Preliminary Copy
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
Notice of Annual Meeting of Stockholders
To the Stockholders of
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, 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 of Directors
John E. Pelletier
Secretary
New York, New York
___________, 1995
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
MAJORITY OF ITS SHARES ELIGIBLE TO VOTE 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.
<PAGE>
Preliminary Copy
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
PROXY STATEMENT
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, 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 canceling 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.
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 presents the possibility that the
functioning of the Fund's investment operations and its
investment performance, as described under "Certain Effects of
Conversion on the Fund--Portfolio Management" below, could be
adversely affected. The Board believes that conversion also
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.
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 since inception at an average discount of -
0.73%. See "Differences Between Open-End and Closed-End
Investment Companies--Redeemability of Shares; Elimination of
Discount and Premium" below. The Fund's average annual
premium/discount by year is as follows:
PREMIUM/
YEAR 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 9) -9.56%]
[On June 9, 1995, the closing price of a Fund share on the NYSE
was 9.33% below its net asset value.]
At this time, the Board does not believe that
eliminating the possibility of a discount justifies changes to
the Fund's portfolio management and operations that might be
required, the risk of reduced size and the potential adverse
effect on its investment performance that conversion would
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.
Differences Between Open-End and Closed-End Investment Companies
Fluctuation of Capital. The Fund is currently
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.
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-
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" of 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 Exchange 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 $39,000 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.
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.
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 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. Since 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
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
$_________. This cost of conversion is not expected to increase
materially the Fund's current expense ratio, [except 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.
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.
New 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.
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
attracting 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, at differing
rates, 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.]
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%. 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 in an amount up to 15% of the
value of its total assets. Leveraging may exaggerate the effect
on net asset value of any increase or decrease in the market
value of the Fund's portfolio.
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 an amount up to 15% of the value of its net
assets.
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 Board has approved, subject to stockholder
approval of Proposal 1, a Distribution Agreement between the
Fund and Premier Mutual Fund Services, Inc. (the "Distributor"),
the principal underwriter for open-end investment companies in
the Dreyfus Family of Funds. Pursuant to the Distribution
Agreement, Fund shares will 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.
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 March 31, 1995, Dreyfus
managed or administered approximately $72 billion in assets for
more than 1.9 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 Corporation 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 following persons are officers and/or
directors of Dreyfus: Howard Stein, Chairman of the Board and
Chief Executive Officer; W. Keith Smith, Vice-Chairman of the
Board; Robert E. Riley, President, Chief Operating Officer and a
director; Lawrence S. Kash, Vice Chairman--Distribution and a
director; Philip L. Toia, Vice Chairman--Operations and
Administration; Paul H. Snyder, Vice President and Chief
Financial Officer; Daniel C. Maclean, Vice President and General
Counsel; Barbara E. Casey, Vice President--Retirement Services;
Henry D. Gottmann, Vice President--Retail; Elie M. Genadry, Vice
President--Institutional Sales; Mark N. Jacobs, Vice President--
Fund Legal & Compliance and Secretary; Jeffrey N. Nachman, Vice
President
- --Mutual Fund Accounting; Diane M. Coffey, Vice President--
Corporate Communications; William F. Glavin, Jr., Vice
President--Product Management; Andrew S. Wasser, Vice President-
- -Information Services; Katherine C. Wickham, Vice President--
Human Resources; Maurice Bendrihem, Controller; Elvira Oslapas,
Assistant Secretary; and Mandell L. Berman, Frank V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
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 relating to foreign securities
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 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 no change in
the management fee was appropriate. 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.
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.
If Proposal 1 is approved by stockholders,
however, the Fund's Board would be declassified. Accordingly,
it is 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, subject to approval of Proposal 1. 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.
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.
INFORMATION REGARDING DIRECTORS
<TABLE>
<CAPTION>
Name, Principal Occupation and Business Director Year Class
Experience for Past Five Years Age Since Term Expires
<S> <C> <C> <C>
CLASS I: 65 1993 1996
WARREN B. RUDMAN
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. His address is
c/o Paul, Weiss, Rifkind, Wharton &
Garrison, 1615 L. Street, N.W.,
Washington, D.C. 20036.
SANDER VANOCUR 65 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. His address is
2928 P Street, N.W., Washington,
D.C. 20007.
JOSEPH S. DiMARTINO 51 1995 1996
Since January 1995, Chairman of the
Board of Directors 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 Bank
Corporation. Mr. DiMartino is a
director and former Treasurer of
the Muscular Dystrophy Association;
a trustee of Bucknell University;
Chairman of the Board of Directors
of Noel Group, Inc.; a director of
HealthPlan Services Corporation; a
director of Belding Heminway
Company, Inc.; a director of Curtis
Industries, Inc.; a director of
Simmons Outdoor Corporation; and a
director of Staffing Resources,
Inc. His address is 200 Park
Avenue, New York, New York 10166.
* "Interested person" as defined in the 1940 Act.
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. His address is 200
Park Avenue, New York, New York
10166.
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.
His address is 903 Park Avenue, New
York, New York 10021.
DANIEL ROSE
President and Chief Executive 65 1992 1997
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. His address is c/o Rose
Associates, Inc., 380 Madison
Avenue, New York, New York 10017.
CLASS III:
DIANE DUNST
Since January 1992, President of 55 1990 1995
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.
Her address is 1070 Park Avenue,
New York, New York 10128.
ROSALIND GERSTEN JACOBS
Director of Merchandise and 70 1994 1995
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. Her address is c/o
Corporate Property Investors, 305
East 47th Street, New York, New
York 10017.
</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. Directors and officers of the Fund, in
the aggregate, as of May 31, 1995, 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 will be
held by Mr. DiMartino, if elected, 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.
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 parentheses next to
each Nominee's total compensation) for the year ended December
31, 1994, was as follows:
<TABLE>
<CAPTION>
(3)
Pension or (4) (5)
retirement Estimated Total
(2) benefits annual Compensation
Aggregate accrued as benefits from Fund and
compensation part of from the fund complex
(1) from the the Fund's Fund upon paid to Board
Name of Board Member Fund* expenses retirement 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.
The following sets forth information relevant to the
executive officers of the Fund:
<TABLE>
<CAPTION>
Name and Position with Principal Occupatin and Business
Fund Age Experience For Past Five Years
<S> <C> <C>
MARIE E. CONNOLLY 37 President and Chief Operating
President and Officer of the Distributor, and
Treasurer 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 31 Senior Vice President and General
Secretary 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 Ropes & Gray,
and prior to August 1990, he was
employed as an Associate at
Sidley & Austin.
FREDERICK C. DEY 33 Senior Vice President of the
Vice President and Distributor and an officer of
Assistant Treasurer 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 30 Associate General Counsel of the
Vice President and Distributor and an officer of
Assistant Secretary 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.
JOSEPH S. TOWER, III 33 Senior Vice President, Treasurer
Assistant 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 59 Vice President of the Distributor
Assistant Treasurer 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 28 Assistant Vice President of the
Assistant Secretary 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 50 Assistant Vice President of the
Assistant Secretary 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 on 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.
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 of
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.
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
represented thereby will be considered to be present at the
Meeting for purposes of determining the existence of a quorum
for the transaction of business. Abstentions, 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 such adjournments, 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 _____________________
_______________________________________, 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: ________________, 1995
<PAGE>
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 other-
wise, 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.
FOURTH: The post office address of the
principal office of the corporation within the State of Mary-
land, 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 re-
classify, 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.
(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 Mary-
land 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:
David W. Burke Joseph S.
DiMartino
Diane Dunst Daniel Rose
Rosalind Gersten Jacobs Warren B. Rudman
Jay I. Meltzer Sander Vanocur
(3) The power to make, alter, and repeal the
by-laws of the corporation shall be vested in the Board of Di-
rectors of the corporation.
(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 Ex-
change 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 Direc-
tors, 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.
(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>
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>
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>
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.
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:
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.
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 Agree-
ment 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>
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 in-
vesting 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
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. 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:
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 Commis-
sion 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 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
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>
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 in-
vesting 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
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. 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:
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 Commis-
sion 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 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
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>
Preliminary Copy
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,
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 proposal, 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.
Please mark boxes in blue or black ink.
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
3. To elect Directors as follows:
(NOTE: Stockholders should vote in respect of both a. and b.
below)
a. If Proposal 1 is not approved, to elect one Class I
Director and two Class III Directors
[ ] FOR all nominees listed below.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below.
[ ] WITHHOLD AUTHORITY only for those nominee(s) whose
name(s) I have written below
CLASS I -- Joseph S. DiMartino
CLASS III -- Diane Dunst, Rosalind Gersten Jacobs
b. If Proposal 1 is approved, to elect eight Directors
[ ] FOR all nominees listed below.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below.
[ ] WITHHOLD AUTHORITY only for those nominee(s) whose
name(s) I have written below
David W. Burke, Diane Dunst, Joseph S. DiMartino,
Rosalind Gersten Jacobs, Jay I. Meltzer, Daniel
Rose, Warren B. Rudman, Sander Vanocur.
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
