, or by reason of your reckless disregard
of your obligations and investment advisory duties hereunder.
In consideration of services rendered pursuant to this Agreement,
the Adviser will pay you, on the first business day of each month, out of the
management fee it receives and only to the extent thereof, a fee at the
annual rate of .20 of 1% of the Fund's average weekly net sub-advised assets
for the preceding month.
Net asset value shall be computed on such days and at such time or
times as described in the Fund's then-current Prospectus. The fee for the
period from the date hereof to the end of the month hereof shall be pro-rated
according to the proportion which such period bears to the full monthly
period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable within 10 business days of the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of the
Fund's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Fund's net assets.
Page E-1
You will bear all expenses in connection with the performance of
your services under this Agreement. All other expenses to be incurred in the
operation of the Fund (other than those borne by the Adviser) will be borne
by the Fund, except to the extent specifically assumed by you. The expenses
to be borne by the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and commissions,
if any, and other expenses in any way related to the execution, recording and
settlement of portfolio securities transactions, fees of Board members who
are not officers, partners, directors, employees or holders of 5% or more of
the outstanding voting securities of you or the Adviser or any affiliate of
you or the Adviser, Securities and Exchange Commission fees and state Blue
Sky qualification fees, advisory fees, charges of custodians, transfer and
dividend paying agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, expenses of listing,
and maintaining the listing of, the Fund's common stock on any stock
exchange, costs of independent pricing services, costs of maintaining the
Fund's existence, expenses of reacquiring shares, expenses in connection with
the Fund's Dividend Reinvestment and Cash Purchase Plan, costs of maintaining
the required books and accounts (including the costs of calculating the net
asset value of the Fund's shares), costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing, printing and mailing share certificates, proxy statements and
prospectuses, costs of stockholders' reports and meetings, and any
extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to the Fund's Management Agreement, but excluding interest,
taxes, brokerage and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the expense limitation
of any state having jurisdiction over the Fund, the Adviser may deduct from
the fees to be paid hereunder, or you will bear such excess expense on a
pro-rata basis with the Adviser, in the proportion ("Your Proportion") that
the sub-advisory fee payable to you pursuant to this Agreement bears to the
fee payable to the Adviser pursuant to the Management Agreement, to the
extent required by state law. If the Adviser waives, for any other reason, or
fails to receive any portion of its fees under the Management Agreement, your
fee under this Agreement shall be reduced by Your Proportion of the amount
which the Adviser shall have waived or not received. The Adviser agrees to
notify you in advance of any such waiver. Your obligation pursuant hereto
will be limited to the amount of your fees hereunder. Any such deduction or
payment, if any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.
The Adviser understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Adviser has no
objection to your so acting, provided that when the purchase or sale of
securities of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by you which have available funds
for investment, the available securities will be allocated in a manner
believed by you to be equitable to each company or account. It is recognized
that in some cases this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for or disposed
of by the Fund.
In addition, it is understood that the persons employed by you to
assist in the performance of your duties hereunder will not devote their full
time to such services and nothing contained herein shall be deemed to limit
or restrict your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature.
You shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund or the Adviser in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
your officer, director, partner, employee or agent, who may be or become an
officer, Board member, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of the Fund, to be
rendering such services to or acting solely for the Fund and not as your
officer, director, partner, employee, or agent or one under your control or
direction even though paid by you.
This Agreement shall continue until June 1, 1996, and thereafter
shall continue automatically for successive annual periods ending on June 1st
of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of the Fund's outstanding
voting securities, provided that in either event its continuance also is
approved by a majority of the Fund's Board members who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable without penalty (i) by the Adviser
upon
Page E-2
60 days' notice to you, (ii) by the Fund's Board or by vote of the
holders of a majority of the Fund's shares upon 60 days' notice to you, or
(iii) by you upon not less than 90 days' notice to the Fund and the Adviser.
This Agreement also will terminate automatically in the event of its
assignment (as defined in said Act). In addition, notwithstanding anything
herein to the contrary, if the Management Agreement terminates for any
reason, this Agreement shall terminate effective upon the date the Management
Agreement terminates.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE DREYFUS CORPORATION
By:_________________________
Accepted:
S.A.M. FINANCE, S.A.
By:__________________________
Page E-3
IMPORTANT
Please Act Promptly.
Sign, Date and Mail your Proxy Card(s) today.
No matter how many shares you own, your vote is important. Voting can also
help your Fund save money. To hold the meeting, a quorum must be represented.
Voting today can save you Fund the expense of another solicitation for proxies
required to achieve a quorum.
For Dreyfus Shareholders with Multiple Accounts:
For your convenience, and to reduce the Fund's mailing expenses, we have
enclosed one proxy card for each of the Dreyfus accounts in your household
that have the same taxpayer identification (i.e., social security) number,
the same zip code and the same type of account. The proxy cards for accounts
with different taxpayer identification numbers have been sent under separate
cover.
These are not duplicates; you should sign and return each proxy card in order
for your votes to be counted.
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
The undersigned stockholder of Dreyfus Strategic Governments Income, Inc.
(the "Fund") hereby appoints Robert R. Mullery and Steven F. Newman, and
each of them, the attorneys and proxies of the undersigned, with full
power of substitution, to vote, as indicated herein, all of the shares of
common stock of the Fund standing in the name of the undersigned at the
close of business on June 23, 1995, at the Annual Meeting of Stockholders
to be held at the offices of The Dreyfus Corporation, 200 Park Avenue, 7th
Floor West, New York, New York at 10:30 a.m. on Friday, August 18, 1995, and
at any and all adjournments thereof, with all of the powers the undersigned
would possess if then and there personally present and especially (but without
limiting the general authorization and power hereby given) to vote as
indicated on the proposals, as more fully described in the Proxy Statement
for the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND, IN THE CASE OF
PROPOSALS 2 AND 4, WILL BE VOTED FOR SUCH PROPOSALS AND, IN THE CASE OF
PROPOSAL 3, FOR THE NOMINEES LISTED BELOW, UNLESS OTHERWISE INDICATED.
THE BOARD DOES NOT FAVOR PROPOSAL 1.
1. To approve a proposal to convert the Fund from a closed-end
investment company to an open-end investment company, which includes
changing the Fund's subclassification from a closed-end investment company
to an open-end investment company, amending and restating the Fund's
Articles of Incorporation, and changing certain fundamental investment
policies of the Fund.
/ / FOR / / AGAINST / / ABSTAIN
2. To approve a new Management Agreement between the Fund and The
Dreyfus Corporation and a Sub-Investment Advisory Agreement between The
Dreyfus Corporation and S.A.M. Finance, S.A.
/ / FOR / / AGAINST / / ABSTAIN
FOR PROPOSAL 3, STOCKHOLDERS SHOULD VOTE IN RESPECT OF BOTH A. AND B. BELOW
3. To elect Directors as follows:
A. If Proposal 1 is not approved, to elect one Class I Director and
two Class III Directors
FOR all nominees listed to the right.
WITHHOLD AUTHORITY to vote for all nominees listed to the right.
CLASS I -- Joseph S. DiMartino
CLASS III -- Diane Dunst, Rosalind Gersten Jacobs
WITHHOLD AUTHORITY only for those nominee(s) whose name(s) I
have struck a line through above.
B. If Proposal 1 is approved, to elect eight Directors
FOR all nominees listed to the right.
WITHHOLD AUTHORITY to vote for all nominees listed to the right.
David W. Burke, Diane Dunst, Joseph S. DiMartino, Rosalind
Gersten Jacobs, Jay I. Meltzer, Daniel Rose, Warren B. Rudman,
Sander Vanocur.
WITHHOLD AUTHORITY only for those nominee(s) whose name(s) I
have struck a line through above.
4. To ratify the selection of Ernst & Young LLP as independent auditors
of the Fund.
/ / FOR / / AGAINST / / ABSTAIN
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting, or any
adjournment(s) or postponement(s) thereof.
Signature(s) should be exactly as name or names
appearing on this proxy. If shares are held jointly, each holder should
sign. If signing is by attorney, executor, administrator, trustee or
guardian, please give full title.
Dated: , 1995
Signature(s)
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
"PLEASE MARK INSIDE BLUE BOXES
SO THAT DATA PROCESSING EQUIPMENT
WILL RECORD YOUR VOTES"
