SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant /*/
Filed by a party other than the registrant / /
Check the appropriate box:
/*/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Dreyfus Strategic Governments Income, Inc.
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(Name of Registrant as Specified in Its Charter)
Dreyfus Strategic Governments Income, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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* Set forth the amount on which the filing fee is calculated and state
how it was determined.
Notes:
PRELIMINARY COPY
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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To the Stockholders:
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
The Annual Meeting of Stockholders of Dreyfus Strategic Governments Income,
Inc. (the "Fund" ) will be held at the offices of The Dreyfus Corporation, 200
Park Avenue, 7th Floor West, New York, New York, on Friday, June 11, 1999 at 10:
00 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 elect Directors as follows:
a. If Proposal 1 is not approved, to elect three Class I Directors to
serve for a specified term and until their successors are duly
elected and qualified.
b. If Proposal 1 is approved as described in the Proxy Statement, to elect
eight Directors to hold office until their successors are duly
elected and qualified.
3. To ratify the selection of Ernst & Young LLP as independent auditors of
the Fund.
4. To consider a Stockholder Proposal to repurchase Fund shares.
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 March 26, 1999 will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board
Michael S. Petrucelli
Assistant Secretary
New York, New York
[April] __, 1999
WE NEED YOUR PROXY VOTE IMMEDIATELY
A STOCKHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY LAW,
THE ANNUAL MEETING OF STOCKHOLDERS OF THE FUND WILL HAVE TO BE ADJOURNED
WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS REPRESENTED. IN THAT
EVENT, THE FUND, AT STOCKHOLDERS' EXPENSE, WOULD CONTINUE TO SOLICIT VOTES IN
AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE
THE FUND TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD
IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.
<PAGE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, JUNE 11, 1999
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, June 11, 1999 at 10:00 a.m. at the offices of
The Dreyfus Corporation, 200 Park Avenue, 7th Floor West, New York, New York,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. Stockholders of record at the close of business on March 26, 1999
are entitled to receive notice of and to vote at the Meeting. Stockholders are
entitled to one vote for each Fund share held and fractional votes for each
fractional Fund share held. Shares represented by executed and unrevoked proxies
will be voted in accordance with the specifications made thereon. If the
enclosed form of proxy is executed and returned, it nevertheless may be revoked
by giving another proxy or by letter or telegram directed to the Fund, which
must indicate the stockholder's name. To be effective, such revocation must be
received before the Meeting. In addition, any stockholder who attends the
Meeting in person may vote by ballot at the Meeting, thereby cancelling any
proxy previously given. As of [ ], 1999, ________ 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 April 5, 1999. 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 __, 1998 through December __, 1998, the
Fund' s shares traded on the NYSE at an average discount from net asset value of
[10.19]%, determined in accordance with the provisions of the Fund's Prospectus.
As a result, the Fund is required to submit Proposal 1 for stockholders'
consideration at the Meeting.
<PAGE>
CONSIDERATION AND RECOMMENDATION OF BOARD OF DIRECTORS
At a meeting held on February 3, 1999, the Fund's Board of Directors
reviewed detailed information concerning the legal and operational differences
between closed-end and open-end investment companies, the Fund's performance to
date as a closed-end fund, the historical relationship between the market price
of its shares and their net asset value and the possible effects of conversion
on the Fund. The Board also considered attempts by the Fund to reduce the market
value discount from net asset value by repurchasing Fund shares in the open
market. AT THAT MEETING, ALTHOUGH IT RECOGNIZED THAT THE REQUIRED SUBMISSION
MUST BE MADE, THE BOARD DETERMINED NOT TO SUPPORT PROPOSAL 1.
The Board believes that conversion to an open-end investment company could
expose the Fund to the risk of a substantial reduction in its size and a
possible loss of economies of scale and an increase in the Fund's expenses as a
percentage of net asset value, as described under "Certain Effects of Conversion
on the Fund--Potential Increase in Expense Ratio and Decrease in Size" below.
The Board believes that conversion also presents the possibility that the
functioning of the Fund's portfolio management and its investment performance,
as described under "Certain Effects of Conversion on the Fund--Portfolio
Management" below, could be adversely affected. ACCORDINGLY, THE BOARD DOES NOT
BELIEVE THAT CONVERSION OF THE FUND TO AN OPEN-END INVESTMENT COMPANY IS IN THE
BEST INTERESTS OF THE FUND AND ITS STOCKHOLDERS.
While conversion would eliminate the possibility of the Fund's shares ever
trading at a discount from net asset value, the Board took note of the fact
that, from inception through December 31, 1998, 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 1998, the shares have traded from
inception through [ ], 1999 at an average discount of ___%. See
" Differences Between Open-End and Closed-End Investment Companies--Redeemable
Shares; Elimination of Discount and Premium" below. The Fund's average annual
premium/discount by year is as follows:
Year Premium/Discount
1988 -1.46%
1989 -2.48%
1990 -5.38%
1991 1.99%
1992 4.85%
1993 3.38%
1994 -6.55%
1995 -11.22%
1996 -12.85%
1997 -12.24%
1998 [10.19]%
1999 thru [ ]. _____%
On [ ], 1999, the closing price of a Fund share on the NYSE was _____%
below its net asset value.
At this time, the Board does not believe that eliminating the possibility of
a discount justifies the risk of reduced size, changes to the Fund's portfolio
management that might be required and the potential adverse effect on its
investment performance that conversion could entail.
If Proposal 1 is not approved by stockholders, the Fund will remain a
closed-end investment company and the Board of Directors will consider whether
any other actions should be taken with respect to the market discount from net
asset value at which the Fund's shares trade.
As described below, if stockholders vote to convert the Fund to an open-end
investment company, the Board will cause the Fund to impose a redemption fee for
a period of 12 months from the conversion date of 1% of the amount redeemed.
<PAGE 2>
DIFFERENCES BETWEEN OPEN-END AND CLOSED-END INVESTMENT COMPANIES
FLUCTUATION OF CAPITAL. The Fund currently is registered as a "closed-end"
investment company under the Investment Company Act of 1940, as amended (the "
1940 Act" ). Closed-end investment companies generally neither redeem their
outstanding stock nor engage in the continuous sale of new securities, and thus
operate with a relatively fixed capitalization. The stock of closed-end
investment companies ordinarily is bought and sold on national securities
exchanges; the Fund's shares since inception have been traded on the NYSE.
In contrast, open-end investment companies, commonly referred to as "mutual
funds," issue redeemable securities. The holders of redeemable securities have
the right to surrender such securities to the mutual fund and obtain in return
their proportionate share of the value of the mutual fund's net assets at the
time of redemption (less any redemption fee charged by the fund or contingent
deferred sales charge imposed by the fund's distributor). Most mutual funds
(including the Fund, if the proposed conversion is effected) also continuously
issue new shares of stock to investors at a price based on the fund's net asset
value at the time of such issuance. Accordingly, an open-end investment company
will experience continuing inflows and outflows of cash, and may experience net
sales or net redemptions of its shares.
REDEEMABLE SHARES; ELIMINATION OF DISCOUNT AND PREMIUM. Open-end investment
companies are required to redeem their shares at a price based upon their
then-current net asset value (except under certain circumstances, such as when
the NYSE is closed or trading thereon is restricted, or when redemptions may
otherwise be suspended in an emergency as permitted by the 1940 Act). The
open-end fund structure thus precludes the possibility of the mutual fund's
shares trading at a discount from, or a premium to, net asset value. Mutual
funds generally are required to value their assets on each business day in order
to determine the current net asset value on the basis of which their shares may
be redeemed by stockholders or purchased by investors. Net asset values of most
mutual funds are published daily by leading financial publications. The shares
of closed-end investment companies, on the other hand, are bought and sold in
the securities markets at prevailing market prices, which may be equal to, less
than, or more than net asset value.
If approved by stockholders, upon conversion of the Fund to an open-end
investment company, stockholders who wish to realize the value of their shares
would be able to do so by redeeming their shares at net asset value (less the
redemption fee discussed below). As a result, the discount from net asset value
at which the Fund' s shares currently trade on the NYSE would be eliminated.
Conversion also would eliminate, however, any possibility that the Fund's shares
could trade at a premium over net asset value and could result in the potential
adverse effects on the Fund's portfolio management and expense ratio.
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 currently are 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 $24,000; 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.
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
<PAGE 3>
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 [175] 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 open-end funds.
SENIOR SECURITIES AND BORROWINGS. The 1940 Act prohibits open-end investment
companies from issuing "senior securities" representing indebtedness (i.e.,
bonds, debentures, notes and other similar securities), other than indebtedness
to banks when there is an asset coverage of at least 300% for all borrowings.
Closed-end investment companies, on the other hand, are permitted to issue
senior securities representing indebtedness to any lender if the 300% asset
coverage is met. In addition, closed-end investment companies may issue
preferred stock (subject to various limitations), whereas open-end investment
companies generally may not issue preferred stock. This ability to issue senior
securities may give closed-end investment companies more flexibility than mutual
funds in "leveraging" their stockholders' investments. The Fund currently has no
indebtedness to banks or other lenders and has no authorized class of senior
securities or any plan for issuing any. The Board of Directors does not believe
that the limitations on leverage imposed by the 1940 Act on mutual funds would
impair the Fund's operations as an open-end investment company.
ANNUAL STOCKHOLDER MEETINGS. As a closed-end investment company listed on
the NYSE, the Fund is required by the rules of the NYSE to hold annual meetings
of its stockholders. If the Fund were converted to an open-end investment
company, it would no longer be subject to these NYSE rules and annual
stockholder meetings would be eliminated, except when required for certain 1940
Act matters. By not having to hold annual stockholder meetings, the Fund would
save the costs of preparing proxy materials and soliciting stockholder 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
[$45,000] 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 stockholder meeting if, among other
reasons, the number of Directors elected by the stockholders were less than a
majority of the total number of Directors or if a change were sought in the
fundamental investment policies of the Fund. In addition, holders of at least
10% of the Fund's outstanding shares may require the Fund to hold a stockholder
meeting for the purpose of voting on the removal of any Director or for any
other purpose.
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. As a closed-end investment
company, the Fund' s current Dividend Reinvestment and Cash Purchase Plan (the
" DRIP" ) permits stockholders to elect to reinvest their dividends and
distributions on a different basis than would be the case if the Fund converted
to an open-end investment company. Currently, if shares are trading at a
discount, the agent for the DRIP will attempt to buy as many shares as are
needed of the Fund on the NYSE or elsewhere. This permits a reinvesting
stockholder to benefit by purchasing additional shares at a discount and this
buying activity may tend to lessen any discount. If, before the agent for the
DRIP completes such purchases, the market price exceeds the net asset value,
then the average per share purchase price of the reinvested shares may exceed
the net asset value per share. If shares are trading at a premium, reinvesting
shareholders are issued shares at the higher of net asset value or 95% of the
market price. As an open-end investment company, any dividend and distribution
reinvested would be at net asset value.
<PAGE 4>
CERTAIN EFFECTS OF CONVERSION ON THE FUND
In addition to the inherent characteristics of open-end investment companies
described above, the Fund' s conversion to an open-end investment company
potentially would have the consequences described below.
POTENTIAL INCREASE IN EXPENSE RATIO AND DECREASE IN SIZE. Conversion to an
open-end investment company would raise the possibility of the Fund suffering
substantial redemptions of its shares, particularly in the period immediately
following the conversion, although the redemption fee of 1% described below may
reduce the number of initial redemptions that would otherwise occur. Unless the
Fund' s principal underwriter were able to generate sales of new shares
sufficient to offset these redemptions, the asset size of the Fund would shrink.
Because certain of the Fund' s operating expenses are fixed or substantially
fixed, a decrease in the Fund's asset size would likely increase the ratio of
its operating expenses to its income and net assets and thereby decrease the
Fund' s net income available for dividends. Such a decrease in asset size also
would result in a reduction in the amount of fees paid to The Dreyfus
Corporation ("Dreyfus"), the Fund's investment adviser.
If the Fund were to experience substantial redemptions of its shares
following its conversion to an open-end investment company, it would likely be
required to sell portfolio securities and incur increased transaction costs in
order to raise cash to meet such redemptions. Any sale of portfolio securities
effected to fund redemption obligations would be a taxable transaction. Neither
the Fund nor its stockholders will realize any gain or loss for tax purposes as
a direct result of the Fund' s conversion. However, the stockholders will
recognize a gain or loss if they later redeem their shares to the extent that
the redemption proceeds are greater or less than the respective adjusted tax
basis of their shares.
PORTFOLIO MANAGEMENT. As noted above, a closed-end investment company
operates with a relatively fixed capitalization, while the capitalization of an
open-end investment company fluctuates depending upon whether it experiences net
sales or net redemptions of its shares. Most open-end investment companies
maintain reserves of cash or cash equivalents in order to meet net redemptions
as they arise. Because closed-end investment companies do not have to meet
redemptions, their level of cash reserves depends primarily on management's
perception of market conditions and on decisions to use fund assets to
repurchase shares. The larger reserves of cash or cash equivalents required to
operate prudently as an open-end investment company when net redemptions are
anticipated could reduce the Fund's investment flexibility and the scope of its
investment opportunities. As an open-end investment company, the Fund may have
to sell portfolio securities in order to accommodate the need for larger
reserves of cash or cash equivalents, and such sales may be expected to occur
under unfavorable market conditions. While the Fund is a closed-end fund,
however, Dreyfus is not required to 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. As of _______ , 1999, [none of the
Fund's net assets were invested in illiquid securities.]
MINIMUM INVESTMENT AND INVOLUNTARY REDEMPTIONS. If the Fund is converted to
an open-end investment company, it will adopt requirements that an initial
investment in Fund shares and any subsequent investment must be in a specified
minimum amount, in order to reduce the administrative burdens and costs incurred
in monitoring numerous small accounts. The Fund expects that the minimum initial
investment requirement will be $1,000 and the minimum subsequent investment
requirement will be $100. The Fund also would reserve the right to redeem, upon
notice, the shares of any stockholder whose account has a net asset value of
less than $500, other than an account which is an IRA or other tax-deferred
retirement plan.
CONVERSION COSTS. The process of converting the Fund to an open-end
investment company would involve legal and other expenses to the Fund, estimated
to be approximately $50,000. Based on the Fund's total net assets as of March
26, 1999 and its expenses for the first three months of fiscal year 1999 on an
annualized basis, it currently is anticipated that conversion costs would
increase the Fund' s expense ratio by approximately 3.2% in the year of
conversion.
MEASURES TO BE ADOPTED TO CONVERT THE FUND TO AN OPEN-END INVESTMENT COMPANY
To convert the Fund to an open-end investment company, stockholders must
approve changing the Fund' s subclassification under the 1940 Act from a
closed-end investment company to an open-end investment company. In connection
therewith, the Fund would have to amend and restate its Articles of
Incorporation and the Board believes it would then be appropriate to change
certain of the Fund's fundamental investment policies and restrictions.
<PAGE 5>
AMENDING AND RESTATING THE FUND'S ARTICLES OF INCORPORATION. To operate as
an open-end investment company, the Fund will be required to amend its Articles
of Incorporation to authorize the issuance of redeemable securities at net asset
value and to provide that its outstanding common stock will be redeemable at the
option of stockholders. Other amendments to the Articles of Incorporation
include changing the Fund's name to "Dreyfus 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. Under Maryland General Corporation Law, charter
amendments must be declared "advisable" by the board. Although the Fund's Board
of Directors does not favor Proposal 1, if the Proposal is approved by
stockholders, the Fund's Board then would deem it advisable to amend the Fund's
Charter. 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 Dreyfus 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. However, unlike the vote required to
open-end the Fund pursuant to Proposal 1, which is a majority of the outstanding
shares of the Fund, the affirmative vote of the holders of at least 75% of the
outstanding shares of the Fund is required to declassify the Fund's Board.
Consequently, if Proposal 1 is approved by the holders of a majority, but less
than 75% , of the outstanding shares of the Fund, the Fund would operate as an
open-end investment company with a classified Board.
AMENDMENT TO MANAGEMENT AGREEMENT. If Proposal 1 is approved, the Fund's
Management Agreement with Dreyfus would be amended to delete certain expenses
payable by the Fund which are inapplicable to an open-end investment company,
such as those relating to listing the Fund's common stock on the NYSE and
administering the Fund's DRIP.
ISSUANCE OF ADDITIONAL CLASSES OF SHARES. The Fund's Charter currently
provides for the issuance of one class of shares with each share representing an
equal proportionate interest in the Fund. If stockholders approve the conversion
of the Fund to an open-end investment company, the Fund's Board of Directors
recommends that the Fund's Articles of Incorporation be amended to authorize the
issuance of additional classes of shares having such preferences or special or
relative rights and privileges as the Directors may determine, to the extent
permitted under the 1940 Act.
The purpose of the amendment would be to permit the Fund to take advantage
of alternative methods of selling Fund shares. The Board of Directors believes
that providing investors with alternative methods of purchasing Fund shares, if
it is operated as an open-end investment company, would (i) enable investors to
choose the purchase method which best suits their individual situation, thereby
encouraging current stockholders to make additional investments in the Fund and
attempting to attract new investors and assets to the Fund, thus benefiting
stockholders by increasing investment flexibility for the Fund and reducing
operating expense ratios as a result of economies of scale; (ii) facilitate
distribution of the Fund's shares; and (iii) maintain the competitive position
of the Fund in relation to other open-end funds that have implemented or are
seeking to implement similar distribution arrangements. As described below, the
classes most likely would differ principally in the method of offering shares to
investors (e.g., pursuant to a front-end sales load or contingent deferred sales
charge and/or Rule 12b-1 Distribution Plan or non-Rule 12b-1 Shareholder
Services Plan) .
If Proposal 1 is approved, the Board currently anticipates that the Fund
would offer four classes of 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
exist
<PAGE 6>
ing Fund stockholders) . Class B and Class C shares would be subject to a
contingent deferred sales charge, with differing schedules, imposed on
redemptions. Class B and Class C shares also would be subject to annual
distribution fees pursuant to a Distribution Plan, adopted in accordance with
Rule 12b-1 under the 1940 Act, as well as the annual service fee referred to
above. Class R shares, which currently are 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 would vote together as a single class at
meetings of stockholders except that shares of a class which were affected by
any matter in a manner materially different from shares of other classes would
vote as a separate class and holders of shares of a class not affected by a
matter would not vote on that matter.
CHANGING CERTAIN FUNDAMENTAL INVESTMENT POLICIES. The Fund's investment
objective, which is to maximize current income to the extent consistent with the
preservation of capital, will remain unchanged if the conversion of the Fund to
an open-end investment company is approved. The 1940 Act requires that a
relatively limited number of investment policies and restrictions be designated
as fundamental policies that cannot be changed without stockholder approval.
Certain of the Fund' s fundamental investment policies and restrictions are
proposed to be amended, as described below. These amendments are necessitated by
certain requirements for open-end investment companies under the 1940 Act and
will standardize certain provisions of the Fund's investment restrictions with
those of other similar open-end funds in the Dreyfus Family of Funds. In
addition, the Board recommends that certain of these investment restrictions be
made non-fundamental investment policies as described below. Non-fundamental
investment policies may be changed by vote of the Directors without further
stockholder approval. Dreyfus does not anticipate that these amendments will
change materially the current investment practices of the Fund.
As proposed to be amended, the investment restrictions of the Fund as an
open-end investment company are set forth on Exhibit B hereto. The current
investment restrictions of the Fund are set forth on Exhibit C hereto and may be
found in the Fund's Prospectus under "Investment Restrictions." Stockholders are
urged to review the complete text of the current investment restrictions of the
Fund and the proposed investment restrictions of the Fund as an open-end
investment company.
Specific changes include a change in investment restriction number 1 which
limits the Fund's ability to borrow money. Currently, the Fund, as a closed-end
fund, may borrow money for temporary or emergency purposes or for clearance of
transactions in amounts not exceeding 10% of its total assets (not including the
amount borrowed) , or in connection with repurchases of, or tenders for, the
Fund' s shares, but only if after each such borrowing the ratio which the value
of the total assets of the Fund less all liabilities and indebtedness not
represented by senior securities bears to the aggregate amount of senior
securities representing indebtedness of the Fund is at least 300%. Leveraging
exaggerates the effect on net asset value of any increase or decrease in the
market value of the Fund's portfolio. As an open-end fund, the Fund would be
permitted to borrow to the fullest extent permitted under the 1940 Act.
Currently, the 1940 Act limits total borrowings to 33(1)3% of the value of an
open-end investment company's total assets. However, the Fund intends to adopt a
non-fundamental policy limiting its ability to borrow money for temporary or
emergency (not leveraging) purposes only to 15% of the value of its total
assets. While borrowings exceed 5% of the Fund's total assets, the Fund will not
make any additional investments.
Investment restriction number 2 relating to pledging, mortgaging or
hypothecating Fund assets is currently a fundamental policy of the Fund. As an
open-end fund, this investment restriction would be a non-fundamental policy of
the Fund and may be changed by vote of the Directors without further stockholder
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.
<PAGE 7>
As a closed-end fund, the Fund may invest without limitation in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice, provided such investments are consistent with the
Fund' s investment objective. As an open-end fund, the Fund would adopt a
non-fundamental policy limiting its ability to purchase illiquid securities,
including such repurchase agreements, to 15% of the value of its net assets.
BOARD ACTIONS. If the proposed conversion to open-end status is approved,
the Board will take the following actions in connection with the conversion.
DISTRIBUTION AND UNDERWRITING. Since shares of an open-end investment
company are offered to the public on a continuous basis, the Fund's Board
anticipates entering into a distribution agreement (the "Distribution
Agreement" ), subject to stockholder approval of Proposal 1. The principal
underwriter for open-end investment companies in the Dreyfus Family of Funds
currently is Premier Mutual Fund Services, Inc. (the "Distributor"). Pursuant to
the Distribution Agreement, Fund shares would be offered and sold directly by
the Distributor itself and other broker-dealers which have entered into selling
agreements with the Distributor. There is no assurance, however, that the
Distributor or any such broker-dealer would be able to generate sufficient sales
of Fund shares to offset redemptions, particularly during the initial months
following conversion.
REDEMPTION FEE. In an attempt to reduce the number of redemptions of Fund
shares immediately following conversion (thereby reducing possible disruption of
the Fund's ordinary portfolio management), and to offset the brokerage and other
costs of such redemptions, for a period of 12 months following the Fund's
conversion to an open-end investment company, the Board will impose a fee
payable to the Fund of 1% of all redemption proceeds.
TIMING. If the stockholders approve Proposal 1, a number of steps will be
required to implement the conversion of the Fund to an open-end investment
company, including the preparation, filing and effectiveness of a registration
statement under the Securities Act of 1933 covering the offering of the Fund's
shares and the negotiation and execution of a new or amended agreement with its
transfer agent. It is anticipated that such conversion would become effective
within approximately six months following a vote approving Proposal 1. The
amendments to the Fund's Articles of Incorporation and fundamental investment
policies would become effective simultaneously with the effectiveness under the
Securities Act of 1933 of the registration statement referred to above.
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 (except as otherwise noted above to
declassify the Fund's Board) the affirmative vote of the holders of a majority
of the Fund's outstanding shares.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS,
INCLUDING THE "NON-INTERESTED" DIRECTORS, DOES NOT FAVOR PROPOSAL 1.
PROPOSAL 2. ELECTION OF DIRECTORS.
(a)The Fund' s Board of Directors is divided into three classes with the
term of office of one class expiring each year. If Proposal 1 is not approved,
Messrs. DiMartino, Rudman and Vanocur would be considered for election as Class
I Directors to serve until the Fund's 2002 Annual Meeting of Stockholders and
until their successors have been duly elected and qualified. In that event, the
Board will remain classified and it is the intention of the persons named in the
enclosed proxy to vote in favor of the election of such Directors.
(b)If, however, Proposal 1 is approved by the holders of at least 75% of
the outstanding shares of the Fund, the Fund's Board would be declassified and
it would be proposed that stockholders elect each person who is currently a
Board member, regardless of class, to hold office for a term of unlimited
duration and until their successors are duly elected and qualified. It is the
intention of the persons named in the enclosed proxy to vote in favor of the
election of Messrs. Burke, DiMartino, Meltzer, Rose, Rudman and Vanocur and Mss.
Dunst and Jacobs. Each of the nominees has consented to be named in this Proxy
Statement and to serve as a Director if elected.
If Proposal 1 is approved, the Fund does not intend to hold annual meetings
of stockholders in the future unless stockholder action is required.
Accordingly, Directors elected at the Meeting will hold office until the Fund is
required by law to hold an election of Directors and until their successors are
duly elected and qualified.
<PAGE 8>
If Proposal 1 is not approved or is approved by the holders of less than 75%
of the outstanding shares of the Fund, only the proposal in paragraph (a) above
would be presented at the Meeting.
If Proposal 1 is approved by the holders of at least 75% of the outstanding
shares of the Fund, only the proposal in paragraph (b) above would be presented
at the Meeting.
The following table sets forth certain information concerning each of the
Directors of the Fund. Each of the nominees currently is a Director of the Fund
<TABLE>
<CAPTION>
INFORMATION REGARDING DIRECTORS
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE WOULD EXPIRE
CLASS I:
<S> <C> <C> <C>
JOSEPH S. DIMARTINO 55 (1988-1991) 2002
Since January 1995, Chairman of the Board of various 1995*
</TABLE>
funds in the Dreyfus Family of Funds. He also is a director of The Noel
Group, Inc., a venture capital company (for which, from February 1995 until
November 1997, he was Chairman of the Board) , The Muscular Dystrophy
Association, HealthPlan Services Corporation, a provider of marketing,
administrative and risk management services to health and other benefit
programs, Carlyle Industries, Inc. (formerly, Belding Heminway Company, Inc.), a
button packager and distributor, and Century Business Services, Inc. (formerly,
International Alliance Services, Inc.) , a provider of various outsourcing
functions for small and medium sized companies. For more than five years prior
to January 1995, 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 and, until
August 24, 1994, the Company's distributor. From August 1994 until December 31,
1994, he was a director of Mellon Bank Corporation. His address is 200 Park
Avenue, New York, New York 10166.
- - ----------------------------
* Mr. DiMartino previously was a Director of the Fund from April 27, 1988 to
November 21, 1991. He was re-elected to the Board on February 8, 1995
<PAGE 9>
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE WOULD EXPIRE
CLASS I CONTINUED
<S> <C> <C> <C>
WARREN B. RUDMAN 67 1993 2002
Since January 1993, Partner in the law firm of Paul, Weiss, Rifkind, Wharton
& Garrison. Mr. Rudman also is a director of Prime Succession, Inc., Collins &
Aikman Corporation, Chubb Corporation and Raytheon Company and a trustee of
Boston College. He also serves as a member of the President' s Foreign
Intelligence Advisory Board, (as Vice Chairman through February 1998 and,
currently, as Chairman) , and a member of the Senior Advisory Board of the
Institute of Politics of the Kennedy School of Government at Harvard University.
From January 1981 to January 1993, Mr. Rudman served as a United States Senator
from the state of New Hampshire. From January 1993 to December 1994, Mr. Rudman
served as Chairman of the Federal Reserve Bank of Boston. His address is c/o
Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L. Street, N.W., Suite 1300,
Washington, D.C. 20036.
SANDER VANOCUR 70 1992 2002
Since January 1992, President of Old Owl Communications, a full-service
communications firm. From May 1995 to June 1996, he was a Professional in
Residence at the Freedom Forum in Arlington, VA, and from January 1994 to May
1995, he has served as a Visiting Professional Scholar at the Freedom Forum
First Amendment Center at Vanderbilt University. From November 1989 to November
1995, he was 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 1977 to December 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.
CLASS II:
DAVID W. BURKE 61 1994 2000
Chairman of the Broadcasting Board of Governors, an independent board within
the United States Information Agency, since August 1995. From August 1994
through December 31, 1994, he was a consultant to Dreyfus, and from October 1990
to August 1994, he was 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 197 Eighth Street,
Charleston, Massachusetts 02642.
<PAGE 10>
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE WOULD EXPIRE
CLASS II CONTINUED
JAY I. MELTZER 69 1991 2000
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; and Adjunct Clinical Professor of Medicine at Cornell College of
Medicine. His address is 903 Park Avenue, New York, New York 10021.
DANIEL ROSE 68 1992 2000
President and Chief Executive Officer of Rose Associates, Inc., a New York
based real estate development and management firm. Pursuant to a Presidential
appointment in July 1994, Mr. Rose serves as a Director of the Baltic-American
Enterprise Fund, which makes equity investments and loans, and provide technical
business assistance to new business concerns in the Baltic States. He is also
Chairman of the Housing Committee of The Real Estate Board of New York, Inc. His
address is 200 Madison Avenue, New York, New York 10016.
<PAGE 11>
NAME, PRINCIPAL OCCUPATION YEAR CLASS
AND BUSINESS EXPERIENCE FOR DIRECTOR TERM
PAST FIVE YEARS AGE SINCE EXPIRES
CLASS III:
DIANE DUNST 58 1990 2001
Since January 1992, President of Diane Dunst Promotion, Inc., a full service
promotion agency. From January 1989 to January 1992, Director of Promotion
Services, Lear' s Magazine. From 1985 to January 1989, she was Sales Promotion
Manager of ELLE Magazine. Her address is 1172 Park Avenue, New York, New York,
10128.
ROSALIND GERSTEN JACOBS 72 1994 2001
</TABLE>
From 1974 to 1976, she was owner and manager of a merchandise and marketing
consulting firm. Prior to 1974, she was a Vice President of Macy's, New York.
Her address is c/o Corporate Property Investors, 305 East 47th Street, New York,
New York 10017.
The persons named in the accompanying form of proxy intend to vote each such
proxy for the election of the nominees listed above, unless stockholders
specifically indicate on their proxies the desire to withhold authority to vote
for any one or more of the nominees. It is not contemplated that any nominee
will be unable to serve as a Board member for any reason, but if that should
occur prior to the Meeting, the proxyholders reserve the right to substitute
another person or persons of their choice as nominee or nominees.
The Fund has an audit committee comprised of its Directors who are not
" interested persons" of the Fund, the function of which is to routinely review
financial statements and other audit-related matters as they arise throughout
the year. The Fund does not have a standing nominating or compensation committee
or any committee performing similar functions, although if Proposal 1 is
approved and the Fund adopts a Distribution Plan with respect to its Class B and
Class C shares, the Fund will be required to create a Nominating Committee
comprised solely of Directors who are not "interested persons" of the Fund. As
of ___________, 1999, the Fund's Directors and officers, as a group
(__ persons), owned less than 1% of the Fund' s outstanding
shares.
The Fund pays the Directors an annual retainer of $4,500 and a fee per
meeting of $500, and reimburses them for their expenses. The Chairman of the
Board, which position is held by Mr. DiMartino, receives an additional 25% of
such compensation. The Fund does not pay any other remuneration to its officers
and Directors and does not have a bonus, pension, profit-sharing or retirement
plan. There were five Board and committee meetings held during the fiscal year
ended November 30, 1998. All of the Directors attended 75% or more of all Board
and committee meetings held during the fiscal year ended November 30, 1998.
The compensation paid to each Director by the Fund for the fiscal year ended
November 30, 1998 and by all other funds in the Dreyfus Family of Funds for
which such Director is a Board member (the number of which is set forth in
parenthesis next to each Director' s total compensation) for the year ended
December 31, 1998, was as follows:
<PAGE 12>
TOTAL
COMPENSATION
FROM FUND AND
AGGREGATE FUND COMPLEX
COMPENSATION PAID TO
NAME OF DIRECTOR FROM THE FUND* DIRECTOR
David W. Burke _______ $_______(__)
Joseph S. DiMartino _______ $_______(__)
Diane Dunst _______ $_______(__)
Rosalind Gersten Jacobs _______ $_______(__)
Jay I. Meltzer _______ $_______(__)
Daniel Rose _______ $_______(__)
Warren B. Rudman _______ $_______(__)
Sander Vanocur _______ $_______(__)
- - ----------------------------------------------
<TABLE>
<CAPTION>
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $___ for all Directors as a group.
The following sets forth information relevant to the executive officers of
the Fund:
<S> <C> <C>
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUND AGE EXPERIENCE FOR PAST FIVE YEARS
MARIE E. CONNOLLY
President and Treasurer 41 President, Chief Executive
Officer, Chief Compliance Officer
and a director of the Distributor and
Funds Distributor, Inc., the ultimate
parent of which is Boston Institutional
Group, Inc., and an officer of other
investment companies advised or
administered by Dreyfus.
MARGARET W. CHAMBERS
Vice President and Secretary 38 Senior Vice President and
General Counsel of Funds Distributor,
Inc., and an officer of other investment
companies advised or administered by
Dreyfus. From August 1996 to March 1998,
she was Vice President and Assistant
General Counsel for Loomis, Sayles &
Company, L.P. From January 1986 to July
1996, she was an associate with the law
firm of Ropes & Gray.
MICHAEL S. PETRUCELLI
Vice President, Assistant Secretary
And Distributor, 37 Senior Vice President of Funds
Assistant TreasurerInc., and an officer
of other investment companies advised
or administered by Dreyfus. From December
1989 through November 1996, he was employed
by GE Investments where he held various
financial, business development and compliance
positions. He also served as Treasurer of the GE
Funds and as a Director of GE Investment Services.
<PAGE 13>
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUND AGE EXPERIENCE FOR PAST FIVE YEARS
STEPHANIE D. PIERCE
Vice President, Assistant Secretary 30 Vice President and Client
and Assistant Treasurer Development Manager of Funds Distributor,
Inc., and an officer of other investment
companies advised or administered by
Dreyfus. From April 1997 to March 1998,
she was employed as a Relationship
Manager with Citibank, N.A. From August 1995
to April 1997, she was an Assistant
Vice President with Hudson Valley Bank, and
from September 1990 to August 1995,
she was Second Vice President with Chase Manhattan
Bank.
MARY A. NELSON
Vice President and Assistant 34 Vice President of the
Treasurer Distributor and Funds Distributor, Inc.,
and an officer of other investment
companies advised or administered by Dreyfus.
From September 1989 to July 1994,
she was an Assistant Vice President and Client
Manager for The Boston Company, Inc.
GEORGE A. RIO
Vice President and Assistant Treasurer 43 Executive Vice President and
Client Service Director of Funds Distributor,
Inc., and an officer of other
investment companies advised or administered
by Dreyfus. From June 1995 to March
1998, he was Senior Vice President and Senior Key
Account Manager for Putnam
Mutual Funds. From May 1994 to June 1995, he
was Director of Business
Development for First Data Corporation. From September
1983 to May 1994, he was
Senior Vice President and Manager of Client Services and
Director of Internal Audit at The Boston Company, Inc.
JOSEPH F. TOWER, III
Vice President and Assistant Treasurer 36 Senior Vice President,
Treasurer, Chief Financial Officer and a director of the
Distributor and Funds
Distributor, Inc., 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
Corporate Finance and Treasury areas.
<PAGE 14>
NAME AND POSITION PRINCIPAL OCCUPATION AND BUSINESS
WITH FUND AGE EXPERIENCE FOR PAST FIVE YEARS
DOUGLAS C. CONROY
Vice President and Assistant Secretary 29 Assistant Vice President of
Funds Distributor, Inc., and an officer of other investment
companies advised or administered by Dreyfus. From April 1993
to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December
1991 to March 1993, he was employed as a Fund Accountant at The
Boston Company, Inc.
KATHLEEN K. MORRISSEY
Vice President and Assistant Secretary 26 Vice President and Assistant
Secretary of Funds Distributor, Inc., and an officer
of other investment companies advised or administered by
Dreyfus. From July 1994 to November 1995,
she was a Fund Accountant for Investors Bank
& Trust Company.
CHRISTOPHER J. KELLEY
Vice President and Assistant Secretary 33 Vice President and Senior
Associate General Counsel of the Distributor and Funds Distributor,
Inc., and an officer of other investment companies advised or
administered by Dreyfus. From April 1994 to July 1996, he was Assistant
Counsel at Forum Financial Group.
ELBA VASQUEZ
Vice President and Assistant Secretary 37 Assistant Vice President of
Funds Distributor, Inc., and an officer of other investment companies
advised or administered by Dreyfus. From March 1990 to May 1996, she
was employed by U.S. Trust Company of New York where she held various
sales and marketing positions.
</TABLE>
The address of each officer of the Fund is 200 Park Avenue, New York, New
York 10166.
<PAGE 15>
PROPOSAL 3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Fund's independent auditors be selected by a
majority of those Directors who are not "interested persons" (as defined in the
1940 Act) of the Fund; that such selection be submitted for ratification or
rejection at the Meeting and that the employment of such independent auditors be
conditioned upon the right of the Fund, by vote of a majority of its outstanding
securities at any meeting called for that purpose, to terminate such employment
forthwith without penalty. The Fund's Board of Directors, including a majority
of its Directors who are not "interested persons" of the Fund, approved the
selection of Ernst & Young LLP for the current fiscal year ending November 30,
1999 at a Board meeting held on February 3, 1999.
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,
1999 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 relevant 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.
PROPOSAL 4. STOCKHOLDER PROPOSAL OF MR. THEODORE A. LINDEN
TO REPURCHASE FUND SHARES
Mr. Theodore A. Linden, 2245 Tasso Street, Palo Alto, California 94301, is
the registered owner of 1,700 shares of the Fund's common stock and has notified
the Fund that he intends to introduce the following proposal at the Meeting:
That the stockholders strongly recommend that the Board of Directors commit
to a large, ongoing program to repurchase discounted shares of the Fund. The
repurchase commitment should have the goal that the increase in NAV attributable
to the repurchase program plus any decrease in the discount approximates the
size of the discount at the time the program is initiated.
Mr. Linden has submitted the following statement in support of his proposal
Over the past three years, the Fund has traded at a persistent discount
ranging from 7% to over 15% and averaging about 11%. The Fund's charter
requires the Board to consider means of reducing a persistent discount and
allows repurchase programs. After three years of consideration and multiple
recommendations against open ending, it is time for the Board to take some
positive action.
This proposal defines a simple, goal-directed repurchase program that will
benefit all shareholders and does not involve the complications of open ending.
A repurchase program has two effects: as shares are repurchased at discounts, it
increases the net asset value (NAV) of remaining shares, and it might reduce the
discount. Shareholders win from both effects.
The effect of repurchases on NAV is quantifiable. If the Fund repurchases
10% of the shares at an average discount of 11%, the impact on NAV will be an
increase of 1.22% . If the Fund repurchases 50% of the shares at the same 11%
discount, the impact on NAV will be a full 11.0% increase.
The effect of repurchases on the discount is less predictable. The key idea
of this resolution is that the Fund will commit to a goal stated in terms of the
combined effects of repurchases on both the NAV and the discount. (Both of
these effects can be separated from the Fund's concurrent investment performance
which may, of course, be positive or negative.) For example, if the Directors
set the goal as a 10% improvement over 12-18 months, this could be achieved by
repurchasing enough discounted shares to affect NAV by 10%, by having the
discount come down by 10% , or by any combination of these two effects.
Shareholders may then reasonably anticipate (but not as a guarantee) that the
market value of their shares 16
<PAGE 16>
will perform about 10% better than the Fund's underlying investment performance.
The repurchase goal might be achieved with few repurchases (if the discount
comes down), but the commitment requires that any upper limit on the repurchases
not be below the 30-50% range.
The Fund managers must consider other issues while structuring a large,
ongoing repurchase program. All these other issues (such as increased per share
expenses) will together affect shareholder value by a small fraction of 1%,
whereas benefits can be expected to approach 10%.
The main disadvantage of a large repurchase program is that it reduces
management fees. However, similar funds are cost-effective at much less than
half of the Fund's current size. Shareholders should vote for this proposal and
remind the Board that their fiduciary duty is to maximize shareholder value, not
to maximize the manager's fees.
THE FUND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS REJECT THIS STOCKHOLDER PROPOSAL
FOR THE REASONS SET FORTH BELOW.
The proponent suggests that a share repurchase program can reduce or
eliminate the market discount and that to the extent it does not succeed in
reducing the discount, the repurchase program will increase the Fund's net asset
value per share of the remaining outstanding shares.
For the reasons discussed below, the Board believes that proponent's share
repurchase program is not in the best interests of the Fund and its shareholders
and urges rejection of the proposal. The Board regularly reviews information
regarding the market price of the Fund's common stock and the relationship
between the share price and the Fund's net asset value per share. The Board
believes that shares of a fixed income, closed-end investment company, such as
the Fund, trade in the market based on the yield being generated by the Fund's
portfolio and general market conditions. Empirical data suggest that share
repurchases appear to have only a transitory effect on a closed end bond fund's
market discount, and therefore, tend to be unsuccessful in effecting any
long-term reduction in the discount. In fact, this is what occurred when the
Fund repurchased some of its shares in 1994. Accordingly, the Board believes
that repurchases of Fund shares may well be fruitless in achieving any long-term
reduction in the discount.
In addition, a share repurchase program could result in the following
negative consequences:
(pound) Transaction costs in order to raise cash to repurchase Fund
shares.
(pound) The sale of a substantial portion of Fund portfolio securities that
otherwise would not be liquidated for investment reasons, making
it more difficult for the Fund to pursue its investment objective.
(pound) Taxable dividends that would be paid to the remaining shareholders due
to any net realized gains from the sales of portfolio securities.
(pound) A reduction in the Fund' s size commensurate with a significant
repurchase program, thereby reducing the Fund's economies of scale.
The other portion of the proposal -- that net asset value per share be
increased by repurchases of Fund shares at a discount -- might work
academically, but as the proponent concedes, to obtain an 11% increase in net
asset value for the remaining shares, the Fund would have to repurchase 50% of
its presently outstanding shares at an 11% discount to the present net asset
value. It should be emphasized that, even with such a large share repurchase
program, shareholders who sell their shares in response to such program still
would be selling shares at the then-current market discount, which could be
greater or less than the discount prior to the program's implementation. As to
the remaining shareholders, the Board believes that significant repurchases of
Fund shares are not in their best interests for the reasons described above.
As stated under Proposal 1 in this proxy statement, the Board does not
believe that the Fund should be converted to an open-end fund. In the Board's
opinion, carrying out the repurchase program suggested in the shareholder's
proposal would be even worse for shareholders in certain respects, as it would
present all of the problems described above without the benefit of permitting
shareholders to redeem Fund shares at net asset value.
17
<PAGE 17>
REQUIRED VOTE AND DIRECTORS' RECOMMENDATION. Approval of Proposal 4
requires the affirmative vote of the holders of a majority of the votes cast on
the Proposal.
THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, DOES NOT
BELIEVE THE PROPOSAL TO REPURCHASE FUND SHARES IS IN THE BEST INTEREST OF
STOCKHOLDERS AND URGES REJECTION OF THE PROPOSAL.
OTHER MATTERS
The Fund' s Board members are not aware of any other matters which may come
before the Meeting. However, should any such matters properly come before the
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
If Proposal 1 is not approved, proposals that stockholders wish to include
in the Fund's proxy statement for the Fund's next Annual Meeting of Stockholders
must be sent to and received by the Fund no later than ___________, 2000 at the
principal executive offices of the Fund at 200 Park Avenue, New York, New York
10166, Attention: General Counsel.
Dreyfus, located at 200 Park Avenue, New York, New York 10166, serves as the
Fund' s investment adviser. Martin G. McGuinn became a director of Dreyfus as of
January 1, 1999. Theodore A. Schachar was elected Vice President-Tax of Dreyfus
as of October 28, 1998. William H. Maresca was elected Controller of Dreyfus as
of September 10, 1998. Richard Terres was elected Vice President of Dreyfus as
of September 1, 1998. Wendy Strutt was elected Vice President of Dreyfus as of
September 1, 1998. Margaret W. Chambers was elected Vice President and Secretary
of the Fund as of June 15, 1998. Stephanie D. Pierce was elected Vice President
and Assistant Treasurer of the Fund as of June 15, 1998. George A. Rio was
elected Vice President and Assistant Treasurer of the Fund as of June 15, 1998.
None of the above had any ownership of, or engaged in any transaction with
respect to, the Fund's shares at the time they assumed their positions. Each of
the above filed a Form 3 pursuant to Section 16(a) of the Securities Exchange
Act of 1934. Mr. McGuinn filed a Form 3 on January 11, 1998. Mr. Schachar filed
a Form 3 on November 13, 1998. Messrs. Maresca and Terres and Ms. Strutt filed a
Form 3 on September 22, 1998. Ms. Chambers and Ms. Pierce and Mr. Rio filed a
Form 3 on July 22, 1998.
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 Proposal 1.
If 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 18
<PAGE 18>
the adjournment that are represented at the Meeting in person or by proxy. A
stockholder vote may be taken for one or more of the proposals in this Proxy
Statement prior to any adjournment if sufficient votes have been received for
approval. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" a Proposal in favor of any
adjournment, and will vote those proxies required to be voted "AGAINST" a
Proposal against any adjournment. A quorum is constituted with respect to the
Fund by the presence in person or by proxy of the holders of more than one-third
of the outstanding shares of the Fund entitled to vote at the Meeting.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Fund, in care of Mellon Bank, N.A., c/o Proxy Services
Corporation, 115 Amity Street, Jersey City, NJ 07304, 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: [April] __, 1999
<PAGE 19>
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 Dreyfus Premier Global Governments Income Fund, Inc.
THIRD: The corporation is formed for the following purpose or purposes
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on, exchange,
distribute or otherwise dispose of and deal in and with securities of every
nature, kind, character, type and form, including without limitation of the
generality of the foregoing, all types of stocks, shares, futures contracts,
bonds, debentures, notes, bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest, certificates of interest,
certificates of participation, certificates, interests, evidences of ownership,
guarantees, warrants, options or evidences of indebtedness issued or created by
or guaranteed as to principal and interest by any state or local government or
any agency or instrumentality thereof, by the United States Government or any
agency, instrumentality, territory, district or possession thereof, by any
foreign government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any state,
the United States or any territory or possession thereof or under the laws of
any foreign country, bank certificates of deposit, bank time deposits, bankers'
acceptances and commercial paper; to pay for the same in cash or by the issue of
stock, including treasury stock, bonds or notes of the corporation or otherwise;
and to exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of every kind and
description, including without limitation, the right to consent and otherwise
act with respect thereto, with power to designate one or more persons, firms,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any said instruments;
(c) to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security the assets of the
corporation;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in, shares of stock of
the corporation, including shares of stock of the corporation in fractional
denominations, and to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of shares of stock of the corporation any funds or
property of the corporation whether capital or surplus or otherwise, to the full
extent now or hereafter permitted by the laws of the State of Maryland
(e) to conduct its business, promote its purposes and carry on its
operations in any and all of its branches and maintain offices both within and
without the State of Maryland, in any States of the United States of America, in
the District of Columbia and in any other parts of the world; an
(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 Maryland, and of the resident agent of the corporation
within the State of Maryland, is The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202.
<PAGE A-1>
FIFTH: (1) The total number of shares of stock which the corporation has
authority to issue is _____________________ (___________) shares of Common
Stock, all of which are of a par value of one tenth of one cent ($.001) each.
________________ _______ (___________) of the authorized but unissued shares of
Common Stock are classified as Class A Common Stock, ___ _____________________
(___________) of the authorized but unissued shares of Common Stock are
classified as Class B Common Stock,________(_________) of the authorized but
unissued shares of Common Stock are classified as Class C Common Stock, and
___________ (____________) of the authorized but unissued shares of Common Stock
are classified as Class R Common Stock.
(2) The aggregate par value of all the authorized shares of stock is
______________________________ dollars ($_______.00).
(3) The Board of Directors of the corporation is authorized, from time to
time, to fix the price or the minimum price or the consideration or minimum
consideration for, and to authorize the issuance of, the shares of stock of the
corporation.
(4) The Board of Directors of the corporation is authorized, from time to
time, to further classify or to reclassify, as the case may be, any unissued
shares of stock of the corporation by setting or changing the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms or conditions of redemption of the stock
(5) Subject to the power of the Board of Directors to reclassify unissued
shares, the shares of each class of stock of the corporation shall have the
following preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption:
(a) (i) All consideration received by the corporation for the issuance or
sale of shares together with all income, earnings, profits and proceeds thereof,
shall irrevocably belong to such class for all purposes, subject only to the
rights of creditors, and are herein referred to as "assets belonging to" such
class.
(ii) The assets belonging to such class shall be charged with the
liabilities of the corporation in respect of such class and with such class's
share of the general liabilities of the corporation, in the latter case in
proportion that the net asset value of such class bears to the net asset value
of all classes. The determination of the Board of Directors shall be conclusive
as to the allocation of liabilities, including accrued expenses and reserves, to
a class.
(iii) Dividends or distributions on shares of each class, whether
payable in stock or cash, shall be paid only out of earnings, surplus or other
assets belonging to such class.
(iv) In the event of the liquidation or dissolution of the corporation,
stockholders of each class shall be entitled to receive, as a class, out of the
assets of the corporation available for distribution to stockholders, the assets
belonging to such class and the assets so distributable to the stockholders of
such class shall be distributed among such stockholders in proportion to the
number of shares of such class held by them.
(b) A class may be invested with one or more other classes in a common
investment portfolio. Notwithstanding the provisions of paragraph (5)(a) of this
Article FIFTH, if two or more classes are invested in a common investment
portfolio, the shares of each such class of stock of the corporation shall be
subject to the following preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption, and, if there are other classes of stock invested in a
different investment portfolio, shall also be subject to the provisions of
paragraph (5)(a) of this Article FIFTH at the portfolio level as if the classes
invested in the common investment portfolio were one class:
(i) The income and expenses of the investment portfolio shall be
allocated among the classes invested in the investment portfolio in accordance
with the number of shares outstanding of each such class or as otherwise
determined by the Board of Directors.
(ii) As more fully set forth in this paragraph (5)(b) of Article
FIFTH, the liabilities and expenses of the classes invested in the same
investment portfolio shall be determined separately from those of each other
and, accordingly, the net asset value, the dividends and distributions payable
to holders, and the amounts distributable in the event of liquidation of the
corporation to holders of shares of the corporation's stock may vary from class
to class invested in the same investment portfolio. Except for these differences
and certain other differences set forth in this paragraph (5) of Article FIFTH,
the classes invested in the same investment portfolio shall have the same
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption.
(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,
<PAGE A-2>
and such dividends and distributions may vary among the classes invested in the
same investment portfolio to reflect differing allocations of the expenses of
the corporation among the classes and any resultant differences between the net
asset values per share of the classes, to such extent and for such purposes as
the Board of Directors may deem appropriate. The allocation of investment
income, capital gains, expenses and liabilities of the corporation among the
classes shall be determined by the Board of Directors in a manner that is
consistent with Rule 18f-3, or its successor, promulgated under the Investment
Company Act of 1940, or any order, other rule or position of the Securities and
Exchange Commission under said Act.
(c) On each matter submitted to a vote of the stockholders, each holder
of a share of stock shall be entitled to one vote for each share standing in his
name on the books of the corporation irrespective of the class thereof. All
holders of shares of stock shall vote as a single class except as may otherwise
be required by law pursuant to any applicable order, rule or interpretation
issued by the Securities and Exchange Commission, or otherwise, or except with
respect to any matter which affects only one or more classes of stock, in which
case only the holders of shares of the class or classes affected shall be
entitled to vote.
Except as provided above, all provisions of the Articles of Incorporation
relating to stock of the corporation shall apply to shares of, and to the
holders of, all classes of stock.
(6) Notwithstanding any provisions of the Maryland General Corporation Law
requiring a greater proportion than a majority of the votes of stockholders
entitled to be cast in order to take or authorize any action, any such action
may be taken or authorized upon the concurrence of a majority of the aggregate
number of votes entitled to be cast thereon.
(7) The presence in person or by proxy of the holders of one-third of the
shares of stock of the corporation entitled to vote (without regard to class)
shall constitute a quorum at any meeting of the stockholders, except with
respect to any matter which, under applicable statutes or regulatory
requirements, requires approval by a separate vote of one or more classes of
stock, in which case the presence in person or by proxy of the holders of
one-third of the shares of stock of each class required to vote as a class on
the matter shall constitute a quorum.
(8) The corporation may issue shares of stock in fractional denominations
to the same extent as its whole shares, and shares in fractional denominations
shall be shares of stock having proportionately to the respective fractions
represented thereby all the rights of whole shares, including, without
limitation, the right to vote, the right to receive dividends and distributions
and the right to participate upon liquidation of the corporation, but excluding
the right to receive a stock certificate evidencing a fractional share
(9) No holder of any shares of any class of the corporation shall be
entitled as of right to subscribe for, purchase, or otherwise acquire any shares
of any class which the corporation proposes to issue, or any rights or options
which the corporation proposes to issue or to grant for the purchase of shares
of any class or for the purchase of any shares, bonds, securities, or
obligations of the corporation which are convertible into or exchangeable for,
or which carry any rights to subscribe for, purchase, or otherwise acquire
shares of any class of the corporation; and any and all of such shares, bonds,
securities or obligations of the corporation, whether now or hereafter
authorized or created, may be issued, or may be reissued or transferred if the
same have been reacquired and have treasury status, and any and all of such
rights and options may be granted by the Board of Directors to such persons,
firms, corporations and associations, and for such lawful consideration, and on
such terms, as the Board of Directors in its discretion may determine, without
first offering the same, or any thereof, to any said holder.
SIXTH: (1) The number of directors of the corporation, until such number
shall be increased or decreased pursuant to the by-laws of the corporation, is
eight. The number of directors shall never be less than the minimum number
prescribed by the Maryland General Corporation Law.
(2) The names of the persons who shall act as directors of the corporation
until the next annual meeting and until their successors are duly chosen and
qualify are as follows:
David W. Burke Joseph S. DiMartino
Diane Dunst Daniel Rose
Rosalind Gersten Jacobs Warren B. Rudman
Jay I. Meltzer Sander Vanocur
<PAGE A-3>
[IF PROPOSAL 1 IS APPROVED BY THE HOLDERS OF LESS THAN 75% OF THE
OUTSTANDING SHARES OF THE FUND, ARTICLE SIXTH, PARAGRAPHS (1) AND (2) ABOVE
WOULD BE REPLACED WITH THE FOLLOWING AND PARAGRAPHS (3) AND (4) WOULD BE
RENUMBERED.]
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
SIXTH: (1) The number of directors of the corporation, until such number
shall be increased pursuant to the bylaws of the corporation, is one. The number
of directors shall never be less than the minimim number prescribed by the
Maryland General Corporation Law nor more than twelve.
(2) The name of the person who shall act as director of the corporation
until the first annual meeting or until his successor is duly chosen and
qualified is as follows:
(3) Beginning with the first annual meeting of stockholders held after the
initial public offering of the shares of the corporation (the "initial annual
meeting"), the board of directors of the corporation shall be divided into three
classes: Class I, Class II and Class III. The term of office of one class of
directors elected at the initial annual meeting shall expire each year. At the
initial annual meeting, directors of Class I shall be deemed to have been
elected to hold office for a term expiring at the next succeeding annual
meeting, directors of Class II shall be deemed to have been elected to hold
office for a term expiring at the second succeeding annual meeting and directors
of Class III shall be deemed to have been elected to hold office for a term
expiring at the third succeeding annual meeting. At each subsequent annual
meeting of stockholders, the directors chosen to succeed those whose terms are
expiring shall be identified as being of the same class as the directors whom
they succeed and shall be elected for a term expiring at the time of the third
succeeding annual meeting of stockholders, or thereafter in each case when their
respective successors are elected and qualified. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes by
resolution of the board of directors so as to maintain the number of directors
in each class as nearly equal as possible, but in no case shall a decrease in
the number of directors shorten the term of any incumbent director.
(4) A director of the corporation may be removed from office only by vote of
the holders of at least seventy-five percent (75%) of the outstanding shares of
the corporation entitled to vote in an election of directors.
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
(3) The power to make, alter, and repeal the by-laws of the corporation
shall be vested in the Board of Directors of the corporation.
(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.
<PAGE A-4>
(3) No provision of this Article SEVENTH shall be effective to protect or
purport to protect any director or officer of the corporation against any
liability to the corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
(4) References to the Maryland General Corporation Law in this Article
SEVENTH are to the law as from time to time amended. No amendment to the
Articles of Incorporation of the corporation shall affect any right of any
person under this Article SEVENTH based on any event, omission or proceeding
prior to such amendment.
EIGHTH: Any holder of shares of stock of the corporation may require the
corporation to redeem and the corporation shall be obligated to redeem at the
option of such holder all or any part of the shares of the corporation owned by
said holder, at the redemption price, pursuant to the method, upon the terms and
subject to the conditions hereinafter set forth:
(a) The redemption price per share shall be the net asset value per
share determined at such time or times as the Board of Directors of the
corporation shall designate in accordance with any provision of the Investment
Company Act of 1940, any rule or regulation thereunder or exemption or exception
therefrom, or any rule or regulation made or adopted by any securities
association registered under the Securities Exchange Act of 1934.
(b) Net asset value per share of a class
shall be determined by dividing:
(i) The total value of the assets of such class or, in the case of a
class invested in a common investment portfolio with other classes, such class's
proportionate share of the total value of the assets of the common investment
portfolio, such value determined as provided in Subsection (c) below less, to
the extent determined by or pursuant to the direction of the Board of Directors,
all debts, obligations and liabilities of such class (which debts, obligations
and liabilities shall include, without limitation of the generality of the
foregoing, any and all debts, obligations, liabilities, or claims, of any and
every kind and nature, fixed, accrued and otherwise, including the estimated
accrued expenses of management and supervision, administration and distribution
and any reserves or charges for any or all of the foregoing, whether for taxes,
expenses or otherwise) but excluding such class liability upon its shares and
its surplus, by
(ii) The total number of shares of such class outstanding.
The Board of Directors is empowered, in its absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by it to be necessary in order to enable the corporation to
comply with, or are deemed by it to be desirable provided they are not
inconsistent with, any provision of the Investment Company Act of 1940 or any
rule or regulation thereunder.
(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
<PAGE A-5>
(g) The corporation, pursuant to resolution of the Board of Directors, may
cause the redemption, upon the terms set forth in such resolution and in
subsections (a) through (e) and subsection (h) of this Article EIGHTH, of shares
of stock owned by stockholders whose shares have an aggregate net asset value of
less than such amount as may be fixed from time to time by the Board of
Directors. Notwithstanding any other provision of this Article EIGHTH, if
certificates representing such shares have been issued, the redemption price
need not be paid by the corporation until such certificates are presented in
proper form for transfer to the corporation or the agent of the corporation
appointed for such purpose; however, the redemption shall be effective, in
accordance with the resolution of the Board of Directors, regardless of whether
or not such presentation has been made.
(h) The obligations set forth in this Article EIGHTH may be suspended or
postponed as may be permissible under the Investment Company Act of 1940 and the
rules and regulations thereunder.
(i) The Board of Directors may establish other terms and conditions and
procedures for redemption, including requirements as to delivery of certificates
evidencing shares, if issued.
NINTH: All persons who shall acquire stock or other securities of the
corporation shall acquire the same subject to the provisions of the
corporation' s Charter, as from time to time amended.
TENTH: From time to time any of the provisions of the Charter of the
corporation may be amended, altered or repealed, including amendments which
alter the contract rights of any class of stock outstanding, and other
provisions authorized by the Maryland General Corporation Law at the time in
force may be added or inserted in the manner and at the time prescribed by said
Law, and all rights at any time conferred upon the stockholders of the
corporation by its Charter are granted subject to the provisions of this
Article.
<PAGE A-6>
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 10 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 1940 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, 7, and 8 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. 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.
9. 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.
10. Purchase securities of other investment companies, except to the extent
permitted under the 1940 Act.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
<PAGE B-1>
EXHIBIT C
CURRENT INVESTMENT RESTRICTIONS OF THE FUND
The following investment restrictions have been adopted by the Fund as
fundamental policies that cannot be changed without the affirmative vote of the
holders of a majority (as defined in the 1940 Act) of the Fund's outstanding
voting shares. The Fund may not:
1. Borrow money, except (a) for temporary or emergency purposes or for
clearance of transactions in amounts not exceeding 10% of its total assets (not
including the amount borrowed); while such borrowings exceed 5% of the Fund's
assets, the Fund will not make any additional investments; (b) in connection
with repurchases of, or tenders for, the Fund's shares, but only if after each
such borrowing the ratio which the value of the total assets of the Fund less
all liabilities and indebtedness not represented by senior securities bears to
the aggregate amount of senior securities representing indebtedness of the Fund
is at least 300%; and (c) as otherwise described in this Prospectus.
2. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with the writing of covered put and
call options and the purchase of securities on a forward commitment or
delayed-delivery basis and collateral arrangements with respect to currency
transactions, options, futures contracts, including those relating to indexes,
and options on futures contracts or indexes and collateral arrangements with
respect to initial or variation margin for futures contracts.
3. Sell securities short or purchase securities on margin, except for such
short-term credits as are necessary for the clearance of transactions, but the
Fund may make margin deposits in connection with transactions in currencies,
options, futures and options on futures.
4. Underwrite any issue of securities, except to the extent that the sale
of portfolio securities by the Fund may be deemed to be an underwriting.
5. Purchase, hold or deal in real estate or oil and gas interests, but the
Fund may purchase and sell securities that are secured by real estate or
interests therein and may purchase mortgage-related securities.
6. Invest in commodities, except that the Fund may purchase and sell
futures contracts, including those relating to indexes, and options on futures
contracts or indexes and commodities or currencies underlying or related to any
such futures contracts as described in this Prospectus.
7. Lend any funds or other assets except through the purchase of all or a
portion of an issue of securities or obligations of the type in which it may
invest; however, the Fund may lend its portfolio securities in an amount not to
exceed 30% of the value of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the Securities and Exchange
Commission and the Fund's Board of Directors.
8. Issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act) except as permitted in Investment Restriction Nos. 1, 2, 3 and 6.
<PAGE C-1>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
The undersigned stockholder(s) of Dreyfus Strategic Governments Income,
Inc. hereby appoints Robert R. Mullery and Michael A. Rosenberg, 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 Dreyfus
Strategic Governments Income, Inc. standing in the name of the undersigned
at the close of business on March 26, 1999 at the Annual Meeting of
Stockholders to be held at the offices of The Dreyfus Corporation, 200 Park
Avenue, 7th Floor West, New York, New York, commencing at 10:00 a.m. on
Friday, June 11, 1999, and at any and all adjournments thereof, with all of
the powers the undersigned would possess if then and there personally
present and especially (but without limiting the general authorization and
power hereby given) to vote as indicated on the proposals, as more fully
described in the Proxy Statement for the meeting.
CONTINUED TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
FOLD AND DETACH HERE
<TABLE>
<CAPTION>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, AND, IN THE CASE OF
PROPOSAL 3, WILL BE VOTED FOR SUCH PROPOSAL AND, Please mark your votes as
IN THE CASE OF PROPOSAL 2, FOR THE NOMINEES LISTED BELOW, UNLESS OTHERWISE indicated in this example.
INDICATED.
THE BOARD DOES NOT FAVOR PROPOSAL 1. 2.To elect Directors as follows: (NOTE: Stockholders should
1. To consider a proposal to convert vote in respect of both A. and B. below)
the Fund from a closed-end investment
company to an open-end investment A.If Proposal 1 is not approved, to elect three Class I company, which includes changing
the Directors.
Fund's subclassification from a
closed-end investment company to an FOR all WITHHOLD CLASS I - Joseph S.
open-end investment company, amending nominees AUTHORITY DiMartino, Warren B. Rudman,
and restating the Fund's Articles of listed to the to vote for all nominees Sander Vanocur
Incorporation, and changing certain right listed to the right
fundamental investment policies of
the Fund.
WITHHOLD AUTHORITY only for those
nominee(s) whose name(s) I have
FOR AGAINST ABSTAIN struck a line through above.
<S> <C> <C> <C>
3. To ratify the THE BOARD DOES B.If Proposal 1 is approved, David W. Burke, Diane Dunst,
selection of NOT FAVOR to elect eight Directors. Joseph S. DiMartino, Rosalind
Ernst & PROPOSAL 4. Gersten Jacobs, Jay I. Meltzer,
Young LLP as 4. To consider FOR all WITHHOLD Daniel Rose, Warren B. Rudman,
independent a shareholder nominees AUTHORITYS ander Vanocur.
auditors of the proposal to listed to the to vote for all
Fund. repurchase Fund right nominees
shares. listed to the
right
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN WITHHOLD AUTHORITY only for
those nominee(s) whose
name(s) I have struck a line through above.
5. In their MARK HERE FOR ADDRESS CHANGE AND
discretion, the NOTE AT LEFT
proxies are
authorized to Signatures(s) should be exactly as
vote upon such name or names appearing on this proxy.
other business as If shares are held jointly, each
may properly come holder should sign. If signing is by attorney,
before the executor, administrator, trustee or
meeting, or any guardian, please give full title.
adjournment(s)
thereof.
DATED:________________________________________________, 1999
_____________________________________________________________
Signature(s)
_____________________________________________________________
Signature(s)
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
</TABLE>
DREYFUS STRATEGIC GOVERNMENTS INCOME, INC.
IMPORTANT
PLEASE ACT PROMPTLY
SIGN, DATE AND MAIL YOUR PROXY CARD(S) TODAY.
Not matter how many shares you own, your vote is important. To hold a
meeting, a quorum must be represented. Voting today can save the Fund the
expense of another solicitation for proxies required to achieve a quorum.
Please note that if you hold more than one account in the Fund, a proxy card
will be sent to you for each of your accounts. You should sign and return
cash proxy card in order for all your votes to be counted.
Thank you for your interest in the Fund.
